AGREEMENT BETWEEN OWNER AND CONTRACTOR



CONTRACT BETWEEN OWNER AND CONTRACTOR

_________(Owner)_________

_______________(Project)_______________

Project ID# ______________

Revision dated 1/10/06

TABLE OF CONTENTS

ARTICLE DESCRIPTION PAGE

1 Contract Documents 2

2 The Work of This Contract 2

3 Relationship of the Parties 2

4 Date of Commencement and Final Acceptance 2

5 Guaranteed Maximum Price 3

6 Cost of the Work 5

6.1 Costs To Be Reimbursed 5

6.1.2 Labor Costs 5

6.1.3 Subcontract Costs 5

6.1.4 Costs of Materials and Equipment Incorporated in the Completed 5

Construction

6.1.5 Costs of Other Materials and Equipment, Temporary Facilities and 5

Related Items

6.1.6 Miscellaneous Costs 6

6.1.7 Other Costs 6

6.1.8 Emergencies 6

6.2 Costs Not To Be Reimbursed 7

7 Changes in the Scope of the Work 7

8 Contractor’s Responsibilities 8

8.1 Consultation 8

8.2 Project Schedule 8

8.3 Phased Construction 8

8.4 Subcontractors and Suppliers 8

8.5 Long-Lead Time Items 9

8.6 Equal Employment Opportunity and Affirmative Action 9

8.7 Project Administration 9

8.8 Coordination of Owner Furnished Materials and Labor 9

8.9 Contractor’s Designated Representative 9

9 Owner’s Responsibilities 10

9.1 Structural and Environmental Tests, Surveys and Reports 10

9.2 Owner’s Designated Representative 10

9.3 Designer 10

10 Discounts, Rebates and Refunds 10

11 Subcontracts and Other Contracts 10

12 Accounting Records 11

13 Progress Payments 11

14 Final Payment 13

15 Miscellaneous Provisions 14

15.1 Dispute Resolution 14

15.2 Other Provisions 14

15.2.2 Extent of Contract 14

15.2.3 Ownership and Use of Documents 14

15.2.4 Governing Law 14

15.2.5 Assignment 14

15.2.6 Interest 14

16 Termination or Suspension 15

CONTRACT BETWEEN OWNER AND CONTRACTOR

Where the basis of payment is the cost of the work plus a fee with a guaranteed maximum price

CONTRACT

Made as of the (day) day of (month) in the year of (year).

Between the Owner: The State of North Carolina through the

_____________Owner_____________

____________Address____________

_______________________________

And the Contractor: ______________Contractor_________

______________Address___________

________________________________

The Project is: ____________Project______________

Project ID# _______________

The Designer is: ___________Designer______________

___________Address______________

________________________________

The Owner and Contractor agree as set forth below.

ARTICLE 1

CONTRACT DOCUMENTS

1. The Contract Documents consist of this Contract, Addenda issued prior to execution of this Contract, other Documents listed in this Contract, Exhibits as described below, the Owners Recommendation for award letter, Project Request for Proposal, Contractor’s Response to the Request for proposal, the Contractor’s Minority Business Participation Goals (HUB) Plan approved by the Owner, the Performance Bond and the Payment Bond with Power of Attorney, Insurance Certificates, Statement of Guaranteed Maximum Price, the approval of the Attorney General and of the Office of State Budget and Management. These form the Contract and are as fully a part of the Contract as if attached to this Contract or repeated herein. The Contract represents the entire and integrated Contract between the parties hereto and supersedes prior negotiations, representations or Contracts, either written or oral. If anything in the other Contract Documents is inconsistent with this Contract, this Contract shall govern.

ARTICLE 2

THE WORK OF THIS CONTRACT

1. The Contractor shall execute the entire Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others.

ARTICLE 3

RELATIONSHIP OF THE PARTIES

1. The Contractor accepts the relationship of trust and confidence established by this Contract and covenants with the Owner and undertakes to act as the Owner’s Fiduciary in all matters related to the Project. The Contractor agrees to cooperate with the Designer and utilize the Contractor’s best skill, efforts and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to make best efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in the best way and most expeditious and economical manner consistent with the interests of the Owner.

ARTICLE 4

DATE OF COMMENCEMENT AND FINAL ACCEPTANCE

1. The date of Work commencement shall be the Notice to Proceed date issued in writing by the Owner, from which the Contract Time of subparagraph 4.2 is measured.

2. The Contractor shall achieve Final Acceptance, as defined by Article 25 of the General Conditions of the entire Work, within _____________ consecutive calendar days from the written Notice to Proceed date subject to adjustments of this Contract Time as provided in the General Conditions.

3. The Contractor shall pay the Owner liquidated damages in the amount of __$______ per day for each day that Final Acceptance of work indicated is delayed beyond the date set forth hereinabove, and with respect to which delay the Contractor has not been granted a time extension as provided in the General Conditions. Should the Designer determine that the Contractor is behind so that, without increasing his rate of performance, the Final Acceptance will be delayed, the Owner shall be entitled to withhold from the next progress payment due the Contractor an amount not exceeding the amount the Owner would be entitled to in liquidated damages. If subsequently the Designer determines that the anticipated delay no longer exists, the Owner shall pay the progress payment next due to the Contractor such amounts as have been withheld in accordance with this paragraph.

ARTICLE 5

GUARANTEED MAXIMUM PRICE

1. The Owner shall pay the Contractor for the Contractor’s performance of the Contract the following:

Cost of the Work (as defined in Art. 6) $ __________

(a) Subcontract packages $ ________

(b) General Conditions Allowance $ ________

Plus Contractor’s Contingency (as define in Art. 5.4) $ _________

Plus Contractor’s Lump Sum Fee $ _________

Which equal Guaranteed Maximum Price $ _________

The Contractor guarantees that the Guaranteed Maximum Price shall not be exceeded, subject to additions, if any, for Changes in the Scope of Work as defined in Art. 7. Costs which would cause the Guaranteed Maximum Price to be exceeded, shall be paid by the Contractor without reimbursement by the Owner. There shall be no increases in the Contractor’s Fee allowed regardless of Changes in Scope of the Work or changes in the Cost of the Work, unless additional funds beyond the original project budget are appropriated to accomplish changes in the Scope of Work. In the event of such additional appropriation, the Contractor’s fee may be adjusted by negotiation and Contract.

2. The Guaranteed Maximum Price is for the performance of the Work in accordance with the Contract Documents listed below and attached to this Contract as marked Exhibits A through G as follows, and which were used by the Contractor to compute the Guaranteed Maximum Price:

Exhibit A: Drawings, Specifications, General, Supplementary and other Conditions of the Contract on which the Guaranteed Maximum Price is based, dated (date).

Exhibit B: Allowance items, dated (date).

Exhibit C: Not Used

Exhibit D: Project schedule, dated (date).

Exhibit E: Alternate prices, dated (date).

Exhibit F: Unit prices, dated (date).

Exhibit G: Addenda to be added to solicitation of trade packages to be issued on or about (date).

3. The Contractor shall provide in the Guaranteed Maximum Price sufficient monies for all construction that is reasonably inferable from the Contract Documents described in Exhibit A and which may be further described through further development of the drawings and specifications by the Designer that is consistent with the Contract Documents and reasonably inferable therefrom. Such further development does not include changes in scope.

4. The Guaranteed Maximum Price shall include the Contractor’s Contingency, a sum established by the Contractor for the Contractor’s exclusive use to cover costs arising out of the assumptions and clarifications (Exhibits B and C) provided by the Contractor to the Owner and Designer, and other costs which are properly reimbursable as Cost of the Work. The Contractor’s contingency shall be used to cover costs arising out of concealed conditions which could not have been reasonably foreseen or anticipated from the reports or other data provided pursuant to Article 9 of this Contract; however, should the Contractor encounter such concealed conditions, the Contractor’s compensation shall be limited to that amount computed per the Unit Prices specified in Exhibit F to this Contract. The Contractor shall not, on account of such concealed conditions, be entitled to any additional payments for any amounts, including without limitation, damages, whether for delay or otherwise. The Contractor shall be entitled to seek an uncompensated extension of time for such concealed conditions pursuant to the terms and conditions of this Contract.

5.5 The cost of the work defined herein shall include any and all efforts made or expense incurred by the Contractor in preparation for performance of this Contract prior to the execution of this Contract.

6. The Owner shall authorize and cause the Designer to revise the drawings and specifications as may be reasonably necessary to reflect the agreed-upon assumptions and clarifications provided by the Contractor to the Owner as a part of its Guaranteed Maximum Price. Such revised drawings and specifications shall be furnished to the Contractor in accordance with schedules agreed to by the Owner, Designer and Contractor. The Contractor shall promptly notify the Designer and Owner if such revised drawings and specifications are inconsistent with the agreed-upon assumptions and clarifications.

7. Execution of this Contract by the Contractor constitutes a Preliminary Guaranteed Maximum Price, established for the purpose of allowing the contractor to proceed with the terms and conditions of the contract including pre-construction services the preparations and coordination of bid packages, scheduling, cost control, value engineering, prequalification and acceptance of bids from first-tier subcontractors for construction work, awarding contracts for the work, and construction administration.

8. Upon completion of the bidding of all subcontract work packages, the Cost of Work shall become the sum total of all subcontract packages as proposed to be awarded to the lowest responsible, responsive bidders plus the original, not to exceed allowance of contractor’s general conditions as defined under Art. 6 plus the actual change in premium cost for Payment and Performance Bonds and Builder’s Risk Insurance. If the Sum of awarded subcontract packages plus the contractor’s general conditions is greater than the Cost of the Work as listed above, the Designer reserves the right to value engineer portions of the project. All value engineering items shall be mutually agreeable between the Contractor, Designer, and the Owner. The Contractor’s construction contingency and fee shall be adjusted using the same percentage of the Cost of Work as approved in the Preliminary Guaranteed Maximum Price. An Amendment to this Contract will be executed incorporating the Final Guaranteed Maximum Price.

ARTICLE 6

COST OF THE WORK

6.1 COSTS TO BE REIMBURSED

6.1.1 The term “Cost of the Work” shall mean costs necessarily incurred by the Contractor in the proper performance of the Work. Such costs shall be at rates not higher than those customarily paid at the place of the Project. The Cost of the Work shall include only the items set forth in this Article 6.

6.1.2 LABOR COSTS

.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner’s Contract, at off-site workshops.

.2 Wages or salaries of the Contractor’s supervisory and administrative personnel when stationed at the site with Owner’s Contract.

.3 Wages and salaries of the Contractor’s supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work.

.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining Contracts, and, for personnel not covered by such Contracts, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided that such costs are based on wages and salaries included in the cost of the Work under paragraphs 6.1.2.1 through 6.1.2.3.

6.1.3 SUBCONTRACT COSTS

Payments made by the Contractor to Subcontractors in accordance with the requirements of the subcontracts.

6.1.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION

.1 Costs, including transportation, of materials and equipment incorporated or to be incorporated in the completed construction.

.2 Costs of materials described in the preceding Clause 6.1.4.1 in excess of those actually installed but required to provide reasonable allowance for waste and spoilage. Unused excess materials, if any, shall be handed over to the Owner at the completion of the Work, or at the Owner’s option, shall be sold by the Contractor; amounts realized, if any, from such sales shall be credited to the Owner as a deduction from the Cost of the Work.

6.1.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS

.1 Costs, including transportation, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site and duly consumed in the performance of the Work; and cost less salvage value on such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value.

.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, installation, minor repairs and replacements, dismantling and removal thereof.

.3 Costs and removal of debris from the site not otherwise included in a demolition subcontract bid package.

.4 Reproduction costs, costs of telegrams, facsimile transmissions and long-distance telephone calls, postage and express delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.

.5 That portion of the reasonable travel and subsistence expenses of the Contractor’s personnel on site incurred while traveling in discharge of duties connected with the Work, and upon the prior written approval of the owner, that portion of the reasonable travel and subsistence expenses of the Contractor’s personnel off site incurred while traveling in discharge of duties connected with the Work.

6.1.6 MISCELLANEOUS COSTS

.1 That portion directly attributable to this Contract of premiums for insurance and bonds.

.2 Sales, use or similar taxes imposed by a governmental authority which are related to the Work and for which the Contractor is liable.

.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay.

.4 Fees of testing laboratories for tests required by the Contract Documents, except those related to nonconforming Work.

.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents.

.6 Costs associated with the accounting services directly attributable to this Project performed at the Contractor’s principal office.

6.1.7 OTHER COSTS

.1 Other costs incurred in the performance of the Work if and to the extent approved in advance in writing by the Owner.

6.1.8 EMERGENCIES

The Cost of the Work shall also include costs described in paragraph 6.1.1 which are incurred by the Contractor in taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property.

6.2 COSTS NOT TO BE REIMBURSED

6.2.1 The Cost of the Work shall not include:

.1 Salaries and other compensation of the Contractor’s personnel stationed at the Contractor’s principal office or offices other than the site office.

.2 Expenses of the Contractor’s principal office and offices other than the site office.

.3 Overhead and general expenses, unless otherwise approved in writing in advance by the Owner.

.4 The Contractor’s capital expenses, including interest on the Contractor’s capital employed for the Work.

.5 Rental costs of machinery and equipment, except as specifically provided in paragraph 6.1.5.2.

.6 Costs due to the negligence of the Contractor or its subcontractors or suppliers or to the failure of the Contractor to fulfill a specific responsibility to the Owner set forth in this Contract.

.7 Costs incurred in the performance of Preconstruction Phase Services, if any.

.8 Except as specifically approved in advance by the Owner, any cost not specifically and expressly described in Paragraph 6.1.

.9 Any and all costs which would cause the Final Guaranteed Maximum Price to be exceeded based on amendment to the contract.

.10 Reproduction costs, costs of telegrams, facsimile transmissions and long-distance telephone calls, postage and express delivery charges, telephone service at the Contractor’s principle office or offices other than the site office.

ARTICLE 7

CHANGES IN THE SCOPE OF THE WORK

7.1 Adjustments to Cost of the Work as set out in Article 5 shall be determined by one of the following methods:

1) When extra work involved is covered by unit prices quoted in the proposals, the value of the change shall be computed by application of unit prices based on quantities, estimated or actual as agreed of the items involved.

2) Negotiation and Contract upon the equitable value of the Cost of the Work.

There shall be no additive adjustments to the Guaranteed Maximum Price for changes other than changes in the Scope of the Work.

7.2 In calculating adjustments to the Guaranteed Maximum Price for Changes in the Scope of the Work, the terms “Cost” and “Costs” shall mean the Cost of the Work as defined in Article 6 of this Contract.

7.4 Changes in the Scope of the Work do not include those changes which are reasonably inferable from the Contract Documents described in Exhibit A and which may be further described through further development of the drawings and specifications by the Designer consistent with the Contract Documents and reasonably inferable therefrom.

ARTICLE 8

CONTRACTOR’S RESONSIBILITIES

8.1 CONSULTATION

The Contractor with the Designer shall jointly schedule and attend regular meetings with the Owner. The Contractor shall consult with the Designer regarding site use and improvements, and the selection of materials, building systems and equipment. The Contractor shall provide recommendations on construction feasibility; actions designed to minimize adverse procurement, installation and construction completion; and factors related to construction cost including estimates of alternative designs or materials, preliminary budgets and possible economies.

8.2 PROJECT SCHEDULE

Within fifteen (15) days after execution of this Contract and prior to the submittal of the first application for payment the Contractor shall prepare a Project Schedule in accordance with the Contract Documents for the Designer’s review. The Project Schedule shall indicate the date of Final Acceptance as (date). The Contractor shall obtain the Designer’s approval of the portion of the Project Schedule relating to the performance of the Designer’s services. The Contractor shall coordinate and integrate the Project Schedule with the services and activities of the Owner, Designer and Contractor. As construction proceeds the Project Schedule shall be updated monthly to indicate proposed activity sequences and durations, milestone dates for receipt and approval of pertinent information, preparation and processing of shop drawings and samples, delivery of materials or equipment requiring long-lead time procurement, Owner’s occupancy requirements showing portions of the Project having occupancy priority, and the date of Final Acceptance ( (date) ). If Project Schedule updates indicate that previously approved schedules may not be met, the Contractor shall make appropriate recommendations to the Owner and Designer consistent with maintaining the Final Acceptance date of (date).

8.3 PHASED CONSTRUCTION

The Contractor shall make recommendations to the Designer regarding the phased issuance of drawings and specifications to facilitate phased construction of the Work, if such phased construction is appropriate for the Project, taking into consideration such factors as economies, time of performance, availability of labor and materials, and provisions for temporary facilities.

8.4 SUBCONTRACTORS AND SUPPLIERS

The Contractor shall seek to develop subcontractor interest in the Project and shall furnish to the Owner and Designer for their information a list of possible subcontractors, including suppliers who are to furnish materials or equipment fabricated to a special design, from whom proposals will be requested for each principal portion of the Work. The Designer will reply in writing within ten (10) days of receipt of the list to the Contractor if the Designer or Owner knows of any objection to such subcontractor or supplier. The receipt of such list shall not require the Owner or Designer to investigate the qualifications of proposed subcontractors or suppliers. If the Designer or Owner objects to any subcontractor or supplier so identified, the Contractor shall furnish a substitute to the Owner and Designer for approval. The Contractor shall prepare a detailed plan to solicit minority participation in the Project by subcontractors, material suppliers, and subcontractors’ subcontractors and material suppliers for review and approval by the Owner. Based on this plan, the Contractor shall actively solicit minority subcontractors and material suppliers from whom proposals will be requested for portions of the Work. The Contractor shall meet the requirements of N.C. Gen Stat. Chpt. 143 and Article 49 of the General Conditions for minority participation in the Project.

8.5 LONG-LEAD TIME ITEMS

The Contractor shall identify, and recommend to the Owner and Designer a schedule for, procurement of long-lead time items which will constitute part of the Work as required to meet the Project Schedule. The Contractor shall expedite the delivery of long-lead time items.

6. EQUAL EMPLOYMENT OPPORTUNITY AND AFFIRMATIVE ACTION

The Contractor shall comply with applicable laws, regulations and special requirements of the Contract Documents regarding equal employment opportunity and affirmative actions programs.

7. PROJECT ADMINISTRATION

1. The Contractor shall provide monthly written reports to the Owner and Designer on the progress of the entire Work. The Contractor shall maintain a daily log containing a record of weather, subcontractors working on the site, number of workers, Work accomplished, problems encountered, and other similar relevant data as the Owner may reasonably require. The log shall be submitted to the Owner and Designer on a monthly basis.

2. The Contractor shall develop a system of cost control for the Work, including regular monitoring of actual costs for activities in progress and estimates for uncompleted tasks and proposed changes. At the Designer’s request, the Contractor shall identify variances between actual and estimated costs within thirty (30) days and report the variances to the Designer. The Contractor will be required to allow the Owner and Designer direct computer access to the financial and schedule records for the Project and shall assist the Owner and Designer with completing the computer connections and shall train the Owner’s and Designer’s personnel to operate the system and shall assist in the operation of the system.

8. COORDINATION OF OWNER FURNISHED MATERIALS AND LABOR

1. The Contractor shall store and install any material and equipment supplied by the Owner and coordinate the installation with the Project Schedule.

8.8.2 Without invalidating the terms of the Contract, the Owner reserves the right to let other contracts in connection with the Project, the work under which shall proceed simultaneously with the execution of the contractor’s work. The Contractor shall afford other separate contractors reasonable opportunity for the introduction and storage of their materials and the execution of their work. The Contractor shall coordinate the work of other separate contractor with the work under his contract.

9. CONTRACTOR’S DESIGNATED REPRESENTATIVE

In addition to the requirements in the General Conditions, the Contractor shall designate in writing representatives who shall be on the Project at all times during its progress and who shall have express authority to bind the Contractor with respect to all matters requiring the Contractor’s approval or authorization. The representatives shall have the authority to make decisions on behalf of the Contractor concerning estimates and schedules, construction budgets, and changes in the Work, and shall render such decisions promptly and furnish information expeditiously so as to avoid delay in the Work.

ARTICLE 9

OWNER’S RESPONSIBILITIES

1. STRUCTURAL AND ENVIRONMENTAL TESTS, SURVEYS AND REPORTS

The Owner shall furnish the following with reasonable promptness at the Owner’s expense:

1. The services of geotechnical engineers.

2. Structural, mechanical, chemical, air and water pollution tests, tests for hazardous materials, and other laboratory and environmental tests, inspections and reports which are required by law.

2. OWNER’S DESIGNATED REPRESENTATIVE

The Owner shall designate in writing an individual who shall receive and process any communications required by the Contract Documents.

3. DESIGNER

The Owner has retained a Designer to provide professional design services required for the Project. Such services shall be provided in accordance with the Contract Between Owner and Designer. Upon request of the Contractor, the Owner shall furnish to the Contractor a copy of the said Contract.

ARTICLE 10

DISCOUNTS, REBATES AND REFUNDS

1. Cash discounts obtained on payments made by the Contractor shall accrue to the Owner. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.

10.2 Amounts which accrue to the Owner in accordance with the provisions of Paragraph 10.1 shall be credited to the Owner as a deduction from the Cost of the Work.

ARTICLE 11

SUBCONTRACTS AND OTHER CONTRACTS

1. The Contractor shall contract directly with the Owner for all construction; shall publicly advertise as prescribed in N.C. Gen Stat. Sec. 143-129; and shall prequalify and accept bids from first-tier subcontractors for all construction work.

2. The prequalification criteria shall be determined by the Owner and Contractor in accordance with N.C. Gen Stat. Sec. 143-128.1 (c).

11.3 The Contractor shall submit its plan for compliance with N.C. Gen. Stat. Sec. 143-128.2 for approval by the Owner prior to soliciting bids for the projects first-tier subcontractors. The Contractor and first-tier subcontractors shall make a good faith effort to recruit and select minority businesses for participation in contracts pursuant to the N.C. Gen. Stat. Sec. 143-128.2.

4. The Contractor may perform a portion of the work only if (i) bidding produces no responsible, responsive bidder for that portion of the work, the lowest responsible, responsive bidder will not execute a contract for the bid portions of the work, or the subcontractor defaults and a prequalified replacement cannot be obtained in a timely manner, and (ii) the Owner approves of the Contractor’s performance of the work.

11.5 No subcontract awarded under Gen. Stat. Sec. 143-128.1 (c) shall be entered into by the Contractor unless the Contractor has first sought at least three qualified subcontractors to quote for the subcontract involved. Such bids as are received by the contractors shall be sealed and opened with a representative of the Owner and/or the Designer present. All bids shall be opened publicly, and once they are opened, shall be public records under Chapter 132 of the General Statutes.

11.6 The Contractor shall award the contract to the lowest responsible, responsive bidder in accordance with the provisions of Gen. Stat. Sec. 143-128.1 (c).

11.7 The Owner shall have the right to require such clarifications as it deems necessary from any subcontractor prior to the award of any sub-contract. The Owner may require the selection of a different first-tier subcontractor for any portion of the work, provided that the Contractor is compensated for any additional cost incurred.

ARTICLE 12

ACCOUNTING RECORDS

1. The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract in accordance with generally accepted accounting principles; the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner’s accountants shall be afforded access upon reasonable notice to the Contractor’s records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law. Owner shall have the right at any time to conduct or have conducted a complete audit of the Contractor’s records relating to the Work.

ARTICLE 13

PROGRESS PAYMENTS

1. Based upon applications for payment submitted to the Designer by the Contractor and certificates for payment issued by the Designer, the Owner shall make progress payments on account of the Contract sum to the Contractor as provided below and elsewhere in the Contract Documents.

2. The period covered by each application for payment shall be one calendar month ending on the last day of the month or as follows:

3. Provided an application for payment is received by the Designer not later than the 25th day of the month, the Owner shall make payment to the Contractor not later than the last day of the following month. If an application for payment is received by the Designer after the application date fixed above, payment shall be made by the Owner not later than thirty days after the Designer receives the Application for payment.

4. With each application for payment, for work performed directly by the Contractor and such other subcontractors and suppliers as the Owner may specify, the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Designer to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor less (2) that portion of those payments attributable to the Contractor’s Fee; plus (3) payrolls for the period covered by the present application for payment.

5. Each application for payment shall be based upon the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire guaranteed maximum price among the various portions of the Work, except that the Contractor’s Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Designer may require. This schedule, unless objected to the Designer, shall be used as a basis for reviewing the Contractor’s applications for payment.

6. Applications for payment shall show the percentage completion of each portion of the Work as of the end of the period covered by Application for Payment. The percentage completion shall be the percentage of that portion of the Work which has actually been completed.

7. Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.

.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work, or if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing.

.3 Add the Contractor’s Fee; the Contractor’s Fee shall be an amount which bears the same ratio to that fixed-sum fee as the total payment described in the two preceding clauses bears to the Cost of the Work as defined in the Contract Documents.

.4 Subtract the aggregate of previous payments made by the Owner.

.5 Subtract the amount, if any, by which the Contractor has been previously overpaid, as evidenced by the Owner’s review of the Contractor’s documentation required by Art. 13.4 or by any audit of the Contractor’s records as provided in Art. 12.1.

.6 Subtract amounts, if any, for which the designer has withheld or nullified a certificate for payment.

.7 Subtract retainage as per paragraph 13.8.

8. Except with the Owner’s prior approval, payments shall be subject to retention of five percent (5%). Whenever any item of work indicated on the Contractor’s Schedule of Values is completed on or before a target date mutually agreed upon by the Owner, Designer and the Contractor, and the Work is agreed to be completed by the Designer and the Owner, the Owner may reduce the amount of retainage on that item by fifty percent (50%) for the remainder of the Project; provided that upon the satisfaction of these criteria, and at its sole discretion, the Owner may choose to reduce the amount of retainage on any item of work so completed up to one hundred percent (100%) for the remainder of the Project.

9. Except with the Owner’s prior approval, the Contractor shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site.

10. The Designer shall take action on the Contractor’s Application for Payment in accordance with the Contract Between Owner and Designer. The Designer’s Certification for Payment shall be based upon the Designer’s on-site observation and the documentation submitted in accordance with paragraph 13.4 and the Contractor’s Application for Payment.

ARTICLE 14

FINAL PAYMENT

1. Final payment shall be made by the Owner to the Contractor pursuant to Articles 32 and 33 of the General Conditions.

2. The amount of the final payment shall be calculated as follows:

.1 Take the sum of the Cost of the Work substantiated by the Contractor’s final accounting and the Contractor’s Fee; but not more than the Guaranteed Maximum Price.

.2 Subtract amounts, if any, for which the Designer withholds, in whole or in part, a final Certificate for Payment as provided in the General Conditions of the Contract or other provisions of the Contract Documents.

.3 Subtract the aggregate of the previous payments made by the Owner.

If the aggregate of previous payments made by the Owner exceeds the amount due the Contractor, the Contractor shall reimburse the difference to the Owner.

3. The Owner’s accountants will review and report in writing on the Contractor’s final accounting within thirty (30) days after delivery of the final accounting to the Designer by the Contractor. Based upon such Cost of the Work as the Owner’s accountants report to be substantiated by the Contractor’s final accounting, and provided the other conditions of paragraph 14.1 have been met, the Designer will, within seven days after receipt of the written report of the Owner’s accountants, either issue to the Owner a final certificate for Payment with a copy to the Contractor, or notify the Contractor and Owner in writing of the Designer’s reasons for withholding a certificate as provided in the General Conditions of the Contract.

4. If the Owner’s accountants report the Cost of the Work as substantiated by the Contractor’s final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to proceed in accordance with paragraph 15.1 without a further decision of the Designer. Unless agreed to otherwise, a demand for resolution of the disputed amount shall be made by the Contractor within sixty days after the Contractor’s receipt of a copy of the Designer’s final Certificate of Payment. Failure to make such demand within this sixty day period shall result in the substantiated amount reported by the Owner’s accountants becoming binding on the Contractor. Pending a final resolution of the disputed amount, the Owner shall pay the Contractor the amount certified in the Designer’s final Certificate of Payment.

ARTICLE 15

MISCELLANEOUS PROVISIONS

15.1 DISPUTE RESOLUTION

15.1.1 Controversies arising from this Contract shall be resolved as provided in the N.C. Gen. Stat. Sec. 143-135.3 and the General Conditions.

15.2 OTHER PROVISIONS

15.2.1 Unless otherwise noted, the terms used in this Contract shall have the same meaning as those in the General Conditions of the Contract.

15.2.2 EXTENT OF CONTRACT

This Contract, which includes this Contract and the other documents incorporated herein by reference, represents the entire and integrated Contract between the Owner and Contractor and supersedes all prior negotiations, representations or Contracts, either written or oral. This Contract may be amended only by written instrument signed by both the Owner and Contractor. If anything in any document incorporated into this Contract is inconsistent with this Contract, this Contract shall govern.

3. OWNERSHIP AND USE OF DOCUMENTS

The Drawings, Specifications and other documents prepared by the Designer, and copies thereof furnished to the Contractor, are for use solely with respect to this Project. They are not to be used by the Contractor, Subcontractor, Subsubcontractors or suppliers on other projects, or for additions to this Project outside the scope of the Work, without the specific written consent of the Owner and Designer. The Contractor, Subcontractors, Subsubcontractors and suppliers are granted a limited license to use and reproduce applicable portions of the Drawings, Specifications and other documents prepared by the Designer appropriate to and for use in the execution of their Work under the Contract Documents.

4. GOVERNING LAW

The Contract shall be governed by the law of the State of North Carolina.

5. ASSIGNMENT

The Owner and Contractor respectively bind themselves, their partners, successors, assigns and legal representatives to the other party hereto and to partners, successors, assigns and legal representatives of such other party in respect to covenants, Contracts and obligations contained in the Contract Documents. Neither party to the Contract shall assign the Contract as a whole without written consent of the other. If either party attempts to make such an assignment without such consent, that party shall nevertheless remain legally responsible for all obligations under the Contract.

6. INTEREST

Payments due and unpaid under the Contract shall bear interest from the date payment is due in accordance with N.C. Gen. Stat. Sec. 143-134.1.

ARTICLE 16

TERMINATION OR SUSPENSION

16.1 The Contract may be terminated or suspended as provided in Articles 29 and 30 of the General Conditions, except that any interest on final payment to the Contractor shall be calculated in accordance with N.C. Gen. Stat. Sec. 143-134.1.

16.2 The Owner may also terminate this Contract upon ten (10) calendar days' written notice (hand-delivered or sent by certified mail, return receipt requested) should the Final GMP exceed the funds budgeted for the GMP. Without prejudice to the Owner’s right to terminate as set forth in the previous sentence, the Owner may in its discretion, allow additional time, but no more than thirty (30) calendar days for the Contractor to attempt to bring the Final GMP within fund budgeted for the GMP. In event of termination, the Contractor shall receive payment for services rendered prior to the receipt of written termination notice from the Owner.

IN WITNESS WHEREOF, the Owner and Contractor have executed this Contract on the day and date first above written in seven (7) counterparts, each of which shall without proof or accounting for other counterparts, be deemed an original contract.

Witness: __________________________________

Contractor

___________________________________ By:___________________________________

Attest: Title:_________________________________

By:________________________________

Title:_______________________________

(CORPORATE SEAL)

Witness: The State of North Carolina through the

____________Owner________________

________________________________ By:_______________________________

Title:_________________________________

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