Exhibit_C_General_Conditions_1_2016.pdf

CONTRACT

GENERAL CONDITIONS

FOR

DESIGN-BID-BUILD MAJOR PROJECTS

THE CALIFORNIA STATE UNIVERSITY

Prepared by:

OFFICE OF THE CHANCELLOR

CAPITAL PLANNING, DESIGN AND CONSTRUCTION

(www.calstate.edu/cpdc/cm)

Revised January, 2016

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CONTRACT GENERAL CONDITIONS

FOR DESIGN-BID-BUILD MAJOR PROJECTS

TABLE OF CONTENTS

1.00 DEFINITIONS

2.00 BIDDING

2.01 Duty to Carefully Examine These Instructions

2.02 Competence of Bidders

2.03 Availability of Plans and Specifications

2.04 Necessity for Careful Examination of Site, Plans and Specifications

2.05 Clarification During Bidding

2.06 Bidding Documents

2.07 Bid Proposals

2.08 Competitive Bidding

2.09 Mistake in Bid

2.10 Failure to be a Responsible Bidder

2.11 Small Business Five Percent Bid Advantage

2.12 California Company; Reciprocal Preference Against Nonresident Contractors;

Certification

2.13 Disabled Veteran Business Enterprise Participation Requirement and Incentive

3.00 AWARD AND EXECUTION OF CONTRACT

3.01 Award of Contract

3.02 Return of Bidder’s Security

3.03 Contract Bonds

3.04 Execution of Contract

3.05 Failure or Refusal to Execute Contract

4.00 CONDUCT OF THE WORK

4.01 Laws to be Observed--Generally

4.02 Laws to be Observed--Regarding Labor

4.03 Environmental Requirements

4.04 Substitution of Subcontractors

4.05 Delegation of Performance and Assignment of Money Earned

4.06 Insurance Requirements

4.07 Indemnification

4.08 Contractor’s Responsibility for the Work

4.09 Occupancy by Trustees Prior to Acceptance

4.10 Payments by Contractor

4.11 Responsibility to Secure and Pay for Permits, Licenses, Utility Connections, Etc

4.12 Patented or Copyrighted Materials

4.13 Property Rights in Materials and Equipment

4.14 Taxes

4.15 Contract Time

4.16 Schedule

4.17 Labor Force and Superintendent

4.18 Limitation of Construction Operations

4.19 Coordination with Other Work

4.20 Drawings Reflecting Actual Construction

4.21 Access for Inspection

4.22 Cleanup of Project and Site

4.23 Project Sign, Advertising

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TABLE OF CONTENTS

5.00 INTERPRETATION OF AND ADHERENCE TO CONTRACT

REQUIREMENTS

5.01 Interpretation of Contract Requirements

5.02 Issuance of Interpretations, Clarifications, Additional Instructions

5.03 Product and Reference Standards

5.04 Shop Drawings, Samples, Alternatives or Equals, Substitutions

5.05 Quality of Materials, Articles and Equipment

5.06 Testing Materials, Articles, Equipment and Work

5.07 Rejection

5.08 Off-Site Testing

5.09 Responsibility of Quality

6.00 CHANGES IN THE WORK

6.01 Change Orders

6.02 Emergency Changes

7.00 CLAIMS AND DAMAGES

7.01 Claims

7.02 Delay in Completion--Liquidated Damages

7.03 Termination for Cause

7.04 Termination for Convenience

7.05 Assignment of Subcontracts

7.06 Third-Party Claims

8.00 PAYMENT AND COMPLETION

8.01 Acceptance

8.02 Partial Payments

8.03 Escrow in Lieu of Retention

8.04 Stop Payment Notices

8.05 Payment

8.06 Guarantee

8.07 Contractor Evaluation

9.00 MISCELLANEOUS

9.01 Governing Law

9.02 Successors and Assigns

9.03 Rights and Remedies

9.04 Waiver

9.05 Survival

9.06 Complete Contract

9.07 Severability of Provisions

9.08 Notices

9.09 Counterparts

SAMPLE FORMS

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1.00 DEFINITIONS

Acceptance – When the Project has been completed in all respects in accordance with the Plans and Specifications, and the Contract has been otherwise fully performed by the Contractor, to the full satisfaction of the Trustees, the Trustees will accept the Project as complete.

Addendum - A document issued by the Architect during the bidding period that modifies or supersedes portions of the Contract Documents.

Agreement - A form that is executed by both the Contractor and the Trustees, that provides the Work will be done in accordance with the Contract Documents, as approved and on file with the Trustees and as incorporated into the Contract Documents by reference.

Allowance – Allowances are allocations of the Contract Amount to portions of the Work that could not be specified sufficiently for competitive bidding.

Architect - The person or organization, including the authorized representatives thereof, commissioned by the Trustees for the design of the Project. For projects on which an engineer or landscape architect is commissioned instead of an architect, the term “Architect” shall mean the design professional so commissioned for the Project.

Bid Date - Shall mean the day on which bid proposals for a project are opened.

Bidder - Any person or business entity acting directly or through an authorized representative who submits a proposal for the Work.

Business Day – Calendar day excluding Saturdays, Sundays, national holidays and state holidays; same as Working Day.

Capital Planning, Design and Construction - Department within Business and Finance, a division in the Office of the Chancellor of the California State University, responsible for all major capital outlay projects.

Change Order - A written agreement entered into after the award of the Contract that alters or amends the executed Contract.

Construction Administrator - The person delegated by the Trustees to manage the construction phase of the Project, and authorized to approve changes to the Contract.

Construction Documents – The Contract General Conditions, Plans, Specifications, and Addenda related to the bidding and construction of the Project.

Construction Inspector - The Inspector on the Project site who receives technical direction from the Architect and administrative direction from the Construction Administrator.

Construction Schedule – The Contractor’s time use plan for completing the Work within the Contract Time.

Contract - The Contract Documents which collectively represent the entire agreement between the Trustees and the Contractor, and which supersede any prior negotiations, representations, or agreements either written or oral.

Contract Amount – The amount of compensation stated in the Agreement for the performance of the Work, as adjusted by Change Order.

Contract Documents - The Bid Proposal Form, Notice to Contractors, Plans, Specifications, Addenda, Agreement, Bonds, Contract General Conditions, Supplementary General Conditions, Special Conditions, Change Orders, and any other documents so designated by the Trustees.

Contractor - The person or business entity that has entered into this Agreement with the Trustees.

Contract Time – The period of time, set out in Calendar Days, established in the Contract Documents within which the Work must be completed. The Contract Time may be adjusted by time extensions through Change Orders.

Day – Unless otherwise indicated herein, Day is a calendar day.

Executive Facilities Officer – University official who oversees the capital outlay process.

Field Instruction - A written order from the Trustees to the Contractor, signed by the Construction Administrator.

Contract General Conditions for Design-Bid-Build Major Projects Revised January 2016 - Page 1 of 51 pages

Plans - The drawings prepared by the Architect and approved by the Trustees which include elevations, sections, details, material and equipment schedules, diagrams, information, notes, or reproductions or any of these, and which show the location, character, dimension, or details of the Work.

Prevailing Wages - The general prevailing rate of wages identified by the Director of the Department of Industrial Relations of the State of California pursuant to section 1770 of the Labor Code.

Progress Schedule – The periodically updated Construction Schedule that reflects the actual progress of the Work and impacts on the Work thereby maintaining a current projected date of completion. Impacts on the Work include, but are not limited to, anticipated delays, re-sequencing of tasks, and Change Orders.

Project - The total Work required by the Contract.

Project Manager - The on-site representative of the Construction Administrator, but without the authority to approve changes to the Contract.

Project Schedule – The time use plan for completing the entire Project from selection of service providers through occupancy.

Major tasks included in the Project Schedule are consultant selection and award, design, code approvals, bid and award, construction, move-in, and closeout.

Site - The area specified in the Contract for the Project and the area made available for the Contractor’s operation.

Specifications - The instructions and requirements prepared by the Architect which complement the Plans and describe the manner of performing the Work or the quantities, qualities and types of materials to be furnished.

State – State of California.

Subcontractor - Contractor that is under contract to the Contractor or another subcontractor for completion of a portion(s) of the Work.

Superintendent - The representative of the Contractor at the construction site, who is authorized to receive instructions from the Architect and the Trustees, and who is authorized to direct the performance of the Work on behalf of the Contractor.

Supplier or Vendor - Any person or business entity that contracts with the Contractor to provide materials or equipment.

Trustees - The Board of Trustees of the California State University and their authorized representatives who act on behalf of the Trustees. See also Executive Facilities Officer and Construction Administrator.

University - The California State University campus upon which the Project is located and the University President and other University officers and employees acting within the scope of their duties.

Work - That which is proposed to be constructed or done under the Contract, including the furnishing of all labor, materials, and equipment.

Working Day – Day excluding Saturdays, Sundays, national holidays and state holidays; same as Business Day.

2.00 BIDDING

2.01 Duty to Carefully Examine These Instructions

Prospective Bidders for this Project shall carefully examine the instructions contained herein and be cognizant of the conditions that must be satisfied before submitting a proposal, and the conditions that affect the award of the Contract.

2.02 Competence of Bidders

a. License and Public Works Registration.

(1) License.

No Bidder may bid on Work for which it is not properly licensed. The Trustees shall disregard any bid received from a Bidder who is not properly licensed (Business and Professions Code section 7028.15). Nor will the Trustees award a Contract to a Bidder who does not possess the appropriate contractor’s license, which is that specified in the Notice to Contractors. Bidders participating in a joint venture must individually possess a current license when submitting the joint venture bid, and the joint venture must possess a joint venture license at the time of award (Public Contract Code section 3300).

(2) Public Works Registration with Department of Industrial Relations The Trustees will only issue public works bids and award public works contracts to currently registered contractors and subcontractors on the Trustees’ public works projects. All bidders and subcontractors of all tiers must register to bid public works projects with the Department of Industrial Relations (DIR), and obtain and maintain current registration numbers. Note: DIR will assess a penalty on any public works contractor

Revised January 2016 - Page 2 of 51 pages who allows its registration to lapse. For more information review the DIR public works registration requirements at http://www.dir.ca.gov/Public-Works/PublicWorks.html.

The following applies to this Contract:

• A contractor will not be in violation for working on a private Project that is later determined to be public work;

• Contractor shall check the public works registration for all subcontractors that it proposes to list to ensure that each subcontractor is registered to bid public works projects with the DIR;

• An unregistered contractor or subcontractor can be replaced with one who is registered;

• A contract with an unregistered contractor or subcontractor is subject to cancellation but is not void as to past work.

b. Prequalification Rating.

The Trustees shall issue bid proposal packages only to Bidders who have prequalified with the Trustees (Public

Contract Code section 10764). To prequalify, all bidders must file their prequalification applications online; and the application includes bidders’ responses to a standard questionnaire, a statement of financial condition and previous experience in performing public works, all in accordance with the instructions contained in the Notice to Contractors.

Bidders shall go to: http://www.calstate.edu/cpdc/cm/contractor_prequal_bidders.shtml, under ‘Project Bidder Prequalification’ and login in to the database using the link provided (PlanetBids). Bidders shall verify the information contained in the prequalification application under oath and submit the completed prequalification application online at least ten (10) Business Days prior to the date for opening bids. The Trustees’ Prequalification Coordinator must approve Bidders not less than one (1) Business Day prior to the date set for opening bids.

The Trustees’ Prequalification Coordinator will review the Bidder’s statement of experience and financial condition upon receipt of a complete application, check Bidder’s references, and notify the Bidder of the rating that has been established based on the information contained in the application. The Bidder’s assigned prequalification rating will be the maximum amount of a contract or contracts that the Bidder may undertake with the Trustees.

The Trustees shall disregard any bid received either from a Bidder that is not currently prequalified, or from a Bidder that is prequalified but the rating is not high enough to accommodate its bid. Although this prequalification permits participation in the bidding of the project, it does not mean that the Bidder satisfies the requirements of being a “responsible” Bidder. This determination occurs later in the process (see Article 2.10, Failure to be a Responsible Bidder).

c. Joint Ventures.

If two or more prospective Bidders desire to bid as a joint venture on a single project, they must file an affidavit of joint venture with the Trustees at least five (5) Days prior to the date and time set for opening bids on a form obtained from the Trustees. The affidavit of joint venture is valid only for the specific project for which it is filed. Each party to the joint venture must be prequalified, as provided herein, at least one (1) Business Day before the time set for opening bids.

If the Trustees announce that the joint venture is the successful bidder, the joint venture shall, prior to the Trustees’ award of the Contract:

1) obtain the joint venture license (Business and Professions Code sections 7029 and 7029.1), and

2) register the joint venture with the Department of Industrial Relations.

2.03 Availability of Plans and Specifications

Bidders may obtain Plans and Specifications online, or at the University where the Work will be performed, or other location as designated in the Notice to Contractors, or Bidders may view them at the locations listed in the Notice to Contractors. Plans and Specifications are available only to licensed contractors, licensed subcontractors and suppliers. The Trustees may charge an amount stated in the Notice to Contractors for each set of Plans and Specifications.

The successful Bidder may purchase additional sets of Plans and Specifications at cost. Subcontractors of the successful Bidder shall receive their Plans and Specifications directly from the Contractor.

2.04 Necessity for Careful Examination of Site, Plans, and Specifications The Bidder shall carefully examine the Site and the Plans and Specifications for the Project. The Bidder shall also investigate, and be satisfied as to the conditions to be encountered, the character and quantity of surface and subsurface materials or obstacles to be encountered, rights of way and easements at or near the site, the Work to be performed, and materials to be furnished and as to the requirements of the proposal, Plans, and Specifications for the Project (see Article 4.11, Responsibility to Secure and Pay for Permits, Licenses, Utility Connections, Etc.). Bidder certifies that Bidder has complied with the requirements of this provision by the submission of its bid.

Contract General Conditions for Design-Bid-Build Major Projects Revised January 2016 - Page 3 of 51 pages http://www.dir.ca.gov/Public-Works/PublicWorks.html http://www.calstate.edu/cpdc/cm/contractor_prequal_bidders.shtml

Any failure by the Bidder to acquaint itself with information that is available or with reasonable investigation may be available will not relieve it from responsibility to properly estimate the difficulty or cost to perform the Work. Such examination does not require independent underground soil borings unless required elsewhere.

a. Subsurface Investigations.

Where the Trustees have made investigations of subsurface conditions, and that information is made available to the

Bidder, such information is limited in scope to that which has been actually encountered in the investigations, and is included only for the convenience of the Bidder.

The Trustees assume no responsibility whatsoever in respect to the sufficiency or accuracy of borings or of the log of test borings or other preliminary investigations or any interpretation of the above. There is no guarantee or warranty, either expressed or implied that the conditions indicated are representative of those that exist throughout the site or that unforeseen conditions or developments may not occur. Making such information available to the Bidder is not to be construed in any way as a waiver of this provision. The Bidder must satisfy itself through its own investigations as to the actual conditions to be encountered.

b. Differing Site Condition.

During the progress of the Work, if the Contractor encounters a subsurface or latent condition at the site that is substantially different from those indicated in the Contract Documents or made available for examination, a differing site condition may exist. The Contractor shall immediately notify the Architect and the Construction Inspector in writing of the differing site condition. The Architect shall investigate the assertion of a differing site condition by collecting the facts and applying the facts as expressed by the Architect to the appropriate provisions of the Contract Documents. If the Architect in the exercise of reasonable discretion determines that a differing site condition exists and that the differing site condition directly results in extra Work, and if the Trustees concur, the Contractor shall be entitled to a change order that shall compensate the Contractor for the extra Work.

2.05 Clarification During Bidding

The Bidder shall examine the Plans and Specifications in preparing the bid and shall report to the Architect any omissions, discrepancies, or errors found in the Plans and Specifications. Before the date of the bid opening, the Bidder shall submit a written request for clarification to the Architect, who may give such clarification in the form of an addendum to all Bidders if time permits. Otherwise, in estimating the cost of the Project, the Bidder shall consider that any conflicts shall be governed by Article 5.01, Interpretation of Contract Requirements.

Bidders are advised that the time for submitting a proposed product as “an equal” is no later than 35 Days after the award of Contract, unless otherwise specified in the Supplementary General Conditions (Public Contract Code section 3400). Refer to Article 5.04-c, Alternatives or Equals.

Only the Architect or the University Official, as identified in the Notice to Contractors, has authorization to answer questions or prepare addenda relative to the Project. Information obtained verbally from any source has no contractual authority, may not be relied upon, and shall have no standing in any event that may occur.

The Bidder is required to acknowledge each addendum on the Bid Proposal Form. Therefore, Bidder is responsible for assuring receipt of all addenda. Bidder shall confirm all addenda with designated Trustees’ official one (1) Business Day prior to bid opening.

2.06 Bidding Documents

The Trustees will identify in the Project advertisement and in the Notice to Contractors if the project is a paper submittal bid, an electronic submittal bid, or an online submittal bid. Following are forms that Bidder shall tender with its bid in either case:

a. Bid Proposal Package.

Following a request from a prequalified Bidder, the Trustees will furnish a bid proposal package, which when completely filled out and executed, may be submitted as a bid. Bids not presented using the furnished bid proposal package shall be disregarded (Public Contract Code section 10764). The bid proposal package is not transferable to another Bidder, and must be submitted in the same name as is used on the Bidder’s license and prequalification.

The Trustees’ bid proposal package contains a standard proposal form that shall be used for Bidder’s proposal. Each proposal shall give the prices proposed in the manner required by the proposal and shall be signed by the Bidder or by the Bidder’s duly authorized representative, with its address and telephone number. If an individual makes the proposal, the individual’s name, postal address, and telephone number must be shown. If made by a partnership, the proposal shall have the signature of all partners, or an affidavit signed by all partners empowering one partner as an agent to act in their behalf, and shall include the address and telephone number of the partnership. A proposal submitted by a corporation shall show the name of the state in which the corporation is chartered, the name of the corporation, its address and telephone number, and the title of the person who signs on behalf of the corporation. The corporation shall also submit a certified copy of corporate board action that identifies and authorizes the person who

Revised January 2016 - Page 4 of 51 pages may sign and submit bids for the corporation. The Trustees shall reject any proposal submitted that is not signed by the Bidder or by the Bidder’s duly authorized representative.

b. Listing of Proposed Subcontractors.

For each proposed subcontractor that will perform Work, labor, or render services for the Bidder in excess of one-half of one percent of the Bidder’s total bid, Bidder shall list on its bid proposal the subcontractor’s name, California Contractors State License Board-issued contractor license number, California Department of Industrial Relations Public Works Registration number, and the location of the place of business. Bidder shall also state on its proposal the portion of Work or labor or rendition of services that each such subcontractor will do. For each alternative, Bidder shall list any subcontractor not included in the base contract subcontractor listing.

Within 24 hours after the deadline established for the receipt of bids, or within the timeframe specified in the Supplementary General Conditions, the Bidder must submit a completed List of Subcontractors—Additional Information form, which contains more detailed information, such as complete subcontractor names, addresses, telephone numbers, license and registration numbers, etc. (Public Contract Code sections 4104, 4105 and 4106).

Bidder’s submittal of a correction to a listed subcontractor’s contractor license number, provided that number corresponds to the listed subcontractor’s name and location, is not grounds for filing a bid protest or considering the bid nonresponsive (Public Contract Code section 4104).

(1) Non-small Business Bidders Claiming the Small Business Preference.

If a Non-small Business Bidder claims the small business preference, the proposal shall list all subcontractors certified as California small businesses, and the total of these subcontracts shall be at least 25% of the total bid price, including awarded alternatives.

(2) Disabled Veteran Business Enterprises (DVBE) Participation Requirement.

Bidder is required to achieve three percent DVBE participation on this Contract and may qualify for the

DVBE bid incentive if Bidder proposes sufficient additional DVBE participation in this Contract. Trustees will calculate the Bidder’s DVBE participation on the total Project bid price, including awarded alternatives.

Bidder is required to achieve at least its proposed level of participation at Contract Completion.

Bidder shall list in its bid proposal, on the List of Proposed Subcontractors form, the DVBEs participating in the bid and the dollar amount of participation by each DVBE. The total of the DVBE participation amounts that Bidder provides on the List of Proposed Subcontractors shall equal at least Bidder’s proposed percentage of DVBE participation. For each alternative Bidder shall list any DVBE participating in work to be performed on the alternative. The Trustees shall grant the DVBE Bid Incentive, if the total amount of DVBE participation equals at least the incentive percentage of the total bid price, including awarded alternatives.

At Contract Completion, Bidder’s actual DVBE participation percentages shall be compared to the percentages proposed at bid. Bidder’s failure to achieve the proposed percentages may subject Bidder to penalties (as described in Article 2.13), and/or may cause the Trustees to question the Bidder’s responsibility in future Trustees’ bids.

(3) List of Subcontractors—Additional Information Form.

Bidders shall indicate on this form the dollar amount of each small business (if the Bidder claimed the non-small business bid preference) and each DVBE participating in its bid.

(4) Subcontractor Directory.

The successful Bidder shall maintain current information requested on the Subcontractor Directory for all tiers of subcontractors working on the Project, and shall submit the Subcontractor Directory with its signed Contract and with all payment requests.

c. Bidder’s Security.

All Bidders shall present bids under sealed cover and have enclosed an amount equal to at least ten (10) percent of the total amount bid, including alternatives (if additive), as bid security. Bidders may submit the bid security in one of the following forms: a cashier’s check or certified check made payable to the Trustees, or a bidder’s bond. The Trustees shall not consider any bid unless Bidder encloses one of these forms of bid security therewith (Public Contract Code section 10765). If the bid security is a bond, a corporation authorized as an admitted surety insurer to issue surety bonds in California shall execute that bond, and it shall be executed on the form prescribed by the Trustees.

For bids that are submitted electronically or online, Bidders shall present their bidder’s security in electronic form when tendering their bids, and then shall submit original bidder’s security within 24 hours of bid opening, or their bids will be deemed nonresponsive.

Revised January 2016 - Page 5 of 51 pages

2.07 Bid Proposals

a. Submission of Proposals.

Bidders shall submit proposals as instructed on the bid proposal. It is the responsibility of the Bidder to see that its bid is received in the proper time and location. Delays in timely receipt of the bid caused by the United States or the Trustees’ mail system, independent carriers, acts of God, electronic communication failures, or any other cause shall not excuse late receipt of a bid. The Trustees shall return unopened, any bid received after the time specified in the Notice to Contractors or in any addendum (Public Contract Code sections 4104.5 and 10766).

b. Withdrawal of Proposals.

Any bid may be withdrawn at any time prior to the time fixed in the public notice for the opening of bids but only by a written request from the Bidder or its authorized representative filed with the Trustees. A request to withdraw a bid that is communicated orally in person, or by use of telegram or telephone is not acceptable. The withdrawal of a bid shall not prejudice the right of a Bidder to file a new bid. This paragraph does not authorize the withdrawal of any bid after the time fixed in the public notice for the opening of bids (Public Contract Code section 10767).

c. Public Opening of Proposals.

Proposals will be publicly opened and read at the time and place stated in the Notice to Contractors. Bidders or their agents are invited to be present (Public Contract Code section 10780).

d. Rejection of Irregular Proposals.

The Trustees may reject any proposal if it shows any alterations of forms, additions not called for, conditional bids, incomplete bids, unsigned bids, erasures, or irregularities of any kind. If Bidder changes the bid amount after the amount has been once inserted, Bidder shall initial the change.

e. Power of Attorney or Agent.

When an agent signs the proposal, a power of attorney either shall be on file with the Trustees before the opening of bids or be submitted with the proposal. Failure to submit a power of attorney may result in the rejection of the proposal as irregular and unauthorized. A power of attorney is not necessary in the case of a general partner of a partnership.

f. Waiver of Irregularities.

The Trustees reserve the right to waive minor irregularities in proposals submitted.

2.08 Competitive Bidding

If more than one bid proposal is offered by an individual or business entity or combination thereof, under the same or different names, all such bid proposals may be rejected, or the Trustees may accept the lowest proposal. A party who has quoted prices on materials or Work to a Bidder is not thereby disqualified from quoting prices to other Bidders, or from submitting a bid directly for the materials or Work.

All Bidders are hereby notified that any collusive agreement fixing the prices to be bid in order to control or affect the awarding of this Contract may render void any Contract awarded under such circumstances. The Bidder, by act of submitting a bid, certifies that in the preparation of the bid, no bid was received by the Bidder from a bid depository, which depository, as to any portion of the Work, prohibits, or imposes sanctions for, the obtaining by the Bidder, or the submission to the Bidder by any subcontractor or vendor or supplier of goods and services, of a bid outside the bid depository. The certification shall constitute a warranty, the falsity of which shall entitle the Trustees to pursue any remedy authorized by law and shall include the right at the option of Trustees of declaring any Contract made as a result thereof to be void (Business & Professions Code section 16600 et seq.).

2.09 Mistake in Bid

As required by Public Contract Code section 5100 et seq., a Bidder shall not be relieved of a bid without consent of the Trustees nor shall any change be made in a bid because of mistakes. However, a Bidder may pursue relief of its bid in accordance with section 5100 et seq. of the Public Contract Code.

2.10 Failure to be a Responsible Bidder

In order to be considered for award of a Contract a Bidder must be a responsible Bidder (Public Contract Code section 10780).

To be responsible, the Bidder, in the judgment of the Trustees, must be sufficiently trustworthy and possessed of the requisite quality, fitness, capacity and experience to satisfactorily perform the Work (Public Contract Code section 1103). Should the Trustees question Bidder’s responsibility, the Trustees shall give the Bidder an opportunity to rebut any evidence of non-responsibility, and to present evidence of responsibility. The hearing shall be informal, and an individual appointed by the Trustees to hear the matter may conduct it in whole or in part in writing. A decision concerning the Bidder’s responsibility shall be mailed to the Bidder within ten (10) Days of the conclusion of the hearing.

Revised January 2016 - Page 6 of 51 pages

2.11 Small Business Five Percent Bid Advantage

If a certified small business is the lowest responsive bidder, the Trustees will not calculate the five percent bid advantage for the other bidders, and will only calculate the DVBE incentive. Only another small business may displace the small business low bidder.

a. Preference for Small Businesses.

In accordance with Government Code section 14835 et seq., and California Code of Regulations, Title 2, section 1896 et seq., the Trustees shall give a small business bid advantage of five percent up to a maximum of $50,000 to contracting firms that have been certified as a “Small Business” by the Office of Small Business & DVBE Services, in the Procurement Division of the Department of General Services. To receive the five percent advantage, certified small businesses shall:

(1) Submit with the bid proposal a completed “Request for Small Business Five Percent Preference Certification” form,

(2) Be certified Small Business upon verification in accordance with section 1896.2, having applied for certification no later than 5:00 PM on bid date,

(3) Submit a timely and responsive bid,

(4) Be determined to be a responsible bidder.

b. Preference for Non-small Businesses.

(1) Preference

The application of the five percent small business bidding preference is also extended to any non-small business that commits to subcontracting at least 25% of its net bid price to California certified small businesses and/or micro businesses. To receive this preference the non-small business must satisfy the following criteria:

(a) Indicate in its bid proposal its commitment to subcontract at least 25% of its net bid amount with one or more small businesses [submit the “Request for Small Business Five Percent Preference Certification” form],

(b) Submit a timely and responsive bid,

(c) Be determined to be a responsible bidder,

(d) Submit the California certified small businesses on the List of Proposed Subcontractors that is provided in the bid documents, and

(e) Submit a List of Subcontractors - Additional Information form within 24 hours after the deadline for receipt of bids, and specify the dollar amount of each small business subcontractor’s bid thereon.

(2) Penalty.

The Trustees will impose a penalty to any non-small business who receives the small business preference and does not contract 25% of its net bid price to California certified small businesses and/or micro businesses.

The penalty will be two times the amount of the bid preference received. For example, if the contractor received a bid preference of $49,000, and does not contract 25% of its net bid price with certified small businesses and/or micro businesses, then the Trustees will assess an amount to be forfeited by the Contractor of $98,000.

c. Trustees’ Reporting of Small Business Participation.

Responsive to direction from the State Legislature, the Trustees are seeking to report increased statewide participation of certified small businesses in contract awards. To this end, the successful Bidder shall inform the Trustees of any contractual arrangements with subcontractors, consultants or suppliers that are certified small businesses.

2.12 California Company; Reciprocal Preference Against Nonresident Contractors; Certification The Trustees shall grant a California company a reciprocal preference as against a nonresident contractor from any state that gives or requires a preference to be given contractors from that state on its public entity construction contracts. The amount of the reciprocal preference shall be equal to the amount of the preference applied by the state of the nonresident contractor with the lowest responsive bid, except where the resident contractor is eligible for a California small business preference, in which case the preference applied shall be the greater of the two, but not both.

Each Bidder shall certify at the time of bid that the Bidder qualifies as a “California company,” which means a business entity licensed in California on the date of bid opening and which is one of the following:

a. a business entity with its prime place of business in California,

b. an out-of-state contractor whose state does not provide a local contractor preference, or

c. an out-of-state contractor that has paid at least $5,000 in sales or use taxes in the immediately preceding five years.

Revised January 2016 - Page 7 of 51 pages

If the Bidder does not qualify as a California company, then it shall indicate the name of the state in which its principal place of business is, and the amount of the local contractor preference in that state (Public Contract Code section 6107).

2.13 Disabled Veteran Business Enterprise Participation Requirement and Incentive California state law requires that its state agencies achieve three (3) percent participation for disabled veteran business enterprises (DVBE) in state contracts. Failure of the Bidder to comply with the DVBE requirement will cause the Trustees to deem the bid nonresponsive and the Bidder to be ineligible for award of Contract.

Bidder/Contractor understands and agrees that the DVBEs identified on the List of Proposed Subcontractors form in the bid may only be replaced by another DVBE, and the substitution must be approved by the Trustees and the Department of General Services (DGS). Trustees will document changes to the scope of Work that impact the DVBEs identified in the bid by contract change order, and will provide their decision on DVBE substitutions in writing via the subcontractor substitution process per Public Contract Code section 4100.

Failure of Bidder/Contractor to seek substitution and adhere to the DVBE participation level identified in its bid may be cause for Contract termination, recovery of damages under rights and remedies due the State, and penalties as outlined in Military and Veterans Code section 999.9 and Public Contract Code section 10115.10 or section 4110.

a. Special Definitions.

(1) “Disabled veteran” as used herein, means a veteran of the military, naval or air service of the United States, including, but not limited to, the Philippine Commonwealth Army, the Regular Scouts, “New Scouts,” and who has at least a ten (10) percent service-connected disability and who is domiciled in the State of California.

(2) “Disabled veteran business enterprise contractor, subcontractor, or supplier” means a person or entity that has been certified by the Office of Small Business & DVBE Services and that performs a “commercially useful function,” as defined below, in providing services or goods that contribute to the fulfillment of the contract requirements.

(a) A person or an entity is deemed to perform a “commercially useful function” if a person or entity does all of the following:

(i) is responsible for the execution of a distinct element of the Work of the Contract;

(ii) carries out the obligation by actually performing, managing, or supervising the Work involved;

(iii) performs Work that is normal for its business services and functions;

(iv) is responsible, with respect to products, inventories, materials, and supplies required for the Contract, for negotiating price, determining quality and quantity, ordering, installing, if applicable, and making payment; and

(v) is not further subcontracting a portion of the Work that is greater than that expected to be subcontracted by normal industry practices.

(b) A contractor, subcontractor, or supplier will not be considered to perform a “commercially useful function” if the contractor’s, subcontractor’s, or supplier’s role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of disabled veteran business enterprise participation.

(c) Equipment Brokers.

(i) A DVBE that rents equipment to the Trustees shall be deemed to be an equipment broker, unless one or more disabled veterans have 51-percent ownership of the quantity and the value of each piece of equipment. If the equipment is owned by one or more disabled veterans, each disabled veteran owner shall, prior to performance under any contract, submit to the Trustees a declaration signed by the disabled veteran owner stating that the owner is a disabled veteran and providing the name, address, telephone number, and tax identification number of the disabled veteran owner.

(ii) A DVBE that rents equipment to the Trustees shall, prior to performing the contract, submit to the Trustees a declaration signed by each disabled veteran owner and manager of the enterprise stating that the enterprise obtained the contract by representing that the enterprise was a DVBE meeting and maintaining all of the requirements of a DVBE. The declaration shall include the name, address, telephone number, and tax identification number of the owner of each piece of equipment identified in the contract.

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(iii) State funds expended for equipment rented from equipment brokers pursuant to contracts awarded under this section shall not be credited toward the DVBE participation requirement.

(iv) A DVBE that is a broker or agent and that obtains a contract pursuant to these provisions shall, prior to performing the contract, disclose to the Trustees that the business is a broker or agent. The disclosure shall be made in a declaration signed and executed by each disabled veteran owner and manager of the enterprise, declaring that the enterprise is a broker or agent, and identifying the name, address, and telephone number of the principal for whom the enterprise is acting as a broker or agent.

(3) (a) DVBE as used herein, means a business concern certified by the Office of Small Business & DVBE Services as meeting all of the following:

(i) The business is at least 51 percent owned by one or more disabled veterans or, in the case of a publicly owned business, at least 51 percent of its stock is unconditionally owned by one or more disabled veterans; a subsidiary that is wholly owned by a parent corporation, but only if at least 51 percent of the voting stock of the parent corporation is unconditionally owned by one or more disabled veterans; or a joint venture in which at least 51 percent of the joint venture’s management, control, and earnings are held by one or more disabled veterans.

(ii) One or more disabled veterans manage and control the daily business operations. The disabled veterans who exercise management and control are not required to be the same disabled veterans as the owners of the business.

(iii) A sole proprietorship, corporation, or partnership with its home office located in the United States, which is not a branch or subsidiary of a foreign corporation, foreign firm or other foreign-based business.

(b) Notwithstanding subdivision (3)(a), after the death or the certification of a permanent medical disability of a disabled veteran who is a majority owner of a business that qualified as a DVBE prior to that death or certification of a permanent disability, that business shall be deemed to be a DVBE for a period not to exceed three years after the date of that death or certification of a permanent medical disability, if the business is inherited or controlled by the spouse or child of that majority owner, or by both of those persons. A business is a DVBE pursuant to this subdivision under either of the following circumstances:

(i) For the duration of any contract entered into prior to the death or certification of permanent medical disability for the sole purpose of fulfilling the requirements of that contract.

(ii) After the date of the majority owner’s death or certification of permanent medical disability established by this subdivision for the sole purpose of providing sufficient time to make orderly and equitable arrangements for the disposition of the business, except that the business shall not enter into any new contract as a DVBE for purposes of the program if the contract would not be completed within the three-year period.

b. Participation Requirement.

In order to satisfy and be responsive to this requirement, the Bidder must meet the three (3) percent DVBE

Participation requirement, which is attained when:

(1) The Bidder is not a DVBE and is committed to use DVBE subcontractors/suppliers for not less than three (3) percent of the Contract dollar amount (including alternatives); or

(2) The Bidder is a DVBE and is committed to performing not less than three (3) percent of the Contract dollar amount (including alternatives) with its own forces or in combination with those of other DVBEs.

c. Documentation Requirements.

The Bidder must document its satisfaction of the DVBE participation requirement. Final determination of DVBE

Participation by the Bidder shall be at the Trustees’ sole discretion.

(1) Required Documentation.

In addition to documentation submitted with the bid proposal on the List of Proposed Subcontractors form (see Article 2.06-b (2)), the DVBE documentation forms that must be completed are as follows, and instructions for completing the required forms correctly are included to assist the Bidder.

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(a) DVBE Transmittal Form.

Bidders must fill out the DVBE transmittal form as a cover sheet to the required documents, attach and submit it and the additional required documentation. All requested DVBE documentation must be completed on the forms provided and submitted with the DVBE Transmittal Form.

(b) Summary of Disabled Veteran Owned Business Participation (Attachment 1).

Summary of Disabled Veteran Owned Business Participation, Attachment 1, must be completed showing the type of Work and company proposed for DVBE participation, their subcontractors (if any), and other related information. Complete the form providing the information as follows:

(i) Company Name: List the name of the company proposed for DVBE participation. If the prime contractor is a DVBE, its name must also be listed to receive participation credit.

(ii) Nature of Work: Identify the proposed Work or service to be provided by the listed company.

(iii) Contracting With: List the name of the party with which the company listed is contracting.

(iv) Tier: Identify the contracting tier using the following level designations:

0=Prime contractor;

1=First tier subcontractor/supplier;

2=Second tier subcontractor/supplier of first tier subcontractor/supplier;

3=Third tier subcontractor/supplier of second tier subcontractor/supplier; etc.

(v) Claimed DVBE Value: State the total dollar amount of the DVBE’s bid.

(vi) Percentage of Bid: State the percentage (%) of the claimed DVBE’s bid as it relates to the Bidder’s total Project bid.

(vii) DVBE Certification: The Bidder must include one copy of the DVBE certification from the Office of Small Business & DVBE Services for each DVBE listed on the Summary of Disabled Veteran Owned Business Participation.

(c) Bidder’s Certification (Attachment 2).

The Bidder must sign and include the Bidder’s Certification, certifying that each DVBE listed on the Summary of Disabled Veteran Owned Business Participation (Attachment 1) complies with the legal definition of DVBE.

(d) Disabled Veteran Business Enterprise Declarations (STD. 843).

The disabled veteran owner(s) and disabled veteran manager(s) of the DVBE must complete this declaration when a DVBE contractor or subcontractor will provide materials, supplies, services or equipment.

(2) Time Frame for Submitting Documentation.

The full DVBE participation documentation must be submitted within 24 hours after the deadline established for the receipt of bids, or within the timeframe specified in the Supplementary General Conditions. If Bidder fails to submit full and accurate documentation by the deadline established, the Trustees will deem the bid nonresponsive, and thus ineligible for award of the Contract.

d. Use of Proposed DVBE.

If awarded the Contract, the successful Bidder must use the DVBE suppliers and/or subcontractors proposed in its bid proposal unless it has requested substitution and has received approval of the Trustees in compliance with the Subletting and Subcontracting Fair Practices Act. See Article 4.04, Substitution of Subcontractors, subsection c- Substitution of a Disabled Veteran Business Enterprise.

e. Trustees’ Reporting of DVBE Participation.

Responsive to direction from the State Legislature, the Trustees are seeking to report increased statewide participation of DVBE in contract awards. To this end, the successful Bidder shall inform the Trustees of any contractual arrangements with subcontractors, consultants or suppliers that are certified DVBE.

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f. Additional DVBE Information Sources.

For more information regarding DVBE certification, copies of directories or for general DVBE information, contact:

State of California, Department of General Services, Procurement Division Office of Small Business & DVBE Services, Room 1-400, MS 210 P.O. Box 989052, West Sacramento, CA 95798-9052 (mailing address) 707 Third Street, First Floor, Room 400, West Sacramento, CA 95605 (physical address) Telephone number: (916) 375-4940; Fax number: (916) 375-4950 E-mail: osdshelp@dgs.ca.gov Or, via the Internet at www.dgs.ca.gov/pd/Programs/OSDS.aspx.

g. Incentive.

In accordance with Government Code section 14838(f), and Military and Veterans Code sections 999.5(a) and

999.5(d), the Trustees are granting a bid incentive for bid evaluation purposes only to Bidders that exceed the three percent DVBE participation requirement. The level of DVBE incentive will correlate to the level of participation; that is, the more DVBE participation proposed, the higher the incentive. The bid incentives are as follows:

DVBE Participation Incentive 3.00% to 3.99% None 4.00% to 4.99% 1% 5.00% to 5.99% 2%

6% or more 3% The DVBE incentive may not exceed $100,000. When used on combination with the Small Business Preference, the cumulative adjustment amount shall not exceed $100,000. If the lowest responsive, responsible bid is a California certified small business, for bid evaluation purposes only, the only bidders eligible for the incentive will be California certified small businesses.

h. Prime Contractor’s DVBE Subcontracting Report (DVBE Subcontracting Report).

(1) Contractor shall submit a DVBE Subcontracting Report to the Trustees at end of the Project and upon completion of…