Exhibit
10.2
General Terms and
Conditions
for
Engineering, Procurement, and
Construction
of
Air Quality Control (AQC)
Systems
August 26,
2005
by and
between
FirstEnergy Generation
Corp.
and
Bechtel Power Corporation
General Terms and Conditions
for Engineering, Procurement, and Construction
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INDEX
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Article 1 -
Definitions
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1
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Article 2 - Relationship of
FirstEnergy, Contractor, and Subcontractors
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6
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Article 3 - Contractor’s
Responsibilities
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8
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Article 4 -
FirstEnergy’s Responsibilities
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18
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Article 5 - Price; Payments to
Contractor
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18
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Article 6 - Project Schedule;
Commencement of Project; Mechanical and Final Completion; Scheduled
Liquidated Damages
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21
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Article 7 - Performance
Guarantee; Performance Liquidated Damages
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25
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Article 8 - Change
Orders
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25
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Article 9 - Force Majeure;
FirstEnergy Delay; Recovery
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29
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Article 10 - Compliance with
Laws, Regulations, and Permits
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30
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Article 11 - Intellectual
Property Rights
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33
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Article 12 - Insurance and
Bonds
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34
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Article 13 - Warranty and
Correction of Work
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37
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Article 14 - Payment of
Accounts; Waiver of Lien Rights
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39
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Article 15 - Default,
Termination and Suspension
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41
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Article 16 -
Indemnities
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42
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Article 17 -
Confidentiality
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44
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Article 18 - Limitation of
Liability
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45
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Article 19 - Miscellaneous
Provisions
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47
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General
Terms and Conditions for Engineering, Procurement, and
Construction
ARTICLE 1 -
DEFINITIONS
1.1 Definitions
. The following
terms, when used in this Agreement with initial capitalization,
shall have the meanings given below unless in any particular
instance the context clearly indicates otherwise:
"AE-Constructor" and/or
"Contractor" means Bechtel Power
Corporation, the entity primarily responsible for performing and
procuring the work.
“Affiliate”
means, with
respect to a Party, any Person: (i) which such Party now or
hereafter owns or controls directly or indirectly; (ii) which is
owned or controlled by the same company or companies that owns,
directly or indirectly, a controlling interest in such Party; or
(iii) which owns or controls, directly or indirectly, such Party.
As used herein, “control” means
direct or indirect possession of the power to direct or cause the
direction of the management or policies of a legal entity, whether
through ownership of voting securities, by contract or otherwise,
and the terms “controlled” and
“controlling” have meanings correlative to the
foregoing.
“Agreement”
has the meaning
set forth in Section 1.2 .
“Applicable Codes and
Standards” means the codes, standards or
requirements set forth herein or in any Applicable Law, which codes
and standards include those described in FirstEnergy’s
Requirements, and shall govern Contractor’s performance of
the Project. In the event of an inconsistency or conflict between
any of the Applicable Codes and Standards as contained in this
Agreement and any referenced attachment, exhibit, schedule or
subcontract, the highest such performance standard shall govern
Contractor’s performance under this Agreement.
“Applicable
Law” means any federal, state, or
local statute, ordinance, rule, regulation, policy or guidance, any
judicial or administrative order or judgment (whether or not by
consent), any duties imposed by common law, and any provision or
condition of any permit, license, or other operating authorization
of any Governmental Authority or other body having jurisdiction
over the Parties, the performance of the Project, or the
Site.
“AQC
Unit” means a portion of a
Subproject associated with a Generating Unit.
“Available
Amount” has the meaning set forth in
Section 12.6 .
“BAPC
Ohio” means Bechtel Associates
Professional Corporation, (Ohio), an Ohio professional corporation
which is an Affiliate of Contractor.
“Bond”
means an on
demand, non-replenishing performance and/or payment security, in
form and substance mutually agreeable to the parties.
“Business
Day” means any day other than a
Saturday, Sunday or other day on which banking institutions in the
State of Ohio are required to be closed.
“Change
Order” means a written order issued
by FirstEnergy to Contractor after the execution and delivery of
this Agreement or a written instrument signed by both Parties after
execution and delivery of this Agreement in accordance with
Article 8 or a written determination pursuant to Section
19.4 that authorizes an addition to, deletion from, suspension
of or other modification to the requirements of this Agreement,
and, to the extent provided for herein, an adjustment to the Target
Construction Cost, the Project Schedule, any Guaranteed Final
Completion Dates, any scope of work under the Subproject, the
Performance Guarantee, any of the Warranties or any other
obligation of either Party hereunder.
“Changed
Criteria” has the meaning set forth in
Section 8.1(A) .
“Commencement
Date” for each Subproject means the
date of issuance of a Notice to Proceed with full construction, or
an equivalent release to commence full construction of that
Subproject.
“Contractor Indemnified
Parties” means Contractor, its
Affiliates, and their respective directors, officers, agents,
employees, invitees, successors, and assigns.
"Contractor's Project
Manager" means Contractor’s
designated authorized Project representative actively engaged in
the supervision of the Project and in all matters relating to this
Agreement, who shall have complete authority to act on behalf of
Contractor on all matters pertaining to the Project, including
giving instructions and making changes in the Project.
“Contract
Price” means the Fee, reimbursable
costs, and all other amounts payable by FirstEnergy to Contractor
under Section 5.1 (provided, the Contract Price shall
not include any amounts paid to Contractor for payments to FE
Vendors that Contractor administers on FirstEnergy’s
behalf).
“Corrective
Work” has the meaning set forth in
Section 13.1(B) .
“Craft
Labor” means building and
construction trades crafts employed by the Contractor or
Subcontractors for the construction of the Project.
“Critical Path
Schedule” has the meaning set forth in
Section 6.4(A) .
“Data"
means
documentation, manuals, maps, plans, schedules, programs,
specifications, software, reports, drawings, designs and other
relevant information and works of authorship.
“Development
Phase” shall mean with respect to
each Subproject, the time period prior to the Commencement
Date.
“Drawings”
mean the graphic
and pictorial documents showing the design, location and dimensions
of the Project, generally including plans, elevations, sections,
details, schedules and diagrams and the 3-dimensional model. Upon
approval by FirstEnergy pursuant to Section 3.3(C) ,
such Drawings shall form a part of the Agreement.
“Effective
Date” means the date of execution by
FirstEnergy and Contractor of this Agreement, or such other date as
may be mutually agreed by FirstEnergy and Contractor as the
Effective Date of this Agreement.
“Environmental
Law” means any Applicable Law
relating to, (A) the protection of (i) natural resources and the
environment, or (ii) human health and the public welfare from
actual or potential exposure to any actual or potential release,
discharge, disposal or emission (whether past or present) of any
Hazardous Substance, or (B) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, of any Hazardous Substance.
“FE
Vendor” means a supplier of equipment,
Materials, and/or services with respect to the Project or any
Subproject, under direct contract with FirstEnergy (including any
direct contract with FirstEnergy in which Bechtel acts as
FirstEnergy’s agent).
“FE Vendor
Arrangement” has the meaning set forth in
Section 3.1(B) .
“Fee”
has the meaning
set forth in Exhibit 5.1 .
“Final Completion
Certificate” means a certificate signed by
Contractor in the form of Exhibit 6.3(C) .
“Final
Completion” has the meaning set forth in
Section 6.3(A) .
“Final Document
Delivery” has the meaning set forth in
Section 6.3(A) .
“Final Lien and Claim
Waiver” means the waiver and releases
provided to FirstEnergy by Contractor and Subcontractors in
accordance with the requirements of Section 6.3(A) , which
shall be in the form of Exhibit 6.3(A) .
“Financing
Assignee” has the meaning set forth in
Section 19.3(C) .
“Financing
Documents” means any and all loan
agreements, notes, indentures, security agreements, pledges,
mortgages, subordination agreements, intercreditor agreements,
partnership agreements, subscription agreements, participation
agreements and other documents relating to the construction,
interim or long-term financing of any Subproject and any
refinancing of any Subproject (including a leveraged lease),
including any and all modifications, extensions, renewals and
replacements of any such financing or refinancing.
“FirstEnergy”
means FIRSTENERGY
GENERATION CORP., an Ohio corporation.
“FirstEnergy
Indemnified Parties” means FirstEnergy, its
Affiliates, and their respective directors, officers, agents,
employees, invitees, successors, and assigns.
“FirstEnergy Designated
Representative” means that Person or Persons
designated by FirstEnergy in a written notice to Contractor who
shall have authority to act on behalf of FirstEnergy on all matters
pertaining to the Project, including giving instructions and making
changes in the Project.
“FirstEnergy Reliable
Information” has the meaning set forth in
Section 3.1(B).
“FirstEnergy’s
Requirements” means the work scope attached
hereto as Attachment A , the operating specifications,
performance data sheets, and coal analysis data sheets, in each
case together with all attachments thereto, and all other documents
provided or identified by FirstEnergy to Contractor’s Project
Manager specifying the purpose, scope, and/or design and/or other
technical criteria for the Project.
“Force Majeure
Event” means (i) an act of God,
epidemic, landslide, lightning, earthquake, flood, fire, eruption,
tornado, or other unusual natural event of any kind affecting a
Party that was not voluntarily induced or promoted by the affected
Party and did not result from a breach of such Party’s
obligations under this Agreement or unlawful behavior by such
Party, or (ii) failure of renewal, revocation, denial or delay in
obtaining (after the affected Party has used due diligence and all
reasonable commercial efforts to obtain) any necessary governmental
authorization or permit, (iii) acts of any Governmental Authority
(not resulting from a violation, or failure to fulfill the
requirements, of Applicable Law by the affected Party),
(iv) war, riot, civil disorder, terrorist act, embargo, strike
or other concerted labor action, or (v) any other event, whether
similar or not to the foregoing which, in each case, is beyond the
reasonable control of the affected Party, despite such
Party’s best efforts to fulfill its obligations under this
Agreement. “Best efforts to fulfill its obligations”
includes attempting to anticipate any Force Majeure Event and to
address the effects of any such event (a) as it is occurring, and
(b) after it has occurred, such that the delay or violation is
minimized to the greatest extent possible. Failure or delay to
perform of any Subcontractor, inability to obtain or delay in
obtaining equipment, Materials or transport, and lack of
availability of laborers, Subcontractors or local materials, shall
not be a Force Majeure Event as to a Party unless caused by a Force
Majeure Event or, where a Subcontractor fails to perform, an event
which would, as to the Subcontractor directly affected thereby,
qualify as a Force Majeure Event hereunder.
“Generating
Unit” means an electric power
generating unit to which a Subproject, or a portion of a
Subproject, is being applied.
“Good
Practices” means those practices and
methods, and that level of competence, care, skill and judgment,
generally used by internationally recognized, experienced and
prudent contractors, engineers, manufacturers and professionals
working in the electric power generation industry in the United
States to design, engineer, construct, manufacture, commission,
test and operate electric power generation facilities and ancillary
equipment for the electric power industry, lawfully and safely, and
with due consideration for reliability, efficiency, operability and
maintainability. It is not intended that Good Practices be limited
to the optimum practices, methods or acts to the exclusion of
others, but rather a spectrum of practices, methods, or acts which
internationally recognized, experienced and prudent contractors,
engineers, manufacturers and professionals would be expected to
employ in carrying out the requirements of this
Agreement.
“Governmental
Authority” means any federal, state, or
local governmental body, including any legislative, judicial, or
executive body, or agency or subdivision thereof, in each case
having jurisdiction to exercise authority or control over a Party
or its agent or over any part of or all of the Project or the
Site.
“Guaranteed Final
Completion Dates” has the meaning set forth in
Section 6.3(B) .
“Hazardous
Substances” means any chemical or other
material which is or may become injurious to the public health,
safety, or welfare or to natural resources or the environment; any
pollutant; contaminant; waste, solid or hazardous; any petroleum
product; polychlorinated biphenyls; asbestos and
asbestos-containing material; and includes substances defined as
"hazardous substances" in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec.
9601, et seq.
“Incentive
Criteria” means the Scorecard Incentive
Criteria, Target Construction Cost, and any other criteria which
adjusts Contractor’s Fee as provided in Exhibit 5.1
.
“Interim Lien and Claim
Waiver” means the waiver and release
provided to FirstEnergy by Contractor and Subcontractors, in
accordance with the requirements of Section 5.2(C) , which
shall be in the form of Exhibit 5.2(C)
“Liquidated
Damages” means Performance Liquidated
Damages and Schedule Liquidated Damages.
“Losses”
mean all losses,
costs, damages, claims, liabilities, fines, penalties, and expenses
(including attorneys’ and other professional fees and
expenses, and court costs, incurred in connection with the
investigation, defense, and settlement of any claim asserted
against any Party).
‘‘Materials”
means all
materials and equipment required for the completion of and
incorporation into the Project.
“Mechanical
Completion” has the meaning set forth in
Section 6.2(A) .
“Monthly Progress
Reports” has the meaning set forth in
Section 3.10(A) .
“Notice to
Proceed” means, for any Subproject, a
written notice to fully proceed with all work on a Subproject, or
with that portion of the Subproject identified in such notice, that
is agreed to and signed by FirstEnergy and Contractor.
“NSR Consent
Decree” means the Consent Decree,
dated March 18, 2005, issued in United States of America, et al. v. Ohio Edison
Company and Pennsylvania Power Company, Civil Action
No: 2:99-CV-1181 (U.S. District Court, SD Ohio), accessible at:
www.epa.gov/compliance/resources/cases/civil/caa/ohioedison.html.
“OEM”
means an original
equipment manufacturer providing major process equipment for a
Subproject.
“Party”
or
“Parties” means
FirstEnergy and/or Contractor and their permitted successors and
assigns.
“Performance
Guarantee(s)” means the guarantees
identified in Exhibit 7.2 .
“Performance Liquidated
Damages” has the meaning set forth in
Section 7.2 .
“Performance
Tests” means those tests required to
be performed to ensure that the Project meets the Performance
Guarantee(s), as mutually determined by the Parties during the
Development Phase.
“Permit”
means any valid
waiver, certificate, license, exemption, variance, franchise,
permit, authorization or similar order from any Governmental
Authority required to be obtained and maintained in connection with
the Site or otherwise in relation to the Project.
“Person”
means any
individual, company, joint venture, corporation, partnership,
association, joint stock company, limited liability company, trust,
estate, unincorporated organization, Governmental Authority or
other entity having legal capacity.
“Professional
Services” means the engineering, design,
procurement, and non-manual construction management services
performed or to be performed by Contractor under this
Agreement.
“Project”
means all
services, labor, Materials, apparatus, structures, supplies, Data,
engineering, design, fabrication, delivery, inspection, and
testing, together with miscellaneous expendable job supplies,
installation-related equipment and tools, and any other services,
work or things furnished or used or required to be furnished or
used, by Contractor in the performance of this Agreement, and
including any work performed pursuant to a Warranty. The term
“Project” shall refer to the work to be performed in
any Subproject only when and to the extent that Contractor has been
authorized to perform work on a Subproject during the Development
Phase, and only when and to the extent that Contractor has been
authorized by receipt of a Notice to Proceed with respect to such
Subproject.
“Project Execution
Plan” means a description of
processes for implementation of a Subproject, as described in
Attachment A and in Article 3 .
“Project
Schedule” means the schedule of the
dates for certain stages of completion of the Subproject, such as
the Scheduled Mechanical Completion Dates and the Guaranteed Final
Completion Dates, as mutually determined by the Parties during the
Development Phase, and which Contractor shall, at a minimum, use
its best efforts to ensure, meets the requirements of Ohio Edison
Company and Pennsylvania Power Company under the NSR Consent
Decree.
“Recovery
Schedule” has the meaning set forth in
Section 9.3 .
“Reliability
Standard” has the meaning set forth in
Exhibit 7.2
“Response
Period” has the meaning set forth in
Section 13.2(C) .
“Schedule Liquidated
Damages” has the meaning set forth in
Section 6.5 .
“Scheduled Mechanical
Completion Date” for each Subproject shall mean
the date by which Contractor is scheduled to achieve Mechanical
Completion of the Subproject , as set forth in the Project Schedule
to be delivered pursuant to Section 6.4 .
“Site”
means
FirstEnergy’s W.H. Sammis electric generation facility
located in Stratton, Ohio, and all other locations owned and
exclusively operated by FirstEnergy or its Affiliates at which the
Project or any Subproject is to be performed or to which Materials
are to be delivered.
“Specifications”
mean those
preliminary documents consisting of the written requirements for
Materials, standards, and workmanship for the Project and
performance of related services. Upon approval by FirstEnergy
pursuant to Section 3.3(C) , such Specifications shall
form a part of the Agreement.
“Subcontract”
means an agreement
by Contractor with a Subcontractor or by a Subcontractor with a
lower tier Subcontractor for the performance of any portion of the
Project.
“Subcontractor”
means any vendor,
subcontractor, materialman or supplier of any tier engaged by
Contractor, or any higher-tier Subcontractor in connection with the
performance of the Project, including BAPC Ohio, the entity to
which all required engineering and design work will be
subcontracted. The term “Subcontractor” shall not
include any FE Vendor.
“Subproject”
means a portion of
the Project as more fully described in Section 3.1(A)
.
“Target Construction
Cost” has the meaning set forth in
Exhibit 5.1
“Taxes”
means any and all
taxes, assessments, levies, duties, fees, charges and withholdings
of any kind or nature whatsoever and howsoever described, including
gross receipts, franchise, sales, use, value added, property,
excise, capital, stamp, transfer, employment, occupation,
generation, privilege, utility, regulatory, energy, consumption,
lease, filing, recording and activity taxes, levies, duties, fees,
charges, imposts and withholding, together with any and all
penalties, interest and additions thereto, but excluding any taxes
on the incomes of the Parties.
“Third
Party” means employees of Contractor
Indemnified Parties and the FirstEnergy Indemnified Parties, acting
in their individual or personal capacity and subject to the
foregoing, parties other than Contractor, FirstEnergy, and their
respective Affiliates, successors and assigns.
“Updated Critical Path
Schedule” has the meaning given it in
Section 6.4(C) .
“Vendor Termination
Costs” has the meaning set forth in
Section 12.6
“Warranty”
has the meaning
set forth in Section 13.1 .
“Warranty
Non-Conformance” has the meaning set forth in
Section 13.2(B) .
“Warranty
Period” has the meaning set forth in
Section 13.1 .
“Work
Scope” means the work scope mutually
determined by the Parties during the Development Phase, which will
include the matters described generally in Attachment A and
such other matters as are mutually agreed by the
Parties.
“Wrap
Arrangement” has the meaning set forth in
Section 3.1(B) .
1.2 Entire Agreement;
Modification . The terms and conditions set
forth in these General Terms and Conditions for Engineering,
Procurement, and Construction (including all exhibits and schedules
attached hereto), together with the Purchase Order to be delivered
by FirstEnergy, FirstEnergy’s Requirements, and the Drawings
and Specifications approved by FirstEnergy pursuant to
Section 3.3(C) , in each case as they may be amended
and supplemented from time to time, shall constitute the entire
agreement between FirstEnergy and the Contractor with respect to
the performance of the Project (the “Agreement” ), and
supersedes any and all other prior understandings, correspondence
and agreements, oral or written, between them. This Agreement may
not be altered, amended, or modified in any way except by a written
modification signed by all Parties.
1.3 Priority
. The documents
making up this Agreement are intended to be complementary and
mutually explanatory of one another. For the purposes of
interpretation, the priority of the documents shall be in
accordance with the following sequence:
(A) the Purchase Order to be
issued by FirstEnergy;
(B) these General Terms and
Conditions;
(C) FirstEnergy’s
Requirements;
(D) the Drawings and
Specifications;
(E) any other documents forming a
part of this Agreement.
The latest dated amendment or
Change Order shall take precedence over that part of the foregoing
documents that it supersedes. Either Party, upon becoming aware of
any such conflict or variance, shall promptly notify the other
Party in writing.
ARTICLE 2 - RELATIONSHIP OF
FIRSTENERGY, CONTRACTOR, AND SUBCONTRACTORS
2.1 Status of
Contractor . The relationship of
Contractor to FirstEnergy shall be that of an independent
contractor. Except to the extent set forth in this Agreement,
nothing herein shall be interpreted to create a master-servant or
principal-agent relationship between Contractor or any of its
Subcontractors and FirstEnergy. Nevertheless, the fact that
Contractor is an independent contractor does not relieve it from
its responsibility to fully, completely, timely and safely perform
the work in strict compliance with this Agreement. Nothing in this
Agreement or in the performance of the Project shall be construed
to create a partnership, joint venture or other joint business
arrangement between FirstEnergy and Contractor.
2.2 Subcontractors
. FirstEnergy
acknowledges and agrees that Contractor intends to have portions of
the Project accomplished by Subcontractors pursuant to written
Subcontracts between Contractor and such Subcontractors. All
Subcontractors shall be reputable, qualified firms with an
established record of successful performance in their respective
trades performing identical or substantially similar work. All
Subcontracts with Subcontractors shall at all times be consistent
with the terms or provisions of this Agreement. No Subcontractor is
intended to be or shall be deemed a third-party beneficiary of this
Agreement. Contractor shall be fully responsible to FirstEnergy for
the acts and omissions of Subcontractors and of persons directly or
indirectly employed by them, as it is for the acts or omissions of
persons directly employed by Contractor. The work of any
Subcontractor shall be subject to inspection by FirstEnergy to the
same extent as the work of Contractor. All Subcontractors and
personnel of Subcontractors are to be instructed in the terms and
requirements of FirstEnergy-approved safety and environmental
protection regulations and shall be expected to comply with such
regulations. In the event that personnel are not adhering to such
regulations, then they shall be removed by Contractor. Nothing
contained herein shall (i) create any contractual relationship
between any Subcontractor and FirstEnergy, or (ii) obligate
FirstEnergy to pay or see to the payment of any
Subcontractor.
CONFIDENTIAL TREATMENT
REQUESTED
EXECUTION
COPY
2.3 Subcontracts
.
(A) Proposed
Subcontractors . Prior to engaging any
Subcontractor (other than any Contractor Affiliate) for performance
of any part of the Project having an aggregate value in excess of
[$ ******], Contractor shall (i) notify
FirstEnergy of such proposed Subcontractor as soon as possible
during the selection process and furnish to FirstEnergy all
information reasonably requested by FirstEnergy with respect to
Contractor’s selection criteria (including copies of bid
packages furnished to prospective Subcontractors and the
qualifications of the proposed Subcontractors), and
(ii) notify FirstEnergy no less than fifteen (15) Business
Days prior to the execution of such Subcontract. FirstEnergy shall
have the discretion, not to be unreasonably exercised, to reject
any proposed Subcontractor. Contractor shall not enter into any
Subcontract with a proposed Subcontractor rejected by FirstEnergy.
FirstEnergy shall undertake in good faith to review the information
provided by Contractor pursuant to this Section 2.3(A)
expeditiously and shall notify Contractor of its decision to accept
or reject a proposed Subcontractor as soon as practicable after
such decision is made, provided, in the event that FirstEnergy does
not inform Contractor of its decision to accept or reject a
Subcontractor within five (5) Business Days, Contractor shall be
entitled to deem that FirstEnergy has accepted such proposed
Subcontractor.
(B) Delivery of
Subcontracts . Contractor shall furnish
FirstEnergy with a copy of all Subcontracts within ten (10) days
after execution thereof.
(C) Terms of
Subcontracts . In addition to the
requirements in Section 2.2 , each Subcontract will contain
the following provisions:
(1) the Subcontract (other than
Subcontracts with Affiliates of Contractor) may be assigned to
FirstEnergy or its designee, at the request of FirstEnergy and
without the consent of the Subcontractor; and
(2) the Subcontractor shall comply
with and perform for the benefit of FirstEnergy all requirements
and obligations of Contractor to FirstEnergy under this Agreement,
as such requirements and obligations are applicable to the
performance of the work under the Subcontract, including an
indemnity for the benefit of FirstEnergy in substance the same as
that included in Article 16 , the insurance requirements
specified in Article 12 , and the provisions of Section
3.7 .
2.4 FE Vendors
. FirstEnergy may
elect to obtain certain products or services relating to each
Subproject directly from an FE Vendor rather than through
Contractor or its Subcontractors. Contractor will provide
construction management and such other management and
administrative services with respect to FE Vendors as provided
herein. However, nothing contained herein shall (i) create any
contractual relationship between any FE Vendor and Contractor, or
(ii) obligate Contractor to pay or see to the payment of any FE
Vendor, except as otherwise expressly agreed. No FE Vendor is
intended to be or shall be deemed a third-party beneficiary of this
Agreement. FirstEnergy shall use best efforts to include in its
contracts with FE Vendors (or in the case that Contractor performs
any work pursuant to this Agreement other than in respect of the
Work Scope as contemplated in Exhibit 5.1 , in any contracts
with any other FirstEnergy contractor if such Contractor work has
any physical or technical interfaces with such other FirstEnergy
contractor’s work) a waiver of subrogation, indemnity, and
waiver and release of consequential damages for the benefit of
Contractor, and shall use reasonable commercial efforts to include
in such contracts a waiver of property damage liability for the
benefit of Contractor.
2.5 Bechtel Associates
Professional Corporation (Ohio) . As required by applicable
Ohio law(s), Contractor intends to subcontract engineering and
design services performed under this Agreement to BAPC Ohio. With
respect to all services performed by BAPC Ohio, Contractor agrees
that FirstEnergy shall have all rights in and to such services as
though such services were performed directly by Contractor
(including the rights described in Article 11 ). Contractor
shall guaranty and be fully responsible to FirstEnergy for the acts
and omissions of BAPC Ohio and of persons directly or indirectly
employed by them, as it is for the acts or omissions of persons
directly employed by Contractor, and FirstEnergy agrees that it
shall look solely and exclusively to Contractor for fulfillment of
any obligations in respect of such services. Contractor shall cause
BAPC Ohio to perform, for the benefit of FirstEnergy, all of the
obligations of Contractor under this Agreement that are applicable
to the scope services provided by BAPC Ohio. Any Subcontract with
BAPC Ohio shall be subject to approval by FirstEnergy.
Article 3 -
Contractor’s Responsibilities
3.1 General Scope of Project;
Phased Release of Project .
(A) The Project tasks are
described generally in Attachment A . The Project will be
divided into a number of Subprojects, with each Subproject made up
of an Air Quality Control system applied to one or more Generating
Units. FirstEnergy, at its option, may proceed with any, all, or
none of the Subprojects.
(B) Development Phase
. During the
Development Phase of each Subproject, Contractor shall perform
engineering, design, and development of the Subproject in
accordance with Attachment A and in consultation with
FirstEnergy. The Parties will mutually determine the scope of the
Subproject, the Work Scope, and other parameters of the Subproject,
the Target Construction Cost, the Project Schedule, and the Project
Execution Plan, and will perform the other tasks described
generally in this Agreement and in Attachment A . During the
Development Phase of each Subproject, the Parties will mutually
determine whether Contractor will contract with and assume
responsibility for OEMs as a Subcontractor (a “Wrap Arrangement”
), or whether FirstEnergy will contract with major equipment
vendors as an FE Vendor (an “FE Vendor
Arrangement” ). Except as otherwise agreed,
the Parties anticipate that the AQC Units associated with
Generating Units 1 through 4 of the Sammis Plant will be performed
as FE Vendor Arrangements. With respect to the AQC Units associated
with Generating Units 5, 6, and 7 of the Sammis Plant, FirstEnergy,
at its sole discretion, will determine whether the Subproject will
be performed as an FE Vendor Arrangement or as a Wrap Arrangement.
Except as otherwise mutually agreed, if the AQC Units associated
with Generating Units 5, 6, and 7 are performed as Wrap
Arrangements, then all such AQC Units will be treated together as a
single Subproject. Further, to the extent that FirstEnergy elects
to utilize Powerspan ECO technology with respect to a Wrap
Arrangement, the Parties agree that the terms and conditions in
this Agreement relating to such Wrap Arrangement shall be adjusted
in a mutually agreeable manner to reflect that: (A) Contractor
shall not be responsible for, among other things, (1) any
Performance Liquidated Damages relating to the actual performance
of the Powerspan ECO technology, or (2) any intellectual property
indemnity obligations relating to the Powerspan ECO technology, (B)
Schedule Liquidated Damages shall be applicable to achievement of
Mechanical Completion after the Scheduled Mechanical Completion
Date (instead of the achievement of Final Completion after the
Guaranteed Final Completion Date), and (C) Contractor shall be
entitled to a Change Order related to any changes in project scope
to the Subproject related to the Powerspan ECO technology.
Contractor may perform preliminary procurement or construction work
prior to the Commencement Date under a partial Notice to Proceed.
To the extent that FirstEnergy desires to utilize this Agreement in
connection with any Subproject to be performed at a Site other than
the W.H. Sammis facility, the Parties agree that it is their mutual
anticipation that such Subprojects will be performed as part of
this Agreement (subject to negotiation of and mutual agreement to
site-specific changes hereto).
(C) Construction Phase
. After the
Commencement Date of each Subproject, Contractor shall perform
construction management, procurement, engineering, design,
construction, startup, testing, and operations training for the
Subproject in accordance with the Work Scope and the Project
Execution Plan, in compliance with the Project Schedule and in
consultation with FirstEnergy.
(D) The Project shall include all
engineering, procurement, construction, and testing of the Project,
all equipment, Materials, labor, workmanship, apparatus,
structures, inspection, manufacture, delivery, fabrications,
transportation, and storage required in connection therewith, and
all other items or tasks that are required to achieve Final
Completion and Final Document Delivery for the individual
Subprojects in accordance with the requirements of this Agreement.
Contractor shall perform the Project in accordance with Good
Practices, all Applicable Laws, all Applicable Codes and Standards,
and all other terms and provisions of this Agreement. It is
understood and agreed that the Project shall include any incidental
work necessary to complete the Project in accordance with Good
Practices, Applicable Law, Applicable Codes and Standards, and all
other terms and provisions of this Agreement. Contractor shall be
entitled to rely on only such items of information supplied by
FirstEnergy as the Parties have mutually specified in the project
design basis document during the Development Phase (the
“FirstEnergy Reliable
Information” ). Contractor’s Project
Manager shall inform FirstEnergy if he learns of any inaccuracy,
error, fault, or other defect in the FirstEnergy Reliable
Information.
3.2 Specific
Obligations . Without limiting the
generality of Section 3.1 , or the requirements of any
other provision of this Agreement, Contractor shall:
(A) Procure, supply, transport,
handle, and properly store and install all Materials, except where
the Parties have agreed that FirstEnergy or its agents,
subcontractors, or vendors will perform such services;
(B) Provide construction,
construction management (including the furnishing of all field
supplies, tools, construction equipment, and all Site supervision
and Craft Labor), inspection and quality control services required
to ensure that the Project is performed in accordance
herewith;
(C) Negotiate all guarantees,
warranties, delivery schedules and performance requirements
(including schedule guarantees and performance guarantees) with all
Subcontractors and FE Vendors on terms that are consistent with
this Agreement, to the extent achievable;
(D) Perform shop and other
inspections of the work of Subcontractors and FE Vendors to ensure
that such work meets all of the relevant requirements of this
Agreement;
(E) Contractor shall use
reasonable commercial efforts to achieve FirstEnergy’s
corporate supplier sourcing goals in awarding Subcontracts under
the Project. By way of example, FirstEnergy’s corporate
supplier sourcing goals for 2005 are as follows:
(1) Small business spend > or =
20.00%
(2) Small disadvantaged business
spend > or = 3.00%
(3) Small woman owned business
spend > or = 3.00%
(4) HUBZone Business spend > or
= 0.27%
(5) Veteran owned business spend
> or = 0.04%
(6) Service disabled veteran
business spend> or = 0.0013%
3.3 Design and
Engineering .
(A) General
. Contractor
shall, as part of the Project, perform all design and engineering
work in accordance with this Agreement. Before commencing design
and engineering, the Contractor shall satisfy itself regarding
FirstEnergy’s Requirements (including design criteria and
calculations). Contractor’s Project Manager shall give notice
to FirstEnergy of any error, fault or other defect in
FirstEnergy’s Requirements of which he becomes
aware.
(B) Drawings and
Specifications . Contractor shall prepare the
Drawings and Specifications for the Project. The Drawings and
Specifications shall be based on the requirements of this
Agreement, including FirstEnergy’s Requirements, Good
Practices, Applicable Codes and Standards, Applicable Law, and all
applicable provisions of the Agreement, and in a fashion consistent
therewith shall develop in detail the requirements of this
Agreement.
CONFIDENTIAL
TREATMENT REQUESTED
(C) Review Process
. The Project
Execution Plan to be developed by the Parties during the
Development Phase shall establish a review process including the
following:
(1) General Review
. During the
development of the Drawings and Specifications, Contractor shall
provide FirstEnergy with the opportunity to perform informal
reviews of the design and engineering in progress. The informal
reviews may be conducted at Contractor’s office located in
Frederick, Maryland, or at any of its Subcontractor’s
offices. The reviews may be of progress prints, computer images,
draft documents, working calculations, draft specifications or
reports, Drawings, Specifications or other design documents
determined by FirstEnergy.
(2) Submission by
Contractor . Contractor shall submit
copies of the Drawings and Specifications identified in the Project
Execution Plans or as subsequently requested by FirstEnergy as
requiring formal review, comment, and approval to FirstEnergy. Each
submission of Drawings and Specifications shall include a statement
that to the best of Contractor’s knowledge such Drawings and
Specifications comply with Section 3.3(B) .
(3) Review Periods
. If Contractor
submits Drawings and Specifications within the applicable time
frame set forth in the Project Schedule, FirstEnergy shall have a
period of [******] Business Days after receipt of such submission
to issue written comments, proposed changes and/or written
approvals or disapprovals of the submission. FirstEnergy’s
review periods shall be extended by the period of any delay due to
a Force Majeure Event.
If FirstEnergy does not issue
any comments, proposed changes or written approvals or disapprovals
within such time periods, Contractor may proceed with the
development of such Drawings and Specifications, but
FirstEnergy’s lack of comments, approval or disapproval, if
applicable, shall in no event constitute an approval of the matters
submitted or bar FirstEnergy from subsequently commenting thereon
or disapproving thereof; provided, however, Contractor shall not
proceed with construction until the required Drawings and
Specifications have been approved in writing by FirstEnergy as set
forth in this Section 3.3(C)(3) .
In the event that FirstEnergy
disapproves the Drawings or Specifications, FirstEnergy shall
provide Contractor with a written statement of the reasons for such
rejection, and Contractor shall provide FirstEnergy with revised
and corrected Drawings and Specifications as soon as possible
thereafter; provided that Contractor shall not receive any
extensions of time to perform any of its obligations
hereunder.
If Contractor submits Drawings
and Specifications at times other than shown in the Project
Schedule, Contractor shall give FirstEnergy advance notice prior to
such submissions to facilitate schedule adjustments when and if
necessary. Thereafter, FirstEnergy shall use good faith efforts to
provide comments, approval and/or disapproval as expeditiously as
reasonably practical, and at Contractor’s request,
FirstEnergy shall state the date by which it believes that it will
be able to respond to such submission.
FirstEnergy’s review or
approval of any Drawings and Specifications shall not in any way be
deemed to limit or in any way alter Contractor’s
responsibility to perform and complete the Project in strict
accordance with the requirements of this Agreement.
Upon FirstEnergy’s
written approval of the Drawings and Specifications, such Drawings
and Specifications shall be the Drawings and Specifications that
Contractor shall use to construct the Project. Upon approval by
FirstEnergy, such Drawings and Specifications shall form a part of
this Agreement.
Additions, modifications, or
deletions to the Drawings and Specifications shall constitute a
Change Order only if and to the extent FirstEnergy requests such
change pursuant to Section 8.1 , or FirstEnergy is notified
by Contractor of a request for such Change Order pursuant to
Section 8.2 and such Change Order is thereafter approved as
provided in Article 8 .
(D) Design Licenses
. Contractor shall
perform all design and engineering services through design
professionals licensed in accordance with Applicable Law, and all
design and engineering deliverables shall be stamped by design
professionals licensed in accordance with Applicable Law. If any
design and engineering services are to be performed offshore, then
FirstEnergy shall have the right to approve such services and the
billing rates applied to such services.
(E) Other Information
. Contractor shall
provide all other information and documentation as may be
reasonably requested by FirstEnergy.
3.4 Contractor’s
Personnel.
(A) Key Project
Personnel . Exhibit 3.4(A) is a
list of Contractor’s key personnel who will be responsible
for supervising the performance of Contractor’s services.
Contractor shall not remove any such personnel from the Project or
from any Subproject without FirstEnergy’s prior written
consent. If any such individual is so removed or otherwise ceases
to be available to the Project or any Subproject for any reason,
any replacement personnel shall be subject to the prior written
approval of FirstEnergy. The individuals identified as technical
specialists on such Exhibit shall be available as needed to support
the Subproject.
(B) Employees
. Contractor shall
employ for the Project only persons known to it to be experienced,
qualified, reliable and trustworthy. At FirstEnergy's request, the
credentials of any of Contractor's employees assigned to perform
the Project shall be submitted to FirstEnergy in advance of such
assignment. Contractor shall require all persons performing the
Project at FirstEnergy's Site to be trained in and to comply with
Contractor's policies, procedures and directives applicable to
activities at FirstEnergy's Site, including security, environmental
protection, worker health and safety, sexual harassment, access,
use of controlled substances, and similar activities, such
policies, procedures and directives to be no less rigorous than
those of FirstEnergy. During the performance of the Project,
FirstEnergy may object to any Contractor employee who, in
FirstEnergy's opinion, does not meet these criteria. In such case,
Contractor shall immediately replace or remove such
employee.
(C) Supervision
. Contractor and
its Subcontractors shall be responsible for enforcing strict
discipline and good order among their employees, and shall assume
full responsibility for their employees’ acts and omissions
in and around FirstEnergy’s Site. Contractor’s Project
Manager shall enforce all environmental protection and worker
health and safety and similar requirements applicable to the
Project. Contractor's Project Manager shall be thoroughly competent
and experienced in the line of work to be performed. He shall
represent the Contractor on the job and have the authority to bind
the Contractor.
(D) Substance Abuse
. The Contractor
shall comply with the FirstEnergy Generation Corp. Substance Abuse
Testing Program (FE SATP), a copy of which is attached hereto as
Exhibit 3.4(D)
(E) Labor Requirements
. Contractor and
its Subcontractors shall comply with the requirements set forth in
Exhibit 3.4(E) with respect to labor employed in connection
with the Project
3.5 Construction Plant, Facilities
and Operations .
(A) On-Site Facilities
. The Contractor
will, unless otherwise specified, construct and remove all
temporary buildings, structures, construction plant, change houses,
portable lavatories and temporary storage buildings required for
its own use or that of its Subcontractors, if any. The location of
such buildings, storage areas for materials and employees' parking
space, if on FirstEnergy's site, will be designated by
FirstEnergy's Designated Representative.
Should FirstEnergy provide
(at a location of its choice within reasonable distance of the
Project area) the water and power source required for performance
of the Agreement, Contractor shall accept these services at its own
risk. However, FirstEnergy will diligently pursue restoration of
any such services which may be interrupted. If such water and power
sources shall be provided by FirstEnergy, they shall be identified
elsewhere in the Project specification. Otherwise, Contractor shall
be responsible for providing the water and power sources necessary
for the performance of the Agreement.
The Contractor agrees that
when any use is to be made by the Contractor or by any of its
Subcontractors or by any of its or their employees for its or their
convenience of any equipment, facilities, office space or apparatus
(including scaffolds, ladders, cranes, derricks, platforms,
runways, bridges, floor, tools, barricades, or other facilities)
which are owned, rented or leased by FirstEnergy or FirstEnergy's
other contractor(s), or contracted for from other contractors, the
Contractor shall prior to and during such use satisfy itself as to
the safety of such facilities; and the Contractor, subject at all
times to the provisions and limitations of Article 16 ,
hereby assumes the entire responsibility and liability for all
injuries, claims, damages, or losses whatsoever resulting from the
use of such equipment, facilities, or apparatus. Contractor agrees
to execute all necessary documents required by FirstEnergy or
FirstEnergy's other Contractors, to acknowledge inspection of such
equipment or apparatus prior to use.
(B) Areas of Project and
Non-Interference with Other Activities on Site
. The Contractor
shall use only the area designated by FirstEnergy's Designated
Representative, and other parts of FirstEnergy's Site shall not be
used for any purpose without the prior approval of FirstEnergy's
Designated Representative. If any part of the Project is to be
performed on an easement or right-of-way held by FirstEnergy, the
Contractor shall limit its activities to that area and not allow
its employees or Subcontractors outside such area. The Contractor
shall direct its employees or employees of its Subcontractors to
enter and leave the premises only through access ways, and to park
only in parking areas designated by FirstEnergy's Designated
Representative.
The portion of the areas
designated that constitutes the construction site shall be under
the control of the Contractor unless otherwise agreed by the
Contractor and FirstEnergy's Designated Representative.
The Contractor shall, to the
maximum extent reasonably practicable, so conduct its work so as to
avoid any necessity to curtail the operations of FirstEnergy's
Site. Where the Project requires connection to or modification of
existing facilities, FirstEnergy's Designated Representative will
arrange for the Contractor to perform such work at FirstEnergy's
convenience and the Contractor shall at all times, to the maximum
extent reasonably practicable, except when required to install such
facilities, keep its employees and cause its Subcontractors to keep
their employees out of, off of, and out of contact with
FirstEnergy's Site and facilities.
FirstEnergy shall provide
access to the existing facilities at the times indicated on the
Project Schedule to allow the Contractor to connect to or make
modifications to the existing facilities, in accordance with the
scope of the Project. The Project Schedule completion date and the
Target Construction Cost for each Subproject shall be subject to
equitable adjustment as appropriate in accordance with Article
8 in the event that such access is not provided.
The Contractor shall conduct
its services so as to minimize interference with other work in
progress. In case of dispute between the Contractor and other
contractors engaged by FirstEnergy, the decision of FirstEnergy's
Designated Representative coordinating the Project shall be
final.
The Contractor shall not,
under the terms of this Agreement, permit its employees or the
employees of any of its Subcontractors to operate the existing
FirstEnergy’s Site or any of its facilities or to perform
maintenance work on the existing FirstEnergy’s Site or any of
its facilities, except such maintenance work as is necessary for
construction purposes.
(C) Access to Project;
Surveillance . FirstEnergy shall be
afforded free access at all reasonable times upon prior notice to
the Contractor's or any of its Subcontractors’ work,
facilities, and records, to perform surveillance and reviews of
work completion and quality, and contract cost and quality records
(except with respect to the financial information described in the
last sentence of Section 3.7(B)) , and to perform work
sampling observation and recording surveillance activities. Any
such surveillance or review performed by FirstEnergy or any failure
by FirstEnergy to so perform shall in no manner reduce the
responsibility and liability of Contractor or its Subcontractors or
excuse them from performance. Access to a Subcontractor's
facilities and records will be coordinated through the
Contractor.
(D) Responsibility for Materials
and Work Prior to Acceptance . The Contractor shall
receive, check in, unload, store, handle and protect all materials
to be used, furnished or erected by the Contractor or its
Subcontractors. Subject to Section 18.4(A) , the property
being used, furnished and/or erected, installed or constructed
under the Agreement shall be considered to be in the care, custody
and control of the Contractor, and the Contractor shall be
responsible for all materials and work until permanently placed,
installed or constructed and accepted by FirstEnergy.
The Contractor shall
satisfactorily dispose of all rubbish resulting from the operations
under this Agreement on a day-to-day basis and upon completion of
the Project shall perform all work necessary to restore territory
embraced within FirstEnergy’s Site of its operations to at
least as good order and condition as at the beginning of the
Project under the Agreement.
(E) Security and Safety
. The
Contractor’s site-specific safety program shall, at a
minimum, comply with the FirstEnergy Contractor Safety Program for
Fossil Generation, a copy of which is attached hereto as Exhibit
3.5(E)-1 The Contractor shall take the necessary precautions to
render the Project secure in order to decrease the probability of
accident from any cause and to avoid delay in completion of the
Project. The Contractor shall use proper safety appliances and
provide first aid treatment and ambulance service for emergency
treatment of injuries and shall comply with all rules, laws,
regulations of the United States of America, the State of Ohio, or
any political subdivision or duly constituted Governmental
Authority with regard to the safe performance of the Project.
Contractor shall also comply with the requirements set forth in
Exhibit 3.5(E)-2 (OSHA compliance and safety).
The Contractor shall provide
temporary fire protection facilities to the extent required by
FirstEnergy during the construction period. The Contractor may be
working adjacent to or concurrent with FirstEnergy's operations or
other construction activities. The Contractor shall maintain close
cooperation and flexible working arrangements with FirstEnergy in
consideration of adjacent structures and work. The Contractor shall
maintain close cooperation with other contractors working at the
site.
Upon commencing work, the
Contractor shall establish and maintain sanitary facilities for its
employees and those of its Subcontractors, to the extent such
facilities are not provided by FirstEnergy and in conformity with
local and state regulations. The Contractor will remove these
facilities upon completion of the Agreement and clean the site to
FirstEnergy's satisfaction.
Contractor shall maintain
adequate project security guards and procedures for the area of any
work to be performed under a Subproject. Without limiting
Contractor’s obligations hereunder, FirstEnergy may at its
discretion provide a security guard at the entrance and exits to
the site who shall have the right to check all persons entering and
leaving the site, check all automobiles, cars and trucks and carry
out such control of persons and vehicles as deemed
necessary.
(F) Sales Prohibited
. The Contractor
is advised that the sale of anything (i.e. food, beverages,
articles of clothing, etc.) on FirstEnergy's Site by the
Contractor's or Subcontractor's personnel is strictly
prohibited.
(G) Arrival and Departure of
Contractor's Tools, Equipment, and Materials
.
The Contractor shall provide
the necessary resources to receive all material or equipment the
Contractor or Subcontractors have shipped to FirstEnergy’s
Site.
The Contractor shall be
responsible for providing FirstEnergy's Designated Representative
with the detailed packing lists of all tools, equipment, and
materials the Contractor is bringing onto the jobsite. The list(s)
shall have been provided to FirstEnergy’s Designated
Representative prior to the time the shipment of such tools,
equipment, and materials arrive at the site. Contractor shall,
where known, identify the specific Subproject associated therewith
and itemize such tools, equipment, and/or materials on separate
forms.
The Contractor shall provide
to FirstEnergy proper verification of ownership of all tools,
equipment, and materials being removed from the jobsite at
anytime.
The Contractor shall prepare
and submit new forms (not marked up original forms used to bring
the tools, equipment, and materials onto the jobsite) itemizing the
tools, equipment, and materials leaving the jobsite for each
individual shipment.
The forms shall be signed by
the Contractor's Project Manager or his designee signifying that
everything listed on the form(s) as being removed from the jobsite
is the property of the Contractor.
The Contractor shall prepare
sufficient copies of the forms to provide at minimum one copy for
FirstEnergy's Designated Representative and one copy to be left
with the security guard when leaving the jobsite.
The Contractor shall be
responsible for providing at least a minimum 24 hour notification
of the tools, equipment, and materials that are being readied for
shipment off the jobsite.
The Contractor shall, prior
to beginning to pack and load tools, equipment, and materials for
shipment off the jobsite, contact FirstEnergy's Designated
Representative to determine if FirstEnergy desires to be present to
monitor the packing and loading process. Should the Contractor fail
to notify FirstEnergy's Designated Representative prior to packing
and loading any shipment, thus resulting in FirstEnergy's inability
to verify the tools, equipment, and materials being shipped, all
costs to redo the entire loading process from the beginning will be
to the Contractor's account.
FirstEnergy retains the sole
option to perform a total or partial ownership verification audit
of all Contractors' shipments leaving the jobsite.
(H) Radio Equipment
. The Contractor
shall not use any two-way radios or radio controlled equipment in
the performance of work covered in this Agreement
unless:
(1) The Contractor shall notify
FirstEnergy, in writing, listing all such frequencies proposed,
their effective radiated power (ERP) and dBm, and, in the situation
of radio controlled equipment, the receiver sensitivity,
selectivity and coding.
(2) FirstEnergy has received a
copy of the current FCC authorization/license document covering the
radio frequencies for which the Contractor has been granted by the
FCC an authorization/license. The Contractor shall also notify
FirstEnergy as to the location of the original document, who in the
Contractor’s organization is responsible for its renewal and
equipment maintenance and whereon the jobsite the document or copy
thereof will be posted.
3.6 Certificates, Permits and
Licenses . Except as otherwise
expressly agreed in writing, Contractor shall obtain all Permits
which are required to be obtained in Contractor’s own name to
perform the Project. Contractor shall provide FirstEnergy with
copies of such Permits as soon as they are obtained. Contractor
shall provide information, assistance and documentation to
FirstEnergy as reasonably requested in connection with any Permits
to be obtained by FirstEnergy.
3.7 Books, Records and
Audits .
(A) Contractor shall keep such
full and detailed Project records including books, construction
logs, records, daily reports, accounts, payroll records and other
pertinent documents as may be necessary for proper financial
management under this Agreement and as required under Applicable
Law. Contractor shall maintain all such books and records in
accordance with applicable generally accepted accounting
principles. Contractor shall also retain all non-identical copies
of all records and documents (including records and documents in
electronic form) as are required to be retained under the NSR
Consent Decree. The Parties shall determine a records retention
protocol during the Development Phase. Contractor shall grant
FirstEnergy such access to such records as is required for
FirstEnergy to comply with the NSR Consent Decree.
CONFIDENTIAL TREATMENT
REQUESTED
EXECUTION
COPY
(B) With respect to each
Subproject, upon reasonable notice during the [******] year period
following Final Completion, FirstEnergy or its designee shall have
the right to audit or to have audited the Project books and records
of Contractor which relate to any work under this Agreement. When
requested by FirstEnergy, Contractor shall provide the auditors
with reasonable access to all personnel relevant to the audit,
property, and records, and Contractor’s personnel shall
cooperate with the auditors to effectuate the audit or audits
hereunder. The auditors shall have the right to copy any and all
documentation relating to performance of cost reimbursable work
under this Agreement. Contractor shall pay for all reasonable
internal costs (except personnel assigned to any Subproject)
incurred by it in assisting FirstEnergy with one yearly audit
performed pursuant to this Section 3.7 . For audits
performed more frequently than yearly during the foregoing period,
FirstEnergy shall pay for such Contractor reasonable internal
costs, except in the event that such audits discover any errors in
Contractor’s billing during such period. Contractor shall
include audit provisions identical to this Section 3.7 in
all Subcontracts. FirstEnergy shall have no right to examine,
audit, or evaluate the basis underlying any hourly rates of
Contractor professional labor or other fixed elements of
compensation agreed to in the rate sheets included in Exhibit
5.1 .
3.8 Hazardous
Substances .
(A) Use of Hazardous Substances by
Contractor . Contractor, any
Subcontractor or its or their personnel, agents or representatives
may only bring onto, use, store or locate on the Site such
Hazardous Substances as are necessary for the performance of the
Project. If such Hazardous Substances are brought onto, used,
stored or located on the Site by Contractor or any Subcontractor or
its or their personnel, agents or representatives, Contractor shall
exercise or cause to be exercised the utmost care and skill and
shall carry on its activities under the supervision of properly
qualified personnel in accordance with Applicable Law. Before Final
Completion of each Subproject, Contractor shall (i) remove all
such Hazardous Substances previously brought onto, stored, used or
located on the Site by Contractor or the Subcontractors in
connection with the delivery, installation, commissioning,
characterization or testing of such work (unless the same have been
permanently incorporated into the Project in accordance with
Applicable Law); and (ii) certify that removal in writing to
FirstEnergy.
(B) Assumption of Risk
. Contractor shall
retain and assume the risk of all Hazardous Substances brought
onto, used, stored or located on the Site and under the control of
Contractor or a Subcontractor or its or their personnel, agents or
representatives, and shall be responsible, at its sole cost, for
the proper handling, collection, storage, removal, use, clean-up,
transportation and disposal of such Hazardous
Substances.
(C) Notice of Presence
. Contractor shall
provide FirstEnergy with (i) written notice of the existence of any
Hazardous Substances which Contractor or the Subcontractors or its
or their personnel, agents or representatives bring onto the Site;
and (ii) appropriate instructions for shipping, handling, exposure
to and disposal of such Hazardous Substances, as required by
Applicable Law.
(D) Compliance with Applicable
Law .
Contractor or the Subcontractors or its or their personnel, agents
or representatives shall not introduce or release or allow to be
introduced or released from the Site or handle, collect, remove,
transport or dispose of Hazardous Substances in violation of
Applicable Law.
(E) Other Environmental Compliance
Requirements . Contractor and its
Subcontractors shall comply with the requirements set forth in
Exhibit 3.8(E)-1 (Asbestos Handling and Removal ),
Exhibit 3.8(E)-2 (Inorganic Arsenic), and Exhibit
3.8(E)-3 (Lead Abatement Terms of Reimbursement) in connection
with the Project.
(F) Pre-existing Hazardous
Substances . Contractor shall not be
responsible or liable for dealing with, handling or disposing of
Hazardous Substances which are pre-existing at, under, above, on or
adjacent to the Site. If, in the course of performance of the
Project, the Contractor encounters on the Site any matter which it
reasonably believes is a Hazardous Substance, the Contractor shall
immediately suspend the work in the area affected and report the
condition to FirstEnergy in writing. In any such event, the
obligations and duties of the Parties hereto shall be as
follows:
(1) If it is determined that such
condition involves a pre-existing Hazardous Substance, then any
required, necessary or appropriate remedial actions shall be
performed by FirstEnergy at its sole cost and expense;
(2) If it is determined that such
condition involves a Hazardous Substance introduced to the Project
Site after the date of this Agreement by the Contractor, its
Subcontractors or any Person for whom either may be liable, then
any required, necessary or appropriate remedial actions shall be
performed by the Contractor at its sole cost and expense;
or
(3) If it is determined that the
condition does not involve a Hazardous Substance, the Contractor
shall, promptly after receiving written notice from FirstEnergy
authorizing the Contractor to recommence site activities in the
subject area, resume the portion of the work that had been
suspended.
3.9 Quality Control, Testing and
Inspection . The Project Execution Plan
to be developed by the Parties during the Development Phase shall
establish quality control, testing, and inspection processes
including the following:
(A) Contractor
Responsibility . Contractor shall be
responsible for all quality assurance, quality control, testing and
inspection activities related to the Project, including all
Materials, whether such work is performed by Contractor or
Subcontractors. During the Development Phase, Contractor shall
submit to FirstEnergy for its review a project specific quality
assurance, quality control, testing and inspection plan, but
excluding tests and inspections relating to Performance Tests.
FirstEnergy may review and comment on, without assuming liability
for, such quality assurance, quality control, testing and
inspection procedures, and Contractor shall make revisions in
accordance with FirstEnergy’s comments. Contractor’s
quality assurance plan shall provide for a quality assurance
individual or individuals to be present at the Site to supervise
the implementation of the quality assurance, quality control,
testing and inspection plan, including all such quality assurance
plan requirements as may be described in FirstEnergy’s
Requirements. FirstEnergy shall be provided reasonable access
during normal working hours to Contractor’s and the
Subcontractors’ facilities for inspection of all testing
activities related to the Project or any portion thereof and shall
be given ten (10) Business Days notice prior to the commencement of
any such testing to ensure that FirstEnergy is able to be present
for all such tests. Records of all testing and inspection work by
Contractor shall be kept complete and available to FirstEnergy
during the performance of this Agreement and for such longer period
as may be specified by Contractor’s standard recordkeeping
practices.
(B) FirstEnergy Rights
.
If
any work or component thereof at the Site has a Warranty
Non-Conformance and cannot be repaired, Contractor shall dispose of
same at no cost to FirstEnergy. If Contractor fails to dispose of
such work or component on a timely basis, then FirstEnergy may
dispose of such work or component in a reasonable manner and shall
be entitled to obtain reimbursement for all reasonable expenses
incurred by FirstEnergy in the disposition thereof.
3.10 Progress Reporting
. The Project
Execution Plan to be developed by the Parties during the
Development Phase shall establish a progress reporting process
including the following:
(A) Monthly Progress
Reports . On or before the fifth
Business Day of each month, Contractor shall submit to FirstEnergy,
along with the Updated Critical Path Schedule, a monthly progress
report in a form acceptable to FirstEnergy, which shall cover all
activities up through the 23 rd day of the preceding month
(the “Monthly
Progress Report” ). Contractor shall provide
FirstEnergy with the number of copies of such reports and shall
arrange for the distribution thereof as FirstEnergy may reasonably
request.
(1) The Monthly Progress Report
shall include the following information:
(i) an executive summary with a
description of overall status and progress of the
Project;
(ii) a description, as compared
with the Project Schedule and the Critical Path Schedule, of
engineering status including actual percentage complete versus
planned percentage, document status, significant activities
accomplished the previous month and significant activities planned
for the current month;
(iii) a description, as compared
with the Project Schedule and the Critical Path Schedule, of
procurement activities including actual percentage complete versus
planned percentage, manufacturing and delivery status, significant
activities accomplished the previous month and significant
activities planned for the current month;
(iv) a description, as compared
with the Project Schedule and the Critical Path Schedule, of
construction activities including actual percentage complete versus
planned percentage, progress summary, numbers of skilled,
unskilled, and supervisory staff on Site compared to planned
levels, significant activities accomplished the previous month and
significant activities planned for the current month;
(v) a description of critical
items, including an evaluation of problem areas, and, to the extent
applicable, of strategies to recovery any delays so as to comply
with the Project Schedule and the Critical Path Schedule and the
expected completion date for such delayed or problematic areas or
activities;
(vi) a description of all
permitting and environmental issues;
(vii) a description of all safety
and security issues;
(viii) a description of quality
assurance, quality control, inspection and testing
activities;
(ix) progress photos, including a
description of the photograph and the date taken; and
(x) any other information
reasonably requested by FirstEnergy, including any material
information of which Contractor is aware that could reasonably be
foreseen to adversely affect the performance of the
Project.
(B) Other Contractor Provided
Information . Contractor shall provide
FirstEnergy with such other information as reasonably requested by
FirstEnergy, including the following:
(1) Minutes for all status and
other project meetings within five (5) Business Days following such
meeting; and
(2) Safety incident reports within
three (3) Business Days of the occurrence of any such
incident.
(3) Progress reports at such other
intervals as may be requested by FirstEnergy.
(C) Review Meetings
. Contractor shall
conduct review meetings with FirstEnergy in person (or if approved
by FirstEnergy, by telephone) within five (5) Business Days after
the submission of each Monthly Progress Report and Updated Critical
Path Schedule and at such other intervals as may be requested by
FirstEnergy, at a mutually agreeable location and time to review
the status of the Project.
(D) Additional Reports
. If any material
problem, emergency, strike, injury, work stoppage or legal problem
is anticipated, or any unanticipated event occurs, that might
adversely affect Contractor’s ability to perform its
obligations hereunder in a timely manner, in addition to other
reports, notices and actions required hereunder, Contractor shall
promptly prepare a written report detailing available information
and steps being taken or taken to correct such problem or event and
shall deliver such report to FirstEnergy as soon as reasonably
practicable. FirstEnergy may at any time request such report with
respect to any event that FirstEnergy reasonably regards as
significant.
3.11 NSR Consent Decree
. Per the
disclosure requirements of the NSR Consent Decree, Contractor
acknowledges that it has received a copy of the NSR Consent Decree,
and shall provide a copy of the NSR Consent Decree to all
Subcontractors and any other company or other organization retained
by Contractor to perform any of the work under this
Agreement.
3.12 FirstEnergy’s Review and
Approvals . FirstEnergy’s review
or approval of, or right to review and approve, any work provided
or performed by Contractor and its Subcontractors under this
Agreement (including approval of Drawings and Specifications,
Subcontractors, safety and environmental protection guidelines,
quality assurance, quality control, testing and inspection
procedures) shall not in any way be deemed to limit or in any way
alter Contractor’s responsibility to perform and complete the
Project in strict accordance with the requirements of this
Agreement, or Contractor’s obligations under Article
13 (Warranty).
ARTICLE 4 -
FIRSTENERGY’S RESPONSIBILITIES
FirstEnergy shall comply with
the following provisions in a timely manner:
4.1 Payment
. FirstEnergy
shall timely pay the Contract Price required to be paid by it to
Contractor pursuant to the terms of this Agreement, and in
accordance with the provisions of Article 5
hereof.
4.2 Permits
. FirstEnergy
shall provide Contractor with copies of all Permits obtained by
FirstEnergy related to the Project as soon as they are obtained.
FirstEnergy shall provide information, assistance and documentation
to Contractor as reasonably requested in connection with the
Permits to be obtained by Contractor hereunder.
4.3 Access to the Site
. FirstEnergy
shall provide Contractor with reasonable access to the Site within
the time (or times) stated in the Project Schedule. Such access
shall be sufficient to permit Contractor to progress with
construction on a continuous basis without substantial interruption
or interference.
4.4 Other
Responsibilities . FirstEnergy shall perform or
cause to be performed any obligation of FirstEnergy explicitly
provided in the Agreement.
ARTICLE 5 - PRICE; PAYMENTS TO
CONTRACTOR
5.1 Price . FirstEnergy will compensate
Contractor in the manner and at the times specified in Exhibit
5.1 . FirstEnergy may request different pricing arrangements
for any Subproject, but subject to the consent and agreement of
Contractor.
5.2 Interim Payments
.
(1) With respect to each
Subproject, Contractor shall submit to FirstEnergy invoices for
payments due as provided in Exhibit 5.1 . An invoice shall
constitute a representation by Contractor, and Contractor shall
provide to FirstEnergy and such other Persons as FirstEnergy may
designate a certificate to the effect, that: (a) the Subproject is
progressing in accordance with the Project Schedule and the
Critical Path Schedule, or shall specify any reasons why such is
not the case; (b) the quality of all work described in the
invoice is in accordance with the terms of this Agreement, or shall
specify any reasons why such is not the case; (c) Contractor
is entitled to payment of the amount invoiced; (d) the work
(or any portion thereof) described in the statement accompanying
the invoice and all previous invoices are free and clear of all
liens, security interests and encumbrances; and (e) all
Subcontractors have been paid the monies due and payable to them
for work performed (except for such amounts as may be disputed in
good faith by Contractor).
CONFIDENTIAL TREATMENT
REQUESTED
EXECUTION
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(2) Invoices shall be submitted to
FirstEnergy’s Designated Representative for approval and
payment. The elements of all amounts invoiced shall be shown
separately, by applicable line items, and shall be classified or
further broken down as FirstEnergy may require for accounting and
payment purposes. Any disputed invoice or portion thereof need not
be paid, but in such case, FirstEnergy shall promptly notify
Contractor of any rejected invoice or portion thereof with reasons
for such rejection. Specific details of the invoicing process are
as follows:
(i) By the [******] of the month
in advance of the cost being incurred, Contractor will
electronically submit two payment requests to FirstEnergy. The
first payment request will be equal to [******}% of the estimated
sum of all reimbursable costs that Contractor anticipates billing
to FirstEnergy for the month the cost will be incurred, adjusted by
an amount equal to the difference (deficiency or excess) between
the payments received for the month preceding the date of invoice
and the actual costs incurred for such preceding month; adding the
amount of the deficiency or subtracting the amount of the excess.
The second payment request will be equal to [******]% of the
estimated sum of all reimbursable costs that Contractor anticipates
billing to FirstEnergy for the month the costs are
incurred.
(ii) FirstEnergy will
electronically transfer funds on a date that will allow Contractor
to receive payment for the first payment request by the [******]
day of the month in advance of the cost being incurred and the
second payment request by the [******] day of the month the cost
will be incurred.
(iii) As soon as practical after the
close of each monthly accounting period, Contractor will
electronically submit to FirstEnergy a Statement of Reimbursable
Cost for the accounting period just ended. Contractor will make its
best efforts to issue this statement on or prior to the [******]
day of the following month. The statement will be supported by a
schedule of charges, together with any supporting records, invoice
copies, payroll abstracts and/or other documentation that
FirstEnergy reasonably requires. Along with each statement,
Contractor will submit a reconciliation of monthly payments and
reimbursable costs incurred. The reconciliation will include
monthly payments received and cost incurred for the latest period
and from inception-to-date.
(iv) FirstEnergy will not withhold
payment of any undisputed amount which is due Contractor beyond the
date payment is due under the Contract.
(v) Interest will be accrued and
payable to Contractor on undisputed amounts that are due and remain
unpaid with such accrual to begin [******] days after the payment
due date. Interest will be due at the rate of the prime rate as
specified under the caption “Money Rates” in the Wall
Street Journal (New York Edition dated the date such interest
begins to accrue) plus [******]%. The obligation to pay interest
will be waived during the first [******] billing cycles under the
first Subproject.
(vi) Fee shall be calculated in
accordance with Exhibit 5.1 and Fee adjustments defined in
Exhibit 5.1(A) .
(vii) Payment of Fees for
Engineering/Graphics Labor and Other Professional Labor will be
paid using the same methodology used for payment of costs as
provided in Sections 5.2(A)(2)(i) through (vi) . Payment of
Fees for all other amounts will be in accordance with the
percentage of Construction Progress, as defined in the
“Project Status” section of the Fee adjustment sheet
provided in Exhibit 5.1-1(A) .
(viii) Contractor will certify that
all amounts due and payable to all Subcontractors prior to the end
of the period covered by a Monthly Progress Report, unless
reasonably disputed, have been paid in accordance with the terms of
the Subcontracts.
(3) Invoice charges shall be
allocated to appropriate accounts, a list of which will be
furnished by FirstEnergy. For work performed by the Contractor
under Article 8 of this Agreement, the charges will be
listed by FirstEnergy's Change Order documentation number (Field
Change Request (FCR) Numbers, Maintenance Work Order (MWO) Numbers,
Extra Work Request (EWR) Numbers, Contracted Services Change Order
(CSCO) Numbers, etc.) and listed by current month and shall be
supported by daily time sheets, accurately describing the work
being performed, signed by FirstEnergy's Designated Representative
showing the craft, first and last names and a unique personal
identification number of each worker and each piece of equipment
employed on the Project. All material charges shall be supported by
the original invoices or other evidence as required by FirstEnergy
to substantiate the charges submitted.
(B) Payment
. Each invoice
shall, after approval by FirstEnergy, be processed for payment for
the amount of each approved invoice less any monies withheld under
Section 5.4 below. Payments by FirstEnergy shall not be
deemed evidence of acceptance by FirstEnergy of the services or
goods called for hereunder.
(C) Interim Lien and Claim
Waivers . Each invoice prior to Final
Completion of each Subproject shall be accompanied by a fully
executed Contractor’s Interim Lien and Claim Waiver in the
form set forth in Exhibit 5.2(C) for all work performed
through the date for which payment is requested, and fully executed
Interim Lien and Claim Waivers from each Subcontractor (other than
with respect to Subcontracts with a total payment obligation of
less than $500,000) in the form set forth in Exhibit 5.2(C)
for all work performed through the date for which payment is
requested.
5.3 Final Payment
. Upon Final
Completion of each Subproject, Contractor shall, in addition to the
other requirements in the Agreement, submit a statement summarizing
and reconciling all previous invoices, payments and Change Orders,
and an affidavit that all payrolls, payroll taxes, liens, charges,
claims, demands, judgments, security interests, bills for
Materials, and any other indebtedness connected with the Project
have been paid, accompanied by a fully executed Contractor’s
Final Lien and Claim Waiver in the form set forth in Exhibit
6.3(A) and fully executed Final Lien and Claim Waivers from
each Subcontractor in the form set forth in Exhibit 6.3(A)
.
5.4 Withholding
. Should
FirstEnergy in good faith dispute any portion of an invoice,
FirstEnergy shall be entitled to withhold payment of the disputed
portion provided that FirstEnergy gives notice to Contractor of
such disputed portion, together with reasons for such dispute,
within the period specified for payment in Section
5.2(A)(2)(ii) . FirstEnergy shall also pay the undisputed
portion of the invoice within such period. In addition to disputed
amounts in an invoice, FirstEnergy may withhold payment of all or
any portion of any invoice, in the amount reasonably necessary to
protect FirstEnergy in the event that: (A) a third party claim has
been asserted for which Contractor has an indemnity obligation
under Section 16.1 unless Contractor is satisfying the
obligation; (B) Contractor has failed to make a payment as and when
due to a Subcontractor or supplier for materials, labor or
equipment; or (C) Contractor has failed to supply any affidavit,
release or waiver of lien which is required pursuant to this
Agreement. If any monies are so withheld, they shall be paid only
when the cause of such withholding has been eliminated. Moreover,
if any monies are so withheld, FirstEnergy shall not be responsible
for any interest payment to Contractor. In the event any
controversy, claim or dispute between the Parties relating to
non-payment of any disputed amounts, including any Change Order,
Contractor shall, unless otherwise agreed in writing by the Parties
or terminated by FirstEnergy pursuant to Article 15 ,
continue with the Project, and FirstEnergy shall continue to pay
all undisputed amounts owed to Contractor under the
Agreement.
5.5 Retainage for Final
Subproject . FirstEnergy shall be
entitled to retain a portion of the Fee payable with respect to the
final Subproject of the Project, in an amount sufficient to provide
for any difference between the amount of Fees paid to Contractor
during the Project (including any other Subproject) and the amount
finally determined to be due. The retainage shall be released upon
Final Completion and Final Document Delivery of the final
Subproject of the Project. No interest will be payable by
FirstEnergy on the amount of the retainage prior to payment
thereof. Contractor may provide a letter of credit with mutually
satisfactory terms, or other payment security acceptable to
FirstEnergy in lieu of any retainage provided under this Section
5.5 .
5.6 Sales Tax
.
(A) Direct Pay Permit
. A Direct Payment
Permit authorizing the purchase of tangible personal property
without payment of the tax at the time of purchase has been issued
to FirstEnergy Generation Corp. The Permit Number for FirstEnergy
Generation Corp. is 98-002723. FirstEnergy agrees to maintain
adequate records of all purchases and pay tax on the taxable items
directly to the Treasurer of the State of Ohio. The Direct Payment
Permit does not apply to construction contracts under which the
contractor is considered to be the consumer and liable for the tax
on materials incorporated into a structure or improvement as
provided in Section 5739.01 (B) Ohio Revised Code.
(B) Tax Exempt Project
- FirstEnergy
states that the overall Project is defined by Ohio Revised Code
§ 5709.20 and is anticipated to be exempt from Ohio Sales and
Use Taxes under Ohio Revised Code § 5709.25. All parties to
this contract will work together to minimize FirstEnergy’s
sale and use tax liability by taking the following
actions:
(1) Contractor - The Contractor
will register for Ohio sales tax purposes as a vendor, thereby
gaining the ability to issue Ohio “Resale Exemption
Certificates” when purchasing items to be incorporated into
the “facility”, and sold to FirstEnergy.
(2) Contractor retains the sales
and use tax liability to report or pay Ohio sales and use
taxes on its purchase, lease or rental of office supplies,
construction tools and equipment used in performing the work.
Taxes required to be paid related to the foregoing shall be
reimbursed as a reimbursable cost pursuant to Section 5.1
.
(3) FirstEnergy Generation Corp.
either has or will apply for an Ohio “Pollution Control
Facilities” exemption certificate as provided by Ohio Revised
Code § 5709.25.
(4) In the event that FirstEnergy
is unable to obtain the "pollution control facility"
exemption, or in the event that Contractor is prohibited by Ohio
governmental authorities from taking the actions provided in
subsection (i) above, FirstEnergy acknowledges that Ohio sales
and use taxes as it relates to the work performed under this
Agreement are reimbursable as a reimbursable cost pursuant to
Section 5.1(A) .
Any questions as to the
application should be submitted to:
Director, Tax Planning &
Compliance
Phone Number: (330)
384-5256
5.7 No Release
. Final payment
shall not in any way release Contractor or any surety of Contractor
from any unperformed obligations of this Agreement, including its
warranties, obligations, any liabilities for which insurance is
required or any other responsibility of Contractor. It is expressly
understood and agreed to by the Parties that nothing in this
Article 5 shall in any way modify or alter
Contractor’s obligations under this Agreement.
ARTICLE 6 - PROJECT SCHEDULE;
COMMENCEMENT OF PROJECT; MECHANICAL AND FINAL COMPLETION; SCHEDULED
LIQUIDATED DAMAGES
6.1 Commencement of
Project . The Project will be released
to Contractor in Subprojects, as set forth in Section 3.1(A)
. Upon execution of a Notice to Proceed, Contractor shall commence
with the performance of the work specified in such Notice to
Proceed.
CONFIDENTIAL TREATMENT
REQUESTED
EXECUTION
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6.2 Mechanical
Completion .
(A) Definition of Mechanical
Completion . “Mechanical
Completion” for each Subproject (or any AQC
Unit, as applicable) shall be deemed to have occurred only upon the
completion of the procurement, fabrication, installation, and
inspection of all necessary components and systems of the
Subproject (or AQC Unit, as applicable) (including all
non-destructive examinations and static integrity tests, such as
hydrostatic and pneumatic pressure or tightness tests, radiography
tests, and other pre-operational mechanical and electrical tests,
calibrations, clean-outs and flushes) to the extent necessary to
permit Performance Testing. Prior to Mechanical Completion,
Contractor shall perform and provide FirstEnergy with documentation
of all checks and tests required to ensure that the Subproject has
been correctly installed and is capable of being operated safely
and reliably within the requirements of the Agreement and without
damage or injury to the Project, the Site, or any other property or
person.
(B) Notice of Mechanical
Completion . Contractor shall provide
written notice to FirstEnergy at such time as the Subproject (or
AQC Unit, as applicable) has achieved Mechanical Completion. Within
fifteen Business Days of such notice, FirstEnergy shall respond to
Contractor in writing that the Subproject (or AQC Unit, as
applicable) has achieved Mechanical Completion on the date stated
in Contractor’s notice or provide Contractor with reasons why
FirstEnergy disputes that Mechanical Completion was achieved on
such date.
6.3 Final Completion
.
(A) Definition of Final Completion
and Final Document Delivery .
“Final
Completion” for each Subproject (or any
AQC Unit, as applicable) shall be deemed to have occurred only upon
completion of the following requirements for the Subproject (or the
AQC Unit, as applicable): (i) Mechanical Completion has been
achieved; (ii) Performance Tests have been successfully completed,
or at the election of Contractor (but provided in the case of the
Wrap Arrangement, solely in the event that the Performance Tests
have resulted in the removal of at least [******]% of SO2).
Contractor has paid FirstEnergy any and all undisputed Performance
Liquidated Damages owed by Contractor and its Subcontractors;
(iii) Contractor has paid FirstEnergy any and all undisputed
Schedule Liquidated Damages owed; (iv) the Reliability
Standard has been achieved; (v) Contractor has delivered to
FirstEnergy a Final Completion Certificate, which FirstEnergy has
approved (provided, for purposes of clarity, that the date of
delivery of a conforming and correct Final Completion Certificate,
and not the date of approval thereof by FirstEnergy, shall be
deemed the date on which this requirement has been completed);
(vi) Contractor has obtained all Permits required in
connection with the performance thereof; (vii) Contractor has
removed all Hazardous Substances for which it is responsible under
Section 3.8(A) and provided to FirstEnergy written
certification thereof, as provided in Section 3.8(A) ;
(viii) Contractor has removed all supplies, waste, materials,
rubbish, and temporary facilities from the Site (except to the
extent the Parties mutually agree the same are necessary to
performing additional AQC Units or Subprojects); (ix) the
Subproject (or AQC Unit, as applicable) has been fully completed as
required under the Agreement, except for items of incomplete work
which do not impair the operation thereof.
“Final Document
Delivery” for each Subproject (or any
AQC Unit, as applicable) shall be deemed to have occurred only upon
completion of the following requirements: (a) Contractor has
delivered to FirstEnergy a fully executed Contractor’s Final
Lien and Claim Waiver in the form of Exhibit 6.3(A) and
fully executed Final Lien and Claim Waivers from all Subcontractors
in the form of Exhibit 6.3(A) ; (b) Contractor has
delivered to FirstEnergy all documentation required to be delivered
under the Agreement, including Drawings and FirstEnergy’s
Confidential Information ; (c) Contractor has assigned or
provided FirstEnergy with all warranties to the extent Contractor
is obligated to do so pursuant to this Agreement.
(B) Guaranteed Final Completion
Dates .
Contractor shall achieve Final Completion and Final Document
Delivery in accordance with the dates set forth in the Project
Schedule to be developed and delivered pursuant to Section
6.4 ( “Guaranteed
Final Completion Dates” ). The parties
anticipate that the Project Schedule for the Subproject associated
with Generating Units 1 through 4 of the Sammis Plant will
designate a separate Guaranteed Final Completion Date for each AQC
Unit within that Subproject. At the election of FirstEnergy, the
Project Schedule for the Subproject associated with Sammis Plant
Generating Units 5, 6, and 7 will designate either a single
Guaranteed Final Completion Date for all AQC Units within that
Subproject, or separate Guaranteed Final Completion Dates for each
AQC Unit within that Subproject (with an adequate time allowed
between the Scheduled Mechanical Completion Dates established for
Generating Units 5, 6 and 7).
(C) Notice of Final
Completion . When Contractor believes it
has achieved Final Completion, Contractor shall deliver to
FirstEnergy a written notice and certification thereof (
“Final Completion
Certificate,” which shall be in the form of
Exhibit 6.3(C)) , certifying to FirstEnergy that all of the
requirements for Final Completion have occurred. The Final
Completion Certificate shall be accompanied by all other supporting
documentation as may be required to establish that the requirements
for Final Completion have been met.
(D) FirstEnergy Acceptance of
Final Completion . FirstEnergy shall notify
Contractor whether it accepts or rejects the Final Completion
Certificate within thirty (30) days following receipt of such
notice. If FirstEnergy agrees that Final Completion has occurred,
FirstEnergy shall deliver to Contractor a written acceptance of
Final Completion. If FirstEnergy does not agree that Final
Completion has occurred, then FirstEnergy shall state the basis for
its rejection in reasonable detail in the written notice provided
to Contractor. In the event that Final Completion has not been
achieved, Contractor shall promptly take such action or perform
such additional work as will achieve Final Completion and shall
issue to FirstEnergy another Final Completion Certificate. Such
procedure shall be repeated as necessary until Final Completion is
achieved.
6.4 Project Schedule
.
(A) Project Schedule; Critical
Path Schedule . With respect to each
Subproject, during the Development Phase, Contractor shall prepare
and submit to FirstEnergy for its review a detailed Project
Schedule, and critical path method schedules for the Subprojects
and for the Project as a whole, which shall be submitted in native
electronic and paper form ( “Critical Path
Schedule” ). The Project Schedule and
Critical Path Schedule shall govern Contractor’s performance
of the Subproject. The Contractor shall use its best efforts to
cause the Project Schedule and Critical Path Schedule to be
consistent with the timetables, goals and objectives of
FirstEnergy, including achievement of the compliance dates
established in the NSR Consent Decree. The Critical Path Schedule
shall represent Contractor’s best judgment as to how it shall
complete the Subproject in compliance with the Project Schedule and
the Guaranteed Final Completion Date. The Critical Path Schedule
shall be a detailed graphic representation of all significant
aspects of the Subproject, showing Contractor’s plans for
performance of the Subproject. Without limiting the generality of
the foregoing, the Critical Path Schedule shall:
(1) include separate activities
for each portion of the Subproject performed by Contractor, its
Subcontractors, or FE Vendors, along with non-physical activities
related to the Subproject, such as the submittal and approval of
shop drawings, product data, samples, Drawings and Specifications,
procurement of Materials, inspection and testing of the Subproject,
and obtaining Permits;
(2) be detailed such that no
activity is longer than fifteen (15) days;
(3) show the duration, early/late
start dates, early/late finish dates and available float for each
activity. Float time shall not belong to either Party, and shall be
allocated as needed during the progress of the
Subproject;
(4) show the percentage completion
as of the date thereof;
(5) identify the Person
responsible for the activity;
(6) for cost-reimbursable work,
show the projected manpower to be used per activity, whether
provided by Contractor or its Subcontractors, showing the number of
personnel, the positions and titles of such personnel and a general
description of the work being performed;
(7) show the Scheduled Mechanical
Completion Date, the Guaranteed Final Completion Date and all other
milestones listed in the Project Schedule;
(8) include allocations of
resources among the scheduled activities; and
(9) reflect logical relationships
between activities, reasonable durations and adequate float time to
account for existing conditions and foreseeable
complications.
The Critical Path Schedule
shall be the schedule which Contractor shall use in planning,
organizing, directing, coordinating, performing and executing the
Subproject (including all activities of Subcontractors and FE
Vendors) and shall be the basis for evaluating progress of the
Subproject.
(B) FirstEnergy Review of
Schedule . FirstEnergy may review the
Critical Path Schedule for general conformance with this Agreement.
If FirstEnergy determines at any time that the Critical Path
Schedule does not conform with this Agreement or the Project
Schedule in any respect, Contractor shall promptly revise and
resubmit the Critical Path Schedule to FirstEnergy.
FirstEnergy’s review of the Critical Path Schedule shall not
relieve Contractor of any obligations for the performance of the
Project, change any Project Schedule milestone or any Guaranteed
Final Completion Date, or be construed to establish the
reasonableness of the Critical Path Schedule. FirstEnergy may
reasonably rely upon the Critical Path Schedule in
FirstEnergy’s dealings with other contractors operating at
the Site or any other Person.
(C) Updated Critical Path
Schedule . Contractor shall update the
Critical Path Schedule monthly and at such other intervals as may
be requested by FirstEnergy by showing the actual progress of the
Subproject; however, Contractor may not modify the Critical Path
Schedule, including any of the Guaranteed Final Completion Dates or
any Project Schedule milestone, without obtaining
FirstEnergy’s prior written approval. Any modifications to
any of the Guaranteed Final Completion Dates or Project Schedule
milestones shall be only by Change Order. Contractor shall provide
FirstEnergy monthly (weekly during the Generating Unit outage) with
a current updated Critical Path Schedule in both hard copy and
electronic form ( “Updated Critical Path
Schedule” ) reflecting the actual progress of
work against the Critical Path Schedule and Project Schedule. The
Updated Critical Path Schedule shall be in the same detail and form
as required by the Critical Path Schedule.
6.5 Schedule Liquidated
Damages . With respect to each
Subproject (or any AQC Unit, as applicable), if Final Completion
occurs after the Guaranteed Final Completion Date and/or if Final
Document Delivery occurs after the date of Final Completion (or in
the case of a Subproject making use of the Powerspan ECO
technology, if Mechanical Completion occurs after the Scheduled
Mechanical Completion Date), and Contractor is responsible for the
payment of schedule liquidated damages for such delay in accordance
with Exhibit 6.5, then Contractor shall pay such amounts to
FirstEnergy in accordance with Exhibit 6.5 until Final
Completion (or Mechanical Completion, in the case of a Subproject
making use of the Powerspan ECO technology), and Final Document
Delivery, as applicable (the “Schedule Liquidated
Damages” ). When any Schedule
Liquidated Damages payment is owed under this Section 6.5 ,
FirstEnergy shall calculate such Schedule Liquidated Damages
payment and invoice Contractor for such amount. Payment of such
Schedule Liquidated Damages shall be due in arrears ten (10) days
after delivery of such invoice.
ARTICLE 7 - PERFORMANCE
GUARANTEE; PERFORMANCE LIQUIDATED DAMAGES
7.1 Performance Tests and
Protocol . Performance Testing will be
carried out in accordance with the Performance Test procedures to
be mutually determined by the Parties during the Development Phase
which shall be consistent with the requirements of the NSR Consent
Decree and, with respect to matters not indicated in such document,
in accordance with the standards and principles normally applied in
test runs for plants of a similar kind. FirstEnergy shall provide
labor, equipment, supplies, and all other items necessary for the
conduct of the Performance Tests. The Performance Tests shall be
conducted and the data obtained during the Performance Tests shall
be analyzed by a Third Party, coordinated by Contractor and subject
to the review and approval of FirstEnergy. A complete copy of all
raw performance data and a detailed listing of all testing
instrumentation utilized shall be provided to both Parties at the
completion of testing.
7.2 Performance Liquidated
Damages . With respect to each
Subproject, if such Subproject fails to achieve all of the
Performance Guarantees listed in Exhibit 7.2 , Contractor
shall, to the extent possible, within such time frame so as to not
delay Final Completion, perform such repair, redesign and
replacements as are required in order that such Subproject might
achieve all Performance Guarantees. If, after exhausting repair,
redesign and replacement alternatives, the Subproject fails to
achieve all of the Performance Guarantees within the required time
frame, and if the Contractor is responsible for the payment of
Liquidated Damages for such failure in accordance with Exhibit
7.2 , then Contractor shall pay, as Liquidated Damages and not
as a penalty, the amount specified for such Performance Guarantee
listed on Exhibit 7.2 ( “Performance Liquidated
Damages” ).
ARTICLE 8 - CHANGE
ORDERS
8.1 Change Orders Requested by
FirstEnergy . FirstEnergy shall be
entitled to request change(s) to any Subproject by way of a Change
Order request in accordance with this Section 8.1
.
(A) FirstEnergy shall submit to
Contractor a written proposed Change Order for each requested
change. Contractor must respond to FirstEnergy within ten (10)
Business Days with a written statement setting forth
Contractor’s estimate as to the effect, if any, which such
proposed Change Order would have on the Target Construction Cost,
the Project Schedule, any Guaranteed Final Completion Dates, the
Performance Guarantee, the Warranties, or any other obligation or
potential liability of either Party hereunder (collectively, the
“Changed
Criteria” ). To the extent reasonably
practicable, the written statement shall include all information
required by Section 8.5 .
(B) If the Parties agree on such
effect of the proposed Change Order (or modify such Change Order so
that the Parties agree on such effect of all provisions as
modified), the Parties shall execute such Change Order, and such
Change Order shall become binding on the Parties.
(C) If the Parties cannot agree on
such effect of the proposed Change Order within fifteen (15)
Business Days of Contractor’s receipt of FirstEnergy’s
proposed Change Order, or if FirstEnergy desires that the changed
work set forth in the proposed Change Order commence immediately
without the requirement of a written statement by Contractor,
FirstEnergy may, by issuance of a unilateral Change Order, require
Contractor to commence and perform such changed work (which
Contractor shall be compensated for in accordance with Section
5.1 ), with the effect of such unilateral Change Order on the
Changed Criteria to be determined as soon as possible. Pending
resolution of any dispute, Contractor shall perform the work as
specified in such unilateral Change Order and FirstEnergy shall
continue to pay Contractor in accordance with the terms of this
Agreement and any previous agreed Change Orders. When FirstEnergy
and Contractor agree on the effect of such unilateral Change Order
on all of the Changed Criteria, the Parties shall record such
agreement by execution of a Change Order, which shall supersede the
unilateral Change Order previously issued and relating to such
changed work. Contractor shall utilize all reasonable efforts to
commence the performance of the changed work or other obligations
required in the unilateral Change Order within three (3) Business
Days of receipt of such unilateral Change Order.
8.2 Change Orders Requested by
Contractor .
(A) Contractor shall have the
right to a Change Order in the event of any of the following
occurrences:
(1) acts or omissions of any
Governmental Authority, including changes in Applicable Law
occurring after the Effective Date of this Agreement and changes in
the terms of Permits or issuance of new Permits occurring after the
Effective Date of this Agreement, which affect Contractor’s
direct cost to perform the work under this Agreement, delay the
time of performance of such work, or materially affects
Contractor’s ability to achieve any Performance Guarantee
offered by Contractor hereunder, other than with respect to United
States import duties, acts of customs authorities, or acts by a
Governmental Authority requiring compliance with Applicable Law
existing prior to the Effective Date of this Agreement;
(2) acts or omissions of
FirstEnergy or its agents which constitute a breach of this
Agreement by FirstEnergy and which affect Contractor’s direct
cost to perform the work under this Agreement, and, with respect to
delays, interruptions, disruptions, interferences or hindrances
caused by FirstEnergy or such Persons, to the extent allowed under
Section 9.2 ;
(3) inaccuracy in FirstEnergy
Reliable Information which materially affects Contractor’s
direct cost to perform the work under the Subproject, materially
delays the time of performance of the Subproject, or materially
affects Contractor’s ability to achieve any Performance
Guarantee offered by Contractor hereunder;
(4) discovery of Hazardous
Substances for which Contractor has not assumed and retained the
risk under Section 3.8(B) , which affects Contractor’s
direct cost to perform the work under this Agreement or delays the
time of performance of such work; provided, however, that delays or
other impacts to the Project caused by the subcontractor retained
by FirstEnergy to perform lead abatement activities shall not be
cause for a Change Order;
(5) a Force Majeure Event;
or
(6) acts or omissions of an FE
Vendor which materially and adversely affect Contractor’s
direct cost of performance and, with respect to delays,
interruptions, disruptions, interferences or hindrances caused by
such FE Vendor, to the extent allowed under Section 9.2
.
(B) Should Contractor desire to
request a Change Order under Section 8.2 , Contractor
shall, pursuant to Section 8.5 , notify FirstEnergy in
writing and issue to FirstEnergy a request for a proposed Change
Order in the form attached hereto as Exhibit 8.2 , a
reasonably detailed explanation of the proposed change and
Contractor’s reasons for proposing the change, all
documentation necessary to verify the effects of the change on the
Changed Criteria, and all other information required by
Section 8.5 .
(C) If FirstEnergy agrees that a
Change Order is necessary and agrees with Contractor’s
statement of such effect of the proposed Change Order on the
Changed Criteria, then FirstEnergy shall issue such Change Order,
which shall be in the form of Exhibit 8.2 attached hereto,
and such Change Order shall become binding on the Parties upon
execution by the Parties of such Change Order.
(D) If the Parties agree that
Contractor is entitled to a Change Order but cannot agree on such
effect of the proposed Change Order on the Changed Criteria within
ten (10) Business Days of FirstEnergy’s receipt of
Contractor’s written notice and proposed Change Order and all
other required information, or if FirstEnergy desires that the
changed work set forth in the proposed Change Order commence
immediately, FirstEnergy may, by issuance of an unilateral Change
Order in the form attached hereto as Exhibit 8.2 , require
Contractor to commence and perform such changed work (which
Contractor shall be compensated for in accordance with Section
5.1 ), with the effect of such unilateral Change Order on the
Changed Criteria (or if the Parties agree on the effect of such
Change Order for some but not all of the Changed Criteria, the
impact of each of the components of the Changed Criteria on which
the Parties disagree) to be determined as soon as possible. Pending
resolution of the dispute, Contractor shall perform the work as
specified in such unilateral Change Order and FirstEnergy shall
continue to pay Contractor in accordance with the terms of this
Agreement and any previous agreed Change Orders. When FirstEnergy
and Contractor agree on the effect of such unilateral Change Order
on all of the Changed Criteria, such agreement shall be recorded by
execution by the Parties of a Change Order in the form attached
hereto as Exhibit 8.2 , which shall supercede the unilateral
Change Order previously issued and relating to such changed
work.
(E) If the Parties cannot agree
upon whether Contractor is entitled to a Change Order, then pending
resolution of the dispute, Contractor shall continue to perform the
work required under the Agreement, and FirstEnergy shall continue
to pay Contractor in accordance with the terms of this Agreement
and any previous agreed Change Orders.
(F) In the event that Contractor
desires a change that it believes would be advantageous to the
Subproject for reasons other than those set forth in
Section 8.2(A) , it shall notify FirstEnergy of the
desired change and shall furnish to FirstEnergy, along with such
notice, a request for a Change Order in the form attached hereto as
Exhibit 8.2 , including a reasonably detailed explanation of
the proposed change and Contractor’s reasons for proposing
the change, supported by all documentation necessary to verify the
effects of the change on the Changed Criteria, including the
information required under Section 8.5 . Within ten
(10) Business Days of receipt of Contractor’s notice and
Change Order request with the required supporting documentation,
FirstEnergy shall have the right in its sole and absolute
discretion to reject Contractor’s Change Order request and
shall notify Contractor of its decision. If FirstEnergy does not
reply within such ten (10) Business Day period, FirstEnergy shall
be deemed to have rejected the proposed change, and Contractor
shall not be entitled to the corresponding Change Order.
8.3 No Change Orders Due to
Contractor Error or Deviation . Notwithstanding anything in
this Article 8 to the contrary, no adjustment for the Target
Construction Cost, the Project Schedule, any Guaranteed Final
Completion Date, any scope of work under the Subproject, any of the
Warranties, the Performance Guarantee or any other obligation of
Contractor hereunder shall be made in connection with any
completion, correction of errors, omissions or deficiencies in, or
incomplete, improper or defective, work on the part of Contractor
or any Subcontractor, or any deviation by Contractor from the scope
of the Subproject which is not the subject of a prior Change
Order.
8.4 Change Orders Act as Accord
and Satisfaction . Change Orders agreed
pursuant to Section 8.1(B) or 8.2(C) by the Parties,
and unilateral Change Orders entered into pursuant to
Section 8.1(C) or 8.2(D) and which the Parties have
subsequently agreed upon the effect of such unilateral Change Order
and have executed a superceding and mutually agreed upon Change
Order as provided in Section 8.1(C) or 8.2(D), shall
constitute a full and final settlement and accord and satisfaction
of all effects of the change as described in the Change Order upon
the Changed Criteria and shall be deemed to compensate Contractor
fully for such change.
8.5 Timing Requirements for
Notifications and Change Order Requests by Contractor
. Should
Contractor desire to seek an adjustment to the Target Construction
Cost, the Project Schedule, any Guaranteed Final Completion Date,
the scope of work under the Subproject, the Performance Guarantee,
Warranties or any other modification to any other obligation of
Contractor under the Agreement for any circumstance that Contractor
has reason to believe may give rise to a right to request the
issuance of a Change Order, Contractor shall, with respect to each
such circumstance,
(A) notify the FirstEnergy
Designated Representative in writing of the existence of such
circumstance within fourteen (14) days (or such other period
expressly provided under the Agreement) of the date that Contractor
knew or reasonably should have known of the first occurrence or
beginning of such circumstance, provided that Contractor shall use
reasonable efforts to give such notice prior to the expiration of
such fourteen (14) day period should any action or inaction by
FirstEnergy or Contractor be required or necessary in relation to
such circumstance to prevent or mitigate any damages to either
Party and in either case, prior to commencement of work for which a
Change Order may be requested (except in the event that such work
is required to be immediately undertaken to avoid imminent loss or
damage to property or persons). In such notice, Contractor shall
state in detail all known and presumed facts upon which its claim
is based, including the character, duration and extent of the
claimed circumstance, the date Contractor first knew of the
circumstance, any activities impacted by the circumstance, the cost
and time consequences of the circumstance and any other details or
information that are expressly required under this Agreement.
Contractor shall only be required to comply with the notice
requirements of this Section 8.5 once for continuing
circumstances, provided the notice expressly states that the
circumstance is continuing and includes Contractor’s best
estimate of the time and cost consequences of the claimed
circumstance; and
(B) submit to the FirstEnergy
Designated Representative a request for a proposed Change Order as
soon as reasonably practicable after giving FirstEnergy written
notice but in no event later than ten (10) Business Days after the
completion of each such circumstance, together with a written
statement (a) detailing why Contractor believes that a Change Order
should be issued, plus all documentation reasonably requested by or
necessary for FirstEnergy to determine the factors necessitating
the possibility of a Change Order and all other information and
details expressly required under this Agreement (including the
information required by Exhibit 8.2 , schedules, detailed
estimates and cost records, daily time sheets); and (b) setting
forth the effect, if any, which such proposed Change Order would
have for the work on any of the Changed Criteria.
8.6 Adjustment Only Through Change
Order .
No change in the requirements of the Agreement, whether an addition
to, deletion from, suspension of or modification to the Agreement,
including any Subproject, shall be the basis for an adjustment for
any change in the Target Construction Cost, the Project Schedule,
any Guaranteed Final Completion Date, the scope of work under the
Subproject, the Performance Guarantee, any Warranties or any other
obligations of Contractor under this Agreement unless and until
such addition, deletion, suspension or modification has been
authorized by a Change Order executed and issued in accordance with
and in strict compliance with the requirements of this Article
8 or as required pursuant to Section 19.4 . No course of
conduct or dealings between the Parties, nor express or implied
acceptance of additions, deletions, suspensions or modifications to
the Agreement, including any work, and no claim that FirstEnergy
has been unjustly enriched by any such addition, deletion,
suspension or modification to the Agreement, whether or not there
is in fact any such unjust enrichment, shall be the basis for any
claim for an adjustment in the Target Construction Cost, the
Project Schedule, the scope of work under the Subproject, the
Performance Guarantee, any Warranties or any other obligations of
Contractor under this Agreement.
ARTICLE 9 - FORCE MAJEURE;
FIRSTENERGY DELAY; RECOVERY
9.1 Force Majeure
.
(A) Duties of the Affected
Party .
Within three (3) Business Days after becoming aware of the
occurrence of a Force Majeure Event, the affected Party shall (i)
provide written notice to the other Party containing full
particulars of such Force Majeure Event (including the anticipated
length of time that the delay may persist, the cause or causes of
the delay, all measures taken or to be taken by the affected Party
to prevent or minimize the delay, the schedule by which the
affected Party proposes to implement those measures, and the
affected Party’s rationale for attributing a delay to a Force
Majeure Event), including the requirements set forth in
Section 8.5 , together with the obligations affected
thereby, and (ii) use reasonable commercial efforts to mitigate the
effect of such delay or failure and to remedy the Force Majeure
Event. The affected Party shall resume performance of its
obligations affected by the Force Majeure Event as soon as
practicable after the conclusion of the Force Majeure Event, and
shall give prompt written notice to the other Party of all
significant facts and events concerning the affected Party’s
efforts to perform and of the conclusion of the Force Majeure
Event. Force Majeure Events shall not excuse any delay or failure
to make payments when due and Contractor shall continue to be paid
under this Agreement notwithstanding any Force Majeure Event. For
purposes of this Section 9.1(A) , Contractor shall be deemed
to know of any circumstance of which Contractor or its
Subcontractors knew or by the exercise of due diligence should have
known.
(B) Effect of Force Majeure
Event .
Except as otherwise provided in Section 9.1 , the
affected Party’s obligations under this Agreement shall be
suspended insofar as performance of such obligations is rendered
impossible by a Force Majeure Event. Any delay or failure by the
affected Party in the performance of any of its obligations under
this Agreement on account of a Force Majeure Event shall not
constitute a default under this Agreement during the period the
Force Majeure Event is in effect to the extent such delay or
failure is caused by the Force Majeure Event; provided that the
af