THIS ADDENDUM MUST BE ACKNOWLEDGED. THIS ADDENDUM SHALL BECOME A PART OF THIS SOLICITATION. Amend Invitation to Bid 14-BS-EQC as follows:

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1 Denver Public Schools Purchasing Department 1617 S. Acoma St. Denver, Colorado INVITATION TO BID 14-BS-EQC ADDENDUM NUMBER ONE May 2, 2014 THIS ADDENDUM MUST BE ACKNOWLEDGED. THIS ADDENDUM SHALL BECOME A PART OF THIS SOLICITATION. Amend Invitation to Bid 14-BS-EQC as follows: See attached draft design build agreement. If your proposal has been submitted and you wish to amend it, please modify your proposal on company letterhead. The amended proposal must be received prior to or included at the time and date set for the proposal opening. Each modification submitted to the District's Purchasing Office located at 1617 S. Acoma St. Denver, CO It must have Vendor s name and return address and the applicable RFP number and title of the RFP clearly marked on the face of the envelope. If more than one modification is submitted, the modification bearing the latest date of receipt by the District's Strategic Sourcing Office will be considered the valid modification. *****This addendum must be acknowledged, whether or not you amend your proposal.***** This Addendum must be included in your submittal or proposal, providing you do not need to amend your proposal. PRINT OR TYPE YOUR INFORMATION Name of Company: Fax: Address: City/State: Zip: Contact Person: Title: Phone: Authorized Representative s Signature: Phone: Printed Name: Title: Date: 14-BS-EQC Addendum # 1 Approved by: Reviewed by: Date: Date:

2 DESIGN-BUILD AGREEMENT This DESIGN-BUILD AGREEMENT (this Agreement ) is entered into this day of, 20, by and between School District No. 1 in the City and County of Denver and State of Colorado (the Owner or District or DPS ) and [full legal name], a [state of formation and type of entity, e.g., Colorado corporation, Colorado limited liability company, etc.] ( Design Builder ). In consideration of the covenants and agreements contained in this Agreement, the sufficiency of which is hereby acknowledged by Design Builder and Owner, Design Builder and Owner hereby promise and agree as follows: Article 1. PROJECT SUMMARY The Project consists of the design and construction of a new Denver Public Schools facility. Design Builder will oversee and manage the construction of the new High School facility, to be located on undeveloped land near 48th & Tower, Denver, Colorado, and which shall be referenced as the East Quad Campus. The new High School will educate between 500 to 1,000 students, and will include facilities required in the District s Education Standards, including a gymnasium, Administrative space, kitchen, commons area, performance space, library and classrooms. Design Builder will also be required to develop a Master Plan that will enable the District to build additional capacity on the campus to meet future demands. The District has retained an engineer to design the civil infrastructure leading to the campus, including designing the roads and utilities that will access and supply the property ( Off-Site Design Work ). Design Builder will be required to coordinate with the engineer and integrate the Off-Site Design Work with the Design Builder s work on the Project and the construction of the Off-Site Design Work. Article 2. COMMENCEMENT DATE. The Design Builder shall commence upon the date specified in a Notice to Proceed issued by Owner ( Commencement Date ). Time limits stated in the Contract Documents are of the essence of this Agreement. The Design Builder shall be responsible for the Project dates as set forth in the Construction Documents and shall comply in all regards with the Project s Planning, Scheduling Specifications Milestone Schedule and other schedules approved by Owner under this Agreement, subject to Excused Delay and adjustment in accordance with this Agreement. Article 3. CONTRACT DOCUMENTS The Contract is this Agreement and the following documents (hereafter, collectively, referred to as the Design-Build Agreement or Agreement ): 3.1 The Request for Proposal, including all responses, addenda, enclosures and official interpretations; and 3.2 The District s Educational Specifications (see DPS website: and 3.3 Design and Construction Standards (see DPS website: and 3.4 Any other documents mentioned in this Agreement, which are incorporated by this reference All exhibits, schedules and attachments, any amendments thereto, all design and construction documents prepared and approved in accordance with this Agreement whether in existence at the time this Agreement is entered into or whether developed after the execution thereof and any

3 Change Orders. It is the intent of the Owner and Design Builder that the Contract Documents include all items necessary for proper execution and completion of the Work. 3.6 Contract Documents are complementary, and what is required by one shall be as binding as if required by all; performance by Design Builder shall be required only to the extent consistent with and reasonably inferable from the Contract Documents as being necessary to produce the intended results. Words that have well-known technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings, unless otherwise defined herein. In the event of inconsistencies in requirements between different parts of the Contract Documents, unless Owner otherwise agrees in writing, Design Builder shall provide the better quality or greater quantity, as specified by Owner. In the event of any irreconcilable difference between different provisions of the Contract Documents, the provision or requirement set forth in the Contract Document first appearing in the list above shall control. 3.7 This Contract constitutes the entire and integrated Contract between Owner and Design Builder, and except as referenced herein, supersedes all prior negotiations, representations or agreements, written or oral. Article 4. DESIGN BUILDER S GENERAL RESPONSIBILITIES. 4.1 Design Builder shall perform all services specifically allocated to it by the Contract Documents as well as those services reasonably inferable from the Contract Documents as necessary for the design, approval, construction and completion of and the Project (the Work ). Design Builder agrees to perform these services usingthe degree of care and skill that is customarily employed by professional design builders performing work on similar projects in the Denver, Colorado metropolitan area and in accordance with the Owner s Standards and applicable Educational Specifications. 4.2 Design Builder and the Design Consultant, to further the interests of the Owner and the Project, shall furnish, develop, coordinate, oversee, and manage the preparation of the design and construction drawings and specifications necessary to perform all of the Work to complete the Project in accordance with this Agreement. 4.3 Personnel. Design Builder shall designate a representative authorized to act on the Design Builder s behalf with respect to the Project and identify to the Owner the employees and other personnel that it will assign to the Project and provide the salary rate for each of them. Design Builder shall also identify any consultants that will be performing services for the Project (collectively, Project Team ). After execution of this Agreement by the Owner, Design Builder shall not remove or replace the persons or entities assigned to the Project except with the Owner s written consent, which consent shall not be unreasonably withheld. Design Builder shall not assign to the Project or contract with any person or entity to which Owner has a reasonable objection. Design Builder shall promptly update the list of persons and consultants if they change during the course of the Project. 4.4 Communications. Design Builder shall establish procedures for communication and coordination among the Project Team, Subcontractors, separate contractors, and others with respect to all aspects of the construction of the Project, and implement such procedures. Article 5. Article 6. OWNER RESPONSIBILITIES DEFINITIONS AND INTERPRETATION 6.1 Agreement. This Design-Build Agreement. 6.2 ADA. The Americans with Disabilities Act of 1990, as amended. 6.3 Dispute Resolution. A dispute subject to the resolution process described in Exhibit G. -2-

4 6.4 As Built Documents. Complete as-built plans and specifications for the Project, including (i) a set of original drawings, printed on mylar, and corresponding CAD files, delivered in Autodesk DWG file format and designed and formatted in accordance with the United States National CAD Standard published by the National Institute of Building Sciences (in the edition current as of the execution of this Agreement), showing the condition of the Project and the completed Work, and (ii) as-built specifications for the Work in electronic format (Microsoft Word or another format approved in writing by Owner), clearly identifying which specified alternate products were utilized in the Work, concatenated into specification divisions so that Design Builder s submittal includes only one electronic document for each division. 6.5 Colorado Labor. Colorado Labor means any person who is a resident of the State of Colorado at the time of employment, selected without discrimination as to race, color, creed, sex, age, or religion, except when sex or age is a bona fide occupational qualification; provided that if C.R.S is revised to provide a different definition of the term Colorado Labor, such term shall have the meaning provided in C.R.S Consistent Development. Production Materials that are consistent with, logically inferable from, and a logical extension and development of the Production Materials approved in the previous Design Phase (including any comments submitted by Owner with respect thereto which Owner may elect not to require Design Builder to incorporate into revised Production Materials for the previous Design Phase) and shall preserve, develop, and satisfy the requirements of the Standards, any applicable Educational Specifications, and the aesthetic intent of the Program and the Production Materials approved in the previous Design Phase. 6.8 Construction Documents. Defined in Exhibit A. 6.9 Construction Work. The portion of the Work comprised of the physical construction of the Project, including supervision and administration thereof CPM Schedule. The Critical Path Method of construction scheduling, as described in CPM in Construction A Manual for General Contractors, published by The Associated General Contractors of America, Inc Current Laws. The applicable laws and regulations in effect from time to time on and after the date of this Agreement, including building codes, dimensional aspects of zoning regulations, safety regulations, ADA requirements, and similar laws and regulations applicable to the Project, and environmental laws, as the same have been officially interpreted by published decisions of courts, published regulations, and other official published interpretations which have the force of law Design Consultant. Architects, space planners, engineers, estimators, and other personnel engaged by Design Builder as Subcontractors to perform part of the Work Design Builder. The party entering into this Agreement directly with Owner Design Builder s Accounting Report. A final accounting of the Cost of Work, with such detailed backup as Owner may specify in its reasonable discretion, prepared by Design Builder Design Builder Fee. Defined in Exhibit A Design Development Documents. Defined in Exhibit B Design Fee. Defined in Exhibit A Design Phase. Each of the phases of design described in Exhibit B. -3-

5 6.19 Design Work. The parts of the Work to be performed during the Design Phases, as further set forth on Exhibit B Educational Specifications. The specifications on Owner s Website as of the date of this Agreement containing design requirements for the Project Final Completion. Finally Complete and Finally Completed shall have the correlative meanings General Condition Costs. Defined in Exhibit A Milestone Schedule. The schedule for the design and construction of the Project set forth in Exhibit A Owner. School District No. 1 in the City and County of Denver and State of Colorado Owner Parties. Owner, its directors, officers, agents and employees, the members of its Board of Education, and such other parties as may be identified in Exhibit A Owner s Project Manager. The individual employee or agent of Owner designated by Owner from time to time as Owner s primary representative in connection with the Project Owner s Report. A report specifying any disagreements the Owner has with the amounts set forth in Design Builder s Accounting Report in sufficient detail to identify the reasons for such disagreement Owner s Website. Owner s Internet World Wide Web page at and its subsidiary pages Preliminary Budget. A preliminary budget showing the estimated costs throughout the Design and Construction phases of the Project (including a breakdown of the design and engineering expense and a preliminary break down of the construction cost) at a total cost not to exceed the Guaranteed Maximum Price Punch List. A punch list prepared by Design Builder and Owner at the time of Substantial Completion, listing items of Work to be completed in order to bring the Work to Final Completion Required Substantial Completion Date. The date specified as the Required Substantial Completion Date in the Milestone Schedule Required Final Completion Date. The date specified as the Required Final Completion Date in the Milestone Schedule Self-Work. Any of the types of Work described on Exhibit E and any other part of the Work as to which Owner consents in writing to performance by Design Builder as Self-Work (which consent shall not unreasonably be withheld) to the extent that such work is actually directly performed by Design Builder and is not performed through a Subcontractor Site. The property of Owner where the Project is to be constructed (or a portion of such property reasonably designated by Owner), whether one or more parcels Standards. The Denver Public Schools Design and Construction Standards in effect and posted on Owner s Website on the date of this Agreement, unless Design Builder and Owner agree to use a different version Subcontractor. Any contractor who has contracted directly with Design Builder for the performance of part of the Work. -4-

6 6.37 Submission. Each set of Production Materials to be submitted to Owner by Design Builder during each Design Phase Substantial Completion. Substantially Complete and Substantially Completed shall have the correlative meanings Sub-subcontractor, Any contractor, who has not contracted directly with Design Builder but has contracted directly with or indirectly with a Subcontractor for the performance of part of the Work Supplier. Any materialman, or supplier of materials or equipment, who has contracted directly or indirectly with Design Builder to provide materials and supplies for the Work Production Materials. All documents, materials, and things, including plans and other drawings, specifications, reports, assessments and models, created or prepared by Design Builder (including any Design Consultants of Design Builder) under this Agreement Interpretation Including shall, unless otherwise specifically stated, mean including, but not limited to Words such as hereby, herein, and hereunder and words of similar import shall be construed to refer to this Agreement in its entirety Where otherwise consistent with the context, the singular shall include the plural and the plural shall include the singular The titles of articles and sections used in this Agreement are primarily for the convenience of the reader but may be used as aids in interpreting any provision herein. If any of the provisions of the exhibits attached hereto or of any of the Contract Documents are inconsistent with the provisions of this Agreement, the provisions of this Agreement shall be controlling Any references to days in any Contract Documents refer to calendar days. Any references in this Agreement, any Contract Documents, or any communications between Owner and Design Builder to business days refer to days when Owner s administrative offices are open for the regular conduct of business. Any such references to the school year refer to the period from August to late May or early June when Owner s school facilities are in regular session, as determined by the official calendar of Denver Public Schools. Any such references to summer refer to the period between the end of one school year in late May or early June and the commencement of the next school year in August. Article 7. CONTRACT PRICE The total amount which Owner shall pay compensate Design Builder for the Work to be performed by Design Builder hereunder (the Contract Price ) equal to the actual cost of the Work ( Cost of Work ) plus the Design Builder Fee. The Contract Price shall not exceed the Guaranteed Maximum Price,, subject to adjustment for Additional Services or Change Orders. Any costs that exceed the Contract Price shall be borne solely by Design/Build Contractor without reimbursement by Owner. The Cost of Work is as follows: Direct Construction Costs means the sum of the amounts that the Design Builder actually and necessarily incurs for General Conditions Costs, Cost of the Work and Design Builder s Contingency during the Construction Phase as allowed by this Agreement Indirect Construction Costs means the fees and reimbursable expenses of Design Consultants for preparation of Production Materials and other amounts payable by -5-

7 Design Builder to third parties for design and development of the Project related to the Work in accordance with Exhibit C-1 and amounts payable to governmental authorities for which Design Builder is liable. Design Builder shall provide Owner with copies of all contracts Design Builder enters into with Design Consultants or other third parties for services included in Indirect Construction Costs. Be careful here listing items because if you have forgotten something the DB will find it General Condition Costs as provided in Exhibit A Reimbursable Expenses as provided in Exhibit C The Design Builder Fee. The Design Builder Fee as provided in Exhibit A. 7.2 Cost Savings. Notwithstanding the amount of the Contract Price, all savings, rebates, refunds and discounts obtained by Design Builder shall accrue to Owner to the extent they apply to Costs of Work payable by Owner (whether paid directly or reimbursed to Design Builder) ( Cost Savings ). To the extent that Savings apply to costs paid by Design Builder without reimbursement, such discounts shall accrue to Design Builder. All trade discounts, rebates and refunds, and all returns from sale of surplus or salvage materials and equipment, shall accrue to the benefit of Owner, and the Design Builder s agreements with Subcontractors and Suppliers shall provide that all Savings be passed through to Owner by Design Builder or by payment directly to Owner. Article 8. DETERMINATION OF THE GUARANTEED MAXIMUM PRICE -6-

8 8.1 Design Builder shall prepare and provide a written Program and budget which shall indicate the initial estimate of the total cost to design and construct the Project ( Initial Cost Estimate ) in accordance with the Exhibit B attached hereto and incorporated herein by reference at the required stages of completion of the schematic design, design development, and construction document stages of the Project ( Design Work ). The Design Builder shall review and understand the standards and requirements in and Owner s Educational Specifications and Standards and perform all services in accordance with those standards and requirements. The Initial Cost Estimate shall be prepared by qualified professionals, cost estimators or contractors retained by and acting in the interest of Design Builder. Each stage of the Design Work shall address the overall coordination of the Project, the Owner s Standards, and identify in the documents details and discrepancies that may generate Change Orders or claims once Project construction commences. The Design Work documents shall be detailed estimates derived from cost quantity surveys based on unit prices for labor, materials, overhead and profit for each stage of the Project. 8.2 Initial Cost Estimate After the preparation and completion of the Schematic Design documents, Design Builder shall deliver to Owner an estimate of the total cost to design and construct the Work, including the estimated Cost of Work and all Design Builder Fees, Indirect Construction Costs, and all other costs which have been or are expected to be incurred in completing the Work based on the Schematic Design documents. Owner will have, at a minimum, twenty-one calendar days from receipt of the same to provide comments and modify the Initial Cost Estimate and Schematic Design Documents Owner, at Owner s option, may either (i) provide written approval of the Initial Cost Estimate and/or the Schematic Design documents, which will become the basis for a preliminary Guaranteed Maximum Price, or (ii) reject all or any portion of either the Initial Cost Estimate or Schematic Design documents or both, as applicable; (iii) or at Owner s discretion, revise all or any portion of either or both the Initial Cost Estimate and Schematic Design documents If Owner reduces, modifies or revises the Schematic Design documents so as to reduce the Initial Cost Estimate, Design Builder shall cooperate and consult with Owner and shall direct its Design Consultants to cooperate and consult with Owner to revise, modify or eliminate the portions of the Cost of Work as deemed reasonable and appropriate to achieve the Owner s desired effect. Accordingly, Design Builder shall make changes to the Schematic Design documents consistent with Owner s revisions and modifications. Thereafter, Design Builder will re-submit the revised Schematic Design documents, together with any revisions of the Initial Cost Estimate, to Owner, who will have fourteen calendar days to review them. This process shall be repeated until Owner has approved the revised Schematic Design Documents, and Initial Cost Estimate The Initial Cost Estimate and Schematic Design Documents, as revised and as approved by Owner, shall be used as the baseline for Consistent Development of the Construction Contract Documents. 8.3 Second Cost Estimate Upon the completion of Design Development documents, Design Builder shall submit a Second Cost Estimate. Design Builder s Second Cost Estimate shall provide a revised estimate of the Cost of Work and all Design Builder Fees, Indirect Construction Costs, and all other costs which have been or are expected to be incurred in completing the Work as described and set forth in the Design Development documents, which may include the Construction Work bids of Subcontractors and Suppliers. Owner will have, at a minimum, thirty or twenty-one days from receipt of the same to provide comments and modify the Second Cost Estimate and Design Development documents. -7-

9 8.3.2 Owner, at Owner s option, may either (i) provide written approval of the Second Cost Estimate and/or the Design Development documents, in which event the preliminary Guaranteed Maximum Price shall be adjusted to equal the amount of the Second Cost Estimate; or (ii) reject all or any portion of either the Second Cost Estimate and/or Design Development documents or both, as applicable; or (iii) at Owner s discretion, elect to revise all or any portion of either or both the Second Cost Estimate and Design Development documents If Owner reduces, modifies or revises the Design Development documents so as to reduce the Second Cost Estimate, Design Builder shall cooperate and consult with Owner and shall direct Design Consultant to cooperate and consult with Owner to successfully revise, modify or eliminate the portions of the Cost of Work as deemed reasonable and appropriate to achieve the Owner s desired effect. Accordingly, Design Builder shall make changes to the Design Development documents consistent with Owner s revisions and modifications. Thereafter, Design Builder will re-submit the revised Design Development documents, together with any revisions of the Second Cost Estimate, to Owner, who will have fourteen calendar days to review them. This process shall be repeated until Owner has approved the revised Design Development Documents, and Second Cost Estimate. When the Second Cost Estimate and Design Development Documents are complete, to the extent the Second Cost Estimate and Design Development documents have been prepared, submitted and approved by Owner, the Development Design documents shall be designated the final Design Work. 8.4 Guaranteed Maximum Price When the Parties agree that the Design Work of the Project is sufficiently developed and documented to allow detailed pricing of its construction, Design/Builder shall prepare and submit a proposed Guaranteed Maximum Price ( GMP ) to Owner. The proposed GMP must be prepared in accordance with the guidelines specified in the attached Exhibit B. Design/Builder s Proposed Guaranteed Maximum Price shall be valid for ninety (90) days following submission to the Owner The Proposed GMP must include a written description of how it was derived that specifically identifies the clarifications and assumptions made by the Design Builder in the GMP and the monetary amounts attributable to them. The Proposed GMP shall include, without limitation, a breakdown of Design Builder s estimated General Conditions Costs and best estimated Costs of the Work organized by trade; contingency amounts, if any; all Fees; and the proposed Commencement Time from the Notice to Proceed, up to and including Substantial Completion and Final Completion dates The Guaranteed Maximum Price Proposal shall allow for all changes and refinements in the Drawings and Specifications through completion of the Construction Documents, except for material changes in scope by Owner The Proposed GMP may include a Design Builder s Contingency amount as an allowed Direct Construction Cost The Proposed GMP and all supporting documents shall identify and describe all items, assumptions, costs, contingencies, schedules and other matters necessary and relevant for proper execution and completion of the Work and for establishment of the Guaranteed Maximum Price. The Proposed GMP and the supporting documents are complementary and, in the event of an irreconcilable conflict between or among them, the interpretation that provides for the higher quality of material and/or workmanship shall prevail over all other interpretations In submitting the Proposed GMP, the Design Builder represents that it will provide every item, system or element of Work that is identified, shown or specified in the Proposed GMP or the supporting documents, along with all necessary or ancillary materials, -8-

10 equipment and work for their complete operating installation, unless specifically excepted by the Owner. Upon Owner s acceptance of the Proposed GMP, the Design Builder shall not be entitled to any increase in the Guaranteed Maximum Price due to the continued refinement of the Construction Documents or the absence or addition of any detail or specification that may be required in order to complete the construction of the Project as described in and reasonably inferable from the Proposed GMP or the supporting documents used to establish the GMP. Any costs that exceed the GMP shall be borne solely by the Design Builder without reimbursement by the Owner. Design Builder is responsible for all design, including incidental designing/detailing as required by the Educational Specifications for shop drawing purposes Prior to commencement of the Construction Services and concurrently with submission of the proposed Guaranteed Maximum Price, the Design Builder shall submit for the Owner s acceptance a schedule for the performance of Construction Phase Services as specified. The Construction Phase Schedule shall include [10 days?] reasonable periods of time for the Owner s review and acceptance of design drawings and submissions and for approval of authorities having jurisdiction over the Project ( AHJ ). Upon acceptance of a proposed Guaranteed Maximum Price by the Owner, the Construction Phase Schedule shall not be modified except for good cause as approved by the Owner at the Owner s sole option and discretion Owner may accept or reject the proposed Guaranteed Maximum Price or attempt to negotiate a change in its terms with Design Builder. Upon acceptance by the Owner of the proposed GMP, the Guaranteed Maximum Price and the supporting documents shall become part of the Agreement between the Owner and the Design Builder. If the Owner rejects the Proposed GMP or the parties are unable or unwilling to agree on a GMP, the Owner may terminate this Agreement Following Owner acceptance of the Proposed GMP, Design Builder shall continue to monitor the development of the Construction Documents so that, when complete, the Construction Documents adequately incorporate and resolve all qualifications, assumptions, clarifications, exclusions and value engineering issues identified in the proposed GMP. During the Construction Documents stage, the Design Builder and the Design Consultant shall jointly deliver a monthly status report to the Owner describing the progress on the incorporation of all qualifications, assumptions, clarifications, exclusions, value engineering issues and all other matters relevant to the establishment of the GMP into the Construction Documents. Article 9. SCHEDULE OF VALUES. 9.1 No later than thirty (30) days prior to the proposed Commencement Date pursuant to the Project Schedule, Design Builder shall submit to Owner, for Owner s review and approval, a schedule of values for the Work which shall be attached hereto as an Exhibit, and incorporated hereby by this reference, showing, in percentage and dollar amounts, the value that the various parts, systems, segments and units of the Work bear to the total Work and the Contract Price. As to major parts, systems, segments and units of the Works, the Schedule of Values shall also reflect the value of the particular Work relative to its status of completion. Design Builder shall monthly revise the Schedule of Values to reflect changes in the progress of the Work and/or Owner-approved Changes in the Work, and in any event, Design Builder shall furnish to Owner for its review all revisions made in the Schedule of Values. Owner-approved Changes in the Work resulting in increases or decreases in the GMP, shall be allocated to the corresponding category of Direct Construction Costs, Indirect Construction Costs, etc unless such change is in addition to any established Work, in which case such Work shall become an additional Work in the Schedule of Values subject to the approval of the Change Order by Owner. Such schedule shall be subject to approval by Owner, which approval shall not unreasonably be withheld. If Owner does not approve such schedule, it shall specify the portions thereof that it does not approve and give reasons why Owner is withholding approval, and Design Builder shall revise the schedule. Such -9-

11 schedule, or any revision thereof, when approved by Owner is herein called the Schedule of Values. 9.2 Although Design Builder shall perform the Work for no more than the Guaranteed Maximum Price, the line-item breakdown of the Guaranteed Maximum Price provided on the Schedule of Values is not guaranteed, and Design Builder has no obligation to keep costs for any line item within the amount specified in the Schedule of Values. Article 10. CONTINGENCY Design Builder may propose to include in the Guaranteed Maximum Price a sum acceptable to both Owner and Design Builder for unforeseen contingencies (the Contingency ). Under appropriate circumstances, and with the prior approval of the Owner, the Contingency will cover conditions that were not reasonably foreseeable as of the time that Owner and Design Builder established the Guaranteed Maximum Price. The Contingency may not be used to pay for costs resulting from Design Builder s errors or omissions in performance of the Work Design Builder may not bill against the Contingency without having first obtained the written approval from Owner. In each request to bill against the Contingency, Design Builder must demonstrate that the request is to defray an actual cost of work for which Design Builder is not otherwise entitled under the Agreement. Such proof shall include detailed information supporting the request To justify its request to bill against the Contingency, Design Builder must establish that an unforeseeable condition caused a material increase to Design Builder s cost of work. Conditions that could have been discovered by Design Builder through a reasonable inspection of the Site, or that would have been reasonably foreseeable based on the general experience held by companies in the industry similar to Design Builder, shall not be considered unforeseeable conditions warranting use of the Contingency. Furthermore, Design Builder acknowledges and agrees that (1) Design Builder relies on information provided by Owner at its own risk because such information may not accurately depict or describe actual conditions at the Site; (2) Design Builder bears the risks associated with conditions at the Site that were reasonably foreseeable based on general experience held by similar companies in the industry; and (3) Design Builder has a duty to inspect the Site to determine existing and/or actual conditions From a cost accounting standpoint, as Contingency funds are used, appropriate entries shall be made, removing funds from the Contingency and moving such amounts to the line items in the Schedule of Values to which they are charged, thereby including such amounts in the Cost of Work, but without altering in any way the Guaranteed Maximum Price. Article 11. PAYMENTS 11.1 Progress Payments. Design Builder shall submit to Owner for Owner s approval a complete and correct payment request ( Payment Request ) in an amount equal to the percentage of the Contract Price for the Work completed through the end of the preceding month. Each Payment Request shall constitute a representation by Design Builder to Owner that the Work has progressed to the point indicated and that Design Builder is entitled to payment in the amount requested. Owner shall make a monthly payment ( Progress Payment ) within thirty (30) days after an Application for Payment is submitted by Design Builder to Owner, as follows: Payment Request. (1) On or before the tenth (10th) day of each month after the Construction Work has commenced (but not earlier than the first day of such month), Design Builder shall submit to Owner an Application for Payment form, accompanied by a Cost Report and the Schedule of Values, a statement in a form approved by Owner setting forth (i) the percentage of the Work completed and the materials stored on the Site for the period ending the last day of the month for which the Progress Payment is requested for each category of the most recent Schedule of Values -10-

12 (including the work of the Design Consultants), (ii) the actual costs incurred for that portion of the Work, (iii) the amount previously paid under this Agreement, (iv) the amount previously retained, (v) the net amount to be paid on the current draw (less applicable Retainage, as defined below), and (vi) the amount of the Guaranteed Maximum Price remaining unpaid if the requested payment is made in full. (2) Each Payment Request shall constitute a representation and warranty of Design Builder (whether or not specifically stated) that Design Builder is not in default hereunder, the amounts requested in the Payment Request are due hereunder, after payment of the amounts requested in the Payment Request, the amount remaining to be paid under the Contract is sufficient to pay for the balance of the Work, the Work performed to date is in accordance with that contemplated by the Milestone Schedule (or specifying the portions thereof that are not), Design Builder has no claims hereunder and has no request for changes in the Milestone Schedule or the Guaranteed Maximum Price not provided for in the Payment Request. Each Payment Request shall set forth the status of all Proposed Changes, Change Directives, and Change Orders, if any. (3) Design Builder shall promptly submit such additional information and documents as Owner may reasonably request in support of the Payment Request. (4) The net amount to be paid on the current draw shall be the lesser of the actual costs incurred by Design Builder in relation to the portion of the Work reflected in the Payment Request (less applicable Retainage), or the amount which is the sum of the product obtained for each category shown on the Schedule of Values by multiplying the percentage of such Work which has been completed by the total amount for such Work on the Schedule of Values (less applicable Retainage). (a) (b) If the Construction Fee is defined in Exhibit A as a percentage of Direct Construction Costs, the portion of the Construction Fee to be included in each Payment Request shall be the same percentage of the Direct Construction Costs properly included in such Payment Request (less applicable Retainage). If the Construction Fee is defined in Exhibit A as a stipulated sum, the portion of the Construction Fee to be included in each Payment Request shall be that proportion of the Construction Fee equal to the percentage of completion of the Work properly included in the Payment Request (less applicable Retainage) Payment Requests For The Design Work, Up to and until the Construction begins, Design Builder shall submit invoices for reimbursable costs of the Design Work plus the portion of the Design Fee applicable to the preceding month, if any, on or before the tenth (10th) day of each calendar month. Each such invoice shall include a schedule (a) listing the invoices received for Indirect Construction Costs through the end of the preceding month, together with a copy of each invoice, (b) except as to invoices submitted by Design Consultants whose part of the Work has been completed, a breakdown for each invoice showing (1) the contract amount or other expected total amount of the Work to be performed by such Design Consultant, (2) the portion of such work that has then been performed, and (3) the amount of such total amount that the Design Consultant has then earned under its contract with Design Builder, and (c) the amount of the invoice that Design Builder is then obligated to pay under its contract with such Design Consultant. After the commencement of the Construction Work, such amounts shall be included in Design Builder s Applications for Payment. -11-

13 Payment of Subcontractors and Suppliers. Design Builder shall promptly pay all amounts due to Subcontractors, the Design Consultants, Suppliers, and any others engaged by Design Builder for the Work. Owner may, at its option, pay Subcontractors, Suppliers and other vendors directly or by checks issued to Design Builder and such persons jointly Payments for Pre-Requisitioned Materials. If payments are to be made on account of materials or equipment not incorporated in the Work but delivered and suitably stored and insured at the Site, or at some other location agreed upon by Design Builder and Owner, such payments shall be conditioned upon submission of bills of sale or such other procedures satisfactory to Owner to establish Owner s unencumbered title to such materials or equipment or otherwise to protect Owner s interest Cost Reports. Design Builder shall deliver to Owner with each Payment Request: (1) Current invoices from Design Builder and all Design Consultants, Subcontractors, and Suppliers who have contributed to the Work; and (2) Any other evidence reasonably requested by Owner to demonstrate that disbursements already made by Design Builder on account of the Cost of Work equal or exceed (a) the previous Progress Payments received by Design Builder, less (b) the portion of those Progress Payments attributable to Design Builder Fee Retainage. Until the Work has been completed and all conditions to Final Payment have been satisfied, Owner shall be entitled to retain, from each Progress Payment five percent (5%) of the value of each line item of the Indirect Construction Costs payable to Design Consultants and Direct Construction Costs that are billed in each corresponding Payment Request, together with the percentage of Design Builder Fee payable with respect to each of the Direct Construction Costs components of the Cost of Work (the Retainage ) Right to Audit; Non-Waiver. Payment of any Progress Payment by Owner shall not foreclose the right of Owner to examine the books and records of Design Builder applicable to this Agreement to determine the correctness and accuracy of any item and shall not constitute an acceptance by Owner of the Work covered thereby or a waiver of any claim or right which Owner may have with regard to such Work or the Payment Request Owner s Ability to Withhold Payment. Owner may decline to make payment of any portion of a Progress Payment that is not then payable in accordance herewith and may decline to make payment of any other portion of a Progress Payment reasonably necessary to protect Owner from any loss because of any of the following: (1) Defective portions of the Work not corrected (for which a Payment Request has been submitted). (2) Damage by Design Builder to property not included in the Work. (3) Failure of Design Builder to obtain necessary permits or licenses or to comply with Current Laws. (4) Failure to submit required progress reports. (5) Failure to keep a superintendent on the Site during Construction Work. (6) Failure of Design Builder to make payments properly to Subcontractors, Design Consultants, Suppliers, and others for labor, materials, or equipment, the filing of -12-

14 claims for payment with respect to part of the Work, or a reasonable likelihood exists that a claim will be made. (7) A reasonable likelihood exists that the Work cannot be completed for the unpaid balance of the Guaranteed Maximum Price. (8) The Work cannot be Substantially Completed by the Required Substantial Completion Date, as extended, if applicable, pursuant to the terms of this Agreement, and the unpaid balance would not be adequate to cover the sum of (i) the unpaid balance of the Guaranteed Maximum Price plus (ii) liquidated damages or other damages for the anticipated delay. (9) Failure of Design Builder to carry out the Work in accordance with the Contract Documents. (10) The Work has not reached the stage of completion claimed in the Payment Request or, for any other reason, payment is not then due hereunder. (11) Claims filed in connection with the Work or reasonable evidence indicating probable filing of claims. (12) Amounts due and unpaid from Design Builder to Owner under this Agreement or any other agreement. (13) Any other cause that reasonably justifies withholding payment either (i) to assure the full and timely performance by Design Builder hereunder or (ii) to protect Owner from loss or damage hereunder. (14) If Owner withholds any portion of a Progress Payment, it shall be obligated to pay the undisputed balance of the Progress Payment, as set forth in the Payment Request, less the amount reasonably estimated by Owner as necessary to protect Owner from the losses enumerated under this Section 5.2. No such withholding in good faith shall constitute an Event of Default by Owner or entitle Design Builder to stop the Work Payment upon Final Completion Full payment of the Contract Price, including all Retainage previously withheld (the Final Payment ), shall be due and payable within forty (40) days after (i) the Work has been fully performed by Design Builder except for Design Builder s responsibility to correct defective or nonconforming Work not yet discovered, and to satisfy other requirements, if any, which necessarily survive Final Payment; (ii) Design Builder has submitted to Owner Design Builder s Application for Final Payment; (iii) a final accounting for the Cost of Work has been submitted by Design Builder and reviewed by Owner and Owner s accountants; (iv) any adjustments in the Final Payment have been made as provided therein; and (v) all of the following items have been provided to Owner or otherwise satisfied: (1) Design Builder s Affidavit. (1) Certify all payrolls and bills for materials, equipment, and other indebtedness connected with the Work for which Owner has paid Design Builder prior to the time of the Payment Request have been paid or otherwise satisfied, and (2) all Work on the Project was performed (a) with the degree of care and skill that is customarily employed by professionals performing work on similar projects in the Denver, Colorado metropolitan area, (b) in accordance with the requirements below, (c) in accordance with the applicable DPS Educational Specifications, the DPS Design and Construction Standards, and (d) in accordance with all applicable codes, regulations and laws. -13-

15 (2) Consent Of Surety To Final Payment. Reasonable evidence in the form of a contractor certification of material compliance with all requirements of this Agreement, together with (a) the required operation and maintenance manuals ; (b) keys for any newly keyed doors with a keying schedule (master, sub-master, and special keys); (c) certificates of all tests and inspections; (d) all existing printed or typewritten operating, servicing, maintenance, and cleaning instructions for all Work, including parts lists and special tools for mechanical and electrical Work; (e) all warranties and related information for services and supplies connected with the Work for which Owner has paid; and (f) any similar materials reasonably requested by Owner. (3) Claim Waiver. Except as set forth herein, acceptance of the Final Payment by Design Builder shall constitute a waiver of claims by Design Builder except those previously made in writing notifying Owner that the identified claims are unsettled at the time of submitting an Application for Final Payment. If after the Substantial Completion date, Final Completion Work is incomplete caused by delay in the correcting and completion of Punch List items that is beyond the control of the Design Builder, the Owner may, in its sole discretion, pay Design Builder any of the amounts that would otherwise be due in Final Payment except that Owner shall retain an amount equal to three hundred percent (300%) of the cost of completing and correcting such incomplete or unacceptable Work, as reasonably estimated by Owner Accounting Review. Promptly following Final Completion of all of the Work, Design Builder shall submit to Owner the Design Builder s Accounting Report. Owner and/or Owner s accountants shall have one hundred twenty (120) days after delivery to review the Accounting Report. Design Builder shall promptly submit such additional information reasonably requested by as Owner. After the receipt of Design Builder s Accounting Report, Owner shall either (i) notify Design Builder that Owner approves Design Builder s Accounting Report or (ii) deliver Owner s Report to Design Builder. If Owner accepts Design Builder s Accounting Report, Owner shall make Final Payment to Design Builder by the end of such one hundred twenty (120) day review period after Owner s receipt of Design Builder s Accounting Report. The following are reasons Owner does not accept the Design Builder s Account Report: (1) Difference in Amounts. (a) (b) (c) If Owner s Report determines the Cost of Work as substantiated by Design Builder s final accounting to be less than claimed by Design Builder, Design Builder may either accept the amount specified by Owner s Report or object thereto and state the amount which Design Builder has determined to be owing, which shall not be greater than the amount shown in Design Builder s Accounting Report. Design Builder may object to Owner s Report by giving written notice of such objection to Owner within sixty (60) days after Design Builder s receipt of Owner s Report. Any such objection shall state and describe the basis for Design Builder s objections in sufficient detail to identify the reasons for such objection. Failure of Design Builder to object to the determination of the amount of Final Payment contained in Owner s Report within such sixty (60) day period shall be the acceptance thereof by Design Builder, in which event that amount shall be binding on Design Builder. If Design Builder timely objects to Owner s Report, Design Builder and Owner shall attempt to agree on a resolution of Design Builder s objection. If no such resolution has then been made within thirty (30) days after Design Builder submits its objection, the issue shall be an Arbitration Dispute and Design Builder shall be entitled to submit the same to Dispute Resolution within forty-five (45) days following Design -14-

16 Subcontractor and Supplier Claims Builder s submission of its objection. If Design Builder does not submit the issue to Dispute Resolution in such time and manner, Design Builder shall be deemed to have waived its objection, in which event the amount provided in Owner s Report shall be deemed to have been accepted by Design Builder. (1) Before Final Payment is made, Owner will advertise the final settlement of this Agreement by two (2) publications of notice thereof pursuant to C.R.S , the last of which shall be published not less than ten (10) days before the date set for Final Settlement. If any unpaid claim for labor, materials, rental machinery, tools, equipment, sustenance, or other supplies used or consumed in connection with the Work is filed, Owner shall withhold from the Final Payment amounts sufficient, in Owner s reasonable determination, to insure the payment of such claim until such claim shall have been paid or withdrawn, such payment or withdrawal to be evidenced by filing with the Owner a receipt in full or an order for withdrawal signed by the claimant or his duly authorized agent or assignee. (2) Notwithstanding the foregoing paragraph, funds retained for the payment of claims filed with the Owner shall not be withheld longer than ninety (90) days following the date fixed for final settlement as published unless an action is commenced within that time to enforce such unpaid claim and a notice of lis pendens is filed with the Owner. (3) At the expiration of the ninety-day period, Owner shall pay to the Design Builder such amounts as are not the subject of suit and lis pendens notices and shall retain thereafter, subject to the final outcome of such suits, only those funds sufficient to insure the payment of judgments that may result from the suit. (4) If any claim for such labor, materials, supplies or equipment remains unsatisfied after Final Payment, Design Builder shall refund to Owner all sums which the Owner may for any reason be obligated to pay to satisfy such claim, including all costs and attorneys' fees incurred by Owner in connection therewith. -15-

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