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CONSTRUCTION
MANAGEMENT AGREEMENT
DATE:
, _____
OWNER-BUILDER:
Name:
Address:
Telephone:
CONSTRUCTION
MANAGER:
Name:
Address:
Telephone:
PROJECT
DESCRIPTION:
Number:
Name:
Address:
Architect:
Engineer:
1.
Contract Documents.
1.1
The Contract Documents are as defined in paragraph 7.1 and shall also
include the following:
2.
Work.
2.1
Contractor shall perform all Work (defined in paragraph 7.3) in
connection with
3.
Time of Commencement.
3.1
The term hereof shall begin on the date Work shall be commenced and shall
terminate years thereafter, provided that Contractor shall complete all
Work in progress after such termination date in accordance with the provisions
of Paragraph 3.2 and Paragraph 12.
3.2
In addition to the provisions of Paragraph 12, the Work shall be
commenced
4.
Contract Sum.
4.1
Owner shall pay Contractor in current funds for the performance of the
Work, subject to additions and deductions by Change Order as provided in the
Contract Documents, an amount ("Contract Sum") equal to (i) the cost
("Contractor's Costs") of all Work completed, including, without
limitation, all costs for labor, supervision, project management, materials,
supplies, Contractor's general conditions of per
square foot and equipment (including construction trailers and rented equipment
provided in connection with the Work, and (ii) a fee ("Contractor's
Fee") equal to
% of Contractor's Costs.
5.
Progress Payments.
5.1
On or before the fifth day of each month during the performance of the
Work, Contractor shall submit to Owner for Owner's approval a request for
payment ("Application for Payment").
Each Application for Payment shall be for a sum equal to Contractor's
Costs (whether or not materials and supplies comprising a portion thereof are
then incorporated in the Work or located on-site or off), which have not been
previously paid by Owner and a portion of Contractor's Fee equal to
% of the Contractor's Costs set forth in such Application for
Payment. Within 10 days after
submission of each such Application for Payment to Owner, Owner shall make
payment to Contractor in the full amount applied for in said Application.
5.2
Payments due and unpaid under the Contract Documents shall bear interest
from the date payment is due at the rate of
% per annum.
5.3
Promptly upon the execution hereof, Owner shall establish at a financial
institution ("Bank") in Phoenix, Arizona reasonably acceptable to
Contractor, an account ("Construction Account") specifically earmarked
for payments under this Agreement. Such
Construction Account shall operate so that drafts against such Account shall be
made upon the joint signature of Owner and Contractor.
Such Account shall be a "zero balance" account providing to
Owner an irrevocable "line of credit", during the term hereof, for
drawings thereunder (which drawings shall be the sole obligation of Owner) of $
(and Bank shall confirm in writing to Contractor such line of
credit).
Owner shall obtain the agreement of Bank that from time to time during
the term hereof, Bank shall provide duplicate copies of the statement of
activity in such Construction Account and showing the remaining available funds
thereunder.
6.
Final Payment.
6.1
As soon as practicable after Substantial Completion of the Work,
Contractor shall submit a final request for payment ("Final
Application") which shall set forth all Contractor's Costs and Contractor's
Fees due and remaining unpaid to Contractor and within 15 days thereof, Owner
shall pay to Contractor the amount due under such Final Application.
7.
Final Documents.
7.1
The "Contract Documents" consist of this Agreement with
supplementary and other conditions, the written work orders ("Work
Orders") and notices to proceed furnished by Owner to Contractor, the
plans, the drawings and specifications attached to or delivered with each Work
Order and all modifications issued by Owner as provided herein after execution
of the Contract such as Change Orders, written interpretations and written
orders for minor changes in the Work. The
intent of the Contract Documents is for Owner to provide thereby all items
necessary for the proper execution and completion of the Work. The Contract
Documents are complimentary and what is required by any one shall be as binding
as if required by all.
7.2
By executing the Contract, Contractor represents that he has visited the
site and familiarized himself with the local conditions under which the Work is
to be performed.
7.3
The "Work" comprises the completed construction required by the
Contract Documents and includes all labor necessary to produce such construction
and all materials and equipment incorporated or to be incorporated in such
construction.
7.4
Contractor shall not be responsible for determining whether the
particular architect or engineer preparing the Contract Documents or part
thereof has made any errors, mistakes, omissions or poor or unsafe design
choices or specifications.
8.
Owner.
8.1
Owner shall furnish all surveys and legal descriptions of the site.
8.2
Except as provided in Paragraph 9, Owner shall secure and pay for
necessary approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or permanent changes in
existing facilities.
9.
Contractor.
9.1
Contractor shall supervise and direct the Work, using his best skill and
attention and, through his Subcontractors, he shall be responsible for all
construction means, methods, techniques, sequences and procedures and for
coordinating all portions of the Work.
9.2
Unless otherwise specifically provided in the Contract Documents,
Contractor shall provide and pay for all labor, materials, equipment, tools,
construction equipment and machinery necessary for the proper execution and
completion of the Work.
9.3
Contractor shall at all times enforce strict discipline and good order
among his Subcontractors (and shall have full right and authority to maintain
strict discipline on the job site) and shall not employ on the Work any person
known to him to be unfit or unskilled in the task assigned to him.
9.4
Contractors warrants, for one year, that all materials and equipment
incorporated in the Work will be new unless otherwise specified, and that all
Work will be of good quality, free from faults and defects and in conformance
with the Contract Documents. All
Work not conforming to these requirements may be considered defective.
9.5
Unless otherwise provided in the Contract Documents, Contractor shall pay
all sales, consumer, use and other similar taxes which are legally enacted at
the time bids are received, and shall secure and pay for all permits and
governmental fees, licenses and inspections necessary for the execution of the
Work.
9.6
Contractor shall give all notices and comply with all laws, ordinances,
rules, regulations and lawful orders of any public authority bearing on the
performance of the Work.
9.7
The Contractor shall be responsible to Owner for the acts and omissions
of (i) Contractor`s employees and (ii) Subcontractors selected and employed by
Contractor and their agents and employees, and other persons performing any of
the Work under a contract with Contractor, but only if Contractor has not
performed his supervisory duties in good faith and without gross negligence.
Contractor shall indemnify and hold harmless Owner and its agents and
employees ("Indemnified Party") from and against all claims, damages,
losses and expenses, including reasonable attorneys' fees arising out of or
resulting from the performance of Contractor's obligations herein with respect
to the Work, provided that any such claim, damage, loss or expense (1) is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including the loss
of use resulting therefrom, and (2) is caused in whole or in part by any
negligent act or omission of Contractor, and (3) if Contractor shall be
responsible therefor as provided in the preceding paragraph.
In any and all claims against an Indemnified Party which are indemnified
by Contractor in this Paragraph 9.7, the indemnification obligation shall not be
limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for Contractor or, if applicable, any
Subcontractor under workers' or workmen's compensation acts, disability benefit
acts or other employee benefit acts.
9.8
Contractor shall furnish and submit all shop drawings and samples
reasonably required by the Contract Documents for approval, if reasonably
requested by Owner. The Work shall
be in accordance with approved submittals.
If Contractor observes that there is an omission, error or contradiction
in the plans, specifications and drawings, he shall promptly notify Owner and
the parties shall mutually agree upon the corrective action required.
9.9
Contractor at all times shall keep the Work site free from accumulation
of waste materials or rubbish caused by his operations.
At the completion of the Work he shall remove all his waste materials and
rubbish from and about the site as well as his tools, construction equipment,
machinery and surplus materials and shall clean all interior surfaces, shall
clean all interior glass and shall leave the Work "broom clean" or its
equivalent.
9.10
Contractor shall pay all royalties and license fees.
He shall defend all suits or claims for infringement of any patent rights
and shall save Owner harmless from loss on account thereof.
10.
Subcontracts.
10.1
A "Subcontractor" is a person or entity who has a direct
contract with Contractor to perform any of the Work at the site and shall not
include any of the contractors mentioned in Paragraph 11.
10.2
Unless otherwise required by the Contract Documents, Contractor, if
reasonably requested from time to time, shall furnish to Owner, in writing, the
names of Subcontractors for each of the principal portions of the Work.
Contracts between Contractor and Subcontractors shall be in accordance
with the terms of this Contract and shall include the provisions of this
Contract insofar as applicable.
10.3
Contractor shall obtain three bids for the providing of any portion of
the Work let to Subcontractors. Contractor
is under no obligation to contract with the party providing the lowest bid but
shall use his discretion in selecting Subcontractors to perform the Work.
11.
Exclusive Contract; Work by Owner or by Separate Contractors.
11.1
This is an exclusive agreement in favor of Contractor and Owner shall not
have the right to award separate contracts in connection with the Work.
11.2
Any tenant shall have the right to use its own contractor to construct
its own tenant improvements. However,
in each case, Owner will pay to Contractor a fee based on $1.00 per square foot
as a waiver of Contractor's exclusive right to perform Work hereunder.
In each such case, Contractor shall not be held responsible or
accountable for completion schedules, any costs caused by defective or ill-timed
work, or, in any way, for such tenant improvements.
12.
Time.
12.1
All time limits stated in the Contract Documents are of the essence of
the Contract. Contractor shall
expedite the Work and achieve Substantial Completion within the time specified
in a Work Order.
12.2
As used herein, "Substantial Completion" of the Work shall
occur (i) when all inspections (if required) by city officials have been passed
and the issuance of the Certificate of Occupancy (if required) is in process, or
(ii) if no such inspection or Certificate of Occupancy is required, then such
construction is sufficiently complete so that the Work may be used for the
intended purpose.
12.3
If Contractor is delayed at any time in the progress of the Work by
changes ordered in Work, by labor disputes, fire, unusual delay in
transportation, adverse weather conditions not reasonably anticipatable,
unavoidable casualties, or any cause beyond Contractor's control, or by any
other cause which Owner determines may justify the delay, then the Contract Time
shall be extended by Change Order for such reasonable time as warranted by such
delay. Contractor shall deliver to
Owner written notice of the onset of any such delay within five working days
after such onset occurs, setting forth the causes for such delay but failure to
deliver such notice shall not prejudice the Contractor hereunder.
13.
Payments and Completion.
13.1
Payments shall be made as provided in Paragraphs 4 and 5.
13.2
Payments may be withheld at a rate equal to _____% of each amount stated
in an Application for Payment on account of (1) defective Work not remedied, (2)
claims filed (unless resulting from non-payment or delinquent payment due to
Owners fault), (3) failure of Contractor to make payments properly to
Subcontractors or for labor materials or equipment, or (4) persistent failure to
carry out the Work in accordance with the Contract Documents (unless resulting
from non-payment or delinquent payment due to Owners fault).
Upon remedy of any such item, or upon making payment of sums requested in
the Final Application, whichever shall first occur, payments withheld will be
paid immediately.
13.3
In each Application for Payment, Contractor shall certify:
"There
are no known mechanics' or materialmen's liens outstanding at the date of this
Application, that all due and payable bills with respect to the Work have been
paid to date or are included in the amount requested in the current Application,
and, except for such bills not paid but so included, there is no known basis for
the filing of any mechanics' or materialmen's liens on the Work, and waivers
from all subcontractors and materialmen have been obtained in such form as to
constitute an effective waiver of lien under the laws of the State of
Arizona."
Contractor will deliver with the Final Application lien releases, waivers
or other assurances satisfactory to Owner that no liens respecting labor,
materials, equipment or other things furnished in the Work will be filed.
13.4
The making of final payments shall constitute a waiver of all claims by
Owner, except those arising from (1) unsettled liens, (2) faulty or defective
Work appearing after Substantial Completion, (3) failure of the Work to comply
with the requirements of the Contract Documents, or (4) terms of any special
guarantees required by the Contract Documents.
The acceptance of final payment shall constitute a waiver of all claims
by Contractor except those previously made in writing and identified by
Contractor as unsettled at the time of the Final Application for Payment.
14.
Protection of Persons and Property.
14.1
Contractor shall be responsible for initiating, maintaining and
supervising all safety precautions in connection with the Work and shall take
all reasonable precautions for the safety of, and shall provide all reasonable
protection to prevent damage, injury or loss to (1) all employees on the Work
and other persons who may be affected thereby, (2) all the Work and all
materials and equipment to be incorporated therein, and (3) other property at
the site or adjacent thereto. He
shall comply with all applicable laws, ordinances, rules, regulations and orders
of any public authority bearing on the safety of persons and property and their
protection from damage, injury or loss. If
Contractor shall be liable therefor as provided in Paragraph 9.7 and this
Paragraph 14.1, Contractor shall remedy all damage or loss to any property.
Nothing herein contained shall be deemed to impose upon Contractor any
obligation to remedy damage or loss attributable to the acts or omissions of
Owner or anyone directly or indirectly employed by Owner or by anyone for whose
acts Owner may be liable, and not attributable to the gross negligence of
Contractor.
14.2
In carrying out his obligation under Paragraph 14.1, Contractor shall be
entitled to recover all of his cost and expense plus a fee in accordance with
his site conditions, based upon a percentage of the value of the supplies and
materials protected for those supplies and materials pre-stocked or purchased by
Owner.
15.
Insurance.
15.1
Contractor's liability insurance shall be purchased and maintained by
Contractor to protect him from claims under workers' or workmen's compensation
acts and other employee benefit acts, claims for damages because of bodily
injury, including death and from claims for damages, other than the Work itself
to property which may arise out of or result from Contractor's operations under
this Contract, whether such operations be by himself or by any Subcontractor or
anyone directly or indirectly employed by any of them. This insurance shall be written for not less than the limits
of liability specified in the Contract Documents or specified below, and shall
include contractual liability insurance applicable to the Contractor's indemnity
obligations under Paragraph 9.7. Certificates
of such insurance shall be filed with Owner prior to the commencement of the
Work if requested by Owner.
15.2
Owner shall purchase and maintain his own liability insurance and, at his
option, may maintain such insurance as will protect him against claims which may
arise from operations under the Contract.
15.3
Owner shall purchase and maintain property insurance upon the entire Work
to the full insurable value thereof, including items of labor and materials in
place or to be used as part of the permanent construction, scaffolding, stagings,
towers, forms, equipment and miscellaneous materials and supplies incident to
said Work. The amount of loss shall
be based upon cost and shall be determined at the time of the replacement of
said loss. The amount of loss shall
include, but not be limited to, the cost of demolition, clean-up, repair and
replacement. Such insurance shall include the interests of Owner, Contractor,
Subcontractors and Subsubcontractors in the Work and shall insure against the
perils of fire and extended coverage and shall include "all risk"
insurance for physical loss or damage including, without duplication of
coverage, theft, vandalism and malicious mischief.
15.4
Any loss insured under Paragraph 15.3 is to be adjusted with the parties
and made payable to the insureds, as their interests may appear.
15.5
Owner shall file a copy of all policies with Contractor prior to
commencement of work. If Owner does
not do so, Contractor may, at his option, obtain such insurance as Owner's agent
with the cost thereof to be reimbursed by Owner upon presentation of a bill
therefor.
15.6
Owner and Contractor waive all rights against each other for damages
caused by fire or other perils to the extent covered by insurance obtained
pursuant to this Article or any other property insurance applicable to the Work,
except such rights as they may have to the proceeds of such insurance held by
Owner as trustee. The Contractor
shall require similar waivers in favor of Owner and Contractor by Subcontractors
and Subcontractors.
16.
Changes in the Work.
16.1
Owner, without invalidating the Contract, may order changes in the Work
consisting of additions, deletions or modifications, the Contract Sum and the
time for performance of Work being adjusted accordingly. All such changes in the Work shall be authorized by written
order ("Change Order") or Contract supplement signed by Owner, except
that changes in the Work which the parties agree do not involve a change in the
Contract Sum or the construction time may be authorized on the plans,
specifications or drawings and dated and initialled by Owner.
16.2
Contractor shall be reimbursed for changes in the Work, and shall be paid
the Contractor's Fee with respect thereto.
Owner shall be reimbursed for deletions in the Work on the basis of the
actual cost of the Work plus a percentage thereof equal to the percentage on
which the Contractor's Fee is based.
16.3
Contractor shall not be liable for any claims whether for breach of
contract, damages or otherwise as a result of changes in the Work made pursuant
to Paragraph 16.1.
17.
Corrections of Work.
17.1
Contractor shall correct any Work that fails to conform to the
requirements of the Contract Documents and shall remedy any defects due to
faulty materials, equipment or workmanship which appear within a period of one
year from the date of Substantial Completion, provided, however, that
Contractor's warranty with respect to defects in mechanical equipment shall be
limited to the full term of any factory or third-party warranty with respect to
such mechanical equipment.
18.
Termination of the Contract.
18.1
If Contractor shall fail to perform his obligations or is otherwise in
default under the terms of this Contract, Owner shall provide a written notice
of default to Contractor specifying the specific defaults hereunder, and if
Contractor fails to eliminate said default(s) within 10 days of receipt of said
notice (or, in the event that said default cannot be cured within said 10-day
period in the exercise of reasonable diligence, Contractor fails to commence
corrective work or other curative measures within said 10 days), Owner may
withhold payment and take such reasonable steps as may be necessary for the
completion of the Work. Nevertheless,
Contractor shall be entitled to receive payment of those items set forth in
Paragraph 18.2(ii)(A) below. If
Contractor begins corrective or curative measures which cannot be completed
within said 10 days in the exercise of reasonable diligence, the time for curing
the default(s) shall be extended to the time required for such repair or
curative measures.
18.2
If Owner fails to make timely payment to Contractor or breaches any other
term or condition of this Contract, then in such event, Contractor may, without
prejudice to or waiver of any other remedy Contractor may have, (i) treat the
Work which is the subject of the payment not made as completed pursuant to a
separate and divisible Contract, or (ii) terminate the Contract, treat the Work
as abandoned by Owner and recover from Owner:
(A) current damages equal to the payment for all Contractor's Costs; the
Contractor's Fee with respect thereto; and all other losses sustained and costs
and expenses incurred in connection with labor, materials, equipment, tools and
construction equipment and machinery, furnished in connection with the Work for
which payment was not received by Contractor; and (B) irrespective of whether
Contractor has recovered such current damages, on demand as and for liquidated
and agreed final damages beyond the date of such demand, an amount equal to
$1.00 per square foot for that portion of the Project which had not been
built-out on the date of such demand (Work in progress shall be appropriately
prorated).
19.
Notices.
19.1
All notices and other communications provided hereunder shall be in
writing and shall be deemed to have been given when mailed by registered or
certified mail, postage prepaid, return receipt requested, or when personally
delivered to the other party at the address shown above or at such other address
as said party may from time to time designate in writing to the other.
20.
Other Conditions or Provisions.
20.1
In the event of litigation between the parties arising out of this
Contract or the work to be performed hereunder, the prevailing party shall be
entitled to recover reasonable attorneys' fees, in addition to all other costs
and expenses incurred by him and such other relief as the Court may award.
20.2
This Contract shall be governed by the laws of Arizona.
20.3
As used herein, the singular includes the plural and the masculine gender
includes the female as properly applicable.
20.4
This Contract may not be assigned by Contractor without Owner's prior
written consent.
20.5
This Contract shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
Upon any sale or other transfer of the Project by Owner, this Agreement
shall remain in full force and effect and the transferee shall execute and
deliver to Contractor a written assumption hereof.
20.6
The Contract Documents contain the entire agreement between Owner and
Contractor and supersede all prior conversations and negotiations between the
parties on the subject matter of the Contract Documents.
Owner and Contractor agree that, except as specifically provided herein,
neither party has made any representations, warranties or agreements as to any
matters concerning the subject matter of the Contract Documents.
IN WITNESS WHEREOF, the parties have executed this Contract as of the
date first above mentioned.
OWNER
By:
Its:
CONTRACTOR
By:
Its:
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