MID-CITY/EXPOSITION LIGHT RAIL TRANSIT PROJECT D_Design-Build Contract No. 1... ·...

Exposition Metro Line Construction Authority Contract No.1-06

DESIGN-BUILD CONTRACT TABLE OF CONTENTS

MID-CITY/EXPOSITION LIGHT RAIL TRANSIT PROJECT

Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build i Conformed Design-Build Contract

1.0 PROJECT DOCUMENTS.................................................................................................. 2 1.1 Abbreviations and Definitions .........................................................................................................2 1.2 Contract Documents ........................................................................................................................2 1.3 Interpretation....................................................................................................................................2 1.4 Omission of Details, Clarification from Authority ..........................................................................4 1.5 Responsibility for Design ................................................................................................................4 1.6 Maintenance of, Access to and Audit of Records ............................................................................5 1.7 Retention of Records........................................................................................................................6 1.8 Public Records Act...........................................................................................................................7

2.0 ROLES AND RESPONSIBILITIES OF CONTRACTOR................................................ 8 2.1 Design and Construction..................................................................................................................8 2.2 Representations and Warranties .......................................................................................................9 2.3 Cooperation......................................................................................................................................9 2.4 Supervision ....................................................................................................................................10 2.5 Contractor Personnel and Organization .........................................................................................10 2.6 Project Organizational Structure .................................................................................................... 11 2.7 Meetings......................................................................................................................................... 11 2.8 Compliance with Laws; Equal Employment Opportunity .............................................................12 2.9 Delay Mitigation ............................................................................................................................13

3.0 ROLES AND RESPONSIBILITIES OF AUTHORITY.................................................. 13 3.1 Role of Authority ...........................................................................................................................13 3.2 Effect of Reviews, Inspections, Tests and Approvals ....................................................................13 3.3 Right of Way ..................................................................................................................................13 3.4 Office Space...................................................................................................................................14

4.0 STRUCTURE OF DESIGN BUILD PAYMENTS TO CONTRACTOR ....................... 14 4.1 Overview of Compensation ...........................................................................................................14 4.2 Design Services..............................................................................................................................15 4.3 Professional Services .....................................................................................................................15 4.4 Insurance........................................................................................................................................15 4.5 Construction...................................................................................................................................15 4.6 Timing of Payments .......................................................................................................................15

5.0 SCOPE OF DESIGN SERVICES AND RESPONSIBILITIES....................................... 15 5.1 General Scope ................................................................................................................................15 5.2 Responsibilities ..............................................................................................................................16 5.3 Design Organization ......................................................................................................................16 5.4 Preliminary Engineering Documents .............................................................................................16 5.5 Review and Corrections.................................................................................................................16 5.6 Notice of Defects ...........................................................................................................................16

6.0 NOTICE TO PROCEED WITH DESIGN WORK.......................................................... 17 6.1 Notice of Award .............................................................................................................................17 6.2 Notice to Proceed...........................................................................................................................17 6.3 Design Package..............................................................................................................................18 6.4 Term of Design Services ................................................................................................................18

7.0 COMPENSATION FOR DESIGN SERVICES............................................................... 18 7.1 Basis of Compensation ..................................................................................................................18 7.2 Design Fee .....................................................................................................................................18




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build ii Conformed Design-Build Contract

7.3 Design Allowance and Design Costs .............................................................................................19 7.4 Design Labor Costs........................................................................................................................19 7.5 Design Overhead Costs/Multiplier ................................................................................................20 7.6 Cost Reimbursements ....................................................................................................................20 7.7 Task Orders ....................................................................................................................................20

8.0 NEGOTIATION OF CONSTRUCTION PRICE; ESTABLISHMENT OF LUMP SUM FIXED PRICE .................................................................................................................. 21

8.1 Cost Estimate .................................................................................................................................21 8.2 Contractor’s Price Proposal ...........................................................................................................21 8.3 Negotiation between Contractor and Authority .............................................................................22 8.4 Design Packages ............................................................................................................................22 8.5 Lump Sum Fixed Price ..................................................................................................................23 8.6 Actions Following Agreement .......................................................................................................23 8.7 Actions Following Failure to Agree...............................................................................................23 8.8 Negotiation of Insurance Prices .....................................................................................................24

9.0 PROFESSIONAL SERVICES ......................................................................................... 24 9.1 Responsibility ................................................................................................................................24 9.2 Compensation for Professional Services .......................................................................................25 9.3 Professional Services Fee ..............................................................................................................25 9.4 Professional Services Allowance ...................................................................................................25 9.5 Professional Services Labor Costs.................................................................................................27 9.6 Professional Services Overhead Costs...........................................................................................27 9.7 Cost Reimbursements ....................................................................................................................28

10.0 INCENTIVES FOR DESIGN WORK AND PROFESSIONAL SERVICES WORK .... 28 10.1 Incentive for Completion of Design Work for less than the Design Allowance ............................28 10.2 Determinations regarding Design Incentives.................................................................................28 10.3 Payment of Design Incentive .........................................................................................................29 10.4 Incentive for Completion of Professional Services Work..............................................................29 10.5 Determinations Regarding Professional Services Incentive ..........................................................29 10.6 Payment of Professional Services Incentive ..................................................................................29

11.0 OWNERSHIP AND USE OF DRAWINGS AND MATERIALS................................... 30 11.1 Property of Authority .....................................................................................................................30 11.2 Confidentiality ...............................................................................................................................30

12.0 SCOPE OF CONSTRUCTION WORK AND RESPONSIBILITIES ............................. 30 12.1 Applicability ..................................................................................................................................30 12.2 General...........................................................................................................................................30 12.3 Project Management ......................................................................................................................30 12.4 Workmanship .................................................................................................................................31 12.5 Materials ........................................................................................................................................31

13.0 NOTICE TO PROCEED WITH CONSTRUCTION ................................................. 31 13.1 Preconditions .................................................................................................................................31 13.2 Issuance of NTP.............................................................................................................................31

14.0 TERM OF CONSTRUCTION ......................................................................................... 32 14.1 Period of Performance ...................................................................................................................32 14.2 Implementation of the Work ..........................................................................................................32 14.3 Schedule Controls and Reports ......................................................................................................32




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build iii Conformed Design-Build Contract

14.4 Weather Delays Caused by Rain ....................................................................................................32 15.0 TOTAL COMPENSATION FOR CONSTRUCTION WORK ....................................... 33

15.1 Lump Sum Fixed Price ..................................................................................................................33 15.2 Construction Fee ............................................................................................................................34 15.3 Construction Allowance.................................................................................................................34 15.4 Construction Contingency .............................................................................................................35 15.5 Construction Incentive for Completion for Less Than Construction Allowance...........................35 15.6 Construction Incentive for Unused Construction Contingency Amount (“CCA”) ........................35 15.7 Construction Incentive for Early Completion................................................................................36

16.0 CONTRACTING PLAN, DBEs AND SUBCONTRACTS............................................. 36 16.1 Contracting Plan ............................................................................................................................36 16.2 Disadvantaged Business Enterprises; Equal Employment Opportunity ........................................38 16.3 Subcontracts...................................................................................................................................40

17.0 RISK ALLOCATION....................................................................................................... 42 17.1 Discovery of Certain Site Conditions ............................................................................................42 17.2 Differing Site Conditions ...............................................................................................................43 17.3 Responsibility for Utility Relocations / Rearrangements and Changes in City Facility Work ......44 17.4 Responsibility for Force Majeure Events.......................................................................................51 17.5 Responsibility for Environmental Compliance..............................................................................53 17.6 Responsibility for Hazardous and Contaminated Substance Remediation ....................................54 17.7 Risk of Loss ...................................................................................................................................56 17.8 Governmental Approvals ...............................................................................................................57 17.9 Environmental Compliance ...........................................................................................................58

18.0 INVOICING AND PAYMENT PROVISIONS............................................................... 59 18.1 Design Payments............................................................................................................................59 18.2 Professional Services Payments.....................................................................................................60 18.3 Insurance Payments .......................................................................................................................61 18.4 Construction Progress Payments....................................................................................................62 18.5 Invoicing Instructions ....................................................................................................................62 18.6 Application for Construction Progress Payment............................................................................63 18.7 Terms of Payment ..........................................................................................................................64 18.8 Payment for Goods Not Incorporated into the Work .....................................................................65 18.9 Title….. ..........................................................................................................................................65 18.10 Retention on Construction Progress Payments ..............................................................................65 18.11 Additional Deductions and Withholding........................................................................................67 18.12 Stop Notice.....................................................................................................................................68 18.13 Payment to Subcontractors ............................................................................................................68 18.14 Payment of Taxes ...........................................................................................................................69 18.15 Final Payment ................................................................................................................................69

19.0 CHANGE ORDERS ......................................................................................................... 71 19.1 Circumstances Under Which Change Orders May Be Issued .......................................................72 19.2 Procedure for Issuance of Change Orders by Authority ................................................................74 19.3 Contractor-Initiated Change Orders...............................................................................................75 19.4 Contents of Change Orders............................................................................................................81 19.5 Certain Limitations ........................................................................................................................83 19.6 Pricing of Change Orders...............................................................................................................85




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build iv Conformed Design-Build Contract

19.7 Basis for Establishing Costs Associated with Change Orders .......................................................86 19.8 Changes in Basic Project Configuration ........................................................................................92 19.9 Changes Outside of Scope .............................................................................................................93 19.10 Change Order Records...................................................................................................................94 19.11 Disputes .........................................................................................................................................96 19.12 No Release or Waiver ....................................................................................................................96 19.13 Insurance Proceeds.........................................................................................................................97 19.14 Additional Requirements ...............................................................................................................97

20.0 DISPUTE RESOLUTION................................................................................................ 98 20.1 Introduction....................................................................................................................................98 20.2 Continuance of Work During Dispute............................................................................................99 20.3 Membership ...................................................................................................................................99 20.4 Operation .....................................................................................................................................102 20.5 Procedures....................................................................................................................................102 20.6 Compensation ..............................................................................................................................106 20.7 Cooperation..................................................................................................................................106 20.8 Provisional Remedies...................................................................................................................106 20.9 Continuing Performance ..............................................................................................................106 20.10 Participation in Other Proceedings ..............................................................................................107 20.11 Standard of Review......................................................................................................................107

21.0 VALUE ENGINEERING............................................................................................... 107 21.1 Description of VECPs..................................................................................................................107 21.2 Information to be Provided ..........................................................................................................107 21.3 Review by the Authority ..............................................................................................................108 21.4 Acceptance of VECPs..................................................................................................................108 21.5 Contract Price Adjustment ...........................................................................................................108

22.0 BONDING, INSURANCE AND INDEMNIFICATION............................................... 110 22.1 Payment and Performance Bonds ................................................................................................ 110 22.2 Insurance Requirements............................................................................................................... 111 22.3 Indemnification And Liability......................................................................................................123

23.0 PROJECT COMPLETION............................................................................................. 130 23.1 Time of Essence; Notice to Proceed ............................................................................................130 23.2 Completion Deadlines..................................................................................................................130 23.3 Liquidated Damages ....................................................................................................................131 23.4 Suspension ...................................................................................................................................132 23.5 Delay in Issuance of Notice to Proceed .......................................................................................133

24.0 AUTHORITY ACCEPTANCE........................................................................................ 134 24.1 Passage of Title ............................................................................................................................134 24.2 Substantial Completion................................................................................................................134 24.3 Punch List Completion ................................................................................................................136 24.4 Final Acceptance..........................................................................................................................136 24.5 Assignment of Causes of Action..................................................................................................137

25.0 WARRANTIES .............................................................................................................. 138 25.1 Representations, Warranties And Covenants of Contractor .........................................................138 25.2 Overall Warranty..........................................................................................................................139 25.3 Warranty Term .............................................................................................................................139




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build v Conformed Design-Build Contract

25.4 Remedy ........................................................................................................................................139 25.5 Permits and Costs.........................................................................................................................140 25.6 Warranty on Corrected Deficiencies ............................................................................................140 25.7 Subcontractor Warranties .............................................................................................................140 25.8 Warranty Beneficiaries.................................................................................................................141 25.9 Damages for Breach of Warranty.................................................................................................141 25.10 Disputes .......................................................................................................................................141

26.0 PARTNERING ............................................................................................................... 141 26.1 Intent… ........................................................................................................................................141 26.2 Participation and Responsibilities................................................................................................142 26.3 Workshops....................................................................................................................................142 26.4 Rights of Parties...........................................................................................................................142

27.0 DEFAULT; SUSPENSION OF WORK; TERMINATION........................................... 142 27.1 Default of Contractor ...................................................................................................................142 27.2 Event of Default; Remedies .........................................................................................................144 27.3 Failure to Comply Caused by Damage Event..............................................................................146 27.4 Failure by Authority to Make Undisputed Payment ....................................................................146 27.5 Termination for Convenience.......................................................................................................147 27.6 Notice of Termination for Convenience.......................................................................................147 27.7 Contractor’s Responsibilities after Receipt of Notice of Termination .........................................147 27.8 Inventory......................................................................................................................................148 27.9 Settlement Proposal .....................................................................................................................148 27.10 Agreement as to Amount of Termination Settlement...................................................................148 27.11 No Agreement as to Amount of Claim.........................................................................................149 27.12 Reduction in Amount of Claim....................................................................................................150 27.13 Partial Payment ............................................................................................................................151 27.14 Inclusion in Subcontracts.............................................................................................................151 27.15 Limitation on Amounts Payable to Subcontractors......................................................................151 27.16 No Consequential Damages or Unearned Profits to Contractor ..................................................152 27.17 No Waiver ....................................................................................................................................152 27.18 Dispute Resolution.......................................................................................................................152 27.19 Allowability of Costs ...................................................................................................................152 27.20 Suspension of Work .....................................................................................................................152 27.21 Termination Due to Non-Appropriation of Funds .......................................................................152

28.0 MISCELLANEOUS ....................................................................................................... 153 28.1 Amendments ................................................................................................................................153 28.2 Waiver.. ........................................................................................................................................153 28.3 Independent Contractor................................................................................................................154 28.4 Successors and Assigns................................................................................................................154 28.5 Designation of Representatives; Cooperation with Representatives ...........................................155 28.6 Gratuities and Conflicts of Interest ..............................................................................................155 28.7 Survival........................................................................................................................................156 28.8. Limitation on Third Party Beneficiaries ......................................................................................156 28.9 Personal Liability of Authority Employees..................................................................................156 28.10 No Estoppel..................................................................................................................................156 28.11 Governing Law and Venue...........................................................................................................157




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build vi Conformed Design-Build Contract

28.12 Notices and Communications ......................................................................................................157 28.13 Further Assurances.......................................................................................................................158 28.14 Severability ..................................................................................................................................158 28.15 Headings ......................................................................................................................................159 28.16 MTA Provisions ...........................................................................................................................159 28.17 Entire Agreement .........................................................................................................................159 28.18 Patents and Copyrights ................................................................................................................159 28.19 Attorney’s Fees ............................................................................................................................160




Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build vii Conformed Design-Build Contract

APPENDICES

APPENDIX 1 ABBREVIATIONS AND DEFINITIONS APPENDIX 2 DESIGN SERVICES CERTIFICATION FOR REQUEST FOR PAYMENT APPENDIX 2A PROFESSIONAL SERVICES CERTIFICATION FOR REQUEST FOR PAYMENT APPENDIX 3 SUBCONTRACTOR / DBE SCHEDULE / FORMS APPENDIX 4 DISPUTES REVIEW BOARD AGREEMENT APPENDIX 5 DESIGNATION OF INITIAL REPRESENTATIVES APPENDIX 6 DRAFT MTA/AUTHORITY TRUST AGREEMENT PROVISIONS APPENDIX 7 PERFORMANCE BOND APPENDIX 8 PAYMENT (MATERIAL AND LABOR) BOND APPENDIX 9 PARCEL AVAILABILITY MATRIX APPENDIX 10 FORM PP – PROPOSAL PRICE


Mid-City/Exposition Light Rail Transit Project March 17, 2006 LRT Design-Build 1 Conformed Design-Build Contract


Design-Build Contract

This Design-Build Contract (Contract) is entered into by and between the Exposition Metro

Line Construction Authority (Authority), a public entity of the State of California, and FCI /

Fluor / Parsons (Contractor), a joint venture, effective as of the last date set forth on the

signature page hereto, with reference to the definitions contained in Appendix 1 hereto and

the following facts:

RECITALS

A. The Authority is a public entity created by the California State Legislature pursuant to

Section 132600 of the Public Utilities Code for the purpose of developing a light rail transit

project from downtown Los Angeles to downtown Santa Monica, including an initial phase

known as the Mid-City/Exposition Light Rail Transit Project. Upon completion of the Mid-

City/Exposition Light Rail Transit Project it will be transferred to the Los Angeles County

Metropolitan Transportation Authority (the “MTA”).

B. The Authority issued a Request for Proposals in September 2005 seeking proposals

for the design and construction of the Mid-City/Exposition Light Rail Transit Project, under a

negotiated design-build contract.

C. Proposals were evaluated using a best value process, taking into account both

technical qualifications and price, and the Contractor was determined to be the highest

ranked proposer.

D. The Board of Directors of the Authority approved contract award to the Contractor at

its March 2, 2006 meeting and authorized the execution of a design build contract and

issuance of a Notice to Proceed for design and professional services work.

E. The Authority and the Contractor have agreed upon final contract terms and

conditions setting forth the rights and obligations of the parties and the requirements

governing the performance of the Work.

NOW, THEREFORE, in consideration of the above and the parties’ mutual promises as

hereinafter set forth, the Authority and the Contractor agree to the following terms,

conditions, and provisions:



1.0 PROJECT DOCUMENTS 1.1 Abbreviations and Definitions Appendix 1 hereto contains the meaning of various abbreviations and other terms used in the

Contract Documents.

1.2 Contract Documents The Contract Documents consist of the following, set forth hereafter in their order of

precedence:

(a) Design-Build Contract (The Terms and Conditions)

(b) Federal Requirements and Contract Clauses

(c) The Scope of Work and General Requirements

(d) The Approved Design Documents

(e) The Technical Specifications, Performance Specifications, Design Criteria,

and Drawings

(f) Fire, Life, Safety Criteria

(g) Mitigation Monitoring Plan

(h) Preliminary Engineering Drawings

(i) Final Environmental Impact Statement and Record of Decision

(j) Geotechnical Reports and Preliminary Environmental Initial Site Assessment

(k) Manuals (DBE and EEO Programs, Safety, Labor Compliance, Local Hire

Program)

(l) Master Agreements (Third Party Agreements)

(m) The RFP

(n) The Contractor’s Response to the RFP; including its Final Revised Proposal

(if any)

1.3 Interpretation In the Contract Documents, the following principles of interpretation shall apply:

(a) All requirements in this Design-Build Contract and the other Contract

Documents apply to both the Design Work and the Construction Work unless otherwise

specified.

(b) The singular includes the plural, and vice versa.



(c) References to statutes or regulations include all statutory or regulatory

provisions consolidating, amending, or replacing the statute or regulation referred to.

(d) The words “including,” “includes,” and “include” shall be deemed to be

followed by the words “without limitation.” Words such as “herein,” “hereof,” and

“hereunder” shall refer to the entire document in which they are contained and not to any

particular provision or section. Words not otherwise defined, which have well-known

technical or construction industry meanings, are used in accordance with such recognized

meanings. Words of any gender shall include each other gender where appropriate.

(e) References to persons include their respective permitted successors and

assigns and, in the case of Governmental persons, persons succeeding to their respective

functions and capacities.

(f) References to “days” mean calendar days unless otherwise specified. If the

date to perform any act or give any notice (including the last date for performance or

provision of notice within a specified time period) falls on a non-working day, such act or

notice may be timely performed on the next succeeding day which is a working day.

Notwithstanding the foregoing, requirements relating to actions to be taken in the event of an

emergency, and other requirements for which it is clear that performance is intended to occur

on a non-working day, shall be required to be performed as specified, even though the date in

question may fall on a non-working day.

(g) Unless otherwise specified, lists contained in the Contract Documents

defining the Project or the Work shall not be deemed all-inclusive.

(h) The Contractor shall interpret the Contract as a whole and read all its parts

together. The Contractor shall not take advantage of any apparent non-conformity that may

be found in the Contract Documents. Should it appear that any contract provision requires

interpretation, the Contractor shall request from the Authority in writing (with an RFI), an

explanation or interpretation of contract provisions as may be necessary, and shall conform to

the interpretation given by the Authority. The interpretation of the Authority is final, and the

Contractor shall proceed with the Work based on the Authority’s interpretation, with the right

to submit a PCO Notice in accordance with Section 19 if the Contractor believes that the

Authority’s interpretation constitutes a change in the Contract or the Work.



(i) In determining whether a conflict exists between the Proposal and other

Contract Documents, to the extent that the Proposal can reasonably be interpreted as an offer

to provide higher quality items than otherwise required by the Contract Documents or to

perform services in addition to those otherwise required, or otherwise contains terms which

Authority considers to be more advantageous than the requirements of the other Contract

Documents, the Proposal shall not be considered in conflict with the other Contract

Documents, and Contractor’s obligations hereunder shall include compliance with all such

statements, offers and terms.

1.4 Omission of Details, Clarification from Authority (a) Omission of details of the Work from the Contract Documents or the

misdescription of details of Work which are necessary to carry out the intent of the Contract

Documents, or which are customarily performed, shall not relieve the Contractor from

performing such omitted Work, or the misdescribed details of the Work, and they shall be

performed as if fully and correctly set forth and described in the Contract Documents,

without entitlement to a Change Order.

(b) If the Work to be done is not sufficiently detailed or explained in the Contract

Documents, the Contractor shall apply to the Authority in writing for further written

clarification and shall conform to the clarification provided. The Contractor shall promptly

notify the Authority of all errors, omissions, inconsistencies, or other defects (including

inaccuracies and inconsistencies) which it discovers in the Contract Documents, and shall

obtain from Authority specific instructions in writing regarding any such error, omission, or

defect before proceeding with the Design Work affected thereby.

1.5 Responsibility for Design The Baseline Requirements and Reference Documents regarding the Project as described in

the RFP shall comprise the basis for design of the Project. The Authority has allowed the

Contractor access to the Site for purposes of inspection and testing.

1.5.1 Contractor Responsible for Design

The Contractor is fully responsibility for the design of the Project and shall furnish the design

of the Project, utilizing fully licensed design firms in accordance with Section 2.1. The

Contractor is responsible for correcting any errors, omissions and defects in such design

through the design and/or construction process, and shall not be entitled to an increase in the



Lump Sum Fixed Price (“LSFP”) or extension of the Contract Time in connection with such

correction.

1.5.2 Liability

The Authority, or Metro, will not be responsible or liable in any respect for any loss, damage,

injury, liability, cost or cause of action suffered by the Contractor, its employees, agents,

officers or Subcontractors or any other Persons for whom the Contractor is legally or

contractually responsible, by reason of use of information contained in the Baseline

Requirements or Reference Documents or action or forbearance in reliance thereon, except to

the extent that Authority has agreed that the Contractor shall be entitled to an increase in the

Contract Price and/or extension of a Completion Deadline with respect to such matter. To

the extent the Contractor or anyone on the Contractor’s behalf uses any of such information

in any way, such use is made on the basis that the Contractor, not the Authority (or Metro),

has approved and is responsible for such information; and the Contractor is capable of

conducting, and is obligated to conduct, all studies, analyses and investigations as it deems

advisable to verify or supplement such information, and that any use of such information is

entirely at Contractor’s own risk and at its own discretion.

1.5.3 Professional Licensing Laws

All design and engineering Work furnished by Contractor shall be performed by or under the

supervision of Persons licensed to practice architecture, engineering or surveying (as

applicable) in the State of California, by personnel who are careful, skilled, experienced and

competent in their respective trades or professions, who are professionally qualified to

perform the Work in accordance with the Contract Documents and who shall assume

professional responsibility for the accuracy and completeness of the Design Documents and

Construction Documents prepared by them in accordance with the normal standard of care of

the industry. The Authority will not pay for or receive any design services that are in

violation of any professional licensing laws.

1.6 Maintenance of, Access to and Audit of Records The Contractor shall maintain at its Project office (or maintain at its central office and assure

availability within 24 hours) a complete set of all books and records for the Project. The

Contractor shall grant to the Authority, or other parties designated by the Authority, such



audit rights and allow Authority such access to and the right to copy such books and records

as Authority may request.

1.6.1 Actual Incurred Cost Documents

Where the payment method for any Work is on an actual incurred cost basis, the Authority

examination and audit rights shall include all books, records, documents and other evidence

and accounting principles and practices sufficient to reflect properly all direct and indirect

costs of whatever nature claimed to have been incurred and anticipated to be incurred for the

performance of such Work. If an audit indicates Contractor has been over credited under a

previous payment, the over credit will be credited against current payments.

1.6.2 Change Orders

For cost and pricing data submitted in connection with pricing Change Orders, unless such

pricing is based on adequate price competition, established catalog or market prices of

commercial items sold in substantial quantities to the public, or prices set by law or

regulation, the Authority and its representatives have the right to examine all books, records,

documents and other data of the Contractor related to the negotiation of or performance of

the Work under such Change Orders for the purpose of evaluating the accuracy,

completeness, and timeliness of the cost or pricing data submitted. The right of examination

shall extend to all documents deemed necessary by the Authority or its representatives to

permit adequate evaluation of the cost or pricing data submitted, along with the computations

and projections used therein.

1.7 Retention of Records The Contractor shall maintain all records and documents relating to the Work (including

copies of all original documents delivered to Authority) for five years after the Final

Acceptance Date or termination date, as applicable, and shall notify the Authority where such

records and documents are kept. Notwithstanding the foregoing, all records which relate to

Claims being processed or actions brought under the dispute resolution provisions hereof

shall be retained and made available until such actions and Claims have been finally

resolved. Records to be retained include all books and other evidence bearing on the

Contractor’s costs under the Contract Documents. The Contractor shall make these records

and documents available to the Authority for audit and inspection, at the Contractor’s office,

at all reasonable times, without charge, and shall allow the Authority to make copies of such



documents (at no expense to Contractor). If approved by the Authority, photographs,

microphotographs or other authentic reproductions may be maintained instead of original

records and documents.

1.8 Public Records Act 1.8.1 Acknowledgement and Applicability

The Contractor acknowledges and agrees that all records, documents, drawings, plans,

specifications and other materials in the Authority’s possession, including materials

submitted by the Contractor are subject to the provisions of the California Public Records

Act (Government Code sections 6250 et seq.). The Contractor shall be solely responsible for

all determinations made by it under such Act, and for clearly and prominently marking each

and every page or sheet of materials with “Trade Secret” or “Confidential” as it determines to

be appropriate.

1.8.2 Trade Secrets

If any of the materials submitted by the Contractor to the Authority are clearly and

prominently labeled “Trade Secret” or “Confidential ” by the Contractor, the Authority will

endeavor to advise the Contractor of any request for the disclosure of such materials prior to

making any such disclosure. Under no circumstances, however, will the Authority be

responsible or liable to the Contractor or any other Person for the disclosure of any such

labeled materials, whether the disclosure is required by law or by court order or occurs

through inadvertence, mistake, or negligence on the part of the Authority, except for any

disclosure of trade secrets or proprietary information in violation of a confidentiality

agreement.

1.8.3 Litigation

In the event of litigation concerning the disclosure of any material submitted by the

Contractor to the Authority, the Authority’s sole involvement will be as a stakeholder

retaining the material until otherwise ordered by a court, and the Contractor shall be fully

responsible for otherwise prosecuting or defending any action concerning the materials at its

sole cost and risk.

1.8.4 Proprietary Information

The Contractor’s documents shall always remain the property of Contractor and shall be

considered to be in the Contractor’s possession, subject to the Authority’s right to review.



The Authority acknowledges that the Contractor may consider that certain documents

constitute trade secrets or proprietary information. This acknowledgment is based upon the

Authority’s understanding that the information contained in these documents is not known

outside the Contractor’s business, is known only to a limited extent and by a limited number

of employees of Contractor, is safeguarded while in the Contractor’s possession, and may be

valuable to the Contractor’s construction strategies, assumptions and intended means,

methods and techniques of construction. The Authority further acknowledges that the

Contractor expended money in developing the information included in these documents and

further acknowledges that it would be difficult for a competitor to replicate the information

contained therein. The Authority acknowledges that these documents and the information

contained therein are being made accessible to the Authority only because it is an express

prerequisite to award of the Contract.

2.0 ROLES AND RESPONSIBILITIES OF CONTRACTOR 2.1 Design and Construction 2.1.1 The Contractor shall furnish the design of the Project and, should the Contractor and

the Authority reach agreement on the Construction Price(s) as set forth in Section 8.0 hereof,

the Contractor shall construct the Project as designed, in accordance with applicable

professional engineering principles and in accordance with the terms and conditions set forth

in the Contract Documents; and shall construct the Project, as designed, in accordance with

applicable construction and manufacturing practices generally accepted as standards of the

industry in the State of California, in a good and workmanlike manner, free from material

defects and in accordance with the terms and conditions set forth in the Contract Documents.

Except for materials, services and efforts otherwise specifically excluded from the

Contractor’s scope of work in the Contract Documents, all materials, services and efforts

necessary to achieve Substantial Completion, Punch List Completion and Final Acceptance

and to perform the Reliability Demonstration Testing on or before the deadlines provided in

Section 23 shall be the Contractor’s sole responsibility; and the cost of all such materials,

services and efforts will be included in the Lump Sum Fixed Price.

2.1.2 The Contractor shall comply with the requirements of any and all applicable

Governmental Rules and the conditions of any required licenses and permits prior to

commencing the Construction Work. Once a LSFP has been agreed upon, the Contractor



shall be responsible for complying with such requirements at its sole cost and without any

increase in the LSFP or extension of any Completion Deadline on account of such

compliance, regardless of whether such compliance would require additional time for

performance or additional labor, equipment and/or materials not expressly provided for in the

Contract Documents. The Contractor will be required to obtain in due course any

Governmental Approval for which it is responsible under the General Requirements and

thereafter to keep such Approvals in effect so as to enable the Work to proceed in accordance

with the Contract Documents.

2.1.3 Submittals

All submittals, documents and drawings shall be in American English. All dimensions shall

be in English Units, except for metric parts.

2.2 Representations and Warranties The Contractor represents, warrants, and covenants that it will, throughout the term of

performance of the Work under this Section, maintain all required authority, license status,

professional ability, skills, and capacity to perform the Contractor’s obligations hereunder

and will perform them in accordance with the requirements of the Contract Documents. The

Contractor further represents and warrants that it can successfully perform the Work in

conformity with Contract Documents and all Governmental Approvals.

Contractor represents that (a) the Contractor is a joint venture duly organized and validly

existing under the laws of the State of California, with all requisite power to own its

properties and assets and carry on its business as now conducted or proposed to be

conducted, (b) the Contractor is composed of FCI Constructors, Inc., a California

corporation, Fluor Enterprises, a California corporation, and Parsons Transportation Group,

an Illinois corporation, and (c) each member of Contractor is duly qualified to do business,

and is in good standing, in the State of California, and will remain in good standing

throughout the term of the Contract and for as long thereafter as any obligations remain

outstanding under the Contract Documents.

2.3 Cooperation The Contractor shall cooperate with Authority, the Program Management Oversight

Consultant, the Utilities, Federal, State and Local Agencies with jurisdiction over the Project

in its performance of the Work, including design reviews, construction inspections, and other

matters relating to the Work.



2.4 Supervision The Contractor shall supervise and be responsible to Authority for acts and omissions of

Contractor’s employees, agents, officers, and Subcontractors and other persons performing

portions of the Work, as though the Contractor directly employed all such persons.

2.5 Contractor Personnel and Organization 2.5.1 Project Manager

The Project Manager shall have full responsibility for the prosecution of the Work and will

act as a single point of contact in all matters on behalf of the Contractor. The Authority

reserves the right to give direction to the Project Manager as necessary to complete the Work

on schedule.

2.5.2 Key Personnel

The Contractor shall assign Key Personnel to the Project in accordance with the

Organizational and Management Structure and the Staffing Plan set forth in the Contractor’s

response to the RFP. The Key Personnel shall remain on the Project until such time as the

Authority decides it does not need the expertise and/or services or until completion of all

Work. The Authority shall have the right to review the qualifications of each individual to be

appointed to a Key Personnel position (including personnel employed by Subcontractors) and

to approve or disapprove use of such person in such position prior to the commencement of

any Work by such individual. The Contractor shall not change any Key Personnel without

the prior written consent of the Authority, which will not be unreasonably withheld.

Key Personnel:

Ray Hughes, Project Manager Glen Ianni, Construction Manager Nick Kakasenko, Lead Heavy Civil Safety Manager Gene Danylyshyn, Project Quality Manager Rod Lopez, Project Scheduler Tom Wilson, Design Manager

2.5.3 Removal of Contractor Personnel

If the Authority determines that any individual employed by the Contractor or by any

Subcontractor is not performing the Work in a proper and skillful manner, then at the written

request of the Authority, the Contractor or such Subcontractor shall remove such individual

and such individual shall not be re-employed for any Work without the prior written approval

of the Authority. If the Contractor or the Subcontractor fails to remove such individual or



individuals or fails to furnish skilled and experienced personnel for the proper performance

of the Work, then the Authority may suspend the affected portion of the Work by delivery of

written notice of such suspension to the Contractor. Such suspension shall in no way relieve

the Contractor of any obligation contained in the Contract Documents or entitle the

Contractor to an extension of time, additional payment, or Change Order. Once compliance

is achieved, the Contractor shall be entitled to and shall promptly resume the Work.

2.5.4 Additional Personnel

The Contractor shall assign such further professional and technical personnel as required to

perform the Work and comply with the terms of the Contract Documents, including

Subcontractor personnel.

2.5.5 Damages for Removal of Key Personnel

2.5.5.1 Any removal of Key Personnel will potentially result in the Authority incurring

significant losses, including loss of reputation, loss of potential governmental funding, and

loss out of other contracts held by the Authority related to the Project. The Authority and the

Contractor acknowledge that these potential losses, while actual, may not be easy to prove in

a court of law. Accordingly, the Authority and the Contractor have agreed to the liquidated

damages amount set forth in Section 2.5.5.2 as a good faith estimate of the Authority’s

potential losses, not as a penalty:

2.5.5.2 If the Contractor makes the decision to remove its Project Manager or other Key

Personnel prior to the completion of the Work, the Contractor shall pay to the Authority

liquidated damages in the amount of $100,000.00. If the Authority agrees to a change in the

Contractor’s Project Manager or other Key Personnel, or if the Contractor documents that the

individual was removed for violation of law or regulation or pursuant to the order of a Court,

then no liquidated damages will be assessed against the Contractor.

2.6 Project Organizational Structure The Contractor’s Management and Organizational Structure is set forth in its response to the

RFP. Any changes to that Structure during the implementation of the Work shall be

submitted to the Authority in writing, and any proposed change involving Key Personnel

shall be subject to the provisions of Section 2.5.

2.7 Meetings The Contractor is required to have personnel, with appropriate technical skills and decision-

making authority, attend Project meetings. The Contractor shall prepare and update a master



meeting calendar listing all scheduled Project related meetings (including community and

third party meetings such as with municipal agencies when necessary), which can reasonably

be identified. The calendar shall be updated at least weekly, and shall show a minimum of

eight weeks in advance. The calendar shall be made available electronically, and/or on a

website, and/or distributed on paper, at the Authority’s discretion. The Contractor shall

prepare minutes of all Project meetings and submit them to the Authority within three

working days, unless otherwise agreed to by the Authority in writing or specified in the

Contract Documents. The Authority shall have three days to review the minutes and request

revision to the minutes unless otherwise specified in the Contract Documents. Any requested

revisions must be submitted within three days of the Authority’s request.

2.8 Compliance with Laws; Equal Employment Opportunity 2.8.1 The Contractor shall comply with all requirements of all applicable Governmental

Rules, including:

(A) The Labor Code and implementing regulations, including requirements with respect

to prevailing wages, nondiscrimination, and employment and training of apprentices,

as more specifically described in the Labor Compliance Manual;

(B) All Environmental Laws, including requirements regarding the handling, generation,

treatment, storage, transportation and disposal of Hazardous Waste (subject to the

provisions contained in Section 22.3.2.2 limiting Contractor’s obligation to execute

hazardous waste manifests as a “generator”); and

(C) All requirements regarding nondiscrimination, including those set forth in Contract

Compliance Manual within the DBE and EEO Programs.

2.8.2 During the performance of the Contract, the Contractor will not discriminate against

any person or group of persons on account of race, color, religion, creed, national origin,

ancestry, physical handicap, medical condition, age, marital status, sex or sexual orientation.

2.8.3 The Contractor confirms that it has an equal employment opportunity policy ensuring

equal employment opportunity without regard to race, color, national origin, sex, age,

religion or handicap; and that it maintains no employee facilities segregated on the basis of

race, color, religion or national origin.



2.8.4 The Contractor shall include Provisions 2.8.2 and 2.8.3 in every Subcontract, and

shall require that they be included in all Subcontracts at lower tiers, so that such provisions

will be binding upon each Subcontractor.

2.9 Delay Mitigation The Contractor shall mitigate delay to the Project in all circumstances, to the extent

reasonably possible, including by resequencing, reallocating or redeploying its forces to other

Work, as appropriate.

3.0 ROLES AND RESPONSIBILITIES OF AUTHORITY 3.1 Role of Authority The Authority shall give approval of and order changes in the Work and shall review and

approve Contractor’s invoices and authorize payments.

3.2 Effect of Reviews, Inspections, Tests and Approvals The Contractor shall not be relieved of any obligation to perform the Work in accordance

with the Contract Documents because of any review, test, inspection or approval performed

or granted by any persons, or by any failure of any person to take such action. The reviews,

inspections, tests and approvals conducted by the Authority, Program Manager, Program

Management Oversight Consultant, Utilities, Federal, State and Local Agencies and others

do not constitute acceptance of the materials or Work reviewed, tested, or inspected. The

Authority may reject or accept any Work or materials, and may request changes and/or

identify additional Work which must be done, at any time prior to the Final Acceptance Date

as specified in Section 23, whether or not previous reviews, inspections, tests or approvals

were conducted by any such persons.

3.3 Right of Way 3.3.1 Unless otherwise provided in another Section, the Authority shall acquire all Right of

Way and shall provide the Contractor with access to the Right of Way in order to allow Work

to be performed in accordance with the Preliminary Schedule or the approved Baseline

Schedule, as appropriate. A list of the Right of Way scheduled for acquisition, and the

anticipated availability dates, is provided in Appendix 9. Except with respect to Utility

Easements as provided in the General Requirements Section 01180, the Contractor shall be

responsible for obtaining, at its cost, any temporary easements or other real property interests

which Contractor deems necessary or advisable in connection with construction of the

Project and/or Relocations.



3.3.2 In the event that the Authority at any time determines it will be unable to provide

access to a particular parcel or parcels prior to the scheduled date, the Authority shall notify

the Contractor, as soon as possible after it makes such determination, and shall provide the

revised projected date for delivery of access. The Contractor shall cooperate with the

Authority to work around such parcel until access can be provided, including rescheduling

Work so as to avoid any delay to the overall Project. If delay to the overall schedule is

unavoidable, then the Contractor shall take appropriate action to minimize the cost and time

impact thereof.

3.3.3 As a necessary condition for obtaining any increase in the LSFP or extension of the

Contract Time related to the Authority’s late delivery of access to the parcels as described in

3.3.2, the Contractor shall provide the Authority with a written notice, within 30 days after

the Authority’s notice under 3.3.2, when lack of availability of a given parcel will result in an

impact to the cost or schedule.

3.4 Office Space The Authority shall provide approximately 18,000 SF of space for the Contractor's use

relating solely to Project activities for a maximum of 18 months for the Design Phase (April

06 to October 07), and 9,000 SF of space for the Contractor's use for the Construction Phase

(October 07 through December 2010). The Authority will pay the rental (including utilities

except for air conditioning during non-business hours), provide audio-visual equipment for

the main conference room, and provide furniture for this space. All other costs associated

with the operations of the Contractor, including additional office space that the Contractor

requires, parking, computers, phone system, CADD stations, plotters and satellite field office

trailers for Contractor site personnel are included in the respective Allowance for either

Design, Professional Services or Construction. The Authority shall pay all costs relating to

its own operations.

4.0 STRUCTURE OF DESIGN BUILD PAYMENTS TO CONTRACTOR 4.1 Overview of Compensation The compensation to the Contractor from the Authority for the performance of the Work

shall fall into the following four categories: (a) Design; (b) Professional Services; (c)

Insurance Costs; and (d) Construction.



4.2 Design Services The Contractor will be paid the Design Fee in accordance with Section 7.2 and will be

reimbursed for the Design Costs in an amount not to exceed the Design Allowance, in

accordance with Section 7.3, Section 7.4 and Section 7.5

4.3 Professional Services The Contractor will be paid the Professional Services Fee in accordance with Section 9.3 and

will be reimbursed for Professional Services costs in an amount not to exceed the

Professional Services Allowance, in accordance with Section 9.4, Section 9.5, and Section

9.6.

4.4 Insurance The Contractor will be paid for Insurance costs as a LSFP in accordance with Section 18.3.

4.5 Construction The Contractor will be paid for the Construction Work on the basis of Progress Payments, in

a total Lump Sum Fixed Price amount, in accordance with Section 15 and Section 18.

4.6 Timing of Payments Compensation for Professional Services will be over the entire term of performance of the

Work. Compensation for Design and Construction will be primarily during those respective

phases of the Work. However, if the Work proceeds in separate Design/Construction

packages, the Contractor may be performing Construction on certain packages at the same

time it is completing Design on other packages and in those circumstances compensation for

Design and Construction will overlap. Compensation for insurance is specified in Section

18.3.1.

5.0 SCOPE OF DESIGN SERVICES AND RESPONSIBILITIES

5.1 General Scope The Contractor shall be responsible for developing, providing, and completing all Design

Documents for the Project, as described in the Scope of Work and General Requirements

Section 01102. The responsibilities of the Contractor shall include design management, the

development and implementation of design procedures, the development and conducting of a

design process, the preparation of all drawings and materials necessary to complete the

Design Documents, and the delivery of signed and sealed design documents ready for

construction (or in the case of self-performed Work, design documents sufficient to construct

the Work). The Contractor shall proceed with the Work in accordance with the design



packages and the design stages described in the Scope of Work and General Requirements

Section 01102. The Authority may also, in its discretion, issue Task Orders to the Contractor

for particular elements included within the Design Scope.

5.2 Responsibilities The Contractor shall supervise and direct design performance using its best skill and

following professional engineering practices, and shall be responsible for selecting the means

of performance. The Contractor shall be responsible for the acts and omissions of its

employees, agents, and subcontractors.

5.3 Design Organization The Contractor shall use the design organization identified in its Proposal in response to the

RFP, and the design organization designated as the lead engineer/designer in that Proposal

shall be the Engineer of Record. The Contractor shall not change the designated designer(s)

or shift work from one design organization to another (including changes in work performed

by Subcontractors) without the prior written approval of Authority.

5.4 Preliminary Engineering Documents The Contractor shall utilize the Preliminary Engineering documents in carrying out the

Design of the Project under the Contract Documents, consistent with the Contractor’s

responsibility under Section 5.5.

5.5 Review and Corrections The Contractor shall review the design contained in the Baseline Requirements and

Reference Documents, and shall notify Authority in writing, as soon as practicable after the

NTP for Design, of any errors, omissions, inconsistencies or other defects in such design.

The Contractor shall be fully responsible for correcting all such errors, omissions,

inconsistencies and other defects at its own cost and expense. If it is necessary to modify any

Baseline Requirements in order to correct any errors, omissions, inconsistencies or other

defects, the Contractor shall first obtain Authority’s and any third party approvals required by

the Contract Documents.

5.6 Notice of Defects If the Contractor learns of any actual or potential defect in the services or Work provided

under this Agreement, or any problem associated with the results of the performance of such

services or Work, or of any nonconformance with a provision of the Contract Documents or

of Federal, state, or local law, the Contractor shall inform the Authority in writing, within 24



hours after learning of such defect, problem or nonconformance, with a full description of the

defect, problem, or nonconformance.

6.0 NOTICE TO PROCEED WITH DESIGN WORK

6.1 Notice of Award Following Contract award by the Authority, the Authority shall provide the Contractor with a

Notice of Award. The Notice of Award will direct the Contractor to submit the following to

the Authority within twenty (20) days: the certificates of insurance described in Section

22.2.1.

6.2 Notice to Proceed 6.2.1 Within five (5) days after receipt from the Contractor of the documentation required

under Section 6.1, the Authority will issue a Notice to Proceed to the Contractor for the

Design Work. For Scheduling purposes it shall be deemed that the Contractor shall

commence performance of the Work upon receipt of a written notice to proceed and shall

complete the Work within the time period specified in the Contract.

6.2.2 The Contractor shall not proceed with any work required under this Agreement

without a written Notice to Proceed from the Authority. Any Work performed or expenses

incurred by the Contractor prior to the Contractor’s receipt of Notice to Proceed shall be

entirely at the Contractor’s risk and is not subject to reimbursement. Work performed and

expenses incurred after Notice to Proceed will be eligible for reimbursement under the terms

of this Design-Build Contract.

6.2.3 Upon receipt of an NTP for the Design Work, the Contractor is also authorized to

proceed with associated and necessary Professional Services.

6.2.4 Within twenty (20) days after the Notice to Proceed for Design, the Contractor shall

submit to the Authority the Contracting Plan required under Section 16.1.

6.2.5 Following the Notice to Proceed for design, the Contractor shall also submit to the

Authority the DBE performance plan required under Section 16.2.3.1 and the DBE

information required under Section 16.2.3.2, in accordance with the schedules for submittals

set forth in those Sections.



6.3 Design Package The Authority may authorize the Contractor, to proceed with the Design Work in specific

and identifiable Design packages. If such authorization is provided, the Contractor shall

implement the Work in accordance with those packages.

6.4 Term of Design Services 6.4.1 The period of service for the Design Work shall commence upon issuance of the

Notice to Proceed under Section 6.2 and will conform to the Contractor’ proposal schedule,

unless extended by the Authority or unless the sequencing of Design Packages requires that

certain Work extend beyond that date.

6.4.2 If the Authority and the Contractor successfully negotiate a LSFP for Construction,

the overall period of services of the Contractor will be increased, as agreed upon by the

parties, to cover the period required for the Construction Work.

7.0 COMPENSATION FOR DESIGN SERVICES

7.1 Basis of Compensation 7.1.1 The Contractor shall provide all personnel, facilities, materials and equipment

required to complete, to the full satisfaction of the Authority, all the Design Services

described in Scope of Work and General Requirements Section 01102.

7.1.2 The Authority shall compensate the Contractor for its costs incurred, which are

allowable under this Contract, to perform the Design Work. The Contractor shall submit

Invoices to the Authority and maintain auditable records and be paid pursuant to the Section

18.1.2.

7.1.3 As described in this Section, compensation to the Contractor for performance of

Design Work will consist of (1) payment of the Design Fee; and (2) reimbursement of the

Design Costs.

7.2 Design Fee 7.2.1 The Contractor will be compensated during the performance of the Design Work in

an amount not to exceed the Design Fee, as set forth in the Contractor’s proposal and

accepted by the Authority.

7.2.2. If an Authority-Directed Change increases the Design Costs above the amount of the

Design Allowance, the Contractor shall be eligible for payment of overhead in connection



with that Change Order in accordance with Section 19.7.6, plus a Design Fee to be negotiated

by the Contractor and the Authority.

7.2.3. If the Contractor incurs Design Costs that are in excess of the Design Allowance and

that are not pursuant to a Change Order, the Contractor shall not be entitled to reimbursement

of those excess costs or to any additional Design Fee, overhead, or profit in connection with

those excess costs.

7.2.4. The Design Fee shall be the Contractor’s sole compensation for the following:

(a) Profit.

(b) Costs over and above a multiplier of 2.4 on the cost of salaries (fixed

compensation paid to employees, exclusive of benefits) paid for direct labor (direct labor

includes any premium pay required by statutory requirements).

7.3 Design Allowance and Design Costs 7.3.1 The Authority has established a Design Allowance as the estimated total cost of

performing the Design Scope of Work, in the amount of $ 21,100,000. The Design

Allowance is the total amount the Authority has budgeted and allocated for the cost of the

Design phase of the Project. The Contractor shall provide and pay for all labor, materials,

equipment, tools, water, heat, utilities, transportation, and other facilities and services

necessary for the proper execution and completion of all Design Work, all at no cost to the

Authority other than the compensation described in this Section.

7.3.2 The Contractor acknowledges that it has an obligation under this Agreement to

complete the Design Work for an amount not to exceed the Design Allowance, and also

acknowledges that the Design Allowance may not be increased except pursuant to an

Authority-Directed Change.

7.3.3 The Design Costs that are reimbursable under the Design Allowance set forth in

Section 7.3.1 are in two categories: Design Labor Costs described in Section 7.4 and Design

Overhead described in Section 7.5.

7.4 Design Labor Costs 7.4.1 Design Labor Costs are defined as the cost of salaries paid for direct labor for all

Design production and Design Management (including Designs of temporary facilities and

excluding what is paid for in Professional Services). Design support labor during

Construction (“DSDC”) of the Project is included in Professional Services. The hourly labor



rates shall be the actual pay rates of the professionals proposed to perform the design at their

then current pay rates as proposed by the Contractor and agreed to by the Authority.

7.4.2 Design Labor Costs shall also include costs for permitting of the design and

Jurisdictional approvals.

7.5 Design Overhead Costs/Multiplier For the performance of the Design Work, the Contractor shall be compensated for Design

Labor Costs times a 2.4 multiplier for the Design Overhead Costs. The 2.4 multiplier is to

cover, but is not limited to, the following expenses: all home office overhead, including but

not limited to, burden and fringe benefits such as: vacation, sick, holiday, workers

compensation insurance, commercial automobile liability insurance, medical and life

insurance, employee welfare and development, employers share of FICA, unemployment and

disability insurance, bonding for Design, and General Overhead such as: indirect labor,

administrative tasks not directly billable by the Project Staff at the Project Office(s) in

support of design (for example invoice processing performed at a Home Office), operating

and reproduction supplies, administrative, financial and legal, facility costs, other rents and

leases, computers and facilities, repairs and maintenance, telephone and utilities, relocation,

advertising, professional activities, postage, freight and other expenses, corporate general and

administrative (G & A) assessment, depreciation and amortization, internal services,

gains/losses; bank charges, other interest expense, other direct costs (“ODCs”), and provision

for losses.

7.6 Cost Reimbursements The Contractor will be paid on a cost reimbursable basis, up to and not to exceed the Design

Allowance, for the Design Labor Costs times a 2.4 multiplier for the Design Overhead Costs

incurred in performing Design Work. Such reimbursement will cover the cost of all labor,

materials, and equipment necessary to complete the specific work involved, as more

specifically described in the invoicing and payment provisions set forth in Section 18.

7.7 Task Orders The Authority may in its sole discretion issue Task Orders to advance a particular part of the

Design Work. If the Authority issues Task Orders for any element of the Design Work, the

Contractor shall be reimbursed for the work performed under the Task Order in accordance

with the terms thereof. Any Task Order Work (other than pursuant to a Change Order) shall

be compensated within the Design Allowance.



8.0 NEGOTIATION OF CONSTRUCTION PRICE; ESTABLISHMENT OF LUMP SUM FIXED PRICE

8.1 Cost Estimate Within 90 days after Notice to Proceed for the Design Work, the Contractor shall prepare an

initial estimate for the Construction Work, based on the Contract Documents. At the 60%

Design submittal phase for each design package, the Contractor shall prepare an interim

construction cost estimate and furnish this estimate to the Authority 14 days after the

submission of the 60% Design submittal.

If the Contractor’s estimated price is greater than the Construction Allowance (or the portion

of the allowance attributable to that package of Work), the parties shall discuss alternative

methods for performing the Work under the Contracting Plan, and shall review and evaluate

value engineering alternatives that were developed under Section 21 and other cost reduction

measures, with the goal of achieving a proposed price(s) that is within the Construction

Allowance.

8.2 Contractor’s Price Proposal At or near the completion of each specific Design Package (as specified in Section 6.3 and

the Scope of Work and General Requirements Section 01102) or at the conclusion of Design

(if Work is not proceeding in packages), the Contractor shall develop and submit to the

Authority a proposed price or prices for performing the Construction Work (or specific

packages or elements of that Work). In developing its proposed price, the Contractor shall

make every effort to be as consistent as feasible with the Construction Allowance. The

proposed price should include all direct construction costs for labor, materials, and

equipment (as well as an allocated share of the total construction bonding costs). The

Contractor shall develop these prices on the basis of:

(a) the detailed scope, quantity, and other information developed or established

during the Design process;

(b) current market rates for labor and materials;

(c) the prices or estimates established, pursuant to the Contracting Plan, for

particular package or elements of the Work;

(d) other relevant cost estimating data, information, and materials; and

(e) the amount, if any, of the Construction Contingency described in Section 15.4

that the Contractor estimates is necessary for that particular Work.



8.3 Negotiation between Contractor and Authority 8.3.1 Immediately following the submittal of a price proposal by the Contractor, for the

Work or a specified package thereof, the Authority and the Contractor shall meet and begin

negotiation of the Construction Price (or the price for the specific Design Package(s), if

applicable). The negotiations shall be conducted in good faith and shall be “open book”.

The Contractor shall make available to the Authority all supporting background information,

unit prices, quantities, scope detail, and pricing data on which its proposed construction

price(s) was based, and the Authority shall make available to the Contractor all supporting

information, estimating techniques, and pricing data on which its Construction Allowance

was based.

8.3.2 If the Contractor’s proposed price is greater than the Construction Allowance (or the

portion of the allowance attributable to that package of Work), the parties shall discuss

alternative methods for performing the Work under the Contracting Plan, and shall review

and evaluate value engineering alternatives that were developed under Section 21 and other

cost reduction measures, with the goal of achieving a proposed price(s) that is within the

Construction Allowance.

8.3.3 If the Authority and the Contractor are unable to agree on the Construction Price for a

particular package of the Work (or an element of such package), the Authority may direct the

Contractor to subcontract that Work. In such event the Authority may require the

subcontracts to be awarded on a best value basis or based on competitive bids from

prequalified firms. The Contractor shall propose the specific procedures to be followed,

subject to Authority approval. The amount of the competitively awarded subcontract shall

then constitute the agreed upon Construction Price for that particular package or element of

the Work.

8.3.4 Any agreement on a Construction Price for a particular package of the Work shall

identify the amount of the construction contingency, if any, which is agreed to be allocated to

that package.

8.3.5. The negotiations shall be conducted for a period not to exceed thirty (30) days, unless

extended for an additional fifteen (15) days by mutual agreement of the parties.

8.4 Design Packages As noted in Section 8.2, in lieu of a single construction price, the Authority and the

Contractor may negotiate construction prices for specific Design packages or Work elements.



8.5 Lump Sum Fixed Price 8.5.1 If the parties reach an agreement on the price for all of the Construction Work, that

price shall be deemed to be the Construction Price. The total price for construction will then

be treated as a Lump Sum Fixed Price (LSFP) that will consist of (a) the Construction Price,

as agreed upon by the parties (including any allocated amount from the construction

contingency); plus (b) the Construction Fee, as set forth in Section 15.2.1.

8.5.2 If the parties reach an agreement on the price for a specific package of the Work, that

price shall be deemed to be the Construction Price for that package. The total price for that

package will then be treated as a LSFP that will consist of (a) the Construction Price for that

package, as agreed upon by the parties (including any allocated amount from the construction

contingency); plus (b) the portion of the Construction Fee allocable to that package of the

Work, which shall be equal to the Construction Fee percentage identified in Section 15.2.1

times the Construction Price for that package, provided that the total amounts paid as

Construction Fee for all packages of the Work may not exceed the Construction Fee set forth

in Section 15.2.1. This provision also applies to Work covered by Section 8.3.3.

8.5.3 If the parties negotiate Construction Prices by packages as described in Section

8.5.2, the sum of the LSFP’s for each of those packages will constitute the LSFP for the

Construction Work.

8.6 Actions Following Agreement If the Authority and the Contractor reach agreement on the Construction Price, the parties

will promptly enter into a Contract amendment incorporating that agreed upon Construction

Price and establishing the LSFP for the agreed upon package(s) of the Construction Work.

8.7 Actions Following Failure to Agree 8.7.1 If the Authority and the Contractor are not able to agree on the Construction Price for

the Work (or any package or element of the Work), the Authority in its sole discretion may

proceed to procure or otherwise obtain that specific Work from other firms, in accordance

with terms and conditions the Authority will establish and prepare. In that event, the

Authority will have no responsibility to compensate the Contractor for any Construction

Work and any portion of the Construction Fee and Overhead allocable to that package of the

Work, which shall be equal to the Construction Fee and Overhead percentage identified in

Section 15.2.1 times the Construction Price for that package, upon which price agreement

could not be reached.



8.7.2 In the event of a failure to agree, the Contractor will be responsible for completing a

camera ready IFB (complete biddable packages) for the Work to be performed by other firms

as described in Section 8.7.1, and also for completing all other remaining design work. The

Authority will issue the final IFB and select the other firm. The other firm will have a

contract directly with the Authority. The Contractor will continue to serve as the Project

Manager and the Engineer of Record for the Work to be performed by other firms, and will

be compensated for that Work as Professional Services in accordance with Section 9.0. If

any package of the Work is performed by another firm pursuant to this Section, the

Contractor shall not be liable for any liquidated damages for failure to achieve the Substantial

Completion Deadline if the contractor demonstrates to the satisfaction of the Authority that

(1) the Contractor exercised due diligence and complied with the Contract Documents in

serving as Project Manager for the Work performed by such other firm; and (2) the failure to

achieve the Substantial Completion Deadline was directly attributable to the performance or

non-performance of such other firm and was not due to the fault or negligence of the

Contractor. If the failure to achieve the Substantial Completion Deadline was due to more

than one factor, the Contractor shall only be relieved of liquidated damages for those days of

delay that are directly attributable to the performance or non-performance of such other firm.

8.8 Negotiation of Insurance Prices Prior to the commencement of the Construction Work, the Authority and the Contractor shall

negotiate a LSFP for the insurance coverages required for the Construction Work under

Section 22.2.2.2 (excluding Professional Liability Coverage). These coverages must cover

the Project from NTP for the first Construction Package through Final Acceptance.

9.0 PROFESSIONAL SERVICES 9.1 Responsibility For the duration of the Contract, the Contractor shall be responsible for the total management

of the design, construction, installation, inspection, Design support labor during Construction

(“DSDC”) of the Project, testing and acceptance of the Work provided under this Contract,

pursuant to the terms and conditions thereof. The Contractor shall be responsible for

establishing the required organization and procedures and providing personnel (in accordance

with its Organizational Structure and Staffing Plan) and supporting equipment/facilities to

ensure that the Project is completed within the time schedule set forth herein. If the



Contractor and the Authority are unable to agree on a Construction Price for the Construction

Work (or any package or element thereof) pursuant to Section 8, the Contractor shall have an

obligation to continue to serve as Project Manager and Engineer of Record for that Work.

9.2 Compensation for Professional Services As described in this Section, compensation to the Contractor for performance of Professional

Services will consist of (1) payment of the Professional Services Fee; and (2) reimbursement

of the Professional Services Costs.

9.3 Professional Services Fee 9.3.1 The Contractor will be compensated during the performance of the Professional

Services Work in an amount up to and not to exceed the Professional Services Fee, as set

forth in the Contractor’s proposal and accepted by the Authority.

9.3.2 If an Authority directed Change Order increases the Professional Services costs over

the Professional Services Allowance, the Contractor shall be eligible for payment of

overhead in connection with that Change Order in accordance with Section 19.7.6, plus a

Professional Services Fee to be negotiated by the Contractor and the Authority.

9.3.3. If the Contractor incurs Professional Services Costs that are in excess of the

Professional Services Allowance and that are not pursuant to a Change Order, the Contractor

shall not be entitled to reimbursement of those excess costs or to any additional Professional

Services Fee, overhead, or profit in connection with those excess costs.

9.3.4. The Professional Services Fee shall be the Contractor’s sole compensation for the

following:

(a) Profit.

(b) Costs over and above an Owner’s multiplier of 2.2 on the cost of salaries

(fixed compensation paid to employees, exclusive of benefits) paid for direct labor (direct

labor includes any premium pay required by statutory requirements).

9.4 Professional Services Allowance 9.4.1 The Authority has established a Professional Services Allowance as the estimated

total cost of performing the Professional Services Scope of Work, in the amount of $

31,600,000. The Professional Services Allowance, plus the Professional Services Fee, is the

total amount the Authority has budgeted and allocated for the Professional Services phase of

the Project. The Contractor shall provide and pay for all labor, materials, equipment, tools,

water, heat, utilities, transportation, and other facilities and services necessary for the proper



execution and completion of all Professional Services Work, all at no cost to the Authority

other than the compensation described in this Section. The Professional Services Allowance

includes, but is not limited to, the following:

(a) Project Management – Project Manager, Design-Build Manager, Design

support labor during Construction (“DSDC”) of the Project, including completion of as-built

drawings

(b) Construction Management – Construction Managers, Deputy or Assistant

Construction Managers, Resident Engineer(s) and Resident Engineer Assistant(s)

(c) Contract Administration / Management – Contract Administrators(s),

DBE/EEQ/AA Contract Compliance and Construction Claims Analyst(s)

(d) Document Control / Configuration Management

(e) Environmental Officer (Services, Compliance)

(f) Quality Assurance / Quality Control – Quality Engineer(s), Quality Control

Inspector(s)

(g) Project Controls – Cost Analyst(s), Cost Engineer(s), Scheduling Engineer(s),

and Estimator(s)

(h) Project Field and Office Engineers, Purchasing personnel, and Human

Resources personnel

(i) Safety – Lead Heavy Civil Safety Representative, Safety Engineer(s) (Civil,

Tunnel (for cut & cover), etc.)

(j) Community Relations – Public Affairs Officer(s)

(k) Administrative (Aide, Assistant, Analyst, etc.) – Receptionists(s) and

Secretary(s)

(l) ITS Network / User Support

(m) Specialists – Geotechnical Instrumentation Specialist (including

instrumentation and readings), Geotechnical analysis (including borings and interpretation of

Geotechnical data), any field investigations and associated equipment (including

contaminated soils investigations), Right of Way Specialist, System Integration Engineer(s),

Testing and Start-up, Third Party Administrator(s), Construction Security Specialist(s) and

Construction Specialist(s)

(n) Survey Party



(o) 2.2 Multiplier on bare labor

9.4.2 The Contractor acknowledges that it has an obligation under this Agreement to

complete the Professional Services Work for an amount not to exceed the Professional

Services Allowance, and also acknowledges that the Professional Services Allowance may

not be increased except pursuant to an Authority directed Change Order.

9.4.3 The Professional Services Costs that are reimbursable under the Professional Services

Allowance are in two categories: Professional Services Labor Costs described in Section 9.4

and 9.5 and Professional Services Overhead described in Section 9.6.

9.5 Professional Services Labor Costs 9.5.1 Professional Services Labor Costs are defined as the cost of salaries paid to labor for

Professional Services Management and Professional Services support labor in support of

Construction of the Project, as specified in Section 9.4. The hourly labor rates shall be based

on the actual pay rates of the professionals proposed to perform the Professional Services at

their then current pay rates as proposed by the Contractor and accepted by the Authority.

9.5.2 Equipment costs for specialty subcontractors, including but not limited to equipment

of specialty subcontractors performing Geotechnical borings and field investigations are

included in the Professional Services Allowance (but not included in the 2.2 multiplier) and

are reimbursed separately from the Professional Services Labor Costs.

9.6 Professional Services Overhead Costs For the performance of the Professional Services Work, the Contractor shall be compensated

for Professional Services labor costs times a 2.2 multiplier for the Professional Services

overhead costs. The 2.2 multiplier is to cover, but is not limited to, the following expenses:

all home office overhead, including but not limited to, burden and fringe benefits such as:

vacation, sick, holiday, workers compensation insurance, commercial automobile liability

insurance, medical and life insurance, employee welfare and development, employers share

of FICA, unemployment and disability insurance, bonding for Professional Services, and

general overhead such as: indirect labor, administrative tasks not directly billable by the

Project Staff at the Project Office(s) in support of Professional Services (for example invoice

processing performed at a Home Office), operating and reproduction supplies, safety and first

aid supplies for Staff personnel, administrative, financial and legal, partnering costs, DRB

expenses, facility costs, other rents and leases, repairs and maintenance, telephone and

utilities, relocation, advertising, professional activities, construction photographs, postage,



freight, Corporate general and administrative (G & A) assessment, depreciation and

amortization, internal services, bank charges, other interest expense, other direct costs

(ODCs), and provision for losses.

9.7 Cost Reimbursements The Contractor will be paid on a cost reimbursable basis, up to and not to exceed the

Professional Services Allowance, for the Professional Services Labor Costs times a 2.2

multiplier for the Professional Services Overhead Costs incurred in performing Professional

Services Work. Such reimbursement will cover the cost of all labor, materials, and

equipment necessary to complete the specific work involved.

10.0 INCENTIVES FOR DESIGN WORK AND PROFESSIONAL SERVICES WORK

10.1 Incentive for Completion of Design Work for less than the Design Allowance If the Contractor completes all of the Design Work, as set forth in the Scope of Work and

General Requirements Section 01102, (including the receipt of all City of Los Angeles,

County of Los Angeles, Caltrans and other third party jurisdictional approvals; the issuance

of the Design documents “Approved for Construction”; and the correction during

construction of any design errors and omissions) in a manner that is satisfactory to the

Authority and that does not adversely affect achievement of the Substantial Completion

Deadline, for a total design cost (excluding the Design Fee) that is less than the Design

Allowance, then the Contractor shall be eligible for incentives as follows:

(a) The Contractor shall be eligible for an incentive payment in an amount equal

to 25% of the amount by which the Design Allowance set forth in Section 7.3.1 exceeds the

total Design Costs incurred by the Contractor to complete the Design Work (excluding the

Design Fee), referred to as the “Design Underrun”.

(b) The remaining 75% of the Design Underrun shall be added to the

Construction Allowance set forth in Section 15.3.2, and shall be included in the

determination of the Contractor’s eligibility for a Constructive Incentive Payment under

Section 15.5.

10.2 Determinations regarding Design Incentives The Authority shall determine the applicability and amount of any Design incentive under

this Section at the Substantial Completion Date. The Authority shall provide the Contractor



with notice and an opportunity to comment before making any final determination under this

Section.

10.3 Payment of Design Incentive The 25% incentive earned under Section 10.1 (a) shall be paid to the Contractor within 30

days after a final determination under Section 10.2.

10.4 Incentive for Completion of Professional Services Work If the Contractor performs all of the Professional Services, as set forth in the Scope of Work

and General Requirements, in a manner that is satisfactory to the Authority and that does not

adversely affect achievement of the Substantial Completion Deadline, for a total Professional

Services cost (excluding the Professional Services Fee) that is less than the Professional

Services Allowance, then the Contractor shall be eligible for incentives as follows:

(a) The Contractor shall be eligible for an incentive payment in an amount equal

to 25% of the amount by which the Professional Services Allowance set forth in Section

9.4.1 exceeds the total Professional Services costs incurred by the Contractor to perform all

of the Professional Services Work (excluding the Professional Services Fee), referred to as

the “Professional Services Underrun”.

(b) The remaining 75% of the Professional Services Underrun shall be added to

the Construction Allowance set forth in Section 15.3.2, and shall be included in the

determination of the Contractor’s eligibility for a Construction Incentive Payment under

Section 15.5.

10.5 Determinations Regarding Professional Services Incentive The Authority shall determine the applicability and amount of any Professional Services

Incentive under this Section prior to Final Acceptance. The Authority shall provide the

Contractor with notice and an opportunity to comment before making any final determination

under this Section.

10.6 Payment of Professional Services Incentive The 25% incentive earned under Section 10.4 shall be paid to the Contractor at the time of

Final Payment under Section 18.15.



11.0 OWNERSHIP AND USE OF DRAWINGS AND MATERIALS

11.1 Property of Authority All drawings and materials developed by the Contractor as a part of its performance of the

Work shall be the property of the Authority. Upon completion of all Work, or upon the

termination or cancellation of the Work, all drawings and materials shall be delivered to the

Authority prior to final payment. All other materials provided to the Contractor by the

Authority to perform the work shall be retained by the Authority at completion, termination,

or cancellation of the Work. In the absence of an agreement by the parties, this Section 11.1

shall not operate to convey intellectual property rights to proprietary design materials that are

owned by the Contractor.

11.2 Confidentiality Any documents, reports, information, and drawings and materials available to or prepared or

assembled by the Contractor or subcontractors in the performance of the Work, shall not be

made available to any person, organization, or entity by the Contractor without advance

written consent from the Authority, unless the Contract Documents specifically direct the

Contractor to provide such materials to such other parties.

12.0 SCOPE OF CONSTRUCTION WORK AND RESPONSIBILITIES 12.1 Applicability This Section and Sections 13 through 15 shall apply to the performance of Construction

Work by the Contractor following an agreement on the Construction Price or prices pursuant

to Section 8 of this Design-Build Contract.

12.2 General The Contractor shall be responsible for conducting all Project Construction activities and for

furnishing all materials, appliances, tools, and labor of every kind required for the Scope of

Construction set forth in the General Requirements, and for constructing and completing all

tasks and Work in that Scope in a skillful and professional manner on or before the dates

specified in Section 23.

12.3 Project Management The Contractor shall be responsible for the management and oversight of Project

development and implementation, including budget and schedule controls, document

controls, invoice/cost controls, administration of quality assurance/quality control programs,

and other Project and technical oversight as specified in Section 9.0.



12.4 Workmanship The Contractor shall be responsible for assuring that all Construction Work performed is

carried out and completed in a skillful, professional, and workmanlike manner.

12.5 Materials 12.5.1 The Contractor shall be responsible for assuring that all materials, equipment, and

products incorporated into the work are new and are of the grade and quality specified in the

Performance/Technical Specifications and the Design Documents.

12.5.2 The Contractor shall be responsible for assuring only materials conforming to the

requirements of the Performance/Technical Specifications are incorporated in the Work. All

materials shall be manufactured, handled, and incorporated so as to ensure completed Work

in accordance with this Article, the Design Documents and the other Contract Documents.

12.5.3 Materials shall be transported, handled, and stored in a manner, which will ensure the

preservation of their quality, appearance, and fitness for the Work. All materials shall be

stored in a manner to facilitate inspection by the Authority.

13.0 NOTICE TO PROCEED WITH CONSTRUCTION

13.1 Preconditions A Notice to Proceed for Construction shall only be issued to the Contractor if the Contractor

and the Authority agree on the Construction Price (or on a Construction Price for a package

of the Work) pursuant to Section 8 and the Authority has delivered to the Contractor a copy

of its agreement(s) evidencing availability of funding for the Project. In addition, the

Contractor must provide to the Authority, prior to the issuance of a NTP for Construction, the

payment and performance bonds required under Section 22.1 and the certificates of insurance

required under Section 22.2.2.

13.2 Issuance of NTP The Contractor shall begin the Construction Work upon receipt of the Notice to Proceed from

the Authority for the Construction Work. The Notice may be in the form of a single NTP

covering the full Scope of Construction Work, or it may be a series of sequential NTP’s

covering specific packages or elements of the Work. In either event, the Contractor agrees

that upon NTP issuance it will prosecute the Work so that it will be completed and performed

on or before the Substantial Completion Deadline in Section 23. Following the Notice to

Proceed with Construction, the Contractor shall submit to the Authority the DBE information



required under Section 16.2.3.2 in accordance with the schedule for the submittal set forth in

that Section.

14.0 TERM OF CONSTRUCTION 14.1 Period of Performance The period of performance for all or a portion of the Construction Work shall commence

upon issuance of the NTP for all or a portion of Construction or upon other direction from

the Authority and shall expire on February 1, 2010. Time is of the essence in the

performance of the Construction Work. In carrying out the Construction Work, the

Contractor is required to perform all Work diligently and take all reasonable steps necessary

to ensure substantial and final completion of the Work in accordance with the deadlines

specified in Section 23. If any circumstances arise that cause the Contractor to believe that

the specified deadlines in Section 23 may or will not be met, the Contractor shall

immediately notify the Authority in writing.

14.2 Implementation of the Work Upon receipt of a Notice to Proceed, the Contractor shall proceed with the Work in

accordance with the Critical Path Schedule specified in Section 01310 of the Scope of Work

and General Requirements.

14.3 Schedule Controls and Reports The Contractor shall be responsible for managing and maintaining the Critical Path Schedule

and for establishing and implementing a system for comparing actual work performed with

the baseline schedule and tracking and resolving all schedule variances. The Contractor shall

prepare and submit to the Authority monthly progress schedules for the Work, as specified in

Section 01310 of the Scope of Work and General Requirements.

14.4 Weather Delays Caused by Rain For purposes of granting time extensions pursuant to the Section 19.5.2 in this Design-Build

Contract, resulting from rain more severe than normal which was not foreseeable, the impact

of normal rainfall for which the Contractor is not entitled to a time extension is defined by

the number of expected work days of delay (based on a five (5) day Standard Work Week)

caused by normal rainfall by month as follows:



Month Number of Work Days

January 5

February 5

March 6

April 2

May 1

June 1

July 1

August 1

September 1

October 1

November 1

December 3

In scheduling the Work, the Contractor shall account for the above number of workdays by

month for which the effects of normal rainfall are expected to prevent work. In the event the

Contractor works a regularly scheduled workweek other than five (5) days per week, the

above numbers shall be multiplied by the ratio of the actual average number of workdays per

week divided by five (5) workdays.

The number of workdays identified on the table above shall be utilized only for the

associated month and may not be added to or carried over to any subsequent month.

15.0 TOTAL COMPENSATION FOR CONSTRUCTION WORK 15.1 Lump Sum Fixed Price The Contractor shall be compensated for Construction Work in a total Lump Sum Fixed

Price (“LSFP”). The LSFP is the sum of the Construction Fee, described in Section 15.2,

and the Construction Price or Prices, described in Section 8.5. The Contractor will not be

provided any compensation in excess of the LSFP other than through a Change Order issued

by the Authority under Section 19 of this Design-Build Contract.



15.2 Construction Fee 15.2.1 The Contractor will be compensated during the performance of the Construction

Work for the Construction Fee set forth in the Contractor’s proposal and accepted by the

Authority. The Construction Fee is fixed and will not be increased or decreased on the basis

of the Construction Price(s) negotiated between the Contractor and the Authority. The

Contractor’s Construction Fee will be converted to a percentage of the Construction

Allowance for purposes of allocating the fee to a package or packages of the Work.

15.2.2 If an Authority directed Change Order increases the LSFP, the Contractor shall be

eligible for payment of overhead and profit in connection with that Change Order in

accordance with Section 19.7.6.

15.2.3 In the absence of such a Change Order described in 15.2.2, the Contractor will not be

paid any amount in excess of the LSFP.

15.2.4 The Construction Fee shall be the Contractor’s sole compensation for the following:

(a) Profit.

(b) Home Office Overhead

15.3 Construction Allowance 15.3.1 Not Used.

15.3.2 The Authority has established a Construction Allowance as the estimated total cost of

performing the Construction Scope of Work, in the amount of $ 295,000,000. The

Construction Allowance, plus the Construction Fee, is the total amount the Authority has

budgeted and allocated for the Construction phase of the Project. The Construction

Allowance will be superceded by the LSFP described in Section 15.1, which is binding on

the Contractor. The Construction Allowance includes, but is not limited to the following:

Construction Direct/Trade Labor up to and including General Superintendent and Foremen,

Construction Materials and Structures, Construction Small Tools and Consumables,

Construction Equipment, Subcontractors, General Requirements (other than those specified

in the Design and Professional Services Allowances), Field Logistics, Field Offices and

Expenses, construction related safety activities and supplies (such as first aid trailer, supplies,

safety incentive awards, training, drug testing, fire protection), Permits and Fees,

Jurisdictional Approvals, , Bonding for Construction, and all other Contractor’s General

Expenses and General Overhead for Construction.



15.3.3 Construction Trade Work Costs are defined as the costs of construction performed by

the Contractor and its subcontractors to complete the Scope of Work. Construction Trade

Work Costs are inclusive of all necessary costs to construct the Project, including labor

(which includes worker’s compensation insurance, commercial automobile liability

insurance, fringe benefits and taxes), materials, and equipment, except for the Construction

Fee (as defined in Section 15.2) and any Contingency. Equipment costs for specialty

subcontractors during Design, including but not limited to equipment of specialty

subcontractors performing Geotechnical borings, shall be considered as part of the

Professional Services Allowance.

15.4 Construction Contingency The Authority has established a Construction Contingency Amount (“CCA”) of $ 20,000,000

to cover risks and unanticipated Project costs. If the parties negotiate prices for specific

packages of the Work, as described in Section 8.5.2, they will agree upon the portion of the

CCA that will be allocated to each such package. Any amounts remaining in the CCA after

completion of the Work and Final Acceptance under Section 24 will be handled in

accordance with the incentive provisions set forth in Section 15.6.

15.5 Construction Incentive for Completion for Less Than Construction Allowance If the Contractor completes all of the Construction Work on or before the Substantial

Completion Deadline for a total Construction Price (excluding any Authority directed

Change Orders and the Construction Fee) that is less than the Construction Allowance, then

the Contractor shall be entitled to an Incentive Payment in an amount equal to 10% of the

difference between the total Construction Price (as described above) and the Construction

Allowance. For purposes of calculations under this Section, the Construction Allowance

shall be increased by the sum of any Design Cost Underrun described in Section 10.1 and

any Professional Services Underrun described in Section 10.4.

15.6 Construction Incentive for Unused Construction Contingency Amount (“CCA”) If there is a balance in the Construction Contingency Amount at the time of the issuance of a

Certificate of Final Acceptance under Section 24.4, the Authority shall first set aside from

that balance a claims reserve in the amount it deems necessary to cover any and all claims

arising from the Work, and then the Authority shall distribute to the Contractor 10% of the

funds remaining in the CCA, at the time of Final Payment under Section 18.15.



15.7 Construction Incentive for Early Completion If the Contractor is eligible for an incentive under Section 15.6 and completes all of the

Construction Work on or before the Substantial Completion Deadline, the Contractor shall be

entitled to an Incentive Payment that when combined with the incentive in 15.6 shall equal

20% of the funds remaining in the CCA, at the time of Final Payment under Section 18.15.

16.0 CONTRACTING PLAN, DBEs AND SUBCONTRACTS 16.1 Contracting Plan 16.1.1 Requirement

All Design and Construction Work must be carried out in accordance with a Contracting Plan

approved by the Authority.

16.1.2 Submittal to the Authority

The Contractor shall submit to the Authority, by the time specified in Section 6.2.4, the

Contracting Plan for the Design Work and the Construction Work. The Plan shall be based

on the proposed Contracting Plan submitted by the Contractor in response to the RFP, and

shall identify and explain any difference from that proposed Plan. The Contracting Plan shall

be subject to the review and approval of the Authority. Prior to commencing the

Construction Work, the Contractor shall submit to the Authority, for its approval, any

necessary revisions and updates to the Contracting Plan.

16.1.3 Contents of Plan

The Contracting Plan shall identify the delivery or subcontracting method that will be used

for each element or package of the Design and Construction Work. The allowable methods

for performing Construction Work (including supply of machinery, equipment, materials and

systems) are as follows: (a) self-performance by the Contractor; (b) performance by a

Subcontractor identified in the proposal, (c) performance by a Major Subcontractor selected

in accordance with a competitive process approved by the Authority as described below or

(d) performance by a non-Major Subcontractor. The Contracting Plan shall include

provisions to ensure that no Subcontract is entered into with a firm that is ineligible to

perform work on public works projects pursuant to Section 1777.1 or 1777.7 of the

California Labor Code (Contractor is permitted to rely on subcontractors self-certifications).

The Authority reserves the right, through its approval of the Contracting Plan, to concur in

the allocation and process of the work as described in this subsection. The Contractor



acknowledges that it will be responsible for demonstrating to the Authority that the cost of

any Construction Work not competitively procured is fair and reasonable or otherwise in the

best interest of the Authority.

16.1.4 Self Performance

The Contracting Plan must provide that not less than 30% and not more than 60% of the

Construction Work will be self performed by the Contractor and its equity participants.

16.1.5 Full and Open Competition for Major Subcontracts

The Authority shall have sole discretion to disapprove any proposed procurement process for

Major Subcontracts that Authority determines does not provide for full and open

competition. Authority’s approval will not be unreasonably withheld for the following

procurement procedures: (a) Work to be subcontracted through low-bid, with the bids

publicly solicited and a fixed price contract awarded to the responsible bidder whose bid,

conforming to the material terms and conditions of the invitation for bids, is lowest in price;

and (b) Work to be subcontracted through value based selection, requests for proposals will

be publicized, evaluation factors identified in the solicitation document and used to review

proposals, and with awards made to the firm whose proposal is most advantageous or offers

the best value to the Project, with price and other factors considered. The Authority

acknowledges that, if the Authority requires Work to be competitively procured that the

Contracting Plan contemplated would be performed by a listed Major Subcontractor, it may

be beneficial to allow firms on the Major Subcontractor’s team to participate in the

competition, and will evaluate requests to allow such participation on a case-by-case basis.

16.1.6 Packages

If the Contractor intends to implement the Work in specific packages, the Contractor shall

include in the Contracting Plan a description of the delivery or subcontracting methods (as

described in Section 16.1.3) proposed for each package.

16.1.7 Inclusion of DBE Goals and Good Faith Efforts

The Contracting Plan shall include an identification of the Work that will be performed, or is

anticipated to be performed, by DBE firms in order to achieve the DBE goals. In addition,

the Contracting Plan shall assure that the process of procuring and awarding subcontracts is

designed and carried out to assure good faith efforts to meet the DBE goals.



16.2 Disadvantaged Business Enterprises; Equal Employment Opportunity 16.2.1. General Requirement

16.2.1.1 The Authority is utilizing the MTA’s Diversity and Economic Opportunity

Programs, including a Disadvantaged Business Enterprises (DBE) Program (with certain

modifications) and an Equal Employment Opportunity and Affirmative Action Program as

set forth in DBE Program. For the purposes of DBE, Equal Employment Opportunity and

Affirmative Action Program compliance, references to the “MTA” or “METRO”, shall be

deemed to be references to the Authority unless otherwise noted.

16.2.1.2 In implementing the Project, the Contractor shall comply with the

Disadvantaged Business Enterprise (DBE) Regulations of the Department of Transportation,

as set forth in 49 C.F.R. Part 26, and with the DBE Program set forth in the Contract

Documents.

16.2.2. DBE Goals

The Contractor shall meet or make good faith efforts to meet the DBE contract goals for the

Project, which have been established by the Authority as (a) 20 % of the Design Allowance

(including Fee) (b) 20% of the Professional Services Allowance (including Fee), and (c) 20

% of the Construction Allowance (including Fee).

16.2.3. Performance Plan; Identification of DBE Subcontractors

16.2.3.1. The Contractor shall submit to the Authority, within twenty (20) days after the

Notice to Proceed for Design, a performance plan for the utilization of DBE subcontractors

to achieve the goals specified in Section 16.2.2. The plan shall include (a) an estimated

dollar amount to be awarded to DBE firms per year; (b) an identification of the areas of work

(in Design, Professional Services, and Construction) to be subcontracted to DBEs, specifying

the areas in which DBE firms have already been selected and the areas in which DBE firms

are anticipated to be used; (c) a description of the good faith efforts the Contractor has made

to date, and will make in the future, to meet the DBE goals; and (d) a description of the race

neutral means (consistent with 49 CFR 26.51) that the Proposer intends to use to facilitate

DBE participation.

16.2.3.2. The Contractor shall provide the Authority with the following DBE

information: (a) within fifteen (15) days after issuance of the NTP for Design, a list (with

names and addresses) of all certified DBE contractors that will perform any portion of the



Design Work or Professional Services associated with the Design Work, together with a

description of their Work and the dollar amount of their participation; and (b) within fifteen

(15) days after issuance of the first NTP for Construction, a list (with names and addresses)

of all certified DBEs that will perform any portion of the Construction Work or Professional

Services associated with the Construction Work, together with a description of their Work

and the dollar amount of their participation and an identification of the specific package of

the Construction work in which they will be involved and the pricing information for each

such package.

16.2.4 Good Faith Efforts and Regulatory Requirements

16.2.4.1 If the information provided under Section 16.2.3.2 (a) indicates a DBE goal in

Section 16.2.2 will not be met, the Contractor shall provide evidence of good faith efforts (as

described in the DBE program) to meet that goal as may be requested by the Authority to

supplement the information included in the proposal. If the information provided under

Section 16.2.3.2(b) with regard to a Construction Package indicates that DBE goal has not

been met for such package, in combination with all previous packages, the Contractor shall

either provide evidence of good faith efforts to meet that goal or shall provide information

regarding its plan to achieve the goal through future solicitations.

16.2.4.2 If the Contractor fails to meet a DBE goal, the Authority will make a fair and

reasonable judgment whether the Contractor made adequate good faith efforts, based on the

standards in the DBE Program and Appendix A to 49 C.F.R. Part 26 and Appendix II of the

Authority’s Contract Compliance Manual. The Authority will consider the quality, quantity,

and intensity of the different kinds of efforts that the Contractor has made. The efforts

employed by the Contractor should be those that could reasonably be expected if the

Contractor were actively and aggressively trying to obtain DBE participation sufficient to

meet the DBE goals. Mere pro forma efforts by the Contractor are not considered to be

sufficient, but the Authority will not ignore bona fide good faith efforts.

16.2.4.3 In accordance with 49 C.F.R. 26.53(f), the Contractor shall obtain the

Authority’s written consent prior to terminating for convenience any DBE contractor and

then self-performing the terminated work; and the Contractor shall make good faith efforts to

find a substitute DBE subcontractor to replace any DBE subcontractor that is terminated or

fails to complete its Work for any reason.



16.2.5 Remedies

The Authority will utilize the administrative remedies in the DBE Program in the event the

Contractor fails to comply with the requirements of this Section 16.2, including withholding

specified percentages from monthly invoices as provided in the Authority’s Contract

Compliance Manual.

16.2.6 Reports

The Contractor shall provide reports to the Authority monthly, and otherwise upon request by

the Authority, regarding the progress of the DBE Program participation. The Contractor

shall attach to the reports written confirmation from identified DBE’s that they are

participating in the Work. If, based on the reports provided by the Contractor, the Authority

determines, in its judgment, that the Contractor is not complying with the DBE Program,

then the Authority shall so advise the Contractor in writing and the Contractor shall have ten

(10) working days after receipt of such notice to meet with the Authority and agree upon a

course of action which will demonstrate to the Authority that the Contractor will comply with

the program. Provision of acceptable evidence of good faith efforts and pursuit of the agreed

upon course of action are conditions to the Authority’s obligation to process and pay

invoices. Failure to comply will result in withholding or delay in payment to the Contractor,

as specified in the DBE Program.

16.2.7 DBE Compliance Workshop

The Contractor, including the Project Manager and an individual designated by the

Contractor as the DBE Officer for the Project, shall participate in a workshop that will

explain the DBE Program requirements and provide guidance on how to complete all

required forms and reports.

16.3 Subcontracts 16.3.1 Major Subcontracts

The Contractor shall promptly notify the Authority in writing of the identity of each Major

Subcontractor selected. The Contractor shall not have the right to make any substitution of

any Major Subcontractor identified in the Proposal or selected in accordance with the

Contracting Plan, except in accordance with the provisions of the Subletting and

Subcontracting Fair Practices Act, Public Contract Code sections 4100 et seq., and the



Contractor shall not amend any existing Major Subcontracts to result in an aggregate increase

of 10% or more in the Subcontract price, without the Authority’s prior written approval.

16.3.2 Required Terms and Subcontractor Schedule

16.3.2.1 The Contractor shall ensure that each Subcontract (at all tiers) shall include

those terms that are specifically required by the Contract Documents to be included therein as

well as such additional terms and conditions as are sufficient to ensure compliance by the

Subcontractor with all applicable requirements of the Contract Documents. The Contractor

shall ensure that all Subcontracts (at all tiers, including Subcontracts with Suppliers) shall

include an agreement by the Subcontractor to participate in any dispute review proceeding

pursuant to Section 20, if the Authority requests such participation.

16.3.2.2 Within fifteen (15) days after issuance of the NTP for Design, the Contractor

shall complete and provide to the Authority a schedule listing all of its current proposed

Subcontractors, using the form attached hereto as Appendix 3. The schedule should include

all Design and Professional Services subcontractors plus any Construction subcontractors

known at that time. The Contractor shall provide an updated schedule each month thereafter.

Such matrix form may be modified so that it can be used to comply with DBE reporting

requirements. The Contractor shall allow the Authority access to all Subcontracts and

records regarding Subcontracts and shall deliver to the Authority, within ten days after

execution, true and complete copies of all Major Subcontracts and, within ten days after

receipt of a request from the Authority, true and complete copies of all other Subcontracts as

may be requested.

16.3.3 Contractor Responsibility for Subcontracted Work

The Contractor shall be fully responsible to the Authority for all acts and omissions of its

own employees and of Subcontractors and their employees. The Contractor shall also be

responsible for coordinating the Work performed by Subcontractors. When a portion of the

subcontracted Work is not performed in accordance with the Contract Documents, or if a

Subcontractor commits or omits any act that would constitute a breach of the Contract, or if

the Authority makes reasonable objection to the use or continued use of such Subcontractor,

the Subcontractor shall be replaced at the direction of the Authority and shall not again be

employed on the Project.

16.3.4 Form of Subcontract



The Authority shall have the right to review the form of subcontract used by the Contractor

for the Project and to require modifications to conform to the requirements herein.

17.0 RISK ALLOCATION 17.1 Discovery of Certain Site Conditions The procedures set forth in this Section 17.1 shall apply in the event of Contractor’s

discovery of (a) any on-Site material that Contractor believes may contain Hazardous Waste

that is required to be removed to a Class I, Class II or Class III disposal site, (b) any

threatened or endangered species, (c) any historic, archaeological, paleontological, or cultural

resources, (d) any Differing Site Conditions or (e) any Main or Trunkline Utilities that are

not indicated with reasonable accuracy in the Contract Documents.

17.1.1 During the progress of the Work, if the Contractor becomes aware of any material,

resource or species described in clauses (a), (b) or, (c) of Section 17.1, then the Contractor

shall immediately notify the Authority thereof telephonically or in person, to be followed

immediately by written notification within 48 hours. The Contractor shall immediately stop

Work in and secure the area pending further instructions. In such an event, the Authority will

view the location by the end of the next full regular working day after receipt of the

immediate notification and shall advise the Contractor at that time whether Work should be

resumed or whether further investigation is required. If during the course of the Work the

Contractor becomes aware of any condition described in clauses (d) or (e) of Section 17.1,

the Contractor shall promptly notify the Authority thereof telephonically or in person but

shall not be obligated to stop Work unless directed by the Authority.

17.1.2 If directed by the Authority, the Contractor shall promptly conduct such further

investigation. The Contractor shall determine within five working days after receipt of such

direction whether the material or condition falls within the scope of clauses (a), (b), (c), (d)

or (e) of Section 17.1. The Contractor shall at that time also advise the Authority of any

action recommended regarding the situation. If Hazardous Waste is involved, the notice

shall describe the type of remediation measures, if any, which the Contractor proposes to

undertake with respect thereto (also refer to Section 01175 of the General Requirements). If

threatened or endangered species or archaeological, paleontological, cultural, or historic

resources are present the notice shall advise the Authority what course of action the

Contractor intends to take with respect thereto and whether the location should be fenced off

or whether Work can resume (also refer to Section 01170 of the General Requirements). The



Authority then will determine whether the Contractor’s findings and proposed actions are

acceptable and will either approve, or require modification of, the Contractor’s proposed

actions.

17.1.3 The Authority shall have the right to require the Contractor to recommence work in

the area at any time, even though an investigation may still be ongoing, so long as not in

violation of Governmental Rules and no health risk exists. The Contractor shall promptly

recommence Work in the area upon receipt of notification from the Authority to do so. On

recommencing Work, the Contractor shall follow all applicable procedures contained in the

Contract Documents and all other legal requirements with respect to such work, consistent

with the Authority’s determination or preliminary determination regarding the nature of the

material or condition.

17.1.4 Upon receipt of notification under Section 17.1.1, the Authority shall determine

whether the discovery is of (a) any materials, resources or species that the Contract

Documents indicate are present in the location in question, or (b) any resources or species for

which an incidental take is permitted under the terms of a Governmental Approval. If so, the

Authority shall have the right to require the Contractor to recommence Work in the area at

any time and to follow applicable procedures contained in the Contract Documents.

17.2 Differing Site Conditions This Section 17.2 describes how responsibility and liability for certain risks relating to

Differing Site Conditions are allocated between the parties after a LSFP is agreed upon,

either for individual packages or for the Total LSFP.

17.2.1 Responsibility for Differing Site Conditions

17.2.1.1. The term “Differing Site Conditions” means (a) subsurface or latent

conditions which differ materially from those indicated in the Geotechnical reports included

in the Geotechnical and Initial Site Assessment Documents, or (b) physical conditions of an

unusual nature, differing materially from those ordinarily encountered in the area and

generally recognized as inherent in the type of work provided for in the Contract Documents.

The term specifically excludes all such conditions of which Contractor had actual or

constructive knowledge as of the Proposal Due Date, and excludes Utility facilities,



Hazardous Substances, and any other conditions that constitute or are caused by a Force

Majeure event.

17.2.1.2 Upon the Contractor’s fulfillment of all applicable requirements of Section 19,

and subject to the limitations contained therein, the Authority shall be responsible for, and

agrees to issue Change Orders, (a) to compensate the Contractor for additional costs directly

attributable to changes in the Work directly attributable to Differing Site Conditions not

reasonably avoidable by the Contractor, and (b) to extend the Completion Deadlines as the

result of any delay in the Critical Path caused by any such conditions. The Contractor shall

bear the burden of proving that a differing site condition exists and that it could not

reasonably have worked around the differing site condition so as to avoid additional cost or

delay.

17.3 Responsibility for Utility Relocations / Rearrangements and Changes in City Facility Work This Section 17.3 describes how responsibility and liability for certain risks relating to the

Utility Work and City Agreements are allocated between the parties after a LSFP is agreed

upon, either for individual packages or for the Total LSFP. This Section 17.3 also addresses

the circumstances under which reductions in the Utility Work and City Facility Work will

result in a deductive Change Order. Provisions regarding the scope of the responsibilities of

the Contractor and the Authority relating to Utility Work and City Facility Work are set forth

in Scope of Work and General Requirements Section 01180.

17.3.1 Entitlement to Change Orders

The Contractor shall be entitled to receive a Change Order for additional costs and delays

associated with Utilities, the Utility Work or City Agreements only as permitted by this

Section 17.3 or for circumstances for which such a Change Order is independently permitted

under Section 19. A deductive Change Order for reductions in the Work associated with the

Utilities, the Utility Work or City Facility Work shall be issued in the circumstances

providing for a decrease in the Contract Price described in this Section 17.3 or in

circumstances for which a deductive Change Order is independently permitted under

Section 19. All Change Orders pursuant to this Section 17.3 shall be subject to the

requirements, limitations, restrictions, and procedures set forth in Section 19.

17.3.2 Responsibility for Identification and Relocation / Rearrangement of Utility

Facilities



17.3.2.1 The Contractor has the obligation to perform all responsibilities and to undertake

all liabilities with respect to identification and Relocation / Rearrangement of all Utilities

(including City Utilities), to the extent that the Contractor is responsible under Scope of

Work and General Requirements Section 01180 (unless otherwise expressly required by this

Section 17.3.2), including Main or Trunkline Utilities which would typically be the

responsibility and liability of public agencies subject to the requirements of Government

Code section 4215. All such responsibilities and liabilities shall be included in the


17.3.2.2 Prior to the establishment of the LSFP pursuant to Section 8, the Contractor shall

be responsible for analyzing the Utility information set forth in the Contract Documents and

Reference Documents, contacting and making inquiries of Utility Owners, and performing

additional investigations as it deems appropriate to verify and supplement such information.

17.3.2.3 The term "reasonable accuracy," when used in this Section and Section 17.3.2.4

shall be determined with reference to location, size or type, as appropriate. If any Main or

Trunkline Utilities which are required to be Relocated are not indicated at all in the Contract

Documents or Reference Documents, or are not indicated on the drawings within + or – two

(2) feet of the actual location in the field, then the Contractor may be entitled to an

adjustment by the Authority for incremental changes in cost or adjustment in time to the

extent the Project critical path is affected, provided however, that if a reasonable examination

of the Site would have revealed the presence of such utility, such as the presence of

manholes, vaults, signs or markers, or other features observable at the surface, no adjustment

in time or cost will be made except for the utilities identified in the Scope of Work and

General Requirements Appendix A. Notwithstanding Section 17.3.2.3, the Contractor shall

be fully liable for, and no Change Order shall be issued with respect to, the circumstances

described in that Section, if (a) a surface inspection of the area would have shown (1) the

existence of a Main or Trunkline Utility with reasonable accuracy, or (2) the likelihood of the

existence of a Main or Trunkline Utility with reasonable accuracy by reason of the existence

of above-ground facilities, such as buildings, meters, junction boxes or identifying markers,

or (b) the exercise of reasonable care, including the investigations described in

Section 17.3.2.2, would have indicated a Main or Trunkline Utility with reasonable accuracy.



17.3.2.4 If (a) it is not necessary to Relocate such Utility, or (b) there is a reduction in the

cost of the Work necessary to Relocate such Utility, then the Authority shall be entitled to a

Change Order reducing the LSFP to reflect the full value of any reduction in the Work that is

directly attributable to such correction. Such Change Order shall be based on the parties'

reasonable estimate of the reduction in the cost of performance of such Work (including

mark-ups calculated in accordance with Section 19.7).

17.3.3 Material Change in Allocation of Work Responsibility

17.3.3.1 Authority-Directed Change

Any changes in the Utility classification and allocation of Work responsibility pursuant to

Scope of Work and General Requirements Section 01180 resulting from the execution of a

Utility Agreement shall be treated as an Authority-Directed Change.

17.3.3.2 Notice Required

If the Contractor believes that an executed Utility Agreement has resulted in an Authority-

Directed Change of the type described in Section 17.3.3.1 warranting an increase in the LSFP

or an extension of the Contract Time, then the Contractor shall notify the Authority in writing

within 15 days after the Authority delivers an executed copy of such Utility Agreement to the

Contractor. In such event, the notification requirements of Section 17.3.3.2 shall apply in

lieu of the PCO Notice requirements set forth in Section 19. Notwithstanding any contrary

provision of the Contract Documents, the Contractor’s failure to provide the foregoing notice

shall constitute a waiver by the Contractor of the right to later claim that an Authority-

Directed Change has occurred on account of any matter which should have been covered by

such notice.

17.3.4 Betterments

17.3.4.1 Increase in Scope

If any changes to the Utility Work or to the City Facility Work are made in accordance with

Scope of Work and General Requirements Section 01180 which constitute Betterments that

were not indicated in the Contract Documents, or which increase the scope of Betterments

that were so indicated, then the Contractor shall be entitled to a Change Order with respect to

any increase in Contractor’s costs of performing the Work that is directly attributable to such

change(s).

17.3.4.2 Decrease in Scope



If any changes to the Utility Work or to the City Facility Work are made which eliminate or

reduce the cost of any Betterments that were indicated in the Contract Documents, thereby

reducing the cost of the Work, then Authority shall be entitled to a Change Order reducing

the LSFP to reflect the value of any reduction in the Work that is directly attributable to the

reduction or elimination of such Betterment. Such Change Order shall be based on the

parties’ reasonable estimate of the reduction in the cost of performance of such Work

(including mark-ups calculated in accordance with Section 19).

17.3.5 Utility Owner Performs Incidental Utility Work

If a Utility Owner performs any Incidental Utility Work that was originally included in the

Contractor’s Scope of Work, thereby reducing the Work to be performed by the Contractor,

then the Authority shall be entitled to a Change Order reducing the LSFP to reflect the value

of any reduction in the Work that is directly attributable to the performance of such Work by

the Utility Owner. Such Change Order shall be based on the parties’ reasonable estimate of

the reduction in the cost of performance of such Work (including mark-ups calculated in

accordance with Section 19).

17.3.6 Change in Relocation / Rearrangement Requirements

In considering opportunities to reduce the costs of certain portions of the Work, which may

increase the costs of certain other portions of the Work, the Contractor shall at all times

consider the impact of Project design changes on Relocations / Rearrangement with the

overall goal of minimizing the necessity for Relocations / Rearrangements to the extent

practicable. Accordingly, except for cost increases or decreases resulting from Authority-

Directed Changes in Project design affecting Utility Work or City Facility Work (which shall

be governed solely by the provisions of Section 19), the following rules shall apply with

respect to any cost increases or decreases associated with Project design changes which

either (a) reduce or eliminate the costs of any Relocation, or (b) result in new Relocations /

Rearrangements or an increase in costs of existing Relocations / Rearrangements:

17.3.6.1 The Contractor shall not be entitled to a Change Order for any such additional

costs which it incurs, including both additional Relocation / Rearrangement costs and the

costs of any additional Work on other aspects of the Project, in order to facilitate the

avoidance or reduction of Relocation / Rearrangement costs.



17.3.6.2 The Contractor shall reimburse the Authority, within 10 working days after

receipt of the Authority’s invoice therefore, for any such additional costs which the Authority

incurs, including (a) any increase in amounts owed by the Authority to Utility Owners or

City Facilities that is directly attributable to such change, (b) any amounts owed by the

Authority to Utility Owners or City Facilities for work which is unusable or which must be

redone as a result of such change, and (c) any acquisition costs incurred by the Authority for

additional Utility Easements required therefore.

17.3.6.3 The Contractor shall not be obligated to provide a credit to the Authority on

account of reductions in the cost of the Work due to any such avoided or reduced Relocations

/ Rearrangements, unless the Authority is entitled to such credit pursuant to any other

provision of this Section 17.3.

17.3.7 Delays

The Contractor shall give notice to the Authority of any circumstance that may lead to a

claim under this Section 17.3.7 within ten (10) working days of the Contractor’s becoming

aware that such circumstance has occurred or is likely to occur. Subject to the limitations

and restrictions set forth in Section 19, the Contractor shall be entitled to an extension of any

affected Completion Deadline:

(a) to the extent that any delay in the Critical Path is directly attributable to a

circumstance for which the Contractor is entitled to a Change Order for increased costs

pursuant to Section 17.3.2 or 17.3.4.1; and

(b) to the extent that any delay in the Critical Path is directly attributable to a

delay by a Utility Owner or City Facility in completing its assigned work on a Relocation /

Rearrangement, or otherwise complying with its obligations under City Agreements, beyond

the date scheduled therefore set forth on the Preliminary Schedule, approved Baseline

Schedule or approved Working Schedule, as appropriate, provided that (1) the Contractor has

made all reasonable efforts to obtain the timely cooperation of the Utility Owner or City

Facility, and (2) no extension shall be available if such delay is concurrent with another delay

which is the Contractor’s responsibility hereunder (in which event such delay and the

associated cost thereof, shall be borne 100% by Contractor).

17.3.8 Additional Restrictions on Change Orders



In addition to all of the other requirements and limitations contained in this Section 17.3 and

in Section 19, the entitlement of either the Contractor or the Authority to any Change Order

under this Section 17.3 shall be subject to the following restrictions and limitations:

(a) The Contractor shall bear the burden of proving that the Relocation /

Rearrangement cannot reasonably be avoided and of adequately supporting, by

documentation acceptable to the Authority, the amount of any additional costs estimated by

the Contractor as both necessary and reasonable.

(b) The Contractor shall not be entitled to a Change Order with respect to costs

incurred or delays resulting from the performance of Incidental Utility Work by the

Contractor or any Utility Owner, except for any such costs or delays which are directly

attributable to circumstances for which additional costs or a time extension are independently

permitted under Section 19, such as for Authority-Directed Changes which affect Incidental

Utility Work.

(c) In no event will the Contractor be awarded any increase in the LSFP for any

increased costs of coordinating with Utility Owners or for assisting the Authority in its

coordination with Utility Owners, except for any such costs which are directly attributable to

circumstances for which additional costs or a time extension are independently permitted

under Section 19, such as for Authority-Directed Changes which affect Utility Work.

17.3.9 Assumption of Utility Risks by Contractor

The Contractor agrees that (a) the LSFP covers all of the Utility Work described in Scope of

Work and General Requirements Section 01180, and (b) it is feasible to obtain and/or

perform all necessary Relocations / Rearrangements within the time deadlines of the Contract

Documents. Without limiting the generality of the foregoing, the Contractor agrees that:

(a) Prior to the date of execution of the Contract, the Contractor analyzed the

risks involved and in negotiating and agreeing upon the LSFP included adjustments deemed

appropriate by the Contractor to account for the potential risks of additional costs and delays

relating to the Utility Work.

(b) The Contractor shall not be entitled to any Change Order with respect to any

Relocations, including any act or failure to act of any Utility Owner or City Facility which

may result in a delay to Contractor's planned schedule or in Contractor's incurring costs not

included in its budget for the Project, except as specified in this Section 17.3.



17.3.10 Material Change in City Agreement

17.3.10.1 If after the date of execution of the Contract, Authority and City enter into a

City Agreement (which term for purposes of this Section 17.3.10 shall include agreements

amending existing executed City Agreements) which includes terms differing from the terms

of the applicable executed agreements between the Authority and the Utilities and Cities (or

assumed terms set forth in the Contract Documents if applicable), then the scope of the Work

shall automatically be deemed revised to account for all such changed terms immediately

upon delivery to the Contractor of the executed agreement or amendment incorporating such

change. If the Authority fails to enter into a City or Utilities Agreement replacing any Draft

City Agreement, the Contractor shall be entitled to assume that the terms contained in the

Draft City Agreement will apply.

17.3.10.2 Any change in the Scope of Work directly attributable to materially differing

terms contained in an executed City or Utility Agreement or to any material deviation from

assumed terms, if no City or Utility Agreement is in fact executed, shall be treated as an

Authority-Directed Change.

17.3.10.3 The Contractor shall notify Authority in writing of any perceived materially

differing terms from the applicable existing executed City Agreement (or assumed terms set

forth in the Contract Documents if the City is not covered by an existing executed City

Agreement) which the Contractor believes would constitute an Authority-Directed Change

warranting an increase in the LSFP or an extension of the Contract Time (a) within 15 days

after Authority delivers a draft revised City Agreement or amendment to a City Agreement to

Contractor, (b) within 15 days after the Authority notifies the Contractor that no City

Agreement will be executed and describing any changes in how such City will be handled

hereunder, or (c) within 15 days after the Contractor becomes aware that the City is not

acting in accordance with the assumed terms. In such event, the notification requirements of

this Section 17.3.10 shall apply in lieu of the Proposed Change Order (“PCO”) Notice

requirements set forth in Section 19.3.2.1.1. Any such Authority-Directed Change shall be

addressed in accordance with the procedures set forth in Section 19. The Contractor shall

thereafter consult with the Authority to discuss potential methods for modifying the draft

City Agreement or amendment, or minimizing the impacts thereof (or of the terms for



handling City described in Authority's notice, if no replacement City Agreement will be

executed). The Authority with regard to the City may send more than one draft or notice,

and the Contractor shall respond to each such draft or notice as provided herein.

17.3.10.4 The Contractor shall notify the Authority in writing within 90 days after the

Contractor receives an executed City Agreement which includes terms which Contractor

believes constitute an Authority-Directed Change described in this Section 17.3.10 and

which warrant an increase in the LSFP or an extension of the Contract Time.

17.3.10.5 Notwithstanding any contrary provision of the Contract Documents,

Contractor’s failure to provide any of the foregoing notices shall constitute a waiver by

Contractor of the right to later claim that an Authority-Directed Change has occurred on

account of any matter which should have been covered by such notice.

17.3.11 Reimbursement of Contractor for Salvage Value Paid by City; No Other

Reimbursement To Be Passed On

In the event that, at a City’s request, the Contractor recovers and delivers (or holds for a

City’s account) materials and/or equipment from a City’s existing facilities which could

otherwise have been sold or reused by the Contractor, and a City pays to the Authority any

amount on account of the salvage value of such materials and/or equipment, the Authority

shall pay such amount to the Contractor within 30 days after receipt of such funds. The

Authority shall not be required to pass on any other payments or reimbursements received by

the Authority from a City. This Section only applies if a LSFP is agreed upon for individual

packages or a Total LSFP is agreed upon.

17.4 Responsibility for Force Majeure Events Except for the events described in this Section 17.4, the risk of events beyond the control of

the parties shall be borne by the Contractor.

17.4.1 Subject to the limitations contained in and upon the Contractor’s fulfillment of all

applicable requirements of Section 19, the Authority shall be responsible for and will issue

change orders based on the occurrence of a Force Majeure event, to:

(a) Compensate the Contractor for additional costs incurred arising from Force

Majeure events (excluding delay damages); and

(b) Extend the completion deadlines as the result of any delay in the critical path

on the baseline schedule caused by a Force Majeure event.



17.4.2 “Force Majeure” shall mean any of the following events (provided such events are

beyond the control of the Contractor and are not due to an act or omission of the Contractor

or any Subcontractor or other Person for whom Contractor may be contractually or legally

responsible) which materially and adversely affects the Contractor’s obligations hereunder

and which event (or the effects of which event) could not have been avoided by due diligence

and use of reasonable efforts by the Contractor:

(a) Any earthquake exceeding 3.5 on the Richter scale and epicentered within 25

miles of the specific location of damage on the Worksite; exceeding 5.0 on the Richter scale

and epicentered within 50 miles from the specific location of damage on the Worksite; or

exceeding 6.5 on the Richter scale and epicentered within 75 miles from the specific location

of damage on the Worksite; in all cases based on the final determination regarding the

location and magnitude of the earthquake published by the National Earthquake Information

Center in Golden, Colorado, and any tidal wave that causes damage to the Work

(b) Any epidemic, hurricane, fire, flood, blockade, rebellion, war, riot, act of

sabotage, act of terrorism, or civil unrest;

(c) The discovery at, near or on the site of any archaeological, paleontological,

biological or cultural resources or hazardous or contaminated substances; provided that the

existence of such resources or substances was not disclosed by the Authority;

(d) Except as otherwise provided in the Contract Documents, (i) the suspension,

termination, interruption, denial or failure to issue, nonrenewal, or amendment of any

Environmental Approval; or (ii) with respect to other types of Governmental Approvals, any

change in, or adoption of policies or procedures by Governmental Persons resulting in

(A) the suspension, termination, interruption, denial or failure to issue, nonrenewal, or

amendment of a Governmental Approval, (B) a requirement to obtain a Governmental

Approval not contemplated as of the date the LSFP was determined, or (C) a material change

in the terms and conditions of any Governmental Approval from those contemplated as of the

date the relevant LSFP was determined;

(e) Any change in a Governmental Rule, or change in the judicial or

administrative interpretation of, or adoption of any new Governmental Rule which is

materially inconsistent with Governmental Rules in effect on the date of the relevant LSFP;

and



(f) Any lawsuit seeking to restrain, enjoin, challenge, or delay construction of the

Project or the granting or renewal of any Governmental Approval, except to the extent that

the risk of such lawsuit has been assumed by the Contractor under the Contract Documents.

Notwithstanding the foregoing, the Contractor shall be responsible for providing builder’s

risk insurance and be responsible for payment of deductibles as specified in Design-Build

Contract Section 22.2.2.

17.5 Responsibility for Environmental Compliance 17.5.1 Performance of Mitigation Measures

17.5.1.1 The Contractor shall be responsible for performance of all environmental

mitigation measures (which term shall be deemed to include all requirements of the

Environmental Approvals and similar Governmental Approvals, regardless of whether such

requirements would be considered to fall within a strict definition of the term) for the Project,

excluding only those measures which are specified as Authority's or Metro’s responsibility in

the Mitigation Monitoring Program. The LSFP will include compensation for Contractor's

performance of all such mitigation measures and for performance of all mitigation measures

arising from New Approvals which this Section 17.5 provides are Contractor's responsibility.

17.5.1.2 The Contractor is required to monitor the progress of performance of

environmental mitigation measures and to provide periodic reports to the Authority as set

forth in the Mitigation Monitoring Program. The Authority's policy is to update the program

semi-annually to account for any revisions in mitigation requirements during the prior period.

17.5.2 New Approvals

The Contractor acknowledges and agrees that the Environmental Approvals were obtained

based on certain assumptions regarding the Project, and that it may be necessary to obtain

new Governmental Approvals of the same type as the Environmental Approvals or revisions,

modifications or amendments to the existing Environmental Approvals (collectively, “New

Approvals”) if the design and construction of the Project furnished by the Contractor results

in an impact on environmentally sensitive areas which exceeds the permitted impact(s). New

Approvals may also be required as the result of Authority-Directed Changes or Force

Majeure events such as a change in Governmental Rules.

17.5.2.1 The Authority is responsible for any New Approvals necessitated by an

Authority-Directed Change or a Force Majeure event. In the event that a New Approval is



necessitated by an Authority-Directed Change or a Force Majeure event, the Contractor shall

not be responsible for obtaining such New Approval or performing additional mitigation

measures necessitated by such New Approval unless a Change Order is issued under

Section 19. The Contractor shall provide support services to the Authority with respect to

obtaining such New Approvals, without any additional compensation. The Change Order

covering the Authority-Directed Change or Force Majeure event would include

compensation to the Contractor for any changes in the Work (excluding such support

services) resulting from such New Approvals as well as any time extension necessitated by

the Authority-Directed Change or Force Majeure event, subject to the requirements and

limitations contained in Section 19.

17.5.2.2 Whenever a New Approval is obtained which changes the existing

environmental mitigation requirements or adds new environmental mitigation requirements,

the Mitigation Monitoring Program will be revised to include such amendments or new

requirements, and the Contractor shall comply with the revised program from and after the

date it receives the revised program. No Change Order shall be allowed in connection with

any revision to the Mitigation Monitoring Program except that (a) Change Orders shall be

issued for additional Work resulting from New Approvals which are Authority’s

responsibility as specified in Section 17.5.2.1, and (b) if the Contractor believes that any

revision constitutes an Authority-Directed Change it shall have the right to seek a Change

Order on that basis, in accordance with the requirements of Section 19.

17.5.2.3 In the event that a New Approval becomes necessary for any reason other than

those specified in Section 17.5.2.1, the Contractor shall be fully responsible for obtaining the

New Approval and for all requirements resulting therefrom as well as any litigation arising in

connection therewith. If the New Approval is associated with a Value Engineering Change

Proposal, costs of obtaining and complying with the terms of the New Approval shall be

considered in determining the cost savings to be shared with the Authority.

17.6 Responsibility for Hazardous and Contaminated Substance Remediation 17.6.1 Upon Contractor’s fulfillment of all applicable requirements of Section 19, and

subject to the requirements and limitations contained therein and in this Section 17.6, the

Authority shall be responsible for, and will issue Change Orders after a LSFP is agreed upon,

(a) to compensate the Contractor for additional costs directly attributable to changes in the



Work arising from the discovery at, near or on the Site of any Hazardous Substances, and

(b) to extend the Completion Deadlines as the result of any delay in the Critical Path caused

by any such discovery; provided that such events are beyond the control of the Contractor

and are not due to an act or omission of the Contractor or any Subcontractor or other Person

for whom the Contractor may be contractually or legally responsible; such events materially

and adversely affects the Contractor’s obligations hereunder, and such event (or the effects of

such event) could not have been avoided by due diligence and use of reasonable efforts by

the Contractor.

17.6.2 The Authority reserves the right to use other labor forces to investigate and to

perform work to determine the nature and extent of any suspected Hazardous Substances(s)

and to handle and/or remove the Hazardous Substances(s) from the area.

17.6.3 Limitations on Change Orders

Although the Contractor shall in general be entitled to a change order in connection with any

hazardous and contaminated substance remediation, the Contractor shall have no right to

receive any compensation for any hazardous and contaminated substance required to be

removed due to any act or omission of the Contractor or of its employees, agents, officers, or

subcontractors or any other persons for whom the Contractor may be contractually or legally

responsible.

17.6.4 Time Extensions

The Contractor may be entitled to an extension of the Substantial Completion Deadline with

regard to hazardous or contaminated substances remediation only for quantities of hazardous

wastes as defined in 40 CFR 261. No extension shall be allowed with respect to any

hazardous or contaminated substances required to be removed due to any act or omission of

the Contractor or of its employees, agents, officers, or subcontractors or any other persons for

whom the Contractor may be contractually or legally responsible.

17.6.5 Use of Trained and Qualified Personnel and Subcontractors

The Contractor shall utilize the services of previously qualified, trained, and/or appropriately

certified personnel and subcontractors for hazardous and contaminated substance

remediation. No training costs (or costs for physical examinations) will be allowed in any

change order for hazardous and contaminated substance remediation.



17.6.6 Notwithstanding anything to the contrary contained in Sections 17.6.3 and 17.6.4, if

the Contractor is prohibited from working at a particular location due to the type of

circumstance described in those sections during the last 12 months prior to the Substantial

Completion Deadline, thus making it impossible for the Contractor to complete all of the

Work required to be performed in that location by the date that all of the other conditions to

Substantial Completion of the Project have been satisfied, then that portion of the Work

which the Contractor was consequently unable to perform in that location by the date that all

other conditions to Substantial Completion were satisfied shall be considered to be a

condition to Final Acceptance (as applicable) rather than a condition to Substantial

Completion.

17.7 Risk of Loss 17.7.1 Maintenance and Repair Liability

17.7.1.1 At all times prior to the Revenue Operations Date, the Contractor shall maintain,

rebuild, repair, restore or replace all Work (including Design Documents, Construction

Documents, materials, equipment, supplies and maintenance equipment which are purchased

for permanent installation in, or for use during construction of, the Project and regardless of

whether the Authority has title thereto, but excluding Vehicles) that is injured or damaged

prior to the Authority’s acceptance thereof. All such Work shall be at no additional cost to

the Authority except to the extent that the Authority is responsible for such costs as provided

in Section 19. The Contractor shall also have full responsibility for rebuilding, repairing and

restoring all other property at the Site whether owned by the Contractor, the Authority or any

other Person. Effective as of the Revenue Operations Date, the Authority shall be considered

to have accepted maintenance liability for all elements of the Project that are complete as of

such date (there are no remaining Punch List items for those elements of the Work). All

remaining elements of the Project shall be considered accepted for maintenance purposes as

of the Final Acceptance Date.

17.7.1.2 At all times prior to the Revenue Operations Date, the Contractor shall protect

existing structures, equipment and vegetation (collectively “Existing Improvements”) within

and adjacent to the Worksite and shall exercise due caution to avoid damage to such Existing

Improvements. Unless otherwise provided, the Contractor shall repair or replace all Existing

Improvements damaged or removed by the Contractor. Repairs and replacements shall be at



least equal to Existing Improvements and shall match them in finish and dimension. All

costs for protecting, removing and restoring Existing Improvements shall be the sole expense

of the Contractor. The Contractor shall maintain in a growing condition all plantings,

seedlings and sods furnished under the Contract Documents and shall protect new tree

growth and other vegetative growth against injury, replacing all dead plants requiring

replacement during such period.

17.7.1.3 The Contractor shall supply security and drainage and erect any temporary

structures as necessary to protect the Work from damage.

17.7.2 Extension of Maintenance and Repair Obligation

During the period beginning on the Revenue Operations Date and ending at Final

Acceptance, the Authority may require the Contractor to continue to have responsibility for

maintaining, rebuilding, repairing, restoring and replacing Work accepted by the Authority,

and shall do so pursuant to a Change Order under Section 19. If the Contractor fails or

refuses to make timely repairs during such period after issuance of a Change Order, the

Authority may make the repairs and will issue a deductive Change Order in an amount not to

exceed the portion of the original Change Order covering the Work.

17.8 Governmental Approvals 17.8.1 Licenses and Permits

Prior to beginning any construction activities in the field for any portion of the Project, the

Contractor shall furnish the Authority with fully executed copies of all Governmental

Approvals (other than the Governmental Approvals obtained by the Authority) required for

such portion of the Project.

Upon request, the Contractor shall submit to the Authority’s Project Manager photocopies of

any or all permits or licenses required of the Contractor or its subcontractors (at all levels,

including labor only) for construction of the Work.

If another party and/or contractor commence Work on the site, the Contractor shall make a

good faith effort to verify that such party and/or contractor has the necessary permits to Work

on the site.

17.8.2 Issuance to Authority

If any Governmental Approval required to be obtained by the Contractor must formally be

issued in the name of the Authority, the Contractor shall undertake all efforts to obtain such



approvals subject to the Authority’s reasonable cooperation with the Contractor, including

execution and delivery of appropriate applications and other documentation in a form

accepted by the Authority. The Contractor shall assist the Authority in obtaining the

approvals and any amendments thereto, including providing information requested by the

Authority, and participating in meetings regarding such approvals.

17.8.3 Maintenance of Governmental Approvals

The Contractor shall undertake all actions necessary to maintain in full force and effect all

Governmental Approvals, including performance of all environmental mitigation measures

required by the Contract Documents or by Law, except to the extent that responsibility for

performance of such measures is expressly assigned to the Authority or any other person.

17.9 Environmental Compliance 17.9.1 Inclusion in Subcontracts

The Contractor shall include all the requirements of Section 17.9 in every Subcontract that is

more than one hundred thousand dollars ($100,000), and shall take such action as the

Authority’s Authorized Representative directs to enforce these requirements.

17.9.2 Compliance with Environmental Laws

17.9.2.1 The Contractor shall comply with all applicable standards, orders, and

requirements issued under any and all Environmental Laws, including those related to

Hazardous Substances; and all interpretations, guidelines, clarifications, mitigation measures,

and any other requirements of Governmental Entities having jurisdiction related to such

Laws.

17.9.2.2 The Contractor shall comply with all rules, regulations, and ordinances of the

SCAQMD that apply to any Work performed pursuant to the Contract Documents. The

Contractor, Subcontractors, and Suppliers shall submit evidence to the Authority that the

governing air quality control criteria and requirements are being met.

17.9.2.3 The Contractor shall comply with the applicable requirements of the

SCAQMD governing solvents, including but not limited to the solvent portions of paints,

thinners, curing compounds, and liquid asphalt used on the Contract. Containers of paints,

thinner, curing compound, or liquid asphalt shall be labeled to indicate that the contents fully

comply with said requirements.



17.9.2.4 The Contractor shall comply with all California Laws regarding pollution

controls in purchasing and leasing new motor vehicles with Contract funds.

17.9.2.5 The Contractor shall not burn any Goods that it disposes.

17.9.3 Environmental Protection Agency (EPA) Regulation

The Contractor shall comply with all applicable regulations (40 CFR Part 15) of the

Environmental Protection Agency (EPA). The Contractor shall not use any facility in the

performance of the Contract that is listed on the EPA List of Violating Facilities, unless and

until the EPA eliminates such name of such facility from such listing. The Contractor shall

promptly notify the Authority of the receipt of any communication from the EPA (or any

successor agency) indicating that a facility to be used by the Contractor is under

consideration for listing on the EPA List of Violating Facilities. The Contractor shall also

report violations to the Authority, to the FTA, and to the EPA Assistant Administrator for

Enforcement.

17.9.4 Energy Conservation

In addition to all other Contractual requirements, the Contractor shall comply with all

mandatory standards and policies relating to energy efficiency contained in the California

energy conservation plan issued in compliance with the Energy Policy and Conservation Act

(42 U.S.C. §6321 et. seq.).

18.0 INVOICING AND PAYMENT PROVISIONS 18.1 Design Payments The Authority shall compensate the Contractor for its costs incurred, which are allowable

under this Contract, to perform the Design Work, up to the amount of the Design Allowance.

The Contractor shall submit Invoices to the Authority and maintain auditable records and be

paid pursuant to Section 18.1.1 hereof.

18.1.1 Design Progress Payment Invoicing

(a) Invoices shall be prepared in a form acceptable to the Authority and shall

correlate with the related Monthly Progress Report. An acceptable Invoice shall be

accompanied by a certified statement, signed by an authorized officer of the Contractor, and

similar in form to the Certification for Request for Payment (Appendix 2), that the Invoice is

a true and correct statement of those Reimbursable Costs incurred by the Contractor and that

Subcontractors and Suppliers have been paid from the previous Progress Payments.



(b) Upon receipt of the acceptable Invoice and Monthly Progress Report, the

Authority shall make payment to the Contractor within thirty (30) days from the date of

receipt of an acceptable Invoice. If the Authority determines that an Invoice does not comply

with the above requirements, the Contractor shall be notified of any defects.

(c) The Authority reserves the right to withhold payments in the event of material

non-compliance with the Contract Documents.

18.1.2 Design Fee Payment Invoicing

The Contractor shall submit a separate Invoice for the Design Fee. The Authority, based on

specific percentages of the Work, will make payments to the Contractor for the Design Fee.

Percentages will be determined for each pay period (month) by dividing the actual dollars

expended for Design Service costs for the month by the total budgeted dollars for the Design

Allowance. In the event of an Underrun in the Design Allowance, the balance of the Design

Fee will be paid in the final pay period (month).

18.2 Professional Services Payments The Authority shall compensate the Contractor for its costs incurred, which are allowable

under this Contract, to perform the Professional Services Work, up to the amount of the

Professional Services Allowance. The Contractor shall submit Invoices to the Authority and

maintain auditable records and be paid pursuant to Section 18.2.1 hereof.

18.2.1 Professional Services Progress Payment Invoicing

(a) Invoices shall be prepared in a form acceptable to the Authority and shall

correlate with the related Monthly Progress Report. An acceptable Invoice shall be

accompanied by a certified statement, signed by an authorized officer of the Contractor, and

similar in form to the Certification for Request for Payment (Appendix 2A), that the Invoice

is a true and correct statement of those Reimbursable Costs incurred by the Contractor and

that Subcontractors and Suppliers have been paid from the previous Progress Payments.

(b) The Authority shall make payment to the Contractor within thirty (30) days

from the date of receipt of an acceptable Invoice. If the Authority determines that an Invoice

does not comply with the above requirements, the Contractor shall be notified of any defects.



18.2.2 Professional Services Fee Payment Invoicing



The Contractor shall submit the Invoice for the Professional Services Fee along with the

Invoice for the Professional Services. The Authority, based on specific percentages of the

Work, will make payments to the Contractor for the Professional Services Fee. Percentages

will be determined for each pay period (month) by dividing the actual dollars expended for

Professional Services Labor costs for the month by the total budgeted dollars for the

Professional Services Allowance. In the event of an Underrun in the Professional Services

Allowance, the balance of the Professional Services Fee will be paid in the final pay period

(month).

18.3 Insurance Payments The Authority shall compensate the Contractor for the costs of insurance obtained by the

Contractor to meet the requirements of Section 22.2 of this Design-Build Contract. The total

compensation for insurance shall not exceed the sum of (a) the amount of the Contractor’s

insurance cost proposal submitted in response to the RFP (see Appendix 10), which shall be

treated as a Lump Sum Fixed Price for the insurance coverages associated with the Design

Services phase of the Project plus (b) the cost of insurance coverages for the Construction

phase of the Project (excluding Professional Liability), which will be negotiated by the

Authority and the Contractor under Section 8.8 and which must cover the Project from the

issuance of the first NTP for Construction. The Contractor shall submit Invoices to the

Authority and be paid pursuant to Section 18.3.1 hereof.

18.3.1 Insurance Payment Invoicing

(a) Invoices for insurance shall be prepared in a form acceptable to the Authority and

shall be submitted by the Contractor as follows: (1) for the insurance coverages required for

the Design Work, within thirty (30) days after the NTP for the Design; and (2) for the

insurance coverages required for the Construction Work, within thirty (30) days after the

issuance of the first NTP for the Construction Work. The negotiated premiums for the

Construction phase of the Project will be paid in five (5) installments with the first payment

to be made within thirty (30) days after receipt of the invoice referenced in clause (2) above,

and subsequent payments to be made in four (4) equal installments annually. An acceptable

invoice shall be accompanied by a certified statement, signed by an authorized officer of the

Contractor, that the invoice is fully consistent with the Contractor’s insurance cost proposal

submitted in response to the RFP.



(b) The Authority shall make payment to the Contractor within thirty (30) days from

the date of receipt of an acceptable Invoice. If the Authority determines that an Invoice does

not comply with the above requirements, the Contractor shall be notified of any defects.



18.4 Construction Progress Payments (Refer to Section 01310 of General Requirements)

18.4.1 Schedule of Values

(Refer to Section 01310 of Scope of Work and General Requirements)

The Contractor shall develop and submit a Schedule of Values based on the LSFP to the

Authority within 30 days after the commencement date stated in the NTP for each

construction package. The Schedule of Values is subject to review and acceptance by the

Authority.

18.4.2 Construction Costs

Payment to the Contractor for Construction Work will be made by the Authority on the basis

of Progress Payments relating to the completion of specific elements of the Scope of Work,

in accordance with the Schedule of Values agreed upon by the Authority and the Contractor.

18.4.3 Construction Fee

Payments to the Contractor of the Construction Fee will be made by the Authority based on

the completion of specific percentages of the Work, in accordance with Section 01310

(Critical Path Method Schedule and Cost/Schedule Integration System) of the General

Requirements. In the event the LSFP or sum of all LSFP packages is less than the

Construction Allowance, the balance of the Construction Fee will be paid in the Final

Payment.

18.5 Invoicing Instructions The Contractor’s Invoice shall include, at a minimum, the following:

(a) Reference to the Authority Contract Number, as well as the Authority

Project, to which the Invoice applies.

(b) The Contractor’s Invoice Number, Invoice Date, as well as the contract

Payment number the invoice represents; for example, Contractor’s submittal of its first

invoice is payment number 1, its second invoice submittal is payment number 2, and so on.

Any Contractor re-submittal/revision to a submitted invoice shall have a letter suffix (a, b, c,



etc.) added to the payment number, signifying the invoice revision; for example, Contractor’s

first re-submittal of its first invoice shall be designated as payment number “1a”.

(c) The itemized and total amount being invoiced (in U.S. Dollars), less the

amount of all contractual retention and deductions applicable for the invoiced amount (in

U.S. Dollars), and the resulting total net payment due.

(d) The time period during which the Work was performed and for which the

invoice is submitted.

(e) Reference to the Contractor’s Taxpayer ID Number.

18.6 Application for Construction Progress Payment 18.6.1 The Contractor’s Application for Construction Progress Payment (hereinafter

“Application”) shall contain:

(a) The Contractor’s ORIGINAL Invoice and two (2) COPIES, submitted in

accordance with the provisions set forth in Section 18.6.2;

(b) A description of the Work completed;

(c) Conditional and unconditional waivers executed by the Subcontractors as

described in the Section 18.13 herein;

(d) Release of Stop Notice from Subcontractors;

(e) Any other documentation the Authority requires to process the Progress

Payment;

(f) The Contractor’s signature and certification that the Work has been performed

in accordance with the Contract Documents, and;

(g) Signature of the Authority’s Authorized Representative acknowledging that

the Work described in the Application has been done in accordance with the Contract

Documents.

18.6.2 The Contractor’s Applications for Progress Payment (i.e., Invoices) shall be

submitted in and delivered or mailed to the Authority as follows:

1. One (1) ORIGINAL and two (2) COPIES to:

Exposition Metro Line Construction Authority

Attn: Richard D. Thorpe

One Gateway Plaza



Mail Stop: 99-17-5

Los Angeles, CA 90012

REF: Invoice No. [Contractor’s Invoice Number]

Project: Mid-City/Exposition Light Rail Transit Project

Contract No.: 1-06

2. One (1) COPY to:

Exposition Metro Line Construction Authority

Attn: Contract Administrator

One Gateway Plaza

Mail Stop: 99-17-5

Los Angeles, CA 90012

REF: Invoice No. [Contractor’s Invoice Number]

Project: Mid-City/Exposition Light Rail Transit Project

Contract No.1-06:

18.7 Terms of Payment 18.7.1 The Authority will make Construction Progress Payments within thirty (30) Days after receipt of an undisputed and properly submitted Application. If the Authority fails to

make any approved Progress Payment within such time, it shall pay interest to the Contractor

equivalent to the legal rate set forth in subdivision (a) of §685.010 of the California Code of

Civil Procedure. Upon receipt of an Application, the Authority shall:

(a) Review the Application to determine if it is complete and meets contractual

requirements.

(b) Return any Application that is not complete or does not meet contractual

requirements as soon as practicable, but not later than seven (7) Days after receipt by the

Authority. The Authority shall set forth in writing the reason(s) why the Application does not

meet contractual requirements.

18.7.2 The number of days available to the Authority to make a Progress Payment without

incurring interest shall be reduced by the number of days by which it exceeds the seven (7)

day return requirement set forth above.

18.7.3 No Progress Payments shall be made for Work not performed in accordance with the

Contract Documents.



18.7.4 Except for Final Payment, an Application shall not be submitted unless the value of

the Work is greater than five thousand U.S. Dollars ($5,000).

18.8 Payment for Goods Not Incorporated into the Work The Authority, at its discretion, may authorize payment for Goods not yet incorporated into

the Work, subject to the following conditions:

(a) Goods shall be delivered to the Worksite or delivered to the Contractor and

promptly placed in appropriate storage within Los Angeles County or other location, as

approved by the Authority.

(b) Prior to inclusion of such Goods in any Application, the Contractor shall

submit certified invoices for such Goods to the Authority. The Authority may allow only

such portion of the amount represented by these invoices that, in its opinion, does not exceed

the reasonable cost of such Goods.

(c) If Goods are stored outside Los Angeles County, the Contractor shall pay all

personal and property taxes that are levied against the Authority by any state or subdivision

thereof on account of the storage of such Goods.

(d) The Authority will permit the Contractor to contest, at its own expense, the

validity of any such tax levied against the Authority in appropriate legal proceedings.

(e) In the event of any judgment or decree by the court against the Contractor

and/or the Authority, the Contractor shall pay it together with any penalty and any other costs

relating thereto. All such Goods so accepted shall become the property of the Authority.

(f) Payments made for Goods included in an Application that are subsequently

lost, damaged, or unsatisfactory shall be deducted from succeeding Applications.

18.9 Title Title to portions of the Work for which Progress Payments or other payments are made shall

pass to the Authority as set forth in Design-Build Contract Section 24.1, entitled Passage of

Title.

18.10 Retention on Construction Progress Payments The Authority shall retain from each Construction Progress Payment ten percent (10%) of the

Construction Progress Payment as part of the security for the fulfillment of the Contract

Documents and completion of the Work by the Contractor. However, after fifty percent

(50%) of the Work has been completed, the Authority may elect to not make further

retentions from the remaining Progress Payments if it determines, in its sole discretion, that



progress on the Work is satisfactory, except that the amount of the retention withheld shall

not at any time thereafter be less than five percent (5%) of the LSFP, as adjusted by Change

Orders. However, if the Authority determines that the Work or progress of the Work is

unsatisfactory, Authority may reinstate, continue or increase retentions in amounts necessary

to increase the total retention to an amount not to exceed ten percent (10%) of the LSFP.

Amounts retained by the Authority pursuant to this Section 18.10 shall be deposited in an

interest bearing account.

18.10.1 Substitution of Securities

18.10.1.1 To ensure performance under the Contract, the Contractor may, at its sole expense,

substitute securities equivalent to the retention withheld by the Authority. Such securities

shall be deposited with an escrow agent approved by the Authority, who shall then pay such

retention to the Contractor. Upon satisfactory completion of the Work, the securities shall be

returned to the Contractor.

18.10.1.2 The Contractor shall be the beneficial owner of any security substituted for monies

withheld and shall receive any accrued interest thereon. Securities eligible for investment

shall include those listed in Government Code §16430, bank or savings and loan certificates

of deposit, interest bearing demand deposit accounts, irrevocable standby letters of credit, or

any other security mutually agreed to by the Contractor and the Authority.

18.10.1.3 The Authority may request that any security still in escrow be revalued from time

to time, but not more often than monthly. Such revaluation will be made by an entity

designated by the Authority and approved by the Contractor. If such revaluation results in a

determination that such securities have a market value less than the amount of retention for

which they were substituted, then notwithstanding anything to the contrary contained herein,

the amount of the retention required under this Section shall be increased by such difference

in market value. Such increased retention will be withheld from the next Progress Payment

due the Contractor hereunder.

18.10.1.4 No substitution of securities (for retention withheld by the Authority) shall be

accepted until the escrow agreement, securities, and any other documents related to the

substitution are reviewed and accepted in writing by the Authority.

18.10.2 Payment of Escrow Account



In lieu of substitution of securities as provided above, the Contractor may request and the

Authority shall make payment of retention earned directly to the escrow agent at the expense

of the Contractor. At the expense of the Contractor, the Contractor may direct the investment

of the payments into securities consistent with Government Code §16430 and the Contractor

shall receive the interest earned on the investments upon the same terms provided for in this

Section for securities deposited by the Contractor. Upon satisfactory completion of the Work,

the Contractor shall receive from the escrow agent all securities, interest and payments

received by the escrow agent from the Authority, pursuant to the terms of this Section. The

Contractor shall pay to each Subcontractor, no later than twenty (20) Days after receipt of the

payment, the respective amount of interest earned, net of costs attributed to retention

withheld from each Subcontractor, on the amount of retention withheld to ensure the

performance of the Subcontractor. The escrow agreement used by the escrow agent pursuant

to this Section shall be substantially similar to the form set forth in §22300 of the California

Public Contract Code.

18.10.3 Release of Retention

The Authority shall release the Retention to the Contractor 60 days following Final

Acceptance of the Work or 30 days following receipt of an invoice from the Contractor,

whichever is later, subject to any deductions from payments allowed under the Contract and

to the Authority’s right to withhold Retention after such date as provided in Public Contract

Code Section 7107.

18.11 Additional Deductions and Withholding 18.11.1 In addition to the Retention described above, the Authority may deduct from each

Construction Progress Payment any or all of the following:

(a) Liquidated Damages that have accrued as of the date of the Application for

Progress Payment;

(b) Deductions from previous Progress Payments already paid, due to Authority’s

discovery of Deficiencies in the Work;

(c) Sums expended by the Authority in performing any of the Contractor’s

obligations under the Contract that the Contractor has failed to perform, and;



(d) Other sums that the Authority is entitled to recover from the Contractor under

the terms of the Contract, including without limitation insurance deductibles and

assessments.

18.11.2 The failure of the Authority to deduct any of the above-identified sums from a

Progress Payment shall not constitute a waiver of Authority’s right to such sums or to deduct

them from a subsequent Progress Payment.

18.11.3 In addition to the retention and deductions described above, if the Authority

determines that the Contractor has failed to comply with the DBE Program, the Authority

may withhold amounts from any invoice for Design, Professional Services, or Construction,

in the percentages specified and in accordance with the provisions of the DBE Contract

Compliance Manual. Any amounts so withheld from the Contractor shall be repaid by the

Authority when the Contractor demonstrates to the satisfaction of the Authority that it has

corrected the non-compliance. In the absence of such a demonstration, amounts withheld

shall be retained by the Authority.

18.12 Stop Notice 18.12.1 General

18.12.1.1 In addition to other amounts properly withheld under this Design-Build Contract,

the Authority shall retain from Construction Progress Payments otherwise due the Contractor

an amount equal to one hundred twenty-five percent (125%) of the amount claimed under

any Stop Notice under Civil Code §3179 et. seq. or other lien filed against the Contractor for

labor, materials, supplies, equipment, and any other thing of value claimed to have been

furnished to and/or incorporated into the Work; or for any other alleged contribution thereto.

18.12.1.2 In addition, and in accordance with Civil Code §3186, the Authority may also

satisfy its duty to withhold funds for stop notices by refusing to release funds held in escrow

pursuant to Public Contract Code §22300. However, the Authority may release such funds

upon receipt of a “Release of Stop Notice” executed by a stop notice claimant, a stop notice

bond, an order of a court of competent jurisdiction, or other evidence satisfactory to the

Authority that the Contractor has resolved such claim by settlement.

18.13 Payment to Subcontractors 18.13.1 Requirements

18.13.1.1 Pursuant to 49 Code of Federal Regulations (CFR) Part 26 and the California

Business and Professions Code §7108.5, the Contractor shall pay each Subcontractor under



this Contract for satisfactory performance of its Work no later than ten (10) Days after

receipt of each Construction Progress Payment received from the Authority. The Contractor

shall pay to each Subcontractor all amounts it has retained from payments under the

Subcontract within ten (10) Days after the Subcontractor’s work is satisfactorily completed.

Such payments to Subcontractors shall be made pursuant to Sections 18.1, 18.2, 18.3 and

18.4.

18.13.2 Waiver and Release Forms

18.13.2.1 As a condition to Authority’s release of any Progress Payment, Contractor shall

furnish the Authority with:

(a) A duly executed “Conditional Waiver and Release” form from each

Subcontractor listed in the current Application, and;

(b) duly executed “Unconditional Waiver and Release” form from each

Subcontractor listed in the preceding Application.

18.13.2.2 The unconditional waiver(s) must state the amount that the Subcontractor has been

paid with respect to the Progress Payment most recently made to the Contractor. The

required waiver and release forms shall be those set forth in California Civil Code §3262,

clarified to confirm that they are not intended to release claims beyond the amount of the

Progress Payment made and do not cover unprocessed or unresolved claims. In the event the

Contractor fails to supply any of the foregoing waiver and release forms, the Authority may

retain the amount attributable to any such Subcontractor until the appropriate form is

received.

18.14 Payment of Taxes 18.14.1 The LSFP includes compensation for all taxes, duties, permit and other fees and/or

royalties imposed with respect to the Work, and any equipment, materials, labor or services

included therein.

18.14.2 The Contractor shall pay all federal, state, and local taxes, and duties applicable to

and assessable against any Work when due, including but not limited to retail sales and use,

transportation, export, import, business, and special taxes. Contractor shall maintain

auditable records, subject to Authority reviews, confirming that tax payments are current at

all times.

18.15 Final Payment 18.15.1 Application for Final Payment



18.15.1.1 The Contractor shall prepare and submit an Application for Final Payment to the

Authority, including:

(a) The proposed total amount due the Contractor, segregated by items on the

Schedule of Values, Amendments, Change Orders, and other bases for payment;

(b) Deductions for prior Progress Payments;

(c) Amounts retained;

(d) An unconditional waiver and release for each Subcontractor;

(e) List of Claims the Contractor intends to file at that time or a statement that no

Claims will be filed;

(f) List of pending unsettled claims, stating claimed amounts;

(g) Written evidence of final inspection and acceptance by each Third Party

Agencies and Utilities of work performed by Contractor on facilities of Third Party Agency

and Utility arising out of performance of the Work;

(h) Written acknowledgement from each Third Party Agency and Utility that it

has received as-built drawings in a form acceptable to it describing the work performed by

the Contractor on the Third Party Agency and Utility’s facilities, and;

18.15.1.2 The Application for Final Payment shall include complete and legally effective

releases or waivers of liens and stop notices satisfactory to the Authority, arising out of or

filed in connection with the Work. Prior Progress Payments shall be subject to correction in

Authority’s review of the Application for Final Payment. Claims filed with the Application

for Final Payment must be otherwise timely under the Contract Documents and applicable

Law.

18.15.1.3 The Application for Final Payment shall include evidence that any non-compliance

with the DBE Program has been remedied to the satisfaction of the Authority. In the absence

of such evidence, any amounts withheld from prior invoices because of such non-compliance

shall be retained by the Authority and not paid to the Contractor.

18.15.1.4 Within a reasonable time, the Authority will review the Contractor’s Application

for Final Payment, and will forward changes or corrections to the Contractor. Within ten (10)

Days after receipt of recommended changes from the Authority, the Contractor will make the

changes, or list Claims that will be filed as a result of the changes, and shall submit the



revised Application for Final Payment. Upon Acceptance by the Authority, the revised

Application for Final Payment will become the approved Application for Final Payment.

18.15.2 Final Payment

18.15.2.1 The Contractor’s Application for Final Payment (i.e., Final Invoice) shall be

marked FINAL and submitted to the Authority in accordance with this Section 18.15.

18.15.2.2 After Final Acceptance of the Work, Final Payment will be made as follows:

(a) If no Claims have been filed with the initial or any revised Application for

Final Payment, and no claims remain unsettled within thirty (30) Days after

Final Acceptance of the Work by the Authority, and agreements are reached on all issues

regarding the Application for Final Payment, the Authority, in exchange for an executed

release, satisfactory in form and substance to the Authority, will pay the entire sum found

due on the approved Application for Final Payment, including the amount, if any, allowed on

settled Claims.

(b) The release from the Contractor shall be from any and all Claims arising

under the Contract, except for Claims that with the concurrence of Authority are specifically

reserved, and shall release and waive all unreserved claims against the Authority and its

officers, directors, employees and Authorized Representatives. The release shall be

accompanied by a certification by the Contractor that:

1) It has resolved all Subcontractor, Supplier and other claims that are related to

the settled claims included in the Final Payment;

2) It has no reason to believe that any party has a valid Claim against the

Contractor or the Authority which has not been communicated in writing by the Contractor to

the Authority as of the date of the Certificate;

3) All warranties are in full force and effect, and;

4) The releases and the warranties shall survive final payment.

19.0 CHANGE ORDERS This Section 19 sets forth the requirements for obtaining all Change Orders under the

Contract Documents. The Authority is subject to constraints, which have resulted in strict

limitations on its ability to increase the LSFP or extend any Completion Deadline(s). The

LSFP constitutes full compensation for performance of all of the Work, subject only to those



exceptions specified in this Section 19 or elsewhere specified in the Contract Documents.

The Contractor hereby waives the right to make any claim for a time extension or for any

monetary compensation in addition to the LSFP and other compensation specified in the

Contract for any reason whatever, except as specifically set forth in this Section 19. To the

extent that any other provision of this Contract expressly provides for issuance of a Change

Order with respect to any matter, such provision is hereby incorporated into this Section 19.

19.1 Circumstances Under Which Change Orders May Be Issued 19.1.1 Definition of and Requirements Relating to Change Orders

19.1.1.1 The term “Change Order” means a written amendment to the terms and

conditions of the Contract Documents issued in accordance with this Section 19. The

Authority may issue unilateral Change Orders as specified below in Section 19.2. The

Contractor may request Change Orders only pursuant to Section 19.3. A Change Order shall

not be effective for any purpose unless executed by the Authority, as specified herein.

Change Orders may be issued for the following purposes (or combination thereof):

(a) to modify the scope of the Work;

(b) to revise a Completion Deadline;

(c) to revise the LSFP or the Construction Price;

(d) to approve a material change in basic Project configuration; or

(e) to revise other terms and conditions of the Contract Documents.

Upon the Authority’s approval of the matters set forth in the Change Order form (whether it

is initiated by Authority or Contractor), Authority shall sign such Change Order form

indicating approval thereof. A Change Order may direct the Contractor to proceed with the

Work with the amount of any such adjustment to be determined in the future in accordance

with the terms of the Contract Documents.

19.1.1.2 The Authority may at any time issue a Directive Letter to the Contractor in the

event of any desired change in the Work or in the event of any dispute regarding the scope of

Contractor’s Work. The Directive Letter will describe the Work in question and will state

the basis for determining compensation, if any. The Contractor will proceed immediately

with the Work as directed, pending the execution of a formal Change Order (or, if the letter

states that the Work is within the original scope of the Work, the Contractor will proceed

with the Work as directed but shall have the right to submit the question of entitlement to a



Change Order and the amount of allowable compensation and time to dispute resolution in

accordance with Section 20).

19.1.1.3 Before starting to work on any item that the Contractor considers to be outside

of the original scope of the Work, as a condition precedent to its right to receive additional

payment therefore or an extension of a Completion Deadline in connection with such Work,

the Contractor shall have received one of the following:

(a) Directive Letter from Authority stating that it is issued pursuant to

Section 19.1.1.2; or

(b) Change Order for such Work signed by Authority.

In the absence of such a Directive Letter or Change Order, the Contractor shall not be

entitled to payment for such extra Work.

19.1.1.4 The following changes in the Work require a Change Order even if they have

no net cost effect on the total Contract amount:

(a) Any material changes in basic Project configuration; and

(b) Any changes which would involve a modification of the Contract, the current

baseline schedule, the schedule of values, the contract milestones, and/or the

milestone descriptions.

19.1.2 Directive Letter as Condition Precedent to Claim that Authority-Directed

Change Has Occurred

A PCO (Proposed Change Order) Notice and subsequent Change Order request pursuant to

Section 19.3.2, or the receipt of a Directive Letter from the Authority shall be a condition

precedent to the Contractor’s right to make a Claim that an Authority-Directed Change has

occurred. The determination whether an Authority-Directed Change in fact occurred shall be

based on an analysis of the original Contract Document requirements and a determination

whether the Directive Letter in fact constituted a change in those requirements. However, a

Directive Letter is required in order for Contractor to have the right to receive compensation

for Work within its original scope (such as Remediation Work) for which additional

compensation for that Work is specifically allowed under this Section 19.

19.1.3 Right of Authority to Issue Change Orders

The Authority may, at any time and from time to time, without notice to any surety, authorize

and/or require changes in the Work within the general scope of the Contract Documents



pursuant to a Change Order proposed by Contractor. All additions, deductions or changes to

the Work as directed by Change Orders shall be executed under the conditions of the original

Contract Documents.

19.2 Procedure for Issuance of Change Orders by Authority This Section 19.2 concerns Change Orders issued by Authority following a Notice of

Proposed Change and Change Orders unilaterally issued by Authority.

19.2.1 Notice of Proposed Change

19.2.1.1 If the Authority desires to issue an Authority-Directed Change or to evaluate

whether to initiate such a change, then the Authority may, at its discretion, issue a Notice of

Proposed Change. The Authority may at any time ask the Contractor to provide two

alternative Change Order Requests, one of which shall provide for a time extension and any

additional costs permitted hereunder and the other of which shall show an increase in the

LSFP.

19.2.1.2 Within five working days after the Contractor’s receipt of a Notice of

Proposed Change, the Authority and Contractor shall arrange an initial consultation (at no

charge to Authority) to define the proposed scope of work. Within ten days after completion

of the initial consultation, the Authority and Contractor shall consult concerning the

estimated cost and time impacts. The Contractor shall provide data regarding such matters as

requested by the Authority.

19.2.1.3 Within five working days after the initial consultation and provision of data as

described in Section 19.2.1.2, the Authority shall notify the Contractor whether the Authority

(a) wishes to issue a Change Order, (b) wishes to request the Contractor to prepare a Change

Order form as discussed at the meeting, (c) wishes to request the Contractor to modify the

work plan and prepare a Change Order form based on the modified plan, or (d) no longer

wishes to issue a Change Order.

19.2.1.4 If so requested, the Contractor shall, within 20 days after receipt of the

notification described in Section 19.2.1.3, prepare and submit to the Authority for review and

approval a Change Order form (in the format provided by the Authority) for the requested

change, complying with all applicable requirements of Section 19.4, incorporating and fully

reflecting all requests made by the Authority. If the Contractor determines that it cannot

meet the time allowed, the Contractor shall notify the Authority in writing of the Contractor’s



proposed deadline for providing the Change Order form, which deadline shall be subject to

approval by the Authority. Development of the cost estimate and scope, including any

modifications thereto requested by the Authority, shall be made at the Contractor’s cost and

expense, except that costs of design and engineering work required for preparation of plans

or exhibits necessary to the Change Order form shall be included in the Change Order as

reimbursable items.

19.2.1.5 In the event that the parties agree that a change in the requirements relating to

the Work has occurred but disagree as to whether the change justifies additional

compensation or time or disagree as to the amount of any change to be made to the Contract

Price or extension of a Completion Deadline, the Authority may order the Contractor to

proceed with the performance of the Work in question notwithstanding such disagreement.

Such order may, at the Authority’s option, be in the form of: (a) an actual incurred cost

Change Order as provided in Section 19.7 or (b) a Directive Letter under Section 19.1.1.2.

19.2.2 Unilateral Change Orders for Authority-Directed Changes

The Authority may issue a Change Order for an Authority-Directed Change at any time,

regardless of whether it has issued a Notice of Proposed Change. Any such Change Order

shall state that the Contractor shall be entitled to compensation on an actual incurred cost

basis as provided in Section 19.7 for the additional Work required thereby.

19.3 Contractor-Initiated Change Orders 19.3.1 Eligible Changes

19.3.1.1 The Contractor may request a Change Order to extend a Completion Deadline

only for the following Excusable Delays changing the duration of a Critical Path:

(a) Authority-Caused Delays;

(b) Delays as specified in Section 17, to the extent provided therein;

(c) Certain delays relating to Utility Work or City Facility Work, as specified in

Section 17, to the extent provided therein; and

(d) Failure of a City, the Authority or Caltrans to provide responses for matters

for which a response is required within the time period specified in the Contract Data

Requirements List (“CDRL”), or if not specified in the CDRL, within the time period

specified in the Scope of Work.



19.3.1.2 The Contractor may request a Change Order to increase the LSFP or the

Design Allowance (subject to certain limitations with respect to delay damages as specified

in Section 19.5.2, and subject to strict compliance with the requirements of this Section 19),

only for increased costs in the Work for the following Compensable Delays:

(a) For additional costs directly attributable to additional Work resulting from

Authority-Directed Changes;

(b) For additional costs directly attributable to Authority-Caused Delays;

(c) For additional costs directly attributable to the occurrence of Force Majeure

events, utility delays, and Differing Site Conditions, as specified in Section 17 to the extent

provided therein, which are not compensable by any insurance, required to be provided

hereunder, excluding delay damages except as permitted by Section 19.5.2;

(d) For additional costs directly attributable to additional Work resulting from

material changes to the basic Project configuration;

(e) For additional costs for which a total Contract amount increase is permitted

under Section 19.8;

The Authority’s Project Manager may issue clarifications, amplifications, and interpretations

of the Contract Documents without issuing a change order. If the Contractor believes the

clarifications, amplifications, and interpretations constitute an Authority-Directed Change,

the Contractor may request a change order in accordance with this Section 19.3.

19.3.1.3 Except for a delay in delivery by the Authority of Authority -furnished Goods

(which may constitute a Compensable Delay if it meets all other qualifying criteria), a

shortage of Goods shall not constitute a Compensable Delay.

19.3.1.4 If a delay arises out of more than one cause, to the extent that the Delay is

Excusable or Compensable, subject to all the requirements of this Section, the Contractor

will be entitled to one extension of Contract Time (and applicable compensation) for the

cumulative change to the Critical Path Schedule.

19.3.1.5 In the event that the Contractor requests a time extension, the Authority may

require the Contractor to provide two alternative Change Order requests, one of which shall

provide for a time extension and any additional costs permitted hereunder, and the other of

which shall show all Acceleration Costs associated with meeting the original completion

deadline, as well as any additional costs permitted hereunder.



19.3.2 Conditions Precedent (Procedures for Contractor-Initiated Change Orders)

The following requirements constitute conditions precedent to Contractor’s entitlement to

request a Change Order in all circumstances except those involving a Notice of Proposed

Change. The Contractor agrees that the filing of Proposed Change Order (“PCO”) Notices

and subsequent filing of requests for Change Orders with the Authority pursuant to this

Section 19.3.2 are necessary in order to begin the administrative process for the resolution of

Contract disputes. The Contractor understands that it shall be forever barred from recovering

against the Authority as stated below if it fails to give notice of any act, or failure to act, by

the Authority or any of its representatives or the happening of any event, thing or occurrence

pursuant to a proper PCO Notice, and thereafter complies with the remaining requirements of

this Section 19.3.2.

19.3.2.1 The Contractor shall deliver to the Authority a PCO Notice stating that an

event or situation has occurred within the scope of Section 19.3.1.1 or 19.3.1.2 and shall state

which subsection thereof is applicable. The first notice shall be labeled “PCO No. 1” and

subsequent notices shall be numbered sequentially.

19.3.2.1.1 Each PCO Notice shall be delivered as promptly as possible after the

occurrence of such event or situation. In the event that any PCO Notice is delivered later

than ten days (unless an earlier deadline applies) after the Contractor first discovered (or

should have discovered in the exercise of reasonable prudence) the occurrence which is

described therein, the Contractor shall be deemed to have waived the right to collect any and

all costs incurred prior to the date of delivery of the written notice, and shall be deemed to

have waived the right to seek an extension of any Completion Deadline with respect to any

delay in any Critical Path which accrued prior to the date of delivery of the written notice.

Furthermore, in the event that any PCO Notice concerns any condition or material described

in Section 17.0 entitled Site Conditions, the Contractor shall be deemed to have waived the

right to collect any and all costs incurred in connection therewith to the extent that the

Authority is not afforded the opportunity to inspect such material or condition before it is

disturbed. The Contractor’s failure to provide a PCO Notice within 30 days after Contractor

first discovered (or should have discovered in the exercise of reasonable prudence) the

occurrence of a given event or situation shall preclude the Contractor from any relief, unless

the Contractor can show, based on a preponderance of the evidence, that (a) the Authority



was not materially prejudiced by the lack of notice, or (b) the Authority had actual

knowledge, prior to the expiration of the 30-day period, of the event or situation and that the

Contractor believed it was entitled to a Change Order with respect thereto.

19.3.2.1.2 The PCO Notice shall: (a) state in detail the facts underlying the potential

claim, the reasons why the Contractor believes additional compensation or time will or may

be due and the date of occurrence, (b) state the name, title, and activity of each Authority

representative knowledgeable of the facts underlying the potential claim, (c) identify any

documents and the substance of any oral communication involved in the claimed change, (d)

state in detail the basis for a claim of necessary accelerated schedule performance, if

applicable, (e) state in detail the basis for a claim that the work is not required by the

Contract Documents, if applicable, (f) identify particular elements of Contract performance

for which additional compensation may be sought under this Section 19, (g) identify any

potential Critical Path impacts, and (h) provide an estimate of the time within which a

response to the notice is required to minimize cost, delay, or disruption of performance.

19.3.2.1.3 If the claim relates to a decision which the Contract Documents leave to the

discretion of a person or as to which the Contract Documents provided that such person’s

decision is final, the PCO Notice shall set out in detail all facts supporting the Contractor’s

contention that the decision constitutes a change in the Contract requirements or other

objection to the decision, including all facts supporting any contention that the decision was

capricious, arbitrary, unreasonable, not supported by the Contract Documents or not

supported by substantial evidence.

19.3.2.1.4 The written notification relating to Site Conditions described in Section 17

may also serve as a PCO Notice provided it meets the requirements for PCO Notices.

19.3.2.1.5 Within ten days after receipt of a PCO Notice, Authority may respond in writing

to Contractor to: (a) confirm that a change has occurred or (b) deny that a change has

occurred or (c) advise Contractor that the necessary information has not been submitted to

decide which of the above alternatives applies, and indicate the needed information and date

by which it is to be received for further review. Failure of Authority to respond shall not

affect Contractor’s obligation to provide a request for Change Order within the time periods

specified in Section 19.3.2.2.



19.3.2.1.6 Any adjustments made to the Contract Documents shall not include increased

costs or time extensions for delay resulting from Contractor’s failure to provide requested

additional information under this Section 19.3.2.1.

19.3.2.2 The Contractor shall deliver all requests for Change Orders under this

Section 19.3 to Authority within 30 days after delivery of the PCO Notice, or such longer

period of time as may be necessary, provided that the Contractor shall have notified the

Authority in writing prior to expiration of such 30-day period how much additional time is

required. The Authority may require design and construction costs to be covered by separate

Change Order requests. If the Contractor fails to deliver a complete or incomplete request

for Change Order meeting the requirements of Section 19.3.2.3 within the appropriate time

period, the Contractor shall be required to provide a new PCO Notice before it may submit a

request for Change Order.

19.3.2.3 Each request for Change Order provided under Section 19.3.2.2 shall meet all

requirements set forth in Section 19.4; provided that if any such requirements cannot be met

due to the nature of the occurrence, the Contractor shall provide an incomplete Change Order

which fills in all information capable of being ascertained and which shall include a list of

those Change Order requirements which are not fulfilled together with an explanation

reasonably satisfactory to the Authority stating why such requirements cannot be met, shall

provide such information regarding projected impact on the Critical Path as is requested by

the Authority and in all events shall include sufficient detail to ascertain the basis for the

proposed Change Order and for any ascertainable amounts with respect thereto. The

Contractor shall furnish, when requested by the Authority, such further information and

details as may be required to determine the facts or contentions involved.

19.3.2.4 The Contractor shall give the Authority access to any and all of Contractor’s

books, records and other materials relating to the Work, and shall cause its Subcontractors to

do the same, so that the Authority can investigate the basis for such proposed request for

Change Order. The Contractor shall provide the Authority with a monthly update to each

outstanding incomplete request for Change Order, describing the status of all previously

unfulfilled requirements and stating any changes in projections previously delivered to the

Authority, time expenditures to date and time anticipated for completion of the activities for

which the time extension is claimed.



19.3.2.5 The Authority may reject the Contractor’s claim at any point in the process.

Once a complete request for Change Order is provided, the Authority will respond within 21

days of delivery of the request. Although the Authority intends to review incomplete Change

Orders for the purposes described in Section 19.3.2.4, the Authority shall have no obligation

to review the back-up associated with any request for Change Order until a complete Change

Order is provided.

19.3.2.6 The Contractor acknowledges that, due to the limited availability of funds for

the Project, timely delivery of notification of such events and situations and requests for

Change Orders and updates thereto are of vital importance to the Authority. The Authority is

relying on the Contractor to evaluate promptly, upon the occurrence of any event or situation,

whether the event or situation will affect the Critical Path or affects costs and, if so, whether

the Contractor believes a time extension and/or LSFP increase is appropriate. If an event or

situation occurs which may affect the LSFP or the Critical Path, the Authority will evaluate

the situation and determine whether it wishes to make any changes to the definition of the

Project so as to bring it within the Authority’s funding and time restraints. The following

matters (among others) shall be considered in determining whether the Authority has been

prejudiced by the Contractor’s failure to provide notice in a timely fashion: the effect of the

delay on alternatives available to the Authority (that is, a comparison of alternatives which

are available at the time notice was actually given and alternatives which would have been

available had notice been given within ten days after occurrence of the event or when such

occurrence should have been discovered in the exercise of reasonable prudence) and the

impact of the delay on the Authority’s ability to obtain and review objective information

contemporaneously with the event.

19.3.2.7 Prior to submission by the Contractor of any request for a Change Order

which is based in whole or in part on any facts alleged in a submittal by any Subcontractor to

the Contractor, the Contractor shall have reviewed all such Subcontractor claims and

determined in good faith whether the claims are justified as to both entitlement and amount.

The Contractor’s request for a Change Order shall include only those items which the

Contractor has determined are so justified and which otherwise meet all requirements

hereunder for Contractor-initiated Change Orders. Each request for a Change Order

involving Subcontractor Work, and each update to an incomplete Change Order request



involving such Work shall include a summary of the Contractor’s analysis of all

Subcontractor claims components and shall include a certification signed by the Contractor’s

Project Manager stating that the Contractor has reviewed and agrees with the Subcontractor’s

justification and has reviewed and verified the adequacy of any back-up documentation

included in the request. Any request for Change Order involving Subcontractor Work which

is not accompanied by such an analysis and certification shall be considered incomplete. In

making this certification, the Contractor shall be entitled to rely on a written certification

from the Subcontractor(s) that its claim is justified as to both entitlement and amount.

19.3.3 Submission of Request for Change Order

After satisfaction of all conditions precedent set forth above, the Contractor shall initiate each

request for a Change Order by submitting a Change Order form and supporting

documentation to the Authority for review. If the Contractor submits a request for Change

Order requesting an extension of any Completion Deadline as permitted by Section 19.3.1.1,

then the Contractor shall also provide an alternative Change Order including a Recovery

Schedule.

19.3.4 Performance of Disputed Work

In the event that the Authority refuses to issue a Change Order based on the Contractor’s

request, the Contractor shall nevertheless promptly perform all work as specified in an

appropriate Directive Letter, with the right to submit the issue of entitlement to a Change

Order to dispute resolution in accordance with Section 20.0. The Contractor shall maintain

and deliver to Authority, upon request, contemporaneous timesheets and materials records,

meeting the requirements of Section 19.7, for all work performed which Contractor believes

constitutes extra work (including non-construction work), until all disputes regarding

entitlement or cost of such work are resolved.

19.4 Contents of Change Orders 19.4.1 Form of Change Order

Each Change Order and request for Change Order shall be prepared using the appropriate

form provided by Authority, with any modifications necessary to meet the requirements of

Section 19.3.2.2, and shall meet all applicable requirements of this Section 19.

19.4.2 Scope of Work, Cost Estimate, Delay Analysis & Information Regarding Change



19.4.2.1 The Contractor shall prepare a scope of work, cost estimate, delay analysis

and other information as required by this Section 19.4.2 for each Change Order, other than

Change Orders issued unilaterally by the Authority.

19.4.2.2 The scope of work shall describe in detail satisfactory to the Authority all

activities associated with the Change Order, including a description of additions, deletions

and modifications to the existing Contract requirements.

19.4.2.3 The cost estimate shall set out the estimated costs in such a way that a fair

evaluation can be made. It shall include a breakdown for labor, materials, equipment,

overhead (which includes all indirect costs) and profit, unless the Authority agrees otherwise.

The estimate shall include costs allowable under Section 19.5.2, if any. If the work is to be

performed by Subcontractors and if the work is sufficiently defined to obtain Subcontractor

quotes, the Contractor shall obtain quotes (with breakdowns showing cost of labor, materials,

equipment, overhead and profit) on the Subcontractor’s stationery and shall include such

quotes as back-up for the Contractor’s estimate. No mark-up shall be allowed in excess of

the amounts allowed under Section 19.7. The Contractor shall identify all conditions with

respect to prices or other aspects of the cost estimate, such as pricing contingent on firm

orders being made by a certain date or the occurrence or non-occurrence of an event.

19.4.2.4 If the Contractor claims that such event, situation or change affects the Critical

Path, it shall provide a delay analysis indicating all activities represented or affected by the

change, with activity numbers, durations, predecessor and successor activities, resources and

cost, with a narrative report, in form satisfactory to the Authority, which compares the

proposed new schedule to the current approved schedule.

19.4.2.5 The Contractor shall provide such other supporting documentation as may be

required by the Authority. The Contractor acknowledges and agrees that the Authority may

use the information contained in the Schedule of Values in evaluating the estimate.

19.4.3 Justification

For all requests for Change Orders initiated by the Contractor, the Change Order form shall

include an attachment containing a detailed narrative justification describing the

circumstances underlying the proposed change, identifying the specific provision(s) of

Section 19 which permit a Change Order to be issued, and describing the data and documents



(including data and reports prepared pursuant to Section 19.7) which establish the necessity

and amount of such proposed change.

19.4.4 Contractor Representation

Each Change Order form shall contain a written representation by the Contractor that the

amount of time and/or compensation requested includes all known and anticipated impacts or

amounts, direct, indirect and consequential, which may be incurred as a result of the event or

matter giving rise to such proposed change.

19.5 Certain Limitations 19.5.1 Limitation on LSFP Increases

Any increase in the LSFP allowed pursuant to a Change Order shall exclude:

(a) costs caused by the breach of contract or fault or negligence, or act or failure

to act, of the Contractor, its employees, agents, officers or Subcontractors or any other

Persons for whom Contractor may be contractually or legally responsible;

(b) costs which could reasonably be avoided by the Contractor, including by

resequencing, reallocating or redeploying its forces to other portions of the Work or to other

activities unrelated to the Work (including in the equation any additional costs reasonably

incurred in connection with such reallocation or redeployment); and

(c) costs for any rejected Work which failed to meet the requirements of the

Contract Documents and any necessary remedial Work.

19.5.2 Limitation on Delay Damages

19.5.2.1 Delay damages shall be compensable hereunder only (a) for Change Orders

issued by the Authority as an alternative to allowing an extension of the Contract Time as

contemplated by Section 19.3.1.5, (b) for delays which qualify as Authority-Caused Delays

entitling the Contractor to an extension of a Completion Deadline and (c) for Force Majeure

events that result in a cumulative suspension of the Work for thirty or more consecutive days,

to the extent such suspension affects the Critical Path. Acceleration Costs shall be

compensable hereunder only with respect to Change Orders issued by the Authority as an

alternative to allowing an extension of the Contract Time as contemplated by

Section 19.3.1.5.

19.5.2.2 Delay damages shall be limited to direct costs directly attributable to the

delays described in Section 19.5.2.1 and mark-ups thereon in accordance with Section 19.7



and extended overhead in accordance with Section 19.5.2.3. In addition, before the

Contractor may obtain any increase in the LSFP to compensate for extended overhead,

Acceleration Costs or other damages relating to delay, the Contractor shall have

demonstrated to the Authority’s satisfaction that (a) the change in the Work or other event or

situation which is the subject of the request for Change Order has caused or will result in an

identifiable and measurable disruption of the Work which impacted a Critical Path activity

(i.e. consumed all available Float and extended the Work required for Substantial

Completion, Punch List Completion or Final Acceptance (as applicable) beyond the

applicable Completion Deadline), (b) the delay or damage was not due to any breach of

contract or fault or negligence, or act or failure to act of the Contractor, its employees,

agents, officers or Subcontractors or any other Persons for whom Contractor may be

contractually or legally responsible, and could not reasonably have been avoided by the

Contractor, including by resequencing, reallocating or redeploying its forces to other portions

of the Work or other activities unrelated to the Work (subject to reimbursement for additional

costs reasonably incurred in connection with such reallocation or redeployment), (c) the

delay for which compensation is sought is not concurrent with any delay for which the

Contractor is responsible; and (d) the Contractor has suffered or will suffer actual costs due

to such delay, each of which costs shall be documented in a manner satisfactory to the

Authority.

19.5.2.3 In the event that the Contractor is entitled to extended overhead under this

Section 19.5.2, it will be applied at a negotiated rate per day.

19.5.3 Limitation on Time Extensions

Any extension of a Completion Deadline allowed hereunder shall exclude any delay to the

extent that it (a) did not impact the Critical Path, (b) was due to the fault or negligence, or act

or failure to act of the Contractor, its employees, agents, officers or Subcontractors or any

other Persons for whom the Contractor may be contractually or legally responsible, or (c)

could reasonably have been avoided by the Contractor, including by resequencing,

reallocating or redeploying its forces to other portions of the Work (provided that if the

request for extension involves an Authority-Caused Delay, the Authority shall have agreed, if

requested to do so, to reimburse the Contractor for any costs incurred, in resequencing,

reallocating or redeploying its forces). The Contractor shall be required to demonstrate to the



Authority’s satisfaction that the change in the Work or other event or situation which is the

subject of the request for Change Order seeking a change in a Completion Deadline has

caused or will result in an identifiable and measurable disruption of the Work which has

impacted a Critical Path activity (i.e. consumed all available Float and extended the Work

required for Substantial Completion, Punch List Completion or Final Acceptance (as

applicable) beyond the applicable Completion Deadline).

19.5.4 Work Performed Without Direction

To the extent that Contractor undertakes any work that is outside of the original scope of the

Work, unless Contractor has received a Directive Letter to perform such work Contractor

shall be deemed to have performed such work voluntarily and shall not be entitled to a

Change Order in connection therewith. In addition, the Contractor may be required by the

Authority to remove or otherwise undo any such work, at its sole cost and expense.

19.6 Pricing of Change Orders The Authority and the Contractor (on its own behalf and on behalf of its Subcontractors)

shall endeavor to negotiate, in good faith, a reasonable cost for each Change Order other than

(a) unilateral Change Orders under Section 19.2.2; and (b) Change Orders for Remediation

Work under Section 19.10.4 which shall be based on competitive bids received from properly

licensed Subcontractors. In general, the price of a Change Order shall be a negotiated lump

sum price as provided below in this Section 19.6 or based on actual incurred cost records

pursuant to Section 19.7.

19.6.1 Contents

A negotiated Change Order shall specify scheduling requirements, time extensions, and all

costs of any nature arising out of the Work covered by the Change Order. Notwithstanding

the foregoing, the Contractor and the Authority may mutually agree to use a multiple-step

process involving issuance of a Change Order which includes an estimated construction cost

and which provides for a revised Change Order to be issued after a certain design level has

been reached, thus allowing a refinement and further definition of the estimated construction

cost.

19.6.2 Added Work

When the Change Order adds Work to Contractor’s scope, the increase in the LSFP shall be

negotiated based on estimated costs of labor, material and equipment, or shall be based on



actual costs in accordance with Section 19.7. For negotiated Change Orders, mark-ups for

profit and overhead shall be consistent with Section 19.7, and risk associated with the Work

described in the Change Order shall be addressed through the assumptions contained therein

regarding the scope of such Work.

19.6.3 Deleted Work

When the Change Order deletes Work from the Contractor’s scope, the amount of the

reduction in the LSFP shall be based upon an estimate including a bill of material, a

breakdown of labor and equipment costs and overhead and profit that would have been

required for the deleted work. The amount of risk associated with such Work as of the date

of execution hereof by the Contractor shall be a factor in determining the mark-up for the

deduction. When a deduction is involved, documented cancellation and restocking charges

may be included in costs and subtracted from the price deduction.

19.6.4 Work Both Added and Deleted

When the Change Order includes both added and deleted Work, the Contractor shall prepare

a statement of the cost of labor, material and equipment for both added and deleted work. If

the cost of labor, material and equipment for the work added and deleted results in a:

(a) Net increase in cost, the change shall be treated as work added and the

provisions of Section 19.6.2 shall be used to determine mark-ups for overhead and profit.

Mark-ups for overhead and profit will be allowed only for the net increase in cost in order to

establish the amount to be added to the LSFP.

(b) Net decrease in cost, the change shall be treated as work deleted and the

provisions of Section 19.6.3 shall be used on the net decrease in cost in order to establish the

price deduct to the LSFP.

(c) Net change of zero, there will be no change in the LSFP.

19.7 Basis for Establishing Costs Associated with Change Orders 19.7.1 General

19.7.1.1 The amount payable for a Change Order is the sum of all eligible costs the

Authority determines are allowable, allocable and reasonable to perform the Work, and a

mark-up for overhead and reasonable profit as set forth herein.

19.7.1.2 Eligible costs shall only be those costs identified in Sections 19.7.1 through

19.7.6.



19.7.2 Personnel Costs

The cost of personnel shall be separated into construction-related Work and non-

construction-related Work as described below.

19.7.2.1 Construction-related Work. The cost of labor for personnel performing

Construction Work, which is subject to prevailing wage requirements, whether provided by

the Contractor or a Subcontractor, will equal the sum of the following:

(a) Actual burdened wages (i.e. the base wage paid to the employee plus audited

employee fringe benefits); plus

(b) Actual direct costs paid to, or in behalf of, workers, including, subsistence and

travel allowances, health and welfare required by collective bargaining agreements, or other

employment contracts generally applicable to the classes of labor employed on the work.

No costs for supervision above the foreman level will be allowed.

19.7.2.2 Non-Construction-Related Work. The cost of labor for personnel performing

non-construction Work will equal the actual wages (i.e. the base wage paid to the employee

exclusive of any fringe benefits) of personnel for non-construction-related Work (that is,

design, Geotechnical investigations, surveying, permits, environmental, and similar aspects

of the Work), performed by employees of professional architect, engineer, or surveying firms

(or independent professional architects, engineers, or surveyors).

19.7.3 Material Costs

Material costs shall be the cost of all materials to be used in the performance of construction

Work including normal wastage allowance as per industry standards, subject to the

requirements set forth in this Section 19.7.3. The material prices shall be supported by valid

quotes/invoices from the Suppliers. The cost shall include sales taxes, freight and delivery

charges and any allowable discounts. The Authority reserves the right to approve materials

and sources of supply of materials to be furnished by the Contractor or Subcontractors, and

shall have the right to furnish such materials as it deems advisable. The price allowed for

materials shall be adjusted as follows:

(a) Affiliated Source of Supply. If the materials are obtained from a supply or

source owned in whole or in part by the Contractor or a Subcontractor, the cost of such

materials shall not exceed the lesser of the lowest price charged by the Contractor or such



Subcontractor (as applicable) for similar materials furnished to other jobs or the current

wholesale price for such materials delivered to the Site.

(b) Excessive Cost. If the cost of such materials is excessive in the opinion of the

Authority, and the Contractor fails to document that such cost accurately reflects the price

actually paid by the Contractor, then the cost of such materials shall be deemed to be the

lowest current wholesale price at which such materials were available, in the quantities

needed and delivered to the Site.

(c) Evidence of Cost. If the Contractor or any Subcontractor (as applicable) does

not furnish satisfactory evidence of the cost of such materials from the actual supplier thereof

within 60 days after the date of delivery of the material, the Authority reserves the right to

establish the cost of such materials at the lowest current wholesale prices at which such

materials were available, in the quantities needed and delivered to the Site

19.7.4 Equipment

19.7.4.1 Basis of Payment. The Contractor will be paid for the use of the Contractor or

Subcontractor-owned or leased equipment, and for equipment rented by the Contractor or

any Subcontractor for actual use in construction of the Project. The hourly rates derived from

the publication specified in Section 19.7.4.2 shall be computed from equipment costs

currently in effect. The rates derived do not include costs for operating personnel.

19.7.4.2 Contractor-Owned or Leased Equipment. Payment for the use and operation

of equipment owned or leased by the Contractor or Subcontractors shall be made for all

construction and automotive equipment (except passenger carrying vehicles or pickup trucks

of less than 1-ton capacity, for which no payment will be made) required in the performance

of the changed Work. Such charges shall not include charges for any item of equipment or

tool with a new cost of $500.00 or less each, except that no cost will be allowed for computer

equipment or surveying equipment regardless of their new cost. The use and operation rates

shall be as set forth in the latest edition of the Rental Rate Blue Book for Construction

Equipment (Blue Book), published by Dataquest, Inc., San Jose, CA, which is in effect at the

time of commencement of the changed Work. Those rates shall be applied as follows:

(a) Use of the equipment shall be computed and charged as follows: The monthly

rental base rate for the equipment shall be multiplied by the shift rate adjustment factor and

the resulting product divided by 176 hours/month to yield the hourly use rate:



Hourly Use Rate = (Monthly Rental Rate) x (Shift Adjustment Factor) 176 hours/month

(b) The hourly use rate for the equipment shall be multiplied by the actual number

of hours the equipment is used in the conduct of the changed Work;

(c) The application of weekly, daily, or hourly rates as set forth in the Blue Book

shall be excluded;

(d) The application of regional adjustment factors shall be excluded;

(e) Normal working conditions shall be assumed unless otherwise approved by

the Authority;

(f) Use of the equipment for second or third shifts shall be at 50% of the first shift

rate established in Section 19.7.4.2(a);

(g) Unless otherwise agreed, the costs of fuel, lubricants, tires, other expendables,

repair parts, service, and maintenance shall be charged at the Estimated Operating Cost/Hr.

set forth in the Blue Book;

(h) Operators will be paid for as specified under Section 19.7.1.1;

(i) Transportation costs to and from the Site for equipment shipped in specifically

to perform changed Work, if approved in advance by the Authority, will be paid separately.

No payment for transportation costs will be made if the equipment brought to the Site for

changed Work is also used on other Contract Work items;

(j) Equipment standby time, if approved by the Authority, will be paid for at 40%

of the applicable rental rate and shall not include any operating costs;

(k) If a rate is not published in the Blue Book, the Contractor shall furnish

appropriate cost information to the Authority to allow calculation of an appropriate rate

following the principles established in the Blue Book; and

(l) All equipment rates as set forth above shall be established and submitted to

the Authority for approval in writing before commencing any changed Work;

19.7.4.3 Outside Rental Equipment. If the Contractor or Subcontractor owned or

leased equipment is not available and equipment is rented from an outside source, payment

will be made on the basis of actual invoiced cost, less any discount allowed by the renting

source. Use of outside rental equipment at rates higher than the applicable Blue Book rate, as

computed above, will not be allowed unless approved in writing in advance by Authority.



19.7.4.4 Equipment Condition and Suitability. All equipment shall be in good working

condition and suitable for the purpose for which the equipment is to be used.

19.7.4.5 Equipment Classification. Unless otherwise specified, manufacturer’s ratings

and manufacturer-approved modifications shall be used to classify equipment for the

determination of applicable rental rates. Equipment that has no direct power unit shall be

powered by a unit of at least the minimum rating recommended by the manufacturer of that

equipment

19.7.4.6 Time to be Paid. The time to be paid for use of equipment on the Site shall be

the time the equipment is in operation on the Actual Incurred Change Order Work being

performed. The time shall include the reasonable time required to move the equipment to

location of the actual incurred cost Change Order Work and return it to the original location

or to another location requiring no more time than that required to return it to its original

location. Moving time will not be paid for if the equipment is also used at the Site other than

for Actual Incurred Change Order Work. Loading and transporting costs will be allowed, in

lieu of moving time, when the equipment is moved by means other than its own power. No

payment for loading and transporting will be made if the equipment is also used at the Site

other than for Actual Incurred Change Order Work. Time will be computed in half and full

hours. In computing the time for use of equipment, less than 30 minutes shall be considered

one-half hour.

19.7.5 Permit Fees

The Contractor will be reimbursed for the cost of any additional permit fees payable as the

result of the change in the Work. Back-up documentation supporting each cost item for this

category shall be provided by the Contractor and approved by the Authority prior to any

payment authorization being granted.

19.7.6 Contractor’s Overhead and Profit

19.7.6.1 Mark-ups for Incurred-Cost Changed Work

If the direct cost of the Work is based in whole or in part on the Contractor’s actual incurred-

cost, the mark-ups (for overhead and profit) the Authority will pay to the Contractor on such

direct costs shall be subject to determination by the Authority, based upon actual overhead

rates and a reasonable profit, not to exceed the markups set forth in Section 19.7.6.2 below.



19.7.6.2 Mark-ups for forward-priced Changed Work

If prior to commencement of performance of Changed Work, the Contractor and the

Authority agree on the amount of the direct costs of such Work, then the mark-ups (for

overhead and profit) the Authority will pay to the Contractor on such direct costs are:

(a) 20% for construction personnel costs per Section 19.7.1.1;

(b) 140% for non-construction personnel costs (plus the negotiated fee as per

Section 7.2.2 and Section 9.3.2;

(c) 10% for material costs per Section 19.7.2;

(d) 10% for equipment costs per Section 19.7.4;

(e) 0% for permit fees per Section 19.7.5;and

(f) 5% for subcontracted Work.

19.7.6.3 Application of the mark-ups in Section 19.7.6.2 is subject to the following:

(a) The mark-ups represent the full and complete price adjustment for all

overhead, small tools (i.e., those costing $500 or less), consumables (items which are

consumed in the performance of the Work which are not a part of the finished product), and

other indirect costs of the added or changed Work, as well as for profit thereon. The

Contractor’s mark-up percentages shall be considered to include, among other costs,

incidental job burdens, field, jobsite, and general home office expenses of all types (including

timekeepers, bookkeepers, and other general office help), supervisory expenses of all types

(excluding only direct supervision of force account work), and all other overhead, general

condition, and indirect costs and expenses.

(b) The mark-ups will be paid to the Contractor only for Work it performs; in the

case of Work that is subcontracted, the mark-up for Subcontract administration will be

allowed to the Contractor (or, at Contractor’s option, to a Subcontractor) and all other mark-

ups will be allowed to the Subcontractor who actually performs the Work.

(c) In the case of subcontracted Work, only one mark-up shall be allowed,

notwithstanding the actual number of intervening Subcontractors. This mark-up shall fully

compensate the Contractor for overhead and profit with respect to subcontracted Work. The

mark-up for subcontracted work will not apply to Work that is self-performed by any Major

Subcontractor that holds an equity interest in the Contractor.



(d) No mark-up will be paid to the Contractor for any materials furnished by the

Authority or for any equipment use costs.

(e) Where the Contractor’s or any Subcontractor’s portion of a change involves

credit items, or the proposed change is a net deductive change, the Contractor shall include

all of Contractor’s and Subcontractor’s overhead and profits in computing the value of the

credit.

19.8 Changes in Basic Project Configuration The basic Project configuration is the information regarding the nature of the Project to be

constructed. Except as authorized by a Change Order, the Contractor shall not make any

material change in basic Project configuration. The following list establishes the standard for

determining whether a material change in the basic Project configuration has occurred (i.e.,

any lesser change or other change not included on the list shall not be considered material).

Authority-directed changes will be covered by change order whether they are within the

parameters of a material change or not.

A material change in the basic Project configuration is one that causes one of the

following circumstances:

(a) A change in the length or shift in the end points of a station and/or any lateral

shift in either edge of a station and or change in the number of stations;

(b) A change in the terminus of the Project (either or both) longitudinally;

(c) A change in the number of at-grade crossings;

(d) A change in the number of signal box units and/or any change in the location

of signal box units;

(e) A change in the number of tracks (pairs of rail) from that shown on the basic

Project configuration drawings;

(f) A change in the number of crossovers and/or any change in the location of

crossovers that affect operations or changes ROW requirements;

(g) A change in the horizontal clearance between tracks;

(h) A change in passing siding locations;

(i) A change that requires the Authority to acquire additional property;

(j) A change that increases the scope of environmental mitigation;

(k) A change that precludes the creation of a quiet zone operation; or



(l) A change in grade crossing structures.

Notwithstanding the fact that the Contract Documents generally obligate the Contractor to

undertake all Work necessary to complete the Project without changes in the LSFP, this

Section 19.8 provides for a change in the LSFP to be made in conjunction with material

Project configuration changes. If any material Project configuration change increases or

decreases the cost of performing the Work, then the Authority will issue a change order to

adjust the LSFP (or Design Allowance if applicable) accordingly. Such change order may

include delay damages, at the Authority’s discretion. Furthermore, if the Contractor

commences any construction Work affected by the change after the Contractor knows or

should have known of the change but prior to delivery of appropriate notice of the change to

the Authority under Section 19.3.3, the change order shall allow the Authority a credit for the

cost of any unnecessary Work performed and/or shall exclude any additional costs associated

with redoing the Work already performed. The Change Order shall also account for any

offsets from change orders previously issued. Notwithstanding the foregoing, material

changes covered by this Section 19.8 may be ordered without any change in total Contract

amount or extension of time, where such amount or time change is not justified.

In the event that the Authority approves a material Project configuration change that reduces

the Contractor’s costs, the change order shall note the amount of cost decrease available for

future offsets.

If a Value Engineering Change Proposal (“VECP”) results in a material change in basic

Project configuration, any cost savings from such Value Engineering Change Proposal shall

be shared in accordance with Section 21.

In general, the Contractor may implement non-material changes in the basic Project

configuration without a change order, unless the change involves a circumstance for which a

change order is specifically required hereunder. The Contractor acknowledges and agrees

that constraints set forth in the environmental approvals and the Contract Documents, as well

as the site conditions and the ROW limits, will impact the Contractor’s ability to make non-

material changes in the basic Project configuration.

19.9 Changes Outside of Scope If any change in the Work directed by the Authority significantly changes the character of the

Work, whether the alterations or changes included in such direction are in themselves



significant changes to the character of the Work or by affecting other Work cause such other

Work to become significantly different in character, an adjustment, excluding anticipated

profit, will be made to the LSFP. The basis for the adjustment shall be agreed upon prior to

performance of such Work. If a basis cannot be agreed upon, then an adjustment will be

made either for or against the Contractor in such amount as Authority may determine to be

fair and equitable (including reasonable profit if appropriate), subject to any subsequent

dispute resolution (if applicable) under Section 20.0. The term “significant change” as used

in this Section 19.9 shall be construed to apply only to circumstances involving a direction to

perform Work, which is not related to the Project.

19.10 Change Order Records Contractor shall maintain its records in such a manner as to provide a clear distinction

between the direct costs of Work for which it is entitled (or for which it believes it is entitled)

to an increase in the LSFP, Design or Professional Services Allowance and the costs of other

operations. The Contractor shall contemporaneously collect, record in writing, segregate and

preserve (a) separate daily work reports as described in Section 19.10.1, together with all

other data necessary to determine the costs of all Work which is the subject of a Change

Order or a requested Change Order, but specifically excluding any lump sum priced Change

Orders which have been executed by Authority, and (b) all data necessary to show the actual

impact (if any) of the change on each Critical Path with respect to all Work which is the

subject of a Change Order or a proposed Change Order, if the impact on the Preliminary

Schedule, approved Baseline Schedule or approved Working Schedule, as appropriate, is in

dispute. Such data shall be provided to the Authority and its authorized representatives as

directed by Authority, on forms approved by the Authority. The cost of furnishing such

reports is included in the Contractor’s predetermined overhead and profit mark-ups.

19.10.1 Daily Work Reports and Data Collection

The Contractor shall furnish the Authority completed Daily Work Reports for each day’s

Work relating to Change Orders, which is to be paid for on an actual incurred cost basis.

Daily time and material Work reports shall be detailed as follows:

(a) Name, classification, date, daily hours, total hours, rate, and extension for

each worker (including both construction and non-construction personnel) for whom

reimbursement is requested.



(b) Designation, dates, daily hours, total hours, rental rate, and extension for each

unit of machinery and equipment.

(c) Quantities of materials, prices, and extensions.

(d) Transportation of materials.

(e) For construction labor, the cost of property damage, liability, and worker’s

compensation insurance premiums, unemployment insurance contributions, bonds, and social

security tax.

The reports shall also state the total costs to date for the actual incurred cost Change Order

Work.

19.10.2 Supplier’s Invoices

Valid copies of Supplier’s invoices shall substantiate materials charges relating to Change

Order Work. Such invoices shall be submitted with the daily time and material Work

reports, or if not available, they shall be submitted as soon as practicable with subsequent

daily time and material Work reports. If Supplier’s invoices not be submitted within 60 days

after the date of delivery of the materials, the Authority shall have the right to establish the

cost of such materials at the lowest current wholesale prices at which such materials are

available, in the quantities concerned, delivered to the location of Work, less any discounts

available.

19.10.3 Execution of Reports

All Daily Work Reports shall be signed by the Contractor’s Project Manager, and his or her

approved designee.

19.10.4 Adjustment

The Authority will compare its records with the completed daily time and material Work

reports furnished by the Contractor and make any necessary adjustments. When these daily

time and material Work reports are agreed upon and signed by both parties, such reports shall

become the basis of payment for the Work performed, but shall not preclude subsequent

adjustment based on a later audit. The Contractor’s cost records pertaining to Work paid for

on a time and material basis shall be open, during all regular business hours, to inspection or

audit by representatives of the Authority during the life of the Contract and for a period of

not less than five years after the Final Acceptance Date, and such records shall be retained by

the Contractor for that period. Where payment for materials or labor is based on the cost



thereof to any Person other than the Contractor, the Contractor shall make every reasonable

effort to insure that the cost records of each such other person will be open to inspection and

audit by representatives of the Authority on the same terms and conditions as the cost records

of the Contractor. Payment for such costs may be deleted if the records of such third parties

are not made available to the Authority’s representatives. If an audit is to be commenced

more than 60 days after the Final Acceptance Date, the Contractor will be given a reasonable

notice of the time when such audit is to begin.

19.11 Disputes If the Authority and the Contractor agree that a request to increase the LSFP or extend any

Completion Deadline by the Contractor has merit, but are unable to agree as to the amount of

such price increase or time extension, the Authority agrees to mark up the Change Order

request provided by the Contractor to reduce the amount of the price increase or time

extension as deemed appropriate by the Authority, as the case may be, and to execute and

deliver the marked-up Change Order to the Contractor, within a reasonable period after

receipt of a request by the Contractor to do so, and thereafter to make payment and grant a

time extension based on such marked-up Change Order. The failure of the Authority and

Contractor to agree to any Change Order under this Section 19 shall be a dispute to be

resolved in accordance with Section 20.0. The Contractor’s Claim and any award by the

DRB shall be limited to the incremental costs incurred by the Contractor with respect to the

disputed matter (crediting Authority for any corresponding reduction in Contractor’s other

costs) and shall in no event exceed the amounts allowed by Section 19.7 with respect thereto.

Any award by the DRB may also include interest on the amount awarded, as determined by

the DRB. If awarded, interest shall accrue at the rate of interest stated in Code of Civil

Procedure section 685.010(a) during the period between the date that each invoice for the

Work in question would have been payable had the Contractor’s request for Change Order

been promptly granted, and the date that payment is actually made.

19.12 No Release or Waiver 19.12.1 An extension of time granted shall not release the Contractor’s Surety from its

obligations. Work shall continue and be carried on in accordance with all the provisions of

the Contract Documents and the Contract Documents shall be and shall remain in full force

and effect during the continuance and until the completion and Final Acceptance of the

Project unless formally suspended or terminated by the Authority in accordance with the



terms hereof. Permitting the Contractor to finish the Work or any part thereof after the

applicable Completion Deadline, or the making of payments to the Contractor after such

date, shall not constitute a waiver of any of the Authority’s rights under the Contract

Documents.

19.12.2 Neither the grant of an extension of time beyond the date fixed for the

completion of any part of the Work, nor the performance and acceptance of any part of the

Work or materials specified by the Contract Documents after the Completion Deadline, shall

be deemed to be a waiver of the Authority’s right to abrogate or terminate the Contract for

abandonment or failure to complete within the extended time specified or to impose and

deduct damages as may be provided.

19.12.3 No course of conduct or dealings between the parties or express or implied

acceptance of alterations or additions to the Work, and no claim that the Authority has been

unjustly enriched shall be the basis for any claim, request for additional compensation or

change in the Contract Time. Further, Contractor shall undertake, at its risk, work included

in any request, order or other authorization issued by a person in excess of that person’s

authority as provided herein, or included in any oral request. Contractor shall be deemed to

have performed such work as a volunteer and at its sole cost.

19.13 Insurance Proceeds The Contractor shall be responsible for processing all claims, and shall not be entitled to

receive a Change Order for any costs which it could have recovered from an insurer.

19.14 Additional Requirements 19.14.1 The Contractor and its Subcontractors shall comply with all applicable state

and federal procedures with respect to the costs claimed under Sections 19.7, 19.8, 19.9 and

19.10 consistent with the following:

(a) Generally Accepted Accounting Principles (GAAP);

(b) Office of Management and Budget (OMB) Circular A-87, Cost Principles for

State and Local Governments; and

(c) 49 CFR, Part 18, Uniform Administrative Requirements for Grants and

Cooperative Agreements to State and Local Governments.

19.14.2 The Contractor and its Subcontractors shall establish and maintain an

accounting system and records that properly accumulate and segregate incurred costs by line

item for the Change Orders authorized by this Section 19.



19.14.3 Any costs incurred in conjunction with this Section 19 for which Contractor

has received payment that are determined by subsequent audit to be unallowable under OMB

Circular A-87, or 49 CFR, Part 18, shall be promptly repaid to the Authority by the

Contractor.

20.0 DISPUTE RESOLUTION The provisions of this Section shall apply to all Disputes arising out of the Work, subject to

certain exclusions as provided herein, that cannot be resolved through informal discussions

between the Parties. The Parties may at any time mutually agree to submit a Dispute to

mediation or arbitration as an alternative to the procedures provided herein, subject to the

requirements of Public Contract Code sections 20104 et seq. All Disputes shall be resolved

strictly in accordance with the Contract Documents and applicable law.

20.1 Introduction A disputes review board (the “DRB”) will be established to assist in the resolution of

Disputes arising out of the conduct of the Work that are covered by this Section 20.0. This

Section describes the purpose, procedure, function and key features of the DRB. The form of

the DRB Agreement, which will formalize the creation of the DRB, is attached hereto as

Appendix 4.

20.1.1 Function and Scope of DRB

(a) The DRB shall be responsible for considering Disputes regarding technical

issues of Design, Engineering and Construction between the Authority and the Contractor

arising out of the conduct of the Work, in an effort to avoid construction delay and litigation.

The DRB shall fairly and impartially consider Disputes referred to it, and shall provide

written recommendations to the Authority and the Contractor, to assist in and facilitate the

timely and equitable resolution of such Disputes.

(b) Technical issues include acceleration, acceptance, coordination, delays and

disruption, differing site conditions, inspection, payment, change cost estimating and pricing,

plans and specifications, punchlist, sequence of work, access, assessments, materials,

warranties, and interpretation of the provisions of the Contract Documents that define the

scope of the Work.

(c) The Authority or the Contractor agree to first make a good faith effort to

amicably and fairly settle their differences and not to indiscriminately assign such Disputes



to the DRB. The Authority and the Contractor are encouraged to resolve potential Disputes

without resorting to this DRB resolution procedure.

(d) Disputes relating to commercial contract terms and conditions are excluded

from the jurisdiction of the DRB. This includes, but is not limited to:

1) Disputes regarding compliance with applicable Law, Contract Termination

(for Convenience or Default), or Liability and Indemnification.

2) Any decision (including failure to provide any approval) by the Authority

that the Contract Documents provide is in the sole discretion of the

Authority.

3) The amounts of any liquidated or stipulated payments set forth in the

Contract Documents, such as Assessments for Special Circumstances and

the daily Liquidated Damage amount. A Dispute of technical issues that

may result in Assessment or Liquidated Damage may be submitted to the

DRB.

4) Issues regarding DBE participation.

20.2 Continuance of Work During Dispute At all times during the course of the dispute resolution process, the Contractor shall continue

with the Work as directed, in a diligent manner and without delay, or shall conform to the

Authority’s decision or order, and shall be governed by all applicable provisions of the

Contract Documents. Records of the Work shall be kept in sufficient detail to enable

payment in accordance with applicable provisions in the Contract Documents, if the

Contractor is determined to be entitled to payment.

20.3 Membership The DRB will consist of (a) one member selected by the Authority; (b) one member selected

by Contractor, each of whom shall meet the requirements set forth in the following

provisions of this Section 20.3; and (c) a third member selected by the first two members,

who meets the requirements set forth in this Section 20.3 as well as the qualifications for an

arbitrator under Public Contract Code sections 10240 et seq. and implementing regulations.

The third member shall act as chair for all DRB proceedings and activities.

20.3.1 Experience of Members

All DRB members shall be experienced in the type of work involved in the Project and

experienced in the interpretation of contract documents. The goal in selecting the third



member is to complement the experience of the first two, thus furnishing technical expertise,

which will facilitate the DRB’s operations. Minimum DRB member qualifications are at

least fifteen years experience in engineering and construction on major transportation, rail

transit, or public works projects valued at $100 million or more. Experience in design-build

method of project delivery is highly desirable.

20.3.2 Avoidance of Appearance of Conflict

It is imperative that DRB members show no partiality to either the Contractor or the

Authority, or have any conflict of interest.

20.3.2.1 No member shall be an Affiliate or otherwise have a financial interest in the Project

or in the outcome of any Dispute decided hereunder, except for the right to receive payment

for serving on the DRB.

20.3.2.2 No member shall currently be, or within two years of the selection date have been,

an officer, director or employee of, or have had financial ties to: (a) the Contractor, any Joint

Venture Member, any Affiliate or any Subcontractor or any Affiliate of a Subcontractor,

(b) the Authority or any agency represented on the Authority Board, or (c) any firm under

contract to the Contractor, any Joint Venture Partner, any Affiliate, any Subcontractor or any

affiliate of a Subcontractor, the Authority or any agency represented on the Authority’s or

Metro’s governing board; provided that eligibility shall not be affected by past fee-based

consulting services on other projects which are disclosed to all Parties.

20.3.2.3 No member shall have had substantial prior involvement in the Project or

relationship with any Party or Affiliate of a nature which could compromise his or her ability

to impartially resolve Disputes.

20.3.2.4 No member shall accept employment with Authority, any agency represented on the

Authority’s or Metro’s governing board, Contractor, any Joint Venture Member, any

Affiliate, any Subcontractor or any affiliate of a Subcontractor during the term of the Project,

and for so long thereafter as any obligations remain outstanding under the Contract

Documents, except as a member of other DRBs.

20.3.2.5 No member shall discuss employment with Authority, any agency represented on

the Authority’s or Metro’s governing board, Contractor, any Joint Venture Member, any

Affiliate, any Subcontractor or any affiliate of a Subcontractor or any consultants working on



the Project during the term of the Project and for so long thereafter as any obligations remain

outstanding under the Contract Documents.

20.3.3 Submission of Disclosure Statements

Before their appointments are final, the first two prospective members shall submit complete

disclosure statements for the approval of both the Authority and the Contractor. Each

statement shall include a resume of experience, together with a declaration describing all

past, present and anticipated or planned future relationships to the Project and with all Parties

involved in the Project or the Work. Including disclosure of past or current professional or

close personal relationships with the Contractor, Subcontractor, Joint Venture Member,

Affiliate of a Subcontractor, any Affiliate, the Authority or its consultants working on the

Project, or with any key member of any such entity. The third DRB member shall supply

such a statement to the first two DRB members and to the Authority and Contractor prior to

approval of his or her appointment.

20.3.4 Selection Process

Upon selection of the first two members, the Authority and the Contractor shall negotiate a

three-party working agreement with each member. Immediately after execution of the

working agreements, the first two members shall commence selection of the third member.

The first two members shall ensure that the third member meets all of the criteria listed

above. The third member shall be selected within four weeks after the first two members are

notified to proceed with the selection. In the event of an impasse in selection of the third

member, that member shall be selected by mutual agreement of the Authority and the

Contractor. In so doing, the Parties may, but are not required to, consider the nominees

offered by the first two members. If the Authority and Contractor cannot agree in the

selection of the third member, then each Party may submit a list of up to five candidates to a

court of competent jurisdiction for judicial resolution of the selection of the third member.

20.3.5 Execution of Agreement

The Authority, Contractor, and all three members of the DRB shall execute the DRB

Agreement attached as Appendix 4, within four weeks after the selection of the third

member.

20.3.6 Reconstitution of the DRB



The Authority and the Contractor shall each have the right to require appointment of a new

DRB to resolve future Disputes, which right may be exercised at any time by delivery of

notice to such effect to the other Party and to the DRB. In such event, a new DRB

Agreement, in the same form as Appendix 4 attached hereto, shall be executed establishing a

new DRB, and except as otherwise mutually agreed by the Authority and Contractor, the

work to be performed by the DRB shall be limited to Disputes submitted to the DRB before

delivery of the notice requiring appointment of a new DRB.

20.4 Operation 20.4.1 No Ex Parte Communications

The Parties are expressly prohibited from seeking any DRB member’s advice or consultation

or discussing with any DRB member any aspect of an existing or potential Claim or Dispute,

without the concurrent participation of the other Party to the dispute, unless the Parties

otherwise agree in writing.

20.4.2 Consultants to the DRB

At the request of the DRB and upon agreement of the Parties, additional experts may be

engaged to assist the DRB to investigate and analyze Disputes and Claims. The duties of the

experts shall be to provide independent advice and professional opinions, and otherwise

assist the DRB on issues related to their areas of expertise. Experts to the DRB shall meet

the same conflict-of-interest restrictions and disclosure requirements as the individual DRB

members. The Authority and the Contractor shall be jointly responsible for the cost of the

expert services, as provided in the DRB Three Party Agreement.

20.5 Procedures 20.5.1 Impartiality of DRB

The DRB shall fairly and impartially consider Disputes referred to it, and shall provide

written recommendations to the Authority and Contractor, to assist in the resolution of

Disputes submitted to the DRB in accordance herewith.

20.5.2 Hearings

20.5.2.1 Normally the hearing will be conducted at or near the Worksite. However, any

location that would be more convenient and still provide all required facilities and access to

necessary documentation is satisfactory. Private sessions of the DRB may be held at any

convenient location.



20.5.2.2 When a Dispute is submitted to the DRB, the DRB, with input from the Contractor

and the Authority, shall first decide when and where to conduct the hearing.

20.5.2.3 Written documentation and arguments from both Parties shall be sent to each DRB

member and to the other party of the Dispute for study at least 7 days prior to the

commencement of the hearing. Each document shall indicate on its face that it is a

confidential settlement document.

20.5.2.4 The third member of the DRB will act as chairperson of the hearing. It is desirable

to keep the hearings as informal as possible except that the DRB shall be guided by Roberts

Rules of Order and may select which particular rules to follow in conducting hearings. Each

member will keep its own notes, and a formal transcript is not prepared, except that in special

cases when agreed to by both Parties, the DRB may allow preparation of a transcript by a

court reporter. Audio or video recordings are not permitted.

20.5.2.5 The Authority and Contractor shall have representatives at all hearings. The

Contractor will first discuss the Dispute, followed by the Authority. Each Party will then be

allowed a rebuttal, and successive rebuttals may be allowed if necessary to ensure that all

aspects are fully covered. The DRB members may ask questions, request clarification, or ask

for additional data. The Authority and Contractor shall both be provided full and adequate

opportunity to present all of their evidence, documentation, and testimony regarding all

issues before the DRB. The DRB shall not be bound by the rules of evidence, except for

those pertaining to privilege. During the hearings, no DRB member shall express any

opinion concerning the merit of any facet of the case. Large or complex Disputes may require

additional hearings in order to consider and fully understand all the evidence presented by

both Parties.

20.5.3 Recommendations of DRB

After the hearings are concluded, the DRB shall meet to formulate its recommendations. All

DRB deliberations shall be conducted in private, with all individual views kept strictly

confidential. The recommendations shall be based on the pertinent provisions of the Contract

Documents, applicable Law, information presented at the hearing, and the facts and

circumstances involved in the Dispute. Any recommendation of the DRB must be supported

by at least two members. The DRB shall make every effort to reach a unanimous

recommendation, but if this proves impossible, the dissenting member may prepare a



dissenting report. The DRB’s recommendations, together with an explanation of its

reasoning, shall be submitted as a written report to both Parties within two weeks of

completion of the hearings. This time may be extended by mutual agreement of all Parties in

exceptionally difficult cases. If requested by either Party, the DRB shall meet with the

Authority and Contractor to provide additional clarification of its recommendation.

20.5.3.1 Within four weeks after receiving the DRB’s recommendations, or such other

time specified by the DRB, the Authority and Contractor shall respond to each other and to

the DRB in writing, signifying either acceptance or rejection of the DRB’s recommendations.

The failure of either Party to respond within the specified period shall be deemed an

acceptance of the DRB’s recommendations. If the Authority and Contractor are able to

resolve their dispute, the Authority will promptly process any required Contract changes.

20.5.3.2 If a Party rejects the DRB’s recommendations and gives timely notice of such

rejection pursuant to Section 20.5.3.1, it shall have the following options:

(a) Within four weeks after receiving the recommendations, the Party may appeal

the recommendations to the DRB. If such an appeal is made, then the six-month period

described in Section 20.5.3.2(c) shall not begin until 30 days after the DRB’s ruling

regarding the appeal. The DRB’s recommendations regarding a particular Dispute may be

appealed to the DRB only once.

(b) If the amount in controversy is less than or equal to $1,000,000, and either

Party appeals the recommendations to the DRB, then the DRB’s decision on the appeal shall

be final and binding on the Parties, subject only to being vacated on any of the grounds set

forth in Code of Civil Procedure section 1286.2. If the amount in controversy is less than or

equal to $1,000,000 and neither Party appeals the recommendations to the DRB, then the

DRB’s initial recommendations shall be final and binding on the Parties, subject only to

being vacated on any of the grounds set forth in Code of Civil Procedure section 1286.2.

(c) If the amount in controversy is greater than $1,000,000, either party may

(whether or not it has filed an appeal with the DRB) submit the Dispute to judicial resolution

by filing a complaint in a court of competent jurisdiction within six months following

issuance of the DRB recommendations. In such event, the DRB recommendations shall be

non-binding and the Parties shall be entitled to a trial de novo.



(d) If the Dispute has not been submitted to judicial resolution by the filing of a

complaint in a court of competent jurisdiction within the required six-month period, then the

recommendations made by the DRB shall be final and binding on the Parties.

(e) If the amount in controversy is greater than $1,000,000 and the

recommendations of the DRB would require the Authority to pay or incur costs or expenses

greater than $1,000,000, the DRB recommendations shall not be binding on the Parties unless

the Authority accepts the DRB recommendations. If the Authority rejects or fails to accept

the DRB recommendations within 120 days, the Contractor may submit the Dispute to

judicial resolution by filing a complaint in a court of competent jurisdiction within six

months following issuance of the DRB recommendations. Failure of the Contractor to file a

complaint in a court of competent jurisdiction within six-months following issuance of the

DRB recommendations shall constitute a waiver of the Contractor’s claims and any further

administrative or judicial review shall be barred.

20.5.3.3 Notwithstanding anything to the contrary in this Section 20.5.3, as permitted

by Public Contract Code section 20104(a)(2), each Dispute where the amount in controversy

is equal to or less than $375,000, shall be heard and determined by an arbitrator or arbitrators

selected pursuant to Public Contract Code sections 10240 et seq. (the “State Arbitration

Act”), and in accordance with the procedures set forth in California Code of Regulations,

Title 1, Chapter 4, sections 1300 et seq. (the “Regulations”). The Authority and Contractor

agree to select the DRB to act as arbitrators under the State Arbitration Act for all such

Disputes, as permitted by Public Contract Code section 10240.3 and Section 1321(a) of the

Regulations; provided that the Parties may, in lieu of appointing the entire DRB, agree to

appoint the third member of the DRB as the single arbitrator. The Parties intend to comply

with the State Arbitration Act, and agree that the State Arbitration Act and Regulations shall

be applicable with respect to Disputes up to $375,000, except as otherwise provided herein.

For Disputes up to $375,000, the Parties agree that the final decision of the DRB (or third

member) shall not be subject to the requirements of Public Contract Code section 10240.8,

and that such decision shall be binding on the Parties, subject only to being vacated on any of

the grounds set forth in Code of Civil Procedure section 1286.2.

20.5.3.4 DRB Recommendations Admissible



The DRB’s written recommendation shall be admissible as evidence in any litigation

concerning the same Dispute, but any evidence presented to the DRB, whether oral or

written, shall be admissible in accordance with the rules of evidence applicable. Findings of

fact by the DRB shall not be collateral estoppel in any other proceeding involving the same

issue, but final DRB decisions, which are binding pursuant to Section 20.5.2 hereunder shall

be res judicata.

20.6 Compensation The Authority and Contractor shall share equally the fees and expenses of all three members

of the DRB. The Authority shall prepare and mail minutes and shall provide administrative

services, such as conference facilities and secretarial services, and shall have the right to

require the Contractor to pay for half of the cost of these services. If the DRB desires special

services, such as legal advice, consulting services, accounting, data research, and the like,

both Parties must agree, and the costs will be shared by them as mutually agreed. The

Contractor shall pay the invoices of all DRB members after approval by both Parties. After

receipt of the Contractor’s paid invoice for DRB services, the Authority shall reimburse

Contractor 50% of such paid invoices within thirty (30) days.

20.7 Cooperation Time is of the essence and the Parties shall diligently cooperate with one another and the

DRB, and shall perform such acts as may be necessary to obtain a prompt and expeditious

resolution of the Dispute.

20.8 Provisional Remedies No Party shall be precluded from initiating a proceeding in a court of competent jurisdiction

for the purpose of obtaining any emergency or provisional remedy which may be necessary,

and which is not otherwise available under this Section 20, to protect its rights, including

temporary and preliminary injunctive relief, attachment, claim and delivery, receivership and

any extraordinary writ.

20.9 Continuing Performance Failure by the Authority to pay any amount in dispute shall not alleviate, diminish or modify

in any respect Contractor’s obligation to perform under the Contract Documents, including

Contractor’s obligation to achieve Final Acceptance of the Project in accordance with the

Contract Documents, and the Contractor shall not cease or slow down its performance under



the Contract Documents on account of any such amount in dispute. Upon resolution of any

such dispute each Party shall promptly pay to the other any amount owing.

20.10 Participation in Other Proceedings The Contractor agrees that, at the Authority’s request, third parties, which are involved in the

design or construction of any part of the Project, may be joined as Parties in dispute

resolution proceedings under this Section 20. Also, if requested by the Authority, the

Contractor will allow itself to be joined as a participant in, and be bound by, any arbitration

or other proceeding that involves the Authority and any other participant in the design or

construction of any part of the Project. This provision is for the benefit of the Authority and

not for the benefit of any other party.

20.11 Standard of Review All Disputes are to be resolved strictly in accordance with the terms and conditions of the

Contract Documents. Any decision (including failure to provide any approval) by the

Authority that the Contract Documents provide is in the sole discretion of the Authority may

be only challenged on the basis that the decision was arbitrary or capricious. Other decisions

of the Authority shall be subject to review under a “reasonableness” standard.

21.0 VALUE ENGINEERING The Contractor is encouraged to submit Value Engineering Change Proposals (“VECPs”) for

the purpose of enabling the Contractor and the Authority to take advantage of potential cost

savings from changes in the requirements of the Contract Documents that do not adversely

impact essential characteristics of the Project. The Contractor is encouraged to submit

VECP’s whenever it identifies potential savings or improvement.

21.1 Description of VECPs A VECP is a proposal developed and documented by the Contractor which:

(a) Would modify or require a change in any of the requirements of, or

constraints set forth in the Contract Documents in order to be implemented; and

(b) Reduces the LSFP without impairing essential functions or characteristics of

the Work, including the meeting of requirements contained in all Governmental Rules, and

provided that it is not based solely upon a change in quantities.

21.2 Information to be Provided At a minimum, the Contractor shall submit the following information with each VECP:



(a) Description of the existing Contract Document requirement(s) which are

involved in the proposed change;

(b) Description of the proposed change;

(c) Discussion of differences between existing requirement(s) and the proposed

change, together with advantages and disadvantages of each changed item;

(d) Itemization of the Contract Document requirements which must be changed if

the VECP is approved (e.g., drawing numbers and specifications);

(e) Justification for changes in function or characteristics of each item, and effect

of the change on the performance of the end item, as well as on the meeting of requirements

contained in the Contract Documents;

(f) Date or time by which a Change Order adopting the VECP must be issued by

the Authority in order to obtain the maximum cost reduction, noting any effect on the Current

Project Schedule;

(g) Cost estimate for existing Contract Document requirements, compared to the

Contractor’s cost estimate of the proposed changes; and

(h) Costs of development and implementation by the Contractor.

21.3 Review by the Authority The Contractor shall submit VECPs directly to the Authority. The Authority will process

proposals expeditiously, but shall not be liable for any delay in acting upon any proposal

submitted pursuant to this Section 21.3. The Contractor may withdraw all, or part, of any

VECP at any time prior to acceptance by the Authority. In all situations, each party shall

bear its own costs in connection with preparation and review of VECPs.

21.4 Acceptance of VECPs The Authority may approve, at its sole discretion, in whole or in part, by Change Order, any

VECP submitted. Designs for approved VECPs shall be prepared by the Contractor for

incorporation into the Contract Documents. Until a Change Order is issued on a VECP, the

Contractor shall remain obligated to perform in accordance with the Contract Documents.

The decision of the Authority as to rejection or acceptance of any VECP shall be final and

not subject to the dispute resolution provisions of this Section 20.

21.5 Contract Price Adjustment If the Authority accepts a VECP submitted by the Contractor pursuant to this Section, the

LSFP shall be adjusted in accordance with the following:



(a) The term “estimated net savings” as used herein shall mean (1) the difference

between the cost of performing the Work according to the Contract Documents and the actual

cost to perform it according to the proposed change, less (2) the costs of studying and

preparing the VECP as proven by the Contractor and approved by the Authority in

accordance with the Change Order procedures set forth herein, less (3) any additional costs

incurred by the Authority resulting from the VECP. The Contractor’s profit shall not be

considered part of the cost.

(b) Except as specified herein, the Contractor is not entitled to share in either

collateral or future Contract savings. The term “collateral savings” means those measurable

net reductions in the Authority’s costs resulting from the VECP, including maintenance costs

and the cost of Authority furnished equipment. The term “future Contract savings” shall

mean reductions in the cost of performance of future construction contracts for essentially the

same item resulting from a VECP submitted by the Contractor.

(c) The LSFP shall be reduced by an amount equal to 50% of estimated net

savings, provided that the Contractor’s Construction Fee shall not be reduced by application

of the VECP.

(e) In a case where the Contractor proposes that an adjustment be made to the

planned acquisition of real property or to the area which has been environmentally cleared

for the Project in order to result in an overall cost savings to the Project (such as a proposal

that additional real property be purchased in order to save on the cost of structures, or a

proposal which would enable a reduction in the real property required to be obtained by the

Authority hereunder by incurring additional construction costs): the VECP shall compare

(1) the incremental reduction in costs (such as for not designing and building a wall), and

(2) the costs involved in adjusting the real property limits or environmental clearances

(which shall be based on the Contractor’s additional costs, such as for providing real property

acquisition support services (including profit) plus the Authority’s additional costs, including

costs of personnel as well as out-of-pocket costs such as the price of the additional real

property), or shall compare (1) the incremental reduction in costs (if any) for not acquiring

the unnecessary real property, and (2) the additional construction costs to be incurred. The

estimated net savings shall be shared 50-50 between the Authority and the Contractor. In the

event the Contractor nevertheless wishes to propose such a VECP, the Contractor shall



provide a separate notification to the Authority describing the proposed impact concurrently

with delivery of the VECP to the Authority.

The Contractor’s share of any VECP cost savings shall be payable at such time as payments

would have been made for the Work which is the subject of the VECP had the VECP not

been implemented.

22.0 BONDING, INSURANCE AND INDEMNIFICATION 22.1 Payment and Performance Bonds 22.1.1 Obligation to Provide Performance and Payment Bonds

The Contractor shall provide to Authority and maintain at all times during the term of this

Contract, adequate security for performance of the Work, as described in this Section (or

other assurance satisfactory to Authority in its sole discretion). Each bond required

hereunder shall be provided by a Surety rated in the top two categories by two nationally

recognized rating agencies or receiving an A.M. Best Co. “Best’s Rating” of A- or better and

Class VIII or better, or as otherwise approved by the Authority.

22.1.2 Performance Bond

The Contractor shall provide the Authority with a Performance Bond guaranteeing due and

punctual performance of all Contractor’s obligations required to be performed hereunder

following the date of issuance of the NTP for the first construction package, in the amount of

100% of the Construction Allowance. If the Contractor commences a package or element of

the Work pursuant to a limited NTP, Contractor may provide an initial Performance Bond

equal to 100% of the construction dollar amount of that package or element. The

Performance Bond shall remain in full force and effect until the expiration of the Warranty

Term under Section 25.2. Notwithstanding any other provision of this Section, performance

by a Surety of any of the obligations of the Contractor shall not relieve the Contractor of any

of its obligations hereunder. The Performance Bond form is included in Appendix 7.

22.1.3 Payment Bond

The Contractor shall provide the Authority with a Payment Bond in an amount equal to

100% of the Construction Allowance. If the Contractor commences a package or element of

the Work pursuant to a limited NTP, the Payment Bond required shall be equal to 100% of

the Construction dollar amount of that package or element. Such bond shall remain in full

force and effect until (a) the Contractor has obtained unconditional releases of liens and stop

notices from all subcontractors that filed a preliminary notice of claim against the bond; or



(b) the expiration of the statutory period for subcontractors to file a claim against the bond.

The Payment (Material and Labor) Bond form is included in Appendix 8.

22.1.4 Adjustments to Bond Amount

The Authority reserves the right to adjust the required amount of the Performance Bond and

Payment Bond under this Section 22.1.2 in the event that the Total LSFP is less or greater

than the Construction Allowance. The Authority also reserves the right to adjust the required

amount of the Performance Bond if the FTA approves an alternative bonding amount or

performance security structure.

22.2 Insurance Requirements For purposes of the Insurance Proposal Price, coverages are to be priced in the following

manner:

A. Design and Professional Services

Workers’ Compensation and Commercial Auto is included in the multiplier for Design and

Professional Services.

B. Professional Liability Insurance

Professional Liability Insurance will be a lump sum fixed price, as specified in the

Contractor’s proposal, with the coverage beginning at NTP.

C. Commercial General Liability

Commercial General Liability prior to the implementation of the CCIP will be a lump sum

fixed price, as specified in the Contractor’s proposal.

D. Additional Insurance Coverages

Additional insurance coverages required during the Construction phase of the Project will be

negotiated as non-construction allowances.

All of the following limits, with the exception of coverage cited in 22.2.1, shall apply solely

to this Project and the Contractor shall be responsible for providing insurance for all

subcontractors on the project. The Contractor’s insurance requirements under this Section

22.2 must also extend to cover any work performed by another party under Contract with the

Authority following a failure to agree on the LSFP for a particular package of the Work,

provided that such other party will be deemed to be a subcontractor for insurance purposes.

As noted in this 22.2, all insurance coverages, except Commercial Automobile Liability, are



to be included in the Contractor Controlled Insurance Program (CCIP), which is required to

be in place prior to the first NTP for Construction, unless the Authority determines otherwise.

In addition, Commercial General Liability and Professional Liability cited in 22.2.1 are to be

issued on a stand alone basis during the Design phase of the Project. It is the responsibility of

the Contractor to secure, monitor, and maintain throughout the Project, current certificates of

insurance for all Subcontractors.

22.2.1 Insurance Requirements for Design Services – CCIP Not Required

22.2.1.1 Contractor and Subcontractor Insurance

All insurance coverages required by the following provisions of this Section must be

provided at the Contractor’s expense during the period of performance of the Design Work.

The Contractor shall furnish acceptable certificates of insurance for those required coverages

to the Authority within twenty (20) days after Notice of Award, in accordance with the

timing requirements in Section 5.1, and prior to commencement of any Design Work. The

Contractor shall indemnify the Authority and Metro for any liability or damages that the

Authority or Metro may incur due to Contractor’s failure to purchase or maintain any

required insurance.

22.2.1.2 Required Coverage and Policies

For the Design Work, the Contractor shall maintain insurance of the types and in the amounts

described below:

A. Standard Commercial Automobile Liability Insurance

Commercial Business Automobile Liability Policy covering all owned, hired and

non-owned automobiles, trucks and trailers, with coverage limits not less than

$1,000,000 Combined Single Limit each for Bodily Injury and Property Damage for

Contractor and Subcontractors Coverage will apply both at and away from the

Worksite. The premiums for Commercial Automobile coverage are included in the

cost multiplier associated with Design and Professional Services activities for the

Project. After construction begins, Automobile Liability coverage is included in the


B. Workers’ Compensation and Employer’s Liability Insurance

Part One – Workers’ Compensation



Worker’s Compensation with statutory limits are required by law, including Maritime

coverage, if appropriate. Coverage will apply both at and away from the worksite.

The premiums for Workers’ Compensation coverage are included in the cost

multiplier associated with Design and Professional Services activities for the Project.

Workers’ Compensation premiums for the Construction Work are included in the


Part Two – Employer’s Liability Insurance

For all occurrences the limits of liability shall be:

Bodily Injury by Accident, each accident $1,000,000

Bodily Injury by Disease, each employee $1,000,000

Bodily Injury by Disease, policy limit $1,000,000

C. Commercial General Liability Insurance

Commercial General Liability Insurance written on the most recent edition of an ISO

“Occurrence” form (or substitute form providing equivalent coverage) covering all

Work done by or on behalf of the Contractor and providing insurance for bodily

injury, wrongful death, personal injury, broad form property damage, contractual

liability with respect to liability assumed by the Contractor by the Contract

Documents, products/completed operations, premises operations, underground hazard

coverage (commonly referred to as “U” coverage), explosion hazard coverage

(commonly referred to as “X” coverage) if the Work involves blasting, and collapse

hazard coverage (commonly referred to as “C” coverage) if the Work may cause

structural damage due to excavation, burrowing, tunneling, caisson work, or

underpinning, and with limits of liability not less than:

The limits of liability shall be:

Each Occurrence Limit $2,000,000

Personal Advertising Injury Limit $2,000,000

Product/Completed Operations Aggregate Limit $4,000,000

General Aggregate Limit $4,000,000

(other than Products/Completed Operations)

Except with respect to bodily injury and property damage included within the

products and completed operations hazards, the aggregate limit shall apply separately



to Work required of the Contractor by the Contract Documents. The Contractor shall

maintain the products and completed operations coverage for a period of at least then

(10) years following substantial completion of the Work. The Contractor shall

maintain such insurance through the expiration of the warranties. If commercial

general liability insurance or other form with a general aggregate limit and products

and completed operations aggregate limit is used, then the aggregate limits shall

apply separately to the Work, or the Contractor may obtain separate insurance to

provide the required limit, which shall not be subject to depletion because of claims

arising out of any other project or activity of the Contractor; any such excess

insurance shall be at least as broad as the Contractor’s primary insurance. The

Contractor shall be the named insured; additional insureds are identified in Section

22.2.3.2.

Offsite Insurance coverage, not provided by the CCIP, shall be maintained by the

Contractors and Subcontractors through its own policies, or project specific policies,

and shall include language that affords coverage for any work emanating from the

Project and related facilities. All certificates of insurance for Subcontractors or off-

site coverage shall be maintained by the Contractor.

D. Professional Liability Insurance – Must Cover all Professional Services:

The Contractor shall provide professional liability or errors and omissions coverage

with project specific limits of no less than $20 million per claim, with a general

aggregate limit of no less than $20 million per claim and aggregate which shall cover

claims resulting from professional errors and omissions of Contractor and any of its

Subcontractors/Subconsultants in connection with the Work provided such claims

arise during the period commencing upon the preparation of the construction

documents and ending ten (10) years from policy inception. Such insurance shall be

in form acceptable to the Authority. Such insurance shall be written to cover all costs

of correcting defects and deficiencies (including unapproved deviations) arising from

the professional liability or errors and omissions of Contractor and the Subcontractors

providing design, engineering or other professional services, at all tiers, shall be

written on a project-specific basis. The insurance policy shall include an

endorsement providing the Authority and Metro vicarious liability coverage. Such



insurance shall be excess to liability insurance required hereunder as respects third

party bodily injury and property damage claims. The policy shall not contain any

provision or exclusion the effect of which would be to prevent, bar, or otherwise

preclude the Authority or Metro from making a claim against the policy. If no single

policy can be procured to provide the coverages listed, multiple policies may be

procured to satisfy these requirements. This provision shall not be construed to

require the professional liability policy to cover construction management services

except to the extent that such services are eligible for coverage under standard

insurance terms and conditions.

22.2.2 Insurance Requirements For Construction Work

22.2.2.1 Contractor and Subcontractor Insurance

In addition to the insurance required under Section 22.2, all insurance coverages required by

the following provisions of this Section must be provided at the Contractor’s expense during

the period of performance of the Construction Work. The coverages, excluding Commercial

Automobile Liability, are to be included in a Contractor Controlled Insurance Program

(CCIP). The Contractor shall provide certificates of insurance for those required coverages

as soon as practicable after agreement on the Construction Price but in any event prior to the

issuance of a NTP for Construction or any package or element thereof. The Contractor shall

indemnify the Authority for any liability or damages that the Authority may incur due to the

Contractor’s failure to purchase or maintain any required insurance.

22.2.2.2 Required Coverage and Policies

A. Standard Commercial Automobile Liability Insurance

Commercial Business Automobile Liability Policy covering all owned, hired and

non-owned automobiles, trucks and trailers, with coverage limits not less than

$1,000,000 Combined Single Limit each for Bodily Injury and Property Damage for

Contractor and Subcontractors. The premiums for Commercial Automobile Liability

coverage are included in the cost multiplier associated with Design and Professional

Services activities for the Project. After Construction begins, Automobile Liability

coverage is included in the Construction Allowance.

B. Workers’ Compensation and Employer’s Liability Insurance

Part One – Workers’ Compensation



Worker’s Compensation with statutory limits are required by law, including Maritime

coverage, if appropriate. Coverage will apply both at and away from the worksite.

The premiums for Workers’ Compensation coverage are included in the cost

multiplier associated with the Design and Professional Services activities for the

Project. Workers’ Compensation premiums for the Construction Work are included

in the Construction Allowance.

Part Two – Employer’s Liability Insurance


Bodily Injury by Accident, each accident $1,000,000

Bodily Injury by Disease, each employee $1,000,000

Bodily Injury by Disease, policy limit $1,000,000

C. Commercial General Liability Insurance

Commercial General Liability Insurance written on the most recent edition of an ISO

“Occurrence” form (or substitute form providing equivalent coverage) covering all

Work done by or on behalf of the Contractor and providing insurance for bodily

injury, wrongful death, personal injury, broad form property damage, contractual

liability with respect to liability assumed by the Contractor by the Contract

Documents, products/completed operations, premises operations, underground hazard

coverage (commonly referred to as “U” coverage), explosion hazard coverage

(commonly referred to as “X” coverage) if the Work involves blasting, and collapse

hazard coverage (commonly referred to as “C” coverage) if the Work may cause

structural damage due to excavation, burrowing, tunneling, caisson work, or

underpinning, and with limits of liability not less than:

The limits of liability shall be:


Personal Advertising Injury Limit $2,000,000

Product/Completed Operations Aggregate Limit $4,000,000

General Aggregate Limit $4,000,000

(other than Products/Completed Operations)

Except with respect to bodily injury and property damage included within the

products and completed operations hazards, the aggregate limit shall apply separately



to Work required of the Contractor by the Contract Documents. The Contractor shall

maintain the products and completed operations coverage for a period of at least then

(10) years following completion of the Work. The Contractor shall maintain such

insurance through the expiration of the warranties. If commercial general liability

insurance or other form with a general aggregate limit and products and completed

operations aggregate limit is used, then the aggregate limits shall apply separately to

the Work, or the Contractor may obtain separate insurance to provide the required

limit, which shall not be subject to depletion because of claims arising out of any

other project or activity of the Contractor; any such excess insurance shall be at least

as broad as the Contractor’s primary insurance. The Contractor shall be the named

insured; additional insureds are identified in Section 22.2.3.2.

Offsite Insurance coverage, not provided by the CCIP, shall be maintained by the

Contractors and Subcontractors through its own policies or project specific policies,

and shall include language that affords coverage for any work emanating from the

Project and related facilities. All certificates of insurance for Subcontractors or off-

site coverage shall be maintained by the Contractor.

D. Railroad Protective Liability Insurance

If Work is to be performed requiring the excavation of soil or use of heavy machinery

within fifty (50) feet of railroad tracks or upon a railroad right-of-way, or as required

by the applicable railroad, the form of coverage shall be acceptable to the Authority

and the applicable railroad, and the limits of liability of such coverage shall be

acceptable to the applicable railroad. Such policy shall name the Authority on the

declaration page with respect to its interest in the specific job. Removal of the

railroad exclusion in the CGL policy forms by endorsement (CG24 17) can satisfy

this coverage requirement.

E. Watercraft and Aircraft Liability Insurance

Aviation and/or Watercraft Insurance in form and with limits of liability and from an

insuring entity satisfactory to the Authority. The operator of any watercraft or aircraft

of any kind must maintain liability naming the Authority and the Contractor and/or

subcontractor an additional insured.

22.2.2.3 Additional Insurance (required upon CCIP implementation)



A. Umbrella/Excess Liability Insurance

Umbrella/Excess insurance is to be structured to include the lines of coverage shown

below on a following-form basis:

Commercial General Liability

Railroad Protective (unless added to GL policy by endorsement CG 24 17)

Watercraft and Aircraft Liability Insurance (if needed)



Annual General Aggregate Limit $100,000,000

B. Contractor’s Pollution Liability Insurance

With a total combined limit of liability of no less than $25 million per occurrence and

$25 million in the aggregate.

C. Environmental Impairment Liability Site Coverage Insurance

To the extent Contractor or Subcontractor will be working on the site and could

potentially discover significant quantities of Hazardous Substances on the Premises or

within the Project, a policy of Environmental Impairment Liability Site Coverage

insurance covering environmental risks, including the clean-up and remediation of

unexpected Hazardous Substances from the Project, with a coverage limit of not less

than $25 Million Dollars ($25,000,000) on a claims made or reported basis/policy

form. The term of the policy shall be no less than a 10-year period from the inception

of insurance coverage. If Hazardous Substances are removed from the Premises and

transported to an off-site disposal site, then the coverage required to be carried under

this Section shall be endorsed to include Non-Owned Disposal Site Coverage in form

reasonably acceptable to the Authority. The Contractor is responsible for the full

amount of loss associated covered by insurance and related deductibles,

notwithstanding the Force Majeure provisions in Section 17.4.

D. Builder’s Risk Insurance

In the amount of the Lump Sum Fixed Price (and thereafter adjusted pursuant to any

Change Orders issued with respect to the Work) or the full replacement value of the

Work, or $175 million, whichever is less. The Builder’s Risk insurance shall cover

the interests of the Authority, the Contractor, and subcontractor of every tier covering



“all risk” perils, issued on ALS 67 or equivalent form, including earthquake and

flood, and insuring against the perils of fire and extended coverage and physical loss

or damages including, without duplication of coverage, theft, vandalism, and

malicious mischief, at limits and sub-limits set forth below. Coverage shall include

off-site storage and transit as specified below, shall include coverage for machinery

during testing, and shall be in a form acceptable to the Authority. The coverage shall

also provide for (1) coverage for any ensuing loss from faulty workmanship,

nonconforming Work materials, omission or deficiency in design or specifications;

(2) coverage for removal of debris and insuring the buildings, structures, machinery,

equipment, facilities, fixtures and all other properties constituting a part of the Work;

and (3) coverage with sub-limits sufficient to insure the full replacement value of any

property or equipment stored either on or off the Site. The Contractor is responsible

for the full amount of loss associated with the total insured value and sub-limits

associated with the project, including related deductibles, notwithstanding the Force

Majeure provisions in Section 17.4.

Builder’s Risk Sublimits of Liability:

$25,000,000 any one Occurrence as respects Land Movement, including earthquake

$25,000,000 any one Occurrence as respects Water Damage

$10,000,000 any one Occurrence as respects Demolition and Debris Removal

$10,000,000 any one Occurrence as respects insured Property during Transit

$10,000,000 any one Occurrence as respects insured Property stored Off-site

$2,500,000 any one Occurrence as respects Plans, Blueprints, Specifications, Books,

Records and/or Data Media

20% of the amount of loss subject to a maximum of $5,000,000 any one

Occurrence for Expending Expenses

$100,000 any one Occurrence as respects Trees, Grass, Shrubbery and Plants

The Contractor and each of its Subcontractors of any tier, shall be solely responsible

for any loss or damage to its or their personal property including, without limitations,

property created or provided under the Contract Documents, its or their tools and

equipment, mobile construction equipment, scaffolding, and temporary structures,



whether owned, used, leased or rented by Contractor or any of its Subcontractors.

Contractor or any of its Subcontractors may, at its or their option, purchase, maintain

and pay for insurance or self-insure such equipment and property, and any deductible

in relation thereto shall be its or their sole responsibility. Any insurance, including

self-insurance, shall be Contractor’s or any of its Subcontractor’s sole source of

recovery in the event of a loss.

If the Authority desires to use a portion of the Project after Substantial Completion

thereof and before Final Acceptance, such use shall not commence until the insurance

companies providing property insurance have agreed by endorsement to the insurance

policies that the property insurance shall not lapse or be cancelled with respect to that

portion of the Project not being used by the Authority on account of such partial use.

The consent of the Contractor and of the insurance companies to such use shall not be

unreasonably withheld. The Contractor shall not be required to maintain property

insurance for any portion of the Project for which Substantial Completion and transfer

of control to the Authority have occurred.

E. Property Insurance

The Contractors and its Subcontractors must provide their own insurance for owned,

leased, rented, and borrowed equipment, whether such equipment is located at a

Worksite or “in transit”. The Contractor and its subcontractors are solely responsible

for any loss or damage to their personal property including, without limitation,

property or materials created or provided under the Contract until installed at the

Worksite, Contractor tools and equipment, scaffolding and temporary structures.

F. Contractor’s Insurance

The Contractor’s insurance shall not be suspended, voided, cancelled by either party,

reduced in coverage or in limits except after thirty (30) days prior written notice to

the Authority by certified mail, return receipt requested. The Contractor shall

promptly deliver to the Authority a certificate of insurance policy, endorsements, and

riders including any exclusions with respect to each renewal policy, as necessary to

demonstrate the maintenance of the required insurance coverages for the terms

specified herein. Such certificates shall be delivered to the Authority not less than 30



days prior to the expiration date of any policy and shall bear a notation evidencing

payment of the premium therefore.

22.2.3 General Requirements Applicable To All Insurance

22.2.3.1 Contractor’s Failure to Procure

The Contractor’s failure to procure or maintain the insurance required by this Section during

the entire term of the Work shall constitute a material breach of contract. In the event of

such a breach, the Authority may exercise all available rights and remedies hereunder,

including the right to immediately suspend or terminate the contract or, at its discretion,

procure or renew such insurance to protect the Authority and Metro and pay any and all

premiums in connection therewith, and withhold or recover all monies so paid from the

Contractor.

22.2.3.2 Additional Insured Endorsement

Each policy, except for Workers Compensation and Professional Liability, shall name

Authority and its parent, subsidiaries, members, directors, and affiliated companies,

including without limitation, Metro, the City of Los Angeles, the County of Los Angeles,

Caltrans, and their respective officers, agents, shareholders, and employees as additional

insureds. The additional insured endorsement for all policies shall state that the coverage

provided to the additional insureds is primary and non-contributing with respect to any other

insurance available to the additional insureds. The Endorsement shall include language that

affords coverage for any work emanating from the Project and related facilities. The

endorsement shall also contain a provision that the Authority, Metro and each other

additional insured shall be notified by the insurer(s), in writing, at least 30 days prior to any

cancellation, non-renewal, or material change adversely affecting the interest of the

Authority, Metro or such other additional insured.

22.2.3.3 Waiver of Subrogation

The Contractor hereby waives all rights of recovery under subrogation because of deductible

clauses, inadequacy of limits of any insurance policy, limitations or exclusions of coverage,

or any other reason against the Authority and its parent, subsidiaries, members, directors, and

affiliated companies, including without limitation, the Authority, Metro, the City of Los

Angeles, the County of Los Angeles, Caltrans, and their respective officers, agents,

shareholders, and employees, and any other contractor or subcontractor performing Work or



rendering services on behalf of the Authority in connection with the planning, development

and construction of the Project.

The Workers Compensation and Employer’s Liability policies shall include a waiver of

subrogation.

22.2.3.4 Additional Insurance

The Contractor shall, by mutual agreement with the Authority and at the Authority’s cost,

provide any additional insurance as may be required by the Authority. The Contractor shall

provide certificates of insurance evidencing any such additional insurance coverage.

22.2.3.5 Deductibles

The Contractor shall be solely responsible for all deductibles and self-assured retentions

hereunder. Any deductibles or self-insured retentions greater than $100,000 for all lines of

coverage except, $250,000 for flood or 5% of total insured value for earthquake must be

declared to and approved by the Authority.

22.2.3.6 Delivery of Policies

The Authority may, in its discretion, require the Contractor to provide actual copies of the

policy of any insurance that is required under this Section 22.2. The Contractor shall supply

any policy required by the Authority or Metro within 10 days after the Authority’s request.

In the event that the Contractor has not received the policy, a signed Binder of Insurance

detailing coverage and deductibles will suffice until the policy is received.

22.2.3.7 Reinsurance

When a Contractor has utilized a fronting company to place insurance (as in the use of a

Captive), the Insurer is reinsured under reinsurance treaties (insert identification numbers

used for the treaties) issued by (identify each reinsurer.) Each such Reinsurer has consented

to the following terms being made part of Insurer’s policy and these terms are also part of the

reinsurance agreements between the Insurer and each of the Reinsures:

(a) The Insurer hereby declares itself the trustee of the reinsurance identified

above for the benefit of each Insured under this policy and covenants to hold all rights and

benefits under each such reinsurance contract in trust for each Insured under this policy.

Consistent with the foregoing, each Reinsurer is aware that the Insurer has constituted itself

as a trustee of all reinsurance for the Insureds under this policy and that this reinsurance is

payable to the Insurer as a trustee for each of the Insureds.



(b) In the event of the insolvency of the Insurer, each Reinsurer shall be

responsible directly to each Insured under this policy as beneficiary of the reinsurance

contract on the basis of liability of the Insurer without diminution because of the insolvency

of the Insurer.

22.2.3.8 Unavailability of Required Coverages

If, at the time of negotiations of the LSFP for the insurance coverages required for the

Construction Work pursuant to Section 8.8, the Contractor documents and demonstrates to

the reasonable satisfaction of the Authority that a specific coverage (or component of

coverage) required under Section 22.2.2 is commercially unavailable at that time, then the

Authority will consider alternative insurance packages and programs that provide risk

coverage comparable to that required under this Section. To demonstrate that a specific

coverage (or component of coverage) is “commercially unavailable”, the Contractor must

document, by providing a letter from Contractor’s insurance broker or agency, that the

Contractor has sought to obtain that coverage (or component of coverage) from insurance

carriers and that the coverage (or component of coverage) either is not currently offered or

that it cannot be provided at a commercially reasonable price. Such letter shall include the

names of the insurance carriers and appropriate detail regarding their unwillingness to

provide coverage and/or premium indications.

22.3 Indemnification And Liability 22.3.1 Indemnification by Contractor

22.3.1.1 Subject to Section 22.3.1.3, the Contractor shall release, defend, indemnify

and hold harmless the Authority, MTA, City and County of Los Angeles, Program Manager,

Program Management Oversight Consultant and their successors and assigns and their

shareholders, officers, directors, agents and employees (collectively referred to in this

Section 22.3.1 as the “Indemnified Parties”) from and against any and all claims, causes of

action, suits, legal or administrative proceedings, costs, damages, losses, liabilities and

response costs, including any injury to or death of persons or damage to or loss of property,

and including reasonable attorneys’ and expert witness fees and costs incurred in connection

with the enforcement of this indemnity, arising out of, relating to or resulting from any of the

following:



(a) The breach or alleged breach of the Contract by the Contractor, its employees,

agents, officers or Subcontractors or any other Persons performing any of the Work for

whom Contractor may be contractually or legally responsible;

(b) The failure or alleged failure by the Contractor or its employees, agents,

officers or Subcontractors or any other Persons for whom the Contractor may be

contractually or legally responsible, to comply with any applicable Environmental Laws or

Governmental Rules (including Governmental Rules regarding handling, generation,

treatment, storage, transportation and disposal of Hazardous Waste) in performing the Work;

(c) Any alleged patent or copyright infringement or other allegedly improper

appropriation or use of trade secrets, patents, proprietary information, know-how, copyright

rights or inventions in performance of the Work, or arising out of any use in connection with

the Project of methods, processes, designs, information, or other items furnished or

communicated to the Authority or another Indemnified Party pursuant to the Contract

Documents; provided that this indemnity shall not apply to any infringement resulting from

Authority’s failure to comply with specific written instructions regarding use provided to

Authority by Contractor;

(d) The alleged negligent act or omission or willful misconduct of Contractor, its

employees, agents, officers or Subcontractors or any other persons performing any of the

Work for whom the Contractor may be contractually or legally responsible;

(e) Any and all claims by any governmental or taxing authority claiming taxes

based on gross receipts, purchases or sales, the use of any property or income of the

Contractor or any of its Subcontractors or any of their respective agents, officers or

employees with respect to any payment for the Work made to or earned by the Contractor or

any of its Subcontractors or any of their respective agents, officers or employees under the

Contract Documents;

(f) Any and all stop notices and/or Liens filed in connection with the Work,

including all expenses and attorneys’ fees incurred in discharging any stop notice or Lien,

provided that Authority is not in default in payments owing to the Contractor with respect to

such Work;

(g) Any release or threatened release of a Hazardous Substance (1) which was

brought onto the Site by the Contractor or its employees, agents, officers or Subcontractors or



any other Persons for whom the Contractor may be contractually or legally responsible, or

(2) which was negligently removed or handled by any such persons, regardless of the source,

origin or method of deposit of such Hazardous Substance;

(h) The claim or assertion by any contractor of inconvenience, disruption, delay

or loss caused by interference by the Contractor (or its employees, agents, officers or

Subcontractors or any other persons for whom the Contractor may be contractually or legally

responsible) with or hindering the progress or completion of work being performed by other

contractors as described in Scope of Work and General Requirements Section 01100 Part 1.6,

or failure of the Contractor or its employees, agents, officers or Subcontractors or any other

persons for whom the Contractor may be contractually or legally responsible to cooperate

reasonably with other contractors in accordance therewith; and

(i) The performance of, or failure to perform, the Contractor’s obligations under

any Utility Cooperative Agreement (or any agreement entered into between the Contractor

and any Third Party pursuant to a Utility Cooperative Agreement), by the Contractor, its

employees, agents, officers or Subcontractors or any other persons for whom the Contractor

may be contractually or legally responsible; any dispute between the Contractor and a Third

Party as to whether work relating to a Relocation/Rearrangement constitutes a Betterment;

and/or any other act or omission by the Contractor, its employees, agents, officers or

Subcontractors or any other persons for whom the Contractor may be contractually or legally

responsible, for which the Authority is liable to indemnify a Third Party pursuant to the

provisions of the Authority’s Utility Cooperative Agreement with such Third Party.

22.3.1.2 Subject to Section 22.3.1.3, the Contractor shall release, defend, indemnify

and hold harmless the Indemnified Parties from and against any and all claims, damages,

losses, liabilities and costs, including reasonable attorneys’ fees, arising out of, relating to or

resulting from errors, omissions, inconsistencies or other defects in the Design Documents

furnished by Contractor, regardless of whether such errors, omissions, inconsistencies or

defects were also included in the Baseline Requirements or Reference Documents. The

Contractor agrees that, because the Baseline Requirements and Reference Documents are

subject to review and modification by the Contractor, such documents shall not be deemed

“design furnished” by Authority or any of the other Indemnified Parties, as the term “design

furnished” is used in Civil Code Section 2782 and Section 22.3.1.3.3. The Contractor hereby



waives the benefit (if any) of Civil Code Section 2782 and agrees that this Section 22.3.1.2

constitutes an agreement governed by Civil Code section 2782.5.

22.3.1.3 The following restrictions shall apply to the indemnities set forth in

Sections 22.3.1.1 and 22.3.1.2:

(a) The Contractor’s indemnity obligation shall not extend to any loss,

damage or cost to the extent that such loss, damage or cost was caused by the negligence or

willful misconduct of such Indemnified Party or its agents, servants or independent

contractors who are directly responsible to such Indemnified Party (in other words, a

comparative negligence standard shall apply).

(b) Except as permitted by Civil Code sections 2782.1, 2782.2 and 2782.5, such

indemnities shall not inure to the benefit of an Indemnified Party so as to impose liability on

Contractor for the active negligence of Authority, or to relieve Authority of liability for such

active negligence.

(c) Such indemnities shall not be construed to affect any extension of statutes of

limitations otherwise applicable to causes of action for breach of contract held by Authority

against Contractor.

(d) In claims by an employee of the Contractor, a Subcontractor, anyone directly

or indirectly employed by them or anyone for whose acts they may be liable, the

indemnification obligation under this Section 22.3.1 shall not be limited by a limitation on

the amount or type of damages, compensation or benefits payable by or for Contractor or a

Subcontractor under workers’ compensation, disability benefit or other employee benefits

laws.

(e) The Contractor hereby acknowledges and agrees that it is the Contractor’s

obligation to cause the Project to be designed and to construct the Project in accordance with

the Contract Documents and that the indemnified parties described above are fully entitled to

rely on the Contractor’s performance of such obligation. The Contractor further agrees that

any review and/or approval by Authority and/or others hereunder shall not relieve the

Contractor of any of its obligations under the Contract Documents or in any way diminish its

liability for performance of such obligations or its obligations to provide indemnities

hereunder.



(f) The Contractor is specifically advised that the Master Cooperative

Agreements with Third Parties include certain agreements by the Authority to indemnify,

defend and hold harmless the Third Parties. The Contractor’s obligations under this Section

22.3.1 shall automatically apply to require it to release, indemnify, defend and hold harmless

the Third Parties, in addition to the Indemnified Parties, with respect to all such matters to the

extent that such matters fall within the scope of the indemnities made by the Contractor as set

forth in Sections 22.3.1.1 and 22.3.1.2.

22.3.1.4 The requirement to provide an indemnity for breach of contract set forth in

Section 22.3.1.1(a) is intended to provide protection to the Indemnified Parties with respect

to third party claims associated with such breach. It is not intended to provide the Authority

with an alternative cause of action for damages incurred directly by the Authority with

respect to such breach.

22.3.2 Indemnification by Authority

22.3.2.1 It is recognized that the Authority may assert that certain third persons or

parties may rightfully bear the ultimate legal responsibility for any and all Hazardous

Substances, which may currently be present on the Site. It is further recognized that certain

state and federal statutes provide that individuals and firms may be held liable for damages

and claims related to Hazardous Substances under such doctrines as joint and several liability

and/or strict liability. It is not the intention of the parties that Contractor be exposed to any

such liability arising solely out of (a) pre-existing Site contamination, whether known or

unknown, except as otherwise provided in Section 22.3.1.1(g), (b) the non-negligent

performance by Contractor, its employees, agents, officers or Subcontractors or any other

Persons for whom Contractor may be contractually or legally responsible, in the handling of

Hazardous Wastes and Substances, and/or (c) the activities of any persons not described in

subsection (b) above, including the Authority. Accordingly, for the purposes of the Contract

Documents only, the Authority shall reimburse the Contractor for Remediation Work

(through payment of the LSFP, as it may be increased by Change Order pursuant to

Section 19), and otherwise indemnify, defend and save Contractor harmless from, any and all

claims, damages, losses, liabilities and costs, including attorneys’ fees, arising out of, or in

connection with, bodily injury (including death) to persons, damage to property, or

environmental removal or response costs arising out of the presence, release, or threatened



release of Hazardous Substances on or from the Site, irrespective of whether such substances

were generated or introduced on the Site before or after execution of the Contract and

irrespective of whether Authority was aware of, or directly involved in, the generation or

introduction of such materials. However, the Authority shall have no obligation to indemnify

and save the Contractor harmless those conditions for which Contractor has agreed to be

responsible as described in Section 22.3.1.1(g), including matters falling within the scope of

the indemnities made by the Contractor in Section 22.3.1.1 and 22.3.1.2.

22.3.2.2 Except for Hazardous Substances for which the Contractor is responsible as

described in Section 17, without contradiction of any assertion by the Authority of third party

liability, and for purposes of the Contract Documents only, (a) Contractor shall not be

required to execute any hazardous waste manifests as a “generator”, and (b) Hazardous

Substances encountered in the performance of the Work shall be disposed of, if at all,

utilizing an EPA Identification Number or other appropriate legal device obtained by, and

carried in the name of, Authority or another Person designated by Authority.

22.3.2.3 In the event the Authority terminates the Contract for convenience and the

Authority elects to accept assignment of any Subcontract under Section 27.7 the Authority

shall indemnify, defend and save Contractor harmless from any and all claims, damages,

losses, liabilities and costs, including attorneys’ fees, arising out of the breach or alleged

breach of the Subcontract by the Authority occurring after the effective date of such

assignment.

22.3.3 No Effect on Other Rights

The foregoing obligations shall not be construed to negate, abridge, or reduce other rights or

obligations, which would otherwise exist in favor of a party indemnified hereunder.

22.3.4 CERCLA Agreement

Without limiting their generality, the indemnities set forth in Sections 22.3.1.1(g) and 22.3.2

are intended to operate as agreements pursuant to Section 107(e) of the Comprehensive

Environmental Response, Compensation and Liability Act, 42 U.S.C. section 9607(e), and

Health and Safety Code section 25364, to insure, protect, hold harmless and indemnify the

indemnified parties.

22.3.5 Exclusion of Consequential Damages

22.3.5.1 Liability Excluded.



In no event shall either Party be liable to the other Party for any “consequential damages”

arising out of performance of the Work or implementation of the Contract Documents (or

failure to perform hereunder), and each Party hereby releases the other from such liability.

The term “consequential damages” means those special, indirect, or incidental damages

which flow naturally and inevitably from an action or failure to act, such as fare revenue

losses, loss of use, cost of capital, debt service, loss of profit on related contracts,

administrative costs, extended overhead, claims of taxpayers and other indirect damage. The

foregoing shall apply to limit liability under actions brought under any theory of law,

including actions in tort (including negligence) as well as in contract. The foregoing release

of liability by the Authority shall extend to Subcontractors provided that the originally

executed Subcontract for such Subcontractor includes a similar release of liability in favor of

the Authority.

22.3.5.2 Exceptions to Exclusion:

The exclusion of consequential damages (set forth in Section 22.3.5.1 above) shall not

exclude or affect:

(a) The Contractor’s obligation to pay Liquidated Damages in accordance with

Section 2.5 or Section 23.3;

(b) Any liability for gross negligence, fraud, intentional misconduct, or criminal

acts;

(c) Any liability respecting indemnification for third party claims;

(d) Any liability for any type of damage or loss, to the extent such loss or damage

is covered by insurance required hereunder, or, if greater, to the extent such loss or damage is

covered by the actual amount of insurance Contractor carries under project specific policies

applicable to the Project and the Work, regardless of whether required to be carried

hereunder, whichever is greater;

(e) The Authority’s obligation to pay Delay Compensation as provided in Section

19.

22.3.6 Limitation of Liability

The Contractor’s liability to the Authority for damages arising out of performance of the

Contract (or failure to perform hereunder) shall be limited to the sum of (a) all costs

reasonably incurred by the Authority or any party acting on the Authority’s behalf in



completing or correcting the Work or having the Work completed or corrected by another

person, whether incurred through enforcement of the Performance Bond, re-procurement, or

other means; plus (b) the amount of fifteen percent (15%) of the total LSFP (which amount

shall specifically include any Liquidated Damages paid under Section 2.5 or Section 23.3, as

well as any payment made to or for the benefit of an Indemnified Party pursuant to Section

22.3.1). However, this limitation shall specifically exclude those matters described in Section

22.3.5.2 (b) and 22.3.5.2 (d). The foregoing shall apply to limit liability under actions

brought under any theory of law, including actions in tort (including negligence) as well as in

contract.

22.3.7 Notification

Each party agrees to notify the other promptly upon receipt of any third-party claim for

which the other party is entitled to indemnity hereunder.

22.3.8 Guaranty

Fluor Corporation, which is the parent company of Fluor Enterprises, has executed and

delivered a guaranty of the Contractor’s obligations under the Contract Documents in

accordance with that to the Authority concurrently with the execution of this Contract. Such

guaranty assures performance of Contractor’s obligations hereunder and shall be maintained

in full force and effect throughout the duration of this Contract.

23.0 PROJECT COMPLETION 23.1 Time of Essence; Notice to Proceed Time is of the essence in the performance and completion of the Work. The Contractor shall

begin performance of the Work as directed in the Design and Construction Notices to

Proceed. An unexcused failure of the Contractor to achieve completion of the Work in

accordance with the approved schedule is a material breach and constitutes the grounds for

default under Section 27. The Contractor shall have no right to payment for any Work it

performs, unless and until a Notice to Proceed is issued.

23.2 Completion Deadlines 23.2.1 Substantial Completion Deadline

The Contractor shall achieve Substantial Completion on or before February 1, 2010. The

deadline for Substantial Completion, as it may be extended hereunder, is referred to as the

“Substantial Completion Deadline.”

23.2.2 Work Performed After Substantial Completion



Following Substantial Completion, the Contractor shall be responsible for obtaining any

required Trackway/Right of Way access permits and shall comply with all applicable

requirements of the Authority’s Operating Rules and Procedures that govern the area on and

immediately adjacent to the Right of Way. All Work in such area shall be conducted at the

direction of the Authority and at the dates and times approved by the Authority. The

Contractor shall bear all costs associated with the performance of such Work.

23.2.3 No Time Extensions

Except as otherwise specifically provided in this Design-Build Contract, the Authority shall

have no obligation to extend any Completion Deadline, and the Contractor shall not be

relieved, for any reason, of its obligation to achieve Substantial Completion, Punch List

Completion and Final Acceptance.

23.3 Liquidated Damages As the result of late completion of the Project, the Authority will suffer damages, which

cannot be quantified as of the date of execution hereof. Therefore, and the Authority has

stipulated an amount to be paid by the Contractor in the event of its failure to achieve

Substantial Completion by the Substantial Completion Deadline. The parties intend for the

Liquidated Damages set forth herein to constitute liquidated damages as such term is used in

Government Code section 53069.85 to the extent said statute may apply, and to constitute

stipulated damages to the extent that said statute is not applicable. The Liquidated Damages

are intended to compensate the Authority for the Contractor’s failure to meet the Substantial

Completion Deadline, and shall not excuse the Contractor from liability from any other

breach of the requirements of the Contract Documents, including any failure of the Work to

conform to applicable requirements.

23.3.1 Amount of Liquidated Damages

In the event that the Contractor fails to achieve Substantial Completion by the Substantial

Completion Deadline, subject to the limitation on liability set forth in Section 22.3.6, The

Contractor agrees to pay the Authority Liquidated Damages in the amount of $ 28,075 for

each day of delay, starting on the Substantial Completion Deadline and ending on the date

Substantial Completion is achieved, provided that in no event shall Liquidated Damages be

assessed under this Section 23.3 in excess of $10 million in the aggregate.

23.3.2 Reasonableness of Liquidated Damages



The liquidated damages in Section 23.3.1 have been set based on an evaluation by the

Authority of the damages to Authority and the public caused by late completion, including

additional administrative costs. The amount of liquidated damages is impossible to ascertain

as of the date of execution hereof and the Authority has estimated the Liquidated Damages in

order to fix the Contractor’s costs and to avoid later disputes over which items are properly

chargeable to the Contractor. Any Liquidated Damages payable in accordance with this

Section 23.3 are in the nature of liquidated damages and not a penalty, and the Contractor

agrees that the sums specified are in the nature of liquidated damages and not a penalty and

are reasonable in light of the anticipated or actual harm caused by the breach, the difficulties

of the proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an

adequate remedy. Liquidated Damages may be owed as the result of a Damage Event, even

though no Event of Default has occurred.

23.3.3 Payment Terms for Liquidated Damages

Liquidated Damages, to the extent not paid as provided in Section 18, shall be payable by the

Contractor to the Authority within ten days after the Contractor’s receipt of an invoice

therefore from the Authority.

23.3.4 Waiver

Permitting or requiring the Contractor to continue and finish the Work or any part thereof

after a Completion Deadline shall not act as a waiver of the Authority’s right to receive

Liquidated Damages hereunder or of any other rights or remedies otherwise available to the

Authority.

23.4 Suspension 23.4.1 Suspensions for Convenience

The Authority may, at any time and for any reason, order the Contractor to suspend all or any

part of the Work required under the Contract Documents for the period of time that the

Authority deems appropriate. The Contractor shall promptly recommence the Work upon

receipt of written notice from the Authority directing the Contractor to resume work. Any

such suspension, which results in a delay to the Critical Path, shall be considered an

Authority-Caused Delay. Adjustments of the Contract Price, Schedule of Values and

approved Baseline Schedule or Working Schedule, as appropriate, shall be available for any



such Authority-Caused Delay, subject to the Contractor’s compliance with the terms and

conditions set forth in Section 19.

23.4.2 Suspensions for Cause

The Authority has the authority by written order to suspend the Work without prior notice,

wholly or in part, for Contractor’s failure to:

(a) Correct conditions unsafe for the Project personnel or general public;

(b) Perform construction quality control strictly in accordance with the approved

Quality Control Program, as determined by the Authority;

(c) Perform Work in accordance with the Contract Documents; or

(d) Perform Work in accordance with orders of the Authority.

Any such suspension shall not be grounds for additional compensation or an extension of the

Contract Time.

23.4.3 Responsibilities of Contractor During Suspension Periods

During any period that Work is suspended, the Contractor shall;

(a) Continue to be responsible for the Work,

(b) Prevent damage or injury to the Project,

(c) Provide for drainage,

(d) Erect necessary temporary structures, signs or other facilities required to

maintain the Project

(e) Maintain in a growing condition all newly established plantings, seedlings and

sods furnished under the Contract Documents, and

(f) Protect new tree growth and other vegetative growth against injury, replacing

all dead plants requiring replacement during the suspension period.

23.5 Delay in Issuance of Notice to Proceed The Authority anticipates that it will issue NTP for Design concurrently with or shortly after

execution and delivery of the Contract. At the Authority’s discretion, the Authority may

issue a limited NTP authorizing the Contractor to perform certain Design Work described

therein. If a limited NTP is delayed beyond April 1, 2006, or if Authority issues a limited

NTP on or before March 1, 2006 and a full NTP for Design is delayed beyond 120 days

thereafter, such delay shall constitute an Authority-Caused Delay.



24.0 AUTHORITY ACCEPTANCE 24.1 Passage of Title The Contractor warrants that it owns, or will own, and has, or will have, good and marketable

title to all materials, equipment, tools, and supplies furnished, or to be furnished, by it and its

Subcontractors that become part of the Project or are purchased for the Authority for the

operation, maintenance or repair, free and clear of all Liens. Title to all of such materials,

equipment, tools, and supplies which have been delivered to the Site shall pass to the

Authority, free and clear of all Liens, upon the earlier of incorporation into the Project, or

payment by the Authority to the Contractor of invoiced amounts pertaining thereto.

Notwithstanding any such passage of title, the Contractor shall retain sole care, custody and

control of such materials, equipment, tools, and supplies and shall exercise due care with

respect thereto, as part of the Work, until the Final Acceptance Date or until the Contractor is

removed from the Project.

24.2 Substantial Completion 24.2.1 The Contractor shall deliver an Application for Substantial Completion to Authority

when all of the following have occurred:

(a) The Contractor has completed all Work (except for Punch List items, final

cleanup and other items included in the requirements for Final Acceptance);

(b) The Contractor has ensured that all Work has been performed in accordance

with the requirements of the Contract Documents;

(c) The Contractor has ensured that the Project may be used without damage to

the Project or any other property on or off the Site, and without injury to any Person;

(d) The Contractor has complied with all Review, Verification and Acceptance

requirements, in accordance with the Contract Documents, including the submittal and

Authority acceptance of all test reports;

(e) The Contractor has successfully completed the Training Program set forth in

Scope of Work and General Requirements Section entitled, Demonstration and Training;

(f) The Authority has received and accepted all System and Facility Safety

Certifications as described in Performance Specifications Section entitled, Safety

Certifications;

(g) The Authority has received and accepted all Design Documents, Record

Documents, As-Built Schedule, Operations and Maintenance Plans and Manuals, right-of-



way record maps, surveys, test data and other deliverables required under the Contract

Documents; and

(h) The Contractor has delivered to the Authority any special tools purchased by

the Contractor (as provided in the Contract Documents) and the Contractor has purchased all

replacement spare parts and delivered them to the Authority free and clear of Liens.

24.2.2 Upon receipt of Contractor’s Application for Substantial Completion, the Authority

shall conduct such inspections, surveys and/or testing as the Authority deems desirable. If

such inspections, surveys and/or tests disclose that any Work does not meet the requirements

of the Contract Documents, the Authority will promptly advise the Contractor as to any

errors, omissions, deviations, defects or deficiencies in the Work necessary to be corrected as

a condition to Substantial Completion. Upon correction of the errors, omissions, deviations,

defects or deficiencies identified as a prerequisite to Substantial Completion, the Contractor

shall provide written notification to the Authority and the Authority shall conduct another

round of inspections, surveys and/or tests. This procedure shall be repeated until the

Authority finds that all prerequisites to Substantial Completion have been met.

24.2.3 Substantial Completion of the Project shall be deemed to have occurred when:

(a) The Authority determines that all requirements of Section 24.2.1 have been

satisfied;

(b) The Authority determines that all errors, omissions, deviations, defects and

deficiencies identified as prerequisites to Substantial Completion have been corrected;

(c) The Authority and Contractor have agreed to a Punch List of items remaining

to be completed or corrected prior to Final Acceptance.

(d) The Authority determines that the Contractor has demonstrated that the

Contract requirements for passenger operation have been met during System Performance

Demonstration, including the requirement for System Service Availability and submittal by

Contractor and acceptance by Authority of the System Performance Demonstration Report,

in accordance with Scope of Work and Acceptance – System Performance Demonstration.

24.2.4 The Authority will issue a Certificate of Substantial Completion to the Contractor at

such time as the Authority determines that Substantial Completion has occurred, under the

standards and criteria set forth in Section 24.2.3.



24.3 Punch List Completion The term “Punch List Completion” means all Punch List items shall have been completed.

After Substantial Completion, the Authority will allow the Contractor reasonable access to

the Worksite to complete the items on the Punch List. At the time the Authority determines

all such items have been completed, the Authority shall notify the Contractor that it has

satisfied Punch List Completion.

24.4 Final Acceptance 24.4.1 On or before Final Acceptance, Contractor shall perform any Work which was

waived for purposes of Substantial Completion and shall satisfy all of its other obligations

under the Contract Documents, including ensuring that the Project has been completed and

all components have been properly inspected and tested. Final Acceptance of the Project

shall be deemed to have occurred when all of the following have occurred:

(a) All requirements for Substantial Completion and Punch List Completion have

been fully satisfied;

(b) The Contractor has delivered to the Authority a certification representing that

there are no outstanding claims of the Contractor or claims, Liens or stop notices of any

Subcontractor or laborer with respect to the Work, other than any previously submitted

unresolved claims of the Contractor and any claims, Liens or stop notices of a Subcontractor

or laborer being contested by the Contractor (in which event the certification shall include a

list of all such matters with such detail as is requested by the Authority and, with respect to

all Subcontractor and laborer claims, Liens and stop notices, shall include a representation by

the Contractor that it is diligently and in good faith contesting such matters by appropriate

legal proceedings which shall operate to prevent the enforcement or collection of the same).

For purposes of such certification, the term “claim” shall include all matters or facts which

may give rise to a claim;

(c) All of the Contractor’s obligations under the Contract Documents (other than

obligations which by their nature are required to be performed after Final Acceptance) shall

have been satisfied in full or waived in writing by the Authority; and

(d) The Contractor has delivered to the Authority a Notice of Completion for the

Project in recordable form and meeting all statutory requirements.



24.4.2 The Authority will issue a Certificate of Final Acceptance to the Contractor at such

time as the Authority determines that Final Acceptance has occurred, under the standards and

criteria set forth in Section 24.4.1.

24.4.3 Final Acceptance will not prevent the Authority from correcting any measurement,

estimate or certificate made before or after completion of the Work, nor shall it prevent the

Authority from recovering from the Contractor, its Surety(ies), or other provider of

performance security or any combination of the foregoing, overpayment sustained for failure

of the Contractor to fulfill the obligations under the Contract Documents. The occurrence of

the Final Acceptance Date shall not relieve the Contractor from any of its continuing

obligations hereunder.

24.4.4 Final Acceptance shall be final and conclusive except for (a) defects not readily

ascertainable by the Authority; (b) actual or constructive fraud; (c) gross mistakes amounting

to fraud; (d) other errors which the Contractor knew or should have known about; and (e) the

Authority’s rights under any warranty or guarantee. The Authority may revoke Final

Acceptance at any time prior to the issuance of the final payment by the Authority upon the

Authority’s discovery of such defects, mistakes, fraud, or errors in the Work.

24.5 Assignment of Causes of Action 24.5.1 The Contractor 's attention is directed to the following requirements in Public

Contract Code 7103.5 and Government Code Sections 4553 and 4554, which shall be

applicable to the Contractor and Subcontractors:

"In entering into a public works contract or a subcontract to supply goods,

services, or materials pursuant to a public works contract, The Contractor or

Subcontractor offers and agrees to assign to the awarding body all rights, title, and

interest in and to all causes of action it may have under Section 4 of the Clayton

Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing

with Section 16700) of Part 2 of Division 7 of the Business and Professions

Code), arising from purchases of goods, services, or materials pursuant to the

public works contract or the subcontract. This assignment shall be made and

become effective at the time the awarding body tenders final payment to the

Contractor without further acknowledgment by the parties.”



"If an awarding body or public purchasing body receives, either through judgment

or settlement, a monetary recovery for a cause of action assigned under this

chapter, the assignor shall be entitled to receive reimbursement for actual legal

costs incurred and may, upon demand, recover from the public body any portion

of the recovery, including treble damages, attributable to overcharges that were

paid by the assignor but were not paid by the public body as part of the bid price,

less the expenses incurred in obtaining that portion of the recovery.”

"Upon demand in writing by the assignor, the assignee shall, within one year from

such demand, reassign the cause of action assigned under this part if the assignor has

been or may have been injured by the violation of law for which the cause of action

arose and (a) the assignee has not been injured thereby, or (b) the assignee declines to

file a court action for the cause of action."

24.5.2 The Contractor hereby offers and agrees to assign to the Authority all rights, title, and

interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.

Code Section 15), arising from purchases of goods, services or materials pursuant to the

Contractor Documents or any Subcontract. This assignment shall be made and become

effective at the time the Authority tenders final payment to the Contractor, without further

acknowledgment by the parties.

25.0 WARRANTIES 25.1 Representations, Warranties And Covenants of Contractor 25.1.1 The Contractor has, and throughout the term of the Contract and performance of the

Work shall maintain, all required authority, license status, professional ability, skills and

capacity to perform Contractor’s obligations hereunder and shall perform them in accordance

with the requirements contained in the Contract Documents.

25.1.2 The Contractor shall comply with the provisions of Section 3700 of the Labor Code

which require every employer to be insured against liability for workers’ compensation or to

undertake self-insurance in accordance with the provisions of that Code, and the Contractor

will comply with such provisions before commencing the Work under the Contract

Documents and at all times during the term hereof, whether by provision of its own insurance

or self-insurance or through participation in the Contractor Controlled/Maintained Insurance

Program (“CCIP”).



25.1.3 The Contractor shall at all times schedule and direct its Work to provide an orderly

progression of the Work to achieve Substantial Completion, Punch List Completion and

Final Acceptance in accordance with the approved Baseline Schedule, as appropriate,

including furnishing such employees, materials, facilities and equipment and working such

hours, including extra shifts, overtime operations, Sundays and holidays as may be necessary

to achieve such goal, all at the Contractor’s own cost except as otherwise specifically

provided in Section 19.

25.2 Overall Warranty The Contractor warrants that:

(a) All design Work, based on the Contract Documents, shall conform to all

professional architectural and engineering principles generally accepted as standards of the

industry in the State of California, and that the Work shall be constructible as designed.

(b) The Work shall be free of material Deficiencies, shall be fit for use for the

intended function, and shall meet all of the requirements of the Contract.

(c) The Goods furnished shall be new and of a quality that meets all of the

requirements of the Contract.

25.3 Warranty Term The Warranties shall commence at Substantial Completion and shall remain in effect until

one year after the Final Acceptance Date, subject to extension pursuant to Section 25.6. The

foregoing shall not, however, be deemed to entitle the Authority to require the Contractor to

correct any patent deficiencies beyond the limitations period stated in Code of Civil

Procedure Section 337.1. If the Authority determines that any of the Work has not met the

standards set forth in Section 25.2 at any time within the Warranty period, then the

Contractor shall correct such Work as specified below. The Authority and the Contractor

shall conduct a walkthrough of the Site at the end of each year during the Warranty period

and shall produce a punch list of those items requiring Warranty Work.

25.4 Remedy Within seven days of receipt by the Contractor of notice from the Authority specifying a

failure to meet the standards set forth in Section 25.2, the Contractor and the Authority shall

mutually agree when and how the Contractor shall remedy such violation; provided,

however, that in case of an emergency requiring immediate curative action, the Contractor

shall implement such action as it deems necessary and shall notify Authority of the urgency



of a decision on a remedy. The Contractor and the Authority shall agree on such remedy

immediately upon notice by or to the Authority of such emergency. If the Contractor does

not use its best efforts to proceed to effectuate such remedy within the agreed time, or should

the Contractor and the Authority fail to reach such an agreement within such seven-day

period (or immediately, in the case of emergency conditions), the Authority, after notice to

the Contractor, shall have the right to perform (or have performed by third parties) the

necessary remedy, and the costs thereof shall be borne by the Contractor.

25.5 Permits and Costs The Contractor shall be responsible for complying with Section 23.2.2 in connection with

Warranty Work. The Contractor shall bear all costs of Warranty Work, including additional

testing and inspections, and shall reimburse the Authority or pay the Authority’s expenses

made necessary thereby within 10 days after the Contractor’s receipt of invoices therefore.

25.6 Warranty on Corrected Deficiencies

The Warranties shall apply to all Work re-done or replaced pursuant to the terms of the

Contract Documents. In the event any Work is re-done or replaced, the Warranty for such

Work shall extend to the later of one year after acceptance of the re-done or replaced Work

by Authority in accordance with the Contract Documents or the expiration of the Warranty

term, provided that the Warranty for re-done or replaced Work shall not extend beyond one

year after the expiration of the original Warranty term.

25.7 Subcontractor Warranties 25.7.1 Warranty Requirements

The Contractor shall obtain from all Subcontractors, and cause to be extended or transferred

to the Authority, appropriate representations, warranties, guarantees and obligations with

respect to design, materials, workmanship, equipment, tools and supplies furnished by such

Subcontractors. All representations, warranties, guarantees and obligations of Subcontractors

shall be written so as to survive all Authority and Contractor inspections, tests and approvals,

and shall run directly to and be enforceable by the Contractor and/or the Authority and their

respective successors and assigns. The Contractor hereby assigns to the Authority all of

Contractor’s rights and interest in all extended warranties for periods exceeding the

applicable warranty period which are received by the Contractor from any of its

Subcontractors.

25.7.2 Enforcement



Upon receipt from Authority of notice of a failure of any of the Work to satisfy any

Subcontractor warranty, representation, guarantee or obligation, the Contractor shall be

responsible for enforcing or performing any such representation, warranty, guaranty or

obligation. The Authority’s rights under this Section 25.7.2 shall commence at the time such

representation, warranty, guaranty or obligation is furnished and shall continue until the

expiration of the Contractor’s relevant warranty (including extensions for redone Work).

Until such expiration, the cost of any equipment, material, labor (including re-engineering) or

shipping shall be the responsibility of the Contractor if such cost is covered by such a

warranty and the Contractor shall be required to replace or repair defective equipment,

material or workmanship furnished by Subcontractors.

25.8 Warranty Beneficiaries In addition to benefiting the Authority and its successors and assigns, the Warranties and

Subcontractor warranties provided under this Section 25 (including Warranties on Corrected

Deficiencies) shall inure to the benefit of, and shall be directly enforceable by, Settler,

Trustee and/or City, to the extent required under the MTA Agreement or the City Agreement.

25.9 Damages for Breach of Warranty The Contractor shall be liable for actual damages resulting from any breach of an express or

implied warranty or any defect in the Work. The obligation relating to breach of expressed or

implied warranty is subject to the limitation of liability described in Section 22.3.6.

25.10 Disputes Any disagreement between the Authority and the Contractor relating to this Section 25 shall

be subject to the dispute resolution provisions contained in Section 20, provided that the

Contractor shall proceed as directed by the Authority pending resolution of the dispute.

26.0 PARTNERING 26.1 Intent The Authority encourages partnering among the Authority, Contractor, and its

Subcontractors. The partnering process is intended to draw on the strengths of each

organization to help identify and achieve reciprocal goals, including achieving completion of

the Work on time, within budget and in accordance with its intended purpose. A primary

consideration of partnering is the prompt and equitable resolution of issues affecting the

conduct of the Work under the Contract Documents and the rights and responsibilities of the

respective parties.



26.2 Participation and Responsibilities This partnering will be bilateral and participation will be voluntary but is strongly

encouraged by the Authority. Any cost associated with this partnering will be agreed to by

both parties and will be shared equally, except that the Contractor and the Authority will each

be responsible for the salaries, travel and subsistence costs of its own attendees.

26.3 Workshops Within 30 days of the Notice to Proceed for Design, the Contractor and the Authority will

mutually select a third-party facilitator to conduct the team building workshop for Contractor

and Authority personnel. The initial workshop should be held within 60 days of Notice to

Proceed. The workshop is expected to last approximately one day and will be held in close

proximity to the Authority’s offices. The Contractor’s and the Major Subcontractors’ key

staff as well as the Authority’s key staff responsible for the management and administration

of the Contract Documents should attend the workshop. During the initial workshop, a

program for the continuation and maintenance of the partnering initiative will be developed

for use through the duration of the Project.

Follow-up workshops may be held periodically throughout the duration of the Contract as

agreed by Contractor and Authority. The partnering sessions will focus on how to work

together to smoothly process payments, change orders, requests for information, delay

requests, substitutions and other typical interactions and interfaces between Contractor,

Authority and consultants. The sessions are meant to establish channels of communication to

maximize productivity of everyone working on the Project and minimize conflict.

26.4 Rights of Parties Either party may withdraw from partnering upon written notice to the other. However, no

claim or dispute settled or change approved through partnering shall be revived. The

establishment of a partnering charter will not change the legal relationship of the parties to

the Contract nor relieve either party from any of the terms of the Contract Documents.

27.0 DEFAULT; SUSPENSION OF WORK; TERMINATION 27.1 Default of Contractor 27.1.1 The Contractor shall be in default of the Contract upon the occurrence of any one or

more of the following events or conditions:

(a) The Contractor fails promptly to begin the Work under the Contract

Documents;



(b) The Contractor fails to perform the Work in accordance with the Contract

Documents;

(c) The Contractor discontinues the prosecution of the Work (exclusive of work

stoppage (1) due to termination by the Authority, or (2) due to and during the continuance of

a Force Majeure event or suspension by the Authority);

(d) The Contractor fails to resume performance of Work which has been

suspended or stopped, within a reasonable time after receipt of notice from the Authority to

do so or (if applicable) after cessation of the event preventing performance;

(e) The Contractor becomes insolvent, or generally does not pay its debts as they

become due, or admits in writing its inability to pay its debts or makes an assignment for the

benefit of creditors;

(f) Insolvency, receivership, reorganization or bankruptcy proceedings have been

commenced by or against the Contractor;

(g) Any representation or warranty made by the Contractor in the Contract

Documents or any certificate, schedule, instrument or other document delivered by the

Contractor pursuant to the Contract Documents was false or materially misleading when

made;

(h) The Contractor breaches any agreement, representation or warranty contained

in the Contract Documents;

(i) The Contractor has assigned or transferred the Contract Documents or any

right or interest herein, except as expressly permitted under Section 28.4;

(j) The Contractor fails to discharge or obtain a stay of any final judgment(s) or

order for the payment of money against it in excess of $100,000 in the aggregate arising out

of the prosecution of the Work (provided that for purposes hereof posting of a bond in the

amount of 125% of such judgment or order shall be deemed an effective stay);

(k) The Contractor has failed, absent a valid dispute, to make payment when due

for labor, equipment or materials in accordance with its agreements with Subcontractors and

applicable law, or has failed to comply with any Governmental Rule or failed reasonably to

comply with the instructions of the Authority consistent with the Contract Documents.

27.1.2 The Contractor and its Surety under the Performance Bond shall be entitled to 15

days notice and opportunity to cure a breach (other than a breach described in (e), (f), or (g)



of Section 27.1.1 or any breach which by its nature cannot be cured), provided that the

Contractor or the Surety commences such cure within such 15-day period and thereafter

diligently prosecutes such cure to completion. If such breach is capable of cure but by its

nature cannot be cured within 15 days, the Authority shall allow such additional period of

time as may be reasonably necessary to cure the breach. In the case of emergency, the

Authority shall have the right to shorten the cure period by so notifying the Contractor and

Surety.

27.2 Event of Default; Remedies 27.2.1 If any breach described in Section 27.1.1 is not subject to cure or is not cured within

the period (if any) specified in Section 27.1.2, the Authority may declare that an “Event of

Default” has occurred and notify the Contractor to discontinue the Work. The declaration of

an Event of Default shall be in writing and given to the Contractor and Surety. The Surety

shall have 30 days from the date of receipt of such notification to notify the Authority

whether it intends to assume responsibility for the Work. In addition to all other rights and

remedies provided by law or equity and such rights and remedies as are otherwise available

under the Contract Documents and the Performance Bond, the Authority may appropriate

any or all materials and equipment on the Site as may be suitable and acceptable and may

direct the Surety to complete the Work or may enter into an agreement for the completion of

the Work according to the terms and provisions of the Contract Documents with another

contractor or the Surety, or use such other methods as may be required for the completion of

the Work, including completion of the Work by the Authority.

27.2.2 If an Event of Default has occurred,

(a) The Contractor and Surety shall be liable to Authority (in addition to any

other damages under the Contract Documents other than those costs intended to be covered

by Liquidated Damages payable hereunder) for all costs reasonably incurred by the Authority

or any party acting on the Authority’s behalf in completing the Work or having the Work

completed by another Person; and

(b) The Authority shall be entitled to withhold all or any portion of further

payments to the Contractor until the Final Acceptance Date or the date on which the

Authority otherwise accepts the Project as complete or determines that it will not proceed



with completion, at which time the Authority will determine whether the Contractor is

entitled to further payments.

27.2.3 Promptly following the Final Acceptance Date or the date on which the Authority

otherwise accepts the Project as complete or determines that it will not proceed with

completion, the total cost of all completed Work shall be determined, and the Authority shall

notify the Contractor and its Surety in writing of the amount, if any, that the Contractor and

its Surety shall pay the Authority or that the Authority shall pay the Contractor or its Surety

with respect thereto. All costs and charges incurred by the Authority, including attorneys’

fees and costs, together with the cost of completing the Work under the Contract Documents,

will be deducted from any moneys due or which may become due to the Contractor or its

Surety. If such expense exceeds the sum which would have been payable under the Contract

Documents, then the Contractor and its Surety shall be liable and shall pay to the Authority

the amount of such excess. If the Surety fails to pay such amount immediately upon the

Authority’s demand, then the Authority shall be entitled to collect interest from the Surety on

the amounts the Authority is required to pay in excess of the remaining balance of the

Contract Price. The interest rate, which the Surety shall pay, shall be 2% in excess of the

reference rate charged by Bank of America from time to time for prime commercial loans of

90-day maturities. The interest rate shall accrue on all amounts the Authority has had to pay

in excess of the remaining balance of the Contract Price from the date of the Authority

payment.

27.2.4 If the Contractor is adjudged a bankrupt or makes a general assignment for the benefit

of creditors, or if a receiver is appointed for the benefit of its creditors, or if a receiver is

appointed on account of the Contractor’s insolvency, such actions could impair or frustrate

the Contractor’s performance of the Work. Accordingly, it is agreed that upon the

occurrence of any such event, the Authority shall be entitled to request of the Contractor, or

its successor in interest, adequate assurance of future performance in accordance with the

terms and conditions hereof. Failure to comply with such request within five days of

delivery of the request shall entitle the Authority to terminate the Contract for default, and to

the accompanying rights set forth in this Section 27. Pending receipt of adequate assurance

of performance and actual performance in accordance therewith, the Authority shall be

entitled to proceed with the Work with its own forces or with other contractors on a time and



material or other appropriate basis, the cost of which will be backcharged against the

Contractor and deducted from the Lump Sum Fixed Price.

27.2.5 In lieu of the provisions of this Section 27.2 for terminating the Contractor and

completing the Work for proper cause, the Authority may pay the Contractor for the parts

already completed according the Contract Documents and may treat the parts remaining

undone as if they had never been included or contemplated as part of the Work. No claim

under this provision will be allowed the Contractor for prospective profits on Work

uncompleted by the Contractor.

27.3 Failure to Comply Caused by Damage Event 27.3.1 An “Event of Default” described in Section 27.1.1(c)(2) shall specifically exclude the

Contractor’s falling behind on a Critical Path if caused solely by an event or events beyond

the Contractor’s control, which event was not due to an act or omission of the Contractor,

and which delay could not have been avoided by due diligence and use of reasonable efforts

by the Contractor (referred to herein as a “Damage Event,” with the understanding that the

term “Damage Event” does not apply in cases where the delay to the Critical Path is resolved

by extension of the applicable Completion Deadline under Section 19). The Contractor shall

promptly notify the Authority of any occurrence of a Damage Event.

27.3.2 If the Contractor falls behind on a Critical Path solely as the result of a Damage

Event, the Authority shall not be entitled to terminate the Contract or exercise any of the

remedies described in Section 27.2 for such failure of the Contractor to perform, except as

follows: if the Contractor fails to perform or delays the performance of any Work as the

result of a Damage Event, then the Authority shall have the right (but not the obligation) to

cause third parties perform such Work, and in such event the reasonable cost of such Work

shall be deducted from the Lump Sum Fixed Price. Furthermore, occurrence of a Damage

Event shall not excuse the Contractor from its obligation to implement a Recovery Schedule

or from its obligation to pay Liquidated Damages for failure to meet the Substantial

Completion Deadline.

27.4 Failure by Authority to Make Undisputed Payment The Contractor shall have the right to stop Work in the event of failure by the Authority to

make an undisputed payment due hereunder, but the Contractor shall not have the right to

terminate the Contract. Such work stoppage shall be considered a suspension for

convenience under Section 23.4.



27.5 Termination for Convenience The Authority may terminate the Contract and the performance of the Work by the

Contractor in whole or, from time to time, in part, if the Authority determines, in its sole

discretion, that a termination is in the Authority’s best interest.

27.6 Notice of Termination for Convenience The Authority shall notify the Contractor of its decision to terminate for convenience by

delivering to the Contractor a written Notice of Termination or Notice of Partial Termination

specifying the extent of termination and its effective date. Termination (or partial

termination) of the Contract shall not relieve the Surety of its obligation for any just claims

arising out of the Work performed.

27.7 Contractor’s Responsibilities after Receipt of Notice of Termination After receipt of a Notice of Termination for convenience, and except as directed by the

Authority, the Contractor shall immediately proceed as follows, regardless of any delay in

determining or adjusting any amounts due under this Section 27:

(a) Stop Work as specified in the notice;

(b) Place no further Subcontracts or orders for materials, services or facilities

relating to the Work terminated, except as necessary for mitigation of damages;

(c) Unless instructed otherwise by the Authority, terminate all Subcontracts to the

extent they relate to the Work terminated;

(d) Assign to the Authority in the manner, at the times, and to the extent directed

by the Authority, all of the right, title, and interest of the Contractor under the Subcontracts

so terminated, in which case the Authority will have the right, in its sole discretion, to accept

performance, settle or pay any or all claims arising out of the termination of each such

Subcontract;

(e) Settle outstanding liabilities and claims arising out of such termination of

Subcontracts, with, to the extent required by the Authority, the approval or ratification of the

Authority, which approval or ratification shall be final;

(f) Transfer title to and deliver to the Authority, as directed by the Authority (1)

all Work in process, completed Work, supplies and other material produced or acquired for

the Work terminated, and (2) the Design Documents, Construction Documents and all other

completed or partially completed drawings (including plans, elevations, sections, details and



diagrams), specifications, records, samples, information and other property which would

have been required to be furnished to the Authority if the Work had been completed;

(g) Complete performance in accordance with the Contract Documents of all

Work not terminated;

(h) Take all action which may be necessary, or the Authority may direct, for the

protection and preservation of the property related to the Contract Documents which is in the

possession of the Contractor and in which the Authority has or may acquire an interest; and

(i) As authorized by the Authority, use its best efforts to sell at reasonable prices

any property of the types referred to in Subsection (f) above; provided, however, the

Contractor (1) is not required to extend credit to any purchaser, and (2) may acquire such

property under the conditions prescribed and at prices approved by the Authority. The

Contractor shall apply the proceeds of any such sale or disposition to reduce any amounts

owed by the Authority under the Contract Documents, or if no amount is owing, the

Contractor shall apply such proceeds as directed by the Authority.

27.8 Inventory The Contractor shall submit to the Authority a list of termination inventory not previously

disposed of and excluding items authorized for disposition by the Authority, upon receipt of

a request therefore from the Authority. Within 45 days of the Authority’s receipt of the list,

the Contractor shall deliver such inventory to the Authority and the Authority shall accept

title to such inventory as appropriate.

27.9 Settlement Proposal After termination under this Section 27, the Contractor shall submit a final termination

settlement proposal to the Authority in the form and with the certification prescribed by the

Authority. The Contractor shall submit the proposal promptly, but no later than 60 days from

the effective date of termination unless the Authority has agreed in writing to allow such an

extension. If the Contractor fails to submit the proposal within the time allowed, the

Authority may determine, on the basis of information available to the Authority, the amount,

if any, due the Contractor because of the termination and shall pay the Contractor the amount

so determined.

27.10 Agreement as to Amount of Termination Settlement Any negotiated settlement under Section 27.9 may include an allowance for profit solely on

the Work that has been completed as of the effective date of termination. The negotiated



settlement shall not include compensation for risks assumed by the Contractor hereunder or

for contingencies included in the Lump Sum Fixed Price, except to the extent of the

Contractor’s actual expenses relating to such risks and contingencies. Such agreed amount or

amounts, exclusive of any extra costs caused solely by the termination, shall not exceed the

total Lump Sum Fixed Price as reduced by the price of Work terminated. Upon

determination of the settlement amount, the Contract will be amended accordingly, and the

Contractor will be paid the agreed amount as described in this Section 27.10.

27.11 No Agreement as to Amount of Claim 27.11.1 In the event of failure of the Contractor and the Authority to agree upon the

whole amount to be paid to the Contractor by reason of the termination of Work pursuant to

this Section 27, the Authority will pay Contractor the sum of the following amounts

(exclusive of interest charges which shall be paid based on the Contractor’s actual cost) for

Work performed prior to the effective date of the termination, as such amounts are

determined by the Authority, and without duplication of any items or of any amounts agreed

upon in accordance with Section 27.9:

(a) The Contractor’s actual reasonable out-of-pocket cost (including costs of

construction equipment only to the extent allowed by Section 19) for all Work performed,

including reasonable overhead and interest and loan fees on amounts expended by the

Contractor, and accounting for any refunds payable to the Contractor with respect to

insurance premiums, deposits, cancellations or similar items, as established to the Authority’s

satisfaction;

(b) A sum, as profit on subsection (a) above, determined by the Authority to be

fair and reasonable; provided, however, if it appears the Contractor would have sustained a

loss on the entire Work had it been completed, no profit shall be included or allowed under

this Section 27.11.1(b) and an appropriate adjustment shall be made by reducing the amount

of the settlement to reflect the indicated rate of loss;

(c) The cost of settling and paying claims arising out of the termination of Work

under Subcontracts as provided in Section 27.7(e), exclusive of the amounts paid or payable

on account of supplies or materials delivered or services furnished by the Subcontractor prior

to the effective date of the termination, which amounts shall be included in the cost on

account of which payment is made under subsection (a) above; and



(d) The reasonable out-of-pocket cost (including reasonable overhead) of the

preservation and protection of property incurred pursuant to Section 27.7(h) and any other

reasonable out-of-pocket cost (including overhead) incidental to termination of Work under

the Contract, including expense incidental to the determination of the amount due to the

Contractor as the result of the termination of Work.

27.11.2 The total amount to be paid to the Contractor, exclusive of costs described in

Sections 27.11.1(c) and (d), may not exceed the total Lump Sum Fixed Price less the amount

of payments previously made. Furthermore, in the event any refund is payable with respect

to insurance premiums, deposits or similar items which were previously passed through to

the Authority by the Contractor, such refund shall be paid directly to the Authority or

otherwise credited to the Authority. The Contractor shall not be entitled to any compensation

in excess of the value of the Work performed (determined as provided in Section 27.11.1)

plus any extra costs caused solely by the termination. The amount set forth in the Proposal by

the Contractor for the Work terminated shall be a factor to be analyzed in determining the

value of the Work terminated. Upon determination of the amount of the termination

payment, the Contract shall be amended to reflect the agreed termination payment, and the

Contractor shall be paid the agreed amount. Except for normal spoilage, and except to the

extent the Authority will have otherwise expressly assumed the risk of loss, there will be

excluded from the amounts payable to the Contractor under Section 27.11.1 or this

Section 27.11.2 the fair value, as determined by the Authority, of property which is

destroyed, lost, stolen, or damaged so as to become undeliverable to the Authority, or to a

buyer pursuant to Section 27.7(i).

27.11.3 If any termination hereunder is partial, the Authority shall determine whether

the scope of Work has changed sufficiently so as to make an adjustment in the Lump Sum

Fixed Price for the remainder of the Work as appropriate. The amount of any such

adjustment as may be agreed upon shall be set forth in a Change Order under Section 19

hereof.

27.12 Reduction in Amount of Claim The amount otherwise due the Contractor under this Section 27 shall be reduced by (a) the

amount of any claim which the Authority may have against the Contractor in connection with

performance of the Work, and (b) the agreed price for, or the proceeds of sale of, materials,



supplies or other things acquired by the Contractor or sold, pursuant to the provisions of this

Section 27 and not otherwise recovered by or credited to the Authority. In the event the

Authority determines an offset hereunder was wrongfully made, the Authority will make the

payment owed within 30 days thereafter.

27.13 Partial Payment Pending a final agreement or determination as to the amount to which the Contractor is

entitled under this Section 27 for a termination or partial termination for convenience, the

Authority may, from time to time, under such terms and conditions as it may prescribe, and

in its sole discretion, make partial payments on account against amounts owed by it to the

Contractor in connection with the terminated portion of the Work, whenever in the opinion of

the Authority the aggregate of such payments shall be less than or equal to the amount to

which the Contractor will be entitled under this Section 27. If the total of such payments is

in excess of the amount finally agreed or determined to be due under this Section 27, such

excess shall be payable by the Contractor to the Authority within 30 days after demand. Any

amounts owing from the Authority to the Contractor under this Section 27 shall be paid

within a reasonable period of time after a final agreement or determination is made as to the

amount owing.

27.14 Inclusion in Subcontracts The Contractor shall insert in all Subcontracts a requirement that the Subcontractor shall stop

Work on the date and to the extent specified in a Notice of Termination from the Authority

and shall require Subcontractors to insert the same provision in each Subcontract at all tiers.

Immediately upon the Contractor’s receipt of any Notice of Termination issued by the

Authority, the Contractor shall communicate such notice to all affected Subcontractors.

27.15 Limitation on Amounts Payable to Subcontractors For the purposes of Sections 27.10 and 27.11, upon termination under Section 27.7(c) of

Work under any Subcontract which would have entitled the Subcontractor to gross proceeds

of $100,000 or more had it not been terminated, the Contractor will not be entitled to

reimbursement for that portion of the termination settlement with any such Subcontractor

which constitutes anticipatory or unearned profit on Work not performed, or which constitute

consequential damages on account of the termination or partial termination.



27.16 No Consequential Damages or Unearned Profits to Contractor Under no circumstances shall the Contractor be entitled to anticipatory or unearned profits or

consequential or other damages as a result of a termination or partial termination under this

Section 27. The payment to the Contractor determined in accordance with this Section 27

constitutes the Contractor’s sole and exclusive remedy for a termination under this

Section 27.

27.17 No Waiver Notwithstanding anything to the contrary in the Contract Documents, a termination under

this Section 27 shall not waive any right or claim to damages which the Authority may have

and the Authority may pursue any cause of action which it may have at law or in equity or

under the Contract.

27.18 Dispute Resolution The failure of the parties to agree on amounts due under this Section 27 shall be a dispute to

be resolved in accordance with Section 20.

27.19 Allowability of Costs All costs claimed by the Contractor under this Section 27 shall, at a minimum, be allowable,

allocable and reasonable in accordance with the cost principles and procedures of Part 31 of

the Federal Acquisition Regulation and Office of Management and Budget (OMB) Circular

A-87, Cost Principles for State and Local Governments.

27.20 Suspension of Work In the event of any suspension of the Work by the Authority for more than 180 days, the

Contractor shall have the right to consider the Contract to have been terminated for

convenience under this Section 27. The Contractor shall notify the Authority of such

election by delivering to the Authority a written notice of termination due to such suspension,

specifying its effective date. Upon delivery by the Contractor to the Authority of a notice of

termination due to suspension, the provisions of this Section 27 shall apply.

27.21 Termination Due to Non-Appropriation of Funds 27.21.1 The Authority, its officers and its employees are not bound by the terms

hereof or obligated to make any payment hereunder for Work performed in any fiscal year

beyond the amount, if any, available to and budgeted by the Authority. The Contractor is not

obligated to perform Work, and correspondingly is not entitled to any compensation for

Work performed, in any fiscal year beyond the amount, if any, available to and budgeted by



the Authority. The foregoing shall allow the Contractor to stop its performance of any Work

that is the subject of a dispute regarding entitlement to payment or amount payable, if the

Contractor reasonably determines that the total compensation payable for undisputed Work

to be performed during the fiscal year, plus the amount in dispute, would exceed the annual

limit described above. The Contractor shall consult with the Authority as soon as it

determines that a stoppage may occur, to allow the Authority the opportunity to seek

additional funding and avoid the stoppage.

27.21.2 In the event that the Authority fails to make an appropriation resulting in

stoppage of Work, the Contractor agrees to resume performance of the Work without any

modification to the terms and conditions hereof, provided that an appropriation (or other

required funding) is approved within 60 days after the start of the fiscal year in question. The

Contractor is responsible for maintaining all Contractor-provided insurance and bonds during

this 60-day period. Any such Work stoppage shall be considered a suspension for

convenience under Section 23.4.1. If funds are not appropriated or otherwise provided

before expiration of such 60-day period, the Contract shall be terminated. Any such

termination shall be considered a termination for convenience under Section 27.

Notwithstanding anything to the contrary contained in this Section 27, if the Contract is

terminated due to non-appropriation of funds, the Contractor shall be entitled to

compensation only for Work performed in the fiscal year in which funds were appropriated

up to the amount appropriated therefore, and shall not be entitled to any damages or other

payment in connection with the termination.

28.0 MISCELLANEOUS 28.1 Amendments These provisions may only be amended by a written instrument duly executed by the parties

or their respective successors or assigns.

28.2 Waiver Either party’s waiver of any breach or failure to enforce any of the terms, covenants,

conditions or other provisions of the Contract Documents at any time shall not in any way

limit or waive that party’s right thereafter to enforce or compel strict compliance with every

term, covenant, condition or other provision, any course of dealing or custom of the trade

notwithstanding. Furthermore, if the parties make and implement any interpretation of the



Contract Documents without documenting such interpretation by an instrument in writing

signed by both parties, such interpretation and implementation thereof will not be binding in

the event of any future disputes.

28.3 Independent Contractor The Contractor is an independent contractor, and nothing contained in the Contract

Documents shall be construed as creating or constituting any relationship with the Authority

other than that of an independent contractor. In no event shall the relationship between the

Authority and the Contractor be construed as creating any relationship whatsoever between

the Authority and the Contractor’s employees. Neither the Contractor nor any of its

employees is or shall be deemed to be an employee of the Authority. Except as otherwise

specified in the Contract Documents, the Contractor has sole authority and responsibility to

employ, discharge and otherwise control its employees and has complete and sole

responsibility as a principal for its agents, for all Subcontractors and for all other Persons that

the Contractor or any Subcontractor hires to perform or assist in performing the Work.

28.4 Successors and Assigns The Contract Documents shall be binding upon and inure to the benefit of the Authority and

the Contractor and their permitted successors, assigns and legal representatives.

28.4.1 The Authority may not assign all or part of its right, title and interest in and to the

Contract, including rights with respect to the Payment and Performance Bonds, to any Person

without the prior written approval of the Contractor.

28.4.2 The Contractor may not delegate any of its duties hereunder, except to Subcontractors

as expressly otherwise permitted in the Contract Documents. The Contractor’s assignment or

delegation of any of its Work under the Contract Documents shall be ineffective to relieve

the Contractor of its responsibility for the Work assigned or delegated, unless the Authority

has granted prior written approval to such relief from responsibility. The Contractor may

assign its rights to receive payment under the Contract Documents. Any assignment of

money shall be subject to all proper set-offs and withholdings in favor of the Authority and to

all deductions provided for in this Design-Build Contract. If the Contractor is in default, all

money withheld, whether assigned or not, shall be subject to being used by the Authority for

completion of the Work.



28.5 Designation of Representatives; Cooperation with Representatives 28.5.1 The Authority and the Contractor shall each designate an individual or individuals

who shall be authorized to make decisions and bind the parties on matters relating to the

Contract Documents. Such designations may be changed by a subsequent writing delivered

to the other party in accordance with Section 28.12. The parties may also designate technical

representatives who shall be authorized to investigate and report on matters relating to the

construction of the Project and negotiate on behalf of each of the parties but who do not have

authority to bind the Authority or the Contractor.

28.5.2 The Contractor shall cooperate with the Authority and all representatives of the

Authority designated as described above.

28.6 Gratuities and Conflicts of Interest 28.6.1 The Contractor shall not permit any member, officer, or employee of the Authority to

have any financial interest in the Contract prohibited by Sections 1090, et seq., and 87100, et

seq., of the Government Code. In addition, the Contractor or its employees shall not enter

into any contract involving services or property with a person or business prohibited from

transacting such business with the Authority, pursuant to Sections 1090, et seq., and 87100,

et seq., of the Government Code. Unless an explicit statement to the contrary accompanies

the Contractor’s Proposal Documents, the Contractor affirms that no Authority member,

officer, or employee of the Authority has any interest (whether contractual, non-contractual,

financial, or otherwise) in this transaction or in the business of the Contractor. If any such

interest becomes known to the Contractor at any time, the Contractor shall submit a full and

complete written disclosure of such information to the Authority, even if such interest would

not be considered a conflict under Sections 1090, et seq., and 87100, et seq., of the

Government Code.

28.6.2 Neither the Contractor nor any of its employees, agents and representatives shall offer

or give to an officer, official or employee of the Authority gifts, entertainment, payments,

loans or gratuities. The Authority may, by written notice to the Contractor, cancel the

Contract, or terminate the Contract for default if it is found that gratuities (in the form of

gifts, entertainment, or otherwise) were offered or given by the Contractor, or any agent of

the Contractor, to any Board member, officer, agent and/or employee of the Authority.

28.6.3 Employment by the Contractor of personnel on the payroll of the Authority is not

permitted in the performance of the Contract, even though such employment may be outside



the Authority employee’s regular working hours or on Saturdays, Sundays, holidays or

vacation time; further, employment by the Contractor of personnel who have been on the

Authority’s payroll within one year prior to the date of Contract award, where such

employment is caused by and/or dependent upon the Contractor securing this or a related

Contract with the Authority, is also prohibited.

28.6.4 The rights and remedies of the Authority specified in this Section 28.6 are not

exclusive and are in addition to any other rights and remedies allowed by law.

28.7 Survival The dispute resolution provisions contained in Section 20, and all other provisions which by

their inherent character should survive termination of the Contract and/or Final Acceptance,

shall survive the termination of the Contract and the date on which Final Acceptance occurs.

28.8. Limitation on Third Party Beneficiaries It is not intended by any of the provisions of the Contract Documents to create any third

party beneficiary hereunder, other than the Trustee or Settlor, or to authorize anyone not a

party hereto to maintain a suit for personal injury or property damage pursuant to the terms or

provisions hereof. The duties, obligations and responsibilities of the parties to the Contract

Documents with respect to such third parties shall remain as imposed by law. The Contract

Documents shall not be construed to create a contractual relationship of any kind between

Authority and a Subcontractor or any other person except the Contractor.

28.9 Personal Liability of Authority Employees The Authority’s authorized representatives are acting solely as agents and representatives of

the Authority when carrying out the provisions of or exercising the power or authority

granted to them under the Contract. They shall not be liable either personally or as

employees of the Authority for actions in their ordinary course of employment. No agent,

consultant, board member, officer or authorized employee of the Authority shall be

personally responsible for any liability arising under the Contract Documents.

28.10 No Estoppel The Authority shall not, nor shall any officer thereof, be precluded or estopped by any return

or certificate made or given by any Authority representative or other officer, agent, or

employee of the Authority under any provisions of the Contract Documents at any time

(either before or after the final completion and acceptance of the Work and payment

therefore) at any time:



(a) from showing the true and correct amount and character of the work done or

materials furnished by the Contractor or any subcontractor or other person engaged in the

performance of the Work;

(b) from showing that any such return or certificate is untrue and incorrect, or

improperly made in any particular; or that the work and materials, or any part thereof, do not

in fact conform to the Contract Documents, or

(c) from demanding and recovering from the Contractor such damages as it may

sustain by reason of Contractor’s failure to comply with the Contract Documents.

28.11 Governing Law and Venue The Contract Documents shall be governed by and construed in accordance with the law of

the State of California. The venue of any proceeding for the litigation and/or resolution of

any dispute under the Contract Documents shall be the County of Los Angeles, California.

28.12 Notices and Communications 28.12.1 Notices under the Contract Documents shall be in writing and delivered personally,

or sent by certified mail, return receipt requested, or sent by a recognized overnight mail or

courier service, with delivery receipt requested, or sent by facsimile communication followed

by a hard copy and with receipt confirmed by telephone, to the following addresses (or to

such other address as may from time to time be specified in writing by such person):

All correspondence with Contractor shall be sent to the Project Manager or as otherwise

directed by the Project Manager. The address for such communications shall be:

FCI / Fluor / Parsons, a joint venture 15701 Heron Avenue La Mirada, California 90638

In addition, copies of all notices to proceed and suspension, termination and default notices

shall be delivered to the following persons:

FCI / Fluor / Parsons, a joint venture Ray Hughes, Project Manager 15701 Heron Avenue La Mirada, California 90638

All communications to the Authority shall be marked with Authority’s contract identification

number and shall be delivered as directed by Authority’s Chief Executive Officer.

28.12.2 Notices shall be deemed received when actually received in the office of the

addressee (or by the addressee if personally delivered) or when delivery is refused, as shown



on the receipt of the U. S. Postal Service, private carrier or other person making the delivery.

Notwithstanding the foregoing, notices sent by facsimile after 4:00 p.m. Pacific Standard or

Daylight Time (as applicable) and all other notices received after 5:00 p.m. shall be deemed

received on the first business day following delivery (that is, in order for a fax to be deemed

received on the same day, at least the first page of the fax must have been received before

4:00 p.m.). Any technical or other communications pertaining to the Work shall be

conducted by the Project Manager and technical representatives designated by the Authority.

The Contractor’s representatives shall be available at all reasonable times for consultation.

Except as otherwise provided in Section 28.5.1, each party’s representative shall be

authorized to act on behalf of such party in matters concerning the Work.

28.12.3 The Contractor shall copy the Authority on all written correspondence pertaining to

the Work between the Contractor and any person other than the Contractor’s Subcontractors,

consultants and attorneys.

28.13 Further Assurances The Contractor shall promptly execute and deliver to the Authority all such instruments and

other documents and assurances as are reasonably requested by the Authority to further

evidence the obligations of the Contractor hereunder, including assurances regarding

assignments of Subcontractors.

28.14 Severability If any clause, provision, section or part of the Contract Documents is ruled invalid by a court

of competent jurisdiction, then the parties shall: (a) promptly meet and negotiate a substitute

for such clause, provision, section or part, which shall, to the greatest extent legally

permissible, effect the original intent of the parties, including an equitable adjustment to the

Contract Price to account for any change in the Work resulting from such invalidated portion;

and (b) if necessary or desirable, apply to the court which declared such invalidity for a

judicial construction of the invalidated portion to guide the negotiations. The invalidity or

unenforceability of any such clause, provision, section or part shall not affect the validity or

enforceability of the balance of the Contract Documents, which shall be construed and

enforced as if the Contract Documents did not contain such invalid or unenforceable clause,

provision, section or part.



28.15 Headings The captions of the sections of the Contract Documents are for convenience only and shall

not be deemed part of the Contract Documents or considered in construing the Contract

Documents.

28.16 MTA Provisions The Contractor shall comply with the requirements set forth in Appendix 6 hereto. The

Contractor shall include a provision in each Subcontract requiring the Subcontractor to

comply with the requirements of Appendix 6 (Trust Agreement) hereto on the same terms as

does the Contractor and shall require that the Subcontractor insert the same provision in each

Subcontract at all tiers.

28.17 Entire Agreement The Contract Documents contain the entire understanding of the parties with respect to the

subject matter hereof and supersede all prior agreements, understandings, statements,

representations and negotiations between the parties with respect to its subject matter.

28.18 Patents and Copyrights The Contractor warrants that the materials, equipment, devices, or processes used on or

incorporated into the Work shall be delivered free of any rightful claim of any third party for

infringement of any patent or copyright. The Contractor shall defend or may settle, at its

expense, any suit or proceeding against the Authority or its representatives based on claimed

infringement that would result in a breach of this warranty. The Contractor shall pay all

damages and costs awarded therein due to such breach, unless a suit is brought concerning a

product or material specified for use by the Authority.

The Contractor shall bear all costs arising from the use of patented materials, equipment,

devices, or processes used on or incorporated into the Work. In case material, equipment,

devices, or processes are held to constitute an infringement and their use is enjoined, the

Contractor, at its expense, shall:

(a) secure for the Authority the right to continue using said materials, equipment,

devices, or processes by suspension of the injunction or by procuring a license or licenses;

(b) replace such materials, equipment, devices, or processes with non-infringing

materials, equipment, devices, or processes; or



(c) modify them so they become noninfringing or remove the enjoined materials,

equipment, devices, or processes and refund the sum paid without prejudice to any other

rights of the Authority.

28.19 Attorney’s Fees In the event of litigation between the parties the prevailing party in any proceeding (including

appeals) shall be entitled to recover from the losing party reasonable costs and court costs,

including reasonable attorneys’ fees, expert witness fees and the reasonable cost of the

arbitrator or other dispute resolver, as determined by the person(s) resolving the dispute.



IN WITNESS WHEREOF, the Contract has been executed as of the last date set forth next to

the signatures of the parties, below.

Date: __________, 2006 EXPOSITION METRO LINE CONSTRUCTION AUTHORITY By:

APPROVED AS TO FORM: Richard D. Thorpe, Chief Executive Officer Nossaman, Guthner, Knox & Elliott, LLP General Counsel By: ________________________

Date: __________, 2006 FCI/FLUOR/PARSONS, a joint venture

FCI Constructors, Inc., a California corporation

By: ____________________ Robert M. Schraeder, Attorney-in-Fact

Fluor Enterprises, a California corporation

By: ____________________ Terry Towle, Attorney-in-Fact

Parsons Transportation Group, an Illinois corporation

By: ____________________ Robert Bax, Attorney-in-Fact

Contractor's License No.: 870128\

Exposition Metro Line Construction Authority Contract No1-06 TABLE OF CONTENTS

Mid-City/Exposition Light Rail Transit Project March 17, 2006 Conformed Design-Build Contract i Appendices to General Provisions

APPENDICES APPENDIX 1 ABBREVIATIONS AND DEFINITIONS APPENDIX 2 DESIGN SERVICES CERTIFICATION FOR REQUEST FOR PAYMENT APPENDIX 2A PROFESSIONAL SERVICES CERTIFICATION FOR REQUEST FOR

PAYMENT APPENDIX 3 SUBCONTRACTOR / DBE SCHEDULE / FORMS APPENDIX 4 DISPUTES REVIEW BOARD AGREEMENT APPENDIX 5 DESIGNATION OF INITIAL REPRESENTATIVES APPENDIX 6 DRAFT MTA/AUTHORITY TRUST AGREEMENT PROVISIONS APPENDIX 7 PERFORMANCE BOND APPENDIX 8 PAYMENT (MATERIAL AND LABOR) BOND APPENDIX 9 PARCEL AVAILABILITY MATRIX APPENDIX 10 FORM PP – PROPOSAL PRICE

Exposition Metro Line Construction Authority Contract No. 1-06 APPENDIX 1

ABBREVIATIONS AND DEFINITIONS FOR

MID-CITY/EXPOSITION LIGHT RAIL TRANSIT PROJECT Design-Build Contract

Mid-City/Exposition Light Rail Transit Project Appendix 1 March 17, 2006 Conformed Design-Build Contract Page 1 Appendices to General Provisions

As used in the Contract to which this Appendix is attached and in the Contract Documents described therein, the following abbreviations and terms shall have the meanings set forth below. References to Sections shall mean Sections of the Contract unless otherwise specified.

APPENDIX 1 ABBREVIATIONS AND DEFINITIONS

ABBREVIATIONS

AAN American Association of Nurserymen, Inc. AAR Association of American Railroads AASHTO American Association of State Highway and Transportation

Officials ACI American Concrete Institute ADA Americans with Disabilities Act ADU Aspects Display Unit AEIC Association of Edison Illuminating Companies AFI American Filter Institute AGC Association of General Contractors of America AGMA American Gear Manufacturers Association AI Asphalt Institute AIA American Institute of Architects AISC American Institute of Steel Construction AISC-SJI American Institute of Steel Construction - Steel Joist Institute AISI American Iron and Steel Institute AJCHN American Joint Committee on Horticulture Nomenclature AMCA Air Moving and Conditioning Association AMTRAK National Railroad Passenger Corporation ANSI American National Standards Institute (Formerly USASI, United

States of American Standards Institute, and ASA, American Standard Association)

APA American Plywood Association (Formerly Douglas Fir Plywood Association)

API American Petroleum Institute APTA American Public Transit Association ARA American Railway Association AREA American Railway Engineering Association AREMA American Railway Engineering and Maintenance of Way

Association ASA See ANSI ASNS American Standards for Nursery Stock ASCE American Society of Civil Engineers ASHRAE American Society of Heating, Refrigerating and Air Conditioning

Engineers





ASLA American Society of Landscape Architects ASME American Society of Mechanical Engineers ASQC American Society of Quality Control ASTM American Society for Testing and Materials ATMS Automated Traffic Management System ATS Administrative Telephone System ATSAC Automated Traffic Surveillance and Control System ATSF Atchison Topeka & Santa Fe Railroad (See BNSF) AWG American Wire Gauge AWPA American Wood Preservers' Association AWS American Welding Society AWWA American Water Works Association BAFO Best and Final Offer BDS Bridge Design Specifications BLS Bureau of Labor Statistics BNSF Burlington Northern & Santa Fe Railroad (formerly ATSF) BOCA Building Officials Conference of America CADD Computer-Aided Design and Drafting Cal-OSHA California Occupational Safety and Health Administration Caltrans State of California Department of Transportation CBD Curve Braking Distance CCC Central Control Console CCF Central Control Facility CCI Construction Cost Index CCIP Contractor Controlled Insurance Program CCO Central Control Operator CCR California Code of Regulations CCTV Closed Circuit Television CDRL Contract Data Requirements List CEO Chief Executive Officer CFR Code of Federal Regulations CNEL Community Noise Equivalent Level CPCC California Public Contract Code CPM Critical Path Method CPUC California Public Utilities Commission CRSI Concrete Reinforcing Steel Institute CSI Construction Specifications Institute CTC California Transportation Commission CWR Continuous Welded Rail D-B Design-Build dB Decibel DC Direct Current DTE Diagnostic and Test Equipment





DUA Digital Voice Annunciation DWP Department of Water and Power of the City of Los Angeles EEI Edison Electric Institute EEO Equal Employment Opportunity EIA Electronic Industries Association EMC Electromagnetic Compatibility EMI Electromagnetic Interference EPA Environmental Protection Agency EPROM Erasable Programmable Read-Only Memory ETS Emergency Trip Stations FCC Federal Communications Commission FEMA Federal Emergency Management Agency FHWA Federal Highway Administration of the U.S. Department of

Transportation FLSC Fire/Life Safety Committee FMEA Failure Modes and Effects Analysis FMP Fire Management Panel FRA Federal Railroad Administration FRACA Failure Reporting, Analysis and Corrective Action FS Federal Specification FSS Federal Specifications and Standards, General Services

Administration FTA Federal Transit Administration GO General Order (pertaining to the CPUC) HVAC Heating, Ventilation & Air Conditioning IC Internal Combustion ICC Interstate Commerce Owner IEC International Electrotechnical Commission IEEE Institute of Electrical and Electronic Engineers IES Illuminating Engineering Society IMSA International Municipal Signal Association IOS Initial Operating Segment IPCEA Insulated Power Cable Engineers Association ISO International Standards Organization ITE Institute of Transportation Engineers JIC Joint Industrial Council JRG Joint Review Group LADOT City of Los Angeles Department of Transportation LCP Local Control Panel LED Light Emitting Diode LLRU Lowest Level Replaceable Unit LRT Light Rail Transit LRU Line Replaceable Unit





LRV Light Rail Vehicle M&SF Maintenance and Storage Facility MBE Minority Business Enterprise MI&H Mobility Impaired and Handicapped MIL Military Specification MP Management Provisions MRTC Metro Rail Transit Consultants MTA Los Angeles County Metropolitan Transportation Authority MTBF Mean Time Between Failures MTTR Mean Time-to-Restore MUTCD Manual of Uniform Traffic Control Devices NBFU National Board of Fire Underwriters NBHA National Builders Hardware Association NBS National Bureau of Standards NCR Non Conformance Report NEC National Electrical Code NEMA National Electrical Manufacturers' Association NESC National Electric Safety Code NFPA National Fire Protection Association NIST National Institute of Standards and Technology NLMA National Lumber Manufacturers' Association NPDES National Pollutant Discharge Elimination Systems NPRD Non-electric Parts Reliability Data NRC Noise Reduction Coefficient NTP Notice to Proceed NVLAP National Voluntary Laboratory Accreditation Program OBE Other Business Enterprise OCIP Owner Controlled Insurance Program OCS Overhead Contact System O&M Operations and Maintenance O&SHA Operating & Support Hazard Analysis OEM Original Equipment Manufacturer OSHA Occupational Safety and Health Administration, and Occupational

Safety and Health Act of 1970, and amendments thereto; United States Department of Labor

PA Public Address PCA Portland Cement Association PCC Public Contract Code PCI Prestressed Concrete Institute PCO (Notice of) Proposed Change PDS Power Distribution System PDSR Project Development Status Report





PGL Profile Grade Line PHA Preliminary Hazard Analysis PM Preventative Maintenance PMC Project Management Consultant PROM Program Read-Only Memory PUC Public Utilities Code PWP Pasadena Water and Power QA/QC Quality Assurance and Quality Control RAC Reliability Analysis Center RDT Reliability Demonstration Test RFI Radio Frequency Interference RFP Request for Proposals RFSC Request for Special Consideration RMA Rubber Manufacturer's Association RMS Root Mean Square RM&S Reliability, Maintainability and Safety ROD Revenue Operations Date ROM Read-Only Memory ROW Right-of-Way SAE Society of Automotive Engineers SAPP Systems Assurance Program Plan SBD Safe Braking Distance SCADA Supervisory Control and Data Acquisition SCAQMD South Coast Air Quality Management District SCAT Simple Catenary, Auto-Tensioned SCE Southern California Edison SCFT Simple Catenary, Fixed Termination SCIL Safety-Critical Items List SCPI Structural Clay Products Institute SCPM Safety-Critical Preventative Maintenance SCPP Safety Certification Program Plan SCR Safety Certification Report SDI Steel Door Institute SIMP Systems Interface Management Plan SMACNA Sheet Metal and Air Conditioning Contractors National Association,

Inc. SP or SPTC Southern Pacific Transportation Company SPD System Performance Demonstration SPI Society of the Plastics Industry SPN Standardized Plant Names SSPC Steel Structures Painting Council SSPP System Safety Program Plan





SSPWC Standard Specifications for Public Works Construction SWFT Single Wire, Fixed Termination T/R Top of Rail TOR Top of Rail TP Technical Provisions TPOCR Traction Powered OCS Capacity Report TPPSR Traction Power Short-Circuit and Protection Settings Report TPSS Traction Power Substation TVM Ticket Vending Machine UBC Uniform Building Code of the International Conference of Building

Officials UFAS Uniform Federal Accessibility Standards UL Underwriters' Laboratories, Inc. UPRR Union Pacific Railroad UPS Uninterruptible Power Supply USAS United States of American Standards (See ANSI) USASI See ANSI U.S.C. United States Code USDOT United States Department of Transportation USSG United States Standard Gage (for uncoated sheets and thin plates) USSWG United States Steel Wire Gage VE Value Engineering VECP Value Engineering Change Proposals VDC Volts Direct Current VMS Variable Message Sign WBE Women Business Enterprise WCLA West Coast Lumbermen's Association WUTC Western Union Telegraph Company





DEFINED TERMS

“Abandoned Utility Work” shall mean the work necessary to properly abandon and/or remove Utilities that are not in use as of the date the Contract is awarded.

“Acceleration Costs” shall mean those fully documented increased costs reasonably incurred by Contractor (that is, costs over and above what Contractor would otherwise have incurred) which are directly attributable to increasing the performance level of the Work in an attempt to complete necessary segments of the Work earlier than otherwise anticipated, such as for additional equipment, additional crews, lost productivity, overtime and shift premiums, increased supervision and any unexpected material, equipment or crew movement necessary for resequencing in connection with acceleration efforts. Profit, overhead and indirect costs in connection with acceleration efforts shall not exceed the limits set forth in Contract Section 19.

“Acceptance” shall mean a conditional determination by the Authority’s Authorized Representative of completion of the Work or any element thereof in accordance with the Contract, by issuance of a Certificate of Substantial Completion of the Work or any element thereof, as provided in the contract.

“Affiliate” shall mean (a) any Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, Contractor or any of its members, partners or shareholders holding a 10% or greater interest in Contractor; and (b) any Person for which 10% or more of the equity interest in such Person is held directly or indirectly, beneficially or of record by (i) Contractor, (ii) any of Contractor’s members, partners or 10% or greater shareholders or (iii) any Affiliate of Contractor under part (a) of this definition. For purposes of this definition the term "control" means the possession, directly or indirectly, of the power to cause the direction of the management of a Person, whether through voting securities, by contract, family relationship or otherwise.

"Alteration" shall mean a change or substitution in the form, character, or detail of the work done or to be done within the original scope of the Contract.

“Application for Final Payment” shall mean Contractor's written request for Final Payment of the Contract Price including reconciliation of all claims, changes or other proper adjustments to the Contract Documents, as described in Contract General Provisions Section 18.15.

"Approval" shall mean acceptance in writing by Authority, or Authority’s designated representative, as applicable. Authority’s approval of Design Documents for construction as described in the Scope of Work shall constitute approval of the design by the Authority for purposes of Government Code section 830.6, but shall not be deemed to relieve Contractor of liability for the design.





"Approved or Approved Type" shall mean design type material, procedure, or method given approval by Authority, or Authority’s designated representative, as applicable.

“As-Built” Drawings shall have the meaning set forth in the Scope of Work and General Requirements Section 1720.

“Authority” means the Exposition Metro Line Construction Authority, a public entity of the State of California, and includes any officer or employee authorized to act on behalf of the Authority by State Law or by action of its governing body.

“Authority-Caused Delay” shall mean delays, to the extent that they affect a Critical Path, arising from the following matters and no others: (a) a suspension order pursuant to Contract General Provisions Section 23.4, (b) Authority-Directed Changes, (c) failure or inability of Authority to provide access to the Right of Way as provided in Contract Section 3.3 (subject to Contractor’s obligations set forth therein), (d) failure or inability of Authority to provide responses to proposed schedules, plans, Design Documents and other submittals and matters for which response is required, within the time periods indicated in the Contract Documents, (e) uncovering, removing and restoring Work, to the extent provided in Scope of Work and General Requirements, (f) failure or inability of Authority to timely deliver the Authority-Furnished Materials, (g) delay in issuance of NTP or an interim NTP by the date established by the Authority, and (h) any improper action by Authority’s designated representative with binding authority as specified in General Provisions Contract Section 28.5 entitled, Designation of Representatives; Cooperation with Representatives, any improper action of the Program Manager pursuant to authority as specified in the Contract, or any improper failure to act by Authority within a reasonable time after delivery of notice by Contractor to Authority requesting such action , (i) any improper action of, or any improper failure to timely act by, any contractor under the Authority’s direct control; or (j) any failure or unsuitability of fare collection equipment or Vehicles furnished by the Authority. Any court order to suspend Work shall not be considered an Authority-Caused Delay (although it may qualify as a Force Majeure event) despite the fact that Authority may specifically direct Contractor to comply with the court order.

“Authority-Directed Change(s)” shall mean any change in the Work (including changes in the standards applicable to the Work), which the Authority has directed the Contractor to perform as described in Contract Section 19.

“Authority Furnished Materials” shall have the meaning set forth in Scope of Work Section entitled, Authority Furnished Materials and Equipment.

"Availability" shall mean the probability that a given system is operational or ready to be placed in operation.

"Baseline Drawings" shall mean the drawings set forth in Scope of Work.





"Baseline Requirements" or "Baseline Project Requirements" shall mean the Baseline Project Requirements as defined in General Requirements Section 01100.

“Baseline CPM Contract Schedule” shall have the meaning set forth in General Requirements Section 01310.

“Betterment” shall mean the upgrading of a Utility being Relocated that is not attributable to construction of the Project or is made solely for the benefit of and at the election of the Utility Owner. The primary aim of Betterment is to make the facility affected more useful, functional, durable, efficient, or of greater capacity. Betterment shall not include technological improvements, which are able to achieve greater usefulness, efficiency, durability or capacity at costs equal to or less than the cost of a “like-for-like” replacement or relocation. Notwithstanding the foregoing, for purposes of General Provisions Section entitled, Responsibility for Utility Relocations / Rearrangements and Changes in City Facility Work, the term “Betterment” shall have the meaning set forth in each City Agreement.

"Car" See Vehicle.

"Central Control Console" (CCC) shall mean the Central Control Operators' work station(s) within the Central Control Facility, consisting of displays and controls that permit all necessary interfaces with the communications subsystems.

"Central Control Facility" (CCF) shall mean a room within the M&SF in which the Central Control Operators perform their tasks and duties.

"Central Control Operator" (CCO) shall mean any operations staff member whose work area is the CCF and who uses communication and other equipment to interact with the System to achieve optimum System performance. CCO can refer to one or more such persons when describing actions or capabilities.

"Certificate of Final Acceptance" shall mean the formal written acknowledgment issued by Authority to Contractor that all Work has been fully completed in accordance with the Contract Documents.

"Certificate of Substantial Completion" shall mean the formal written acknowledgment issued by Authority to Contractor that the Project has attained Substantial Completion.

“Change Order” shall have the meaning set forth in Contract Section 19 of the General Provisions.

"Check-Redundant Characteristic" shall mean a system design characteristic involving cross-comparison of two or more sub-systems with a combined probability of failure low enough to ensure safe operation of the system.





“City” shall mean individually and/or collectively, as the context may require, the City of Los Angeles, the City of Culver City, Caltrans, and Los Angeles County excluding, in the context of Utility Work, DWP.

“City Agreements” shall mean, individually and/or collectively, as the context may require, the Draft City Agreements, as the same may be modified or amended from time to time by versions (executed or unexecuted) provided by Authority to Contractor and identified as such by Authority.

"City Facility" shall have the meaning set forth in each City Agreement.

"City Facility Work" shall mean the Work associated with Rearrangement of City Facilities, including the Work described in General Provisions Section entitled, Responsibility for Utility Relocations / Rearrangements and Changes in City Facility Work.

“City Project” shall have the meaning set forth in each City Agreement.

“City Utility” shall mean any Utility owned or operated by each City, excluding any Utilities owed or operated by DWP.

“Claim” shall mean a separate demand by Contractor for (a) a time extension which is disputed by Authority, or (b) payment of money or damages arising from work done by or on behalf of Contractor in connection with this Contract which is disputed by Authority. For purposes of determining the jurisdiction of the Disputes Board, arbitrator or referee, Claims and other disputes shall be valued based on the amount claimed exclusive of interest, costs and attorneys’ fees. The Disputes Board may require consolidation of related Claims if requested by either party, but consolidation of separate Claims shall not affect jurisdiction of the Disputes Board, arbitrator or referee with respect to each Claim. Except as specified in Contract General Provisions Section 20, all requests for time extensions and all disputes seeking equitable relief, such as but not limited to specific enforcement of any provision of the Contract Documents are deemed to have a value less than or equal to $1,000,000. A Claim will cease to be a Claim upon resolution thereof, including resolution by delivery of a Change Order or Contract amendment signed by all parties.

“Completion Deadline(s)” shall mean the Substantial Completion Deadline as set forth in General Provisions, Section 23.2.

“Compensable Delay” shall have the meaning set forth in Contract Section, General Provisions, Section 19.

“Concurrent Delay” shall mean if Contractor is delayed by any act or event that would otherwise be a Compensable Delay, but the Delay is concurrently caused by any Excusable (but not Compensable) Delay or any Inexcusable Delay, Contractor’s remedy shall be the same as for an Excusable Delay, and the Authority will, by Change Order or other





Modification, extend the Contract Time. Contractor will not be entitled to any change in the Total Contract Price or any other compensation. Delays will not be Concurrent to the extent that one Delay affects the Critical Path Schedule and the other Delay does not. In that event, the sole Delay will be the one that affects the Critical Path Schedule. The Change Order or other Modification extending Contract Time for a Concurrent Delay will be Contractor’s sole remedy arising out of the Concurrent Delay.

"Conduit" shall mean any conduit, casing, sleeve, hanger, attachment, or blockout for installation or protection of Utilities attached to or installed through structures, or installed under rail or roadway crossings, and any associated pull-ropes for Utility cables.

"Consist" shall mean one or more vehicles operating as a single unit.

“Construction Allowance” means the budget for the Construction Work (or for a specific package of the Work), as established and identified by the Authority in the RFP and General Provisions Section 15.0.

“Construction Contingency” means an amount to cover risks and unanticipated Project costs as specified in General Provisions Section 15.4.

“Construction Documents” shall mean all shop drawings, working drawings and samples necessary for construction of the Project in accordance with the Contract Documents.

“Construction Fee” shall mean the construction portion of the Proposal Price set forth in Appendix 10.

“Construction Price” means the price for the Construction Work negotiated by the Authority and the Contractor at or, near the completion of Design Services.

“Construction Work” or “Construction Scope” means the construction of stations, facilities, trackwork/line segments, civil elements, and systems; utilities relocation; project management; and supply of materials and equipment and all other tasks and activities necessary to build the Project and make it ready for revenue operations. The Scope of the Construction Work is set forth in the Scope of Work and General Requirements Sections.

“Contaminated Groundwater” shall mean extracted groundwater including contaminants above legally-permitted discharge levels so as to require treatment prior to re-use or disposal. Contaminated groundwater which may legally be re-used without treatment, including use for dust control, or which merely requires dilution prior to re-use or disposal, shall specifically be excluded from the term.

"Contract" shall mean, depending on the context, (a) the Design-Build Contract, or (b) collectively, the Contract Documents which establish the respective rights and obligations of Authority and Contractor.

"Contract Data Requirements List" shall mean the list set forth in Scope of Work





“Contract Documents” means the entire set of terms, conditions, requirements and directions which collectively constitute the obligations of the Contractor in the performance of the Work, including all exhibits, attachments, appendices, amendments thereto and all change orders issued. The order of precedence of the Contract Documents is set forth in Section 1.2 of these General Provisions.

“Contracting Plan” shall have the meaning set forth in Section 16 of these General Provisions.

“Contract Specifications” shall mean the specifications describing the Work that are developed by the Contractor.

“Contract Time” shall mean the Substantial Completion Deadline, with respect to the Work required to be completed as a condition to Substantial Completion and/or the Final Acceptance Deadline with respect to the Work required to be completed as a condition to Final Acceptance.

"Contractor" means the person identified as the Contractor or Design-Builder responsible for carrying out the Design Scope, the Professional Services Scope and the Construction Scope, in accordance with the Contract Documents. The terms “Contractor” and “Design-Builder” are interchangeable terms.

“Contractor Maintained Insurance (or CCIP)” shall have the meaning set forth in Contract General Provisions Section 22.2.

"Contractor's Utility Report" shall mean the list of Utilities likely to be impacted by the Project to be provided by Contractor with the Utility Sheet submittals, as more specifically provided in General Requirements Section 01180.

“Critical Path and Critical Path Schedule (CPM)” shall mean each critical path on the Preliminary Schedule, Baseline Schedule or Working Schedule, as appropriate, which ends on a Completion Deadline (i.e. the term shall apply only following consumption of all available Float). The lower case term "critical path" shall mean the activities and durations associated with the longest path(s) through the Preliminary Schedule, Baseline Schedule or Working Schedule, as appropriate. The Critical Path Schedule is the schedule developed by the Contractor for the performance of the Design Scope and the Construction Scope as described in General Requirements Section 01310.

“Damage Event” shall have the meaning set forth in Contract Section 19..

“Day or Days” shall mean calendar day, unless otherwise stated.





“DBE Program” means the program utilized by the Authority to implement the DBE requirements applicable to the award and administration of U.S. Department of Transportation contracts, as set forth in 49 CFR Part 26.

“Design-Build Contract” or “Negotiated Design-Build Contract” shall mean that certain Negotiated Design-Build Contract No. 1-06 executed by Authority and Contractor, as it may be amended from time to time.

“Design Allowance” means the budget for the Design Scope of Work, as established and identified by the Authority in the RFP and set forth-in Section 7.3 of the General Provisions.

“Design Documents” shall mean all drawings (including plans, elevations, sections, details and diagrams), specifications, reports, calculations, records and submittals necessary for design of the Project in accordance with the Contract Documents, following final review thereof by Authority and others as required by the Contract Documents.

“Design Fee” shall mean the design portion of the Proposal Price set forth in Appendix 10.

"Design Load" shall mean all applicable loads and forces or their related internal moments and forces used to proportion members. For "strength design," refers to loads multiplied by the appropriate load factors provided by the applicable codes. “Serviceability design" or "allowable stress" design refers to the loads without load factors.

“Design Services” shall have the meaning set forth in Scope of Work and General Requirements Section 01102.

“Design Submittals” shall mean the submittals described in Scope of Work for Phase 1 Design Services.

“Design Underrun” shall have the meaning set forth in Contract General Provisions Section 10.1.

“Design Work” or “Design Scope” means the Scope of Design Services the Contractor is required to perform and complete under the terms of these General Provisions and as set forth in Section 01102 of the General Requirements.

"Diagnostic Test Equipment" (DTE) shall mean preprogrammed automatic test sets used to check circuitry and subsystems, with built-in on-board memory storage, downloadable to a notebook PC. Provision of DTE shall be understood to include PC database and other software necessary to support analysis and reports of DTE data.

“Differing Site Conditions” shall have the meaning set forth in Contract General Provisions Section 17.





“Design Labor Costs” shall have the meaning set forth in Contract General Provisions Section 7.4.

“Design Overhead Costs” means the Design Labor Costs times a 2.4 multiplier. Design Overhead Costs shall also have the meaning set forth in Contract General Provisions Section 7.5.

“Directive Letter” shall mean a letter issued by Authority, or its duly authorized designee, directing Contractor to proceed with added, deleted or changed Work.

“Dispute” shall mean a disagreement between the parties as to the merits, amount or remedy arising out of an issue in controversy, including a disagreement regarding a Claim or asserted default.

“Disputes Board” shall have the meaning set forth in Contract Section 20.

“Disputes Board Agreement” shall mean the agreement among Authority, Contractor and the members of the Disputes Board as described in Contract General Provisions Section 20.

“Draft City Agreement” shall mean each draft Master Cooperative Agreement between Authority and each City, which is included in RFP Document.

“Drawings and Materials” means all maps, drawings, plans, profiles, cross-sections, specifications, and renderings (including the originals thereof) and all software and hardware, developed for the design and construction of the Project.

“DSDC” means Design support during Construction.

"Dwell" shall mean station dwell time, defined as the time during which a train is stopped in a station from wheel stop to wheel start.

“Engineer of Record” or “Designer of Record” means the corporation, partnership, sole proprietorship, or other business entity that is (A) an integrated part of the Design Build Team, (B) responsible for performing Design Work under the Contract Documents; (C) delivers signed and sealed Final Design documents to the Authority in accordance with the Contract Documents; and (D) retains full legal and professional responsibility for those design documents (and all materials included therein) throughout the performance of Construction Work and thereafter, notwithstanding the fact that the Construction Work (or a package or element thereof) is being performed by another firm or entity pursuant to Section 8.7 of the General Provisions. The terms “Engineer of Record” and “Designer of Record” are interchangeable terms.





"Environmental Approvals" shall mean the Governmental Approvals included in Contract Documents.

“Environmental Laws” shall mean all Governmental Rules now or hereafter in effect relating to the environment or to emissions, discharges, releases or threatened releases of Hazardous Substances into the environment including into the air, surface water or ground water or onto land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances or otherwise relating to the protection of public health, public welfare or the natural environment (including protection of nonhuman forms of life, land, surface water, groundwater and air), including Section 306 of the Clean Air Act (42 U.S.C. 1857(h)), Section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, Environmental Protection Agency Regulations (40 C.F.R. Part 15) and California Environmental Quality Act (CEQA).

"Equal" shall mean providing the same function, performance and reliability.

“Equity Member” or “Equity Participant” as used in the RFP means an entity that holds an ownership interest in the proposer.

“Event of Default” shall have the meaning set forth in Contract General Provisions Section 27.

“Excusable Delay” shall have the meaning set forth in Contract General Provisions Section 19.

"Fail-Safe Characteristic" shall mean a system built-in design characteristic, which permits, on occurrence of a failure, that the system remains safe.

"Failure" shall mean an inability to perform an intended function, but excluding the following:

(1) Consumable item, (2) Dependent failure, (3) Collision, accident, vandalism or negligence of the operator, (4) Incorrect or abusive use by the operation or maintenance personnel, or by

incorrect operation or maintenance procedures or practices by the operator or maintenance personnel,

(5) Passenger-induced failure.

"Failure Rate" shall mean the frequency of failure, expressed as failures per hour. Failure rate is the mathematical reciprocal of mean time between failures (MTBF).

“Final Acceptance” means the action of the Authority of accepting the Work and determining that all tasks and elements of the Work set forth in Contract General Provisions





Section 24.4 have been completed in a satisfactory manner and in compliance with all requirements of the Contract Documents..

“Final Acceptance Date” shall mean the date on which Final Acceptance occurs.

“Final Relocation Plans” shall mean the detailed designs to be prepared by Contractor or the Utility Owner, which upon approval, shall be used to construct a Relocation.

"Finish-out" shall mean all construction work in addition to the basic structure and shell to finish a building, or space completely so that it requires no additional work prior to use for its intended purpose, other than installation of specific Authority-Furnished Materials.

"Fixed Facilities" shall mean the civil works and stations, including the buildings, stations, improvements, fixtures, grading, drainage, track bed, sub-ballast, trackway structures, track-support structures, grade separations, landscaping and fencing and the maintenance and storage facility.

"Flexural Structural Frequency" shall mean the first vertical frequency of vibration of an unloaded elevated structure, based on the flexural stiffness and mass distribution of the superstructure.

“Float” shall generally mean the difference between early completion times and late completion times for activities as shown on the Project Schedule, and shall include any float contained within an activity as well as any period containing an artificial activity (that is, one which is not encompassed with the meaning of the work "Work").

“Force Majeure” shall have the meaning set forth in Contract General Provisions Section 17.4.

“Goods” shall mean equipment, material and other products incorporated into or required to perform the Work, or otherwise furnished by the Contractor in accordance with the Contract. Unless explicitly identified otherwise, Goods shall be furnished by the Contractor.

“Governmental Approval” shall mean any approval, authorization, certification, consent, decision, exemption, filing, lease, license, permit, registration or ruling, required by or with any Governmental Person in order to design and construct the Project.

“Governmental Person” shall mean any federal, state, local or foreign government and any political subdivision or any governmental, quasi-governmental, judicial, public or statutory instrumentality, administrative agency, authority, body or entity other than Authority.

“Governmental Rule” shall mean any statute, law, regulation, ordinance, rule, judgment, order, decree, permit, concession, grant, franchise, license, agreement, directive, guideline, policy requirement or other governmental restriction or any similar form of decision or





determination by, or any interpretation or administration of any of the foregoing by, any Governmental Person, which is applicable to the Work or the Project, whether now or hereafter in effect.

"Guarantee" shall mean the document, if any, evidencing Guarantor’s guarantee of performance of the Contract, to be delivered concurrently with the executed Contract in the form attached to the RFP as Form G.

"Guarantor" shall mean an entity (if any) required, as a condition to shortlisting the Contractor, to guarantee performance of the Contract.

“Hazardous Substance” shall mean any (a) substance, product, waste or other material of any nature whatsoever which is or becomes listed, regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq. (“CERCLA”); the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (“RCRA”); the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the Clean Water Act, 33 U.S.C. Sections 1251 et seq.; the California Hazardous Waste Control Act, Health and Safety Code Sections 25100 et seq.; the California Hazardous Substance Account Act, Health and Safety Code Sections 25330 et seq.; the California Safe Drinking Water and Toxic Enforcement Act, Health and Safety Code Sections 25249.5 et seq.; Health and Safety Code Sections 25280 et seq. (Underground Storage of Hazardous Substances); the California Hazardous Waste Management Act, Health and Safety Code Sections 25170.1 et seq.; Health and Safety Code Sections 25501 et seq. (Hazardous Materials Response Plans and Inventory); or the California Porter-Cologne Water Quality Control Act, Water Code Sections 13000 et seq., all as amended, (the above-cited California state statutes are hereinafter collectively referred to as the “State Toxic Substances Laws”) or any other federal, state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect, (b) any substance, product, waste or other material of any nature whatsoever which may give rise to liability under any of the above statutes or under any statutory or common law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under any reported decisions of a state or federal court, (c) petroleum or crude oil excluding de minimus amounts and excluding petroleum and petroleum products contained within regularly operated motor vehicles, and (d) asbestos or asbestos-containing materials in structures and or other improvements on or in the Site (other than mineral asbestos naturally occurring in the ground).

“Hazardous Waste” shall mean soils and other materials containing Hazardous Substances and which require special treatment, transport and disposal under uniform hazardous waste manifests.





"Headway" shall mean the elapsed time between two consecutive trains traveling in the same direction on the same track passing an identical reference point.

"Headway, Operational" shall mean the planned (scheduled) headway or service interval for trains in normal service. The operational headway can be maintained reliably when there are no failures or external perturbations.

"Headway, Non-interference" shall mean the minimum headway at which trains can circulate throughout the System without having to stop or reduce speed due to trains ahead.

"Incidental Utility Work" shall mean all Abandoned Utility Work and the Work associated with all (a) Service Line Relocations, (b) Temporary Relocations, (c) Utility Appurtenance Adjustments, (d) purchases and installations of Conduits, (e) Protections in Place, and (f) resurfacing and restriping of streets (including sidewalks) made necessary by Relocation work (whether performed by Contractor or by Utility Owners).

“Indemnified Parties” shall have the meaning set forth in Contract Section 22.3.

"Inspection" shall mean the checking or testing for condition, performance, and safety of equipment against established standards.

"Interface" shall mean the points where two or more functional systems, subsystems, or structures come into physical or functional contact.

“Key Personnel” means the Project Manager, Design Manager, Construction Manager, Project Scheduler/Controls, Safety Manager and QA/QC Manager (or equivalent positions).

"KIP" shall mean a force equivalent to 1,000 pounds.

"Landmark Stations" shall mean unique stations in the system for which Contractor shall comply with the design as defined in the Baseline Requirements.

“Liens” shall mean any pledge, lien, security interest, mortgage, deed of trust or other charge or encumbrance of any kind, or any other type of preferential arrangement (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security instrument and the filing of or agreement to file any financing statement or other instrument intended to perfect a security interest).

"Liner" (as in interior liner) shall mean the visible covering material for the walls, ceiling and other interior surface.





"Line Replaceable Unit" (LRU) shall mean an assembly designed for replacement from a wayside installation (first level maintenance) in order to return the wayside equipment to a serviceable state.

“Liquidated Damages” shall mean the damages payable by Contractor to Authority as specified in Contract Section 23.3.

"Load Factor" shall mean a factor by which the service load is multiplied to obtain the design load.

"Lowest Level Replaceable Unit" (LLRU) shall mean the smallest unit for line replacement, such as a component, circuit board, or assembly that would be replaced in effecting a repair of the System or subsystem in accordance with the Contractor's specific maintenance plan.

“Lump Sum Fixed Price” or “LSFP” means the sum of the Construction Price or Prices and the Construction Fee as described in General Provisions Section 8.5.

"Major Participant" shall mean each entity which has an equity interest in the Proposer or is a Primary Participant or a Major Subcontractor.

"Major Subcontractor" shall mean any Subcontractor responsible for (A) design services for a price that exceeds 5% of the Design Allowance; (B) professional services for a price that exceeds 5% of the Professional Services Allowance; or (C) construction services (including specialty fabrication and installation work) for a price that exceeds ½ of 1% (0.5%) of the Construction Allowance.

“Major Subcontract” means any Subcontract or combination of Subcontracts with a Major Subcontractor.

"Main or Trunkline Utility" shall mean a Utility, which is not a Service Line, and which relative to the particular system of which it is a part, (a) is a larger line serving as a main line to connecting tributary lines and (b) serves a larger area, all as reasonably determined by Authority. In so determining, reference may be made by Authority to definitions in the relevant manual or code of the applicable Utility Owner, if any.

"Maintenance and Storage Facility" (M&SF) shall mean an area including the Operations Department, a maintenance facility, repair shops, work bays and related amenities; a vehicle storage area of tracks and switches, and administrative offices related to and necessary in connection with such facilities.

"Manufacturer" shall mean the builder or producer supplying materials, equipment or apparatus for installation.





“Master Agreements” shall mean any of the following documents (including, unless otherwise specified, any modifications and amendments thereto):

(a) a City Agreement (in its most current form, whether executed or unexecuted), to the extent such agreement relates to the Relocation of Utilities owned or operated by a City; and

(b) any other agreement between Authority and a Utility Owner which establishes a general framework for the processing of Relocations, including any such agreement(s) entered into between Authority and the DWP.

A document is a “Master Agreement” if it meets the definition set forth herein, without regard to the name by which the document designates itself.

"Maximum Load Point" shall mean the link between adjacent stations with the heaviest passenger load by direction, expressed as passengers per hour per direction.

"Mean Time Between Failures" (MTBF) shall mean the average operating time between failures.

"Mean Time To Restore" (MTTR) shall mean the average time required to diagnose, repair or replace and ascertain that a unit of equipment of the System is ready to go back into service following its malfunction, and restart that unit on the System to full service. The MTTR does not include mobilization time and time to obtain the required items from stores.

"Minimum Operational Headway" shall mean the elapsed time between the passages of the lead edge of consecutive trains at a given point on the System (see Headway, Non-interference).

“Mitigation Monitoring Program” shall mean the document entitled Mitigation Monitoring Program, designated in the Contract Documents.

"Mobility Impaired and Handicapped" (MI&H) shall mean riders who have mobility-related limitations. Often referred to an "elderly" and "handicapped" in transportation literature.

"New Approval" shall mean any of the following:

(a) a new Governmental Approval of the same type as the Environmental Approvals; and

(b) a revision, modification, or amendment to one or more of the Environmental Approvals.





“Notice of Award” shall have the meaning set forth in the General Provisions Section 6.1.

“Notice of Proposed Change” shall mean a notice issued to Contractor by Authority specifying a proposed addition, deduction or change to the Contract Documents. A Notice of Proposed Change is not an order to incorporate revisions into the Work.

“Notice of Termination” and “Notice of Partial Termination” shall mean a notice issued by Authority to terminate this Contract and the performance of Work by Contractor, either in whole or in part, pursuant to Contract General Provisions Section 27.

“Notice to Proceed (NTP)” shall mean the written directive from Authority to the Contractor authorizing the Contractor to begin prosecution of a specific portion of the Work as specified therein.

"Operating Hours" shall mean the scheduled and actual number of hours during which the System provides service in an operating period.

"Operating Schedule" shall mean the specific scheme of vehicle/train operations scheduled on an hourly, daily, and weekly basis, in accordance with the Technical and Performance Specifications.

"Operating System" shall mean the vehicles, running surfaces, switches, other track equipment, power distribution, and other Signaling, communications, maintenance, and all other equipment associated with operating the trains.

"Overtravel Buffer" shall mean a device placed at any track terminus to provide a controlled deceleration should a train not stop before reaching the device.

“Payment Bond” shall mean the payment bond described in Contract General Provisions Section 22.1.

"PCO Notice" shall mean each notice delivered by Contractor to Authority as described in Contract General Provisions Section 19.

"Peak Period" shall mean the time-interval of greatest System patronage demand.

“Performance Bond” shall mean the performance bond described in Contract General Provisions Section 22.1.

“Person” shall mean any individual, corporation, company, voluntary association, partnership, trust, unincorporated organization or Governmental Person.





“Preliminary Relocation Plans” shall mean the conceptual plans which Contractor or the Utility Owner shall prepare to show the consensus among Contractor, Authority and the Utility Owner as to the proposed design of a Relocation.

"Preliminary Schedule" shall mean the Preliminary Schedule included with the Proposal Documents.

"Primary Participant" shall mean each entity with primary responsibility for construction of the Project, 20% or more of the design work or subcontract portions in excess of three percent (3%) of the Proposal Price.

“Professional Services Allowance” means the budget for the Professional Services Scope of Work, as established and identified by the Authority in the RFP and set forth-in Section 9.4 of the General Provisions.

“Professional Services Fee” shall mean the professional services portion of the Proposal Price set forth in Appendix 10.

“Professional Services” or “Professional Services Work” shall have the meaning set forth in the General Provisions Section 9.0.

“Professional Services Labor Costs” shall have the meaning set forth in Contract General Provisions Section 9.5.

“Professional Services Overhead Costs” means the Professional Services Labor Costs times a 2.2 multiplier. Professional Services Overhead Costs shall also have the meaning set forth in Contract General Provisions Section 9.6.

“Professional Services Underrun” shall have the meaning set forth in Contract General Provisions Section 10.4.

“Program Management Oversight Consultant” shall mean Gannett Fleming Inc. or such other person designated in writing by Authority as its Program Management Oversight Consultant.

“Project” means the Mid-City/Exposition Light Rail Transit Project, as more specifically described in Summary Work Section 01100 of the Scope of Work and General Requirements, and all other work product to be provided by Contractor in accordance with the Contract Documents.

"Project Management Plan" shall mean the plan established by Contractor as specified in Scope of Work.

“Project Manager” shall have the meaning set forth in Contract General Provisions Section 2.5.1.





"Proof" (used as a suffix) shall mean the device and contents are impervious to, or unharmed by the indicated materials, environment or other outside elements, as in splash proof or dust proof.

“Proposal Documents” shall mean those documents constituting Contractor’s proposal in response to the RFP, including any best and final offers or supplements to proposals as may have been requested by Authority.

“Proposal Due Date” shall have the meaning set forth in the RFP Document.

“Proposal Price” shall mean the amounts set forth in the Proposal Document Form TPP.

"Proposer" shall mean an individual, firm, partnership, corporation, joint venture, or limited liability company, which submits a Proposal for the Project.

“Protection in Place” or “Protect in Place” shall mean any activity undertaken to avoid damaging a Utility which does not involve removing or relocating that Utility, including staking the location of a Utility, avoidance of a Utility’s location by construction equipment, installing steel plating or concrete slabs, encasement in concrete, temporarily de-energizing power lines, and installing physical barriers. For example, temporarily lifting power lines without cutting them would be considered Protection in Place; whereas temporarily moving power lines to another location after cutting them would not be considered Protection in Place.

"Proven Design" shall mean, as used here, those technologies that have been successfully deployed in day-to-day service in rail transit applications in North America.

"Provide" shall mean design, construct, furnish, install, and test complete in place.

"Public and Business Impacts Mitigation Plan" shall mean the plan required to be provided under Scope of Work and General Requirements Section 01100.

"Public Information Plan" shall mean the plan required to be provided under Scope of Work and General Requirements Section 01100.

“Punch List” shall mean the list of Work with respect to the Project which remains to be completed after achievement of Substantial Completion of the Project, and shall generally be limited to minor incidental items of Work necessary to correct imperfections which have no adverse effect on the safety or operability of the Project but which must be completed as a condition of Punch List Completion.

"Punch List Completion" shall have the meaning set forth in Contract General Provisions Section 24.3.





“Quality Control Program” shall mean the program described in General Requirements Section 01460.

“Rearrangement” shall have the meaning set forth in each City Agreement.

“Record Documents” shall mean all Project drawings, specifications and related documents to be provided by Contractor and as described in Scope of Work and General Requirements Section01720.

"Recovery Schedule" shall mean the schedule Contractor is required to provide under General Requirements Section 01310.

"Redundancy" shall mean a design approach in which more than one unit that can meet the required functionality is implemented. Redundancy has one of two objectives, to enable a function to be performed in the event of the failure of one unit, or to enable failure to be detected by comparing the outputs of two units. The second purpose is called "checked redundant" and enables a system to revert to a safe state in the event of failure.

“Reference Documents” shall mean the documents designated in the RFP as "Reference Documents."

"Reliability" shall mean the probability that a system, subsystem, component or part will perform satisfactorily when used under stated conditions for a stated period of time.

"Reliability Demonstration Test" shall have the meaning set forth in Performance Specifications Part 4 Section 22.9.

“Relocation” shall mean each removal, relocation, abandonment and/or Protection in Place (including provision of temporary facilities as necessary) of any and all Utilities that is necessary in order to accommodate or permit construction of the Project. Notwithstanding the foregoing, the term “Relocation” shall refer to City Utilities only when used in those provisions of the Contract Documents which are listed in Scope of Work and General Requirements Section 01180.

“Remediation Work” shall mean any Work for which a Hazardous Substance Removal Certification from the State of California Contractors Licensing Board is required.

“Request for Proposals (RFP)” shall mean Request for Proposals No. 1-06 regarding the Project issued by Authority, including all addenda and attachments thereto.

“Retainage” shall have the meaning set forth in Contract General Provisions Section 18.10.





“Revenue Operations Date” shall mean the date Metro commences revenue operations for the Project.

“RFP Documents” shall mean the documents issued as part of the RFP.

“Right of Way” shall mean the real property (which term is inclusive of all estates and interests in real property) which is necessary for ownership and operation of the Project. The term specifically excludes:

(a) the Utility Easements; and

(b) any temporary easements or other real property interests which Contractor deems necessary or advisable in connection with:

(i) Construction of the Project; and/or

(ii) Relocations.

The term ‘Right of Way’ is sometimes used to mean Project right of way and is sometimes used to mean rights of way for other facilities.

"Safety" shall mean freedom from those conditions that can cause death, injury, occupational illness, or damage to or loss of equipment.

“Safety Program” or "Safety and Health Plan" shall mean the safety and health plan established by Contractor as specified in General Requirements Sections 01545 and 01547.

"Schedule Adherence" shall mean the degree to which every vehicle leaves each station at the time stated in the operating schedule.

"Schedule of Values" shall have the meaning set forth in Scope of Work and General Requirements Section 01310.

"Scheduled Service" shall mean periods when the System is functioning in the selected Operating Mode, resulting in the planned number of trains operating in accordance with the Operations Plan, including time sequence of vehicle arrivals and departures resulting from planned number of vehicles following their planned routines.

"Scheduled Vehicle Cycles" (Trips) shall mean the number of vehicle round trips scheduled during an operating period.

“Scope of Work” shall mean the document entitled Scope of Work and General Requirements.





"Service" shall mean the operation of the System under normal conditions with passengers.

"Serviceability Design" shall mean the performance design of trackway and other structures under service loads. Serviceability requirements to be considered include control of stress, fatigue, vibration, deformation, and cracking.

“Service Line” shall mean a Utility line, the function of which is to connect an individual service location (e.g., a single family residence or an industrial warehouse) to another Utility line which connects more than one such individual line to a larger system. The term “Service Line” also includes any Utility on public or private property that services structures located on such property.

"Service Load" shall mean live and dead loads as specified in these Technical Provisions without load factors.

“Settlor” shall mean MTA, in its capacity as settlor under the Trust.

"Shop" shall mean any facility designed for maintenance activities.

"Single Unit" shall mean a self-contained vehicle capable of running as a single vehicle.

“Site” shall mean those areas designated in writing by Authority for performance of Work and such additional areas as may, from time to time, be designated in writing by Authority for Contractor’s use in performance of the Work. The Site initially includes the area within the planned Right of Way. For purposes of indemnification, safety and security requirements and payment for use of equipment the term “Site” also includes any areas on which Relocation work is performed and any property being temporarily used by Contractor for storage of equipment and/or construction Work.

"Specifications" shall mean various specification documents as referenced in the Technical and Performance Provisions.

"Standard Vehicle" shall mean the maximum weight of the vehicle used for design. The empty vehicle weight (AWO), the fully loaded vehicle weight (AW2), and the crush-loaded vehicle weight (AW4) are defined in Technical Provisions. AW2 weight shall be used for fatigue load calculations, and AW4 weight shall be used for strength and stress calculations.

"Storage Facility" shall mean a facility containing a track network for receiving, dispatching, and storing vehicles or consists and work equipment.





"Storage Track" shall mean a section of track used to store service-ready vehicles, trains prior to their dispatch into passenger-carrying service and any failed trains removed from service and awaiting transport to the M&SF.

"Strength Design" shall mean the adequate strength design of -trackway using load combinations, load factors and resistance factors.

"Subassembly" shall mean a collection of components used to perform a distinct function, usually in conjunction with other assemblies and components, as part of a larger subsystem or system. Subassemblies are usually replaceable as units, such as circuit boards, bearings, and valves.

“Subcontract” shall mean any subcontract to perform any part of the Work or provide any materials, equipment or supplies for any part of the Work between Contractor and a Subcontractor, or between any Subcontractor and its lower tier Subcontractor, at any tier.

“Subcontractor” shall mean any Person with whom Contractor has entered into any Subcontract, and any other Person with whom any Subcontractor has further subcontracted any part of the Work, at any tier.

“Substantial Completion” shall mean completion of all elements of the Project in accordance with the Contract Documents as described in Contract General Provisions Section 24.2.

“Substantial Completion Deadline” shall have the meaning set forth in Contract General Provisions Section 23.2.1.

"Substation (Traction Power)" shall mean a facility in which electrical power is received and converted to DC voltage of a lower level for distribution on the trackway.

"Successful Vehicle Cycles" (Trips) shall mean the number of vehicle cycles completed without interruption or delay due to a downtime event during one operating period. Unscheduled stoppages resulting from the causes listed, as exclusions shall not be counted.

"Supplier" shall mean any Person, other than employees of Contractor, not performing work at the Site, that supplies machinery, equipment, materials or systems to Contractor or any Subcontractor in connection with the performance of the Work. The term "Supplier" includes fabricators and material dealers.

“Surety” shall mean each properly licensed surety company approved by Authority which issued the Payment Bond and/or the Performance Bond.





“System” shall mean the following elements of the Project: running surfaces, switches, other track equipment, power distribution, central control and other automatic train control, communications, maintenance and all other equipment associated with operating trains.

"System Integration" shall mean integration of all of the Systemwide Elements with each other and the integration of the Systemwide Elements with the Fixed Facilities.

"Systemwide Elements" shall mean the trackwork, traction power system including substations and the OCS, corrosion control, train control system, communications system and grade crossing equipment.

"System Equipment" shall mean the vehicles; running surface, fencing, emergency walkway, and other equipment; traction power distribution and back-up power equipment; train control equipment; grade crossing warning devices; communications equipment; signage; safety and security equipment; station platform; maintenance tools and equipment; spare parts; and other items required by this Contract.

“Technical Provisions” shall mean the documents designated in the RFP.

"Temporary Relocation" shall mean (a) any interim relocation of a Utility (i.e. the installation, removal and disposal of the interim facility) pending installation of the permanent facility in the same or a new location, and (b) any removal and reinstallation of a Utility in the same place without an interim relocation.

“Third Party” means a Government Entity, utility company, railroad or other entity that contracts with the Authority or Metro by means of a Cooperative Agreement, Utility Services Agreement or other similar agreement regarding the construction, reconstruction, rearrangement and/or improvement of facilities owned or controlled by the jurisdictional agency, to facilitate the Work of the Contractor.

"Time/Down" shall mean the time during which equipment is not capable of doing useful work because of maladjustment, malfunction, or maintenance in progress.

“Total Construction Price” means the sum of the LSFP.

"Trackway" shall mean that portion of the system’s rail line, which has been prepared to support the track and its appurtenant structures.

"Train" shall mean a single light rail vehicle or set of two or more vehicles coupled together and operated as a single unit, displaying a headlight to the front and taillight to the rear.

"Truck" shall mean a vehicle undercarriage assembly containing wheels and axles, motors, gearboxes, brakes, collectors, cable, piping, etc.





“Trust” shall mean the trust established pursuant to the Trust Agreement.

“Trustee” shall mean Authority, in its capacity as trustee of the Trust, and not in its individual capacity.

“Utility” shall mean a public, private, cooperative, municipal and/or government line, facility or system (including all appurtenances thereto and including service lines) used for the carriage, transmission and/or distribution of cable television, electric power, telephone, telegraph, water, gas, oil, petroleum products, steam, chemicals, sewage, storm water, or any similar commodity. However, when used in the context of the removal, relocation and/or protection of facilities to accommodate the Project, the term “Utility” or “utility” specifically excludes (a) storm water facilities providing drainage for the property on which the Project is to be constructed and (b) traffic signals, street lights, and electrical systems serving existing improvements on such property.

“Utility Agreement” shall mean a Master Agreement and/or a Work Order, as the context may require, as the same may be modified or amended from time to time.

"Utility Appurtenance Adjustment" shall mean the adjustment of Utility appurtenances (e.g. manholes, valve boxes, and vaults) for line and grade upon completion of roadway work.

“Utility Easement” shall mean a permanent replacement easement and/or other interest in real property located outside of the Right of Way limits that is necessary for a Relocation / Rearrangement.

“Utility Owner” shall mean the owner or operator of any Utility (including both privately held and publicly held entities, cooperative utilities, municipalities and other governmental agencies).

"Utility Sheets" shall mean the utility layout plans to be included as part of the Design Submittals, as more particularly described in General Requirements Section 01180.

“Utility Work” shall mean the Work associated with Relocation of Utilities, including the Work described in General Requirements Section 01180. The term “Utility Work” shall include the Work relating to City Utilities only when used in those provisions of the Contract Documents, which are incorporated by reference into General Requirements Section 01180.

“Value Engineering Change Proposals (VECPs)” shall have the meaning set forth in General Provisions Section 21.1.

"Vehicle" shall mean a single rail passenger-carrying unit.





"Vital" shall mean a term applied to a device or circuit which has known, predictable failure modes, such that no single failure creates a less restrictive state.

"Vital Component or Circuit" shall mean any device, circuit, or software module used to implement a vital function.

“Warranties” shall mean the warranties made by Contractor in Contract Section 25.

"Wayside" shall mean the portion of the System around the vehicle and excluding vehicles.

“Work” shall mean all of the administrative, design, engineering, Utility Relocation, procurement, legal, professional, manufacturing, supply, installation, construction, supervision, management, testing, verification, labor, materials, equipment, documentation and other duties and services to be furnished and provided by Contractor as required by the Contract Documents, including all efforts necessary or appropriate to achieve Final Acceptance of the Project except for those efforts which the Contract Documents specify will be performed by Authority or other Persons. In certain cases the term is also used to mean the products of the Work.

“Work Order” shall mean a work order or agreement, as the same may be amended from time to time, issued by Authority or between Authority and a Utility Owner or Governmental Person, authorizing and providing for the performance of specific work and or services and/or the purchase of materials and equipment relating, at least in part, to the Relocation of one or more Utilities owned or operated by such Utility Owner. A document is a “Work Order” if it meets the definition set forth herein, without regard to the name by which the document designates itself, and without regard to whether it is issued pursuant to the provisions of an applicable Master Agreement or independently of any Master Agreement.

"Working Days" shall mean those days during which Authority conducts regular business.

"Working Schedule" shall have the meaning set forth in General Requirements Section 01310.

Exposition Metro Line Construction Authority Contract No 1-06


APPENDIX 2

EXPOSITION METRO LINE CONSTRUCTION AUTHORITY

CONTRACT NO. 1-06

ENGINEERING DESIGN SERVICES MID-CITY/EXPOSITION LIGHT RAIL TRANSIT PROJECT

APPENDIX 2 DESIGN SERVICES CERTIFICATION FOR REQUEST FOR PAYMENT

This is certify that and to the best of my knowledge and belief: 1. I have reviewed the invoiced costs submitted herewith. All costs are current, accurate, and

complete. 2. All costs included in this invoice (identify contract and date) are allowable (identify cost

rates, period covered) in accordance with the requirements of the Contract to which they apply.

3. This invoice does not include any costs which are unallowable under applicable cost

principles of the Authority; and 4. All costs contained in this invoice are allocable to this contract, as they benefit both the

contract and the work, and can be distributed to them in reasonable proportion to the benefits received.

5. Payments to Subcontractors and Suppliers have been made from previous payments received

under Contract No.1-06, and timely payments will be made from the proceeds of the payment covered by this certification, in accordance with subcontract agreements.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on _____________________, 20__ at, _______________________, ____________________________ (Date) (City) (State) ______________________________ ______________________________ ____________________

(Typewritten or Printed Name) (Signature of Authorized Official) (Title)


Mid-City/Exposition Light Rail Transit Project Appendix 2A March 17, 2006 Conformed Design-Build Contract Page 32 Appendices to General Provisions

APPENDIX 2A


CONTRACT NO. 1-06

PROFESSIONAL SERVICES MID-CITY/EXPOSITION LIGHT RAIL TRANSIT PROJECT

APPENDIX 2A PROFESSIONAL SERVICES CERTIFICATION FOR REQUEST FOR PAYMENT

This is certify that and to the best of my knowledge and belief: 1. I have reviewed the invoiced costs submitted herewith. All costs are current, accurate,

and complete. 2. All costs included in this invoice (identify contract and date) are allowable (identify cost

rates, period covered) in accordance with the requirements of the Contract to which they apply.

3. This invoice does not include any costs which are unallowable under applicable cost

principles of the Authority; and 4. All costs contained in this invoice are allocable to this contract, as they benefit both the

contract and the work, and can be distributed to them in reasonable proportion to the benefits received.

5. Payments to Subcontractors and Suppliers have been made from previous payments

received under Contract No.1-06, and timely payments will be made from the proceeds of the payment covered by this certification, in accordance with subcontract agreements.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on _____________________, 20__ at, _______________________, ____________________________ (Date) (City) (State) ______________________________ ______________________________ ____________________ (Typewritten or Printed Name) (Signature of Authorized Official) (Title)



APPENDIX 3 SUBCONTRACTOR / DBE SCHEDULE / FORMS The following forms are required to be submitted by the Contractor at time of Proposal:

DESIGN AND PROFESSIONAL SERVICES PROPOSED LIST OF SUBCONTRACTORS AND SUPPLIERS This form captures information related to the Design and Professional Services work on the project.

CONSTRUCTION PROPOSED LIST OF SUBCONTRACTORS AND SUPPLIERS

This form captures information related to the Construction work on the project. These forms identify all businesses planned to participate in the contract resulting from

this procurement. The following information is captured in the forms: Name the participating business, provide the dollar value of their portion of the work, the percentage of the participating business’s price to the total contract price set by the prime contractor and state whether the participating business is a DBE.

The Authority recognizes that some of the information, including the identity of all subcontractors and/or suppliers along with subcontract amounts may not be known at the time of bid. For this reason, all known information at time of bid or proposal is to be provided on these forms to the best of the Contractor’s ability. Should the bidder/proposer find that the forms do not provide enough space to present the information, the bidder/proposer may prepare the information in a separate report using, for example, a spreadsheet or similar tool. It is required that the information be provided in a similar format as the forms provided herein.

Failure to provide completed forms may be cause for the Authority to determine the

bidder/proposer to be non-responsive.



EXPO METRO LINE AUTHORITY FORMS

DESIGN AND PROFESSIONAL SERVICES

PROPOSED LIST OF SUBCONTRACTORS AND SUPPLIERS RFP Number: 1-06

Project Name: Mid-City/Exposition Light Rail Transit Project

Prime Contractor Proposal Price

Please name each firm A Prime

ContractorNext Tier?

$ Value Of Work

% Of Price

DBE? Yes/No

Prime

%

%

%

%

%

%

%

%

%

%

%

%

%

%

Value of Work (This Page, L1 thru L18)

%

Cumulative Value of Work, (Page 1 thru this Page)



EXPO METRO LINE AUTHORITY FORMS

CONSTRUCTION

PROPOSED LIST OF SUBCONTRACTORS AND SUPPLIERS RFP Number: 1-06

Project Name: Mid-City/Exposition Light Rail Transit Project

Prime Contractor Proposal Price

Please name each firm A Prime

ContractorNext Tier?

$ Value Of Work

% Of Price

DBE? Yes/No

Prime

%

%

%

%

%

%

%

%

%

%

%

%

%

%

Value of Work (This Page, L1 thru L18)

%

Cumulative Value of Work, (Page 1 thru this Page)



APPENDIX 4

APPENDIX 4 DISPUTES REVIEW BOARD AGREEMENT DRAFT

THIS DISPUTES REVIEW BOARD AGREEMENT ("Agreement") is made

and entered into this ____ day of __________, 200_, among the Exposition Metro Line Construction Authority, a public entity of the State of California (“Authority”), _________________ a _________________ ("Contractor"), and ______________________ (collectively, the "Board Members"), with reference to the following facts:

A. Authority and Contractor have entered into a contract pursuant to Authority’s Mid-City/Exposition Light Rail Transit Project, Negotiated Design-Build Contract (the "Negotiated Design-Build Contract"). Pursuant to the Negotiated Design-Build Contract, Contractor agreed to furnish the design for and to construct the Project.

B. The Negotiated Design-Build Contract provides for the establishment and operation of a Disputes Board (the "Board") to assist in resolving disputes and claims among Authority, Contractor and others in respect to the Project.

NOW, THEREFORE, in consideration of the terms, conditions, covenants and agreements contained herein, the parties hereto agree as follows:

1. ESTABLISHMENT OF BOARD 1.1 The Board shall begin operation upon execution of this Agreement by Authority,

Contractor and the first two Board Members, and shall terminate upon completion of all work required to be performed by the Board hereunder unless sooner terminated in accordance with this Agreement or applicable law. The Board shall initially consist of two members, one selected by Authority and one selected by Contractor. The first duty of the Board shall be to select its third member as provided in Section 20 of the Contract General Provisions. Section 20 of the General Provisions is incorporated by reference herein.

1.2 Each member of the Board represents, warrants and covenants on his/her behalf that he/she:

(a) Does not have an ownership interest in Authority or Contractor, or a financial interest in the Negotiated Design-Build Contract, the Project or the Mid-City/Exposition Light Rail Transit Project or in the outcome of any dispute decided hereunder, except for payment for serving on the Board;

(b) Has not been employed, and that his/her employer has not been employed, by either Authority or Contractor, or any entity that is a member of either Authority or Contractor, within two years prior to this Agreement, except for fee-based consulting services on other projects which are disclosed to all parties;

(c) Has not had substantial prior involvement in the Project or the Mid-City/Exposition Light Rail Transit Program or relationship with any party or affiliate thereof of a nature which could affect his/her ability to impartially resolve disputes and does not know of any reason why he/she cannot be impartial in rendering decisions;

(d) Shall not accept employment by Authority or Contractor during the term hereof and for as long thereafter as any obligations remain outstanding under the Contract Documents; and

(e) Shall not discuss employment, nor make any agreement regarding employment with Authority or Contractor or any member of Authority or Contractor during the



term hereof and for as long thereafter as any obligations remain outstanding under the Contract Documents.

1.3 Prior to hearing the first Dispute, and thereafter upon request of Authority or Contractor from time to time, and at least annually, each Board Member shall provide Authority and Contractor a declaration under penalty of perjury affirming that such member meets the qualifications set forth in section 1.2 hereof, and agrees to be bound by the terms of the Contract Documents. Each Board Member shall promptly notify Authority and Contractor if any circumstances are likely to prevent a prompt and fair hearing and decision or if the member fails to meet such qualifications. Any Board Member failing at any time to meet such qualifications shall be removed from the Board.

2. BOARD ORGANIZATION AND RESPONSIBILITIES 2.1 The Board is organized in accordance with Section 20 of the Contract General

Provisions, for the purposes described therein. The Board is intended to fairly and impartially consider the Disputes under the Negotiated Design-Build Contract, Subcontracts thereunder and other contracts relating to the Project placed before it and to provide written decisions for resolution of such Disputes. The Board Members shall perform the services necessary to participate in the Board's actions in accordance with this Agreement.

2.2 The Board Members shall visit the Site prior to commencement of construction, and after commencement of construction shall visit the Site periodically to keep abreast of construction activities and to develop a familiarity with the work in progress, or as may be deemed desirable or necessary in the consideration of any claim or dispute. A special Site visit shall be scheduled at the request of either party or any Board Member; provided that all reasonable efforts shall be made to allow issues to be raised at the regularly scheduled Site visits except where a special visit is warranted due to special circumstances such as the need to observe Site conditions before they are disturbed. Representatives of Authority and Contractor shall have the right to accompany the Board on any such visit.

2.3 All Board Members are to act independently in the consideration of facts and conditions surrounding any Dispute. Seeking the Board Members' advice or consultation, ex parte, is expressly prohibited; provided, however, that either party may seek such advice or consultation from the entire Board, at a Board meeting, after first giving notice to all parties who might thereafter be parties before the Board in a Dispute involving that problem. A Board Member who has ex parte contact with a party or party representative shall be subject to removal from the Disputes Board for cause.

2.4 Board Members may withdraw from the Board upon delivery of written notice of withdrawal to Authority, Contractor and the other Board Members, which notice shall specify a withdrawal date at least 28 days following the date of delivery of the notice. Should the need arise to appoint a replacement Board Member, the replacement member shall be appointed in the same manner as provided by the Negotiated Design-Build Contract for appointment of the original member. The selection of a replacement Board Member shall begin promptly upon notification of the necessity for a replacement and shall be completed within 28 days thereafter. The change in Board membership shall be evidenced by the new member's signature on this Agreement.

2.5 The Board Members acknowledge that Authority and Contractor have the right to require appointment of a new disputes review board to resolve future Disputes, which right may be exercised at any time by delivery of notice to such effect to the other party and to the Board Members. In such event a new agreement in the same form as this agreement will be



executed establishing the new board, and except as otherwise mutually agreed by Authority and Contractor, the work to be performed by the Board established under this Agreement shall be limited to Disputes submitted to the Board before delivery of the notice requiring appointment of a new Board.

2.6 The personal services of the Board Member are a condition to receiving payment hereunder. No Board Member shall assign any of his or her work pursuant to this Agreement without the prior written consent of both Authority and Contractor.

2.7 Each Board Member, in the performance of his or her duties on the Board, is acting as an independent contractor and not as an employee of either Authority or Contractor. No Board Member will be entitled to any employee benefits.

3. HEARINGS AND DECISIONS 3.1 Each Dispute under the Negotiated Design-Build Contract involving $375,000

or less shall be heard by the Board or, subject to approval of both parties, the third Board Member, acting in their/his/her capacity as arbitrator(s) under the State Arbitration Act and the Regulations, as they may be amended from time to time. Authority and Contractor shall stipulate that the Board members (or third member, as appropriate) be appointed as such arbitrator(s). The Board (or third member, as appropriate) has jurisdiction to determine whether the requirements of the Negotiated Design-Build Contract, the State Arbitration Act and the Regulations have been met. For the convenience of the Board Members, current pertinent provisions of the State Arbitration Act and statutes referenced therein and of the Regulations are attached hereto as Exhibits B and C. If the third member is appointed as the sole arbitrator, he or she shall consult with both of the other Board Members in making his or her decision.

3.2 Each Dispute involving more than $375,000 shall be heard by the Board as provided in Section 20 of the Contract General Provisions.

3.3 In general, the Board shall have the right to establish its own procedures and time limits, including the right to establish or to waive evidentiary rules and procedures, except for evidentiary rules pertaining to privilege.

3.4 Upon receipt by the Board of a notice of appeal, either from Contractor or Authority, the Board (or Board Member acting as arbitrator) shall convene a hearing to review and consider the matter as quickly as possible, taking into consideration the particular circumstances and the time required to prepare detailed documentation. Both Authority and Contractor are encouraged to provide exhibits, calculations, and any other pertinent material to the Board for review prior to the hearing. All such material shall concurrently be given to the other party.

3.5 The Board shall convene to consider questions presented to it and shall at the conclusion of each hearing either provide the Dispute Board Decision or advise the parties when the Dispute Board Decision will be forthcoming.

4. PROVISION OF DOCUMENTS TO BOARD 4.1 Contractor, with assistance of Authority, shall furnish to each Board Member

one copy of all documents it might have, other than those furnished by Authority, which are pertinent to the performance of the Negotiated Design-Build Contract and necessary to the Board’s work.

4.2 Authority shall furnish each Board Member one copy of all Contract Documents, all Design Documents (following preparation thereof by Contractor and approval



thereof by Authority) and other documents pertinent to the performance of the Design-Build Contract and necessary to the Board's work.

4.3 Each Board Member agrees to execute and deliver a confidentiality agreement as described in Section 1.9.4 of the Contract General Provisions.

5. EXPENSES 5.1 Except as otherwise provided in article 6, payment for services rendered by each

Board Member and for their direct, non-salary expenses shall be calculated in accordance with the payment schedule for such Board Member agreed to among Authority, Contractor and the Board Member and shall be paid in accordance with Section 20 of the Contract General Provisions.

5.2 Invoices for payment for work completed shall be submitted no more often than once per month. Such invoices shall be in a format approved by Authority and accompanied by a general description of activities performed during this period. The value of work accomplished for payment shall be established from the billing rate and hours expended by the Board Member together with direct, non-salary expenses. Billings for expenses shall include an itemized listing supported by copies of the original bills, invoices, expense accounts and miscellaneous supporting data.

5.3 Each Board Member shall keep available for inspection, for a period of five years after final payment, the cost records and accounts pertaining to this Agreement.

6. DISPUTES INVOLVING OTHER PARTIES 6.1 The parties acknowledge that various third parties (including Subcontractors

and the Program Manager) have agreed or will agree that the jurisdiction of the Disputes Board shall extend to disputes affecting such third parties. In general, such disputes shall be heard by the three Board Members, appointed as described above, in accordance with the terms of the Negotiated Design-Build Contract, this Agreement and the contract between Authority and such third parties ("Such Other Contractors"). However, to the extent that the following rights are contractually provided to Such Other Contractors in their agreements with Authority, the parties agree that the membership of the Board may be modified with respect to disputes involving Such Other Contractors, as follows:

(a) Such Other Contractor may agree to use the existing Board with respect to the dispute. (This option shall be deemed selected (i) unless Such Other Contractor delivers written notice to the Board that it intends to select a qualified consultant/Board Member with respect to such dispute, which notice is delivered to the Board within seven days after delivery of written notice to Such Other Contractor describing the dispute and stating that Such Other Contractor is a necessary party to the dispute resolution procedure, or (ii) if Such Other Contractor fails to select a qualified consultant/Board Member, as described below, within seven days after delivery of notice of intent to select such person, or after notification of Authority’s or Contractor’s disapproval of the Board Member.)

(b) If Such Other Contractor elects not to use the existing Board as provided above, then:

(i) Such Other Contractor may select an advisor who shall act as a non-voting consultant to the Board with respect to the dispute; or

(ii) Such Other Contractor may select a fourth Board Member who shall have the right to participate in the selection of a fifth Board Member and to participate in the decision-making process hereunder with respect to such dispute; or



(iii) With respect to disputes which do not involve the Contractor, Such Other Contractor shall have the right to appoint a Board Member who shall replace the Board Member appointed by the Contractor.

In selecting a non-voting consultant/Board Member, Such Other Contractor is encouraged to appoint the same individual for all disputes, so that such individual will have the opportunity to develop expertise and familiarity regarding the Project.

6.2 Any non-voting consultant or Board Member selected by Such Other Contractor shall be required to meet the qualifications for Board Members set forth herein and shall execute and agree to be bound by the terms of this Agreement as to disputes involving Such Other Contractor. In the event that option (ii) is selected, Such Other Contractor’s selection of the fourth Board Member shall be subject to Authority’s and Contractor’s approval, and the fifth Board Member shall be selected by a majority vote of the four Board Members. Disputes regarding appointment of such fifth Member shall be subject to the dispute resolution procedures set forth in Section 20 of the Contract General Provisions, and shall be decided by the original three Board Members.

6.3 Expenses of the Disputes Board payable by Such Other Contractor shall be as follows:

(a) In the event that option 6.1(a) is selected, Such Other Contractor shall share equally the costs and expenses for the Disputes Board in accordance with Section 20 of the Contract General Provisions; or

(b) In the event that option 6.1(b)(i), (ii) or (iii) is selected, Such Other Contractor shall be responsible for paying the costs and expenses for the consultant or for the Board Member which it appointed, as well as a proportionate share of the costs and expenses of the third and fifth members (subject to the right to be reimbursed for such costs and expenses as the prevailing party, as may be awarded in accordance with Section 20 of the Contract General Provisions) together with a proportionate share of any common costs allocable to the parties to a dispute under Section 20 of the Contract General Provisions. In determining the amount of any such payment or reimbursement of costs and expenses, the Board Members are specifically directed to consider the benefit accruing to Such Other Contractor resulting from the Board's expertise and familiarity with the Project and the expenditures previously incurred by Authority and Contractor to develop such expertise and familiarity.

6.4 The provisions set forth in this Section 6 shall supersede any provisions to the contrary contained in Section 20 of the Contract General Provisions.

7. MISCELLANEOUS 7.1 Capitalized terms used but not defined herein shall have the meanings set forth

in the Design-Build Contract. 7.2 (a) The parties intend for Section 20 and the other terms of this Agreement to

be complementary. Except as otherwise specifically provided herein, in the event of any conflict between this Agreement and said Section 20, Section 20 shall control.

(b) With respect to Claims and disputes up to $375,000 under the Contract, the parties intend for this Agreement and Section 20 of the Contract to be complementary with the terms of the Arbitration Act and Regulations. With respect to Disputes up to $375,000, in the event of any conflict between this Agreement and the terms of the Arbitration Act and Regulations, this Agreement shall control to the extent that the requirements of the Arbitration Act and Regulations are waivable; otherwise the Arbitration Act and Regulations shall control.



7.3 Notices hereunder shall be sent as provided in Section 28.12 of the Contract General Provisions. The addresses for the Board Members are set forth on the signature pages hereof.

7.4 This Agreement shall be governed by and construed in accordance with the law of the State of California.

7.5 No Board member shall release any material or data prepared or received by the Board under this Agreement to any other person or agency. All press releases or information to be published in newspapers, magazines, or electronic media, shall be distributed only after first being authorized by Authority and Contractor.

7.6 The parties hereto mutually understand and agree that all Board Members, in the performance of their duties on the Board, are acting in the capacity of independent contractors and not as employees of Authority or Contractor. The Board Members shall have no personal or professional liability arising from the services provided under this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BOARD MEMBERS ________________________________

Address:

___________________________________

Address:

__________________________

Address:

__________________________

CONTRACTOR By: __________________________

Title: __________________________

By: __________________________

Title: __________________________

AUTHORITY EXPOSITION METRO LINE CONSTRUCTION AUTHORITY

By:

Title: __________________________

APPROVED AS TO FORM: By:________________________ General Counsel

[Exhibits to be Provided Prior to Execution]



APPENDIX 5 DESIGNATION OF INITIAL REPRESENTATIVES DRAFT

Authority Representatives: • Interim Chief Executive Officer (currently Richard D. Thorpe) • Additional representatives designated in writing by the Chief Executive Officer for

specific matters Contractor Representatives:

• Principal On-Site (currently Ray Hughes) • Additional representatives designated in writing by the Principal On-Site for specific

matters



APPENDIX 6 DRAFT MTA/AUTHORITY TRUST AGREEMENT PROVISIONS [The following provisions are based on the

current draft of the Trust Agreement between

MTA and the Authority, and are subject to change]

The following terms are pass-through provisions required by the Trust Agreement. As used in this Appendix 6, “Contract,” “Contractor” and “Indemnified Parties” shall have the meanings set forth in Appendix 1. All other capitalized terms contained in this Appendix 6 shall have the meanings set forth in the Trust Agreement.

1. Contractor acknowledges and agrees:

(a) that Contractor’s obligations under Contract Section 22.3.1 shall automatically apply to require it to release, indemnify, defend and hold harmless the Trustee and the Settlor, in addition to the Indemnified Parties, with respect to all such matters to the extent that such matters fall within the scope of the indemnities made by Contractor as set forth in Contract Sections 22.3.1 and 22.3.2.

(b) that any Liens encumbering any of the Project Assets arising out of or in connection with the Contract shall be extinguished and of no further force and effect as to Project Assets upon the Phase 1 Project Assets Distribution Date;

(c) that the Payment and Performance Bonds shall name Trustee and Settlor as dual obligees thereof;

(d) that the Trustee shall have the right to promptly discharge (or cause to be discharged) any mechanic’s or materialman’s liens or claims of such lien, if any, filed or otherwise asserted against any of the Project Assets and all stop notices;

(e) that the Trustee and the Settlor as third-party beneficiaries of the Contract, shall have the right to enforce, and shall have the benefit of, any and all guaranties, warranties, bonds and the like contained or otherwise applicable to the Contract and any work undertaken or materials purchased pursuant thereto;

(f) that any occurrence or transaction which gives rise to a claim under the Contract shall also be deemed an occurrence or transaction for purposes of filing a claim pursuant to Section 900 et seq. of the California Government Code; and

(g) that no provision of the Contract shall toll, waive or modify the provisions of California Government Code Section 900 et seq.

2. Contractor acknowledges and agrees that the following provisions required by the Trust Agreement shall be a part of the Contract and binding on Contractor:



At the request of the Authority, the MTA has previously provided to the Authority copies of certain preliminary design documents for the Project ("Existing Preliminary Design Documents") prepared by the MTA's design engineer (DMJM + Harris), which were not completed/signed/sealed by MTA’s design engineer and in all respects are preliminary in nature and should not be relied upon for any purpose whatsoever (including, the design and construction of the Project). Copies of the Existing Preliminary Design Documents may have been provided to you in connection with this Contract. Neither the Contractor nor any Subcontractor shall have no right to rely upon the Existing Preliminary Design Documents in any manner whatsoever (including, the design and construction of the Project). The Contractor represents, warrants and covenants that the Contractor will not rely upon the Existing Preliminary Design Documents in any manner whatsoever (including, the design and construction of the Project) and will do its own independent investigation of all matters related to this Contract and the Existing Preliminary Design Documents. The Contractor waives and releases the MTA and its design engineer (and each of their respective officers, directors, agents, contractors and employees) from any and all claims, liabilities, losses, damages, costs and expenses arising out of or in connection with the Existing Preliminary Design Documents. In connection with the release and waiver set forth in the preceding sentence:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

The MTA and its design engineer are each third party beneficiaries of the provisions of this paragraph and shall have the right to enforce the waiver and release contained in this paragraph against the Contractor.

The Contractor shall cause each Subcontract, at all tiers, to include the foregoing provision (revised as appropriate for inclusion in the Subcontract, but otherwise in substantially the form set forth above, and without any material changes therein).


Mid-City/Exposition Light Rail Transit Project Conformed Design-Build Contract PERFORMANCE BOND

Appendix 7 Page 45

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Appendices to General Provisions

APPENDIX 7 PERFORMANCE BOND


WHEREAS the Exposition Metro Line Construction Authority ("Authority") has awarded to ___________________________________ ("Principal"), a Design-Build Contract (hereafter called the “Contract”), which Contract is specifically incorporated by reference herein, for the design and construction of Mid-City Exposition Light Rail Transit Project, and WHEREAS Principal is required under the terms of the Contract to furnish a Bond for the faithful performance of the Contract; NOW, THEREFORE, we __________________________________________, as Principal, and __________________________________________________, ("Surety"), as Surety, are held and firmly bound unto the Authority in the sum of ____________________Dollars ($______________), this amount being not less than the total Construction Allowance in lawful money of the United States of America, for payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severably, firmly by these presents. In case suit is brought upon this Bond, Surety shall pay reasonable attorneys' fees to the Authority in an amount to be fixed by the court. The condition of this obligation is such that, if the hereby-bonded Principal or its heirs, executors, administrators, successors, assigns, or Subcontractors shall in all things stand to and abide by and well and truly keep and perform all the undertakings, terms, covenants, conditions, and agreements in the Contract and any alteration thereof, made as therein provided, all within the time and in the manner therein designated and in all respects according to their true intent and meaning, then this obligation shall become null and void; otherwise, it shall be and remain in full force and effect. Further, Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or modification of the contract documents, or of the Work to be performed thereunder, shall in any way affect its obligations under this Bond, and it does hereby waive notice of any such change, extension of time, alteration, or modification of the contract documents or of the Work to be performed thereunder.


Mid-City/Exposition Light Rail Transit Project Conformed Design-Build Contract PERFORMANCE BOND

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March 17, 2006


IN WITNESS WHEREOF, three identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety named herein, on the _____________ day of _________________ 200__, the name and corporate seal of each corporate party being hereto affixed and these presents duly signed by its undersigned representative pursuant to authority of its governing body.

By (Principal) By (Surety) By


Mid-City/Exposition Light Rail Transit Project Conformed Design-Build Contract PAYMENT BOND

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March 17, 2006


APPENDIX 8 PAYMENT (MATERIAL AND LABOR) BOND


CONTRACT NO. 1-06

PAYMENT (MATERIAL AND LABOR) BOND

WHEREAS Exposition Metro Line Construction Authority ("Authority") has awarded to __________________________________ ("Principal"), a Design-Build Contract (hereafter called the “Contract”), which Contract is specifically incorporated by reference herein, for the design and construction of Mid-City Exposition Light Rail Transit Project, and WHEREAS Principal is required under the terms of the Contract to furnish a Bond to secure the payment of claims of laborers, mechanics, material men, and other persons as provided by law; NOW, THEREFORE, we _____________________________, as Principal, and _________________________, ("Surety"), as Surety, are held and firmly bound unto the Authority in the sum of __________________ Dollars ($ _________________), this amount being not less than the total Contract Price in lawful money of the United States of America, for payment of which sum well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. In case suit is brought upon this Bond, Surety will pay reasonable attorneys' fees to the Authority and the plaintiff(s) in an amount to be fixed by the court. The condition of this obligation is such that, if the hereby-bonded Principal, or its heirs, executors, administrators, successors, or assigns, or Subcontractors shall fail to pay any of the persons named in Civil Code § 3181 or to pay amounts due under the Unemployment Insurance Code with respect to work or labor performed under the Contract, or amounts due under the Contract, or any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of Principal or its Subcontractors pursuant to § 13020 of the Unemployment Insurance Code with respect to Work or labor performed under the Contract, then the Surety herein named shall pay for the same in an amount not exceeding the sum specified in this Bond; otherwise the above obligation shall be void. This Bond shall inure to the benefit of any of the persons named in Civil Code § 3181 as to give a right of action to such persons or their heirs, executor's, administrators, successors, or assigns in any suit brought upon this Bond. Further, Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or modification of the contract documents, or of the Work to be performed thereunder, shall in any way affect its obligations on this Bond, and it does hereby waive notice


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of such change, extension of time, alteration, or modification of the contract documents, or of the Work to be performed thereunder. IN WITNESS WHEREOF, three identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety named herein, on the ________ day of _______________, 200___, the name and corporate seal of each corporate party being hereto affixed and these presents duly signed by its undersigned representative pursuant to authority of its governing body.

By (Principal) By (Surety) By


Mid-City/Exposition Light Rail Transit Project Conformed Design-Build Contract PARCEL AVAILABLITY MATRIX

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March 17, 2006Appendices to General Provisions

APPENDIX 9 PARCEL AVAILABILITY MATRIX PROPERTY TAKES – AVAILABLE 480 CALENDAR DAYS FROM NTP NO PARCEL NO LOCATION AND OWNER

1 WE-616 Full take – street widening north of LaCienga (Harris) 2 MC-403 Full take – TPSS#6 @ Farmdale (Diacos) 3 MC-322 Full Take – TPSS #5 @ 9th Avenue (Held) 4 MC-249 Part-Take – TPSS#4 @ Arlington (City of LA) 5 MC-258 Full Take – TPSS #3 @ Normandie (Hines) 6 D-120 Full Take – TPSS#2 – Parking lot owned by USC 7 OM1 Division 11 Truck Parking Site 8 OM2 UNION PACIFIC Mid Day Storage Site STREET WIDENING (PART-TAKES) – AVAILABILE 480 CALENDAR DAYS FROM NTP.

NO PARCEL NO LOCATION AND OWNER

1 WE-606 Wesley Street in Culver City (City of Culver City) 2 MC-243 Cul de sac @ 3rd Street (Lemus) 3 MC-244 Cul de Sac @ 3rd Street (Optical) 4 MC-252 Signal Case @ Catalina (Wisconsin Gardens) 5 MC-256 Cul de Sac @ 3rd Street ( TBD) 6 MC-257 Cul de Sac @ 3rd Street (TBD) 7 MC-259 Arlington Street Widening (Hans, et. al) 8 MC-260 Arlington Street Widening (TBD) 9 MC-261 Vermont/Expo Street Widening (ARCO) 10 D114 Vermont Street Widening (USC) CALTRANS PARCELS – ENCROACHMENT PERMIT NO PARCEL NO LOCATION 1 D-160 Caltrans Slope on Jefferson Blvd ---- At the NTP Date 2 D-169 TPSS # 1 – Flower and 18th Street ---- September 30, 2007 LEASE TERMINATIONS ON ROW – 180 CALENDAR DAYS AFTER RECEIPT OF NOTICE FROM THE CONTRACTOR THAT ROW IS REQUIRED OUTDOOR ADVERTISING SIGNS – 180 CALENDAR DAYS AFTER RECEIPT OF NOTICE FROM THE CONTRACTOR THAT ROW IS REQUIRED


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APPENDIX 10 FORM PP – PROPOSAL PRICE

FORM PP - PROPOSAL PRICE DESIGN

Design Fee and Overhead above the 2.4 Multiplier, as described in Sections 7.2 and 7.3 of the General Provisions $ 5,550,000.00

PROFESSIONAL SERVICES

Professional Services Fee and

Overhead above the 2.2 Multiplier, as described in Section 9 of the General Provisions $ 12,187,000.00

CONSTRUCTION

Construction Home Office Overhead and Fee, as described in Section 15.2 of the General Provisions $ 27,450,000.00

INSURANCE

Proposed Cost of Professional Liability Insurance for the entire Project and Commercial General Liability insurance for the design phase only, as described in Section 22.2 of the General Provisions $ 7,320,000.00

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