Portions of this exhibit marked "* * *"
have been redacted and filed separately with the Securities and
Exchange Commission in connection with a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended.
Exhibit 10.64
CONTRACT
FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
BETWEEN
BOISE POWER PARTNERS JOINT VENTURE
CONSISTING OF
KIEWIT POWER ENGINEERS CO.
AND
TIC - THE INDUSTRIAL COMPANY
AND
IDAHO POWER COMPANY
FOR
LANGLEY GULCH POWER PLANT
CONTRACT
FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
BETWEEN
BOISE POWER PARTNERS JOINT VENTURE AND IDAHO POWER
COMPANY
TABLE OF CONTENTS
|
Article 1
|
RESPONSIBILITIES OF CONTRACTOR
|
|
Article 2
|
RESPONSIBILITIES OF OWNER
|
|
Article 3
|
COMPENSATION
|
|
Article 4
|
PAYMENT TERMS
|
|
Article 5
|
NOTICE TO PROCEED
|
|
Article 6
|
INSPECTION OF THE WORK
|
|
Article 7
|
(Intentionally Deleted)
|
|
Article 8
|
FACILITY TESTS
|
|
Article 9
|
SUBSTANTIAL AND FINAL COMPLETION
|
|
Article 10
|
CHANGES
|
|
Article 11
|
WARRANTIES
|
|
Article 12
|
TITLE
|
|
Article 13
|
DEFAULT
|
|
Article 14
|
TERMINATION
|
|
Article 15
|
SUSPENSION
|
|
Article 16
|
FORCE MAJEURE
|
|
Article 17
|
INSURANCE
|
|
Article 18
|
RISK OF LOSS
|
|
Article 19
|
INDEMNIFICATION
|
|
Article 20
|
INTELLECTUAL PROPERTY INFRINGEMENT
|
|
Article 21
|
CONFIDENTIAL INFORMATION
|
|
Article 22
|
RIGHTS TO INTELLECTUAL WORK PRODUCT
|
|
Article 23
|
ASSIGNMENT
|
|
Article 24
|
LIENS
|
|
Article 25
|
NOTICES AND COMMUNICATIONS
|
|
Article 26
|
LIMITATIONS OF LIABILITY
|
|
Article 27
|
LIQUIDATED DAMAGES
|
|
Article 28
|
MISCELLANEOUS
|
|
Article 29
|
DISPUTE RESOLUTION
|
LIST OF EXHIBITS
|
DEFINITIONS
|
Exhibit A
|
|
SCOPE OF WORK AND TECHNICAL SPECIFICATIONS
|
Exhibit B
|
|
SCHEDULE OF VALUES
|
Exhibit C
|
|
OWNER FURNISHED EQUIPMENT/OWNER’S SCOPE
|
Exhibit D
|
|
FACILITY SITE DATA/GEOTECHNICAL REPORT
|
Exhibit
E
|
|
PERFORMANCE GUARANTEES
|
Exhibit F
|
|
CONTRACTOR’S OBLIGATIONS TOWARDS OFE
|
Exhibit G
|
|
PERMITS
|
Exhibit H
|
|
PRE-APPROVED EQUIPMENT SUPPLY SUBCONTRACTORS
|
Exhibit I
|
|
SAFETY
MANUAL
|
Exhibit
J
|
|
FORM OF CORPORATE GUARANTEE
|
Exhibit K
|
|
PROJECT SCHEDULE
|
Exhibit L
|
|
ENGINEERED EQUIPMENT
|
Exhibit M
|
|
FORM OF
NOTICE OF SUBSTANTIAL COMPLETION
|
Exhibit
N
|
|
FORM OF NOTICE OF FINAL COMPLETION
|
Exhibit O
|
|
T&M RATE SHEET
|
Exhibit P
|
|
FORM OF PARTIAL LIEN RELEASE
|
Exhibit Q
|
|
FORM OF
FINAL LIEN RELEASE
|
Exhibit
R
|
CONTRACT FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
NEW PLYMOUTH POWER PLANT
THIS CONTRACT (“Contract”) is made and entered into
this ______ day of April, 2009, by and between Idaho Power Company,
an Idaho corporation with offices located at 1221 West Idaho
Street, Boise, Idaho (“Owner”) and Boise Power Partners
Joint Venture, a joint venture consisting of Kiewit Power Engineers
Co., a Delaware corporation with offices located at 7311 W 132nd
St., Suite 300, Overland Park, KS
66213, and TIC-The Industrial Company, a Delaware corporation with
offices located at 2211 Elk River Road, Steamboat Springs, CO 80487
(“Contractor”), for the design, engineering,
procurement and construction services, as more fully described
herein.
RECITALS
WHEREAS, Owner wishes to have Contractor furnish certain
engineering, procurement, construction management and construction
services related to the Project, as more fully described in this
Contract; and
WHEREAS, Owner desires to furnish certain plant equipment,
interconnects, the Facility Site, and other items related to the Project, as more
fully described in this Contract; and
WHEREAS, Contractor desires to engineer, procure materials, manage
construction, construct and start up
the Project, as more fully described in this Contract.
NOW THEREFORE, in consideration of
the mutual covenants and agreements herein contained and other good
and valuable consideration, the receipt of which is hereby
acknowledged, and intending to be legally bound, the Parties hereto
agree as follows:
ARTICLE 1 – RESPONSIBILITIES OF CONTRACTOR
1.1
Performance of the Work. Contractor shall furnish or cause
to be furnished all Work in accordance with the terms and
conditions of this Contract, and in compliance with all
Governmental Approvals and Governmental Rules applicable to the
prosecution of the Work. Contractor shall design, install, and test
Project systems in a safe manner, using qualified, competent and,
where necessary, licensed personnel.
1.2 Design and
Engineering. Contractor
shall furnish detailed design and engineering of the Work including
appropriate specification of equipment, materials and systems to be
incorporated into the Work. Engineering shall be based on the
preliminary engineering, design criteria, and other information
contained in Exhibit B . Contractor’s engineering
services shall include the preparation of drawings, specifications,
schedules, calculations, documents, and estimates, and coordination
with the engineering efforts of Subcontractors.
1.3 Procurement.
Contractor shall procure and make
payments for Engineered Equipment, materials, equipment, supplies,
and services to be included in the Work by Subcontractors.
Contractor shall also perform such inspection, expediting, quality
surveillance, and traffic services as Contractor deems necessary in
connection with such procurement.
1.4 Construction . Contractor shall perform services to
construct the Work, including installation of OFE, furnishing
management, labor, equipment, tools, and temporary facilities
necessary for such construction. Contractor shall handle and
warehouse materials, supplies and equipment required for such
construction and materials, supplies
and equipment supplied by Owner and used by Contractor and
Subcontractors.
1.5
Start-Up, Testing, and Initial Operation. Contractor shall
perform the start-up, testing and initial operation as described in
Exhibit B . Contractor shall conduct the Performance Tests
as described in Exhibit F . Contractor shall provide first
fill of all lubricants.
1.6 Spare
Parts. Contractor shall have the right to use Owner’s
operating spare parts on a “use and replace” basis.
Contractor shall promptly replace at its expense any such spare
parts Contractor uses from Owner’s inventory. Operating spare
parts for OFE that are used by Contractor will be provided at
Owner’s expense and not replaced by Contractor; provided, if
Contractor must use a spare part for OFE because of negligence by
Contractor, then Contractor may use such spare part, but must
replace it.
1.7
Securing Governmental Approvals. Contractor shall secure
those Governmental Approvals that are listed in Exhibit H as
Contractor’s responsibility. Contractor shall on a timely
basis provide all customary and reasonably necessary support to
Owner in connection with Owner’s securing of Governmental
Approvals under Section 2.5 and that are listed in
Exhibit H as Owner’s responsibility.
1.8
Compliance with Governmental Approvals. Contractor shall
design and construct the Work so that, if properly operated and
maintained, and if Owner meets its obligations under the Contract,
the Work will be in compliance with
the technical requirements of all applicable Governmental
Approvals.
1.9
Independent Contractor. Except as may be expressly set forth
herein to the contrary, Contractor is an independent contractor and
nothing contained herein shall be construed as constituting any
relationship with Owner other than that of Owner and independent
contractor, nor shall it be construed as creating any relationship
whatsoever between Owner or Owner’s Representative and
Contractor’s employees. Except as expressly limited in this
Contract, Contractor shall be entitled to exercise the right to
hire, discharge, promote and transfer its employees; to select and
remove foreman or other persons at other levels of supervision; to
establish and enforce reasonable standards of production; to
introduce, to the extent feasible, labor saving equipment and
materials; to determine the number of craftsmen necessary to
perform a task; and to establish, maintain, and enforce rules and
regulations conducive to efficient and productive operations.
Notwithstanding anything to the contrary herein, Owner reserves the
right to prohibit such person(s) as it deems advisable from
entering onto the Facility Site without liability to Contractor
after notifying Contractor of the person(s) prohibited and the
reasons therefore, provided however that any such decision by Owner
shall entitle Contractor to an equitable adjustment to the Contract
Price and/or Project Schedule pursuant to a Change.
1.10 Responsibility
for Subcontractors and Agents. Contractor may subcontract
portions of the Work to any Person without further approval by
Owner. Notwithstanding any agreement with any Subcontractor(s),
Contractor shall be solely responsible for the Work, and has
complete and sole responsibility as a principal for its agents and
all others it hires to perform or assist in performing the Work.
However, Contractor will select from pre-approved first tier
equipment supply Subcontractors as identified in Exhibit I .
Equipment supply Subcontractors that are not on this list and which
have a contract value greater than *** shall be submitted to Owner
for approval, which shall not be
unreasonably withheld.
1.11 Progress
Reports. Contractor shall submit to the Owner monthly reports
describing the status of the Work in reasonable detail, which shall
include information showing actual progress against the Project
Schedule. Contractor shall provide a budget update with each
monthly report showing total amount
expended and billed to date and remaining contract
dollars.
1.12 Publicity.
Contractor shall obtain Owner’s prior written approval of the
text of any external announcement,
publication, or other type of public communication concerning the
Work or the Facility prior to the release of the same by
Contractor. Contractor shall provide that a similar obligation is
placed on Subcontractors.
1.13 Safety.
Contractor shall implement and administer for the Project, a safety
and health program subject to approval of Owner, and attached
hereto as Exhibit J , including development of a safety
manual for the Project establishing
Contractor and Subcontractor safety guidelines and requirements.
During performance of the Work, Contractor shall take reasonable
precautions for the safety of persons. Contractor shall require
Subcontractors working on the Facility Site to adhere to the safety
and health program established for the Project. Owner shall require
its employees and subcontractors working on the Facility Site to
adhere to the safety and health program established for the
Project, as well as any applicable OSHA requirements.
1.14 Site
Security. Contractor shall be responsible for the security of
the Work and the Facility Site after mobilization of
Contractor’s forces at the Facility Site during such times
that Contractor’s forces are physically present on the Facility Site, except
as excused by a Force Maj eure event.
1.15 Contractor
Representative. Contractor shall designate and identify by
Notice to Owner its Project Manager, who shall act as Owner’s
primary point of contact with Contractor with respect to the
prosecution of the Work.
1.16 Corporate
Guarantees. No later than thirty (30) Business Days after the
date of execution of this
Contract, Contractor shall deliver to Owner, in a form attached
hereto as Exhibit K , corporate guarantee from Kiewit Energy & Power Inc. guaranteeing
the performance of Contractor.
1.17
OFE. Contractor shall act as an agent to administer the
Siemens subcontract pursuant to Exhibit G .
ARTICLE 2 – RESPONSIBILITIES OF
OWNER
2.1
Owner Furnished Equipment. Owner shall furnish, at its
expense, OFE, including the Siemens SGT-6-PAC5000F combustion
turbine generator (“CTG”) and the SST-700HP –
900RH steam turbine generator (“STG”), which shall be
delivered undamaged to the Facility Site or to the designated rail
siding at the time specified in the Project Schedule, and shall be
in compliance with the requirements of Exhibit D of this
Contract and shall be free from defects and deficiencies. All OFE
shall be in a condition which does not increase Contractor’s
cost or delay the progress of the Work. Any increase in
Contractor’s cost or time of
performance due to a failure to comply with this Section 2.1
, including the timely delivery of the OFE, shall be treated as an
event entitling Contractor to an equitable adjustment under
Article 10 below. Owner shall retain payment obligations for
OFE contracts, subcontracts or other items assigned by Owner to
Contractor, if any; however, payments are not to be released
without first providing Contractor prior notice and an opportunity
to comment.
2.2
Cooperation with Contractor. Owner shall cooperate with
Contractor during the performance of this Contract. Such
cooperation shall include timely supply of all those items,
personnel, services, and information required to be supplied by
Owner under this Contract, including but not limited to the OFE; no
material interference with Contractor’s agents, employees, or
Subcontractors; and timely administration of all of Owner’s
obligations under this Contract.
2.3
General Responsibilities. Owner shall furnish the following
with respect to the Project:
a) provide a Facility Site of sufficient size, free of Hazardous
Wastes or Materials, including necessary easements, staging areas, and
unrestricted access;
b) provide environmental remediation of the Facility Site, if
required, except for any environmental remediation required due to the acts or omission
of Contractor or any Subcontractor;
c) furnish available geological and other Facility Site data,
including identification of any preexisting underground facilities,
on which Contractor shall be entitled to rely, which shall be set
forth in Exhibit E ;
d) Site Utilities / Consumables including Fuel:
i) Construction Utilities / Consumables -
Owner will provide adequate water for the Project in accordance with required specifications
including related coordination with the applicable utilities.
Construction power (including start-up, testing and commissioning)
and related coordination with the local utilities is by
Owner.
ii) Start-up, Testing and Commissioning Utilities /
Consumables - Owner will provide all fuel, reagents, consumables,
lubricants (except first fill of lubricants by Contractor),
chemicals, electrical power including back-feed, water, sanitary
and firewater at required specifications, through start-up, testing and through to Final
Completion.
e) Owner will provide start-up and operational
spare parts in time to support start-up, testing and commissioning
of the Project. Contractor shall be allowed to utilize these spares
as needed pursuant to Section 1.6 above;
f) Owner will provide all necessary permits, licenses and other
Governmental Approvals excluding those listed as Contractor’s
responsibility pursuant to Exhibit H . Any development,
start-up, operation, building, use, and environmental type
Governmental Approvals not listed on Exhibit H shall be
supplied by Owner;
g) Owner will coordinate and pay for any activities of the Owner
Engineer, if any, and other required
costs for development purposes;
h) Owner will coordinate and pay for all utility and
interconnection related system studies and interface requirements
and will provide available service utility and other interface data
on which Contractor shall be
entitled to rely and which shall be set forth in Exhibit
E;
i) All interconnects, backfeed power, natural gas, water,
construction power, chemicals, Owner- furnished Governmental
Approvals, Owner-furnished spare parts, technical assistants,
operators
and other Owner obligations shall be supplied by Owner in
quantities and qualities as required, no later than dates indicated on the Project
Schedule;
j)
Owner will furnish any required demineralized water production
mobile treatment system per the Project Schedule to support the start-up and
commissioning activities of the Project;
k)
Owner will provide any shop equipment, tools, office furniture, and
laboratory facilities necessary for
operation of the Project;
l)
Owner will arrange for disposal or sale of energy generated by the
Project during commissioning and any
Performance Test;
m)
Owner will provide other items as specifically detailed in
Exhibit D as Owner’s obligations, or as otherwise specified in the Contract;
and
n)
All OFE and Owner specified equipment of standard production
configuration and proven technology.
2.4
Owner’s Representative. Owner shall designate and
identify by Notice to Contractor its Owner’s representative,
who shall act as Contractor’s primary point of contact with
Owner with respect to the prosecution of the Work.
2.5
Operations Personnel. After Notice from Contractor, Owner
shall, within fifteen (15) days prior to commencement of the
Performance Tests, provide qualified, competent, and, where
necessary, licensed operations and maintenance personnel for
testing, start-up and initial operation of the Facility.
Owner shall provide that such
personnel perform the duties to which they are assigned in
accordance with generally accepted practices and standards of the
industry. Owner shall supply, or cause to be supplied, sufficient
small tools to facilitate on-the-job training of the operations and
maintenance personnel. Owner shall be responsible for the negligent
acts or omissions and willful misconduct of its operating and
maintenance personnel.
ARTICLE 3 – COMPENSATION
3.1
Contract Price. Owner shall pay Contractor the Contract
Price, which shall be paid in accordance with Sections 4.1
and 4.2 , subject to increases or decreases only as
specified in Changes approved in accordance with Article 10,
or as set forth in Section 3.5 below.
3.2 Other
Compensation. In addition, Owner shall pay to Contractor: (i)
certain costs of termination
of this Contract in accordance with
Article 14 ; (ii) reimbursement for certain costs of Changes
pursuant to Article 10 ; (iii) interest on late payment as
set forth in Section 4.3 ; and (iv) the ongoing suspension
costs set forth in Section 15.4 .
3.3
Purchase of Surplus Materials. Subject to mutually agreeable
terms, Owner shall have the option to purchase any or all surplus
construction materials and any supplies remaining on the Facility
Site at Substantial Completion.
3.4
Taxes. Contractor shall pay: (i) all payroll and other
related employment compensation taxes for Contractor’s
employees; (ii) all sales, use, and property taxes applicable to
the Contractor’s ownership, purchase or use of small tools,
consumables, expendables, and construction equipment required to
perform the Work, (iii) all sales, use, gross receipts and excise
taxes imposed on the Contractor’s purchase, sale, use or
storage of equipment, materials, and any other items procured by
Contractor for purposes of installation into, affixation or
attachment to, or incorporation into the Facility to be constructed
for Owner or to otherwise be provided by Contractor to Owner
pursuant to this Contract unless Owner has provided written
instructions to Contractor identifying specific items eligible for
exemption from Idaho sales and use taxes; and (iv) federal, state
and other taxes which may be assessed on Contractor’s net
income from the Work (collectively, the “Contractor
Taxes”). Owner is responsible for: (i) all sales, use, gross
receipts and excise taxes imposed on OFE; and (ii) property taxes
imposed on the Facility, the Facility Site, OFE and any other
equipment, materials, and all other items delivered to the Facility
Site for installation into, affixation or attachment to, or
incorporation into the Facility (collectively, the “Project
Taxes”). Contract Price includes Contractor Taxes and
excludes all Project Taxes. Owner shall directly reimburse
Contractor, in addition to Contract Price, for any and all Project
Taxes incurred and actually paid by Contractor and for the actual
cost incurred to post any necessary tax bond. Owner shall defend
and indemnify Contractor from and against any and all claims for,
and resulting liability for Project Taxes and any Idaho sales and
use taxes relating to pollution control equipment and related
penalties and interest, and any dispute resolution costs and
attorneys’ fees (including costs of enforcement of this
provision) that may be asserted on all items which Contractor
purchased under exemption certificates or written instructions
provided by Owner to Contractor and for which taxes are later
assessed. At Owner’s expense and only with Contractor’s
consent, Owner will have the right to direct the basis on which any
tax assessment will be paid or contested and to control any contest
leading to the settlement of assessed taxes. Owner retains the
right to choose the attorneys who will represent Contractor’s
and/or Owner’s interest regarding any tax assessments and/or
litigation.
It is acknowledged
between the Parties that the Owner believes the Work contains
certain items of property that may
qualify under Idaho Code Section 63-3622X as exempt from the State
of Idaho’s sales and use tax as pollution control equipment.
It is to the mutual advantage of both Parties to identify and claim
these items of property as exempt prior to providing sales or use
tax remittance to the State of Idaho. Contractor will use
commercially reasonable efforts to identify, based on information
provided by Owner, such property prior to placing orders to procure
it. Owner shall provide written instructions to Contractor
identifying materials, machinery, or devices that will be procured
for the Work upon which Contractor is to exclude Idaho sales or use
taxes on the basis of exemption pursuant to Idaho Code Section
63-3622X.
It is acknowledged by the Parties
that, pursuant to Idaho law as of the date of this Contract, all
shipping and handling charges do not attract Idaho sales or use tax
and will be stated separately in all invoices issued to Contractor.
Shipping refers to any charge incurred for the delivery, freight,
and transportation. Handling refers to the fees imposed by the
seller for the preparation of property for shipping.
Contractor shall, prior to Final
Acceptance, and with the Owner’s assistance, provide to Owner
a listing of equipment included in the Work that meets the
requirements of Idaho Code Section 63-602P as property that
contributes to the elimination, control or prevention of air or
water pollution.
If a change order results in an increase or decrease in the
Contract Price, the revised Contract Price (reflecting the increase
or decrease as a result of the change order) shall include all
Contractor Taxes and exclude all
applicable Project Taxes. Owner shall reimburse Contractor for all
applicable Project Taxes paid by Contractor in accordance with the
provisions of this Section 3.4.
3.5
Engineered Equipment Target Price Adjustments. Purchase
orders and subcontracts will be awarded by Contractor for the
procurement of the Engineered Equipment. The value of the purchase
orders and the subcontracts will be recorded and reported to the
Owner monthly throughout the course of the Work. Monthly reporting
will also include a projected Engineered Equipment Cost, that will
be compared to the Engineered Equipment Target Price. The Parties
shall reconcile the Engineered Equipment Cost with the Engineered
Equipment Target Price no later than two weeks after
Contractor’s last purchase of major Engineered Equipment,
within thirty (30) days after each of the Substantial Completion
Date, the Final Completion Date, and the conclusion of the Warranty
Period, unless the Parties otherwise agree. Upon conclusion of each
reconciliation, the Parties shall agree on a value for the
Engineered Equipment Cost, as applicable, and, to the extent excess
costs or shared savings have not yet been accounted for, either (i)
the Contractor shall make a reimbursement to Owner subject to the
limit set forth in Sections 3.6 (ii) Owner shall make a payment to
Contractor subject to the limit set forth in Section 3.6, or (iii)
no reimbursement will be required.
3.6
Engineered Equipment Target Price. The basis for the
Engineered Equipment Target Price is as listed in Exhibit M
and the technical specifications in Exhibit B applicable to
the Engineered Equipment. The Engineered Equipment Target Price, as
shown on Exhibit M , is ***. It is the intent of the Parties
that Contractor and Owner share the potential risks and benefits
associated with the Engineered Equipment Target Price. If the
Engineered Equipment Cost exceeds the Engineered Equipment Target
Price, up to seven million, nine hundred eight-two thousand, four
hundred thirty-three dollars ($7,982,433), the Owner and the
Contractor shall equally bear the excess costs. To the extent the
Engineered Equipment Cost exceeds the Engineered Equipment Target
Price by more than seven million, nine hundred eight-two thousand,
four hundred thirty-three dollars ($7,982,433), the Owner shall be
solely responsible for all costs above the seven million, nine
hundred eight-two thousand, four hundred thirty-three dollar
($7,982,433) difference. If the Engineered Equipment Cost is less
than the Engineered Equipment Target Price, up to eight million,
seventeen thousand, five hundred sixty-seven dollars ($8,017,567),
the Owner and the Contractor shall share equally in the savings
difference. To the extent the savings difference is greater than
eight million, seventeen thousand, five hundred sixty-seven dollars
($8,017,567), the Owner shall be solely entitled to all such
savings .
The Engineered Equipment Target Price shall
include the cost of the following items:
a)
Final detailed design scope adjustments required to provide a
facility meeting all requirements of the Contract (without regard to any
Changes).
b)
Vendor technical field services, required to support the
Contractor.
c)
Revisions or re-order of equipment caused by Contractor’s
engineering changes.
d)
Cost of all change orders issued to Engineered Equipment suppliers
and subcontractors initiated by the
Contractor.
The Engineered Equipment Target Price does not cover or incorporate
the costs associated with any Change, and any such costs shall be
the sole responsibility of Owner. In the event Contractor incurs
any additional costs relating to the Engineered Equipment due to a
Change or any additional sales or use tax, Contractor shall submit a Change Order in
accordance with Article 10 .
3.7
Engineered Equipment Target Price Disclosure and Rights. The
Contractor shall provide the Owner with copies of all purchase
orders, material contracts and subcontracts, including all change
orders and amendments, for all Engineered Equipment for the purpose
of allowing Owner to audit the Engineered Equipment
Cost.
Any liquidated damages
paid by any Subcontractor or Subcontractor’s subcontractor
shall not affect the Engineered Equipment Cost. The Owner shall not
share in the benefit of any liquidated damages payable by any Engineered Equipment Subcontractor or
Subcontractor’s subcontractor, as the damages are to
compensate the Contractor for costs resulting from failure of the
Engineered Equipment vendors to perform. Any back-charges, re-work
or other such work associated with the Engineered Equipment shall
not affect the Engineered Equipment Cost. The Owner shall not share
in the reduction of any Engineered Equipment contracts related to
Contractor’s back-charges, re-work or any other such work
associated with Engineered Equipment.
3.8 Labor
Adjustment. Contractor and Owner agree that portions of the
Contract Price as set forth in Exhibit C were established on
a firm price basis. Owner has requested and Contractor has agreed
to a seven month delay in issuing the Notice to Proceed. There may
be escalation on the labor portion of the Contract Price arising
from this delay; if so, the labor portion of the Contract Price
will qualify for adjustment as set forth in this Section. This
shall be the sole adjustment to the Contract Price for the impacts
to the labor portion of the Contract Price arising from the seven
month delay in issuing the Notice to Proceed. This Section shall in
no way limit Contractor's rights to other adjustments that are
allowed per Article 10 , such as: (a) impacts arising from
further delay, if any, in issuing the Notice to Proceed; and (b)
impacts arising from any other events.
(a) Labor
Indexes. For the purpose of this labor adjustment provision,
the Labor Indexes used shall be based on labor cost surveys
performed by a mutually acceptable independent third party firm.
Such surveys shall be formulated to accurately reflect the cost of
labor for the Project and the regional area, and shall consider
wages for applicable craft labor groups. The Labor Indexes shall
take into account the Labor Portion of each labor group as a fixed
percentage of the labor portion of the Contract Price as provided
below. The parties agree that labor cost surveys for the
Northwestern United States prepared by PAS, Inc. of Saline, Michigan, are mutually
acceptable.
A Base Labor Index (BLI)
shall be established using actual Survey Labor Rates dated on or
about March 1, 2009. For example:
|
|
|
|
Example Survey
|
|
|
|
Labor
|
|
Average
|
|
|
CRAFT
|
Portion
|
|
Hourly Wage Rate
|
|
|
Boilermakers
|
10%
|
X
|
$20.00 =
|
2.00
|
|
Electricians
|
20%
|
X
|
$20.00 =
|
4.00
|
|
Iron Workers, Structural
|
2%
|
X
|
$20.00 =
|
0.40
|
|
Millwrights
|
15%
|
X
|
$20.00 =
|
3.00
|
|
Pipefitters
|
16%
|
X
|
$20.00 =
|
3.20
|
|
Welders
|
17%
|
X
|
$20.00 =
|
3.40
|
|
Base Labor Index (BLI)
|
|
|
SUM =
|
16.00
|
A Periodic Labor Index (PLI)
shall be established using actual Survey Labor Rates dated on or
about September 1, 2009. For example:
|
|
Example Survey
|
|
Labor
|
Average
|
CRAFT
|
Portion
|
|
Hourly Wage Rate
|
|
|
Boilermakers
|
10%
|
X
|
$25.00 =
|
2.50
|
|
Electricians
|
20%
|
X
|
$18.00 =
|
3.60
|
|
Iron Workers, Structural
|
2%
|
X
|
$20.00 =
|
0.40
|
|
Millwrights
|
15%
|
X
|
$22.00 =
|
3.30
|
|
Pipefitters
|
16%
|
X
|
$30.00 =
|
4.80
|
|
Welders
|
17%
|
X
|
$20.00 =
|
3.40
|
|
Periodic Labor Index
(PLI)
|
|
|
SUM =
|
18.00
|
The BLI and PLI shall be calculated to two
decimal places.
(b) Adjustment Calculation. If the PLI is less than or equal
to the BLI, the Contract Price shall not be adjusted. If the PLI is
greater than the BLI, a Cost Increase to the Contract Price shall
be calculated as follows:
• Adjustment
Percentage ( AP ) = ***
• Cost
Increase = ***
The AP shall be calculated to four
decimal places. However, in no case shall the Cost Increase exceed
***. For example:
AP = ***
Computed Cost Increase =
***
*** (cap); therefore, a change order for the Cost Increase of ***
would be executed.
(c) Price Adjustment & Billing. The price adjustment
calculation shall be performed by Contractor within the pay period after the Survey Labor
Rates dated on or about September 1 st , 2009, are
published. If a Cost Increase results, the parties shall
immediately execute a change order for the Cost Increase in
accordance with Article 10 . The Contractor may submit an
invoice for the Cost Increase at any time after execution of such
change order and payment shall be made in accordance with
Article 4 .
ARTICLE 4 – PAYMENT
TERMS
4.1
Payment to Contractor.
a.
Subject to the terms of this Contract, O