Page 1 of 14 In addition to the terms and conditions contained in the subcontract, the parties agree as follows: Section 1. The Subcontract Agreement Subcontractor shall: 1.1 Be bound by the terms of this subcontract and the contract documents. The contract documents shall consist of the agreement between Gerald H. Phipps, Inc. ( Phipps ) and the Owner through its authorized representatives including, the general and supplementary conditions, the drawings, the specifications, all addenda to and all modifications issued prior to execution of this subcontract and all issued change orders by the Owner ( Contract Documents ). Subcontractor acknowledges it has or has had the opportunity to inspect the Contract Documents prior to the execution of the subcontract, and assumes toward Phipps all the obligations and responsibilities that Phipps, by those documents, assumes toward the Owner. Subcontractor shall comply with all requirements of the Contract Documents relating to any rights, redress and remedies that Phipps has against the Owner. Where a provision of this subcontract is inconsistent with the Contract Documents, the more stringent requirement shall apply. 1.2 Agree at the time of entering into this subcontract that no substitutions, except those as accepted by the Architect in writing, were contemplated in arriving at the amount of this subcontract. If the Subcontractor proposes a substitution, Subcontractor shall strictly follow the terms of the Contract Documents regarding approval of the substitution and shall assume responsibility for such substitution and be responsible for all costs associated with the approval of the substitution, including design impacts to other trades. 1.3 Agree to participate in specified liquidated damages assessed by the Owner. If the Contract Documents provide for liquidated or other damages for delays, and are so assessed, then Phipps may assess these damages against the Subcontractor in proportion to the Subcontractor s share of the responsibility for such delay. Phipps will not assess liquidated or other damages against the Subcontractor for the portion of the delays or causes attributable to Phipps or other subcontractors or arising outside of this subcontract. 1.4 Perform its work ( Subcontractor work ) under the general direction of Phipps and subject to the final approval of the Architect/Engineer or other specified representative of the Owner, in accordance with and reasonably inferable from the Contract Documents. Subcontractor will furnish all of the labor and materials, shop drawings and samples, tools, equipment, protection, unloading, hoisting and scaffolding, which are necessary to complete Subcontractor s work. Any notation in the Contract Documents such as by contractor or by general contractor which is in the scope of the Subcontractor s work shall be the responsibility of Subcontractor. 1.5 In the event Subcontractor wishes to use any equipment owned or leased by Contractor, Subcontractor agrees that prior to using such equipment it will execute the form provided by Contractor relating to Subcontractor s use of the equipment. Nothing in this Agreement shall be construed as Contractor s commitment to provide any equipment for Subcontractor s use unless agreed to in writing by the parties. Section 2. Payment Subcontractor shall: 2.1 Submit to Phipps applications for payment on the Phipps form titled Subcontractors Application and Certificate for Payment. Applications for payment must be submitted to the Remit to Address provided to the Subcontractor under separate cover. Applications for Payment must be in the correct office by the 20th day of each month for processing unless specifically directed otherwise. Electronic versions of the Applications for Payment will be accepted, however, they must be submitted in an unmodified electronic format provided by Gerald H. Phipps, Inc. 2.1.1 Understand that submission of Subcontractor s Insurance Certificates are a condition precedent to payment of Subcontractor s monthly payment application and to performing any work on the project site. 2.2 Submit to Phipps, prior to submitting its first application for payment a signed Subcontract Agreement and, a complete and accurate Schedule of Values of the various parts of the Subcontractor work, aggregating the total sum of this subcontract, itemized and detailed as required by Phipps and the Contract Documents, and supported by such evidence as Phipps may direct. The schedule of values shall be itemized by general areas, specific large pieces of equipment and/or another similar method, which shall accurately indicate the value of work performed, or services rendered. This schedule, when approved by Phipps, shall be used as the basis for making monthly applications for payment. The application must be an estimate of all the work completed for the period of time stated in the request for payment. A separate request must be submitted for a partial or final payment of retention, along with consent of surety. 2.3 Agree that if Subcontractor does not submit to Phipps an application for payment by the 20th of the month, Phipps may, at its option, either process the application in the following month, or include in Phipps monthly application for payment to the Owner such amount as it may deem proper for the work of Subcontractor for the preceding month and Subcontractor agrees to accept such amount in
Page 2 of 14 lieu of the amount in Subcontractor s late payment application. 2.4 Agree that if payments are made on account of materials not incorporated in the work but delivered and suitably stored at the site, or stored at some other location with proof of insurance and agreed upon in writing, such payments shall be in accordance with the terms and conditions of this subcontract. Material stored off-site and paid for will become the property of the Owner and identified as such. Acceptable insurance shall be provided, covering materials stored off-site. Payments will not be made without this insurance coverage. 2.5 Agree that the Owner s payment to Phipps for the work is a condition precedent to Phipps obligation to make progress payments or final payment to the Subcontractor and Subcontractor agrees to share this credit risk with Phipps. Phipps shall pay the Subcontractor within seven (7) days following Phipps receipt of payment from the Owner. Should Owner s non-payment be due to the deficient, incomplete, non-conforming or otherwise substandard work of others and not of Subcontractor, then Phipps shall, a reasonable time after Owner has credited Phipps with performance of the work by Subcontractor, be obliged to pay Subcontractor for its work regardless of whether Phipps has been paid by Owner. 2.6 Agree that, unless a different amount is stated in the subcontract, a ten percent (10%) retention shall be held on all payment applications until final payment is made by Owner. 2.7 Agree that all monies received from Phipps shall be held in trust for and used first for the payment of labor and materials for this subcontract and not used by Subcontractor to satisfy obligations on other contracts or for other purposes. Subcontractor shall pay all valid charges for labor and materials to perform Subcontractor s work and obtain a release of any claim or lien rights in exchange for this payment and provide the lien waivers to Phipps prior to the next progress payment. If Subcontractor fails to make such payments, or if Phipps reasonably believes that all valid labor and material charges for Subcontractor s work are not being timely paid, Phipps may make the payments on behalf of Subcontractor, or Phipps may take such action as it deems necessary to ensure that the charges are paid including the right of Phipps to issue joint checks to Subcontractor and third parties. If payments are made by Phipps, Subcontractor shall be notified of the payment and Subcontractor shall, within seven (7) calendar days of the notice, reimburse Phipps for the amount paid. Phipps reserves the right to disregard any assignment of Subcontractor s payment rights to a third party if necessary to carry out the requirements of this section and be certain that all labor and materials used to perform Subcontractor s work are paid. 2.8 Agree Phipps may withhold payments for the unpaid balance of the subcontract if Phipps reasonably believes that the work may not be completed on schedule and in accordance with the Contract Documents. If Phipps has not provided previous notice of withholding, Phipps shall serve notice on Subcontractor of its concerns and the amount of any withholding of funds within the time for payment set forth in this subcontract. 2.9 If the Project is in the City of Colorado Springs or any other jurisdiction allowing sales tax refunds to selected project Owners, the Subcontractor is required by law to remit sales tax on purchased materials to the appropriate jurisdiction and complete/submit to Phipps the sales tax forms necessary for the refund (i.e., Colorado Springs Forms ST16 and ST16a, Pueblo Forms CP513 and CP513a). The Subcontractor s final billing and retention will not be paid by Phipps until these forms are properly completed, submitted and approved by Phipps. If the Contractor has paid a use tax deposit as noted on the request for proposal, bid form or the face of the Subcontract Agreement, then no city sales taxes are included in the Subcontract Agreement. Before retention will be released, a valuation of materials put into place on this project under this Subcontract Agreement must be submitted to Phipps to submit to the respective city for close-out of the use tax deposit. Jurisdictional Agency(s) reserves the right to audit the Subcontractor. 2.10 Agree final payment shall be paid to Subcontractor upon approval by the Owner, Owner s Representative, Architect and Phipps of Subcontractor s work, Subcontractor s compliance with all requirements of the Contract Documents; receipt of a final lien and claim waiver and affidavit on a form approved by Phipps, executed by Subcontractor; and satisfactory evidence having been received by Phipps that all labor, (including customary fringe benefits and payments due under collective bargaining agreements) and all sub-subcontractors, and material men have been paid and are waiving their lien rights and bond claims upon receipt of final payment. 2.11 Understand that Phipps will not process Subcontractor s final payment application until Phipps receives, as required by the Contract Documents, (a) a final set of all record drawings, and operating and maintenance manuals; (b) all guarantee and warranty documents; (c) material valuation for all tax exempt projects and (d) appropriate lien waivers. Section 3. Duties Subcontractor shall: 3.1 Agree time is of the essence. Subcontractor shall provide Phipps, within ten (10) calendar days after receipt of an executed subcontract, scheduling information, which
Page 3 of 14 shall include durations, crew sizes, procurement dates, submission dates of required shop drawings, project data and samples of Subcontractor s work (including the activities of its sub-subcontractor s vendors and suppliers). Subcontractor understands accurate information is necessary to meet the established milestone dates as Phipps intends to use the information to prepare the project schedule of work and to establish the sequence and time requirements of all work activities for Subcontractor and all other subcontractors. Phipps reserves the right to require Subcontractor to submit schedules in electronic format consistent with the requirements of the Contract Documents for all schedule submissions, including revisions or look ahead schedules. 3.2 Agree Phipps may revise such schedule as the work progresses. Subcontractor agrees to make no claim for acceleration or delay by reason of such revisions so long as such revisions are of the type normally experienced in work of this scope and complexity. If Subcontractor is unable to comply with the project schedule because of events for which extensions of time are permitted in the Contract Documents, Subcontractor s time for completion shall be extended for a reasonable period of time, provided that a time extension is given by the Owner to Phipps, and provided that notification of delay is given to Phipps within the time provided in the Contract Documents. A time extension shall be the sole remedy for such delays unless Phipps receives compensation for such delays from the Owner based on the Contract Documents. If Phipps receives compensation from the Owner, Phipps shall apportion the compensation among the parties delayed. If Subcontractor is unable to comply with the project schedule because of events caused by Phipps or Phipps other subcontractors, Subcontractor shall make its claim for additional time or additional compensation within the time period and in the manner provided in Section 4. 3.3 With the first application for payment, Subcontractor shall furnish Phipps with its list of proposed subsubcontractors, equipment and material suppliers and the source and fabricator of all materials, including any proposed to be supplied or fabricated by subcontract, along with the description and the dollar amount of the corresponding item of work for all items of work in excess of $5,000.00. Phipps must approve all entities identified, and such approval will not be unreasonably withheld. Subcontractor must replace all third parties not approved by Phipps. Subcontractor shall require its sub-subcontractors; equipment and material suppliers to comply with all requirements set forth in this subcontract, the schedule of work and all other Contract Documents. Subcontractor and any labor brokers or temporary help agencies used by Subcontractor or its sub-subcontractors shall comply with the Immigration Reform and Control Act of 1986, as amended and all Federal, State and local laws regarding the employment of persons who are not U.S. citizens. In the event the Owner is a State Agency or Political Subdivision of the State of Colorado, Subcontractor shall complete the certification required by Colorado law regarding the employment of illegal aliens on the form provided by Phipps. In addition Subcontractor and such labor brokers or temporary help agencies shall comply with all applicable State, Federal and local laws, including worker s compensation laws and unemployment insurance coverage, tax, social security and Medicare withholding. The practice of subcontractors or labor brokers assigning independent contractor status to workers to avoid these requirements is not allowed. 3.4 Prosecute Subcontractor s work in a prompt and diligent manner in accordance with the schedule of work without hindering the work of Phipps or any other subcontractor. Subcontractor agrees to keep itself informed of the progress of the project and confer with Phipps to coordinate its sequence and required progress to maintain the project schedule. Subcontractor acknowledges that it may be required to perform work out of the sequence originally planned as required by Phipps to maintain the progress of the project. Subcontractor acknowledges that it has anticipated certain reasonable delays and disruptions as part of its subcontract price to the extent customary in a project of the nature being undertaken by Phipps. If work or property of others is delayed or damaged by Subcontractor, Subcontractor will pay for all costs and damages incurred by such other party, including Phipps, and will cause all such damage to be corrected to the satisfaction of and without cost to Phipps and Owner. Should Subcontractor sustain any loss through (a) any wrongful or negligent act or omission of any other subcontractor or (b) failure of any other subcontractor to perform its contractual undertakings, Subcontractor shall have no claim or cause of action against Phipps for such loss, but shall have a claim or cause of action against the responsible subcontractor to recover any and all loss sustained. Act or Omission shall be defined to include, but not be limited to, any unreasonable interruption or delay caused by any such subcontractor. 3.5 Employ a competent Superintendent and necessary assistants who will be in attendance at the project site during the progress of the work. The Superintendent shall be satisfactory to Phipps and shall not be changed except with the consent of Phipps, unless the Superintendent ceases to be in Subcontractor s employ. The Superintendent shall represent Subcontractor and all communications given to the Superintendent shall be as binding as if given to Subcontractor. The Superintendent shall attend all coordination scheduling and scheduling and safety meetings where Subcontractor s work is involved and as required by Phipps.
Page 4 of 14 3.6 Provide, if required, a field office for its exclusive use, along with all related utilities and cost thereof. No subcontractor signs will be allowed except on equipment and on the field office. 3.7 Lay out its work from control points and benchmarks supplied by Phipps and be responsible for its accuracy and the placement of all inserts, embedments, grounds and block out, etc., as required to complete the work. Subcontractor shall be responsible for repair of such items that are improperly placed unless the original control work was not accurately performed by Phipps. If Subcontractor s work involves any excavations, as that term is defined by Colorado Law, Subcontractor shall fully comply with utility locate requirements and protect against interference with any existing utilities and be fully responsible for any damages caused by any violation of Colorado Law concerning any excavation. 3.8 Be responsible for supplying its own crew drinking water, ice and cups. 3.9 Agree any inspection or review by Phipps of Subcontractor s work or submittals shall not relieve Subcontractor from its obligation to perform the work in accordance with the Contract Documents. Subcontractor understands that the Architect will have the authority to reject work, which does not conform to the Contract Documents. 3.10 Maintain at the site, one (1) copy of all drawings, specifications, addenda, approved shop drawings, change orders and modifications in good order and marked currently to record all changes made during construction relating to Subcontractor s work. If Subcontractor or any third party fails to submit shop drawings, product data or samples which meet the specifications, the additional costs (price increases and other cost due to delays in placing order) to furnish the specified equipment and/or material shall be borne by Subcontractor. 3.11 Cooperate with Phipps and those other subcontractors whose work may interfere with Subcontractor s work and participate in the preparation of coordinated drawings and work schedules in areas of congestion, specifically noting and advising Phipps of any interferences by other contractors or subcontractors. 3.12 Give adequate notices pertaining to the work of Subcontractor to proper authorities and secure and pay for all necessary licenses, permits, governmental fees and inspections to carry on Subcontractor s work and shall furnish a copy of said permits, licenses and inspection reports to Phipps. 3.13 Pay all taxes, including sales and/or use taxes, applicable to the performance of Subcontractor s work as required by law and the Contract Documents. 3.14 Strictly comply and require the same strict compliance by its employees, sub-subcontractors and suppliers with all Federal, State and local laws, rule ordinances, codes and/or regulations governing the creation, generation, acquisition, possession, storage and disposal of hazardous materials of any nature, or any other substance or material that may be considered hazardous, including mold, mildew, fungi or other similar microbial condition utilized, produced or that are a by-product, directly or indirectly, of the performance of Subcontractor s work. Strictly comply and require the same strict compliance by its employees, sub-subcontractors and suppliers with all storm water runoff regulations and the plans and procedures adopted by Phipps or any other subcontractor. Any loss incurred by Phipps, including attorney s fees and costs, because of a violation of any hazardous material or storm water runoff law, rule or regulation under this Section whether by the EPA, CDPHE, any other governmental agency or as a result of a private action will be the responsibility of the Subcontractor to the extent caused by Subcontractor s negligence or fault. 3.15 Maintain its own safety program, which shall meet all applicable Federal, State and/or local safety related laws and regulations. Subcontractor shall fully comply with the hazard communication standard for the construction industry and any Federal, State or local right to know legislation and shall transmit information to all parties concerning chemical hazards, as it pertains to Subcontractor s work. Subcontractor shall submit for review, upon execution of this agreement its written Loss Control Program, experience modifiers and incidence rates for the past three (3) years. Phipps may issue a directive to Subcontractor with respect to a safety compliance issue and Subcontractor shall respond promptly to Phipps directive. Failure of Subcontractor to correct the violation may cause Phipps, at is discretion, to take whatever steps are necessary to correct said violation. Any loss incurred by Phipps, including attorney s fees and costs, because of such violation or any safety citations to the extent caused by the negligence or fault of Subcontractor will be the responsibility of Subcontractor. Should Subcontractor not have a written Loss Control Program, Subcontractor agrees to abide by Phipps current Loss Control Program. (A copy is available upon request.) 3.16 Not assign this agreement nor subcontract any part of the Subcontractor s work without the prior written consent of Phipps, with the exception of those subcontractors listed by Subcontractor and approved by Phipps as set forth in Section 3.3 and subject to the restrictions set forth in Section 3.3. Subcontractor consents to the assignment of this agreement by Phipps to the Owner provided that the assignment is effective only after termination by Owner of Phipps and written notice is sent by Owner to Subcontractor. 3.17 Be advised that Phipps has in place a comprehensive safety program and drug & alcohol policy. The
Page 5 of 14 Subcontractor shall abide by these policies on all work performed on the jobsite. Employees of the Subcontractor or sub-subcontractors may be removed from the jobsite for violations of the policies. Subcontractor agrees that all of its employees and all employees of its sub-subcontractors while on the jobsite will wear protective gear, including hard hats and protective clothing that complies with the applicable OSHA rules and regulations. In addition to the above, the Subcontractor agrees that all of its employees and all employees of its sub-subcontractors while performing site work operations outside the footprint of the building shall wear safety vests meeting A.N.S.I. standards or highvisibility colored shirts as approved by Phipps Safety Manager. Subcontractor agrees that if Phipps requests that an employee of Subcontractor or an employee of one of the Subcontractor s sub-subcontractors be removed from the jobsite based upon the employee s failure to wear appropriate safety gear or because of improper conduct by the employee, including the use of abusive language, Subcontractor will immediately remove the employee from the jobsite. 3.17.1 Agree if in the performance of Subcontractor s work, it becomes necessary, convenient or advisable, to remove, replace or interfere with any safety devices or controls installed by Phipps or another subcontractor, this Subcontractor will replace or restore such devices or controls at its expense. In the event such safety devices or controls are not so replaced or restored and it is necessary for Phipps to perform the work, Phipps may deduct the cost from any amounts due to Subcontractor. 3.17.2 Understand Phipps has a Crisis Management Plan and, Subcontractor is expected to cooperate with Phipps with respect to any occurrence of a jobsite catastrophe. 3.17.3 Require A.N.S.I. approved safety glasses to be with an individual one hundred percent (100%) of the time, when an individual is on the jobsite. Proper eye protection is to be worn, per OSHA requirements, or when performing any of the following activities, or while in an area where the activities are occurring: drilling, grinding, hammering, cutting of any material, chipping of any material, blowing areas clean, sandblasting, bead blasting, running any tools powered by electric, pneumatic or hydraulic energy, operating power actuated tools, demolition, handling concrete, handling chemicals, welding and torch work. Any activity, which could generate particles or liquids getting into a worker s eyes, requires proper eye protection, which is consistent with OSHA requirements. 3.17.4 Agree Phipps on-site safety representative shall be notified immediately when an accident has occurred. Subcontractor s first responsibility is to ensure that first aid and medical treatment have been started as necessary. 3.17.5 Agree Subcontractor and all sub-subcontractors are to provide competent persons as per the OSHA regulations. 3.17.6 Agree OSHA s Fall Protection Standard, 29 C.F.R. 1926. 500-503 (Subpart M) will be followed by Subcontractor. All site personnel exposed to a fall must employ 100% fall protection when working six feet (6 ) or more above the working surface of the area where the work is being performed. Roofers, precast erectors and scaffold erectors may comply with exceptions provided in Subparts L and M. This six foot (6 ) fall arrest requirement also applies to all concrete reinforcing steel and form work operations. This six foot fall arrest requirement does not apply to unloading of trucks where appropriate tie off points cannot be provided. Steel erection subcontractors must comply with 29 C.F.R. 1926, 750-761 (Subpart R in its entirety) with the exception of 100% fall protection required at six feet (6) or more above working surfaces for all steel erection related activities (no exceptions). OSHA s cranes and derricks 29 C.F.R. 1926. 550-556 shall be followed by Subcontractors with the following exception: tag lines will be used with every hoisted load. Exceptions to this must be pre-approved by the Gerald H. Phipps, Inc. Safety Manager. 3.17.7 Agree Subcontractor has reviewed its subcontract with Phipps and all attachments related to safety, and informed its field employees and sub-subcontractor s employees of the safety requirements and the following: Verbal Warning Phipps will notify Subcontractor s foreman if it learns that employees are committing or have committed serious safety violations on the site. Interpretation of Fault: In appropriate cases, a Phipps field supervisor may determine if the infraction was caused by a decision of employees or their foreman. In appropriate cases, disciplinary action will be directed at the appropriate party. First Written Warning Phipps supervisors observing serious safety violations of employees will document violations to the appropriate Subcontractor personnel. Subcontractors' employee committing violation similar to violations their foreman has previously been warned about will be removed from the project for two days. Second Written Warning Employees receiving a second written warning on a serious violation will be removed from all Phipps jobsites permanently.
Page 6 of 14 Employees removed from a jobsite may not be transferred to other Phipps projects. Imminent danger, as defined by OSHA, is when a worker is exposed to potential hazard where death or serious injury or illness could reasonably be expected. Employees who create or expose themselves to imminent dangers or who willfully violate safety rules may be removed immediately from all Phipps jobsites. 3.17.8 Agree it is the policy of Phipps to have field superintendents "walk the jobsite" on a routine basis. Subcontractors will be advised of safety deficiencies observed. It remains the sole obligation of the Subcontractor to comply with all project safety rules, OSHA standards, and general duty obligations and to be responsible for the safety of their employees. Additional inspections may be conducted by Phipps personnel. All noted safety deficiencies must be corrected immediately and not to exceed twenty-four (24) hours. Life threatening and/or repeat violations are of particular concern. Multiple notices to Subcontractors and/or their employees indicate a Subcontractor s inattention to safety. Subcontractors will receive verbal and then written warnings regarding safety deficiencies. Thereafter, if life threatening and/or repeat violations are noted, the Subcontractor will be responsible for the cost of the inspection, including Phipps supervisory, project manager, safety personnel and consultant s time. The minimum charge for inspections due to negligence of Subcontractors creating life threatening and/or repeat violations will be $250. 3.18 Carry on Subcontractor s work and maintain its progress during any dispute and/or legal proceedings. 3.19 Prior to building enclosure, Subcontractor shall provide the temporary heat and protection necessary to maintain its progress during cold weather. 3.20 Keep the building and premises clean of debris resulting from the performance of Subcontractor s work. If Subcontractor fails to comply with this paragraph within twenty four (24) hours after receipt of notice of noncompliance from Phipps, Phipps may perform such necessary clean up and deduct the cost from any amounts due to Subcontractor. 3.21 Agree in the case of minor repairs to newly finished surfaces (not covered by property insurance), the cost of said repairs for which responsibility cannot be ascertained shall be prorated to subcontractors in proportion to the manpower employed during the period when damage occurred. 3.22 Provide Phipps within ten (10) calendar days after execution of this subcontract, the Subcontractor s written Quality Management Program, which shall pertain to all work to be performed by Subcontractor, including the work of sub-subcontractors, vendors and suppliers. This program shall identify responsible personnel, a means for monitoring quality, with a format for reporting and frequency of reports. If Phipps does not approve Subcontractor s written Quality Management Program, Subcontractor agrees to comply with Phipps current Quality Management Program. Subcontractor shall include in its Quality Management Program any specific project protocol which has been adopted by Phipps and may be applicable to the special requirements of performing Subcontractor s work in the environment required in the Contract Documents. 3.23 Agree to provide to Phipps all documents and other information required of Phipps by the Contract Documents relating to the Owner s rights to audit the costs incurred by Subcontractor in the performance of its work or any change order work. Subcontractor will be bound by the determinations made as a result of any audit conducted by the Owner as it affects the cost of work performed by Subcontractor and the compensation Subcontractor will receive for the work. Section 4. Subcontractor shall: Changes in the Work 4.1 Agree that Phipps may add to or deduct from the amount of work covered by this subcontract, and any changes so made in the amount of work involved, or any other parts of this subcontract, shall be by a written amendment setting forth the changes involved and the value thereof which shall be mutually agreed upon between Phipps and Subcontractor ( change order ). Phipps may also add to or deduct from the amount of work before final agreement as to the value ( change directive ). Subcontractor agrees to proceed with the work as changed when it receives a written change directive from Phipps so as not to delay the progress of the work, and pending any determination of the value, unless Phipps first requests a cost proposal. If Phipps requests a cost proposal for a change, Subcontractor shall comply with such request within seven (7) calendar days. If the Subcontractor fails to comply with such request within seven (7) calendar days, Phipps shall provide an estimate of the cost involved for the written change directive and provide such estimate to Subcontractor. If Subcontractor does not provide a written objection to Phipps within three (3) calendar days of receipt of the estimate of cost, the estimate shall be the cost to be paid to the Subcontractor for the change directive.
Page 7 of 14 4.2 Be entitled to receive no extra compensation for extra work or materials or changes of any kind regardless of whether the same was ordered by Phipps, unless a written change order or change directive has been issued by Phipps. If extra work was ordered by Phipps and Subcontractor performed same but did not receive a written change order or change directive, Subcontractor shall be deemed to have waived any claim for extra compensation regardless of any written or verbal protests or claims by Subcontractor. Subcontractor shall be responsible for any costs incurred by Phipps for changes of any kind made by Subcontractor that increase the cost of the work for either Phipps or other subcontractors when Subcontractor proceeds with such changes without a written order. 4.3 Agree that no claim for extra compensation for additional services rendered or materials furnished by Subcontractor to Phipps shall be valid unless written notice is given to Phipps prior to the furnishing of the services or material. Prior to the last day of the calendar month following that in which the claim originated, or at an earlier time, if required by the Contract Documents, Subcontractor shall give Phipps written documentation of the amount of the claim. 4.4 Make all claims for extra compensation and for extension of time to Phipps in accordance with this section and consistent with the contract documents. For all claims that are the responsibility of the Owner, the claims shall be made in the manner provided in the Contract Documents and provided to Phipps in time to allow Phipps at least three (3) work days within which to present the claims to the Owner. For claims that do not involve the Owner and subject to Section 4.3, such claims shall be made in writing and be made not later than seven (7) calendar days after the event that the Subcontractor feels entitles it to additional compensation or time. Phipps agrees to pursue reasonable claims submitted by Subcontractor against the Owner under the provisions of the Contract Documents. Subcontractor shall be responsible for preparation of the claims and for all legal and other costs incurred by Phipps. Should Subcontractor elect to pursue its remedy directly against the Owner pursuant to this provision, Subcontractor shall indemnify Phipps from any claims from the Owner and shall be bound by the outcome of such claim and shall waive any and all claims against Phipps arising out of the same claim. 4.5 Agree that if the work for which Subcontractor claims extra compensation is the result of events that would be the responsibility of the Owner, extra compensation shall be paid exclusively and solely out of funds paid by Owner to Phipps. If it is determined by the Owner, the Owner s representative or the Architect that Phipps is not entitled to a change order or extra compensation, then Phipps shall not be liable to Subcontractor for any extra compensation for such work, unless Phipps agreed in writing to such extra compensation specifically excluding Owner s approval and payment as being a condition precedent to payment by Phipps. 4.6 Agree for changes in the work approved by Phipps, Subcontractor shall be reimbursed for overhead, general conditions and fee or profit in an amount consistent with the Contract Documents and Subcontractor shall be bound by those terms. In the absence of such terms, mark-up for Change Order work performed by this Subcontractor will not exceed a total of fifteen percent (15%) of the cost for overhead and fee or profit. Mark-up by this Subcontractor for Change Order work performed by its subcontractors will not exceed five percent (5%) of the cost for overhead and fee or profit. Mark-up for Change Order work performed by second tier subcontractors shall not exceed a total of fifteen percent (15%) of the cost for overhead and fee or profit. 4.7 Work overtime or extra shifts to overcome any delays. Subcontractor shall be reimbursed for overtime or extra shifts, if and only if, directed in writing by Phipps to work overtime for reasons other than delays caused by Subcontractor. Reimbursement shall be based on hours shown on daily time sheets and approved by Phipps. Only the premium portion of such approved overtime exclusive of any mark ups for overhead and/or fee shall be considered for reimbursement. Section 5. Insurance Subcontractor shall: 5.1 Prior to starting work and as reasonably requested by Phipps during the performance of work, supply insurance certificates in compliance with the following insurance requirements of Phipps. General Liability $1 million per occurrence, $2 million aggregate General Aggregate limits apply per project Coverage is primary/noncontributory in favor of Gerald H. Phipps, Inc. Thirty (30) day cancellation clause by certified mail. Gerald H. Phipps, Inc. named as an additional insured, including products/completed operations Contractual Liability Personal Injury Liability Products and Completed Operations coverage should be maintained for two (2) years after project completion. Automobile Liability $1 million combined single limit
Page 8 of 14 Owned, Hired and Non-Owned Automobile Liability Included Hired and Non-Owned coverage required if no owned/leased vehicles. Letter stating there are no owned/leased vehicles required also. Gerald H. Phipps, Inc. named as an additional insured Workers Compensation Limits of: $1,000,000 each accident $1,000,000 each employee $1,000,000 policy limit Waiver of Subrogation in favor of Gerald H. Phipps, Inc. Non-election of Workers Compensation by proprietor/partners/executives/officers is not acceptable. Thirty (30) day cancellation notice clause by certified mail See attached sample certificate. The certificate should clearly indicate the expiration date of all policies All coverage is required to be on an occurrence basis and shall be maintained without interruption from the date of the commencement of Subcontractor s work until the date of final payment except for any coverage required to be maintained after final payment. Insurance carriers must have minimum Best s Rating of A. All Certificates of Insurance shall clearly identify any policy exclusions for EFIS, mold or other exposures customarily covered by standard insurance policies. Umbrella/excess liability may be used to satisfy primary liability limit requirements. 5.2 If Builder s Risk Property Insurance Coverage is provided by Phipps or the Owner as noted in the Contract Documents or this subcontract, it is the Subcontractor s responsibility to determine if coverage adequately covers their interests and subcontractors of any tier and the amount of deductible they may be responsible for. If a Builder s Risk/Installation Floater is provided by the Subcontractor, a waiver of subrogation in favor of Phipps and the Owner shall be provided to Phipps. 5.3 Regardless of payment under Section 2.5, Subcontractor is responsible for materials stored off-site; allrisk property coverage for the material must be carried by the Subcontractor. Insurance Certificates describing the coverage and giving Phipps thirty (30) days notice of cancellation must be submitted with the invoices for payment. 5.4 If not covered under the Builder s Risk policy of insurance or any other property or equipment insurance required by the Contract Documents, the Subcontractor shall procure and maintain at the Subcontractor s own expense, property and equipment insurance written on an all-risk basis, evidenced by a Certificate of Insurance satisfactory to Phipps. 5.5 Be responsible for providing insurance for all its property, tools, and equipment used on the site or away from the site. Section 6. Subcontractor shall: Indemnification 6.1 To the fullest extent permitted by law, indemnify and hold harmless Phipps, and the Owner, their officers and employees and any party Phipps is required to indemnify in the Contract Documents from and against all liabilities, claims, damages, losses, penalties, causes of action, judgments, costs and expenses, including reasonable attorney s fees arising out of or resulting from the performance of the Subcontractor s work or the failure of the Subcontractor to perform the work in accordance with the terms and conditions of the subcontract or resulting from the Subcontractor s violation of any laws, rules, regulations or ordinances applicable to Subcontractor s work. This obligation to indemnify includes all loss, damage and expense attributable to bodily injury, sickness, disease, death, injury to or destruction of tangible property, other than the work itself, including the loss of use resulting therefrom but only to the extent caused by the negligence or fault of Subcontractor or anyone employed directly or indirectly by Subcontractor or anyone for whose acts Subcontractor may be liable including Subcontractor s agents, representatives, subcontractors or suppliers. 6.1.1 Subcontractor shall comply with all OSHA standards and general duty obligations pertaining to its work. Subcontractor shall indemnify and hold harmless Phipps from and against any loss, claim, action, proceeding, liability, damage, fine, penalty, costs and expenses (including attorney fees) to the extent caused by the negligence or fault of Subcontractor or anyone for whose acts Subcontractor may be liable, by reason of a failure to comply with all OSHA standards and general duty obligations or arising in whole, or in part, from Subcontractor s safety violation. 6.1.2 Subcontractor shall, at all times after payment by Phipps, indemnify and hold Phipps and Owner harmless against any liability for claims and liens for labor performed or materials used or furnished in the performance of the Subcontractor s work, including any costs and expenses incurred in the defense of such claims and liens, reasonable attorney fees and any damages to Phipps or Owner resulting
Page 9 of 14 from such claims or liens. Subcontractor agrees after written demand to immediately cause the effect of any suit or lien to be removed from the project and the real property upon which it is located and in the event Subcontractor shall fail to do so, Phipps is authorized to use whatever means in its discretion it may deem appropriate to cause said lien or suit to be removed or dismissed and the costs thereof, together with reasonable attorney s fees, shall be immediately due and payable by Subcontractor. In the event a suit on such claim or lien is brought, Subcontractor shall, at the option of Phipps and/or Owner, defend said suit at its own cost and expense, and will pay and satisfy any such claim, lien or judgment as may be established by a decision of the court. Subcontractor may litigate any such lien or suit provided Subcontractor causes the lien to be removed promptly from the property and the property upon which the project is located. 6.1.3 If Subcontractor, or sub-subcontractor is signatory to any collective bargaining agreements covering Subcontractor s work, the Subcontractor or subsubcontractor agrees that is shall indemnify and hold Phipps harmless from all obligations of the Subcontractor including fringe benefit payments, health and welfare, pension and apprenticeship payments as may be a part of these agreements. Subcontractor shall be liable to Phipps for all reasonable expenses incurred by Phipps related to Subcontractor s collective bargaining agreements or Subcontractor s actions related to such agreements. 6.2 Understand that in any and all claims against the Owner, the Architect, Phipps and other contractors or subcontractors, or any of their agents or employees, by an employee of the Subcontractor, anyone directly or indirectly employed by the Subcontractor or anyone for whose acts the Subcontractor may be liable, the indemnification obligation under this article shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Subcontractor under Workers Compensation Acts, Disability Benefit Acts or other employee benefit acts. 6.3 Understand that the obligations of the Subcontractor under this article shall not extend to the liability of the Architect, its agents or employees arising out of (a) the preparation or approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications, or (b) the giving of or the failure to give directions or instruction by the Architect, its agents or employees provided such giving or failure to give is the primary cause of the injury or damage. 6.4 Be bound by, and at its own cost, comply with all Federal, State and local laws, ordinances and regulations (hereinafter collectively referred to as laws ) applicable to the Subcontractor s work. The Subcontractor shall be liable to Phipps and the Owner for all loss, cost and expenses, including attorney s fees to the extent caused by the negligence or fault of Subcontractor, its employees and agent resulting from the failure to comply therewith, including, but not limited to, any fines, penalties or corrective measures. Section 7. Performance Bond and Labor and Material Payment Bond 7.1 Upon request by Phipps, a performance bond and a labor and material payment bond shall be furnished in the full amount of this subcontract on forms required by Phipps. The bonds are to be executed by a surety company or companies authorized to do business in the state where the project is located. The bonds must be acceptable to Phipps and be written in favor of Phipps. The bonds shall require the attorney-in-fact who executes the bonds on behalf of the surety to affix a certified and current copy of its power of attorney. Phipps shall be paid by Subcontractor for all legal and court costs, including attorney s fees that Phipps incurs in the enforcement of its rights under said bonds. Subcontractor is responsible for payment of the cost of the bonds. The cost of said bond, if required, shall also be presented by the Subcontractor and identified as a separate line item in this Agreement. 7.2 In the event that the surety fails to fulfill its obligations and contracts including, but not limited to, being adjudged a bankrupt prior to the completion of this agreement, the Subcontractor shall immediately furnish another bond, at Subcontractor s expense and at no additional cost to Phipps, in the full amount of this agreement, executed by a new surety company acceptable to Phipps. Section 8. Warranty 8.1 The Subcontractor warrants to Phipps that materials and equipment furnished under the subcontract will be of good quality and new unless otherwise required or permitted by the contract documents, that the work of Subcontractor will be free from defects not inherent in the quality required or permitted, and that Subcontractor s work will conform with the requirements of the contract documents. Work not conforming to these requirements, including substitutions not properly approved and authorized, may by considered defective. Subcontractor agrees to promptly correct, without cost to the Owner or Phipps any and all defects due to faulty workmanship and/or materials which may appear within the guarantee or warranty period established in the contract documents, and if no such period is stated in the contract documents, then such guarantees shall be for a period of one (1) year from date(s) of acceptance of the project by the Owner. Such warranty obligation of Subcontractor includes all cost to remove or correct work of Subcontractor or others
Page 10 of 14 not otherwise covered by said warranty in order to perform warranty work. This warranty shall be in addition to all other warranties and remedies, express or implied under the law and the contract documents. In the event the Subcontractor is contacted directly by the Owner or representatives of the Owner to perform warranty work or correct defective Subcontractor s work, Subcontractor shall notify Phipps within two (2) working days. Section 9. Contractor s Obligations 9.1 Phipps agrees that no claim for services rendered or materials furnished by Phipps to Subcontractor shall be valid unless written notice is given to Subcontractor within a reasonable time of furnishing the services or materials. The final amount of the claim shall be given in writing by Phipps to the Subcontractor as soon as practicable. 9.2 Storage areas, if available, will be allocated by Phipps for Subcontractor s materials and equipment. Areas to be used by Subcontractor for parking, office trailer(s), marshaling yard(s), etc., must be first approved by Phipps. Section 10. Default and Termination 10.1 If Subcontractor breaches any of its contractual obligations, Phipps may serve a written notice of default (Notice to Subcontractor including Surety Compliance). The notice of default shall give Subcontractor not less than two (2) working days to cure the default. If Subcontractor fails to cure the default, Phipps may, at its option, do either or both of the following: (a) take whatever action it deems necessary to correct the breach and deduct the entire cost incurred by Phipps together with all loss or damage from any monies then due or that become due to Subcontractor or (b) terminate the subcontract by delivering written notice of termination to Subcontractor, and its Surety. 10.1.1 To correct Subcontractor s breach, Phipps shall be entitled to take over or to cause others to take over all work being performed or to be performed under this subcontract, together with any tools and equipment, and any appliances, materials and supplies specifically ordered or fabricated for the project, whether at the jobsite or elsewhere, and to complete such work for the account of Subcontractor by whatever method Phipps deems reasonably practical and expedient. Subcontractor acknowledges that Phipps may employ a substitute contractor on lump sum or time and material basis to complete partially performed construction work and in such event, no further payment to Subcontractor shall be made until said work is completed and accepted and paid for by Owner. If the unpaid balance of the subcontract sum exceeds the entire cost of completed said work, such excess shall be paid to Subcontractor; however, if such entire cost exceeds the unpaid balance, Subcontractor shall immediately pay to Phipps the additional costs incurred. 10.1.2 Any action by Subcontractor to cure a default during the cure period must be bona fide and effective to correct or substantially correct the default. Until Phipps has withdrawn the notice of default, Subcontractor shall not be entitled to a second notice and right to cure for the same default included in the original notice and right to cure, which occurs within sixty (60) calendar days of the original notice. All warranties shall survive any default and termination, and Subcontractor shall remain responsible to Phipps for such warranty obligations. 10.1.3 The term entire cost as used in the subcontract shall include all sums paid and obligations incurred by Phipps or others to do the work and furnish the labor, materials, services, tools and equipment, or have the same done or furnished by others, including, but not limited to, reasonable overhead and profit; all and any other necessary expenses of any nature reasonably incurred in connection with or incidental to such work, including court costs and attorney fees. Phipps may back charge and deduct the entire cost from any monies owed to Subcontractor and if the entire cost exceeds the amount owed, Subcontractor shall immediately pay Phipps the amount of such excess. 10.2 If Phipps terminates the subcontract, Subcontractor shall not be entitled to any further payments under the subcontract until Subcontractor s work has been completed and accepted by the Owner and payment has been received by Phipps from the Owner. In the event that the unpaid balance due exceeds Phipps cost of completion, the difference shall be paid to Subcontractor, but if the entire cost exceeds the balance due, Subcontractor agrees to immediately pay the difference to Phipps. 10.3 Phipps may terminate this subcontract (a) if its contract with the Owner is terminated or (b) upon forty-eight (48) hours written notice to Subcontractor. If the subcontract is terminated for either of these reasons, Subcontractor shall be paid for the percentage of work completed through the date of the termination of the subcontract. Receipt of payment by Phipps from the Owner is a condition precedent to payment of the Subcontractor. 10.4 Subcontractor may terminate this subcontract for breach by Phipps of its obligations under this subcontract. In the event Subcontractor feels Phipps is in breach of any of its obligations to Subcontractor, Subcontractor shall provide Phipps with written notice setting forth the basis of the breach and provide Phipps with five (5) working days to cure the default. If Phipps fails to make a bona fide and effective effort to correct or substantially cure the default within the cure period, Subcontractor may terminate the subcontract and shall be entitled to recover its lost profits associated with Phipps default. If the claimed breach is disputed by Phipps, Subcontractor shall continue its work