USING AND

UNDERSTANDING
ENGINEERING SERVICE AND
CONSTRUCTION CONTRACTS
John R. Clark, Esq.

~ VAN NOSTRAND REINHOLD COMPANY

~ _ _ _ _ _ _ NewYork
The Engineers Joint Contract Documents Committee's standard forms
included in the Appendix on pages 123-313 have been reproduced
with permission of the EJCDC which holds the copyright for those
documents.

Copyright © 1986 by Van Nostrand Reinhold Company Inc.

Softcover reprint of the hardcover 18t edition 2007

library of Congress Catalog Card Number: 85-20229

ISBN 978-1-4684-7312-4 ISBN 978-1-4684-7310-0 (eBook)
00110.1007/978-1-4684-7310-0

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library of Congress Cataloging-in-Publication Data

Clark, John R., 1916-

Using and understanding engineering service and
construction contracts.
Includes index.
1. Engineering-Contracts and specifications.
2. Building-Contracts and specifications. I. Title.
TA180.C55 1986 624'.068 85-20229
 CONTENTS
Introduction / v
1. Historical Background / v
2. Importance of Understanding and
Use / vi
3. Philosophy Underlying EJCDC's
Documents / vii
(a) Fairness and Objectivity / vii
(b) Professional License and Standard
of Care / viii
(c) Contractual Undertakings / x
(d) Duties and Responsibilities of
Engineers / x
(e) Control/xi
(f) Separate Functions of Engineer and
Contractor / xi
(g) Cooperation / xii
(h) Similarity with AlA Documents / xii
(i) Use of an Attorney / xii
4. Use of This Book / xiii
1. Standard Form of Agreement between
Owner and Engineer for Professional
Services / 1
1. Meeting of the Minds /1
2. Written Agreement Essential / 2
3. Owner's Form / 2
4. Describing the Project / 3
5. Estimating Construction Cost / 4
6. General Description of Basic Services I
6 (vi) Multi-Prime Contracts /24
7. Basic Services / 7
(a) Exhibit A / 7
(b) Study and Report Phase / 7
(c) Preliminary Design Phase / 8
(d) Final Design Phase / 9
(e) Bidding and Negotiating Phase /10
(f) Construction Phase /11
(i) General Administration /11
(ii) Site Visits /11
(1) Observation /13
(2) Progress and Quality /13
(3) To Enable Engineer /13
(4) A Greater Degree of
Confidence /13
(5) Completed Work /14
(6) Conform Generally /14
(7) Integrity of Design
Concept /14
(8) No Supervision /14
(9) No Means, Methods /15
(10) No Safety Precautions /
15
(11) Comply with Laws /15
(12) No Guarantee /15
(13) No Responsibility for
Contractor's Work /15
(14) Resident Project
Representative /15
(15) General/16
(iii) Rejecting Work /16
(iv) Interpretations /17
(v) Shop Drawings /18
(vi) Substitutes /18
(vii) Inspections and Tests /18
(viii) Disputes /19
(ix) Payments to Contractor / 20
(x) Maintenance Manuals / 21
(xi) Substantial Completion /21
(xii) Limitations of Responsibility /
21
(g) Operational Phase / 22
8. Additional Services / 22
(a) Advance Authorization Needed /
22
(i) Applications for Grants / 22
(ii) Measured Drawings / 23
(iii) Owner Requested Changes /
23
(iv) Alternate Designs / 23
(v) I ndependent Professional
Associates / 24
(vii) Problems During Bidding / 24
(viii) Subsurface Data /25
(ix) Serving as a Witness / 25
(b) No Advance Authorization
Needed /25
(i) Redesign for Substitutes / 25
(ii) Too Many Contractor
Claims /25
9. Owner's Responsibilities / 25
(a) Owner's Representative /26
(b) Project Requirements /26
(c) Physical and Other Site
Conditions / 26
(d) Surveys for Construction /27
(e) Governmental Approvals / 27
(f) Other Trained Experts /28
(g) Monitoring Compliance with
Laws /28
(h) Owner's Special On-Site
Representative / 28
iii
iv CONTENTS

(i) Construction Coordinator' 28 6. Engineer's Responsibilities' 43

(j) Owner Bears Costs' 29 (a) Obligation to Consult' 43
10. Period of Service' 29 (b) Identity of Other Professional' 43
(a) Orderly Progress' 29 (c) Complete Set of Documents' 43
(b) Timing of Design Services' 30 7. Period of Service' 44
(c) Bidding Phase Services 1 30 8. Method of Payment' 44
(d) Construction Phase Services 1 30 9. Construction Cost and Opinions of
(e) Fast-Tracking' 30 Costs 145
11. Methods of Payment' 30 (a) Construction Cost for This Part of
(a) General 1 30 Project /46
(b) Multi-Prime and Cost Plus' 31 (b) Redesigning' 46
(c) For Basic Services' 31 (c) Cost Limit for Project' 46
(d) Estimating Charges 1 31 10. General Considerations / 46
(e) Additional Services 1 31
(f) Reimburseable Expenses' 32
(g) Progress Payments' 32 3. Construction Related
(h) Adjusting Compensation 1 32 Documents /47
(i) Definitions' 32
12. Construction Cost and Opinions of 1. General' 47
Cost '32 2. Locator Guide 1 47
(a) Definition of Construction Cost'
32
(b) Limit of Construction Cost 1 33 4. Owner-Contractor-Stipulated Price
(c) When Limit is Exceeded' 33 and Cost-Plus / 50
13. General Considerations' 33
(a) Termination' 33 1. General' 50
(b) Reuse of Documents 1 33 2. Defined Terms 1 50
(c) Professional Liability Insurance' 34 3. Materials and Equipment' 50
(d) What Law Governs' 35 4. Effective Date of the Agreement' 51
(e) Successors and Assigns' 35 5. Work '51
(f) Arbitration' 36 6. Engineer as Owner's Representative'
14. Special Provisions' 37 52
(a) Supplemental Provisions' 37 7. Contract Time / 52
(b) Agreement is Complete 1 37 8. Timely Performance 1 52
9. Contract Price' 53
(a) Definition 1 53
2. Standard Form of Agreement between (b) Cost of the Work / 53
Engineer and Associate Engineers for (c) Records of Costs' 54
Professional Services / 38 (d) Contractor's Fee 1 54
(e) Guaranteed Maximum Price' 54
General 138 10. Payment Procedures / 55
1. Project Description and This Part of 11. Contractor's Representations I 55
Project /38 12. Listing of Contract Documents / 56
2. Guide Sheet / 39 13. Assignments' 57
(a) Single Prime Construction
Contract' 39
(b) Services at Site' 39 5. Standard General Conditions of the
(c) Professional Liability Insurance' 39 Construction Contract / 58
(d) Identifying Exhibits' 39
3. Underlying Concepts' 40 1. General 1 58
(a) Independent Contractor' 40 2. Defined Terms 1 58
(b) Coordination' 40 (a) Addenda' 59
(c) Communications 1 40 (b) Agreement' 59
4. Basic Services' 41 (c) Application for Payment / 59
(a) I nterpretations and Changes / 41 (d) Change Orders and Work
(b) Accepting Subcontractors and Directive Changes' 60
Suppliers' 42 (e) Contract Documents' 61
(c) Accepting Substitutes' 42 (f) Contract Price' 61
(d) Less Than Full Services' 42 (g) Contract Time' 61
(e) Post-Construction Services / 42 (h) Defective' 62
5. Additional Services' 43 (i) Drawings' 62
(a) Advance Authorization Always (j) Effective Date of the Agreement 1 62
Required' 43 (k) Field Order' 62
(b) Resident Project Representative is (I) Notice of Award / 63
Additional' 43 (m) Notice to Proceed 1 63
(c) Operational Phase Services' 43 (n) Project / 63

(0) Resident Project Representative /
63
(p) Shop Drawings / 64
(q) Subcontractor / 64
(r) Substantial Completion / 64
(s) Supplier / 65
(t) Underground Facilities / 65
(u) Unit Price Work / 65
(v) Work / 65
(w) Work Directive Change / 65
(x) Written Amendment / 65
3. Preliminary Matters / 66
(a) Delivery of Bonds / 66
(b) Commencement of Contract
Time: Notice to Proceed / 66
(c) Starting the Work / 66
(d) Examination of Contract
Documents / 66
(e) Schedules / 67
(i) Progress / 67
(ii) Shop Drawings /67
(iii) Values / 67
4. Intent, Amendment, and Reuse of
Contract Documents / 68
(a) Intent / 68
(b) Order of Preference / 68
(c) Reference Standards / 68
(d) Controlling Law / 70
(e) Report of Inconsistencies in
Documents / 70
(f) Amending and Supplementing
Contract Documents / 70
(g) Reuse of Documents / 71
5. Availability of Lands; Physical
Conditions; Reference Points / 71
(a) Availability of Lands / 71
(b) Subsurface and Latent Physical
Conditions / 72
(c) Reference Points / 74
6. Bonds and Insurance / 74
(a) Performance and Payment Bonds /
74
(b) Liability and Property Insurance In
General /75
(i) Liability and Property
Insurance Carried by
Separate Parties / 75
(ii) Advice of Insurance
Counsellor / 75
(iii) Acceptance of Coverage / 75
(c) Contractor's Liability Insurance /
76
(d) Owner's Liability Insurance / 76
(e) Property Insurance / 76
(i) All Risk Coverage / 76
(ii) Waivers / 76
(iii) Deductibles / 76
(iv) Partial Utilization / 77
7. Contractor's Responsibilities / 77
(a) Supervision / 77
(b) Following Instructions Concerning
Construction / 77
(c) Labor, Materials, and Equipment /
78
(d) Progress Schedule I 78
CONTENTS vi
(e) Substitute or "Or-Equal" Items /
78.
(i) General /78
(ii) Procedure / 78
(iii) Specifying Construction
Methods / 79
(iv) Change Order or Shop
Drawing / 79
(v) Engineer Sole Judge / 79
(vi) Compensation for Engineer /
80
(vii) Substitutes during Bidding /
80
(f) Subcontractors, Suppliers, and
Others / 80
(i) Definition /80
(ii) General Discussion /80
(1) Prequalification / 80
(2) Listing Required /80
(3) Identity Submitted /81
(4) Engineer's Duty to
Speak /81
(5) Consequences of
Rejection / 81
(6) After Effective Date / 81
(7) Subcontractors Bound to
Owner / 81
(8) Cost-Plus Work / 81
(9) Waivers / 81
(10) No Contractor with
Subcontractors and
Suppliers / 81
(g) Permits, etc. /82
(h) Compliance with Laws / 82
(i) Taxes / 83
(j) Use of Premises / 83
(k) Record Documents / 83
(I) Safety / 83
(i) General / 83
(ii) No Duty to Employees / 84
(iii) Stopping the Work / 85
(iv) Compliance with laws and
Regulations / 85
(v) Miscellaneous / 85
(m) Emergencies I 85
(n) Shop Drawings / 86
(i) General/ 86
(ii) They are Useful/ 86
(iii) Schedule / 86
(iv) Professional Review of What
is Delegated / 86
(v) Take It Seriously / 87
(vi) Limited Purpose of
Approval / 87
(vii) Not a Contract Document /
87
(viii) Design Concept / 87
(ix) Variations in Submittals / 88
(x) Stamps / 88
(0) Continuing the Work / 88
(p) Indemnification /88
8. Multi-Prime Contracts / 89
(a) General/ 89
(b) Advance Notice of Others
Working at Site / 89
vi CONTENTS

(c) Covenant to Cooperate for Benefit (f)Final Payment /106

of Other Contractors / 90 (i) Two Dates-Substantial and
(d) Construction Coordinator /90 Final Completion /106
(e) Provisions in Owner-Engineer (ii) Procedure and Conditions
Agreement / 90 Precedent /106
9. Owner's Responsibilities / 91 (iii) Surety /106
10. Engineer's Status / 91 (iv) Notice of Acceptance /106
(a) General / 91 (v) Post-Construction Services /
(b) Visits to the Site / 91 107
(c) Interpretations and Clarifications / (vi) Special Remedy for
92 Contractor /107
(d) Field Orders / 92 (vii) Contractor's Obligation is
(e) Rejecting Defective Work /92 Absolute /107
(f) Unit Price Determinations / 93 15. Suspension and Termination /107
(g) Decisions on Disputes / 93 (a) Suspension /107
(h) Limitations on Engineer's (b) Termination by Owner /107
Responsibilities / 94 (i) Customary Defaults /107
(i) General / 94 (ii) Termination without Cause /
(ii) Dangerous Language in 108
Specifications / 95 (c) Termination by the Contractor /
(iii) Sureties / 95 108
11. Changes in the Work, Price, and 16. Arbitration /109
Time /96 17. Miscellaneous /110
(a) General / 96
(b) The Change Order and the Work
Directive Change / 96 6. Additional Comments re Supplementary
(c) Work in Emergencies / 96
Conditions / 111
(d) Procedural Matters / 97
(e) Value of Change Order Work / 97 1. General/111
(f) Cash Allowances / 97 2. Schedule of Events /111
(g) Unit Price Work /97 3. Subsurface Data /111
(h) Acts of God / 98 4. Insurance /111
12. Warranties and Guarantees / 98 5. Subcontractors and Suppliers /111
13. Quality of Work /100 6. Multi-Prime Contracts /112
(a) Quality Called for by Contract 7. Unit Price Work /112
Documents from the Owner's Point 8. Special Guarantees /112
of View /100 9. Conditions Precedent to Substantial
(b) Tests and Inspections /100 Completion /112
(c) When the Work is Defective /101 10. Additional Matters /112
(i) Reject /101
(ii) Correct, Move, and Replace /
101 7. Additional Comments Concerning
(iii) Accept /101 Instructions / 113
(iv) Stop the Work /101
(v) Owner Does Work /101 1. Introduction to New Form /113
(vi) Remove Contractor from 2. Definitions /113
Job / 102 3. Qualification of Bidders /113
(vii) Waiver and Correction 4. Examination of Work Conditions and
Period /102 Site by Bidder /113
14. Payments to the Contractor /102 5. Issuing Addenda /114
(a) General/102 6. Substitutes /114
(b) Schedule of Values /102 7. Subcontractor and Suppliers /114
(c) Submission and Review of 8. Form of Bid /114
Application for Progress 9. Withdrawal of Bid /114
Payments /103 10. Bidding Procedure /115
(i) General /103 11. Award /115
(ii) Procedures /103 12. Supplementary Instructions /115
(iii) Refusal of Payment /103
(d) Substantial Completion /104 Footnotes / 117
(i) General/104
(ii) Effect of Substantial
Completion /104
Appendices / 121
(iii) Procedure /104
(iv) "Punch" List /104 Subject Index / 313
(v) Exclusive use of Site /105
(e) Partial Utilization /105 Cross Reference Index / 318
 INTRODUCTION

1. HISTORICAL BACKGROUND

In the late 1950s many members of the design professions-Engineers as well as Ar-
chitects-became concerned about their exposure to claims for professional malprac-
tice and particularly about the increasing number of claims that had been successfully
brought against them arising out of their Construction Phase activities. This led to
special studies sponsored by the American Institute of Architects and the Engineers
joint Counsel. The outcome was twofold: the development of a policy of professional
liability insurance to insure Engineers and Architects against errors and omissions in
the performance of their professional services, and the review and development of the
customary contractual arrangements defining the design profeSSional's undertakings
a
vis vis his client (the Owner), the Project to be designed, and the Contractor who
was to implement that design. At the outset, the AlA's Owner-Architect Agreement
(No. B131), General Conditions (No. A201) and the Owner-Contractor Agreements (Nos.
A101 & 111) were the documents most frequently used by design professionals, and
these received particular attention.
In the early 1960s it became apparent that there was a need for a separate series of
documents prepared to address these relationships when the Project to be designed
involved primarily engineering considerations. The number of Projects for which the
Engineer was employed by the Owner as the prime professional to handle the Project
design and construction administration was increasing. There was a need for greater
flexibility in the approach to many of the details of the relationships between the design
professionals, Owners, and Contractors. At the same time, the importance and strength
of several professional engineering societies was being felt, particularly the National
Society of Professional Engineers. This was accompanied by a desire for recognition
of the separate identity of the Engineer as the principal or prime professional respon-
sible for Project design rather than as a professional associate of the Architect. Ac-
cordingly, in 1963 the Professional Engineers in Private Practice, a practice division of
the National Society of Professional Engineers (NSPE/PEPP), formed a Contract Docu-
ments Committee which, after careful study, commenced publication of various stan-
dard contract forms. The number of forms has increased over the years; there are now
more than 25 standard documents. Several years ago the American Consulting Engi-
neers Council (ACEC) abandoned its separate efforts to develop its own contract forms
and joined with the NSPE/PEPP Contract Documents Committee. More recently, a sim-
ilar step was taken by the American Society of Civil Engineers (ASCE), whose repre-
sentatives joined the same committee. At this point the name of the Committee was
changed to Engineers joint Contract Documents Committee (EjCDC). Shortly thereafter
representatives of the Construction Specifications Institute (CSI) joined the EjCDC and
the CSI became a full-fledged member of EjCDC with its shield appearing on all of
EjCDC's Construction Related Documents.
The EjCDC consists of fourteen regular members: four each from the NSPE, ACEC,
and ASCE, and two from CSI. Membership is coveted, but rotated periodically. There
are also "observers" from the participating societies and administrative personnel. The
EjCDC's deliberations have benefited from its inception in 1963 by a continuity in the
participation of legal counsel. Standard documents are scheduled for review three

vii
viii INTRODUCTION

years after release for publication. Whether it is a new form or the review of one that
has been revised many times, the full EjCDC membership considers with great care
the language of each sentence of each document from the practical as well as the
professional point of view. Thus, when a standard form is completed it represents the
best thinking of dedicated practitioners whose aim has been to develop and make
available to the members of the engineering profession, to Owners, to Contractors,
and to the public at large standard forms that set forth in clear language, fairly and
objectively, a professionally acceptable, customary, and national norm for the activities
and interrelationships of Owners, Contractors, and Engineers during design and con-
struction.
Any standard form developed by professional engineerng societies is subject to the
criticism that it is one-sided and "loaded" in favor of the Engineer. However, a genuine
effort has been made to be professional, fair, practical, and objective. For many years
the EjCDC received comments from Contractors as to its Construction Related Docu-
ments, but it was not until the early 1980s that a representative of the Associated
General Contractors of America (AGC) formally joined in the EjCDC's deliberations.
Discussions and negotiations followed the AGC's input. This led to the 1983 series of
EjCDC's Construction Related Documents,1 each of which bears on the cover page a
notation that the document has been "approved and endorsed" by the AGe. This
endorsement is an important achievement because it says to Owners, Contractors, and
their attorneys, to courts, and to arbitration panels that the EjCDC's documents are in
fact fair and objective and should be considered for use by all. It emphatically dispels
the accusation, at times heard from the uninformed, that they are heavily loaded in
favor of the Engineers.

2. IMPORTANCE OF UNDERSTANDING AND USE

Basic to the EjCDC's activities is the tenent that every Engineer should be thoroughly
familiar with the terms and conditions of his agreement with his client. It is the agree-
ment under which he works. It is the source of many of his rights, duties, principles,
and responsibilities during the design and construction. Equally important is that he
be familiar with the terms and conditions of the agreement between the Owner and
Contractor pursuant to which the Project which the Engineer has designed is to be
built, although one must bear in mind that the Engineer is not a party to that contract.
Engineers are well advised to use the EjCDC's standard documents wherever possible
because they have withstood many challenges in court and their wording has been
carefully prepared for clarity and to avoid misunderstandings. When the use of the
standard forms is not possible one should appreciate the significance of the differences
between the standard EjCDC forms and the document one is proposing to use.
There is a reason behind every sentence in each EjCDC form. While some may be
more apparent than others these reasons should be understood by the users of the
standard forms. It is the purpose of this book to discuss and analyze the more impor-
tant provisions of EjCDC's documents which are most widely used and to explain the
reasons for those provisions. The documents to be considered are as follows:

Standard Form of Agreement Between Owner and Engineer for Professional Services,
No. 1910-1 (1984 ed.), referred to herein as the O-E Agreement
Standard Form of Agreement Between Engineer and Associate Engineer for Profes-
sional Services, No. 1910-13 (1985 ed.), referred to herein as the E-AE Agreement.
Standard Form of Agreement Between Owner and Contractor:
on the Basis of Stipulated Price, No. 1910-8-A-1 (1983 ed.) referred to herein as the
Stipulated Price Agreement; and
on the Basis of Cost-Plus, No. 1910-8-A-2 (1983 ed.), referred to herein as the Cost-
Plus Agreement.
 INTRODUCTION ix

Both documents may be referred to herein collectively as the O-Kor Agreements

or the Owner-Contractor Agreements.
Standard General Conditions of the Construction Contract, No. 1910-8 (1983 ed.),
referred to herein as the General Conditions
Guide to the Preparation of Supplementary Conditions, No. 1910-17 (1983 ed.), re-
ferred to herein as the Supplementary Conditions.
Guide to the Preparation of Instructions to Bidders, No. 1910-12 (1983 ed.), referred
to herein as the Instructions.

These documents have been reproduced with the permission of the EjCDC in the
Appendix to this book, and reference will be made throughout the text to their various
paragraphs. Reference is made to the paragraphs of the documents analyzed by use
of abbreviations for brevity, thus: to the O-E Agreement, O-E 13.9.2; to the E-AE Agree-
ment, E-AE '4.1.9; to the O-Kor Agreements, O-Kor '3.5.3; to the General Conditions,
,GCD '2.10.6; to the Supplementary Conditions, SC ,3.7; and to the Instructions, I
'1.2.5.

3. PHILOSOPHY UNDERLYING EJCDC'S DOCUMENTS

There are several concepts or principles, some with their origin in the law, others
developed from professional practice, that are basic to the EjCDC's activities and have
had a controlling influence on the preparation of its documents. An appreciation of
these principles is essential to an understanding of the documents. The more important
are discussed here using laymen's language instead of legalese.

a. Fairness and Objectivity

It must be remembered that the participating organizations in EjCDC are professional
societies. Thus, their approach to the preparation of standard contract documents and
related matters is quite different than it might be if they were strictly trade associations.
Maintenance of professional standards is of paramount importance to these societies.
The influence of this commitment is as apparent in the EjCDC's documents as it is in
this book. If the standard documents that have been developed with such deliberation
and care are not useful to the profession, the time, effort, and money that has gone
into their preparation will have gone for naught. If those documents are not in keeping
with professional standards, they will not be acceptable to professional Engineers and
they will not be acceptable to Owners, Contractors, or others involved in a Project's
design and construction. Accordingly, the temptation to slant the documents with
wording favorable to the Engineer has been strongly resisted. The documents are not
intended for use as a starting point in negotiations with the other parties in anticipation
of the erosion of language favorable to the Engineer that can be bargained away in
favor of some concession made elsewhere. Rather, their purpose is to set forth clearly
and concisely what services the Engineer has been trained to perform, is professionally
qualified and obligated to perform and expects to perform, and at the same time to
recognize that others, particularly the Contractor, have their own expertise and skills
which the Engineer does not possess but which are equally important for the successful
completion of any Project and to recognize the responsibilities imposed upon an En-
gineer by virtue of his licensure.
There is a trichotomy of authority and responsibility in the customary design and
construction relationships, and it is important for each of the three parties involved to
understand what he is to do and not do, and what he can and cannot count on the
others to do? The customary relationship is frequently misunderstood primarily be-
cause there is no formal contract between the two most active parties-the Engineer,
 x INTRODUCTION

who is to develop and document the design concept, and the Contractor, who is to
implement the design and construct the Project. Each has a separate agreement with
the Owner and each knows that what he does will have an effect on the other. It is
believed that if all three parties have an understanding at the outset as to what part
each is to play-if they have a meeting of the minds on the points of importance to
each-the chances for misunderstandings later on will be greatly reduced and the
possibility for ill will, claims, and litigation will be lessened. The desire to minimize
the chances of disputes and claims arising has been one of the forces motivating the
EjCDC in its document work. The documents, particularly the Construction Related
Documents, endeavor to explain the functions of the Engineer-what he as a duly
licensed professional expects to do and what the other parties are expected to do. In
this way these documents explain and reduce to a written understanding the customary
three-party relationship. Their aim is to illustrate, depict, and portray in clear language
the nationally accepted division of functions and responsibilities in this trichotomy. In
doing so, they have provided guidance for Owners and the courts as to what services
may be expected from a licensed Engineer as well as what services may be profession-
ally required of him. 3

b. Professional License and Standard of Care

Engineers and Architects must be licensed to practice their professions. The statute
under which these licenses are granted define in general terms the professional re-
sponsibilities associated with licensure. licensure carries with it a responsibility that
is for the benefit of the General Public. It continues to be necessary to remind licensed
professionals that their licenses are not intended to protect them in the exclusiveness
of their practices from competition of laymen, but rather to protect the General Public
against the conduct of certain activities which in the eyes of the legislatures should
only be carried on by specially trained and certified (licensed) persons. A license is like
a badge, evidencing qualifications and expertise. It should serve as a constant reminder
that performance of services must be in accordance with professional standards. Sta-
tutory and common law determine what those standards are and the extent of the
duties and responsibilities that emanate from licensure.
In addition to these responsibilities, common law also determines what may be
legally expected of a licensed professional. In the case of Engineers and Architects, it
may be simply stated thus: A design professional is required by law to exercise a degree
of care, skill, and diligence in the practice of his profession equivalent to what may
be reasonably required of one in his profession. What may be "reasonably required"
to measure up to professional standards in a particular situation depends to a signifi-
cant degree on testimony presented in each case where the extent of the standard is
being tested. In many applications where the accepted course of professional conduct
can be readily determined in advance, the EjCDC documents have in effect codified
what may be expected of Engineers and, as noted above, described and established a
nationally accepted norm for professional practice. The law will not accept professional
standards of practice or customary professional conduct that is below the reasonable
needs of the General Public to be assured of health, safety, and welfare, which assur-
ance is the basic reason for granting of a license to practice.
While insisting that its standard documents call for services that are profeSSionally
acceptable and that measure up to professional standards, the EjCDC has been con-
cerned that its documents not extend the Engineers' responsibilities and authority
beyond what is "reasonably required" and for which they have been specially trained
and licensed. In the absence of a special agreement, the law does not require an
Engineer or Architect to deliver a perfect plan; there is no implied warranty or assur-
ance that his Drawings and Specifications will be perfect and free of defects. It may
be surprising to some that unless there are special circumstances or a particular con-
tractual undertaking, most jurisdictions adhere to the rule that there is no implied
 INTRODUCTION xi

warranty that what has been designed will be reasonably suitable for the purpose and
use intended. (See discussions in Chapter 1 at section 4 and re O-E '1.6.12 at section
7.f.xii, and at footnote 14.) Yet there are certain implied warranties associated with the
practice of engineering, one of which is a warranty that the Engineer's Drawings and
Specifications have been prepared in accordance with professional standards. While
it may be difficult for the Owner and Contractor to appreciate and accept, it is the law
in most jurisdictions that where judgment and special skills are the predominant in-
gredient of an assignment, infallibility will not be required. Professional services do
not ordinarily lend themselves to the doctrine of liability without fault which in effect
imposes on a mass producer of a product made for consumer use the responsibility
of an insurer against a defect in the product which causes harm to the consumer. In
situations where unknown and uncontrollable factors are common and the primary
reason for employment is the exercise of judgment, exactitude will not be required.
The practice of engineering in the design of projects and facilities is not treated by the
courts as an exact science. Although rendered some years ago, the following quotations
from court decisions are helpful in understanding some of the limits of professional
responSibility:

[T]he general rule is applicable that those who sell their services for the guidance
of others in their economic, financial and personal affairs are not liable in the ab-
sence of negligence or intentional misconduct. ... Those who hire [experts] ... are
not justified in expecting infallibility, but can expect only reasonable care and com-
petence. They purchase service, not insurance. 4
... those who hire experts for the predominant purpose of rendering special skills,
cannot expect infallibility. Reasonable expectations, not perfect results in the face
of any and all contingencies, will be ensured under a traditional negligence standard
of conduct. In other words, unless the parties have contractually bound themselves
to a higher standard of performance, reasonable care and competence owed gen-
erally by practitioners in the particular trade or profession defines the limits of an
injured party's justifiable demands ....5

It is difficult and sometimes almost impossible to know in advance just where the
line as to professionally acceptable conduct will be drawn. One should remember,
however, that courts have demonstrated a willingness to expand the scope of profes-
sional responsibility beyond what many had thought to be its appropriate limitations.
Normally, the professional responsibility of an Engineer to be certain that what he has
designed is reasonably safe for public use does not carry with it responSibility for the
safe construction of what he has designed. This is because construction is the province
of the Contractor over which the Engineer does not and should not have control. Yet,
particularly in the case of personal injury to third persons, courts have at times held
design professionals responsible for injuries resulting from the construction process.
There are other situations where professional responsibility has been extended to
include responsibility for functions and activities which an Engineer's training does
not qualify him to undertake. This had led to efforts to include in agreements for
engineering services and construction documents language limiting the liability of
Engineers to a specific dollar amount. This amount is usually considerably less than
might be imposed by law upon a licensed design professional for failure to perform
in accordance with professional standards. No language, no matter how carefully pre-
pared, should be relied upon to fully protect an Engineer against claims arising out of
his failure to meet professional standards of reasonable care, skill, and diligence in
furnishing services. Efforts to do so by wholesale use of limitation-pf-liability language
will most certainly fail when tested in court. 6 This is particularly true because the
responsibilities of a licensed design professional extend for the benefit of persons-
third parties and the General Public-who would not be parties to the release language
and quite properly should not be affected by it.
xii INTRODUCTION

The EjCDC feels that it is undesirable and not in keeping with the mission of a
professional society to try by standard sOciety-endorsed contract forms to relieve En-
gineers from responsibility for properly performing those duties and responsibilities
which their professional training and expertise qualifies them to perform and which,
because of their being licensed to practice, they have a duty to the General Public to
perform, professionally and without negligent errors or omissions. It is most likely that
the typicallimitation-of-liability language will provide no more than illusory legal pro-
tection since courts, juries, and arbitrators are not likely to accept wholesale efforts to
avoid professional responsibilities or to limit the amount of damages payable for failure
to perform in accordance with professional standards. In spite of pressures from cer-
tain professional liability insurance carriers, one will not find limitation-of-liability lan-
guage in the EjCDC standard documents because EjCDC has taken the position that
professionalism must not be traded for lower premiums. EjCDC's thrust and that of
the more responsible insurance carriers has been to educate through standard docu-
ments and other publications so that the extent and limitations of the professional
duties and responsibilities will be properly understood by all. This is another of the
reasons for the preparation of the EjCDC's standard documents and for their wide
acceptance and use.
Professional liability insurance for Engineers and related matters are discussed in
Chapter 1 at section 13.c.

c. Contractual Undertakings
Although the scope of an Engineer's or Architect's professional responsibilities should
not fall below a level that is required by the law under which he has been granted a
license to practice nor below professional standards as determined under common
law, those responsibilities may be, and frequently are, increased by contract. When
the standard documents for design services and construction were first examined in
1957 in the light of the alarming increase in the number of claims based on the failure
to perform in accordance with professional standards, that is, professional negligence,
it became apparent that many of the contractual undertakings of Architects and En-
gineers were extending their responsibilities into areas not related to their professional
training and licensure, areas that did not require the knowledge and skill of an Archi-
tect or Engineer, and areas which were properly the province of other disciplines,
particularly Contractors. This led to a major overhauling of standard documents, par-
ticularly AlA's Owner-Architect Agreement, No. B-131, and General Conditions of the
Construction Contract, No. A-201. It was at this time that the NSPE/PEPP's Owner-
Engineer Agreement, No. 1910-1, and General Conditions of the Construction Contract,
No. 1910-8, were introduced. The committees that prepared those documents were
careful to be certain that whenever a contractual undertaking involved an activity or
function that extended the duties and responsibilities of an Architect or Engineer be-
yond what might strictly be required to comply with professional standards, the activity
or function was directly related to the professional function, was one that the training
of an Architect or Engineer qualified him to perform, was one that did not involve legal
exposure beyond what an Architect or Engineer would ordinarily be willing to under-
take, and was one which no other party in the design and construction process was
better able to perform. These general tests still guide the EjCDC in its review and
revising of its standard documents.

d. Duties and Responsibilities of Engineers

Any discussion of standard agreements for furnishing professional engineering or ar-
chitectural services will soon turn to the use of the words duties and responsibilities,
as we have already seen. These are words which have come to worry design profes-
sionals because of their connotation of legal exposure. The important point to bear in
 INTRODUCTION. xiii

mind, and one that has affected much of EJCDC's deliberations, is a general legal axiom
that with every right there is a corresponding duty and with every privilege there is a
corresponding responsibility. We have seen that the privilege (or license) to practice
engineering or architecture carries with it certain responsibilities. The contractual right
to reject a Contractor's Application for Payment for certain specified reasons carries
with it the duty to do so when those reasons exist. The contractual right to reject
defective Work in certain situations and the right to call for special testing of Work
performed carry with them corresponding duties. The contractual right to stop the
Work may carry with it the duty to do so. The right to supervise the Work carries with
it the duty to do so. EJCDC has been careful to see that a right is not assigned or
privilege granted in its standard documents to a party that is not properly trained and
prepared to carry out the corresponding duty or responsibility.

e. Control

Experience has taught us that responsibility without authority is a dangerous situation

in which to find oneself, and with authority there is associated responsibility. With
control, there is also responsibility. In developing its documents the EjCDC has tried
to give authority and control to the party best qualified to exercise then and to associate
responsibility with that authority and control, and not otherwise.

f. Separate Functions of Engineer and Contractor

Before the design professionals became concerned about unanticipated and unnec-
essary legal exposure, the standard documents provided that the design professional
was to "supervise" construction, and this in spite of the fact that the Contractor was
for all practical purposes in charge of the construction Work and obligated to have a
superintendent at the job site. By use of the word supervise the design professional
was given the right to control and direct the Work of the Contractor and thus unwit-
tingly the duty to do so. This led to the first major change in wording of the societies'
standard documents which now quite properly provide that the Contractor will su-
pervise his own Work. The Contractor has his own knowledge and training and brings
to the construction skills and expertise which are quite different from the Engineer's
and are more important to successful completion of the Work. The EjCDC's Construc-
tion Related Documents carefully delineate the functions of the Engineer and Con-
tractor and adhere to the concept that each should "do his own thing", or "stick to
his last" as the old axiom teaches us. Contractors are as concerned as Engineers (and
Architects) that each party should perform his assigned functions without interference
from the other. Accordingly, in describing the Contractor's functions the words su-
pervise and control are used because he must have authority over the construction
activities, be in charge of the Work as it is performed, and assume responsibility for
how the Work is done? The Engineer's function is to be available to interpret and
clarify his documentation and to observe how the Contractor is implementing the
design concept as presented in the design documentation (particularly the Drawings
and Specifications) in order to give a certain degree of assurance (which of necessity
must be far less than a guarantee of the Contractor's performance) that the completed
Project will be in accordance with the requirements of the Contract Documents and
that in carrying out the construction Work the Contractor has preserved the integrity
of the design concept. In recognition of the Contractor's function of supervision and
control over the Work as it is performed, it is stated (and the words are repeated
frequently) that it is the Contractor and not the Engineer who is to have control over
and be responsible for the "means, methods, techniques, sequences, and procedures
of construction and safety precautions and programs incident thereto". This is EjCDC
and AlA standard language and represents a nationally accepted division of authority
and responsibility between the design professional and the Contractor.
xiv INTRODUCTION

g. Cooperation

It has been wisely stated that no agreement, no matter how carefully negotiated or
worded, can keep two parties together who wish to fall apart. One hears a great deal
about the difficulties Contractors have with Engineers and Architects and all too often
a series of horror stories from design professionals about countless problems they
have experienced with Contractors. Owners have their own set of horror stories. On
the other hand, the three-party relationship has been used successfully for many dec-
ades, which leads one to suspect that in most Projects the parties have worked well
together. The EjCDC documents have been prepared on the assumption that a coop-
erative spirit between Owner, Contractor, and Engineer, which is so essential for suc-
cessful completion of any Project, will be operative and controlling throughout. A
meeting of the minds on the important aspects of the relationship is essential to a
good working understanding. Understanding, cooperation, and a willingness and de-
sire to Work together are expected. Existence of adversary relationships on which all
too many parties thrive is recognized but the EjCDC documents do not dwell on those
aspects of the relationships, although procedures are established for resolution of
disputes and claims.

h. Similarity with AlA Documents

Because of the great similarity between the functions of Engineers and Architects and
the impact of their services on the General Public, the EjCDC has recognized the
importance of adhering whenever practicable to identical philosophies and concepts,
if not identical language, to describe the three-party relationship and the trichotomy
of duties and responsibilities. This is as important to design professionals as to their
insurance carriers, Owners, Contractors, and others who use the standard documents
because it fortifies the belief that the EjCDC's (and also the AlA's) standard documents
do present a fair, objective, and nationally accepted norm for the performance of
professional services. Because of the similarity of language and approach, most of what
is said in this book will have as much significance for Architects and others using the
AlA standard documents as it should to Engineers, to whom it is primarily directed.
For a cross reference between the provisions of the EjCDC and AlA general conditions,
see EjCDC Cross Reference between E1CDC Standard General Conditions of the Con-
struction Contract and AlA General Conditions of the Contract for Construction, No.
1910-11.

i. Use of an Attorney

At the top of the cover page of each EjCDC document there is a printed statement
that reads: "This document has important legal consequences; consultation with an
attorney is encouraged with respect to its completion or modification". The EjCDC
appreciates that its documents address only the customary and usual aspects of the
three-party relationship and will require modification and supplementation to adapt
them for use in connection with each particular Project. Accordingly, guidance in
preparing supplemental or amending language has been provided (see Exhibit A to
the O-E Agreement and the Guide Supplementary Conditions); but the EjCDC feels
strongly that where the rights of other parties are involved Engineers should not pur-
port to be experts in the preparation of contract terms and conditions. That is a matter
for a licensed attorney with experience in the areas of the law that are involved. It may
be expected, however, that in those parts of the contracts which deal with the more
technical aspects of design services and construction, guidance for legal counsel will
be provided by the Engineer.
 INTRODUCTION xv

4. USE OF THIS BOOK

This book has been prepared by legal counsel who has had the benefit of service with
the EJCDC (and its predecessor organizations) since its inception and also at times as
special counsel to the AlA's Documents Review Board. It has been prepared from the
background of a lawyer and should prove valuable to lawyers who wish to understand
the whys and wherefores of the standard contract language. It has been prepared
primarily for use by design professionals, particularly practicing Engineers. It does not
purport to be a legal treatise; it does not take much trouble to cite legal authority
(which can be readily located by competent legal counsel). Much effort has been ex-
pended to avoid "lawyer talk" and to state in layman's language such legal principles
as are discussed.
One who does not subscribe to the philosophy and concepts underlying the EJCDC's
Standard Documents may find them less useful than otherwise; however, they address
so many of the issues raised in the relationships between design professionals, Owners,
and Contractors that a review of the explanations in this book should be most bene-
ficial. If the customary three-party relationship is not to pertain (as would be the case
where a Construction Manager is employed or where the design professional is em-
ployed by the Contractor-design-build or turnkey as it is called), extensive revisions
of the standard documents will be necessary, but the issues addressed in the standard
documents and discussed in this book should be addressed in the contracts used in
whatever approach is selected.
 1
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND ENGINEER FOR PROFESSIONAL
SERVICES, No. 1910-1 (1984 ed.)

The O-E Agreement is one of the first documents prepared for use by design Engineers.
It was first published in 1964 and has been reviewed and revised periodically since
then. 8
The O-E Agreement is printed with a Guide Sheet which explains many of the points
to look out for in completing the document, adapting it to the particular assignment
and preparing it for signature. It is expected that the Guide Sheet, and related pages
will be torn off along the perforated lines before signing.

1. MEETING OF THE MINDS

Careful discussion at the outset of the Engineer-client relationship is essential to the
development of a clear understanding between the parties as to the rights, duties,
authority, and responsibilities of the Engineer-what he intends to do and should do,
the extent of the authority that the Owner wishes him to have when acting as the
Owner's representative during construction, what he neither intends doing nor is qual-
ified to undertake, and the manner and rate of his compensation. It is equally essential
that there be an understanding of the duties and responsibility of the Owner. In ad-
dition, attention should be directed to the anticipated role of the Contractor and the
extent to which the Owner will be satisfied in relying upon the Contractor to complete
the Work as designed. In addition to an understanding and appreciation of the im-
portance of the professional engineering function, there should be recognition of the
fact that the Engineer is not in the position to control the Contractor's Work and the
fact that the Engineer can only give the Owner limited assurance at best as to the
quality of this Work and its compliance with the requirements of the Contract Docu-
ments. The Owner and Engineer should also discuss those services categorized as
Additional Services in O-E '2.1 in order to determine if any of those services are to be
furnished by the Engineer as part of Basic Services.

2. WRITTEN AGREEMENT ESSENTIAL

Following these discussions and arrival at a common understanding or meeting of the
minds, the entire understanding should be reduced to writing. Reliance on oral agree-
ments and recollections will most certainly cause later difficulties since it places the
parties at the mercy of the fallibility of human memory. Amendments and supplements
to the original agreement should likewise be in writing and properly Signed. All of the
EJCDC Agreements for professional services follow the approved legal practice of stat-
ing that they represent the entire agreement between the parties, supersede all prior
agreements or understandings, written or oral, and may only be amended by an ap-
propriately signed document (see O-E ,8.3).
2 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

3. OWNER'S FORM

As pointed out above, the use of the Standard Form of Agreement between the Owner
and Engineer for Professional Services is strongly recommended because of its fairness
in allocating duties and responsibilities to those best qualified to carry them out, and
its wide acceptance. However, Owners frequently have their own standard forms or
an Owner may have prepared one specifically for the Project involved. The Engineer's
legal advisor should review such documents carefully. The Engineer should understand
how the Owner's special form differs from the O-E Agreement and the extent to which
the special form may impose heavier obligations upon the Engineer than he is willing
or qualified to accept or leave him without the degree of authority over the Project as
it is constructed which he considers essential to the performance of a fully professional
job. Additional compensation is frequently not sufficient to make up for the increased
risk and exposure inherent in many of the Owner-imposed provisions.
This applies particularly to Owner-imposed General Conditions as well as to the
agreement with the Owner. Attention is invited to O-E '1.6 and to GCD '9.1, where it
is stated that the duties and responsibilities and limitations on the authority of the
Engineer as the Owner's representative during construction as set fourth in Articles
1-17 of the EjCDC Standard Form of General Conditions cannot be expanded without
the written consent of the Owner and Engineer. Frequently, a client will insist on a
prescribed form of General Conditions which assigns to the Engineer functions that
he is neither p-repared nor qualified to assume or carry out. These additional functions
may not be covered by the standard language of his professional liability insurance.
The language of the EjCDC Standard Forms which delineate the responsibilities of the
Owner, Engineer, and Contractor during the construction may be referred to by En-
gineers to support their natural reluctance to agree to provide services they are not
professionally trained for or obligated to furnish. Recently, particularly in connection
with OSHA and other similar legislation, Owners have wanted assurance that their
Contractors will comply with the safety requirements or other laws or regulations
applicable to performance of the Work. Monitoring such aspects of the Contractor's
Work is best left to others more qualified than the Engineer, and in O-E '3.9, the Owner
is required to provide separately for any such monitoring services rather than turning
to the Engineer to do so.
Any additional responsibilities or duties assigned to the Engineei merit careful scru-
tiny as well as advice as to the extent to which they are covered by the Engineer's
professional liability insurance. In some instances, contract forms prescribed by Own-
ers contain assumed liability, guarantees, indemnity, or hold-harmless provisions
wherein the Engineer indemnifies the Owner against various risks or assumes liability
arising out of the design of structures or participation in the construction process
which go far beyond what he would otherwise be accountable for under the law. The
EjCDC has joined with the AlA in issuing a policy statement strongly opposing inclu-
sion of such indemnity provisions and like language in any agreement with the Owner.
Indemnity and hold-harmless provisions impose responsibilities and liabilities on an
Engineer which it is not his professional function to assume. Insurance is usually avail-
able to the Owner to cover most of the risks about which the Owner is concerned.
Many Owners do not realize that if an Engineer declines to indemnify or hold his client
harmless, it does not mean that the Engineer is unwilling to accept the professional
responsibilities assigned to him by the law. Indemnification is an additional step not
appropriate to the professional relationship (see discussion at section 3.b of the Intro-
duction). If it becomes necessary for the Engineer to accept some sort of an indemnity,
guarantee, or assumption-of-liability provision, he ought first to consult his attorney
and insurance counselor so that he may understand the additional exposure he is
being required to undertake and the extent to which a special rider to his insurance
policy may provide protection. Standard general liability and professional liability in-
surance policies in current use do not apply to claims arising because of special as-
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 3

sumption of liability under a hold-harmless or indemnity provision or specific guar-

antee. A special endorsement must be obtained to cover such exposure.

4. DESCRIBING THE PROJECT

Paragraph O-E 3.2 requir.es the Owner to provide all criteria and full information as to
his requirements for the Project. All special requirements should be included in the
description of the Project which appears in the blank space provided on the first page
of the O-E Agreement (or if that space will not permit, on an exhibit thereto). The more
specific the initial description of the Project's requirements, the less chance there is
for changes in its general scope, extent, and character after design services have started
and a possible charge for Additional Services under O-E '2.1.3. For example, if a build-
ing is to be air-conditioned, the required average ambient temperatures should be
stated rather than a mere requirement that the building be air-conditioned. The same
applies to requirements for soundproofing and similar considerations. Precise lan-
guage can avoid misunderstandings and would have avoided several expensive law-
suits. Sample language is as follows:

The Owner intends to construct a rayon and nylon weaving and garment manufac-
turing plant in the City of Millersburg, Pennsylvania on a ten-acre site at the inter-
section of Kirk and Moore Streets, to consist of a single story structure of approxi-
mately 120,000 square feet floor area, including approximately 20,000 square feet of
office, kitchen, cafeteria, cloakrooms, toilet rooms and equipment rooms, the ceiling
height above the floor of the manufacturing area to be 10 to 12 feet; the entire
building to be sprinklered, heated and air conditioned throughout, including a pro-
cess area of approximately 60,000 square feet which is to be designed so as to
maintain an average ambient condition of 75°F dB plus or minus 3°F, and an average
relative humidity of 50%, plus or minus 5%, assuming no more than a 20° difference
between inside and outside dB temperatures and an outside relative humidity of not
over 65%; electric and process steam utilities to be coordinated with the require-
ments of the manufacturers of equipment selected by the Owner; site improvements
to consist principally of: electric and water utility service connections, parking lot
for approximately 300 vehicles, platform loading area, security fencing of the entire
site and landscaping of approximately 3 acres of the site; construction cost to be
approximately $5,000,000, exclusive of manufacturing and office equipment; here-
inafter called Project.

It frequently develops that the Owner has had studies made of his proposed Project
and a program or special analysis of certain requirements has been developed. This
may determine the scope of the Project and serve as a basis for the Engineer's services.
If the Program was not prepared by the Engineer, it should be carefully examined by
him to determine if the scope of the Work and the requirements of the Project are
acceptable to the Engineer and achievement of the Owner's goals considered feasible.
It may be that the Engineer will require special language to permit reliance upon certain
conclusions in the Program or studies rather than having to check their accuracy for
himself. Specific reference to the Program should be made in the description of the
Project and, where practical, a copy of the document attached as an exhibit to the 0-
E Agreement.
More frequently than not, when the O-E Agreement is signed the requirements for
the Project will not have been refined to the point where a description as complete as
the one quoted above can be prepared. Many aspects of the requirements may be
developed during the Study and Report Phase of services, in which case they should
be included as part of that Report furnished at the conclusion of Phase 1. The important
point to rem~mber is that the Owner's reqUirements ought to be written down as soon
4 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

as they are known, and, as circumstances may dictate their change, changes should
be documented with the Owner's understanding and written approval.
In this connection it is worth remembering that although the Owner, in delineating
the requirements of his Project, may establish goals or requirements for the Engineer's
design, the Engineer's obligation as a licensed professional to design a Project that is
professionally acceptable and safe for the public use must take precedence over the
Owner's wishes.
The special aspects of a particular Project may call for additional services of the
Engineer. This could happen, for example, when a Project is to be financed with gov-
ernmental funds with the result that the Engineer might be required by regulation to
include in the design certain features which might otherwise be left out or to undertake
more careful scrutiny of the construction process than he otherwise would. When this
happens, it is a good idea to recognize it in the description of the Project and to
acknowledge the effect it will have on the scope of the Engineer's services.
The Engineer may be required to or prefer to perform or obtain from others services
such as land surveys or subsurface data which the Owner normally furnishes; this too
should be mentioned in the description of the Project. When the Engineer's services
are to include more than is anticipated by the standard Agreement, changes in the 0-
E Agreement will be needed as well as a possible increase in compensation to cover
the Additional Services that are undertaken and the additional risk assumed.
The source of the Owner's funds to finance the Project can be important to the
Engineer for another reason. If the construction of the Project is contingent upon
obtaining certain governmental clearances (EPA approval, for instance) or being able
to demonstrate to a lending institution that the Project will be financially viable and
able to generate enough profit to service the anticipated debt requirements, the Owner
may not have sufficient funds to pay for the Engineer's services (indeed, he may not
even intend doing so) if the contingencies are not met. A wise Engineer will learn about
such contingencies at the outset of his undertaking.
language which purports to guarantee a specific result or warrants that the Project
will meet the Owner's needs should only be included in the Project description under
very special circumstances. 9 As noted at section 3.b of the Introduction, one who
furnishes professional services which involve special training, expertise, and the ap-
plication of judgment factors cannot be expected to be infallible; rather, his standard
of professional services is the exercise of reasonable care. The guarantee of a special
result usually is not appropriate in the employment of design professionals, but where
it is, the language of the last clause of O-E '1.6.12 may be applicable (see discussion
at section 7.f.xii in this chapter).

5. ESTIMATING CONSTRUCTION COST

When costs exceed the Owner's expectations, disappointment, unhappiness, and re-
sentment come between the parties. This is usually attributable to misunderstandings
and the failure to address in advance the matters of estimating, budgeting, and cpst
control. At the outset of their relationship, the Engineer should determine from the
Owner what, if any, cost limitations or budgetary restrictions the Owner wishes to
impose on the Project. Paragraph O-E 3.2 requires the Owner to advise the Engineer
of "any budgetary limitations". These should be acceptable to the Engineer as being
realistic and achievable. The parties should then review the provisions of the O-E
Agreement pertaining to cost control and budgetary restrictions (see particularly O-E
Art. 6 and discussion in Chapter 1 at section 12 below), and their understanding should
be reduced to writing and incorporated in the O-E Agreement. The Guide Sheet ex-
plains in '2 that if a Construction Cost limitation is to be established as a condition to
the Agreement, a specific statement to that effect should be included as part of the
Project description to set forth the amount initially agreed upon. As the design of the
Project develops, additional factors affecting cost may be revealed, in which case the
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 5

limitation can be adjusted, but any change in an agreed fixed limitation should only
be accomplished by a formal written amendment of the O-E Agreement.
Before reviewing the various provisions of the O-E Agreement which pertain to the
Owner's budgetary considerations and cost limitations, one should remember the dis-
tinction that is drawn in the Agreement between opinions of probable cost and cost
estimates. Most engineering firms do not have in-house cost estimating expertise, but
are able to make pretty accurate judgments in advance of the receipt of quotations
from Contractors. These judgments or opinions of probable cost are not to be confused
with formal estimates prepared by cost estimators (i.e., persons with special cost es-
timating training and expertise).
There is a very carefully worded statement in O-E '6.2.1 which explains the extent
to which the Engineer is able to give assurance as to the probable cost of construction.
This points out that if more accurate estimating is desired, a specially trained inde-
pendent cost estimator should be employed by the Owner as indicated in O-E '3.9.
The first reference in the Agreement to costs appears in O-E '1.2.6. where it is
provided that the Engineer's Report furnished at conclusion of the Study and Report
Phase of services will include an opinion of probable Total Project Costs. The term
Total Project Costs is defined, and the term includes Construction Cost which is de-
fined in O-E '6.1. 10 Total Project Costs also include an allowance for engineering costs.
Note also the Total Project Costs include further services to be provided by others for
the Owner pursuant to O-E "3.7-3.11, such as legal, insurance counseling, accounting,
auditing, safety inspector during construction and the cost of subsurface explorations,
boundary surveys, property and deed descriptions.
In O-E "1.3.4 and 1.4.3 it is expected that the Engineer will refine his opinions of
probable Total Project Costs as the details of the design are developed. It is also
expected that the Engineer's submission at the conclusion of each Phase of design
services will be formally accepted by the Owner and this acceptance will include ac-
ceptance of the Engineer's current revised opinions of probable cost. In fact, O-E
'6.2.2.1 states that the Owner's acceptance of a revised opinion of cost in excess of
the then established limit will constitute a corresponding revision in the Construction
Cost limit then in effect. Nevertheless, if the Construction Cost figure included in the
opinion differs from one established when the Agreement was signed and set out
initially in the Project description as variously adjusted, a formal acceptance of the
new figure is desirable.
When the Owner employs an independent cost estimator to provide greater assur-
ance as to what the actual Construction Cost will be, the Engineer will want the right
to rely upon that estimator's figures and also the right to challenge them where ap-
propriate.
If the Engineer is required to employ an independent cost consultant, this should
be explained in the Project description in Exhibit A (discussed below), and the Engineer
should be allowed additional compensation to cover the additional exposure assumed.
It is worth remembering that most standard policies of professional liability insurance
currently in use do not provide protection for the Engineer against claims arising
because of his faulty cost estimates.
Paragraph O-E 6.2.2 deals with the Engineer's responsibility when a Construction
Cost limit is established and specifically set forth in the Agreement (preferably in the
Project description as noted above). In O-E '6.2.2.2 it is stated that the established
Construction Cost figure is to contain a 10% contingency, and in O-E '6.2.2.3 the
Engineer is given considerable latitude in selecting materials, equipment, and com-
ponent systems for the Project and in adjusting the general scope, extent, and character
of the Project to bring it within the established budgetary limitation. This point should
be emphasized in discussions with the Owner, who may be unwilling to permit the
Engineer to have such broad authority, but without it the Engineer may be unwilling
to commit himself to design within a budget.
Paragraph O-E 6.2.2.5 deals with the consequence of the Contractor's proposal or
6 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

bid exceeding the established Construction Cost limit. The Owner has three choices:
to accept an increase in the limit; to renegotiate or rebid in the hopes of obtaining
more favorable prices; or to consent to changes in the Project's general scope, extent,
and character. Any such changes must neither prejudice the Project's requirements
nor compromise sound engineering practices; in other words, the Owner would not
be required to accept a Project that did not meet its basic purposes and the Engineer
would not be expected to countenance changes in design that are not professionally
acceptable. When changes in design are necessary because the third option is elected,
the Engineer is obligated to provide the redesigning services at his cost but without
profit to him, and that is the extent of the Engineer's liability for an erroneous opinion
of probable Construction Cost when and if a fixed limit has been so established.
The language of O-E '6.2.2.5 differs somewhat from earlier editions of the
O-E Agreement. 6 While quite limiting in the extent of the Engineer's exposure for failure
to anticipate actual Construction Cost, the Agreement contains a clear statement of
the extent to which professional Engineers believe it is fair for them to assume re-
sponsibility in respect of anticipated Construction Cost. If an Owner is not satisfied
with this limitation of responsibility, other arrangements can be made, such as em-
ployment of an independent cost estimator pursuant to O-E '3.9.
Unless they possess special cost estimating expertise, Engineers should not induce
their clients to rely on their estimating abilities. One need hardly mention the difficulty
and fruitless efforts of many Engineers to collect their fees when the bids or quotations
are so much in excess of the Owner's budget that he is unable or unwilling to proceed
with his Project.
The main point for Engineers to remember and to communicate to their clients is
that the tighter the budget, the more latitude and control must be given to the design
professional in the selection of materials, equipment, component systems, etc., and
even in adjusting the Project's scope. When an Engineer exercises the latitude granted
to him in selecting materials, equipment, component systems, etc., or in adjusting the
Project scope for budgetary reasons, it is foolhardy not to obtain his client's written
endorsement of his design decision to avoid a subsequent disappointment by his client
because the Project does not perform or function as anticipated or promised.

6. GENERAL DESCRIPTION OF BASIC SERVICES

Paragraph O-E 1.1 calls for the performance of professional engineering services in a"
Phases of the Project. The Engineer is to serve as the Owner's professional engineering
representative and is to provide consultation and advice. His services are to include
customary civil, structural, mechanical, and electrical engineering services and custom-
ary architectural services incidental thereto. Unless otherwise provided, Basic Services
do not include services of other disciplines, such as those which the Owner is expected
to employ in accordance with O-E "3.4-3.11. If the Engineer were required to provide
such services, they would most likely be considered Additional Services under O-E
"2.1.7 or 2.1.14. It may be that the Engineer will want to employ certain specialists to
assist in providing Basic Services. These might include experts in the field of kitchen
design, acoustics, vibration, and other disciplines with quite limited application. Such
employment would probably not receive specific mention in the Agreement, but the
Engineer would no doubt make an adjustment in his fee for Basic Services to cover
whatever may be required. This is particularly true in the case of the lump Sum and
Percentage methods of payment, but see also O-E '5.1.1.5 of the Direct labor and
Salary Costs methods of payment and O-E '5.1.1.4 of the Cost-Plus method. If employ-
ment of any such expert is required by the Owner, this should be reflected in the
Project description, but the Engineer should be cautious about agreeing to share re-
sponsibility (and liability) for a Project with any person who is not professionally ac-
ceptable to him. When the Engineer employs an independent professional associate
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 7

or consultant, such as a structural Engineer, to assist in the performance of professional

services throughout the design of the Project, the E-AE Agreement may be used. On
the other hand, if employment of the consultant is not to extend throughout the entire
design of the Project, the EJCDC's Owner-Consultant Form of Agreement may be used.11

7. BASIC SERVICES
The Engineer's Basic Services, which are described in Section 1 of the O-E Agreement,
are to be provided in six Phases. No Standard Form of agreement is adequate to address
the peculiarities and special aspects of each Project, and the EJCDC form recognizes
the necessity of amending and supplementing the general description of Basic Services
as necessary for adapting to each assignment.

a. Exhibit A
Exhibit A, "Further Description of Basic Engineering Services and Related Matters", is
a suggested way of handling the amending and supplementing. Its use is explained in
'3 of the Guide Sheet and specific reference is made to it at the end of the description
of each Phase of Basic Services, except the Construction Phase where the reference is
made in O-E '1.6.1. A suggested format for use in preparing Exhibit A is attached to
the Guide Sheet at page vii, and the paragraphs of that format follow the sequence of
the description of Basic Services in the O-E Agreement. Exhibit A is meant to contain
a further or expanded description of each Phase of Basic Services as applicable to the
particular Project undertaken (the printed language of the Agreement being generally
applicable to most Projects). If, following negotiations with the Owner, the Engineer's
Basic Services are to be expanded to include services normally treated as Additional
Services, care should be taken to strike out or modify comparable language in the
various paragraphs of Section 2-Additional Services of Engineer and to make appro-
priate changes in the provisions for payment for professional services (see discussion
of O-E Art. 5 at section 11 of this chapter). Exhibit A should also include an agreed time
for performance of Basic Services during Phases 1, 2, and 3, and if there are specific
time requirements for performance of services during the remaining Phases, these also
should be included. If the Engineer rather than the Owner is to furnish services of the
types described in O-E n3.4 and 3.5, this information should also be included in the
Exhibit. Reference is made to Exhibit A in O-E '5.1.1 of each alternate method of pay-
ment.
In those places where supplementing or amending data will not appear in Exhibit
A, reference in the Agreement to the Exhibit should be crossed out.
Like the other Exhibits to the Agreement, Exhibit A is identified in O-E ,8.2 and is to
be attached to the Agreement. It will thus be treated as much a part of the Agreement
as if all of its provisions were actually written in the Agreement. It may only be amended,
supplemented, modified, or cancelled in the same manner as the Agreement.

b. Study and Report Phase

The description of services to be rendered during this Phase is quite brief of necessity.
Paragraph O-E 1.2.1, which provides for clarifying and defining the Owner's require-
ments for the Project, may have to be changed depending upon the extent to which
the items to be covered may have already been developed in a previously prepared
Program for the Project as discussed under section 4 of this chapter. 12
Paragraph O-E 1.2.2 refers to the necessity of obtaining certain studies and reports,
such as geotechnical examinations, which the Engineer may use in preparing his doc-
umentation. The same point is made in O-E '1.3.3. These are studies and reports which
it is preferable for the Owner to obtain separately and to furnish to the Engineer as is
8 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

explained in the comments concerning O-E '3.4 at section 9.c of this chapter. Most
Projects require some sort of approval from one or more governmental bodies. While
in O-E '1.2.3 the Engineer is required to identify and analyze the requirements and to
consult with governmental bodies as applicable and in O-E ,1.4.2 during the Final
Design Phase he is responsible for preparing documentation so that the Owner may
file the necessary applications to obtain the required approvals from the governmental
authorities which have jurisdiction to approve the design of the Project, it is the Own-
er's responsibility to obtain the approvals as indicated in O-E '3.8. In other words, the
Engineer does not usually undertake responsibility for obtaining the necessary gov-
ernmental clearances since these may be denied for purely political reasons or reasons
that are not related to the adequacy of the designs. The Engineer is required to partic-
ipate and assist in consultations with these governmental authorities (see O-E "1.2.3
and 1.4.2); yet, one should note in particular that in O-E '2.1.1 (discussed at section
8.a.i of this chapter), the Engineer's Basic Services do not include preparation of ap-
plications for or obtaining approvals of private or governmental authorities or prepa-
ration of environmental assessment or impact statements, nor do they include assist-
ance in obtaining governmental approvals of authorities that have jurisdiction over the
environmental assessment or impact of the Project. Unless the Agreement is changed
to include such services as part of Basic Services (in which case compensation for Basic
Services should be adjusted) the Engineer would be entitled to additional compensa-
tion if he is asked to furnish such services as are covered under O-E '2.1.1.
The provisions of O-E '1.2.4 may require change depending upon the extent to which
the matters referred to there have already been decided by the Owner or covered in
a previously prepared Program for the Project.
The Report to be furnished at the conclusion of the Study and Report Phase of
services is described in O-E '1.2.6. Any amendments or supplements to this description
should appear in '2 of Exhibit A.
Five copies of the submittals furnished at the conclusion of each Phase of design
services are called for in O-E "1.2.7, 1.3.5, and 1.4.5. If the Owner wants additional
copies or sets, these are to be furnished at cost (see O-E "5.1.3 and 5.4.2 of each
method of payment).

c. Preliminary Design Phase

Services under a subsequent Phase of Basic Services are not to commence until the
Owner has given specific written authorization for the Engineer to do so. This is a
good practice to follow and will avoid rendering services before the Owner is prepared
to pay for them.
Paragraph O-E 1.3.2 may have to be supplemented in Exhibit A to cover any specific
requirement that the Owner has in mind for this Phase of services. In O-E '1.3.3 it is
made clear that ~hen the Owner obtains professional services for the Project from
persons other than the Engineer in order to enable the Engineer to perform his services
(as required by O-E '3.4, for instance), the Engineer is to assist the Owner in obtaining
such services. That is, the Engineer is to act as the Owner's representative with respect
to such matters such as administering the Owner's contract with the other profession-
als to the extent necessary to enable the other professionals to furnish what is expected
and necessary for the Project or discussing with the Owner's separately employed
geotechnical Engineer the scope of the services required (but the Engineer should not
have responsibility for obtaining such services nor for the services so obtained). These
are typical of the activities that the Engineer may expect to carry out as the Owner's
"professional engineering representative for the Project" in accordance with O-E '1.1.
Because the progress with the design of the Project during this Phase of services
should permit a more careful analysis of cost factors affecting its completion, the
Engineer is expected to furnish as part of his Preliminary Design documentation a
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 9

revised opinion of probable Total Project Cost to reflect the new information that has
been developed (see O-E ,1.3.4).
In connection with O-E '1.3.5, see discussions on page 8 concerning O-E '1.2.7.

d. Final Design Phase

Like the other design Phases of services, no work should be undertaken by the Engi-
neer under this Phase of services without the Owner's specific written authority to do
so and his acceptance of any change in the Construction Cost limit if one has been
established.
Paragraph O-E 1.4.1 contains a general description of the documentation that the
Engineer is to prepare and furnish at the conclusion of the Final Design Phase; this
description is supplemented by the language of O-E '1.4.4. Of particular significance
is the definition of the term Drawings which appears in O-E '1.4.1 (it is similar to the
definition of that term in Article 1 of the General Conditions). While not specifically
defined here, the term Specifications is also defined in Article 1 of the General Con-
ditions. It is noted in O-E ,1.4.1 that the Specifications are to be prepared in conform-
ance with the sixteen-division format of the Construction Specification Institute. If that
widely accepted practice is not to be followed, a change to this effect should be noted
in '4 of Exhibit A (or the parenthetical clause appearing at the end of O-E '1.4.1 may
be crossed out). In connection with O-E '1.4.2, see the discussion above concerning
O-E '1.2.3. The opinion of probable Total Project Costs furnished in accordance with
O-E '1.4.3 should be a carefully prepared document reflecting the Engineer's best
judgment of the probable cost based on specific requirements of the Project as re-
flected in the final Drawings and Specifications. In selecting materials and equipment
to be specified, it is expected that as part of Engineer's Basic Services he will have
considered alternate solutions to the Owner's problems and will have evaluated con-
struction, operating, and maintenance costs. If further cost analyses applicable to the
finished Project are required, they would be treated as Additional Services and paid
for by the Owner as explained in O-E '2.1.6.
Paragraph O-E 1.4.4 itemizes those Contract Documents which the Engineer is to
furnish at the conclusion of the Final Design Phase. These documents affect the legal
rights of the parties who will be signing the construction contract. A review of the
legal aspects of these documents by counsel for the Owner is therefore necessary.
This paragraph also notes that the documents submitted are to be consistent with
the EJCDC's Standard Forms and Guides for their preparation. This is a most significant
provision from the Engineer's point of view, since the EJCDC's agreements for engi-
neering services and its Construction Related Documents have been carefully inte-
grated and the language and suggested wording of all of them contemplate an under-
standing and degree of responsibility and authority for the Engineer that is in keeping
with professional standards, as has been discussed above. This requirement in O-E
'1.4.4 complements the requirement in O-E '1.6.1 that the Engineer's duties and re-
sponsibilities during the Construction Phase will be in accordance with the EJCDC
General Conditions and may not be restriCted or expanded without the Engineer's
specific consent. This is a particularly important point for the Engineer to remember
if he is confronted with a special form of General Conditions that the Owner insists
on using or if the Owner wishes to modify the Standard Form of General Conditions
in a way not acceptable to the Engineer. The point should be discussed with the Owner
at the outset of the relationship between the Engineer and the Owner as explained at
sections 1 and 2 of this chapter.
The possibility that the Engineer's services for the Project will end with completion
of the Final Design Phase of services presents many problems for the Owner, the
Contractor, and the Engineer. There is a brief discussion of some of these problems
10 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

in a separate section that appears on pages iv-vi of the Guide Sheet to the O-E Agree-
ment. legal counsel should be consulted before finalizing any arrangement of this
kind.

e. Bidding and Negotiating Phase

Once again there is the reminder at the beginning of this paragraph that the Engineer
should not start furnishing services under this Phase without the Owner's written
authorization.
Paragraph O-E 1.5.1 contemplates that the Owner will be responsible for negotiating
or obtaining bids from the construction Contractors, and the Engineer is to assist him
in this function. At times the Owner will wish to turn this function over to the Engineer,
in which case changes in the Agreement should be made in '5 of Exhibit A. Note,
however, that the Owner is required by O-E '3.13 to attend various conferences and
meetings with respect to obtaining bids and that" O-E 4.6 and 4.10 require the Owner
to proceed with the Bidding and Negotiating Phase promptly after acceptance of the
Final Design documents (although it may be necessary to delay the award of contracts
if the negotiated or bid prices are too high in order to allow for rebidding or revision
of the Drawings and Specifications as provided in O-E '6.2.2.5). While the Engineer is
to receive and process deposits from Contractors for copies of the Bidding Documents,
he should not assume responsibility for receiving, processing, or handling the bid
security.
Issuing Addenda is covered in O-E '1.5.2. The word Addenda is defined in Article 1
of the General Conditions and is used in the O-E Agreement with the same meaning.
Addenda are not to be issued after the opening of the bids (see comments at Chapter
5, section 2.a). Important data with respect to their issuance should appear in the
Instructions.
The matter of accepting or rejecting certain Subcontractors, Suppliers, and others
where such acceptance is called for in the Bidding Documents (usually in the Supple-
mentary Conditions) has caused concern for design professionals as well as Contrac-
tors. In providing advice to the Owner as to the qualifications of any Subcontractor or
Supplier, the Engineer is granted a special privilege or immunity if he acts carefully,
fairly, and on the basis of firm evidence. legal counsel should always be consulted in
such situations. Contractors are disinclined to give this right of acceptance or rejection
to either the Owner or the Engineer because they feel that they are responsible for
Subcontractors and Suppliers they employ and thus should have an absolute right to
select parties of their own choosing. Many Owners and Engineers feel otherwise. It is
important for Owners, Contractors, and Engineers to appreciate the interests of each
in this regard. The right to accept or reject should only be reserved and applied in
those cases where it can be shown to be of real interest to the Project. The discussions
on this subject in SC '6.8 and I ,10 may prove helpful. See also comments at Chapter
5, section 7.f.ii.
Acceptability of substitute materials and equipment is usually not allowed prior to
the opening of bids and not recommended by EJCDC until after the contract has been
awarded (see comments at Chapter 5, section 7.e). Engineers should bear in mind that
accepting a substitute item of materials or equipment is tantamount to specifying that
item in the Drawings and Specifications and that the Engineer assumes full responsi-
bility for its propriety for the Project once it has been accepted. Preclearance of items
is hampered by the fact that there may not be sufficient time during the bidding period
to permit a proper evaluation of an item that has been proposed.
While the Engineer is required to attend the bid opening to assist the Owner, he
will be wise to insist on the Owner's attendance since it is the Owner who should be
in charge of the bid opening process (see O-E ,'1.5.1, 1.5.5, and 3.13).
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 11

f. Construction Phase
Although it is customary to budget or bill during the Construction Phase only about
25% of total charges for engineering services, a great deal more attention is devoted
to this Phase of services in contracts between Owners and design professionals than
to all other Phases together. This may be attributable in significant part to the intro-
duction of a third party, the Contractor, into the relationship between the Owner and
the Engineer, to the requirement that both the Engineer and the Contractor work
closely together while respecting each other's separate areas of expertise, and to the
fact that neither is to control the other's activities. Engineers are justifiably sensitive
about the large number of legal claims that have been made against them arising out
of their Construction Phase activities, not only by Owners and Contractors but also by
the employees of Contractors who have been injured during construction and seek
damages in excess of what they are jlwarded under workers' compensation laws.

i. The language of O-E ~1.6 describing Construction Phase services is carefully in-
tegrated with that of the comparable provisions of the General Conditions, and the
same wording appears in most instances. That is why there is reference in O-E ~1.6.1
to the EJCDC's Standard General Conditions. Any amendment or supplement to the
wording of any of the paragraphs of O-E ~1.6 should be followed by a comparable
modification in the General Conditions. Correspondingly, a change in any of the pro-
visions of the General Conditions dealing with the Engineer's duties, responsibilities,
and authority may require changes in the O-E Agreement.
Until the early 1960s, design professionals were given responsibility to "supervise"
the Work of the Contractor during construction. The word supervise means control,
as we have seen in discussion at section 3.f of the Introduction. Design professionals
do not want or need to control the Contractor's Work in order to carry out their
properly assigned professional activities, and Contractors do not want their Work con-
trolled by design professionals. Accordingly, the word supervise is no longer used in
describing the Engineer's functions. It is the Contractor who supervises and employs
the superintendent to be at the site (see GCD ~6.2). The Engineer is to consult with
and advise the Owner during construction and act on the Owner's behalf, all as spe-
cifically set forth in and authorized by his Agreement with the Owner and also as set
forth in the Contract between the Owner and the Contractor, particularly in the Gen-
eral Conditions. Paragraph O-E 1.6.1 states that the extent and limitations of the Engi-
neer's duties, responsibilities, and authority are spelled out in the Contract Documents
(see also GCD ,9.1). Using the same language in the General Conditions as the O-E
Agreement assures that the Contractor will also know of the extent and limitations of
the duties, responsibilities, and authority of the Engineer to act on the Owner's behalf
during construction. It is quite important that in actual practice the Engineer live within
the scope of his authority and responsibility as so carefully spelled out in these doc-
uments.
The last sentence of O-E ~1.6.1 (for which there is a comparable provision in GCD
~8.1) requires that the Owner's instructions to the Contractor in respect to the Project
are to be issued through the Engineer. Compliance with this requirement is essential
to the Engineer's ability to properly exercise the authority that has been given him
during construction and to assuming correspondent responsibility.

ii. Paragraph O-E 1.6.2 deals with the Engineer's visits to the site during construction.
This paragraph was extensively revised in the 1984 edition but no change of substance
was intended. 8 The rewording was intended to make clearer to the parties the purposes
of the Engineer's visits to the site-what the Engineer intends to be able to accomplish
12 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

on the Owner's behalf and the limitations on what he is willing to undertake. In

addition to making "visits to the site at intervals appropriate to the various stages of
construction", the Engineer is to provide resident project services at the site as part
of Basic Services.
This is considered important to enable the Engineer to carry out his assigned duties
and responsibilities. This is a new feature of the 1984 edition. Paragraph O-E 1.6.2.1
contains a positive but general statement of what it is the Engineer is to accomplish
through his visits to the site. Paragraph O-E 1.6.2.3 contains a specific statement of the
limitations of the responsibility undertaken. Because these two paragraphs are consid-
ered so essential to the Engineer's relationships with the Owner and Contractor during
construction, they are quoted here verbatim.

1.6.2.1 Engineer shall make visits to the site at intervals appropriate to the various
stages of construction as Engineer deems necessary in order to observe as an ex-
perienced and qualified design professional the progress and quality of the various
aspects of Contractor(s), work. In addition, Engineer shall provide the services of a
Resident Project Representative (and assistants as agreed) at the site to assist Engi-
neer and to provide more continuous observation of such work. Based on infor-
mation obtained during such visits and on such observations, Engineer shall en-
deavor to determine in general if such Work is proceeding in accordance with the
Contract Documents and Engineer shall keep Owner informed of the progress of
the work.
1.6.2.3 The purpose of the Engineer's visits to and representation by the Resident
Project Representative (and assistants, if any) at the site will be to enable Engineer
to better carry out the duties and responsibilities assigned to and undertaken by
Engineer during the Construction Phase, and, in addition, by exercise of Engineer's
efforts as an experienced and qualified design professional, to provide for Owner a
greater degree of confidence that the completed work of Contractor(s) will conform
generally to the Contract Documents and that the integrity of the design concept
as reflected in the Contract Documents has been implemented and preserved by
Contractor(s). On the other hand, Engineer shall not, during such visits or as a result
of such observations of Contractor(s)' work in progress, supervise, direct or have
control over Contractor(s)' work nor shall Engineer have authority over or respon-
sibility for the means, methods, techniques, sequences or procedures of construc-
tion selected by Contractor(s), for safety precautions and programs incident to the
work of Contractor(s) or for any failure of Contractor(s) to comply with laws, rules,
regulations, ordinances, codes or orders applicable to Contractor(s) furnishing and
performing their work. Accordingly, Engineer can neither guarantee the perfor-
mance of the construction contracts by Contractor(s) nor assume responsibility for
Contractor(s)' failure to furnish and perform their work in accordance with the Con-
tract Documents.

Preparing the language of these two paragraphs presented a serious challenge to

EJCDC. It is believed that the language correctly and fairly states the extent of the
Engineer's undertaking and lays out what assurances the Engineer can give to the
Owner that the completed Project will be what he bargained for in the Contract Doc-
uments, and also what assurances are not intended. It explains what the Engineer
intends being responsible for and what is beyond the scope of that responsibility. The
difficult part in drafting was to make such a statement which would also be acceptable
to Owners. Owners frequently expect and want more from their Engineers-in fact,
more than their Engineers are trained to provide and more than their professional
responsibility dictates that Engineers should provide. This usually is often beyond what
a professional errors and omissions insurance policy will cover. In working out the
language of O-E '1.6.2.3 (and comparable language in O-E '1.6.9.2), the EJCDC was
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 13

concerned that it set an equitable scope of responsibility for the professional Engineer
and that it state as precisely as it could the positive aspects of the Engineer's duties
and responsibilities during construction and follow those statements with an equally
clear statement of where those duties and responsibilities stop (see discussion at sec-
tions 7.f.11 and 12 of this chapter re O-E '1.6.12). This is not to say that some Engineer's
will not quite properly agree to undertaking further duties and responsibilities. Rather,
it is to point out that if they do so, they and their Owners should recognize the
possibility that their additional undertakings may well involve furnishing services or
giving assurances which most Engineers practicing within the scope of what is consid-
ered professionally acceptable practice consider to be in addition to and beyond what
society has a right to expect of a specially trained and professionally licensed design
Engineer.
A few comments on important words of O-E "1.6.2.1 and 1.6.2.3 are appropriate at
this point:
1. "To observe as an experienced and qualified design professional": In early edi-
tions of the O-E Agreement and General Conditions, the Engineer was given the right
and had the duty to "supervise the Contractor's work", but for reasons explained above
(see Introduction and sections 3.e and 3.t) the word supervise is no longer used since
it connotes control. Neither the Contractor nor the Engineer wishes the Engineer to
have control over the Contractor's Work. Other words were considered to explain
what was intended, and some years ago the present language was agreed upon. The
AlA Documents state that the Architect is to "observe as an architect". In both docu-
ments the intent is to indicate that the observing is to be sophisticated and by a
specially trained professional using his experience and expertise in looking out for his
client's interest in a general way.
2. "The progress and quality of the various aspects of the Contractor's work"; "to
determine in general if such work is proceeding in accordance with the Contract
Documents": The key words here are progress, quality, and in general, but they must
be read in conjunction with the language of O-E '1.6.2.3 because the intent of the
observation is not to enable the Engineer to give any guarantee of the progress or
quality of the Contractor's Work or assurance that it does in fact conform to the
Contract Documents. The only guarantee or warranty is an implied warranty imposed
by law that the services of observing will be performed in accordance with and will
measure up to professional standards.
3. "To enable Engineer to better carry out the duties and responsibilities assigned
to and undertaken ... during the Construction Phase": These duties and responsibil-
ities are set forth in the remaining paragraphs of O-E '1.6 and include those duties
and responsibilities assigned to the Engineer in the General Conditions. They also
include such additional duties and responsibilities as may be set forth in Exhibit A,
including any that may appear in the printed form of the O-E Agreement as Additional
Services but are reclassified as Basic Services for the particular Project.
4. "By exercise of ... efforts"; "a greater degree of confidence": These words indi-
cate that the Engineer will try, on the basis of the observations he has been employed
to provide (limited as they may be) during his own visits to the site "at intervals ap-
propriate to the various stages" of the Work and through the activities of his resident
staff at the site, to look out for the Owner's interests; but, as explained at the end of
O-E '1.6.2.3, giving "a greater degree of confidence"n is neither an undertaking to
assure exact compliance by the Contractor with the Contract Documents nor a guar-
antee of the Contractor's Work. The concept is one of doing the best that the Engineer
can as a licensed design professional who designed the Project and one who is to have
limited responsibility and authority during its construction to see that the construction
Work is generally in conformance with the requirements of the Contract Documents
so that the completed Project is what the Owner bargained for. The concept is also
that the Owner's interest will be better served if the Engineer is employed in this
customary but limited capacity to represent the Owner during construction. The more
14 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

time the Engineer and his resident staff are employed to devote to observing construc-
tion, the more assurance can be given to the Owner, but many Owners are tempted
to cut back on Construction Phase services for economic reasons, which frequently
proves to be a poor economy.
5. "Completed work": The word completed, which appears in O-E "1.6.2.3, 1.6.3,
and 1.6.11 as well as GCD "3.2, 9.2, 13.10 and 14.13, is considered most significant
because it emphasizes that the Engineer's efforts are not directed toward how the
Work is done (i.e., means, methods, techniques, sequences, and procedures of con-
struction or safety precautions and programs incident thereto), but rather toward the
end result of the construction Work (i.e, what the Owner will receive when the Project
is finished). There are, of course, many aspects of how the Work is done that will affect
its end result, and these must be subject to the Engineer's review and right of rejection
as the various aspects of the Work are completed, but the many portions of the Con-
tractor's Work which are temporary and have no bearing on the ultimate outcome of
the Project should not be the concern of the Engineer or subject to his scrutiny. They
should be left to the Contractor, who has the expertise in the area of construction
means, methods, techniques, sequence, and procedures which the Engineer is not
expected to possess.
6. "Conform generally": It is general rather than detailed or specific observations the
Engineer intends providing (and in all honesty, that is all he can provide without em-
ploying an horde of inspectors to stand behind each construction worker). The same
concept appears in the last sentence of O-E '1.6.2.1: "to determine in general if such
work is proceeding in accordance with the Contract Documents". In the very early
editions of the AlA's Owner-Architect Agreement, the Architect's function during con-
struction was characterized as "inspecting" the Work. This word is no longer used in
this context because it connotes a greater detail of examination of the Work in progress
than is intended. Inspections are now provided in connection with Substantial Com-
pletion and final payment and relate to the "completed" Work. (See O-E '1.6.11 and
GCD '14.8 and discussion at section 14.d.iv of Chapter 5.)
7. "Integrity of the design concept ... has been implemented and preserved"; "the
Contractor's work will not prejudice the integrity of the design concept": Pains have
been taken to make clear the limitations on the Engineer's duties and responsibilities
during the Construction Phase and the limited nature of the assurance the Engineer
is able to give the Owner that the Project will be completed in accordance with the
Contract Documents. Nevertheless, it is particularly important for Engineers to remem-
ber and for Owners to appreciate that the key or basic elements of the completed
Project are to be passed upon by the Engineer to be certain that they do in fact perform
as intended and that the Project is usable by the Owner for the purposes indicated in
the O-E Agreement and the Contract Documents. 14 This is what is intended by the
Engineer's Certificate or Notice of Acceptance provided for in O-E '1.6.9 and GCD
'14.13. In endeavoring to further explain that the Engineer's visits to the site and right
to reject defective Work are end-result oriented, the EJCDC's documents provide that
the Engineer's efforts are to be directed at giving the Owner a degree of confidence
as a result of the Engineer's services (greater than if he were not serving) that the
"integrity of the design concept" of the Project as reflected in the Contract Documents
is being and will be implemented, preserved, and not prejudiced by the Work of the
Contractor. In this context, the term design concept is intended to refer to the com-
pleted Project as a functioning whole, ready for occupancy and use, as contemplated
by the Owner and the Engineer and as that concept is reflected in the Contract Doc-
uments prepared by the Engineer. The term design concept may be used in other
contexts, (see, for instance, O-E '1.6.5 and GCD '6.26 which is discussed at section
7.n. viii of Chapter 5).
8. "Will not supervise, direct or have control over": These words reiterate the ideas
expressed many times in the EJCDC's documents. They remind the Owner and give
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 15

assurance to the Contractor that the Contractor is to be in charge of the construction

activities.
9. "Means, methods, techniques, sequences, and procedures": Because the Con-
tractor is in charge of the construction process, of his employees and Subcontractors
at the site, and of the relationships with his Suppliers, it is important to him that his
exclusive authority to supervise, direct, and control all aspects of the Work-the means,
methods, techniques, sequences and procedures-be stated positively (see discussion
at section 3.f of the Introduction). These five words quoted above have been used
together extensively in the EJCDC documents.
10. "Safety precautions and programs incident to the work": Because the Contractor
is in charge of the Work and supervises, directs, and controls how it is done by his
employees and Subcontractors and their employees, it is logical for him to be assigned
or to assume responsibility to see that it is done in a safe way. While in the late 1950s
the AlA documents gave the Architect authority over safety aspects of the Work, all
Standard Forms now recognize that this is not a matter that should come under the
jurisdiction of the Engineer or the Architect, who neither have control over how the
Work is done nor authority to direct the Contractor's or Subcontractor's employees in
their furnishing and performing the Work. This matter is discussed more fully below
in the analysis of GCD '6.20 at section 7.1 of Chapter 5.
11. "Comply with laws, rules, regulations, ordinances, and orders applicable to fur-
nishing and performing": It is not the function of a design professional to monitor the
Contractor's compliance with laws, regulations, etc., that pertain to the furnishing and
performing of the Work or the carrying out of the construction activities. In the first
place, having the right to do so would carry with it the duty to do so and such duty
would most likely by held to run for the benefit of the Contractor, Subcontractors,
employees, and third parties at the site. 15 Engineers and Architects are not specially
trained to furnish such services, while others frequently are. If the Owner believes it
important that someone monitor the Contractor's Work to see that it is being done in
accordance with the applicable laws, regulations, etc., or in compliance with a partic-
ular statute such as the Davis Bacon Act or OSHA, it would be appropriate for the
Owner to employ a person trained in such matters as is provided in O-E '3.9 rather
than turning to the Engineer or Architect to do so.
12. "Can neither ... guarantee": If the Owner feels that he wishes some party to
guarantee the Contractor's Work, he should require a performance bond, which is the
customary practice under such circumstances, but the relief under a performance bond
is usually not available for more than a year after the Project is completed. It would
be quite inappropriate to ask for such insurance from one not in the business of
insuring nor in control of the Work. 16
13. "Assume responsibility for Contractor(s') failure to furnish and perform their
Work in accordance with the Contract Documents": This language follows the reason-
ing expressed above that because he has no control over how the Work is done nor
over those doing it and is only employed to provide limited observation of the con-
struction process, the Engineer cannot assume responsibility for all that the Contractor
furnishes and provides. As noted above, the key and basic aspects of the Work must
be checked and inspected by the Engineer to see that the finished Project is what was
bargained for, but this duty does not extend to all aspects or every detail of the Work.
Observations of the construction process will of necessity always be limited since it is
virtually impossible (to say nothing of being economically unjustified) to require that
the Engineer employ enough observers and inspectors of the Work to stand behind
each employee of the Contractor and Subcontractors (to say nothing of the Suppliers)
in order to be certain that the finished Project is precisely in accordance with the
Contract Documents. Spot checking of key and essential elements of the Project is
what is intended. (See also comments at section 13.a of Chapter 5.)
14. In O-E '1.6.2.2, reference is made to Exhibit B, wherein it is expected that the
16 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

duties and responsibilities of the Engineer's Resident Project Representative will be

spelled out. It is also expected that a copy of this document will be given to the
Contractor (see GCD ~9.3 and SC ~9.3). Suggested language for Exhibit B appears at
pages viii-x following the Guide Sheet of the O-E Agreement. Obviously, this sugges-
tion can be altered for adaptation to the individual practices of each Engineer, the
experience and training of the resident staff, and the peculiarities of each Project; but
whatever set of instructions is finally used for the resident staff, it should be attached
as an Exhibit to the O-E Agreement as indicated in O-E '8.2.2.
15. An Owner must first rely on the Contractor to produce a completed Project that
conforms precisely to the requirements of the Contract Documents and implements
all details of the design concept as reflected in the Contract Documents. In GCD '13.1
the Contractor warrants and guarantees that his Work will meet that standard. The
Owner's greatest assurance that such conformance and compliance will be achieved
must of necessity rest on the ability and integrity of the Contractor. In O-E ~1.6.2, the
Owner is told what he can count on the Engineer to do on his behalf during construc-
tion to provide additional assurance that such conformance and compliance will in
fact be achieved. He is also told that the Engineer cannot do it all. The Engineer's role
is limited, but very important to such assurance. It is this writer's firm conviction that
an Owner is better off and his Project will be better completed when the Engineer
who has designated the Project is employed to render customary Construction Phase
services. Furthermore, it is essential for the Project's proper completion that the Owner
understand, appreciate and accept, at the outset of the Project's design and most
certainly before construction is started, the limited role of his Engineer during con-
struction and the importance of a properly experienced and qualified Contractor with
integrity. The Engineer cannot, should not try to, and is not obligated as a licensed
professional to protect and save the Owner harmless from all shortcomings of the
Contractor. A wise Owner will not place reliance on his Engineer to do what he is not
qualified to do. Many experienced Contractors recognize the importance of the Own-
er's employing the design Engineer to perform customary Construction Phase services;
a problem may arise, however, in the case of an inexperienced Engineer, or one who
did not design the Project, or one who is not committed to developing an harmonious
and practical relationship with the Contractor.
language in the General Conditions which corresponds with that of O-E '1.6.2 may
be found primarily in GCD ~9.2.

iii. Re O-E '1.6.3: In the earliest editions of the O-E Agreement, the Engineer was
given the right to stop the Contractor's Work if he believed it was not proceeding in
accordance with the requirements of the Contract Documents. like other rights re-
served to the Engineer, this right was found to have a corresponding duty for the
benefit of not only the Owner, but also the Contractor, his surety, his Subcontractors,
employees at the site, and certain third parties. This was a duty which the Engineer
never intended assuming and which was not necessary for him to assume in the per-
formance of full professional services. It was also felt that the Engineer's right as Own-
er's representative to reject defective or nonconforming Work gave to the Engineer
sufficient power to carry out his Work to protect the Owner's interests and preserve
the integrity of the design concept of the Project. Accordingly, the right to stop the
Work was dropped from the EJCDC and the AlA Standard Forms some years ago as it
applies to the Engineers' and Architects' activities, and in addition the Owner's right
to stop the Work is now quite circumscribed. 17
The language of O-E ~1.6.3 deals with the Engineer's right to disapprove of or reject
Work when, on the basis of the Engineer's observations and visits to the site and the
daily contact of his resident staff at the site, it becomes apparent to the Engineer that
what the Contractor is doing will not "produce a completed project" (emphasis sup-
plied, see discussion above re "completed" at section 7.f.ii.5 of this chapter) that con-
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 17

forms generally to the requirements of the Contract Documents or will "prejudice the
integrity of the design concept of the Project as reflected in the Contract Documents".
The Engineer is given a great deal of power under O-E '1.6.3, and he must exercise it
circumspectly. It should be noted, however, that the duties undertaken by the Engineer
are not for the Contractor's or anybody else's benefit-just the Owner's (see GCD
"9.13 and 14.15, in particular) and, of course, the General Public's.

iv. Re O-E '1.6.4: As we have seen, very few, if any, sets of Drawings and Specifica-
tions are so complete that they do not require interpretation and clarification for the
Contractor's gUidance. Issuing interpretations and clarifications is part of the Engi-
neer's customary duties during the Construction Phase, and Contractors usually count
on this. In dealing with this matter, GCD '9.4 states that all interpretations and clari-
fications "shall be consistent with or reasonably inferable from the overall intent of
the Contract Documents". In GCD '3.2, the Contractor is required to furnish and
supply all "Work, materials and equipment that may be reasonably inferred from the
Contract Documents as being required to produce the intended result ... whether or
not specifically called for". That result is a "functionally complete Project to be con-
structed in accordance with the Contract Documents". Sometimes it is hard for Owners
and Contractors (and also courts) to appreciate why it is that the Engineer's documen-
tation cannot be complete in every respect at the conclusion of the Final Design Phase
to the point that nothing need be inferred and no interpretations or clarifications are
required. It does not appear realistic or practical to hope for such perfection, and
professional practice does not require it. s From the Owner's point of view, it is quite
important for the Engineer to be available to observe the manner in which his docu-
mentation is interpreted by the Contractor; otherwise, the Contractor might unwit-
tingly or through avarice furnish and provide workmanship, materials, and equipment
of lesser quality than was contemplated. However, with the language of GCD '3.2, the
Contractor is left at the mercy of an unscrupulous Engineer who may use the power
to interpret or clarify in order to overcome shortcomings in his documentation and to
require Work to be furnished or performed which the Contractor could not reasonably
have expected. To protect the Contractor against any such abuse, it is provided in the
General Conditions that the Contractor may ask for an adjustment in price or time if
he believes any interpretation or clarification by the Engineer to be unwarranted. Ac-
cordingly, the Engineer must act most professionally when exercising this power. This
matter is discussed in more detail at Chapter 5, section 4.a, which deals with the above-
referenced provisions of the General Conditions.
Paragraph O-E 1.6.4 also obligates the Engineer to issue Work Directive Changes and
Change Orders as required in response to any such interpretations or clarifications.
The duties and responsibilities of the Owner, Contractor, and Engineer in respect of
Work Directive Changes and Change Orders is discussed in considerable detail in the
applicable paragraphs of Chapter 5, particularly at section 1.d. The matter of preparing
Work Directive Changes and Change Orders is also covered in O-E '2.2.1. There, it is
provided that the Engineer will be entitled to additional compensation if he is required
to render services in connection with Work Directive Changes or Change Orders to
reflect changes requested by the Owner, if the resulting adjustment in compensation
for Basic Services (typically when the Engineer is paid on the basis of a lump sum fee
for Basic Services) is not commensurate with the services rendered. It may be assumed
that the Engineer's Basic Services during the Construction Phase will entail a certain
amount of time spent on Work Directive Changes and Change Orders, which may be
considered routine and thus neither covered by the provisions of O-E '2.2.1 nor enti-
tling the Engineer to additional compensation. Note, however, the language of O-E
'2.1.3, which also deals with the matter of changes in the Engineer's documentation
when the reasons for the changes are attributable to causes beyond the Engineer's
control.
18 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

V. In O-E '1.6.5, the Engineer's obligations in respect to Shop Drawings and samples
is introduced. This topic is analyzed at section 7.n of Chapter 5. 18 Without repeating
here what is said there, attention is directed to the obligation to "approve". There has
been a good deal of comment about the use of this word because it allegedly indicates
a greater degree of commitment by the Engineer than many Engineers ( and some
insurance carriers) consider appropriate. However, the better reasoning-and that sup-
ported by most knowledgeable text writers and commentaries-is thClt whether the
word approve or some other word (such as accepted, checked, returned without com-
ments, examined) is used, the same legal result will be achieved, because as a licensed
design professional, the Engineer has a duty to review and approve (or disapprove) of
the Contractor's submittals which are furnished in response to the Contract Docu-
ments. The approval does not, however, extend to all information appearing on the
submittal. This most important point is quite carefully explained in O-E '1.6.5 as well
as in GCD '6.26. This is because much of the information appearing in a submittal
pertains to matters that are not properly the Engineer's concern (such as the fabrication
process, assembly in the field, storage, shipping, maintenance, etc.) The Engineer's
only concern is with those portions of the submittal that relate to the proposal's con-
formance with the design concept of the Project and its compliance with the infor-
mation given in the Contract Documents. Accordingly, when reviewing and approving
a Contractor's submittal, the Engineer is not to be considered as having become in-
volved in or passed upon the propriety of any means, methods, techniques, sequences,
or procedures of construction or any safety precautions or programs incidental thereto.
These, as we have seen, are strictly the province of the Contractor.
Because some insurers strongly urge that their Engineers .use any appropriate word
other than approve to indicate that the Engineer has no objections to the Contractor's
submittal and that the Contractor may proceed to order and install the item as if it
had been specified in the Contract Documents, parenthetical language was inserted
in the second line of O-E '1.6.5 to permit use of the Standard Form by those who wish
to follow such advice. If the Engineer does not intend to approve the Contractor's
submittal, this should be communicated to the Owner before the O-E Agreement is
signed and the Standard Agreement changed to reflect the parties' understanding,
which will also require changes in the General Conditions. In addition, the Owner
must understand the intent and significance from his point of view of the change in
wording.

vi. Re O-E '1.6.6: In most Projects, the Contractor is permitted to propose alternate
or substitute items to be furnished instead of what has been specified. The advantages
of this practice have been widely accepted. 18 Various aspects of the procedure involved
are covered in GCD '6.7 and I '9, discussed at section 7.e of Chapter 5. Engineers will
be wise to bear in mind that, barring special circumstances, by accepting a proposed
substitute or "or-equal" item of material or equipment, they are in effect agreeing that
the substitute is as appropriate for the Project as if it were included in the Drawings
and Specifications that are a part of the Contract Documents. While the practice of
proposing substitutions has its advantages, experience teaches us that Contractors
have been known to abuse the privilege by flooding the Engineer with an unreasonable
number of proposals. To guard against this, the Engineer should insist on the Con-
tractor's strict compliance with the procedures set forth in GCD '6.7 and remind the
Contractor (and also the Owner) of the provisions of GCD ,6.7.3 with comparable
language in O-E '2.2.2 that entitles the Engineer to additional compensation for his
services in evaluating an excessive number of substitutions. Under certain circum-

procedure is discussed at '1

stances, substitutions may be considered in advance of the submission of bids; this
9 and SC '6.7

vii. Inspections and tests of the Contractor's Work may be required by laws, regu-
lations, etc., by the Contract Documents, or by the Engineer during construction to
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 19

determine if certain Work is acceptable. O-E '1.6.7 covers the authority of the Engineer
to act on the Owner's behalf in this regard. The subject is also covered in GCD ~13.3
and 13.9 (see discussion at section 13.b of Chapter 5).
It is customary for the Engineer to receive from the Contractor and review on behalf
of the Owner the various certificates of inspection, testing, and approval that are re-
quired, but the parenthetical clause at the end of O-E '1.6.7 explains that the review
is merely to determine that the inspections, tests, and approvals called for in the
Contract Documents have been conducted and obtained and the results indicate com-
pliance. Once again it has become necessary to spell out for the benefit of Owners
and Contractors that the authority and responsibility of the Engineer have certain
definite limitations.

viii. Paragraph O-E 1.6.8 and GCD "9.11 and 9.12, which are complementary, deal
with the Engineer's authority (and responsibility) to act as an impartial interpreter of
the requirements of the Contract Documents and as a judge of the acceptability of the
Work and to make decisions on all claims of the Owner and the Contractor relative to
the acceptability of the Work or the interpretation of the requirements of the Contract
Documents that pertain to the execution and progress of the Work. The Engineer (like
the Architect under the AlA Standard Documents) will find himself in a most difficult
position as a result of this undertaking, because he is in the employ of the Owner but
must act in good faith and impartially and not show favor to his employer. More
challenging, however, is the fact that in many of the disputes that arise between the
Owner and the Contractor, the issue is whether or not the Drawings and Specifications
prepared by the Engineer were adequate and, if not, whether the Contractor should
be entitled to additional compensation from the Owner. Accordingly, the Engineer
may be asked to judge impartially whether or not his documentation was adequate or
professionally acceptable. If he decides in all honesty that his documentation was
deficient, he runs the risk of a successful claim by the Owner against him. If his
documentation was truly deficient, but to protect his client (and ultimately himself)
the Engineer turns down the Contractor's claim, he runs the risk of being charged with
bad faith and unprofessional conduct; this is probably not covered by his professional
liability insurance.
It is a truly difficult position to be in and one which has troubled the legal profes-
sional because of its inherent conflict of interest. Yet, it is a function that design
professionals have undertaken for years and one that is in the interest of Owners and
Contractors. It has stood the test of time in spite of the associated pitfalls. This is
probably so because design professionals have knowledge of the facts and an under-
standing of the construction process and industry as well as an immediate availability
which makes them acceptable to Owners and Contractors. They also have a record of
strictly professional behavior under the circumstances.
Their acceptability is in significant part attributable to their better understanding of
the practical aspects of the construction process and the kinds of problems that may
arise. It was felt desirable, however, that the Engineer's jurisdiction to act as an im-
partial interpreter and judge should be carefully restricted to those areas that were
closely related to his special expertise and to the reasons for his being employed by
the Owner (and generally acceptable to the Contractor) to provide services during the
Construction Phase. Accordingly, GCD ~9.11 provides that the Engineer's jurisdiction
extends only to what might be loosely referred to as work-related disputes. Disputes
pertaining to other issues that may come up between the parties are not something
which the Engineer's training and expertise give him any particular qualification to
decide; and hence, their resolution had best be left to others who are not confronted
with such a conflict of interest. For comments on GCD '~9.11 and 9.12, see section
10.g of Chapter 5. Much broader authority in these matters is given to the Architect in
the AlA's standard documents.
20 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

ix. The extent of the Engineer's duties and responsibilities in respect of his reviewing
and passing upon the Contractor's Applications for Payment is explained in O-E '1.6.9.1.
The limitations of such duties and responsibilities are set forth in O-E '1.6.9.2. Com-
parable language will be found in Article 14 of the General Conditions, particularly
GCD "14.5, 14.6, and 14.13, which are discussed at sections 14.c and 14.f of Chapter
5. The essence of these paragraphs is the fact that the Engineer and his resident staff
are only given limited responsibility and authority at the site during construction;
accordingly, the Engineer can only give the Owner general assurance that to the best
of his knowledge, information, and belief the Work covered by an Application for
Payment has been properly done (lithe quality of such Work is generally in accordance
with the Contract Documents", emphasis supplied). However, by recommending pay-
ment, the Engineer will be deemed to have represented to the Owner that, based upon
his on-site visit and the services of his resident staff, the progress of the Work is as
indicated. In case of progress of the Work, the words generally and to the best of his
knowledge, information and belief do not appear as qualifiers. Progress payments are
made as the Work progresses and at times when the quality of the Work as a func-
tioning completed Project cannot be evaluated, which in many cases is not until the
Project is finished, started up, and finally tested; accordingly, there is a further reser-
vation in that respect as well as in the case of Unit Price Work.
The limitations on the representations that the Engineer will be deemed to have
made when a payment is recommended are contained first in a statement that the
recommendation is strictly on the basis of the extent of the observations of and con-
tacts with the Work which the Owner has employed the Engineer and his resident staff
to provide (if the Owner wants more careful checking, he must provide for it at the
outset and pay for it). Next, it is repeated that in order to make the representations
associated with recommending payment, the Engineer is not required to become in-
volved in supervising, directing, or controlling the Work, nor is he to become involved
in the means, methods, techniques, sequences, and procedures of construction or
safety precautions and programs incident thereto or in monitoring the Contractor's
compliance with laws, regulations, etc., applicable to the performance of the Work.
These points are restated here as in O-E '1.6.2.3 with respect to visits to the site because
they are considered so important to the proper understanding of the Engineer's func-
tion during construction. There have been too many lawsuits in which the Engineer
has had to deny that his authority in respect to reviewing applications for and rec-
ommending payment included by implication, if not otherwise, a right and thus a duty
to control the Work and become involved in the construction process. lastly, there is
a statement that the Engineer is not responsible for auditing the Contractor's books
or checking to see if the Contractor has properly applied the monies paid to him as
progress payments. If the Owner or the surety are not satisfied with the integrity of
the Contractor, they should not have contracted with him in the first place. It is not a
proper function for a licensed design professional to undertake to examine the Con-
tractor's fin~ncial records to see how he has used the monies paid to him. In O-E '3.9
it is stated that if the Owner wants assurance as to how or for what purpose the
Contractor has used the monies paid to him under the construction contract, he should
hire his own accountant or auditor (note, also the language of ,11 Cost Plus Agree-
ment). Materials and equipment may be acquired by the Contractor subject to a lien
or security interest in favor of the Supplier or a financial institution; this involves legal
considerations as to which the Engineer professes no expertise and had best be left
to others. Accordingly, the Engineer's representations implied from a recommendation
of payment do not include passing on matters of title to what has been installed or
constructed, but there is an express warranty on this subject by the Contractor in GCD
'14.3.
Even when the Engineer believes the progress and quality of the Work will support
a recommendation of payment, it may be that there are other matters at issue between
the Owner and the Contractor which might affect the amount due from the Owner to
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 21

the Contractor; accordingly, a reservation is also made in this respect for the Owner's
benefit.

x. The parenthetical clause in O-E '1.6.10 follows the same language as in O-E ,1.6.7
and clarifies the extent of the Engineer's responsibility to review the substance of the
various documents to be assembled by the Contractor and delivered to the Engineer
for the Owner at the conclusion of the Project. See also GCD ,,14.12 and 14.13 dis-
cussed at section 14.f of Chapter 5.

xi. As mentioned above, the use of the word inspection in respect of the Engineer's
activities during site visits has been reserved to describe the review of the Work in
connection with Substantial Completion and final payment. This connotes a careful
examination of the completed Project and is quite different from observation as an
experienced and qualified design professional during construction. The inspections
are of the Work when it has been finished, and they are directed toward seeing that
the design concept has been properly implemented and preserved by the Contractor
so that the completed Project as a functioning whole is in general what the Owner
bargained for.
At the time of final payment, it frequently becomes necessary to assemble various
papers and documents to enable the Owner to obtain permanent financing for the
Project. While the nature of these documents should be known far in advance of
settlement and the parties apprised of what they will be called on to deliver, this
unfortunately does not happen as often as it should. One of the documents frequently
required as a condition to such a financing is a statement by the Engineer that the
Project has been completed in accordance with the Drawings and Specifications. As
we have already discussed at some length above, the Engineer is not in a position to
know that and thus should not certify to it. What kind of certification can the Engineer
give for such purposes in addition to his recommendations for final payment? Both 0-
E '1.6.11 and GCD ,14.13 (discussed at section 14.f.iv of Chapter 5) call for a written
notice to the Owner and the Contractor that the Work is "acceptable". This is really
as far as an Engineer performing customary services can go. It is as far as good pro-
fessional practice requires him to go. He should not be expected to go further and
certify what he does not know. In calling for the Notice of Acceptance, the EJCDC
hopes to defeat requests for more comprehensive certifications. An Engineer who is
confronted with any such request should consult his attorney before signing it.

xii. Paragraph O-E 1.6.12 contains a general statement of the limitations on the En-
gineer's responsibilities and authority. This is in addition to the more specific state-
ments made in particular applications as noted above. The number of lawsuits in which
it has been alleged that the Engineer's duties and responsibilities extend further than
he intended or further than is professionally required have dictated the necessity of
making specific statements of limitation in connection with the particular responsibility
assumed (particularly in O-E "1.6.2.3 and 1.6.9.2) as well as a general and ali-encom-
passing statement contained in O-E '1.6.12. It would be fortunate if a general statement
could be relied upon to be completely effective in all situations, but the tenacity of
plaintiffs' counsel has persuaded the EJCDC of the importance of repetition for clarity
and emphasis in certain instances.
There are three important elements of O-E '1.6.12. Since the Engineer does not
supervise, direct, or control the Contractor's Work or that of his Subcontractors or
Suppliers or any of their agents or employees, the Engineer is absolved of the respon-
sibility for what they might do; except to the extent that he has undertaken to observe
and inspect that Work in accordance with the specific language of the other paragraphs
of O-E '1.6 and subject to the specific limitations expressed therein and in the General
22 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Conditions, and except for any additional duties and responsibilities he may have
specifically undertaken.

g. Operational Phase
After considerable struggle over the years to address what services the Engineer is
normally expected to provide after the Project is completed and functioning, the EJCDC
in its 1984 edition of the O-E Agreement resolved on the creation of an additional Phase
of services called the Operational Phase. 8 This might have been called the Post-Con-
struction Phase were it not for the fact that initial services during this Phase may be
provided before final payment. The Operational Phase of Basic Services is described
in O-E '1.7 as it may be amended and supplemented from time to time in '7 of Exhibit
A. In O-E '4.8, the provisions with respect to the period of time during which such
services are to be rendered are set forth. Most of the language describing these services
is pretty straightforward and needs no comment here. It is well to remember, however,
that O-E '1.7.5 uses carefully worded language to describe the documentation to be
furnished; the term as-builts has been abandoned for obvious reasons (see comment
at section 7.k of Chapter 5 re the term as-builts).

8. ADDITIONAL SERVICES
The description of Basic Services in Section 1 of the O-E Agreement covers those
services which are usually provided by the Engineer and covered by his fee for Basic
Services. Depending upon the nature of the Project, the Owner's preferences, the
breadth of the Engineer's in-house expertise, and the Engineer's desire or willingness
to undertake additional responsibilities, the listing of Basic Services may be expanded;
that is one of the purposes of Exhibit A. Many categories of professional services which
Engineers are frequently called upon to provide in addition to Basic Services are listed
in Section 2-Additional Services. If it is known at the time the Agreement is signed
that the Engineer will be expected to provide any of the services of the types listed in
O-E '2.1, it would be best to include these as Basic Services (in Exhibit A) and to adjust
the Engineer's compensation for Basic Services. On the other hand, it is usually not
clear that the Engineer will be called upon to render any of such services even though
he would be willing to do so if asked and properly compensated. That is the purpose
of Section 2.

a. Advance Authorization Needed

Those services which are not strictly Basic Services but which the Engineer is frequently
asked to provide are listed in O-E '2.1, "Services Requiring Authorization in Advance",
where it is explained that the services are not part of Basic Services, are to be paid for
separately, and are to be provided only on written request by the Owner. In order to
make the Agreement shorter, several types of Additional Services which are related
have been grouped in the same sub-paragraphs. Some comment as to the various
types included in this category of Additional Services is appropriate here.

i. Many Projects are financed in whole or significant part by grants from private,
quasi-public, or governmental bodies. Obtaining such grants is usually not an under-
taking for a design professional. On the other hand, supporting documents for the
grant applications will at times include data or design information prepared by the
Engineer or Architect. As we noted in the discussions of the Project description (see
section 4 of this chapter), it is best to recognize the necessity of obtaining such a grant
at the outset, in order to permit appropriate planning and scheduling of design work
and to identify specific design criteria that may be required by the grantor, as well as
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 23

to recognize that a condition precedent to the Project's progressing (and probably

payment for design services) is the obtaining of approval for the Project. Whereas
O-E "1.2.3 and 1.4.2 refer to the preparation of design documentation that is to ac-
company any application to obtain approval of a governmental body that has jurisdic-
tion over the design concept of the Project, O-E '2.1.1 refers to obtaining financial
support for the Project. The parenthetical clause in the second line of this paragraph
recognizes the fact that there may be some overlapp'ing of services and documentation
for these two purposes. While the Engineer's participation in the filings to obtain
design approval will in the usual case be more Significant than in the case of obtaining
grants, it is the Owner who has responsibility for the filing and for obtaining both
approvals (see O-E n1.2.3, 1.4.2, and 2.1.1 and discussions at sections 7.b and 9.e of
this chapter).
Many Engineers are well qualified to prepare environmental impact statements and
frequently are asked to do so by their clients. On the other hand, this is a specialized
area of practice for which the Engineer should receive additional compensation if asked
to provide the services involved. In the normal case, the environmental studies, state-
ments, and reports will have been obtained by the Owner from others (see O-E ,3.4.3)
and will be furnished to the Engineer, who should be entitled to rely upon the data
and conclusions submitted. When a Project involves special environmental consider-
ations with which the design concept must conform, considerably more design work
is required for which O-E '2.1.1 allows the Engineer additional compensation. While
the Engineer may develop all of the documentation and assist in the presentation to
the appropriate authorities, it is the Owner who has the responsibility of obtaining the
approval and of meeting such conditions as the authorities may require (see O-E n.B
discussed at section 9.e of this chapter).

ii. It is customary for the Owner to furnish to the Engineer data with respect to
existing conditions and facilities and for the Engineer to be entitled to rely on the data
furnished as to both its accuracy and its completeness. This is what is intended by
O-E '3.4. There are many engineering firms which possess the necessary in-house
expertise to perform the required investigations or are willing to employ the necessary
experts to do so for them if they receive appropriate compensation for the responsi-
bilities undertaken. Paragraph O-E 2.1.2 is a partial counterpart to O-E '3.4. Reference
is made to the discussions of that paragraph which appear at section 9.d of this chapter.

iii. Redoing design documentation hecause the Owner has changed his mind about
what he wants can be very costly for the Engineer, and also for the Owner. Developing
and documenting the Owner's requirements for the Project at the outset and including
information in the initial Project description (see discussion at section 4 above) or no
later than conclusion of the Study and Report Phase will help an Owner develop a
firm understanding of the general scope, extent, and character of the Project which
he wants as well as pretty specific ideas as to its size, complexity, character of con-
struction, and method of financing. It will reduce the occasions when redesigning
becomes necessary. Pinning down the Project's requirements at an early stage is also
considered a good discipline for the Engineer. A certain amount of changing of doc-
uments and redesigning may be expected as incidental to obtaining the Owner's ac-
ceptance of the documentation submitted at the conclusion of each phase of services.
However, when the Engineer is required to make "significant changes" in documen-
tation that has been previously accepted, he should be entitled to additional compen-
sation as provided in O-E '2.1.3 (See also O-E '2.2.1.)

iv. As the details of the design unfold and the anticipated cost of construction is
considered, concern is frequently expressed by Owners about their ability or willing-
24 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

ness to pay for the full cost of their Projects. Maybe a dressed-down version would be
better. At other times, increased plant capacity might be affordable if the low bid is
within the anticipated range and interest rates are favorable. Under such circum-
stances, an Engineer is often asked to prepare alternate designs as a hedge against
bids coming in too high or being low enough to make alternates affordable. An Engi-
neer is usually quite satisfied to prepare documentation for the alternate approach. If
compensation for Basic Services does not cover the additional time required, he should
be compensated additionally. This is the purpose of O-E '2.1.5.

v. Independent professional associates and consultants may be employed by the

Engineer (by his own choice or at the Owner's request) to assist in the performance
of Basic Services as is permitted by O-E ~7.5.2. The matter of the Engineer's compen-
sation therefor is addressed in one way or another in O-E ~5.1.1 of the various sug-
gested methods of payment,19 Where an independent professional associate or con-
sultant is employed to assist in furnishing Additional Services, the Engineer should be
entitled to additional compensation; O-E '5.1.2.2 of each suggested method of payment
provides for this. Often, an Engineer will be asked to provide certain services or furnish
certain data which it is customary for the Owner to provide as contemplated in O-E
'3.4. Where the Engineer does not possess the necessary in-house expertise, it will be
necessary for him to employ an independent professional associate or consultant to
do the job. Although the Engineer would receive additional compensation for render-
ing such services, he should bear in mind (as explained at section 9.c of this chapter)
the increased legal exposure involved in doing so. This is significant, and special pro-
visions to address the matter may be required. The reason for the increased legal
exposure is that having undertaken to provide or furnish certain data, the Engineer
will be responSible for it whether or not he does the Work in-house or it is subcon-
tracted to others. While such an arrangement is not uncommon, the matter of legal
exposure and insurance coverage in this connection must be reviewed with experts in
these fields.

vi. Sometimes the law requires it and sometimes it is in the best interest of the
Project to award several prime contracts for the construction Work as contrasted with
an award of one general contract with numerous subcontracts. Preparing documents
for a multi-prime arrangement will require considerably more work for the design
professional. It is the intent of O-E '2.1.8 to allow the Engineer additional compensation
for the services required when they are not considered part of Basic Services. Where
it is known at the outset that a multi-prime arrangement will be utilized, it might be
wise to reflect this in the Project description, expand the description of Basic Services
in Exhibit A to include what is covered in O-E '2.1.8 which should be stricken out, and
provide for increased compensation for the Engineer's Basic Services, unless compen-
sation for Basic Services is on the basis of a factor such as in the case of Direct labor
or Salary Costs methods of payment. When either of these two methods of payment
is used, the increased number of hours worked will automatically produce increased
compensation, but attention should be given to the effect of any increase in time spent
and the consequent increased compensation payable on any estimate of charges for
services that the Engineer may have been required to give pursuant to O-E "5.1.1.5.1
and 5.1.1.5.2.

vii. Engineers are frequently required to spend more time than might be considered
reasonably anticipatable when dealing with bid protests, rebidding, renegotiating (see
O-E ,2.1.10); in evaluating and determining the acceptability of a great number of
substitutions proposed by the Contractor (see O-E ,2.2.2); and in evaluating an unrea-
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 25

sonable number of Contractor claims (see O-E '2.2.6). In all of these situations, the
Engineer should be entitled to additional compensation, and in some, advance au-
thorization to render the services is not expected.

viii. The provisions of O-E '2.1.11 should be read in conjunction with those of O-E
'3.5 and GCD H.4.

ix. Paragraph O-E 2.1.13 should be read in conjunction with O-E '5.1.2.2 of each
method of payment. Note that time spent in preparing to serve is to be compensated
for on a different basis than time spent in actually serving as a witness.

b. No Advance Authorization Needed

There is another category of services which are not considered Basic Services, but
which the Engineer is frequently called upon to provide. These are dealt with in O-E
'2.2. The types of services listed here are to be provided without waiting for the Own-
er's written authorization, but the Engineer is expected to advise the Owner promptly
after he commences any of such services. The reasons for this arrangement are that it
would be almost impossible in many circumstances to obtain authorization from the
Owner in sufficient time to permit the Engineer to do what is required or it is so
apparent that the Owner would expect the Engineer to do what is required that re-
questing the advanced authorization would be meaningless.

i. When the Contractor proposes an item as a substitute for what has been specified
(as allowed by GCD '6.7), the Engineer must evaluate it as part of Basic Services (see
O-E '1.6.6 and discussion at section 7.f.vi of this chapter). Frequently, acceptance of
the proposed substitute, while being in the best interest of the Project, will necessitate
certain changes in the Drawings and Specifications to adapt them to use of the sub-
stitute. If the substitution is proposed prior to the opening of bids, O-E '1.5.4 applies;
and, if after the award, O-E '1.6.6 applies. The procedure for submitting substitutions
is set forth in GCD '6.7. The time spent in fitting a substitute into the overall design
and revising the Drawings and Specifications as appropriate can be considerable. This
should be treated as an Additional Service and paid for as such. At times Contractors
have been known to abuse the privilege of submitting suggestions for substitutions to
the point where the Engineer's office is flooded with proposals, all of which must be
evaluated and many of which have not been carefully thought out by the Contractor.
To restrict such activities, it is provided in GCD ,6.7.3 that the Contractor is to pay the
Engineer's charges for evaluating all substitutes, and the last clause of O-E '2.2.2 per-
mits the Engineer to recover from the Owner for the additional time he has been
required to spend in this regard.

ii. In connection with O~E '2.2.6, see discussions above with respect to O-E '2.1.10
at section B.a.vii of this chapter.

9. OWNER'S RESPONSIBILITIES
All too often during discussions leading up to signing an O-E Agreement, the parties
fail to give attention to the responsibilities of the Owner that are in addition to his
paying for engineering services and the Construction Cost and responding to and
ultimately accepting the documentation submitted. Great pains have been taken in
26 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

this book to point out that there are definite limitations to what Engineers are trained
to do and can do for their Owners, and it is a mistake from an Owner's point of view
to assign responsibilities to an Engineer that the Engineer is neither qualified nor
prepared to assume. The oft-repeated axiom has particular application to the design
professionals in this connection: Let the cobbler stick to his last. There are many
matters that it would be unwise for the Owner to expect the Contractor to handle on
his own. Accordingly, there are many matters to be taken care of during the design
phases as well as during construction that the Owner had best handle himself or seek
assistance on from someone other than the Engineer or the Contractor. It is the pur-
pose of Section 3 of the O-E Agreement to list the more important of these matters.
Before reviewing the various subparagraphs of Section 3, it would be well to mention
one major area of misunderstanding as to a risk that should properly rest with the
Owners and should not be the responsibility of their Engineers: the accurate perfor-
mance of the construction contract by the Contractor in accordance with the require-
ments of the Contract Documents. It is true that certain checking and reviewing of the
Work should be properly undertaken by the Engineer for the Owner's benefit, but as
we have specifically noted above, the "Engineer can neither guarantee the performance
of the construction contract by Contractor(s) nor assume responsibility for Contrac-
tor(s)' failure to furnish and perform their Work in accordance with the Contract Doc-
uments". The risk of a Contractor failing to do so should rest with the Owner, and if
the comfort and assurance the Owner can derive from this Engineer's participation
(limited as it may be) during construction is not adequate for the Owner's purposes,
the Owner has the choice of employing additional people to oversee the Work or
accepting the risk. He should not count on his Engineer to solve all of the problems
that may arise with the construction Contractor. We have also seen that the law does
not entitle the Owner to expect that his Engineer will perform without mistakes: "Those
who hire [experts] ... are not justified in expecting infallibility but can expect only
resonable care and competence. They purchase service not insurance".4 These two
concepts are basic to the understanding between the Owner and the Engineer and
should be the subject of frank discussion before the parties enter into any agreement.
With these concepts in mind, we may now consider the more important subparagraphs
of Section 3.

a. Owner's Representative
For practical reasons, the Engineer should insist that the Owner designate in writing
a person with authority to act on the Owner's behalf as provided in O-E '3.1. Having
one person to deal with will facilitate communication. It is important from the Engi-
neer's point of view that he remember that his dealings with the Owner must be with
and through the designated party. The Engineer should not take instructions from nor
accept consents or approvals from anyone other than the designated party. This is
particularly important to bear in mind when the Owner is a governmental body or the
Project is financed with public money.

b. Project Requirements
Paragraph O-E 3.2 ties in closely with the description of the Project and the discussions
under section 4 of this chapter.

c. Physical and Other Site Conditions

Paragraph O-E 3.4 deals with the investigations, examinations, and reports of existing
subsurface conditions and professional interpretations and opinions with respect to
the data obtained. It also deals with topographical surveys, boundaries, property de-
scriptions, zoning restrictions, etc. It is preferable practice for the Owner to obtain the
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 27

technical data, interpretations, and opinions needed for the Project from others who
are trained in this very specialized field of Work (although a different approach may
be favored, especially by those engineering firms that have the necessary in-house
expertise and the essential insurance). When the Engineer undertakes to provide any
of the types of services covered in O-E ~3.4, he assumes responsibility for what is
furnished whether the Work is done in-house by the Engineer's own personnel or is
subcontracted to another firm with the required expertise. In addition, when the type
of information listed in O-E ~3.4 is provided by the Owner, the Engineer should be
entitled to rely upon it in preparing his documentation. If not, then the Engineer should
receive additional compensation for the time spent in checking the Work of others
just as if he had been employed to obtain the information himself. On the other hand,
if the Engineer furnishes the services involved, it would not be appropriate, and even
if reliance were agreed to by the Owner, it would not be effective to block claims of
third parties whose rights might have been prejudiced by some error or omission in
the investigation, report, or conclusion submitted by the Engineer or one of his in-
dependent professional associates or consultants.
The legal exposure in this area is great and professional liability insurance expensive,
if it can be obtained at all. As a result, many specialists in the field of geotechnical
engineering endeavor to include in contracts with their clients provisions limiting their
liability for professional negligence. This concept is not endorsed by the EJCOC or the
AlA, although the existence of the practice is recognized. Whenever a design profes-
sional is involved in the design of a Project on which other design professionals are
also involved, whether the other professionals are employed as independent profes-
sional associates of the design professional or are employed directly by the Owner, it
is important for the Engineer to know if any design professional involved has the
benefit of limitation-of-liability provisions. This point is discussed in ~16 of the Guide
Sheet to the E-AE Agreement and at section 2.c of Chapter 2. Professional liability
insurance and related matters are discussed in this chapter at section 13.c.
The fact that the design of many Projects is completed and contracts for the con-
struction are let without exact knowledge as to the conditions of the subsurface on
which they are to be built and rest, or knowledge of the physical conditions of existing
surface or subsurface structures that will affect their construction or be effected thereby,
has been troublesome for Engineers, Contractors, and Owners. The consequences that
follow from relevation of the true nature of a hidden condition have proven surprising
to many and have led to as many claims as any other aspect of the relationships
between Owners, Contractors, and Engineers. This matter is discussed in more detail
in connection with GCO '~4.2 and 4.3 (see Chapter 5, section 5.b). It is important for
Owners to appreciate that unknown r.onditions may be revealed during construction
and that it probably was not the fault of anyone that the unknown condition was not
revealed sooner. Consequently, the Owner must accept the responsibility of having to
pay more for his Project than the initial Contract Price, and he may be unable to recover
the increased cost from anybody. (Usually he has no valid basis for trying.) If this risk
is not acceptable, the Owner may increase the amount of investigation of the unknown
until it is acceptable.

d. Surveys for Construction

It is made clear in O-E ~3.5 that the Owner has the duty (it is not the Engineer's) to
provide engineering surveys to enable the Contractor to start his Work; otherwise, the
Engineer would have to do this and would be entitled to additional compensation
under O-E '2.11 (see also GCO ~4.4).

e. Governmental Approvals
For discussion of O-E '3.8, see comments concerning O-E '~1.2.3, 1.4.2, and 2.1.1 at
sections 7.b and 8.a.i of this chapter.
28 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

f. Other Trained Experts

Accounting, insurance counseling, legal, and auditing services are usually not part of
the Engineer's expertise, nor does he customarily have in-house experts in these fields.
These are matters that should be left to others with special training (and licenses where
required). Accordingly, O-E '3.9 reminds the Owner that if such services are needed
in connection with the Project, he must provide them himself. Note also that in con-
sidering Total Project Costs an allowance for such services is to be included, and the
Owner is expected to provide information as to the anticipated costs thereof as indi-
cated in O-E '3.12. In the discussion of opinions of probable cost and estimates (see
section 5 of this chapter), it was pointed out that the Engineer's expertise does not
usually include cost estimating, and if the Owner wants a more accurate "guess" of
Construction Cost in advance of the award of the construction contract, he should
employ a specially trained cost estimator (see O-E 16.2.1) which O-E 13.9 obligates him
to do. As explained in the discussion of the Engineer's review of Applications for
Payment (see section 7.f.ix of this chapter), the Engineer should neither purport to
possess the qualifications of an accountant nor undertake to give the Owner assurance
as to how the Contractor has used the monies paid to him on account of the Contract
Price. If the Owner (and the surety, if any) is not satisfied to trust the Contractor's
statements in this regard, then a properly trained auditor should be employed as
required by O-E 13.9.

g. Monitoring Compliance with Laws

The matter of the Contractor's compliance with various laws applicable to the perfor-
mance of the Work may be of sufficient interest to the Owner so that he wishes such
compliance to be monitored. Monitoring that is required by law or regulation usually
involves compliance with safety regulations pertaining to the performance of the Work
such as OSHA. It is a matter which an Engineer should avoid becoming involved in
without careful thought as to the authority granted, the breadth of responsibility un-
dertaken, the time and compensation allowed, and the legal exposure involved. Safety
precautions and programs incident to performing the Work are strictly within the
Contractor's exclusive jurisdiction as we have seen, and GCD n6.14.1 and 6.20 so
provide. Paragraph O-E 3.9 makes clear that functioning as a safety inspector or monitor
of code compliance is not a customary professional engineering undertaking. Refer to
discussions in Chapter 5 at section 7.1 in connection with GCD 16.20 and safety during
construction.

h. Owner's Special On-Site Representative

When the Owner wishes to designate a special party to represent his interest at the
site in addition to the Engineer and his resident staff (which frequently happens in
governmental Work and on large Projects with sophisticated Owners), it is essential
that the duties, responsibilities, and authority of the Owner's representative at the site
and how that individual is to interface with the Engineer, the Engineer's resident staff,
and the Contractor be spelled out precisely in advance of constructJon. This is called
for in O-E '3.11.

i. Construction Coordinator
The matter of awarding the construction Work on a multi-prime basis raises many
issues that have not been addressed in the standard EJCDC documents because of
their complexity and the lack of uniformity in approach. One issue is recognized,
however: the matter of coordination among the activities of the various Contractors at
the site. In GCD '7.4 it is provided that if there is a multi-prime contractual arrangement
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 29

for the performance of the construction, a coordinator will be identified and his duties,
responsibilities, and authority carefully documented for the benefit of all persons af-
fected. It is stated that neither the Owner nor the Engineer will be the coordinating
party. Paragraph 3.11 of the O-E Agreement ties in with GCD '7.4 and obligates the
Owner to designate the coordinator (see also discussion in SC '7.4 and at section 6 of
Chapter 6. The EjCDC recognizes the interest of many engineering firms in undertaking
con~truction management assignments and believes that these assignments can be
properly carried out where the firm involved possesses the necessary experience. This,
however, is not true in the usual case, and in order to discourage giving the assignment
to an Engineer without qualifications, the EjCDC has provided that another and usually
better qualified party is to be designated by the Owner.

j. Owner Bears Costs

As part of the preliminary discussion with the Owner, the Engineer will wish to point
out that the matters covered in Section 3 are going to cost money. Whether the Owner
requests the Engineer to include some of the services involved as part of Basic Services
(for which an increased charge should be made), or it is provided that the Engineer is
to furnish the services as called for and the Owner will pay for them as Additional
Services, or the Owner obtains the services on his own from others, the Owner should
recognize that obtaining such services will be a cost associated with the Project which
the Owner will have to pay one way or another. This is one of the items that should
be included in Total Project Costs (see O-E '1.2.6).

10. PERIODS OF SERVICE

Having an understanding as to the time within which engineering services are to be
completed is as important to Owners as it should be to Engineers. The general com-
plaint that design professionals do not perform services in a timely manner can be
countered by establishing a schedule for services. In this way the Owner should have
some assurance that the design documentation will be forthcoming in accordance with
his time schedule for the Project. It will also enable the Engineer to schedule his work
load, plan for his manpower needs, and develop a budget for expenses during his
work on the Project. The primary purpose of Section 4-Periods of Service is to bring
these matters to the attention of the parties before the O-E Agreement is signed so
that there can be a common understanding of the interest of each and a meeting of
the minds about what each is expected to do.

a. Orderly Progress
It is common knowledge that Projects do drag on. When they do, the Engineer is
required to render services over a longer period of time than anticipated, with the
likelihood of higher rates of pay for his employees and greater costs than he budgeted.
It may not be possible to prevent delays because progress of the Project may be
contingent upon the Owner's obtaining clearances (private or governmental, see last
clause of O-E ,4.5) which can take a lot more time to obtain than expected. In recog-
nition of this, it is explained in O-E '4.1 that the Engineer's commitment as to timing
of services and rates of compensation "have been agreed to in anticipation of the
orderly and continuous progress of the Project through completion of the Construction
Phase". It is also expected that Exhibit A will be used to indicate specific times or dates
by which the various phases of services are to be completed if that is considered
important by either party, and if the times are exceeded through no fault of the En-
gineer (which is hard to prove at times) the rates of Engineer's compensation are
"subject to equitable adjustment". It is interesting to note that the EjCDC agreements
for professional services differ significantly from the AlA's in that the EJCDC's intend
30 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

a much more specific commitment between the parties as to the time periods for
furnishing and performing services.

b. Timing of Design Services

Paragraphs O-E 4.2, 4.3, and 4.4 follow the same approach of the "orderly and contin-
uous" progress of services from one phase to the next, with the Owner giving prompt
written instructions to proceed with each subsequent Phase of services after accep-
tance of the documentation for the previous Phase. The requirement for a formal
authorization to proceed with each subsequent Phase coincides with the language of
O-E n1.2, 1.3, 1.4, and 1.5. In O-E '4.5 it is indicated that if the Owner does not act
promptly in response to the Engineer's submissions during the first three Phases, as
is required by the last clause of O-E '3.7, the Engineer's services under those Phases
will automatically be considered complete, in which case all compensation payable for
such services will become due.

c. Bidding Phase Services

Services during the Bidding and Negotiating Phase cannot, for obvious reasons, be
started until the Owner decides to proceed to take bids or negotiate the Contract
Price, and O-E H.6 calls for a written authorization from the Owner before the Engineer
is to proceed with this Phase of services. Services under this Phase are to be considered
complete When the first construction contract is signed or, if no contract is signed,
when negotiations with the prospective Contractors are terminated, except as may be
required for redesigning, rebidding, or renegotiating in accordance with O-E '6.2.2.5,
which would become applicable where an established Construction Cost limitation
has been exceeded.

d. Construction Phase Services

Recommendation of final payment (not final payment itself) terminates the Construc-
tion Phase. This is in recognition of the fact that Owners at times delay making the
final payment after it has become due. (See O-E '4.7.)

e. Fast-Tracking
Paragraphs O-E 4.7 and 4.12 recognize the common practice of starting one aspect of
the construction Work (such as excavating and foundation Work) before a construction
contract for the remainder of the Work is signed, and usually before all of the design
documentation for the Project is completed. This arrangement, known as fast-tracking,
is particularly useful when time considerations for completion of a Project are very
important. It usually involves the development of a critical path scheduling for the
furnishing of services and performance of construction Work. This arrangement will
supersede many of the provisions of Section 4, in which case it is expected that the
necessary changes in language will be accomplished in Exhibit A.

11. METHODS OF PAYMENT

a. General
There are five different methods of payment provided for in the standard form of the
O-E Agreement, and each appears on a separate set of pages so that the pages not
used may be torn out and destroyed. Attention is directed to the introductory remarks
about these methods of payment which apppear in "7-11 of the Guide Sheet to the
O-E Agreement. It is expected that whatever method of payment is selected, there will
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 31

be amendments of or supplements to the printed language for which Exhibit A is

intended to be used. There are many blank spaces to be completed in the several
paragraphs of each method of payment, as explained in the Guide Sheet.

b. Multi-Prime and Cost-Plus

When construction Work is let on the basis of a multi-prime contract arrangement or
where the construction contract contains cost-plus or incentive compensation provi-
sions, it may be expected that the Engineer will have to devote more time to the Project.
In such cases, it is customary to provide for higher compensation to cover the addi-
tional effort involved when the Engineer's compensation for Basic Services is on the
basis of lump Sum, Percentage Fee or Cost-Plus a Fixed Fee. While increased com-
pensation will automatically follow the increased expenditure of time when compen-
sation is on the basis of Direct labor or Salary times a factor, one should consider the
impact of rendering services under such circumstances on any estimate of charges for
engineering services (see O-E '5.1.1.5 or 5.1.1.5). It is also expected that the number of
prime contracts for which separate design documentation will have to be prepared
and administrative services rendered as part of Basic Services will be agreed to and
the number inserted in the blank space in O-E '5.1.1.2 of the first three methods of
payment. If there are a greater number of prime contracts involved than has been
agreed to, the O-E '2.1.8 will apply.

c. For Basic Services

Compensation for Basic Services is covered in O-E '5.1.1 of each method of payment.
Since resident Project services at the site are treated as part of Basic Services (see 0-
E '1.6.2.1), payment for such services is dealt with in O-E '5.1.1.3. The method whereby
the Engineer will pay his resident Project staff will frequently differ from the method
of payment by the Owner to the Engineer for Basic Services. Compensation for Op-
erational Phase services is also dealt with in a separate subparagraph because it is
expected that services during this Phase will most likely be paid for on an hourly basis.

d. Estimating Charges
An entirely new concept appears in O-E '5.1.1.6 of the Cost-Plus method and O-E
'5.1.1.5 of the Direct labor and Salary Costs methods of payment. This concept is
discussed in '7 of the Guide Sheet. It recognizes that when compensation is on a basis
other than lump Sum or a Percentage Fee, an Owner will often want an estimate of
what charges for Basic Services are likely to be. The estimated figures are to be inserted
in the blank spaces of these paragraphs, which provide that before Basic Services are
"about eighty percent completed" the Engineer is obligated to advise the Owner if it
is apparent to the Engineer that the estimate will be exceeded, whereupon the Owner
and Engineer are to discuss the matter and reduce the remaining services or agree to
increased compensation.

e. Additional Services
Compensation for Additional Services is covered in O-E '5.1.2 of each method of pay-
ment, and different subparagraphs are provided to indicate different methods of com-
pensation for the various types of services rendered by the Engineer's in-house per-
sonnel, his independent professional associates and consultants (see discussion re 0-
E '2.1.7 at section 8.a.v of this chapter) and in connection with any litigation, arbitration,
or other legal or administrative proceedings.
32 ENGINEERING SERVICE AND CONSTRUalON CONTRAaS

f. Reimbursable Expenses
Engineering practices differ with respect to what may be considered Reimbursable
Expenses, and Owners frequently have strong feelings on the subject. Any change in
the definition of this term, which appears in O-E '5.4.2, had best be made in O-E '8.1.
One should bear in mind that the definition of the term is broader in the case of the
Direct Labor and Salary Costs methods of payment (see the last sentence of the defi-
nition) which allows a markup over actual costs for certain types of Reimbursable
Expenses. Note that O-E '5.1.3 would otherwise allow only the actual cost of Reim-
bu rsable Expenses.

g. Progress Payments

Progress payments on account of services rendered are contemplated by O-E '5.2.

Where payment is on the basis of Lump Sum and Cost-Plus methods, the Engineer's
estimate of the services completed is to be used as the basis for billing, while in the
Percentage Fee method a formula is provided (this formula appeared as part of the
definition of Construction Cost in Section 6 of the earlier editions of the O-E Agree-
ment). In all five methods of payment, the Engineer is given the right after notice to
stop work when he is not paid within thirty days of billing (see also O-E '4.10), and in
addition a 1% charge per month is to be added to the amount owed.

h. Adjusting Compensation

There are several places in the O-E Agreement where it is provided that the agreed-
upon compensation will be adjusted in response to changed circumstances. These
appear in O-E ,,4.9,4.11,5.3.4, and 5.4.1 (see also O-E ,6.2.2.4).

i. Defintions

Paragraph O-E 5.4 contains the definitions of the terms Direct Labor and Salary Costs,
which are basic to the Agreement. Note that compensation for Additional Services or
some special aspect of Basic Services may be on the basis of Direct Labor or Salary
Costs even though compensation for Basic Services is on another method. The com-
ments appearing in '11 of the Guide Sheet to the O-E Agreement are particularly
helpful in understanding the definitions. The term Salary Costs was called Payroll Costs
in earlier editions of the O-E Agreement.

12. CONSTRUCTION COST AND OPINIONS OF COST

a. Definition of Construction Cost

The definition of Construction Cost which appears in O-E '6.1 has two principal ap-
plications in the O-E Agreement. The first is in connection with payment for engineer-
ing services when compensation is on the basis of a percentage of Construction Cost.
When using that method of payment, Construction Cost can only be estimated prior
to the actual award of the contract for construction, and the order of priority to be
used in estimating appears in '5.2.2 of the Percentage Fee method of payment. Con-
struction Cost is also part of Total Project Costs which is defined in O-E '1.2.6 and the
figure which is addressed in the Engineer's opinion of probable Total Project Costs. It
is as important to note that the term il1c1udes only the cost of the parts of the Project
which have been "designed and specified" by the Engineer as it is to remember the
various items that are not included in the definition.
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 33

b. Limit of Construction Cost

Construction Cost may be a very important consideration for the Owner, in which
case a limit of Construction Cost may be formally established and specifically set forth
as a condition to the O-E Agreement. Reference is made to the discussion concerning
estimating at section 5 in this chapter and particularly the distinction drawn there
between opinions of probable costs which the Engineer is usually prepared to furnish
and formal estimates of Construction Cost. Paragraph O-E 6.2.1 contains a reasonable
explanation of the extent to which the ordinary Engineer is able to go in giving the
Owner assurance in advance of bids or quotations as to what the Project will cost. It
also points out that if greater assurance or more accurate estimates are required by
the Owner, a party qualified in cost estimating should be employed (see O-E '3.9).

c. When Limit Is Exceeded

In those cases where a Construction Cost limit has been accepted by the Owner and
the Engineer and established so that the provisions of O-E '6.2.2 apply, it is important
for the Owner and the Engineer to review these provisions carefully, particularly be-
cause they set forth an exclusive remedy for the Owner in case of a faulty opinion of
probable costs by the Engineer. The provisions are discussed with other matters relat-
ing to estimating and cost control at section 5 of this chapter.

13. GENERAL CONSIDERATIONS

a. Termination

Paragraph O-E 7.1 should be read in conjunction with O-E n4.11 and 5.3.2. If more
complete provisions with respect to termination by either party are to be desired, the
additional language may be added as a supplement to the Agreement in O-E ~8.1.

b. Reuse of Documents

The Drawings and Specifications and other documentation prepared by the Engineer
are his own, and his ownership and property interests therein should remain para-
mount. Paragraph GCD 3.6 makes it clear that the Contractor and others working for
him do not acquire any ownership interest in the Drawings and Specifications prepared
by the Engineer even after the Project has been completed. These documents may not
be reused without consent and verification by the Engineer. This provision of the
General Conditions supplements O-E '7.2, which recognizes that the Owner also has
a certain legitimate interest in these documents. Having paid for them, he should be
permitted to use them for his own purposes so long as he does not prejudice the
Engineer's rights in these documents or their use does not expose the Engineer to
liability. Protection for the Engineer against any reuse without his specific adaptation
and verification is a very important point. Accordingly, O-E '7.2 requires the Owner to
indemnify the Engineer against any loss he might suffer if the Engineer's documenta-
tion is not specifically verified or adapted by him for a second use by the Owner and
indicates that the Engineer is entitled to additional compensation for his services if he
is asked to adapt and verify his documents for the new use. This is different from the
AIA'a approach, which endeavors to preserve in the design professional an exclusive
property right in his own documentation. The EJCDC believes it is more important to
protect the design professional against unauthorized reuse of his documents than to
preserve an exclusive property right in them. Under the EJCDC forms, the "property"
rights of both Owner and Engineer in the Drawings and Specifications are recognized.
As a result of passage of the Federal Copyright law, which became effective on
34 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

january 1, 1978, it seems that copyright protection for an Engineer's Drawings and
Specifications is not a valuable method of protection in most cases. This law supersedes
copyright protection under state statutes and the common law. Accordingly, the EjCDC
documents assume that copyright protection for his documentation is not a matter of
significant concern to the Engineer.

c. Professional Liability Insurance

Paragraph O-E 7.3.1 deals with general liability insurance which the Engineer is required
to maintain, but there is no provision for the maintenance of professional liability
insurance. However, the EjCDC considers it important that Engineers maintain profes-
sional liability insurance.
No written agreement, no matter how carefully drawn, can be relied upon to fully
protect an Engineer against claims arising out of his failure to meet prescribed stan-
dards of care in furnishing professional services. Efforts to do so by wholesale use of
limitation-of-liability language or indemnification provisions will most certainly prove
useless when tested in court. This is particularly true since the responsibilities of a
licensed professional are involved and the rights of third parties are affected. Further-
more, in those cases where such language has been given effect, the language was
carefully negotiated by the parties with equal bargaining power and it applied to a
particular and unique set of circumstances. (One such set of circumstances may arise
in connection with asbestos and hazardous waste clean up where the protection of
professional liability insurance coverage is now almost impossible for most Engineers
to obtain.)
language that may be added as O-E "7.3.2 and 7.3.3 to cover the requirement that
professional liability insurance be maintained is set forth in ~12 of the Guide Sheet to
the O-E Agreement. This language calls for the maintenance of professional liability
insurance and provides for specific amounts of coverages, deductible provisions, and
the duration of coverages. The scope of coverage of any policy should be reviewed
with care-do not rely solely upon the offering brochure, but examine the types of risk
excluded. Coverage usually only extends to liability incurred in the performance of
professional services in the insured's capacity as an Engineer. Among the types of risks
normally excluded are untimely performance, assumed liability such as guarantees of
performance and express warranties, faulty estimates or opinions of costs, and dam-
ages in the case of Projects in which the insured has a property interest. Coverage
usually applies to claims that are actually made during the period when the policy is
in effect. Accordingly, if a professional error was made during the policy period but a
claim is not made until after that period, there might be no coverage. This is particularly
important when the amount of coverage or deductible provisions have changed from
one policy period to the next or when coverage is shifted from one carrier to another.
In suggested O-E ~7.3.3, professional liability coverage for independent professional
associates and consultants is considered. The EjCDC believes it important that all
design professionals involved on a given Project maintain professional liability insur-
ance. When relying upon insurance coverage of another party, it is a good idea to
specify the amount of coverage and the deductible and to require its maintenance for
at least the period of the applicable statutes of limitations. Only limited protection will
be available for an Engineer if the required coverage of his professional associates
remains in effect only during the construction of the Project, since many claims arise
or are made after completion of the Project. Most policies are usually written on a
claims-made basis.
It may be that some subprofessionals are unable to meet the requirement to maintain
professional liability insurance. This would increase the exposure of the insured pro-
fessionals if an uninsured professional is unable to satisfy a judgment. The Engineer
may be held vicariously liable for the acts of his uninsured professional associates and
would be unable to recover indemnity from the party who might be primarily at fault.
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 35

If the insured professionals are jointly and severally liable with the uninsured profes-
sional, they may have to satisfy the uninsured's share of a judgment and as a practical
matter be unable to recover contribution. These points should be discussed by the
Engineer with insurance and legal counsel to be certain that coverages of all insureds
are adequate to address these risks. If the insurance carried by the design professionals
is issued by different carriers, the extent of the various coverages should also be
examined.
An alternate solution to separate professional liability insurance coverages is the
purchase of Project insurance by the Owner, which can be written to cover, among
other things, the professional liability of all involved design professionals. If Project
insurance is to be maintained by the Owner, the suggested O-E "7.3.2 and 7.3.3 should
be changed and appropriate language added.
If any design professional involved in the Project has the benefit of language limiting
liability for professional negligence and equivalent language is not available to the
others, this too should be discussed with legal counsel. The Engineer should be par-
ticularly aware of the ramifications of agreeing to limit the liability of a professional
associate when the Engineer's liability is not similarly limited or of working on an
assignment when another professional working on the same Project has either the
benefit of limitations-of-liability language or does not carry adequate professional lia-
bility insurance.
Some professional societies have approved, and commended to their membership,
policy forms written by certain insurers which have been the subject of negotiation
between the society and the carrier and are tailored to the needs of the design pro-
fessional. However, where the agreement with the Owner or the Contract Documents
assigns to the Engineer responsibilities not normally undertaken by a design profes-
sional, or that may not be considered "professional services ... in the insured's ca-
pacity as an ... Engineer" (customary policy language), the Engineer should consult
his insurance counselor to ascertain the extent to which the policy provides protection
for him. Where the situation requires coverage beyond the scope of the standard
policy, it may be possible to obtain coverage by a special endorsement on the Engi-
neer's professional liability insurance poliCY, at times at a quite nominal charge.
There are many facets to the matter of professional liability insurance coverages for
design professionals which are adequately discussed in other publications and are far
too complex for review here. Suffice it to say that because the subject is intricate, the
advice of competent insurance and legal counsel is essential

d. What Law Governs

Specifying in advance what legal jurisdiction will control the interpretation and the
enforcement of the provisions of the O-E Agreement will save time and money if
litigation over that document develops. Owners may not accept the language in O-E
'7.4, in which case some other jurisdiction should be identified.

e. Successors and Assigns

It is customary for any agreement to indicate that it is binding not only on the parties
who have signed it but also on their successors and assigns. The legal significance of
these provisions in any given application had best be reviewed with legal counsel since
there are many facets to the possible problems involved. The language of O-E '7.5.1
is relatively straightforward, but that of O-E '7.5.2 addresses certain more subtle issues.
In the first sentence it is recognized that the law in certain jurisdictions will not permit
a restriction on the assignment or pledge of monies that are or may become due under
a contract for services; this is the way that many parties finance their work. The second
sentence recognizes that while an agreement may be transferred from one party to
another (as when an Engineer leaves one firm and takes a particular contractual as-
36 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

signment with him to another), the Owner's consent to the transfer or assignment of
the agreement from the first firm to the second will not automatically relieve the first
firm from liability for performance under that agreement. The language of the third
sentence permits the Engineer to employ independent professional associates and
consultants to assist in the performance of professional services under the O-E Agree-
ment as discussed at section B.a.v of this chapter and contemplated in the several
methods of payment where separate paragraphs are provided to cover compensation
for services (Basic and Additional) rendered by independent professional associates or
consultants.
The language of O-E 17.5.3 is particularly significant. It states that no party other
than the Owner and the Engineer have any rights under the O-E Agreement. Such
language has been difficult to enforce at times. The language intends to preclude any
implication that the provisions of the O-E Agreement are for the benefit of others, such
as construction lenders, Contractors, Contractors' employees, sureties, Subcontractors
and their employees, or the Engineers' independent professional associates and con-
sultants. (See discussion of GCD '9.13 in Chapter 5 at section 10.h.i.)

f. Arbitration
Binding arbitration of disputes that arise under the O-E Agreement has been the rec-
ommended approach of the EJCDC for many years, and the AlA follows this same
approach in its agreements for design services. It is not the purpose of this book to
analyze the pros and cons of binding arbitration. There are a plethora of texts on the
subject and more in the writing to be sure. A few general comments may be pertinent,
however. Making and pursuing a formal claim against another party to an agreement
is not a simple matter and is very time consuming and costly. It is usually more ex-
pensive if the parties proceed at law rather than in binding arbitration. Arbiters do not
purport to be bound to follow the law; however, they must act in good faith and
without partiality. Most parties who have lost a case in the courts or before an arbitra-
tion panel are convinced that any other method of resolving disputes is far better; and
very few parties who have won a case are satisfied with the time and money they have
expended on the matter. The courts have developed rules that are just and fair for the
taking of testimony and the resolution of disputes; the advantages and protection
afforded by these rules should not be overlooked or abandoned lightly in favor of less
formal and less predictable procedures before arbiters.
There is no easy way to resolve disputes that will leave a happy taste in the mouths
of all parties involved. The best antidote is extreme caution in entering into an agree-
ment and working toward a meeting of the minds and an understanding of what each
party to a contract is obligated to do and is entitled to rely upon the other to do. It is
the ounce of prevention that the EJCDC documents try to provide rather than the
pound of cure that is involved in claims and litigation.
Paragraph O-E 7.6 follows the recommendation of the EJCDC that there should be
binding arbitration of disputes under the O-E Agreement. The mechanics are set forth
in the various subparagraphs of O-E '7.6. A few points of particular interest merit
attention here. As provided in O-E '7.6.3, only claims and counterclaims involving
$200,000 or less may be considered by the arbiters. This is because it was thought that
the expenses of litigation in court was too great for resolution of lesser claims and
because, where greater amounts of money are at issue, Owners and Engineers should
have the benefits and protections of the rules of testimony and procedures so carefully
worked out by the cou rts over the years.
In most legal proceedings, the courts will permit or require joinder of other parties
into the proceedings between the two litigants because of a common interest of law
or fact. Accordingly, in a dispute between an Owner and an Engineer, other claimants
such as the Contractor, Subcontractor, their employees, sureties, independent profes-
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND ENGINEER 37

sional associates, and consultants could all be joined and all issues between them
resolved in one proceeding. Owner's counsel may favor such an approach because it
may involve a savings of time. It frequently results in losing sight of the subtleties of
legal principles, such as the difference between the legal basis of liability for a design
professional 4 ,s and a Contractor. The result is frequently a miscarriage of justice, par-
ticularly because the arbiters are not bound to follow the law, nor is there any assur-
ance that their decisions will be in accordance with applicable legal principles.
Many counsels for design professionals feel their clients are better served if their
disputes with Owners are settled in a proceeding in which the two parties are the only
litigants. This is the purpose of O-E '7.6.4. On the other hand, many Owners may wish
for a different result.
There is no appeal from the decision of arbiters (short of fraud or other extreme
causes), and except in special cases, the reasoning for the arbiters' decisions are not
announced (probably not even known). Just the results are given out.
The EJCDC believes that arbitration of disputes under the Construction Industry
Arbitration Rules of the American Arbitration Association is in the best interest of both
the Owner and the Engineer, but also recognizes that others may differ, and the laws
of all states are not similar with respect to arbitration. Accordingly, the form of the
O-E Agreement has been prepared so that O-E '7.6 dealing with arbitration may be
eliminated from the document simply by tearing out the separate page (page 17) on
which it is printed and completing information at the bottom of the last page to indicate
the page number as well as the total number of pages that make up the entire Agree-
ment. ObViously, the Table of Contents should also be modified.

14. SPECIAL PROVISIONS

a. Supplemental Provisions

Paragraph O-E 8.1 permits the addition of amending and supplemental provisions which
do not properly belong in Exhibit A. If there is not sufficient space, a rider or additional
exhibit or schedule may be added, in which case the additional document should be
included in the listing of attachments in O-E '8.2.

b. Agreement Is Complete

There is a very important statement in O-E ,8.3 which is for the equal protection of
the Owner and the Engineer. Here it is provided that the O-E Agreement with its listed
exhibits and schedules constitutes the entire agreement between the parties in respect
to the Project and all other writings or oral understandings are superseded, wiped out,
and of no legal effect. It behooves the parties to be certain that there is no existing
understanding, written or oral, that is not covered in the Agreement, its exhibits, and
schedules. Reliance should not be placed on any such understanding, whether oral or
written.
 2
STANDARD FORM OF AGREEMENT
BETWEEN ENGINEER AND ASSOCIATE
ENGINEER FOR PROFESSIONAL
SERVICES, No. 1910-13
(1985 ed.) (E-AE Agreement)
In O-E '1.1.1 the Engineer undertakes as part of Basic Services to furnish "customary
civil, structural, mechanical and electrical engineering services and customary archi-
tectural services incidental thereto". The Engineer may do this Work in-house, or he
may employ other design profeSSionals with special expertise to assist in performing
these services, which may be because of lack of in-house expertise or other time
demands on his staff. In such cases, the Engineer will be responsible for the services
of the other design professionals who may be considered his agents or subcontractors.
The EJCDC has prepared three Standard Forms of Agreement for use in these situa-
tions.
The E-AE Agreement is intended for use when one Engineer employs another as an
independent professional associate to provide continuous services during the study,
design, and construction of a Project. When an Architect is employed by the Engineer,
the Standard Form of Agreement between Engineer and Architect for Professional
Services, No. 1910-10 (1985 ed.) (the E-A Agreement) is intended for use. When an
independent professional associate or consultant is employed by the Engineer to par-
ticipate only to a limited extent (such as rendering services during only one Phase) in
the design aspect of the Project, it is expected that the parties will use the Standard
Form of Agreement Between Engineer and Consultant for Professional Services, No.
1910-14 (1985 ed.) (the E-C Agreement). There is a great deal of similarity in these three
documents since they are based on and closely parallel to the O-E Agreement, which
is referred to in them as the Prime Agreement. A great deal of what is said here about
the E-AE Agreement has equal application to the E-A Agreement and to the E-C Agree-
ment, but neither is discussed in detail in this book.
Because the Associate Engineer undertakes in E-AE '1.1.1 to do for the Engineer a
part of what the Engineer has undertaken to do for the Owner in the Prime Agreement
and the E-AE Agreement is based on the O-E Agreement, the language and approach
of the E-AE Agreement are quite similar to those of the O-E Agreement and the language
is identical in a great many places. Accordingly, it will not be necessary to review here
and analyze the provisions of the E-AE Agreement where the two documents are ba-
sically the same. The reader may find appropriate comments and explanations in the
relevant parts of Chapter 1.

1. PROJECT DESCRIPTION AND THIS PART OF THE PROJECT

The part or portion of the Engineer's overall services which the Associate Engineer is
to perform for the Engineer will cover less than the Engineer's entire assignment for

38
 STANDARD FORM OF AGREEMENT BETWEEN ENGINEER AND ASSOCIATE ENGINEER 39

the Project and is identified and referred to in the E-AE Agreement as This Part of the
Project (see E-AE ,B). It is intended that the Project will be identified in the E-AE Agree-
ment exactly as it is in the O-E Agreement. Because so much of the services the As-
sociate Engineer will be expected to provide is based on the Prime Agreement, it is
provided that a copy of all portions of the Prime Agreement which are pertinent to
the Associate Engineer's services are to be attached as Exhibit A to the E-AE Agreement.
While prime professionals are at times reluctant to disclose to their independent pro-
fessional associates or consultants the details of the financial arrangements with their
clients, it is important that any provision of the Prime Agreement (such as timing of
payments) which will affect an Associate Engineer's right to compensation be included
in the exhibit (see E-AE ,5.2.2).

2. GUIDE SHEET
As in the case of the O-E Agreement, there is a Guide Sheet to assist the practitioner
in using the E-AE Agreement. Many of the comments in the E-AE Guide Sheet are the
same as those in the O-E Guide Sheet, and they will not be discussed here. The E-AE
Guide Sheet also points out several rather basic differences between the Prime or
O-E Agreement and the E-AE Agreement.

a. Single Prime Construction Contract

In the E-AE Agreement, it is assumed that all of the Work designed and specified by
the Associate Engineer will be constructed pursuant to one prime contract. Accord-
ingly, the word Contractor is used in the singular throughout, and there are no alternate
paragraphs in the various methods of payment dealing with the possibility of multi-
prime contracts being awarded (but see E-AE '2.1.8 in case there are).

b. Services at the Site

Basic Services of the Associate Engineer do not include the services of a Resident
Project Representative or assistants. Such services are treated as Additional Services,
and no sample form for guidance in preparing the list of duties, responsibilities and
limitations of authority of an Associate Engineer's Resident Project Representative is
provided. There is, however, a separate subparagraph in E-AE '5.1.2, "Payment for
Additional Services", to cover a possible different method of payment for the Resident
Project Representative's services.

c. Professional Liability Insurance

While neither the O-E Agreement nor the E-AE Agreement contains a requirement that
the design professional maintain professional liability insurance, the likelihood of this
being required is recognized and suggested language for use is furnished in each
Guide Sheet. The E-AE Guide Sheet, however, contains a discussion of the importance
of all design profeSSionals involved on a Project carrying appropriate professional lia-
bility insurance. It also contains a warning to be alert to the possibility that one of
several design professionals on a Project might either have inadequate professional
liability insurance coverage or the benefit of limitation-of-liability language in a separate
agreement with the Owner (see E-AE Guide Sheet "14 and 16 and discussion at section
13.c in Chapter 1).

d. Identifying Exhibits
The exhibits to the E-AE Agreement are identified by prefix letters to avoid confusion
with the exhibits to the O-E Agreement. Exhibit AE-A is the Prime Agreement; Exhibit
40 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

AE-B is the Further Description of Basic Engineering Services and Related Matters,
which is to be used for amending and supplementing just as Exhibit A to the O-E
Agreement is; and if an Associate Engineer's Resident Project Representative is to be
employed, Exhibit AE-C would cover the duties, responsibilities, and limitations of
authority of the Associate Engineer's Resident Project Representative.2° Similarly, the
Exhibits to the E-A Agreement are to bear the identifying letter A-A, A-B, and A-C; and
those of the E-C Agreement are to bear the letters C-A, C-B, and c-c.

3. UNDERLVING CONCEPTS

In the general description of the Associate Engineer's services at the bottom of Page
1 of the E-AE Agreement, three statements very basic to the relationship between the
Engineer are made. .

a. Independent Contractor
The Associate Engineer is referred to as an "independent" professional associate, re-
sponsible for the "means and methods" used in performing his own services, and is
not a "joint-venturer" with the Engineer or any other parties involved in the Project.
It is considered important to emphasize the Associate Engineer's separateness from
the Engineer not only to negate any possible argument that they are joint venturers
with equal responSibility and liability for the other's work, but for other administrative
and legal reasons as well. While the Associate Engineer is obviously the Engineer's
subcontractor and to a certain extent the Engineer's agent, the reverse is not true. The
Associate Engineer is also not an employee of the Engineer. He is a separate indepen-
dent contractor.

b. Coordination
The responsibility of the Engineer as the prime professional with overall authority for
the design and construction administration aspects of the Project is emphasized by
the use of the words "general administrator and coordinator of professional services"
and "facilitate exchange of information" among the independent professional associ-
ates and consultant whom the Engineer has retained "as necessary for coordination"
of the services of several parties involved. The corollary to this language is found in
E-AE '1.1.1, where the Associate Engineer is required to "collaborate" with the Engineer
and to communicate with the Owner and other independent professional associates
and consultants through or with the knowledge of the Engineer, and his services must
be performed so that they "will be coordinated" with the services of the others. Taking
charge and assuming responsibility for coordination of the design is a Significant re-
sponsibility and is essential for the success of the Project. logically this responsibility
falls on the shoulders of the Engineer, who is the prime professional. It is important
that he have the authority to carry it out and that his independent professional asso-
ciates and consultants understand that they are to cooperate with his efforts in this
respect but have a contractual right to count on him to do the coordinating. That such
sources be coordinated is of great importance to the Owner and the Contractor.

c. Communications
Communications of the Associate Engineer must go through (or be with the knowledge
of) the Engineer; otherwise, the Engineer might loose his control over the design ser-
vices and coordination. Accordingly, it is provided in many places that the Associate
Engineer's dealings are to be with the Engineer, who must transmit all messages to the
Owner and obtain instructions, approval, or consent from the Owner. See, for instance,
E-AE ~1.3.1, "accepted by Owner as confirmed by Engineer", and similar language in
 STANDARD FORM OF AGREEMENT BETWEEN ENGINEER AND ASSOCIATE ENGINEER 41

E-AE '1.4.1. Again, it is stated in E-AE 11.6.1 that "all of Associate Engineer's commu-
nications to Contractor will be through, or with the knowledge of," the Engineer. In
the various subparagraphs dealing with Construction Phase services, it is emphasized
that the Associate Engineer informs, assists, keeps advised, consults with, and makes
recommendations to the Engineer. Authority for the Associate Engineer to perform
Additional Services comes from the Engineer, not the Owner, and it is the Engineer
who is obligated to pay for such services. He will want to know the source of the funds
to make such payments before authorizing his Associate Engineer to preceed. In Sec-
tion 3, "Engineer's Responsibilities", it is the Engineer who must deal with the Owner
and obtain information from the Owner as necessary for the Associate Engineer's work.
It is the Engineer who has the obligation to make payments for the Associate Engineer's
services, and the contract does not give the Associate Engineer any rights against the
Owner.21 The matter of paying for the Associate Engineer's services is discussed at
section 8 of this chapter. One of the major criticisms that members of the EJCDC have
against the AlA's Standard Form of Agreement between Architect and Engineer, No.
C141 (1979 ed.), is that the responsibility of the Architect as prime professional to
coordinate his design services and those of his independent professional associate is
not spelled out to a sufficient extent to permit an Engineer to rely on the Architect to
do so.

4. BASIC SERVICES
Throughout the description of Basic Services, the Associate Engineer is to furnish anq
provide services to the Engineer to assist the Engineer in carrying out the duties and
responsibilities which the Engineer has undertaken under the Prime Agreement. The
wording of each subparagraph is almost identical with the comparable paragraph of
the Prime Agreement. In spite of this, certain relationships merit special comment
here.

a. Interpretations and Changes

While in E-AE 11.6.4 the responsibility of the Associate Engineer to assist in issuing
interpretations and clarifications and Work Directive Changes and Change Orders in
connection therewith is relatively straightforward, the related language in E-AE 13.8 is
most important. The same may be said of E-AE '1.6.5, dealing with Shop Drawings and
other submittals. If an Associate Engineer is to be in a position to assume proper
responsibility for his work and if an Engineer is to properly utilize the services of his
Associate Engineer, it is essential that no interpretation or clarification of the Associate
Engineer's documentation be issued by the Engineer without consultation with his
Associate Engineer. The same applies to the review and approval of Shop Drawings,
samples, and other submittals which pertain to This Part of the Project. The Associate
Engineer's input is essential from both the Associate Engineer's and the Engineer's
point of view if the Associate Engineer is to keep abreast of developments in the Project
as they take place. likewise, the Associate Engineer must be given the opportunity to
and be required to participate in the preparation of pertinent Work Directive Changes
and Change Orders,and the Engineer must not act on them without the input of the
design professional who prepared the documentation that is to be affected by the
change. While this may seem to be a relatively simple point, it merits emphasis because
of the numerous examples from reported court decisions in which a design profes-
sional has caused trouble for himself, his independent professional associates, and
others involved in the Project, when, for reasons best known to him (probably to save
time or money), he has failed to turn to hiS independent associate for consultation and
advice with respect to such matters, particularly when they pertain to the Drawings
and Specifications for This Part of the Project. When the schedule of Shop Drawings
submittals is prepared as required by GCD "2.6 and 2.9, it is important for the Engineer
42 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

to allow sufficient time for the review and input of his independent professional as-
sociates. 18

b. Accepting Subcontractors and Suppliers

The right to accept or reject a particular Subcontractor or Supplier proposed by the
Contractor may be specifically reserved to the Owner and Engineer (see I ,10, GCD
,6.8, SC '6.8, and discussion in Chapter 5 at section 7.f.) When the Subcontractor's or
Supplier's Work is basic to This Part of the Project, the Associate Engineer has a duty
to participate in the exercise of the right to accept or reject, and it is so provided in
E-AE "1.5.2 and 1.5.3. The corollary to this requirement appears in E-AE '3.11, which
obligates the Engineer to consult with the Associate Engineer before taking any such
action.

c. Accepting Substitutes
Paragraph E-AE 1.6.6 covers the Associate Engineer's consultation with and advice to
the Engineer with respect to the acceptability of substitute items of materials and
equipment that the Contractor may propose for This Part of the Project during the
Construction Phase as allowed under GCD ~6.7 (see I ~9, SC ~6.7 and discussion at
section 7.e of Chapter 5). Once again it is important for the Engineer to avail himself
of the services and advice of the Associate Engineer before taking action on the ac-
ceptability of proposed items. If a proposal is to be considered prior to the opening
of bids, acceptance would be evidenced by an Addendum as to which the Associate
Engineer's duties are covered in E-AE '1.5.2. If the issue is raised after the signing of
the construction contract, the necessary steps appear in GCD ~6.7, where it is stated
that a substitute item of material or equipment can only be accepted by the issuance
of a Change Order or an approved Shop Drawing. We have already seen that the
Engineer is not to approve either of these documents without first consulting with his
Associate Engineer as provided in E-AE '3.8.

d. Less Than Full Services

There are many ways in which the Engineer can and should avail himself of the services
of his independent professional associates, not only during the three design Phases,
but also during the Bidding or Negotiating Phase and particularly during the Construc-
tion Phase. It may be, however, that a decision is made not to employ the Associate
Engineer to provide Construction Phase services. This will, of course, place consider-
ably more responsibility on the Engineer. It will also put the Associate Engineer in as
difficult a position as the Engineer would be put in if the Owner were not to employ
the Engineer to render services during the Construction Phase. This situation is dis-
cussed on pages iv-vi of the Guide Sheet to the O-E Agreement, and what is said there
with respect to the protection of the Engineer's interests has equal application to the
protection of the Associate Engineer where he is not employed for full customary
services. Just as the Owner's interests may be prejudiced by his failing to employ the
design Engineer to provide full Construction Phase services, so also may the interests
of an Engineer be prejudiced if he fails to employ an Associate Engineer to do so.

e. Post-Construction Services
It is not customary for the Engineer to employ an Associate Engineer to render post-
construction services as a separate Phase of service. In the O-E Agreement, there is an
Operational Phase of services (see O-E '1.7), but the E-AE Agreement does not take
that approach. Rather the services covered in the O-E Operation Phase are included
as Additional Services under the E-AE Agreement. If the Engineer requests the Associate
 STANDARD FORM OF AGREEMENT BETWEEN ENGINEER AND ASSOCIATE ENGINEER 43

Engineer to perform such services, the Associate Engineer is to be compensated just

as he is to be compensated for any other type of Additional Service.

5. ADDITIONAL SERVICES
This Section follows the same approach and contains much of the same substance as
Section 2 of the O-E Agreement (see Chapter 1, section 8). A few exceptions are worthy
of note here.

a.
All types of services are covered in one category and require written authorization
from the Owner in advance of performance, whereas in the O-E Agreement certain
types of services may be rendered without advance authorization (see O-E '2.2).

b.
Resident Project Services are considered Additional Services and are dealt with in E-
AE '2.2 rather than being considered part of Basic Services (see O-E '1.6.2).

c.
As mentioned above, the services included as Operational Phase services in the O-E
Agreement which are included in the E-AE Agreement are treated as Additional Ser-
vices.

6. ENGINEER'S RESPONSIBILITIES
Just as it is important in negotiating the O-E Agreement to pay careful attention to the
Owner's responsibilities, so also it is important to pay careful attention to the Engi-
neer's responsibilities when negotiating the E-AE Agreement. With the few exceptions
noted below, the language of Sections 3-"Engineer's Responsibilities" of the E-AE
Agreement is similar to that of the comparable paragraphs of the O-E Agreement,
although there are a few provisions of Section 3 of the O-E Agreement that have no
counterpart in the E-AE Agreement. Reference is made to Chapter 1, section 9 for
comments on provisions of Section 3 of the O-E Agreement.

a. Obligation to Consult
The obligation of the Engineer to consult with the Assoicate Engineer in respect of
issuing interpretations and clarifications, acting on Shop Drawings and sample sub-
missions and on Work Directive Changes and Change Orders, and accepting Subcon-
tractors and Suppliers is covered in E-AE '3.8 and 3.11 and emphasized at section 4.a
of this chapter.

b. Identity of Other Professional

Paragraph E-AE 3.10 obligates the Engineer to advise the Associate Engineer of the
identity of the Associate Engineer's other independent professional associates and
consultants with whom the Associate Engineer will have to cooperate and interface
while rendering services (see E-AE ,1.1.1).

c. Complete Set of Documents

When final documentation for the construction contract for This Part of the Project is
prepared, it is important that the Associate Engineer have a complete set and that that
44 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

set be kept up to date if the Associate Engineer is to be able to perform properly many
of his Bidding and Negotiating and Construction Phase services. That is the purpose
of E-AE '3.12.

7. Period of Service
The language here follows that of Section 4 of the O-E Agreement. The essential points
to remember are that the Associate Engineer's commitment to render services for the
compensation and in accordance with the terms and conditions set forth in the E-AE
Agreement are made in anticipation of an "orderly and continuous progress" of the
Associate Engineer's work, services under each phase are to commence only after
specific written authorization to do so, and it is expected that several of the provisions
of Section 4 will be amended or supplemented by use of Exhibit AE-B. For other com-
ments see discussion of Section 4 of the O-E Agreement at section 10 of Chapter 1.

8. METHOD OF PAYMENT

As in the case of the O-E Agreement, five different methods of payment are offered
on five separate sets of pages. Within each method of payment'there are differences
from the O-E Agreement to reflect the fact that it is not contemplated that the Work
designed and specified by or under the supervision of the Associate Engineer will be
let under more than one prime contact, and resident Project services are considered
Additional Services rather than Basic Services.
Additional differences from the O-E Agreement are found in E-AE "5.2.1, 5.2.2, and
5.3.1. There has been a significant difference in the practices of some prime profes-
sionals in the way in which they treat their obligation to pay their professional asso-
ciates for services rendered. One approach followed by many Architects holds to the
belief that the prime professional has no obligation to pay his independent professional
associates until he, the prime professional, has been paid by the Owner; there is a sort
of sharing concept which is akin to that of joint venturers rather than an employer-
employee relationship or one that exists between two independent contracting parties.
The opposite approach holds to the theory that the prime professional is obligated to
and should pay his independent professional associates just as he is obligated to and
pays for his rent, secretarial and technical assistance, and supplies. The former point
of view fails to recognize that the independent professional associates do not expect
a sharing arrangement when their fees are set;22 the latter approach fails to recognize
that the prime professional usually does not have sufficient working capital to enable
him to pay his independent professional associates until he has been paid by the
Owner.
The approach taken in the E-AE Agreement (and also in the E-A and E-C Agreements)
is that the Engineer must bill the Owner on a monthly basis on account of the Associate
Engineer's services and expenses and is to make payment to the Associate Engineer
promptly (within fourteen days) after he has been paid by the Owner on account of
the Associate Engineer's services. (This may present the problem of having to prove
what payments by the Owner to the,Engineer actually apply to the Associate Engineer's
bill to the Engineer.) The Engineer is also expected to exert reasonable efforts to recover
from the Owner on account of the Associate Engineer's billings. In the unfortunate
situation where the Owner fails or refuses to pay the Engineer on account of the
Associate Engineer's services, the Engineer is obligated to make payment to the As-
sociate Engineer out of his own funds. In other words, the Engineer has the ultimate
obligation to see to payment of the Associate Engineer's bills whether or not the Owner
pays the Engineer on account thereof, but during the course of the relationship, the
timing of payments to the Associate Engineer is directly related to the timing of pay-
ments by the Owner to the Engineer.
 STANDARD FORM OF AGREEMENT BETWEEN ENGINEER AND ASSOCIATE ENGINEER 45

What can the Associate Engineer do if the Engineer fails to submit to the Owner
statements to cover the Associate Engineer's charges to the Engineer, or the Owner is
slow in paying the Engineer on account of the Associate Engineer's services, or the
Engineer fails to press the Owner for payment? Paragraph E-AE 5.1.3 gives the Associate
Engineer two remedies in those cases where there is no dispute between the Engineer
and the Associate Engineer as to the amount that is owing. In such cases, if the As-
sociate Engineer has not been paid by the Engineer within fourteen days after the
Engineer has received payment from the Owner on account of the Associate Engineer's
services and expenses, which payment the Engineer is obligated to pass on to the
Associate Engineer as provided in E-AE '5.2.2, or if the Engineer does not pay the
Associate Engineer (regardles of the reasons) for sixty days after receipt of an acceptable
statement from the Associate Engineer, then the Associate Engineer may, on notice,
stop rendering services to the Engineer and the amounts owing to the Associate En-
gineer are to be increased at the rate of 1% per month. It is obvious that these pro-
visions can be frustrated if the Engineer does not act in good faith in respect of the
statements that the Associate Engineer submits, and the 1 % per month addition may
run afoul of the anti-usury laws (although care has been taken to avoid identifying the
1% as interest). Engineers should bear in mind that the 1% additional amount, if
charged, could probably not be passed on to their Owners.

9. CONSTRUCTION COST AND OPINIONS OF CONSTRUCTION COSTS

While following the same format and using much of the same language as Section
6 of the O-E Agreement, the E-AE Agreement has several significant differences.

a. Construction Cost for This Part of the Project

The definitions of Total Project Costs and Construction Cost are basically the same in

is defined. In'3
both documents, but in E-AE '6.2 the term Construction Cost for This Part of the Project
of the E-AE Guide Sheet reference is made to the possible establish-
ment of a limit for Construction Cost for This Part of the Project, but it must be
recognized that in many situations it will be difficult to separate out or identify costs
for a portion of a Project. In E-AE '1.1.1 the Associate Engineer is obligated to cooperate
with the Engineer in determining the proper share of the construction budget which
is to be allocated to This Part of the Project. The determination is to be made by the
Engineer, who must act fairly in his allocations among his various independent pro-
fessional associates and consultants. The Associate Engineer's opinions of probable
cost relate only to that Part of the Project for which he has responsibility (see E-AE
'1.2.7, 1.3.2, and 1.4.3 and 6.3.1).

b. Redesigning

The obligations of the Associate Engineer to redesign if the established limit of cost
for This Part of the Project is exceeded are set out in E-AE '6.3.2. These follow the
approach of the O-E Agreement with two notable exceptions. The first is that the
Associate Engineer is not given a right comparable to that given to the Engineer in
O-E '6.2.2.3 wherein the Engineer has significant discreation in the section of materials,
equipment, and component systems and the right to make reasonable adjustments in
the general scope, extent, and character of the Project to bring it within the established
cost limitation. It was felt by the EJCDC that this right had best be left in the hands of
the Engineer as prime professional with responsibility for overall coordination of de-
sign services.
In E-AE '6.3.2.4 there is the same general approach to the responsibility to redesign
when the established limit is exceeded as there is in the O-E Agreement, but in the
E-AE Agreement the Engineer is only obligated to request the Owner to exercise certain
46 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

choices whereas the Owner must choose between the alternates as required by O-E
'6.2.2.5.

c. Cost Limit for Project

Paragraph E-AE 6.3.3 deals with the situation where a Construction Cost limit has been
established for the Project, but not for This Part of the Project. In such circumstances,
the Engineer is given the power to require the Associate Engineer to modify his Draw-.
ings and Specifications as necessary to make them bear a "reasonable portion" of any
cost reduction required to bring the Construction Cost for the entire Project within
the established limit. The Associate Engineer may thus be asked to devote time (at cost
and without profit) to modify his documentation when the reason for the established
limit being exceeded was not his fault.

10. GENERAL CONSIDERATIONS

a.
Paragraph 7.2, of the E-AE Agreement follows the indentical approach of comparable
paragraphs in the O-E Agreement. The interests of the preparers of Drawings and
Specifications are preserved, and at the same time the Owner and the Engineer are
given the necessary rights of reuse. It is, however, worth noting that the E-AE Agree-
ment differs significantly from the AlA's Standard Form of Agreement between Archi-
tect and Engineer, No. C141 (1979 ed.). The difference lies in AlA's provisions that the
Architect as prime professional is given an exclusive right in the independent profes-
sional associates documentation that could prevent an Associate Engineer from reusing
his own documentation.23

b.
The language of E-AE '7.3 has no counterpart in the O-E Agreement.

c.
The matter of maintaining professional liability insurance is discussed at section 2.c of
this chapter.

d.
The language of E-AE '7.6.3 purports to exclude other parties from any contractual
rights under the E-AE Agreement. This may be ineffective in the case of the Owner for
whose benefit the Engineer and the Associate Engineer know and intend that the
Associate Engineer's documentation is being prepared and by whom it is to be used,21

e.
The provisions for arbitration are identical with those of the O-E Agreement and may
be torn out if that method for the resolution of disputes between the Engineer and
the Associate Engineer is not acceptable. What has been said in Chapter 1 at section
13.f in respect of the arbitration provisions of the O-E Agreement has equal application
to the E-AE Agreement. In deciding whether or not to use the recommended language,
legal counsel should, of course, be consulted. In addition, the effect of E-AE '7.7.4
should be evaluated since it and O-E '7.6.4 would prohibit joinder of an Engineer and
his Associate Engineer in any arbitration proceedings instituted by another party, in-
cluding the Owner or another independent professional associate. Depending on the
circumstances, this mayor may not be a desirable result.
 3
CONSTRUCTION RELATED DOCUMENTS

1. GENERAL

In Chapters 1 and 2 the discussion has been centered on agreements for the providing
of engineering services, particularly with the first three Phases of professional engi-
neering services, and the development of the Contract Documents, including the Draw-
ings and Specifications. The next five chapters are concerned with the contractual
arrangements under which the design is to be implemented by the Contractor during
which time the Engineer (and, where indicated, his independent professional associates
and consultants) are to provide Bidding or Negotiating, Construction, and Operational
Phase services. The more important of the documents governing the relationship be-
tween the Owner and the Contractor and the Engineer's participation as the Owner's
representative are the Owner-Contractor Agreements, the General Conditions, the
Supplementary Conditions, and the Instructions to Bidders. These are referred to here-
inafter loosely as the Construction Related Documents, but the term includes other
EJCDC documents.1

2. THE LOCATOR GUIDE

The term Contract Documents is defined in Article 1 of the General Conditions. The
Contract Documents are comprised of several documents, including the Drawings.
The specific documents which make up the Contract Documents for each contract and
Project are listed in '8 of the Stipulated Price Agreement and '16 of the Cost-Plus
Agreement (see discussion in Chapter 4 at section 12). There are other widely used
documents that relate to the understanding between the Owner and the Contractor,
such as the Invitation to Bid, Instructions to Bidders, and the Bid; these are referred
to as the Bidding Requirements. 24 They are not considered part of the Contract Doc-
uments because their impact is for the most part eclipsed by the signing of the Owner-
Contractor Agreement, to which all documents pertaining to construction are to be
attached.
Anyone confronted with the assignment of preparing documents for the construc-
tion of a facility is faced with numerous decisions as to which of the various documents
involved should deal with a particular topic. For years there had been no generally
accepted approach, and wide variation in practice produced contradictions, unantici-
pated legal consequences, and confusion among practitioners and their counsel, to
say nothing of the uninitiated. To help remedy this situation, the predecessor of the
EJCDC, with the CSI and the AlA Documents Review Board, completed a tabulation
for the guidance of those preparing such documents. This is the Uniform Location of
Subject Matter, No. 1910-16 (1981 ed.) (the locator Guide, as it is called), which was
first published in 1977. It is anticipated that this document will receive AGC endorse-
ment at the time of its next publication. The documents considered in the locator
Guide are the ones customary in construction projects: Advertisement or Invitation to
Bid, Instruction to Bidders, Bid, Agreement, General Conditions, Supplementary Con-

47
48 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

ditions, Division 1-General Requirements of the Specifications (General Require-

ments), and Divisions 2-16 of the Specifications.
It was necessary to arrive at a few philosophical conclusions before developing the
tabulation. The first was acceptance of the distinction between the Bidding Require-
ments and the Contract Documents and recognition that the former were not part of
the latter.24 The Bidding Documents include both the Bidding Requirements and the
Contract Documents. The Contract Documents are considered to be the Agreement,
General Conditions, Supplementary Conditions, General Requirements, Divisions 2-
16 of the Specifications and the Drawings. Use of the Specifications format of the
Uniform Construction Index has been assumed.
The next conclusion was as to the substance of the Agreement: that it should contain
the basic information as to price, basic terms applicable to payment and retainage
arrangements, any terms as to guaranteed maximum price, cost sharing or incentive
compensation, provisions for liquidated damages, identification of key parties in-
volved, identification of various documents which together comprise the Contract Doc-
uments, and certain very basic representations of the Contractor.
It was agreed that the General Conditions should contain the underlying provisions
affecting the rights and responsibilities of the parties involved which are typical of the
vast percentage of all Projects. The expression of these rights and responsibilities as
well as the limitations thereof is considered so important and has such sweeping and
subtle legal consequences that the carefully chosen language of the General Condi-
tions should be altered only where mandated by the specific requirements of a given
Project. It is accepted, however, that there will be provisions of the General Conditions
that will need to be supplemented or amended, some by the Supplementary Condi-
tions, others by the General Requirements. Care in making any changes in the terms
of the General Conditions is essential, and in most cases the advice of an attorney
should be sought.
Significant efforts have been made by the EJCDC ana the AlA's committees to de-
velop guidelines for preparation of Supplementary Conditions. While the Supplemen-
tary Conditions are primarily intended for use when modifying or supplementing the
basic contractual relationships, the allocation of subject matter between the Supple-
mentary Conditions and the General Requirements is more difficult of analysis and
may appear arbitrary at times. The emphasis has been to place in the General Require-
ments those provisions which are Work-related, pertain to performance of the Work,
are strictly administrative in nature, and have a common application to the other di-
visions of the Specifications. For example, language supplementing that of the General
Conditions on the matter of Shop Drawing processing and the requirement to maintain
a current marked-up set of record documents at the site is to appear in the General
Requirements. On the other hand, language to set forth the details and amounts of
property and liability insurance, language to identify those Subcontractors and Sup-
pliers who must be acceptable to the Owner and Engineer, and language to identify
"technical data" contained in reports of subsurface conditions on which the Contractor
may rely are to appear in the Supplementary Conditions.25
It is firmly believed that language expressing the basic responsibilities of the parties
with respect to construction had best be carved in stone, particularly in the case of
such important matters as Shop Drawings and insurance coverages:'This has led to
the metaphor that the bones and sinew of the contractual relationships should appear
in the General Conditions and the flesh should be added by the Supplementary Con-
ditions, Specifications, and Drawings. Some have referred to General Conditions as
the "contractual-legal" provisions as modified and supplemented by the Supplemen-
tary Conditions, but it is well to remember that all provisions of the Contract Docu-
ments are contractual and have legal consequences. The wording of any paragraph of
the Specifications may prove to be of more legal significance in a given case than any
other language in the Contract Documents.
 CONSTRUCTION RELATED DOCUMENTS 49

The locator Guide is intended to discourage the frequent practice of covering the
same topic or thought in two or more places. To cover the subject once and clearly
should be sufficient. This author has seen quite a few sets of Contract Documents
containing several differently worded statements on precisely the same subject. Such
excesses are grist for the legal mill. Accordingly, in the EJCDC forms there are frequent
cross-references from one document to another (see I n8 and 21, for instance), but
the effort has been to "say it once and correctly". There are a few notable exceptions
to this commitment.

3. RECENT CHANGES

The important change between the 1983 and earlier editions of EJCDC's Construction
Related Documents are itemized and discussed in "The 1983 Editions of EJCDC's Con-
struction Related Documents," No. 1910-9-A.
 4
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR ON THE BASIS OF
A STIPULATED PRICE, No. 1910-8-A-1 (1983 ed.)
(STIPULATED PRICE AGREEMENT) AND STANDARD
FORM OF AGREEMENT BETWEEN OWNER AND
CONTRACTOR ON THE BASIS OF COST-PLUS,
No. 1910-8-A-2 (1983 ed.) (COST-PLUS
AGREEMENT)
1. GENERAL

The language of the Stipulated Price and Cost-Plus Agreements are identical in most
respects. Obviously, the provisions in respect of price and payment which appear in
Articles 4 and 5 of the Stipulated Price Agreement differ from the comparable provi-
sions in the Cost-Plus Agreement which appear in Articles 4-9 and 12 of that document.
Articles 1,2,3,6,7,8, and 9 of the Stipulated Price Agreement are identical with Articles
1, 2, 3, 10, 11, 13, and 14 of the Cost-Plus Agreement. In spite of their similarity, both
documents have been reproduced in full in the Appendix. When the two documents
are referred to collectively in this book, the term Owner-Contractor Agreement or 0-
Kor Agreement is used.

2. DEFINED TERMS

The Owner-Contractor Agreements have been prepared for use as part of a fully in-
tegrated set of Contract Documents. Defined terms have been used uniformly in
EJCDC's Contract Documents with the same meanings. Paragraph 9.1 of the Stipulated
Price and '14.1 of the Cost-Plus Agreement provide that the terms used in those Agree-
ments which are defined in Article 1 of the General Conditions will have the meanings
indicated in the General Conditions. There is a similar provision in I '1, and the same
approach is followed in the Supplementary Conditions. The definitions listed in Article
1 of the General Conditions are discussed at section 2 of Chapter 5.

3. MATERIALS AND EQUIPMENT

In addition to the use of defined terms, language has been standardized wherever
possible. For instance, the words materials and equipment appear together in all of
the EJCDC documents; they are not specifically defined, but they refer to all the tan-
gible items which the Contractor is to deliver and incorporate into the Work. The term

50
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR 51

is intended to be all-inclusive so that it is not necessary to make broader reference

than by use of the words materials and equipment except in special circumstances
where such terms as component systems, supplies, products, or items may be used
for particular emphasis. In the definition of the word Work which is used throughout
EjCDC's documents to describe what the Contractor is to do, it is stated that Work is
the result of performing services, furnishing labor, and furnishing and incorporating
"materials and equipment" into the construction. Significant confusion has resulted
when specification writers and others use different words than materials and equip-
ment to convey the same idea or add other nouns to the two words without intending
to convey a meaning different from the standard approach.

4. EFFECTIVE DATE OF THE AGREEMENT

The Owner-Contractor Agreement states at the outset that it is "dated as of ";

a specified date is to be inserted. This is for convenience in referring to and identifying
the document and, if no other date is indicated, in determining as of what date the
Agreement became effective and binding on the parties and when their rights arose
thereunder. It is not likely, however, that the O-Kor Agreement will be signed by both
parties on the same date. The EjCDC standard forms contemplate a prescribed sched-
ule of events starting with the date of the bid opening and continuing through the
date when the Contract Time starts to run. This is explained at SC '2.3. It is expected
that the O-Kor Agreement in its final form will be delivered to the Contractor with the
Notice of Award within 45 days of the date of the bid opening. Within fifteen days
thereafter, the Contractor is to return it to the Owner duly executed and accompanied
by the required documents and evidence of compliance with the specified conditions
precedent. The Owner is then to sign within ten days and deliver a fully signed coun-
terpart to the Contractor (see I ,18). This is usually the date on which the O-Kor
Agreement becomes effective and binding on the parties; however, a place is provided
above the signature of the parties to specify the date on which it is intended that the
Agreement is to become effective (particularly when the date given at the beginning
of the Agreement may be different). This is the Effective Date of the Agreement, which
is a term that is defined in Article I of the General Conditions. This is an important
date because it is the date on which the Contract Time starts to run and to which other
events are keyed (see Article 2 of the General Conditions and particularly GCD ,2.3).

5. WORK
In Article I of the O-Kor Agreement the terms Work and Project are used. They are
defined in Article 1 of the General Conditions. It is important to remember the differ-
ence in the meaning of the two terms.
The definition of Work has been the subject of endless discussion. It applies to the
completed construction anQ is the result of performing services, furnishing labor, and
furnishing and incorporating materials and equipment into the construction. The
EjCDC's definition differs slightly from that contained in the widely used AlA General
Conditions, A201, but the emphasis of both is that Work is the result of a particular
Contractor's services and labor and the applications of materials and equipment. On
the other hand, the term Project encompasses the total construction of which a par-
ticular Contractor's Work may only be a part. In the Contract Documents the term
Work is used with an initial capital; that is not the case in the O-E Agreement, although
in both instances basically the same meaning is .intended. 26 When the term is used
without an initial capital in the Contract Document (as it is in Article 7 of the General
Conditions), the use is not in the defined sense; rather, reference is made to services,
labor, materials, and equipment to be provided by persons other than the Contractor
such as other prime contractors.
52 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

6. ENGINEER AS OWNER'S REPRESENTATIVE

In Article 2 of the O-Kor Agreements it is stated that the Engineer is to act as the
Owner's representative and assume all duties and responsibilities and have all rights
and authority assigned to the Engineer in the Contract Documents. This ties in with
the language in O-E '1.6.1 and GCD '9.1. It is important to remember that this is the
extent of the Engineer's authority-he is not authorized to act on the Owner's behalf
in connection with the Project to any extent greater than has been agreed to in the
O-E Agreement except as he may have assumed responsibilities and authority under
the Contract Documents. It is also important to remember that the Engineer is not a
party to the contract between the Owner and the Contractor. A great deal of the
reasoning behind the limitations on the Engineer's duties and responsibilities during
construction stem from this fact (see, for instance, O-E '1.6.12 and GCD "9.13-9.16).
In most jurisdictions, a claim in contract by a Contractor against an Engineer will fail
for this reason. One should not assume, however, that claims on other bases may not
be successfully brought by a Contractor against an Engineer, such as claims based on
implied duties, responsibilities, and obligations of an Engineer for the benefit of a
Contractor, his Subcontractors, their employees, and others. These have been the
subject of comment in Chapters 1 and 2.

7. CONTRACT TIME
Contract Time is defined in Article 1 of the General Conditions as the number of days
or the date stated in the O-Kor Agreement for completion of the Work (see discussion
at section 2.g of Chapter 5). I n Article 3 of the O-Kor Agreements there is alternate
language for use when performance is to be completed by a fixed date or within a
certain number of days. Each choice provides for a date of Substantial Completion and
date of final completion (see also discussions regarding Certificate of Substantial Com-
pletion at section 2.r of Chapter 5 and regarding GCD '14.8 at section 14.d of that
Chapter). Note that the Contract Time starts running as provided in GCD '2.3, and it
may only be changed by a Change Order or a formal amendment of the O-Kor Agree-
ment (see GCD ,12.1).
Paragraph 7 of the Instruction contains suggested language for use when the bidder
is permitted to designate times for performance.

8. TIMELY PERFORMANCE
It is dearly provided in GCD '12.3 that the Contract Time is."of the essence", which
is legal terminology to the effect that the parties really mean what they have said about
the time limits for performance of their various obligations, the most obvious being
the Contractor's timely completion of the Work and the Owner's prompt payment of
monies owing to the Contractor. Owners have been known to be late in making pay-
ments, and a remedy has been given to the Contractor in Article 6 of the Stipulated
Price Agreement and Article 10 of the Cost-Plus Agreement which allows interest on
amounts not paid when due. Note this provision for interest is located in the O-Kor
Agreement in accordance with the locator Guide; past practice was to put it in the
General Conditions (where it still is in the AlA's General Conditions), or the Supple-
mentary Conditions or General Requirements, or in more than one of these places.
The date when progress payments become due is specified in the last sentence of
GCD '14.4, and the date when final payment becomes due appears in the last sentence
of GCD '14.13, subject in each case to certain other considerations. These dates are
related to the dates when Applications for Payment are submitted.
The Contractor's timely performance of the Work is something that cannot be as-
sumed. The Owner's legal remedies against the Contractor for failure to complete on
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR 53

time have not proven satisfactory, particularly because of the expense and delay en-
tailed in proving monetary damages in a legal proceeding. Accordingly, a practice has
grown up of agreeing in advance to the amount of damages that would be suffered
by the Owner should the Contractor be late in performing. These are called "liquidated
damages". While Contractors do not favor this approach, it is generally accepted as
presenting a viable solution to a real problem.
In '3.3 of the O-Kor Agreement there is suggested language in case a provision for
liquidated damages is to be added. Note that the locator Guide indicates that language
on this subject should appear in the O-Kor Agreement, rather than in the Instructions,
Supplemental Conditions, or General Requirements, where many have a penchant for
locating it. It is well to remember that any amount selected for liquidated damages
must have a direct bearing on the actual damages that the Owner estimates he will
suffer if the Work is not completed on time. If the amount provided is supportable
only as a penalty against the Contractor for tardy performance, there is a real risk that
the liquidated damages provisions will prove unenforceable because courts are reluc-
tant to enforce penalty provisions not imposed by their own initiative. Accordingly,
the Owner should perserve such records as he may have in support of the reason-
ableness of the amount stipulated. Because Engineers and other design professionals
are not particularly qualified to determine the amount of damages that the Owner
might suffer in the event of late performance, the advice of Owner's counsel should
be sought whenever liquidated damage provisions are to be included in the Agree-
ment.

9. CONTRACT PRICE

a. Definition
Contract Price is defined in Article I of the General Conditions (see discussion in
Chapter 5 at section 2.h) as the monies payable by the Owner to the Contractor under
Contract Documents, and Article 4 of the O-Kor Agreements states that this is "for
completion of the Work in accordance with the Contract Documents". In Article 4 of
the Stipulated Price Agreement, it is expected that a fixed amount or lump sum will
be inserted.

b. Cost of the Work

In Articles 4 and 5 of the Cost-Plus Agreement it is provided that the amount to be
paid is dependent upon the Cost of the Work which is to be "determined as provided
in paragraphs 11.4 and 11.5 of the General Conditions". The Cost of the Work is defined
in detail in GCD n11.4 and 11.5, which contain a carefully worked out and eminently
fair division between what should be reimbursable to the Contractor and those costs
which he should be required to absorb as part of his overhead and profit. A few years
ago, the EJCDC spent considerable time in reviewing many cost-plus forms used by
Owners and Contractors and concluded that a fresh and objective approach was nec-
essary because many of these forms were either too favorable to one party or not
sufficiently current to address many of the situations that arise today.
Paragraph 11.4 of the General Conditions deals with the five categories of expenses
that may be included in the Cost of the Work for which reimbursement is allowed.
Each category is covered in a separate subparagraph. The five categories are: payroll
costs for personnel performing the Work under agreed-to job classifications, materials
and equipment costs, amounts paid to Subcontractors, amounts paid to special con-
sultants, and an all-inclusive category of nine types of expenses which are collectively
referred to as supplemental costs. Paragraph 11.5 of the General Conditions itemizes
the categories of costs that may not be included in the term Cost of the Work, but are
to be covered by the Contractor's Fee; these are payroll costs for the Contractor's
54 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

administrative personnel whether at the job site or not, office expenses other than for
the Contractor's office at the site, capital expenses, cost of insurance premiums in-
cluding insurance which the Contractor is required to maintain under the Contract
Documents, costs attributable to the Contractor's negligence or furnishing of defective
Work, and overhead and general expenses not specifically allowed as Cost of the Work.
These provisions appear in the General Conditions rather than in the Cost-Plus
Agreement because they may be applicable to Change Order Work performed under
a Stipulated Price Agreement as well as to Work furnished under a Cost-Plus Agree-
ment. 27
The Cost-Plus Agreement follows the idea of '10.2 of the Instructions, which requires
the Contractor to identify prior to the Notice of Award those portions of the Work he
proposes to subcontract and restricts his right to subcontract more Work after the
Notice of Award is given. The reason for this provision is that in a Cost-Plus arrange-
ment it is more expensive for the Owner if the Work is subcontracted since not only
is the Subcontractor allowed a certain amount for overhead and profit, but the Con-
tractor is also allowed an amount for overhead and profit on the same Work. This is
also the reason why the Contractor's Fee on the percentage basis (discussed below)
will probably be at a different rate for subcontracted Work than for other Work (see
'6.1 of the Cost-Plus Agreement and GCD '11.4.3).

c. Records of Costs
Article 12 of the Cost-Plus Agreement requires the Contractor to keep careful and
detailed accounts and records of costs with respect to all that goes into the Work and
will effect the Cost of the Work. These accounts and records are to be acceptable to
the Owner, who is given the right to examine them. No mention is made of the En-
gineer in Article 12 because in O-E '3.9 it is made clear that the Engineer does not
intend performing the functions of an accountant in examining the Contractor's books
and records.

d. Contractor's Fee
Article 6 of the Cost-Plus Agreement deals with the amount of the Contractor's Fee
which is to be paid by the Owner to the Contractor for overhead and profit. It is in
addition to the Cost of the Work and is part of the Contract Price. While there are
numerous methods of determining lhe amount of the Contractor's Fee, the Cost-Plus
Agreement presents a choice between the two most frequently used: a fixed fee or a
fee based on a percentage of the Cost of the Work. I n the latter approach the five
categories of costs that are included as allowable Cost of the Work under GCD '11.4
are presented separately to permit use of differing percentages for each category. In
GCD '11.6 there are provisions which permit an adjustment in the Contractor's Fee in
the event of authorized changes in the Work, and these provisions deal with the
possibility that both additive and deductive changes may be included in one Change
Order. These provisions tie in with '8.2 of the Cost-Plus Agreement. Where the Con-
tractor's Fee is a fixed fee, '8.1 would apply.

e. Guaranteed Maximum Price

When the Work is to be performed under a Cost-Plus method of payment, the Owner
will frequently require some assurance from the Contractor that the total amount
payable, that is, the Contract Price, will not exceed a given figure. This is the purpose
of Article 7 of the Cost-Plus Agreement and of the last sentence of '6.1 thereof. At
times a guaranteed maximum price limitation will be accompanied by a provision
allowing the Contractor to share in savings if the Cost of the Work is less than a
specified figure. Such provisions take various forms, and no standard language has
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR 55

been provided in the EJCDC documents. Changes in the Work will usually have a
direct effect on any guaranteed maximum price; this is addressed in '8.3 of the Cost-
Plus Agreement, which is to be read in conjunction with the provisions of GCD '11.6.

10. PAYMENT PROCEDURES

Article 14 of the General Conditions contains the general provisions applicable to the
payment of amounts owing to the Contractor, Applications for Payment, final payment,
and justifications for withholding payment. These are discussed in Chapter 5 at section
.14. As indicated in the Locator Guide, these may be amended or supplemented in the
Supplementary Conditions or the General Requirements. The specific amounts of prog-
ress payments and the allowed retainage are to appear in the O-Kor Agreement (see
Article 5 of the Stipulated Price and Article 9 of the Cost-Plus Agreement and the last
sentence of GCD ~14.2). The provisions for progress payments are quite similar in both
forms of O-Kor Agreement. It is important to note that progress payments are to be
based on the schedule of values established in accordance with GCD '2.9 (with certain
exceptions in the case of Unit Price Work). Paragraph 9.1.2 of the Cost-Plus Agreement
contains special provisions in respect of progress payments on account of the Con-
tractor's Fee.
In accordance wiht approved policy of the EJCDC's underlying organizations, the
language of these Articles now permits an arrangement whereby there will be no
further retainage when the Work is 50% completed as determined by the Engineer if
its character and progress have been satisfactory to both the Owner and the Engineer.
In making such determinations, Owners and particularly Engineers must act fairly and
impartially.
The matter of retainage has been the subject of negotiation and some controversy
for years. As explained in the Note to User which appears on the reverse side of the
cover page of the O-Kor Agreements, legislation in some states permits a Contractor
to deposit acceptable securities with the Owner or a designated stakeholder in lieu of
retainage. Sometimes this method is selected by preference. This is an area fraught
with legal considerations that had best be investigated and explained by the Owner's
legal counsel before a decision is made to follow this approach. The Note to User
refers to several of the issues that should be addressed. 28

11. CONTRACT-oR'S REPRESENTATIONS

The O-Kor Agreements contain in F of the Stipulated Price and '11 of the Cost-Plus
Agreement very significant representations by the Contractor with respect to six most
important matters:

a. his examination and study of the Contract Documents, the local area where the
Work is to be performed, and the legal environment applicable therto;
b. his examination of the identified reports of explorations and tests of subsurface
conditions and drawings of the physical conditions that will affect the Work;
c. his obtaining and studying such additional examinations, test, etc., as he consid-
ered necessary for the performance and furnishing of the Work at the Contract
Price, within the Contract Time, and in accordance with the terms and conditions
of the Contract Documents;
d. his review and examination of data in respect of Underground Facilities (a defined
term) so that no additional examinations, tests, etc., will be required for the per-
formance and furnishing of the Work at the Contract Price, within the Contract
Time, and in accordance with the terms and conditions of the Contract Docu-
ments;
e. the correlation of all such observations, studies, examinations, etc., with the terms
and conditions of the Contract Documents; and
56 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

f. the giving of notice to the Engineer of all conflicts, errors, or discrepancies he

has discovered in the Contract Documents and his acceptance of the Engineer's
written resolution thereof.

These representations are also made automatically (see I ,4.8) when the Contractor
submits his bid and are repeated verbatim in the EjCDC's Suggested Bid Form. 29 In
spite of the admonition in the Locator Guide to "say it once and correctly", these
representations are thrice repeated in the EjCDC's Construction-Related Documents
because they are considered vital to a proper working relationship between the parties.
The automatic representation in the Instructions and the specific one in the Bid Form
cease to have practical legal consequences once the O-Kor Agreement has been signed;
hence, it is considered necessary to repeat them in the Agreement not only to preserve
their legal viability but also for emphasis.
The representations in '7 of the Stipulated Price and '11 of the Cost-Plus Agreement
include a statement that the Contractor has examined the Contract Documents and
found nothing amiss, and that they are acceptable to him (or if something was amiss,
it has been resolved in a way that is acceptable to him). It is fair enough to require the
Contractor to examine the documentation and to disclose any deficiencies or defects
that he may have discovered. It is quite another matter to hold him responsible for
finding deficiencies and defects in the documentation prepared by the Engineer or to
preclude his raising questions or criticizing provisions which he subsequently discov-
ers to be confusing, inconsistent, or possibly wrong. Accordingly, while the Contractor
is required to make a reasonable examination and to disclose promptly problems he
discovers, he is not prejudiced by his failure to detect any deficiencies in the Engineer's
documentation (see GCD n2.S and 3.2 as well as GCD n6.1, 6.14, and 6.20). It is the
Engineer who has prepared that documentation and caused the problem, if there is
one; he is the professional licensed to prepare the Drawings and Specifications; and
he should not be relieved from responsibility or liability because the Contractor may
have failed to detect a deficiency or defect in the Engineer's documentation. Quite the
contrary, the Engineer's documentation should be prepared so that a reasonable Con-
tractor may rely upon it as being professionally complete and accurate. The EjCDC
does not agree with those who include in their contracts language which purports to
relieve the Engineer from such liability when the Contractor has the opportunity but
fails to detect deficiencies in the Engineer's documentation.
The representations in "7.2, 7.3, and 7.4 of the Stipulated Price Agreement and
"11.2,11.3, and 11.4 of the Cost-Plus Agreement are closely related to the provisions
of GCD "4.2 and 4.3, I '4 and SC "4.2 and 4.3, which are discussed in Chapter S at
section S.b.

12. LISTING OF CONTRACT DOCUMENTS

The term Contract Documents is defined in Article 1 of the General Conditions, but
the actual documents that comprise the Contract Documents for each particular Project
must be specifically identified as provided in Article 8 of the Stipulated Price and Article
13 of the Cost-Plus Agreements. This is as important for the purpose of legal identifi-
cation of the documents involved as it is for good and orderly housekeeping. It is
essential that the Owner and Contractor, as well as the Engineer, have a complete set
of the Contract Documents. The documents in each set should be physically attached
to one another (except possibly in the case of the Drawings, which should be alter-
natively specifically identified). Each set should be meticulously kept up to date. Bear
in mind that the documents listed "comprise the entire Agreement" between the
Owner and Contractor concerning the Work and "there are no Contract Documents
other than those listed". The listing includes Addenda which is a term defined in Article
1 of the General Conditions. Addenda may only be issued prior to the opening of bids.
 STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR 57

The EJCDC believes that no changes should be made in the Contract Documents
between the date of the bid opening and the Effective Date of the Agreement (see
discussion at section 2.a of Chapter 5); accordingly, '8.12 of the Stipulated Price and
'13.12 of the Cost-Plus Agreements refer to various amending and supplemental doc-
umentation which are delivered or issued after the Effective Date of the Agreement
(see discussion in Chapter 5 at section 4.f concerning GCD "3.4 and 3.5).

13. ASSIGNMENTS
The language of '9.2 of the Stipulated Price Agreement and '14.2 of the Cost-Plus
Agreement is similar to that of O-E "7.5.1 and 7.5.2. Reference is made to section 13.e
of Chapter 2 for pertinent comments about language that deals with the transfer or
assignment of rights under a contract from one party to another.
 5
STANDARD GENERAL CONDITIONS OF THE
CONSTRUCTION CONTRACT, No. 1910-8
(1983 Ed.) (GENERAL CONDITIONS)

1. GENERAL
Many of the provisions for the General Conditions deal with the topics that are ad-
dressed in the Instructions or the Supplementary Conditions. These three documents
are closely interrelated. Accordingly, the discussions in this Chapter about the General
Conditions will include also those provisions of the Instructions and the Supplemen-
tary Conditions which relate to the various topics addressed in the General Conditions.
At the bottom of the cover page of the General Conditions there is a box in which
it is explained that the Owner-Contractor Agreements and the General Conditions have
been prepared for use together and their provisions are interrelated. The E1CDC sug-
gested language for use in preparing the Instructions to Bidders, Supplementary Con-
ditions, and the Bid is also closely related to the other Construction-Related Docu-
ments. Standardized language is used and defined terms are used with the same
meanings throughout. Because of this a change in one standard form will frequently
necessitate changes in one or more of the others. Since no standard form can fit
precisely the needs of every Project, amendments of and supplements to all standard
forms are to be expected. The user is encouraged to make them where necessary; and
he is alerted to the need to consider the ripple effect of each change, not only on the
other parts of the document changed, but on all other documents that comprise the
Construction-Related Docu ments.
The General Conditions adhere to the principles for allocation of subject matter
among the various Contract Documents that are set forth in the Locator Guide (see
discussion in Chapter 3 at section 2).

2. DEFINED TERMS

The definitions in Article 1 of the General Conditions are equally applicable to all of
the Construction-Related Documents as has been emphasized repeatedly.
All defined terms are written in solid capitals (viz. OWNER, CONTRACTOR, ENGI-
NEER) or with an initial captial, which is usually the case (viz. Agreement, Change
Order, Notice of Award, Substantial Completion), or in italics. The only italicized word
is defective, written so because, being an adjective, it is impractial to use it with an
initial captial or otherwise indicate to the reader that it is a defined term. The definitions
may be changed and additional defined terms added. Changes and additions should
be made in the Supplementary Conditions (see SC-II-C and SC 111-1). Additional defi-
nitions appear at I ~1.
Many of the definitions contained in the General Conditions are relatively straight-
forward and do not merit comment here; discussion of the more significant provisions
of others may prove helpful.

58
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 59

a. Addenda
An addendum is to be used only prior to the opening of bids. Its primary purpose is
to interpret or clarify the terms and conditions of the Bidding Documents in response
to comments from prospective bidders, but it is frequently used to accomplish changes
initiated by the Owner or Engineer. Note that I 15 provides that only written interpre-
tations, clarifications, and changes of the Bidding Document will be binding. It is
important that all parties who have received a set of Bidding Documents be listed and
that each receive a copy of each Addendum as issued. Note that requests for clarifi-
cations and interpretations must be received by the Engineer at least ten days before
the date of bid opening in order to allow sufficient time to prepare and circulate
answers to all affected parties.
When a bid is submitted, it is important to know that the bidder has received all
Addenda issued. Accordingly, the EjCDC's Suggested Bid Form 29 requires that each
Bidder list all Addenda of which he acknowledges receipt. Some Addenda will relate
to the Bidding Requirements and, like the rest of the Bidding Requirements, will cease
to have value once the construction contract is signed. Other Addenda will pertain to
the Work; these are included in the defintion of the term Contract Documents and are
to be listed by number in the O-Kor Agreement along with the rest of the documents
that comprise the Contract Documents.
The reason for the requirement that Addenda may only be issued prior to the open-
ing of bids is that the EjCDC believes that all bidders should be treated uniformly.
Hence, its standard documents do not intend that any significant changes will be made
between the date of the bid opening and the Effective Date of the Agreement (see I
19 and Bid Form ,F). Negotiations with a successful bidder on minor administrative
details are permissible but should only be formalized after the Effective Date of the
Agreement by a Change Order or a Written Amendment. The AlA's standard forms
appear to permit issuing addenda after the bid opening.

b. Agreement
It is expected that the Agreement will take the form of either the Stipulated Price or
the Cost-Plus Agreement and will be signed by the Owner and the Contractor. While
many people refer to the Agreement as the "contract", it would be technically incorrect
to do so since the contract includes the Agreement and all of the other Contract
Documents.

c. Application for Payment

It is a good idea if agreement on the form of Application for Payment that the Con-
tractor is to use is reached promptly after the Work gets under way. Certainly this is
one of the matters that should be discussed at one of the preconstruction conferences
(see GCD "2.6 and 2.9). It is provided in GCD 114.1 that the accepted schedule of
values is to "serve as the basis for progress payments and will be incorporated into a
form of Application for Payment acceptable to Engineer".3o The Application for Pay-
ment is to include or be accompanied by "such supporting data as is required by the
Contract Documents". The same language also appears in GCD,,14.2 and 14.12. Some
forms of General Conditions (including the AlA's) add a further provision similar to
what earlier editions of the EjCDC's General Conditions stated: "and as Engineer may
reasonably require". The ideas of Owners, Contractors, and Engineers on what sup-
porting data should be required usually differ, particularly when hindsight is applied.
Because Engineers do not usually possess accounting expertise (see discussion re O-E
13.9 at section 9.f of Chapter 1), they are reluctant to be given a right that carries with
it a duty to prescribe such supporting data as will satisfy the Owner (and frequently
Contractor's surety) that the Contractor has properly used the monies paid to him
60 ENGINEERING SERVICE AND CONSTRUalON CONTRACTS

under the contract. Accordingly, the EjCDC documents now stipulate that whatever
supporting data is to be required will be determined when the Contract Documents
are being prepared and included in the Supplementary Conditions so that all parties
can plan in advance for what is expected. This is especially important in connection
with final payment (see comments at SC n14.2 and 14.12).

d. Change Orders and Work Directive Changes

The definition of Change Order has been modified in the 1983 edition of the EjCDC's
General Conditions, and a new term, Work Directive Change, has been added. A Change
Order must now bear the signature of both the Owner and the Contractor and the
recommendation of the Engineer. A Work Directive Change does not require the Con-
tractor's signature. The EjCDC has prepared a suggested form for both documents. 31
The introduction of the new term Work Directive Change and the related form tie in
closely with another major change that was made in the 1983 edition of the General
Conditions. Specific language was introduced in GCD '3.4 to clarify that the only ways
to amend the Contract Documents to provide for additions, deletions, or revisions of
the Work or to change the terms and conditions of the Contract Documents are by a
formal Written Amendment, a Change Order, or a Work Directive Change. The pro-
visions of GCD '3.4 are discussed in section 4.f of this chapter.
It has long been apparent that there are frequent occasions when a change in the
Contract Documents is necessary and the Contractor must proceed with the Work
involved on the basis of revised documentation before an agreement can be reached
as to the effect of the change on the Contract Price or Contract Time. The previous
definitions of the EjCDC did not provide for acceptance of a Change Order by the
Contractor, although it was by a Change Order that many changes in the requirements
of the Contract Documents were to be accomplished. There was no established pro-
cedure whereby the Contractor could formally challenge the effect of a Change Order
on price and time, although it was accepted practice that this would be done in ap-
propriate cases. Many felt that it was unwise to require the Contractor's agreement
and signature on a Change Order because this might permit serious delays before the
Contractor would be required to proceed with the revised Work requirements. On the
other hand, if the Contract Documents could be modified by a Change Order and a
Change Order did not require acceptance by the Contractor, it would amount to a
unilateral amendment of the Contract Documents, which obviously was neither fair to
the Contractor not what the parties intended. As a solution to this dilemma, the EjCDC
developed a new concept and a new form, which is the Work Directive Change. It is
to be signed by the Owner on the Engineer's recommendation but does not require
the Contractor's acceptance or signature. It directs or orders a change in the Work to
be accomplished by the Contractor who must comply with the directions given. A
Work Directive Change cannot change Contract Price or Contract Time, and the right
of the Contractor (or the Owner) to request an adjustment in either because of the
directed change is preserved. When the parties have agreed as to the effect of a Work
Directive Change on price, time, or other provisions of the Contract Documents, it is
contemplated that a Change Order (or a formal Written Amendment) will be signed
by the Owner and Contractor to document the understanding. Of course, if there is
agreement at the outset as to the effect, if any, of the change on price and time, a
Change Order may be signed without the need to use a Work Directive Change. New
language in GCD '3.4 and Article 10 ties in with the revised definition of the term
Change Order and the introduction of the new term Work Directive Change.

e. Contract Documents
The definition of Contract Documents has been variously discussed in several para-
graphs above/2 but a few additional comments are pertinent here.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 61

The bid may be attached to the O-Kor Agreement as one of the Contract Documents
as indicated in '8.10 of the Stipulated Price and ~13.10 of the Cost-Plus Agreements.
While all of the information in the bid with respect to price should appear in and is
usually typed into the appropriate place in the O-Kor Agreement, it has become cus-
tomary in those cases where the bids are complicated and various alternate proposals
have been made to affix the actual bid to the Agreement in order to avoid possible
errors in transcribing the information from one document to the next.
At times the Contractor will be asked to submit certain information in support of
the bid before an award is made; this might include identification of proposed Sub-
contractors or Suppliers where that is required by the Bidding Documents (see dis-
cussion re GCD ~6.8 and I ~10 at section 7.f of this chapter). Such data would also be
attached to the Agreement and become one of the Contract Documents.
The clause at the end of the definition as well as ~8.12 of the Stipulated Price and
~13.12 of the Cost-Plus Agreements indicate that there may be additional documents
delivered after the Effective Date of the Agreement which become Contract Documents
or supplement the requirements of the Contract Documents. Paragraphs 3.4 and 3.5
of the General Conditions list the documents involved and are discussed in this chapter
at section 4.f.

f. Contract Price
The term Contract Price has been discussed in some detail at section 9 of Chapter 4,
and reference is made to the comments there. The Contract Price is to be established
in Article 4 of the O-Kor Agreements. The 1983 edition of the General Conditions
contains provisions dealing with Unit Price Work which affects the Contract Price.
These are discussed in this chapter at section 11.g. A change in the Work may require
changes in the Contract Price, but this can only be accomplished by a Change Order
or a Written Amendment. There are many places in the General Conditions where it
is stated that an adjustment in price may be requested by one of the parties. Where
they cannot agree on the amount of an adjustment, the procedures for initial resolution
of their differences are introduced in GCD ~11.2 with references to other provisions.
Owners, Contractors, and Engineers should be mindful of the procedures established
here, particularly the requirement that written notice of a claim for a change in Contract
Price (or Contract Time, which is covered in GCD ~12.1) must be given not later than
thirty days after the occurrence of the event giving rise to the claim, and data in support
of the claim must be given within sixty days after such occurrence. By the sixtieth day
the claimant must state in writing that the amount of his claim covers all known amounts
to which the claimant is entitled as a result of such occurrence. The effect of this
procedure is to force the parties to come forth with their claims at an early date and,
by requiring that supporting data be submitted promptly thereafter, to preclude a
claimant building up the amount of his claim on the basis of second thoughts and
some imagination, which has been known to happen too frequently in the past. Claims
pertaining to the Work are to be decided initially by the Engineer in accordance with
GCD '9.11, which is discussed at section 10.g of this chapter. It is important for him
to bear in mind that his decision must be rendered promptly and that he has no power
to waive compliance with any of the established procedures except to allow a claimant
additional time to ascertain more accurate data in support of his claim.

g. Contract Time
Contract Time is to be established in Article 3 of the O-Kor Agreement as discussed at
sections 7 and 8 of Chapter 4. The rules for computing time for all purposes of the
Contract Documents are set forth in GCD '17.2. Time is "of the essence" of the Agree-
ment (see GCD ,12.3). A change in the Work may constitute justification for a change
in the Contract Time, which may only be accomplished by a Change Order or a Written
62 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Amendment. There are several places in the General Conditions wherein reference is
made to a possible adjustment in Contract Time. If the parties are unable to agree on
the extent of an adjustment, the procedure for initial resolution of their differences by
the Engineer are introduced in GCD '12.1, with references to other provisions. The
procedures are similar to those for a claim to adjust price, which is discussed in section
2.f immediately above.
Paragraph 12.2 of the General Conditions indicates that the Contractor is entitled to
an extension of the Contract Time when his Work is delayed for reasons beyond his
control and the Owner would be obligated to sign a Change Order embodying the
change (see GCD ,10.4). Note, however, that this paragraph does not provide for a
change in price, just a change in time.

h. Defective
Defective is the only defined term that is written without an initial capital. That is
because it is an adjective. It always appears in italics to remind the user of the fact that
it is a defined term. The word is used to describe defective, faulty, or nonconforming
Work or Work that has been damaged after installation but before final payment. It is
well to remember that even if an item of material or equipment has been installed or
Work has been completed and covered by an Application for a Progress Payment, the
Contractor bears the risk of damage to the item or Work prior to final payment unless
at the time of Substantial Completion this risk has been shifted to the Owner. (See
GCD '14.8 discussed at section 14.d of this chapter.)
While the term is used frequently in the General Conditions, its primary use is in
GCD '9.6, wherein the Engineer is given the right to reject defective Work (see also
O-E '1.6.3) and in Article 13 of the General Conditions dealing with the Contractor's
warranty that his Work will not be defective and containing provisions for remedying
defective Work. See discussions in this chapter at sections 10.e and 13.c.

i. Drawings
The word Drawings is used in precisely the same sense in the Contract Document as
in the O-E Agreement. Its definition in the O-E Agreement, which appears in O-E '1.4.1,
differs slightly from that contained in the General Conditions. No difference of sub-
stance is intended. The EJCDC process of periodic and seriatim review of its standard
documents mandates that when a change is made that affects several documents, it
will take a few years before the change approved for one appears in all. When the 0-
E Agreement was revised in 1984 it was felt that the words "character and scope of the
Work" which appear in several places in the General Conditions were not sufficiently
descriptive and should be revised to read "general scope, extent and character". It is
expected that this wording will find its way into the next edition of EJCDC's General
Conditions. 19

j. Effective Date of the Agreement

This important term has been discussed in Chapter 4 at section 4.

k. Field Order
It is important to remember that a Field Order must be in writing and signed by the
Engineer. Its instructions are intended to supplement the requirements of the Contract
Documents or to authorize minor variations or deviations in the Work which must be
consistent with the overall intent of the Contract Documents, but a Field Order will
not be effective to change price or time. The Engineer's authority to issue Field Orders
appears in GCD '9.5, and the effect of the Field Order on the Contract Documents is
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-·8 63

covered in GCD 13.5.1. A Field Order issued by the Engineer will be binding on both
the Owner and the Contractor. The Contractor is given the right to request an adjust-
ment in price or time if he believes the consequences of the Field Order justify it.

I. Notice of Award
It is expected that a formal Notice of Award will be given to the successful bidder
within 45 days of the date of bid opening (see I ~16.6 and SC ,2.3). The Notice of Award
is to be accompanied by the Agreement ready for signing with all exhibits and the
Drawings attached. It is to indicate what additional documents, if any, the Contractor
is to provide and other conditions he is to comply with before returning the Contract
Documents to the Owner for signing. If the bidder complies with those conditions
and has returned the Agreement duly signed with the appropriate exhibits attached,
the Owner is obligated to sign the Agreement and deliver a signed counterpart to the
Contractor. The EjCDC's form of Notice of Award, No. 1910-22, may be used for this
purpose. It is expected that the Notice of Award will be attached to the Agreement as
one of the Contract Documents (see ,8.4 of the Stipulated Price and ~13.4 of the Cost-
Plus Agreement).
The Notice of Award is referred to in I "6.2,10.1, 10.2, 16.6, and 18; GCD '6.8, and
SC ~6.8 as well as ~D of the Suggested Bid Form. The Notice of Award is an important
document because many of the scheduled events and rights of the parties are affected
by the date of its issue. For instance, where Subcontractors and Suppliers proposed
by the Contractor require acceptance by the Owner and the Engineer this should be
accomplished before the Owner gives the Notice of Award.

m. Notice to Proceed

EjCDC's Standard Documents contemplate the use of a Notice to Proceed, and the
EjCDC document No. 1910-23 may be used for this purpose. The Notice to Proceed
fixes the date when the Contract Time starts to run and when the Contractor may start
to perform his obligations under the Contract Documents. Several events are keyed
to this date. The principal reference to the Notice to Proceed appears in GCD ~2.3.
This Notice should not be given later than thirty days after the Effective Date of the
Agreement unless there has been a change in GCD ~2.3 which should be accomplished
in SC ~2.3 (see comments at SC ~2.3).

n. Project
See discussion at section 4 of Chapter 4.

o. Resident Project Representative

The 1984 edition of the O-E Agreement, which was completed after the 1983 edition of
the General Conditions, provides that resident services at the site are part of the
Engineer's Basic Services (see O-E '1.6.2.1 discussed in Chapter 1 at section 7.f.ii), but
it is recognized that a decision to employ a Resident Project Representative may be
postponed until after the O-E Agreement has been signed and it is closer to the time
when construction is to start. The General Conditions do not assume that such services
are part of Basic Services, but GCD ~9.3 recognizes the possibility that a Resident
Project Representative may be employed. If one is employed, it is essential that his
duties, responsibilities, and limitations of authority be spelled out clearly in a docu-
ment for the Owner, Contractor, and Engineer to study and understand. The O-E Agree-
ment (see discussion in Chapter 1 at section 7.f.ii.14) provides that an exhibit will be
attached to cover these points, and the Guide Sheet to the O-E Agreement gives sug-
gested language for this purpose. This language is taken directly from the EJCDC's
64 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

"Suggested listing of Duties, Responsibilities and limitations of Authority of Resident

Project Representatives, No. 1910-1-A (1983 ed.). This document should be attached to
the Agreement or included in the Supplementary Conditions (see SC ,9.3).
As the definition indicates, the Resident Project Representative is to be the Engineer's
representative. It may be that the Owner will designate an additional party to act on
his behalf at the site, or there might be a Construction Manager or a Construction
Coordinator. In such cases it would be necessary also to spell out the scope of authority
of each of them, taking into consideration the extent to which the services of the
various parties at the site are to be complementary and the extent to which reliance
may be placed on one by the others to avoid duplication of effort. This concept is
discussed more fully at section 8 below and in Chapter 6 at section 7.

p. Shop Drawings

The term Shop Drawings is used primarily in CCD "6.23-6.28, which is discussed at
section 7.n of this chapter. It is also used in O-E '1.6.5 as well as in GCD ,'2.6, 2.9,
and 6.7.3. 18

q. Subcontractor
The point to remember about the definition of Subcontractor is that in order to be
considered a Subcontractor, one must be employed to perform Work at the site. It
does not matter how many tiers down from the Contractor the party may be, so long
as he is performing Work at the site. Some other forms of General Conditions require
that to be considered a Subcontractor, a party must have a direct contract with a prime
Contractor, and any party performing Work at the site that does not meet this condition
does not come within the scope of the definition of that term. 33 A difference in defi-
nition can have far-reaching consequences which should be carefully evaluated by
those using other forms. In the EJCDC context, any party who may have a contract
with the Contractor or a Subcontractor to furnish any services, materials, or equipment
to be incorporated in the Work but who is not to do any Work at the site would be
considered a Supplier, which term is defined in Article 1 of the General Conditions.

r. Substantial Completion
The most important aspect of the definition of Substantial Completion is that the
Engineer's written certification is a condition precedent to achieving Substantial Com-
pletion; without that certification there is no Substantial Completion in advance of
final payment. The EJCDC has prepared a form for use when making this certification;
it is a Certificate of Substantial Completion, No. 1910-8-D. If the Engineer does not
certify that Substantial Completion has been achieved, then the date of Substantial
Completion is the same as the date when final payment falls due under GCD '14.13.
In addition to the Work being sufficiently complete in accordance with the Contract
Documents so that it can be used for the purpose intended, there may be other con-
ditions or requirements to be complied with (such as furnishing favorable certificates
indicating compliance with prescribed tests) which the Owner or Engineer will consider
important before either is willing to accept Substantial Completion. It is fair that the
Contractor know of these at the start of his Work. Accordingly, it is provided in SC ,1
that if additional requirements are to be added, these should be included in an amend-
ment of the definition which should appear in the Supplementary Conditions. Changes
in the administrative procedures with respect to Substantial Completion should appear
in the General Requirements.
Many aspects of Substantial Completion are considered in GCD '14.8 and are dis-
cussed at section 14.d of this chapter.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 65

s. Supplier

The term Supplier was introduced in the 1984 edition of the General Conditions. Its
use is intended to eliminate the necessity of setting out a long list of parties who are
now covered by the defined terms. A Supplier may be differentiated from a Subcon-
tractor in that the latter performs Work at the site while a Supplier does not.

t. Underground Facilities
The term Underground Facilities was introduced in a 1984 edition, and its prinicpal use
is in GCD ~4.3.

u. Unit Price Work

The 1984 edition of the General Conditions covers in considerable detail the matter of
payment for Work on a unit price basis. The term Unit Price Work is used primarily in
the GCD "9.10 and 11.9, but as the index to the General Conditions will testify, it is
also used in several other places in that document. It is discussed at SC '9.10. In
addition, reference to unit prices appears in the O-Kor Agreement, in the definition of
Contract Price, and particularly in n4 and K of the Suggested Bid Form. 29 Unit Price
Work is discussed at section 11.g of this chapter.

v. Work
See discussion at section 5 of this chapter.

w. Work Directive Change

This newly introduced term and the EJCDC's suggested form of Work Directive Change
are discussed in connection with Change Orders in this chapter at section 2.d. Note
that the definition of the term contains an editorial remark that a Work Directive
Change may not change the Contract Price or the Contract Time, but it

"is evidence that the parties expect that the change directed or documented by a
Work Directive Change will be incorporated in a subsequently issued Change Order
following negotiations by the parties as to its effect, if any on Contract Price or
Contract Time ... ."

The emphasis has been added here because these words were inserted after consid-
erable negotiations in order to preclude any argument by a Contractor that the issuance
of a Work Directive Change would automatically entitle him to an increase in price or
time or both.

x. Written Amendment
Many years ago, the AlA and the NSPE in their Standard General Conditions introduced
the defined term Modifications to cover various offical changes to the Contract Doc-
uments that might be issued after the Agreement was signed. A Modification included
a formal Written Amendment, a Change Order, an Engineer's written interpretation of
the Contract Documents, and a Field Order or its equivalent. The term seemed a bit
clumsy and was dropped from the 1983 edition of the EJCDC's General Conditions.
This led to further changes. The first was the definition of the term Written Amend-
ment, which normally deals with the nontechnical and nonengineering aspects of the
Contract Documents, whereas it is expected that Work-related changes will be accom-
plished by Change Orders. Obviously the distinction cannot be strictly adhered to.
66 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

The second change, which is analyzed at section 4.f of this chapter, appears in GCD
"3.4 and 3.5. It is the addition of language that explains the several ways in which the
Contract Documents may be amended, modified, or supplemented.

3. PRELIMINARY MATTERS

a. Delivery of Bonds

Paragraph 2.1 of the General Conditions and I '17 serve as reminders that if perfor-
mance or payment bonds are required, they are to accompany the executed agreement
delivered by the Contractor to the Owner and actually attached as exhibits thereto as
provided in '8.3 of the Stipulated Price and '13.3 of the Cost-Plus Agreements. 34 Par-
agraph SC 1 of the Supplementary Conditions reminds the user of the changes to be
made when such bonds are not required.

b. Commencement of Contract Time: Notice to Proceed

The significance of the provisions of GCD '2.3 has been explained in the discussion
of the Notice to Proceed at section 2.m of this chapter. The EJCDC's arbitrarily estab-
lished schedule of events from the opening of bids until the Contract Time starts to
run is explained at SC ,3.2 (see also section 2.j above). When preparing its 1984 series
of Construction-Related Documents, EJCDC decided to shorten this period to a maxi-
mum of 75 days (it had been ninety days).

c. Starting the Work

Paragraph 2.4 of the General Conditions stipulates that no Work may be undertaken
at the site until the Contract Time starts running because various legal papers may
have to be filed or delivered before the Work at the site starts and it is necessary to
be certain that the prescribed insurance coverages are in effect. Accordingly, it is
important that steps be taken promptly after the Effective Date of the Agreement so
that when the Contact Time does start running (usually as indicated in the Notice to
Proceed), all administrative details and paperwork are in order. One of the steps to be
considered appears in GCD '2.7, which requires the parties to exchange certificates
of required insurance before any Work at the site may be started. This is to preclude
any subsequent complaint that the coverage provided by one party was not what the
other was entitled to or expected (see also GCD ,5.14, discussed in this chapter at
section 6.b.iii). Paragraph 2.8 of the General Conditions requires that a preconstruction
conference be held before the Contractor starts any of the Work at the site.

d. Examination of Contract Documents

In his bid and in the O-Kor Agreement (Article 7 of Stipulated Price and Article 11 of
the Cost-Plus Agreements) the Contractor is required to represent that he has famil-
iarized himself with the Contract Documents; has correlated the results of all the
required examinations, tests, etc., with the terms and conditions of the Contract Doc-
ument; has given the Engineer written notice of any conflicts or discrepancies he
discovered; and is satisfied with the Engineer's resolution of all problems discovered.
This has been discussed at section 11 of Chapter 4. Paragraph 2.5 of the General
Conditions continues with this theme and requires that, before starting each part of
the Work, the Contractor must study and compare the pertinent Contract Documents
and check and verify related data. He is to bring to the Engineer's attention any conflict,
error, or discrepancy he discovers and obtain a written interpretation or clarification
from the Engineer where necessary. Precisely the same approach is presented in GCD
'3.3. When the desired cooperative spirit exists between the Engineer and the Con-
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 67

tractor, these paragraphs can have a very beneficial effect on the Work and may avoid
difficulties cropping up later on as the Work progresses. Of course, if any written
interpretation or clarification issued by the Engineer presents a problem for the Con-
tractor, a claim for an adjustment in price or time may be made as indicated in GCD
'9.4. The Contractor should not be held responsible, however, if he fails to detect
conflicts, errors, or discrepancies in the Engineer's documentation, and this is clearly
the intent of GCD "2.5 and 3.3. Similar language also appears in GCD "6.1, 6.14.2,
and 6.20, when the Contractor is required to follow a particular instruction or direction
of the Engineer. (See comments at section 7.c of this chapter.)

e. Schedules
A progress schedule, a schedule for Shop Drawings submissions, and a schedule of
values are to be submitted by the Contractor in preliminary form within ten days after
the Effective Date of the Agreement. These are to be finalized at least ten days before
the first Application for Payment is submitted. The finalized schedules are to be ac-
ceptable to the Engineer, but in each case it is made quite clear that acceptance is not
intended to constitute approval. All the schedules may be changed during the progress
of the Work.

i. The Engineer's acceptance of the progress schedule does not impose responSibility
on him for the timely progress of the Work, which is the sole responSibility of the
Contractor. Changes in the progress schedule during construction are provided for in
GCD '6.6. Neither acceptance of the progress schedule nor any adjustment thereof is
to constitute authority for a change in the Contract Time (although Contractors have
been known to make that argument). Paragraph 2.9 of the General Conditions makes
it clear that this schedule is to provide "an orderly progression of the Work to com-
pletion within the Contract Time" (emphasis supplied). Persistent failure of the Con-
tractor to adhere to the schedule is one of the acts listed as justifying the Owner's
termination of the Contractor's services (see GCD '15.2.6).

ii. Acceptance of the Shop Drawings schedule indicates only that from the Engineer's
point of view, the submissions called for are all that will probably be needed and
sufficient time has been allowed for him (and, where appropriate, his independent
professional associates and consultants) to process the submissions. The schedule of
Shop Drawings submissions is a very important item. It is discussed at section 7.n of
this chapter, where various aspects of the party's dealings with respect to Shop Draw-
ings submissions are analyzed. 18

iii. By accepting the schedule of values, the Engineer merely indicates that the form
and substance are satisfactory. No implication is intended that the specific values
assigned to the various parts of the Work are actually correct. The content of the
schedule of values is explained in GCD '2.6.3. It is intended that the schedule of values
will serve as the basis for progress payments and be incorporated into the Application
for Payment form (see GCD ,14.1), and the EJCDC's suggested form for Application of
Payment is arranged in just this way.30 When accepting the schedule of values, the
Engineer is responsible for acting fairly toward the Owner and the Contractor; but, as
Owner's representative, he should make certain that the initial payments are not
weighted so heavily in the Contractor's favor during the early stages of construction
that payments are made for Work not actually performed or that payments for Work
performed are far in excess of the cost thereof.
68 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

The reasons for care in clarifying the import of the Engineer's acceptance of each
of these schedules are twofold. First, acceptance is not intended as approval, because
each schedule contains information that is basically the Contractor's responsibility. For
instance, the Contractor is responsible for the progress of the Work and is to see that
it is finished within the Contract Time. Not being an expert in construction, the Engi-
neer would be presumptuous to tell the Contractor how to schedule his Work, which
is expressly stated to be one of the Contractor's sole responsibilities; however, it is in
the interest of all partiesfor the Contractor to establish a schedule for the Work which
shows that, if adhered to, the Work can be completed on time. Also the Engineer does
not know what considerations will affect preparation of the information necessary for
the Contractor to make the Shop Drawings submittals. So it is not intended that the
Engineer pass on that aspect of the schedule of Shop Drawings submissions, only that
the listing of submissions be complete and the Engineer given sufficient time to per-
form his review and approval. Second, the carefully worded language of GCD '2.9 is
intended to cut off arguments advanced by many who, when things have gone wrong
on a Project, have endeavored to blame them on the Engineer.

4. INTENT, AMENDMENT, AND REUSE OF CONTRACT DOCUMENTS

a. Intent
Few, if any, sets of Drawings and Specifications are so complete that they do not require
interpretation and clarification for gUidance of the parties who have been selected to
implement the design concept and to carry out the requirements of the Contract
Documents. Each Contractor brings his own approach to the Work, intends using his
own construction equipment and methods, his own labor, his own Subcontractors and
Suppliers. No set of Drawings and Specifications or Contract Documents can address
all of the issues or answer all the questions that may come to a particular Contractor's
mind as he reviews the Contract Documents preliminary to his bid or when he actually
starts or performs the various parts of the Work. One might comment that the intent
of any well-drawn contract should be clear from its wording and no reference to
outside evidence (written or oral) should be needed to convey that intent. That is not
the case with Drawings, Specifications, and Contract Documents, and it never has been
the expectation of the parties that it would be (see comments re O-E '1.6.4 at section
7.f.iv of Chapter 1). A set of Contract Documents, Drawings, or Specifications that is
so precisely drawn as to allow no flexibility in the means and methods of construction
or the selection of items of materials and equipment would not be in the interest of
any of the parties. The fact that the intent of the Contract Documents must be clarified
and elucidated by the Engineer as the Contractor performs his Work is specifically
recognized in GCD "3.1 and 3.2, and the Engineer's responsibility to issue interpre-
tations and clarifications is covered in GCD '9.4 and O-E '1.6.4. Since the Drawings,
Specifications, and Contract Documents are intended to describe a functionally com-
plete Project (or part thereof), any Work that may "reasonably be inferred" (emphasis
supplied) "as being required to produce the intended result" is to be supplied by the
Contractor even though not specifically called for in the Contract Documents. This
requirement leaves the Contractor at the mercy of what others might consider to be
"reasonable" and the "intended result". However, the clarifications and interpretations
which the Engineer issues must be "consistent with or reasonably inferable from the
overall intent of the Contract Documents" (see GCD ,9.4). If the Contractor considers
an interpretation or clarification issued by the Engineer to be unreasonable, he may
make a formal request for an adjustment in price or time. In exercising his power to
interpret or clarify his own documentation, it is essential that the Engineer act fairly
and objectively-that is a professional function which the Owner has employed him
to perform even if the decision may be contrary to the Owner's or the Engineer's own
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 69

financial interest. It is one which the Contractor is entitled to expect him to perform
with professional integrity.

b. Order of Preference

It is stated in the GCD '3.1 that the Contract Documents are complementary and what
is called for by one is as binding as if called for by all. This statement must be read in
conjunction with the next sentence, which states that a functionally complete Project
is intended. In recognition of the fact that design documentation is rarely free from
minor conflicts, errors, or discrepancies (although the existence of any but the most
minor would be difficult to justify where professional standards of performance are
expected), earlier editions of EjCDC General Conditions contained a provision, familiar
to many design professionals, listing the order of preference or priority to be used in
resolving conflicts between the various Contract Documents. The result was that if
there was a conflict between the Supplementary Conditions and the General Condi-
tions, for instance, and the Supplementary Conditions were listed with a higher prior-
ity, the provisions of the Supplementary Conditions would be controlling. The pre-
scribed order of priority was changed in an earlier edition of the General Conditions,
and finally the language was abandoned. This was for two reasons. First, no one
was able to tell the EjCDC in advance where his mistake was going to occur, and it
had developed in many cases that the document with the lower priority contained the
correct statement. Second, the customary language failed to address the matter of
conflicts, errors, or discrepancies within a particular document. The EjCDC feels that
the best solution to the problem is for the Engineer to be very careful when reviewing
his documentation before it is released and to carefully coordinate the documentation
prepared by his independent professional associates and consultants with the other
documents for the Project.

c. Reference Standards

In preparing his Drawings and Specifications it is customary for a design professional

to make reference to standard specifications, manuals, and codes of technical societies,
organizations, or associations in order to amplify the description of materials, equip-
ment, construction systems, standards, or workmanship, but by doing so there is no
intention to revise or supersede the terms and conditions of the Contract Documents.
At times reference is made to particular laws or regulations applicable to the perfor-
mance of a particular part of the Work. These referenced documents are constantly
changing so that one may not know to which edition reference has been made.
Paragraph 3.2 of the General Conditions provides that unless it is otherwise specified,
reference is made to the edition of the referenced document in effect at the time when
the bids are opened (or if no bids are taken, the Effective Date of the Agreement). This
means that the Engineer must be alert to detect changes in such documents as they
occur or to provide in his Drawings and Specifications that the reference is to a
document of a particular date. The difficulty with the latter approach is that it may be
mandatory to comply with the latest edition of laws and regulations and failure to call
for compliance with the latest edition of a trade manual, code, or standard may con-
stitute unprofessional practice. An unfortunate aspect of this problem may be found
in the fact that very few design professionals have the referenced documents in their
offices and an even smaller number have read thoroughly what they have.
A greater difficulty which has surfaced in several recent legal proceedings is that the
referenced documents frequently purport to assign to the Engineer duties and re-
sponsibilities which he never intended to undertake or authority which the Contractor
never intended him to have. These duties and responsibilities are frequently contrary
to the explicit terms and conditions of the Contract Documents, particularly provisions
70 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

which state that it is the Contractor's responsibility to supervise, direct, and control
the Work and to initiate, maintain, and supervise all safety precautions and programs
in connection with the Work (see GCD ,,6.1 and 6.20) and that the Engineer will not
be responsible for means, methods, techniques, sequences, or procedures of construc·
tion or safety precautions or programs incident thereto (see GCD '9.15 and O·E '1.6.2.3
in particular). Accordingly, it is provided in GCD '3.2 that no provision of any refer-
enced standard specification, manual, or code, or of any law or regulation will be
effective to assign responsibilities to the Engineer in connection with supervising or
directing the Work or the other matters mentioned above which are contrary to other
expressed provisions of the General Conditions. There is a comparable provision in
GCD '6.5 that deals with instructions from Suppliers about applying, installing, con~
necting, erecting, etc., their materials and equipment. Engineers may wish to include
in their specifications, wherever reference is made to a standard specification, manual,
code, law, or regulation, a provision to the effect that if there is a conflict between the
Contract Documents and any such referenced documents, the provisions of the Con-
tract Document will take precedence. A word of caution about this approach is that if
the language of the referenced standard, manual, etc., is to be followed or if an ap-
plicable law or regulation specifically mandates that the Engineer be responSible for a
certain function, then the general language in GCD '3.2 or 6.5 should be modified
carefully to indicate the limited extent to which the provisions of the referenced doc-
ument will be controlling.

d. Controlling Law
The last sentence of GCD '3.1 follows customary legal practice of identifying the law
of the forum that is to control the interpretation of a Contract Document. A provision
that makes controlling the law of some jurisdiction other than that in which the Project
is located would be most difficult to enforce.

e. Report of Inconsistencies in Documents

The points raised in GCD '3.3 are discussed in connection with similar language in
GCD '2'.5 (see section 3.c of this chapter).

f. Amending and Supplementing Contract Documents

One of the principal changes accomplished by the 1983 edition of the General Con-
ditions appears in GCD "3.4 and 3.5, wherein there is a formal recognition and state-
ment of the various ways in which the requirements of the Contract Documents may
be changed or supplemented and the obligations of the Owner and Contractor mod-
ified or varied. Past editions of the EJCDC's General Conditions and the more widely
used AlA General Conditions do not address this issue precisely, and the matter has
been left to custom, which varies quite a bit. As discussed above, the term Work
Directive Change has been introduced to provide a means of giving formal direction
to the Contractor to proceed with changed Work requirements before an agreement
is reached as to the effect, if any, on price or time. Once that has been determined, a
Change Order is to be signed by the 'parties to document their understanding. While
the Contractor may be directed to proceed with the changed Work by a Work Directive
Change, Contract Price and Contract Time may only be changed by a written document
signed by the Owner and Contractor; that would be a formal Change Order or Written
Amendment. The Contractor's and Owner's rights to request an adjustment in price
or time because of a changed Work requirement are carefully spelled out in GCD
'10.1, where use of the Work Directive Change is explained (see sections 2.d, 11.a and
11.b of this chapter).
Paragraph 3.4 of the General Conditions deals with amendments and supplements
accomplished by Written Amendments, Change Orders, and Work Directive Changes.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 71

The requirements of the Contract Documents with which the Contractor must comply
may also be varied or supplemented during the course of construction by Field Orders,
by Engineer's written interpretations and clarifications, and by Shop Drawing and sam-
ple approvals. Paragraph GCD 3.5 recognizes this. There was concern among many
that it would be unwise to recognize formally that a written interpretation or clarifi-
cation of the Contract Documents by the Engineer has the effect of modifying the
requirements of the Contract Documents; yet, if the Contractor is obligated to comply
with an interpretation or clarification, it must be accepted that the requirements have
been changed. Similarly, there was concern over formal recognition of the effect of an
approval (acceptance, checking, review, or whatever one wishes to call it) of a Shop
Drawing on the requirements of the Contract Documents. On the other hand, in fair-
ness to the Contractor, it was felt that the Contract Documents should be precise on
this point and state clearly that such an approval was effective to modify the require-
ments of the Contract Documents. One must always remember that much of the
information contained in Shop Drawing submissions relates to how the Work is to be
performed or a particular item is fabricated, which are matters that are strictly and
exclusively the concern of the Contractor, his Subcontractors, and his Suppliers, and
as to which the Engineer has no authority or responsibility. This fact has dictated the
conclusion that an approved Shop Drawing submittal is not to be considered one of
the Contract Documents, although that part of such a submittal which bears the En-
gineer's approval will be effective to supplement the requirements of the Contract
Documents. Because the Shop Drawings contain extraneous information which at times
is difficult to separate from the design-related data, they are not, even when approved,
to be considered part of the Contract Documents (see discussion in this chapter at
section 7.n.vii and also discussion re O-E '1.6.5 at section 7.f.v of Chapter 1).18
There is another very carefully worded caveat about the consequences of a Shop
Drawing approval as far as modifying or changing the requirements of the Contract
Documents is concerned. That appears in GCD "6.25.2 and 6.27 (discussed at section
7.n.ix of this chapter), wherein is explained that the Contractor must give the Engineer
specific notice on each Shop Drawing submission and resubmission if what is pre-
sented varies from the requirements of the Contract Documents; and, before the vari-
ation will be effective or the Contractor will be entitled to proceed with the Work
involved, the Engineer must specifically have noted approval of the variation at the
time of his Shop Drawing approval.

g. Reuse of Documents
Paragraph 3.6 of the General Conditions, which prohibits reuse of the Drawings and
Specifications by the Contractor, any Subcontractor, or any Supplier, complementsthe
provisions of O-E '7.2 and is discussed in Chapter 1 at section 13.b.

5. AVAILABILITY OF LANDS; PHYSICAL CONDITIONS; REFERENCE POINTS

a. Availability of Lands
The reference in GCD '4.1 to other provisions of the Contract Documents is to a
possible provision in the General Requirements or a notation of supplemental infor-
mation on one of the Drawings. The significance from the Contractor's point of view
of the last sentence in this paragraph should not be overlooked. In I '4.1 he has been
required to visit the site and become familiar with the local conditions affecting cost,
progress, performance, or furnishing of the Work; in his representations in the O-Kor
Agreement he has been required to make a specific statement that he has done so;
and in GCD ,6.4, all responsibilities for furnishing and providing temporary facilities,
tools, and equipment necessary to furnish and perform the Work are placed on him
(see also GCD 16.16). Accordingly, if the property on which the Work is to be performed
and other lands and easements the Owner is making available to the Contractor are
72 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

not adequate for the Contractor's purposes, he must either acquire on his own addi-
tional property or rights 00 a temporary basis or be forced to confine his activities to
a smaller area. In the latter case, this will entail additional expense which he should
allow for in his bid or quoted price, because he will not be entitled to an extra for it
after the contract is signed.

b. Subsurface and Latent Physical Conditions

Subsurface and latent physical conditions at the site present special problems which
are constantly arising. At the time when the Agreement is signed, the parties and the
Engineer cannot know precisely what is under the surface or what hidden physical
conditions may be uncovered or revealed during the Work. When the true conditions
are revealed and the Engineer has decided what, if any, changes in the documentation
are required in response thereto, questions always arise about what effect the surprise
and remedial action will have on price and time of performance. To put it another way:
Who should bear the risk of the unknown? When the Contract Documents purport to
assign that risk to the Contractor, his bid or quoted price will have to include a con-
tingency to protect against the possible adverse effects that revelation of the true
conditions may have on his Work. When the risk has been assigned to the Owner,
realization that the Project will cost more or will take longer to complete usually takes
the Owner by surprise (in spite of prior warnings). He may not be able to raise sufficient
funds to pay for increased cost. Experience shows that in such circumstances too many
Contractors have abused the right to ask for extra cost or time and Engineers are
frequently drawn into lawsuits as one of the parties on whom to place blame. In the
preferred arrangement it is the Owner who is to obtain from an independent source
reports of explorations and tests of subsurface conditions at the site and drawings of
physical conditions in or relating to existing surface and subsurface structures (except
Underground Facilities, which is a defined term) which are at or contiguous to the site
(see O-E ~3.4 and discussion at section 9.c of Chapter 1). This information is then
furnished to the Engineer, who is entitled to rely upon it in performing his services
for the Project. All of the data relied upon by the Engineer in preparing his documen-
tation is then identified in the Contract Documents and made available to the Con-
tractor, who is entitled to rely thereon to the limited extent stated.
It is fair to say that differing site conditions have been the subject of more claims
between the parties than any other matter that has arisen during construction. Since
the true nature of the unknown cannot be determined prior to construction, the very
best way to avoid disputes and claims and to minimize the chances for misunderstand-
ings is to make it clear to all the parties at the start what their responsibilities and
exposures are and who is to bear the associated risks. One additional ingredient is
essential: Whatever arrangement is decided upon, it must be as fair as possible recog-
nizing that the parties are dealing with the unknown. The EJCDC has devoted a great
deal of time to discussion of this issue, and representatives of the AGC have played
an helpful role in developing the present language of the GCD ~4.2 and 4.3, SC 14.2
and 4.3, and I '4, wherein this matter is addressed. The revised language of the 1983
edition represents very important changes.
The 1978 edition provided that the Contract Documents should identify for the
Contractor's benefit "all reports of investigations and tests of subsurface and latent
physical conditions at the site or otherwise affecting cost, progress or performance of
the Work which were relied upon by the Engineer in preparation of the Drawings and
Specifications. It went on to state that the accuracy and completeness of such reports
were not guaranteed and they were not part of the Contract Documents. It was made
clear in 1978 editions of the Instructions and the Supplementary Conditions that the
Contractor was responsible for making such investigations, tests, etc., as he might
consider necessary to enable him to submit a firm bid or quotation to perform the
Work as specified within the Contract Time, at the Contract Price, and without claims
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 73

for extras because of discovering subsurface conditions that differ from what was
reflected in the identified reports on which the Engineer had relied or that were dif-
ferent from what the Contractor had anticipated. The risk of the unknown was placed
squarely on the Contractor, and his only relief in case of a surprise was to call it to
the Engineer's attention. If, after studying the situation (with the necessary additional
investigation and tests), the Engineer concluded that the subsurface or latent condi-
tions differed "materially from those intended in the Contract Documents" and the
differing Conditions "could not reasonably have been anticipated" by the Contractor,
a Change Order would be issued with appropriate price or time adjustments for the
Contractor's benefit.
While identification of data relied on is similar in both editions, the division of
responsibility has been changed in the 1983 edition. First, a distinction is made between
three categories of information relative to subsurface conditions: These three cate-
gories are (i) reports of explorations and tests of subsurface conditions at the site that
were utilized by the Engineer in designing the facility; (ii) drawings of physical condi-
tions (other than Underground Facilities, discussed below) in or relating to subsurface
and surface structures which are at or contiguous to the site, which draWings the
Engineer used in preparing the Contract Documents; and (iii) data about Underground
Facilities at or contiguous to the site. The term Underground Facilities is specifically
defined in Article 1 and means, generally, pipelines, cables, manholes, tunnels, etc.,
and easements containing the same which are used to provide electricity, gas, steam,
water, sewage, and other similar facilities.
In the case of such reports of explorations and tests (category i above), the Con-
tractor is entitled to rely on the "technical data" contained therein, but not on non-
technical data, interpretations, or opinions; and he is not entitled to rely upon such
reports as being complete for the Contractor's other purposes. Hence, except as to
such "technical data", the full risk of the unknown is placed on the Contractor. In the
case of drawings of such physical conditions (category ii above) the Contractor is also
entitled to rely, but only on the "technical data". There are the same express limitations
on reliance, and responsibility for the unknown has been Similarly assigned to the
Contractor. In both categories, if the Contractor discovers a differing condition, he
must report it to the Engineer. The Engineer is required to evaluate the situation and
decide if a change in the Contract Documents is required, in which case a change in
price or time may be allowed.
The term technical data is not defined in the General Conditions because its meaning
will vary by Project, but SC '4.2 of the Guide to the Preparation of Supplementary
Conditions reminds the Engineer that he must indicate in the Supplementary Condi-
tions exactly what parts of such reports and drawings are to be considered "technical
data" on which the Contractor may rely. (See also I 14.2) It is also important to note
that such reports and drawings are specifically not considered part of the Contract
Documents; this is because they may contain data for which the Owner and Engineer
do not wish to assume responsibility.
The Contractor is instructed in GCD ~4.2.3 on how to proceed if "technical data"
on which he is entitled to rely proves to be inaccurate or physical conditions uncovered
differ materially from those indicated in the Contract Documents. In GCD '4.2.4 the
Engineer is required to review the situation and to advise the Owner and Contractor
of his findings and conclusions. If what has been revealed calls for a change in the
Contract Documents, a Work Directive Change or Change Order is to be issued as
provided in GCD '4.2.5. A change in price or time may be justified because of the
inaccuracy or difference, but GCD ~14.2.6 is carefully written so that a change will only
be allowed "to the extent ... attributable to any such inaccuracy or difference". In
other words, the Contractor is not automatically entitled to it. Note that the Engineer's
role is more carefully explained and significantly reduced from what it was in the earlier
editions of the General Conditions. Furthermore, the Additional Services the Engineer
is expected to render to "reflect and document the consequences of the inaccuracy
74 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

or deficiency" may, depending upon the circumstances, be considered part of his Basic
Services under O-E 11.6.3 or Additional Services under O-E "2.1.3 or 2.2.1.
In the case of Underground Facilities, the 1983 edition explains that what is reflected
in the Contract Documents is based on data furnished by the owners of such facilities
(such as a utility corporation or pipeline company). The Owner and the Engineer as-
sume no responsibility for either the accuracy or completeness of such information
(unless a special exception is made in the Supplementary Conditions). The Contractor
is given full responsibility to coordinate his activities with those of the owners of the
Underground Facilities and to protect the same during construction. If an Under-
ground Facility is discovered that was not indicated in the Contract Documents, or in
a location differing from that indicated, and if the Contractor could not have been
expected to anticipate the different conditions, the Contractor is to notify the Owner
and the Engineer. The Engineer is then to evaluate the situation and decide if the
Contract Documents should be modified. If the Contractor "could not reasonably have
been expected to be aware of" the Underground Facility, the Contractor will be entitled
to an increase in price or time to the extent attributable to the changed conditions.
Paragraph 4.3 of the General Conditions in dealing with Underground Facilities places
on the Contractor a much greater risk of the unknown than in GCD '4.2. As explained
above, this is because the information and data with respect to Underground Facilities
is within the peculiar knowledges of the owner of the Underground Facilities, who is
the source of all data in this regard that is provided to the Owner, the Engineer, and
the Contractor. Neither the Owner nor the Engineer should be placed in a position of
vouching for the accuracy or completeness of what has been provided (see GCD
14.3.1.1). If something is amiss, the Contractor has the same remedies against the owner
of the Underground Facility as the other parties have. The Contractor's rights to request
an adjustment in price or time because of an inaccuracy or difference as to an Under-
ground Facility is contingent upon his being able to prove that he "could not reason-
ably have been expected to be aware of" the inaccuracy or differing conditions. If the
parties are not able to agree on this pOint, it is to be referred initially to the Engineer
for resolution.
Note also that at all times during construction, the Contractor has full responsibility
for locating, and for the safety and protection of, all Underground Facilities (see
GCD 14.3.1.2 and 4.3.2). The procedure for notice to and review and redocumentation
by the Engineer in GCD '4.3 is similar to that contained in GCD '4.2.
All of these matters are addressed at I 14, which has an important bearing on the
provisions of GCD '4.2 and 4.3. There is a detailed discussion at SC "4.2 and 4.3 which
contains such an helpful analysis of the issues raised that it would have been quoted
verbatim here were it not included in the full text of the Supplementary Conditions
which appear in the Appendix. Particular attention is directed to the language sug-
gested for use when identifying "technical data" contained in reports of examinations
and tests.

c. Reference Points

The provisions of GCD '4.4 in respect of the Owner's obligation to establish reference
points for construction complement those of O-E '3.5. This service is not usually part
of the Engineer's Basic Services. If the Engineer is requested to make engineering
surveys and to do staking to enable the Contractor to proceed with the Work, it would
be considered an Additional Service under O-E 12.1.11.

6. BONDS AND INSURANCE

a. Performance and Payment Bonds

The bonds referred to in GCD '5.1 are Performance and Payment Bonds. The latter
bond is sometimes referred to as the labor and Material Bond. The Contractor is
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 75

required to provide both of these in an amount at least equal to the Contract Price
unless there is a stipulation to the contrary, which should appear in SC 'S.1. Cross-
reference is made at I '17 to these requirements. It is considered good practice to
include in the Project Manual samples of the types of bonds that will be required. The
EjCDC, in conjunction with the AlA, AGC, Surety Association of America, and other
societies, have recently developed new forms of Performance and Payment Bonds
which are more comprehensive than the forms customarily used heretofore. 34 The
matter of the Contractor's selecting a surety that is acceptable to the Owner is ad-
dressed in GCD 'S.1, but SC ,S.1 discusseS the possibility of prequalifying proposed
sureties or accepting the apparent successful bidder's surety prior to giving the Notice
of Award.

b. Liability and Property Insurance in General

i. It has been the custom for many years that the liability insurance in respect of all
aspects of the Work is to be purchased and maintained by the Contractor because he
is in charge of the Work, and the property insurance on the Project as it is constructed
is to be maintained by the Owner because he usually owns the land on which the
Project is being built and acquires title to the improvements thereon (i.e., the Work)
as they are completed. This is the approach followed in the EjCDC Construction Re-
lated Documents (and also in the AlA's), but it is recognized that, particularly in certain
types of Projects designed by Engineers, it is possible to vary this approach and
provide that both liability and property insurance will be procured by the Contractor.
In ot~er Projects a custom has developed whereby both liability and property insurance
is to be procured by the Owner; this is referred to as "wrap up" insurance. There are
other approaches and all of them have their merits and drawbacks. It is not the purpose
of this book to analyze the pros and cons of the different approaches to insurance
coverage during construction because there are several quite adequate texts available,
the field and market are constantly changing, and expert advice on these matters is
the province of competent insurance counselors, who should always be consulted.
The discussions at SC nS.3-S.1S are complete and informative. Additional information
is available from the texts referred to in the bibliography contained in SC ,I-D.

ii. Because very few engineering firms are qualified to give advice on matters of
insurance coverage, the EjCDC has developed two forms: one for use by the Engineer
in requesting instructions from the Owner as to the specifics of the coverages to be
called for in the Supplementary Conditions, and the other for use by the Owner in
communicating these instructions to the Engineer for inclusion in the Supplementary
Conditions. 35 It is the Owner, not the Engineer, who should make all decisions as to
types of coverage, amounts, and deductible provisions to be provided.

iii. In GCD '2.7 the Owner and Contractor are required to exchange certificates (or
other proof) that each has obtained the insurance coverages required of him by the
Contract Document. This must be done before any Work is started at the site. In GCD
,S.14 it is stated that if either party is not satisfied with the coverage provided by the
other, he must give the other notice thereof within ten days. Failure to give such notice
constitutes acceptance of the coverages provided as complying with the requirements
of the Contract Documents. This provision has the advantage of encouraging the par-
ties to examine carefully the insurance that is provided (preferably with the advice of
insurance counsel), and it should materially reduce complaints as to the adequacy of
coverages provided, which have been known to arise after a loss has been suffered.
76 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

c. Contractor's Liability Insurance

The provisions dealing with liability insurance coverage to be maintained by the Con-
tractor appear in GCD "5.3 and 5.4 and are explained at SC "5.3 and 5.4. Additionally,
attention is directed at the requirement that the comprehensive general liability insur-
ance is to include completed operations insurance which is to remain in effect for at
least two years after final payment, unless changed as indicated in the last paragraph
at SC '5.3. All liability insurance is to remain in effect until final payment (unless a
change is authorized in the Certificate of Substantial Completion (see GCD '14.8 and
comment at section 14.d.ii of this chapter), and also at all times when the Contractor
may be correcting, removing, or replacing defective Work. Monitoring the Contractor's
compliance with these latter provisions is not part of the Engineer's Operational Phase
services, and Owners should not expect their Engineers to do so.
Contractual liability coverage called for in GCD '5.4 extends to liability assumed by
the Contractor under GCD ,6.30 in particular, but also under any other provision of
the Contract Documents in which the Contractor has undertaken to assume respon-
sibility for matters for which the law does not normally make him responsible (see, for
instance, GCD "6.12 and 6.16 and language suggested in SC ,7.5).

d. Owner's Liability Insurance

Se~ comments re GCD '5.5 at SC '5.5.

e. Property Insurance
i. Property insurance is dealt with in GCD "5.6-5.13, and the extensive comments
at SC '5.6 et seq. are important to their understanding. Note that the insurance is to
include the interest of the Engineer and his consultants in the Project. 36 Note also that
this insurance is to be written on an "all-risk" basis. Bear in mind, however, that while
"all-risk" coverage includes many more risks than the conventional fire insurance with
extended coverage, vandalism, and malicious mischief coverage, it does not cover all
risks. If coverage against the risk of a particular peril is desired, this should be dis-
cussed with an insurance counselor and an appropriate provision included in the
Supplementary Conditions where necessary.

ii. In GCD 15.8, wherein the matter of waiver of rights is discussed, it is provided
that the Owner and the Contractor waive all claims each may have against the other
to the extent that claims are covered by the property insurance provided and also to
all claims that either may have against any Subcontractor, the Engineer, or Engineer's
consultants. Waivers are required by all Subcontractors (see GCD '6.11) and by the
Engineer and his consultants. The advantage of such waiver provisions is discussed at
SC '5.11. It should be noted that each insurer is likely to have his own requirements
about the permissibility and effectiveness of such waivers; these matters should be
reviewed with insurance counsel in each case.

iii. Paragraph 5.9 of the General Conditions provides that the Owner is not respon-
sible for maintaining property insurance to the extent of the deductible amount spec-
ified to protect the interest of the Contractor, his Subcontractor, and others in the
Work. They can assume this risk on their own or purchase the necessary coverage.
This provision is different from that of the AlA's General Conditions, which makes the
Owner responsible for all losses within the deductible amount (see also comments at
SC ,5.9).
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 77

iv. The provisions of GCD '5.15 deal with certain technical aspects of property in-
surance that are important to understand when the Owner is going to occupy part of
the Work prior to Substantial Completion of all the Work as allowed by GCD '14.10
(see comments under SC '5.15).

7. CONTRACTOR'S RESPONSIBILITIES
a. Supervision
There are no more basic and fundamental statements of the Contractor's duties and
responsibilities than those contained in GCD '6.1. Most of the other provisions of
Article 6 stem from the Contractor's undertaking to "supervise and direct the Work".
The importance of these words is the subject of numerous comments throughout this
book (see in particular sections 3.e and 3.f of the Introduction). It follows logically from
the undertaking to supervise and direct the Work that the Contractor is to be "totally
responsible for the means, methods, techniques, sequences and procedures of con-
struction" (see GCD ,6.1) and for "safety precautions and programs incident thereto'
(see GCD ,6.20). These statements complement those of O-E "1.6.2.3, 1.6.9.2, and 1.6.12
and GCD "9.15 and 9.16, wherein it is stated that the Engineer is not to supervise,
direct, or control the Work and is to have no authority over means, methods, tech-
niques, sequences, and procedures of construction or safety precautions and programs
incident thereto. The AlA's documents carefully adhere to this approach. A good deal
has been written and more spoken about the fact that design professionals are no
longer given the authority (which they had many years ago) to supervise the Work or
to direct or control how it is done; yet, as has been explained above, they do not
possess the expertise to do so and it is most certainly clear that Contractors do not
want them to do so. What is needed, and it is provided in EJCDC documents, is a duty
and responsibility on the part of the Engineer as the Owner's representative with the
necessary associated authority to observe the various aspects of the Work as they are
completed in order to give a greater degree of confidence to the Owner, but not a
guarantee, that the completed Work will conform generally to the requirements of the
Contract Documents and that in performing the Work the Contractor has properly
implemented and preserved the design concept as reflected in the Contract Docu-
ments (see discussion in various subparagraphs under section 7.f of Chapter 1).
Since the Contractor is to supervise the Work, it is quite logical that he should be
required to have a superintendent at the site with the authority to act on the Contrac-
tor's behalf, and this is provided in GCD '6.2.

b. Following Instructions Concerning Construction

In special circumstances, it may be necessary for the Engineer to specify the use of a
particular means, method, technique, sequence, or procedure of construction for the
Contractor's guidance when the Contractor could not be expected to be aware of
certain intricacies or risks involved or to insure a particular result when only one
construction approach will produce the desired result. When this happens, the Con-
tractor is absolved of primary responsibility for any negligence in the design or selec-
tion of the construction approach specified in the Contract Document as is provided
in the next-to-Iast sentence of GCD '6.1. Similarly, it is provided in GCD '6.14.2 that
the Contractor is not primarily responsible for making certain that the Work called for
by the Drawings and Specifications does not violate any law or regulation. The same
approach appears in GCD '6.20, which imposes on the Contractor all the responsibility
for all safety aspects of the Work but absolves him from responsibility for "damage or
loss attributable to the fault of Drawings and Specifications". There is a half-joking
comment that "contractors hire from the neck down" and thus are entitled to follow
78 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

the requirements of Contract Documents blindly. While there may be a scintilla of

truth and some substance in these thoughts, the Contractor will be required to act
reasonably and must bring to the Engineer's attention any conflict, defect, deficiency,
inadequacy, legal violation, or unsafe condition that is involved in or will be produced
by his compliance with the Contract Documents when he is or should reasonably have
been aware of the problem. He is not to be held responsible to detect such deficiencies
in the documentation, but he must review the documents with care and bring to the
Engineer's attention what he finds, knows, or should have had reason to know. Once
again, where there is a cooperative working relationship between the Contractor and
Engineer, these issues should not present a problem. (See comments at section 3.d of
this chapter.)

c. Labor, Materials, and Equipment

The requirement in GCD '6.3 that the Work is to be performed during regular working
hours and without th.e use of overtime is because the Engineer, his resident staff, any
other representatives of the Owner, governmental inspectors, and the like are to have
access to the Work at all times when it is in progress (see GCD '13.2). They must know
in advance if it is to be performed at unusual hours.
The responsibilities of the Contractor in respect of construction equipment, tools,
and temporary facilities, which is covered in GCD '6.4, is included in the discussion
of GCD '4.1 at section 5.a of this chapter.
Compliance with the Supplier's instructions about the application, installation, erec-
tion, cleaning, etc., of the materials and equipment which the Supplier has furnished
is provided in GCD '6.5 which has been included in the discussion of GCD '3.2 at
section 4.c of this chapter.

d. Progress Schedule
The purpose of the progress schedule and the effect of adjustments to it as allowed
by GCD '6.6 are discussed in this chapter at section 3.e.i.

e. Substitute or nOr-Equal" Items

i. The EJCDC believes that if a contract is awarded after bidding, it should be awarded
on the basis of the materials and equipment described in the Drawings and specified
in the Specifications without consideration of possible substitute or "or-equal" items.
Whenever it is specified in the Contract Documents that a substitute item of material
or equipment may be furnished or used by the Contractor if acceptable to the Engineer,
application for such acceptance should not be acted on by the Engineer until after the
Effective Date of the Agreement. The procedure for submission by the Contractor of
any such application and the valuation of the proposal by the Engineer is set forth in
GCD ,6.7. This is intended to encourage genuine suggestions for substitutes which
the Contractor can demonstrate will meet the requirements of the Project and dis-
courage those which do not have the utilitarian value of that specified.

ii. Paragraph 6.7.1 of the General Conditions permits substitutions (unless specifi-
cally noted otherwise) where sufficient supportive information is submitted. The En-
gineer should insist on compliance with each step in the established procedure for
evaluation and acceptance. The Contractor is the one to make the proposal to the
Engineer, not a Subcontractor or Supplier, although they may have initiated the idea
and their input will be essential. The application must bear the Contractor's certifica-
tion that he believes the substitute to be of equal substance and utility. The Engineer
is the one who determines acceptability, and he will be as responsible for the adequacy
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 191D-8 79

and appropriateness of any substitute or or-equal item that he accepts as he would be

if he had included the item in the Drawings and Specifications that are a part of the
Contract Documents. (He may, however, share that responsibility with others who have
proposed the substitute.) Accordingly, the Engineer should insist on the proposal being
accompanied by reliable supporting tests and other information as to proven use under
circumstances simulating the intended use. The several points to be covered by the
Contractor in his application are listed in GCD '6.7.1, and these may be supplemented
in the General Requirements or the particular Specification involved. In evaluating a
proposal, the Engineer will have to consider the effect that acceptance of the proposed
item will have on the Work and whether or not it will necessitate changes in the
Contract Documents to adapt the design to the proposed substitute. The cost and time
considerations involved are also to be evaluated, as well as the availability of mainte-
nance, repair, and replacement service for the proposed item as compared with the
one specified. Many new items of materials and equipment are introduced via the
substitution route. While they may have the advantage of immediate availability and
lower price, it may be that they will not have undergone the test of time. Acceptance
of new material and equipment or the use of established materials and equipment in
new applications is a matter that has always presented problems for design profes-
sionals because of the desire to be progressive and innovative in design, because of
the desire to hold down construction costs, and because of the responsibilities asso-
ciated with acceptance of untried items. 37 A wise Engineer will insist on documented
proof of prior usage (both good and bad) of the proposed item and, in appropriate
circumstances, a special guarantee from the Supplier (see GCD ,6.7.3), which should
be reviewed by the Owner's attorney. Where difficult decisions are involved, he will
share with his Owner the advantages and disadvantages of accepting a proposed sub-
stitute in place of the item specified.
The EJCDC General Conditions differ from the AlA's in this respect since the latter
contain no provisions or procedure for submission and evaluation of proposed sub-
stitutes.

iii. Paragraph 6.7.2 of the GCD deals with proposals by the Contractor in those rare
cases where a particular means, methods, technique, etc., of construction is specified
in the Contract Documents (see GCD ,6.1). Recently the federal government, by of-
fering financial incentive, has encouraged Contractors to find alternate methods of
construction (instead of those specified) without significantly altering the quality of the
facility to be constructed. It is usually left up to the Engineer to pass upon the prac-
ticality and soundness of the alternate approach. Any arrangement of this nature should
be entered cautiously by the Engineer, not only because of the responsibility involved
in acceptance. He also needs to be certain that he is allowed time and funds sufficient
to permit a proper evaluation, that the Contractor will have no claim against him for
refusing an alternate which, if accepted, would have entitled the Contractor to incen-
tive compensation, and that he is compensated fairly for the additional time spent.

iv. Since acceptance of a proposed substitute will have the effect of changing the
requirements of the Contract Documents, it is provided that acceptance is to be evi-
denced by a Change Order or an approved Shop Drawing.

v. Since the Engineer becomes as responsible for the adequacy and appropriateness
for the Project of an accepted substitute as if he had included the item in the Drawings
and Specifications that form part of the Contract Documents, it is proper that his
decision on acceptability should be final, and it is provided in GCD ,6.7.3 that the
Engineer "will be the sole judge of acceptability". A Contractor may be disappointed
80 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

when his proposal is turned down and the anticipated savings on the Work lost as a
result. The quoted language is intended to preclude arguments by the Contractor after
the Engineer has rendered his decision on acceptability. Once again, it is appropriate
to remind Engineers that they cannot afford to act arbitrarily in making decisions on
these matters. Contractors are entitled to fair treatment, which a professional is ex-
pected to provide; there have been successful lawsuits against those who have acted
in a biased and unprofessional manner.

vi. Because it is likely that the Engineer may be required to spend considerable time
in evaluating proposed substitutions and in making changes in the Contract Docu-
ments occasioned by their acceptance, it is provided in GCD ~6.7.3 that the Engineer
is to keep track of his time in rendering such services and, whether or not the proposed
substitute is accepted, the Contractor is to reimburse the Owner for the charges of
the Engineer and his consultants in connection therewith. This provision has its coun-
terpart in O-E "1.6.6 and 2.2.2, which are discussed in Chapter 1 at sections 7.f.vi and
8.b.L

vii. Some practitioners find it desirable to consider requests for substitutions during
the bidding period (in spite of the time constraints involved and effect on other bid-

language included at I '9

ders) and issue Addenda to evidence acceptance. If this approach is followed, alternate
may be used.

f. Subcontractors, Suppliers, and Others

i. The words Subcontractor and Supplier are defined in Article 1 of the General
Conditions, and reference is made to the discussion of those terms at section 2.q of
this chapter.
ii. The right of the Contractor to employ Subcontractors and Suppliers of his own
choosing and for whom he assumes full responsibility under the Contract Documents
(see GCD '6.9) is basic to his business. This right must be weighed against the justified
concern of the Owner and the Engineer in certain special situations that the particular
Subcontractor or Supplier employed be experienced and acceptable. A custom has
developed whereby the Contractor has been required to identify his proposed Sub-
contractors and Suppliers for the major or important parts of the Work and the Owner
and Engineer are given the right to accept or reject those proposed. It appears that
this right is exercised only on rare occasions and much less frequently than it is re-
served. Contractors are strongly opposed to the Owner or Engineer having such rights
except in connection with very special aspects of the Work. There most certainly is no
uniform approach to these matters nor one that has received anything bordering on
unanimous endorsement by the various affected parties. During development of the
1983 edition of EJCOC's General Conditions, which received the endorsement of the
AGC, this subject was one of the most carefully negotiated, and the language of GCO
'6.8, SC '6.8, and I '10 received exhaustive attention. The exact wording of each of
those paragraphs appears in the Appendix; all three should be read in conjunction
with one another and with care. Without repeating the meticulously worded language
there, a few points on the subject of Subcontractors and Suppliers are in order here.
1. Some practitioners prefer to allow qualifications of Subcontractors and Suppliers
prior to the submission of bids, but the time constraints on the Engineer, mechanical
procedures and other intricacies involved require careful study and the approach may
not be permitted under applicable law.
2. Provisions dealing with the acceptance of proposed Subcontractors and Suppliers
between the date of bid opening and the award are discussed at I '9 and SC '6.8. It
is important to remember that the Owner's and Engineer's rights of rejection prior to
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 81

the Notice of Award would apply only to those Subcontractors and Suppliers, trades,
or manufacturers that are specifically identified in the Supplementary Conditions. The
right does not extend generally to the principal or important Subcontractors and Sup-
pliers, trades, or manufacturers as it used to in earlier editions; in fact, it does not
extend to any party that is not specifically identified. This is because the EJCDC feels
that the right should only be reserved and exercised in special cases where the nature
of the Work involved is of special and unique significance to the success of the Project.
3. Where the type of Subcontractor, Supplier, trade, manufacturer, etc., has been
properly identified in the Supplementary Conditions and the Contractor is required
to list and the Owner and Engineer have the right to accept or reject, it is expected
that promptly after the opening of bids the apparent successful bidder will submit a
list of the parties whom he proposes to employ (see SC '2.3 and I ,10.1). Experience
statements and other data with respect to the proposed parties are also to be submitted
(see I "16.2-16.4). It is considered good practice to explain in SC '6.8 as much as
possible of the supporting data that will be required.
4. It is believed the Engineer has a duty to advise his Owner when he has a valid
objection to any proposed Subcontractor or Supplier whose identity the Contractor
has been required to disclose. In carrying out his duty, the Engineer probably will have
a qualified privilege that will protect his confidential communications to his client if
he acts fairly and on the basis of solid facts; but the area is fraught with such legal
pitfalls that the advice of legal counsel should always be sought before taking any
action or refraining from acting.
5. The most controversial aspect of any contractual arrangement dealing with the
acceptance or rejection of Subcontractors or Suppliers is the consequences of rejection
of a proposed party. When the apparent successful bidder is required to provide a
substitute that is acceptable to the Owner and Engineer, will he be entitled to an
increase in the Contract Price attributable thereto? If not entitled to a price adjustment,
will he be entitled to withdraw his bid? If he withdraws his bid, will he sacrifice his
bid security? Will he be allowed to rebid or to appear as a Subcontractor for the next
highest bidder? Will the Owner and Engineer assume greater responsibility for the
substitute's performance than for the party initially selected by the Contractor? These
and any number of related questions must be addressed in the contract language that
deals with this matter. In the comments at I '10, language is furnished that covers
alternate approaches to some of these problems. These alternates present but two of
any number of approaches. It is noteworthy that the comments at I '10 and SC '6.8
have the approval of both the EJCDC and the ACe.
6. If the acceptability of Subcontractors and Suppliers becomes an issue after the
Effective Date of the Agreement, the provisions of CCD '6.8 are applicable. The Con-
tractor may be required by the Owner or the Engineer to change a Subcontractor or
Supplier after the Effective Date of the Agreement but would be entitled to an adjust-
ment in price attributable thereto.
7. When Work is subcontracted, CCD '6.11 preserves the rights of the Owner in
respect of the party performing the Work by requiring that each Subcontractor must
agree to be bound by the terms and conditions of the prime contract.
8. When payment for the Work under the prime contract is on the basis of Cost-
Plus, one of the allowable Costs of the Work is payments to the Subcontractors (see
CCD ,11.4.3). This would include the Subcontractor's charges for overhead and profit,
to which would be added an additional charge of the Contractor for his overhead and
profit on the same Work. To minimize this doubling-up effect, I '10.2 requires the
Contractor to identify the portions of the Work which he proposes to subcontract and
prevents additional subcontracting without the Owner's consent (see also Bid Form
,,5(b) and P, and CCD '11.6.2).
9. The discussion in this chapter at section 6.e.ii concerning property insurance notes
the requirements of CCD '6.11 that Subcontractors give insurance claim waivers.
10. In CCD '6.9 it is stated that no wntractual relationship is intended between the
82 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Owner and Engineer on the one part and the Contractor, Subcontractors, and Suppliers
on the other. The intent is to preclude claims by Subcontractors and Suppliers against
the Owner (and possibly the Engineer) based on rights and duties arising under the
Contract Documents. Such claims have been known to arise when payment has not
been made by the Contractor to his Subcontractors and Suppliers on account of Work
furnished and performed. There is also other language to the effect that in exercising
his responsibilities and authority under the General Conditions as the Owner's rep-
resentative, the Engineer does not assume any duties or responsibilities to any Sub-
contractor or Supplier (see GCD '9.13 and O-E '1.6.12). The EjCDC has taken the
position (somewhat in contrast to the AlA) that the relationships and dealings between
the Contractor and his Subcontractors and Suppliers are for the most part not the
business of the Owner and the Engineer. It is the Contractor who has employed them
and is responsible for their Work (see GCD ,6.9), and he does not want the Owner or
the Engineer butting in. 38 The language of GCD '9.13 and 9.16 and 0-En1.6.12 confirm
that the Engineer is not to become involved in the relationships between the Contractor
and his Subcontractors and Suppliers (although it must be recognized that in some
matters, they will have to deal with one another, but this should always be done in
the presence of the Contractor or his superintendent). While the AlA's General Con-
ditions expressly permit withholding a progress payment from the Contractor because
of his failure to properly pay his Subcontractor and Suppliers, a comparable provision
has recently been dropped from the EjCDC's General Conditions. Further, language
permitting the Owner and Engineer to furnish to Subcontractors and Suppliers infor-
mation as to the amount paid to the Contractor on account of their Work has been
dropped from the 1983 edition of the EjCDC's General Conditions, although possible
wording for this purpose may be found at SC '6.9. If it is desired that in reviewing
Applications for Payment the Engineer is to determine that the Contractor has properly
paid his Subcontractors and Suppliers, this requirement should be recognized in SC
'14.2. Also, any supporting documentation required should be specifically noted there,
because the Engineer no longer has the right to request supporting documentation
from the Contractor that is not expressly called for in the Contract Documents (see
comments at SC ,14.2).

g. Permits, etc.
The allocation of responsibility and costs set forth in GCD '6.13 deserve attention of
the parties.

h. Compliance with Laws

The requirement in GCD '6.14.1 that the Contractor give all notices prescribed by laws
and regulations is important since it might not otherwise be clear who has the obli-
gation to do so. On the other hand, it really should not be necessary to obligate the
Contractor to comply with laws and regulations applicable to the performance of the
Work (but see discussion at section 7.1 of this chapter re GCD ,6.20). Some statutes,
however, do require that specific mention be made of their provisions in the Contract
Documents or even that their texts be quoted verbatim. Where required, this should
appear in SC '6.14 or in a special supplement to the Supplementary Conditions (see
Chapter 6, section 10). It is common practice of some design professionals to single
out certain statutes for notation in SC '6.14, but they obviously cannot mention all
that are applicable to the Work. If the law or regulation does not require that it be
noted or quoted in the Contract Documents, the better practice would be not to do
so. The second sentence of GCD '6.14.1, which relates to the last clause of O-E '3.9,
is important and has been discussed at section 9.f of Chapter 1 (see also comment in
the second paragraph at SC ,6.14). Note that in the representations made by the Con-
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 83

tractor in the Owner-Contractor Agreement, he states that he has familiarized himself

with the laws and regulations applicable to the Work.
Paragraph 6.14.2 of the General Conditions has been discussed at section 7.6 of this
chapter.

i. Taxes
The obligation of the Contractor to pay taxes imposed on him which are applicable
during performance of the Work differs from that of the AlA's General Conditions,
which only requires the payment of taxes legally enacted at the time bids are received.
The presumption of the AlA document is that the Owner is obligated to pay any
subsequently enacted taxes, but apparently no credit is to be allowed to the Owner
for repeal or change of any tax law that might have become effective after bids were
received, nor will it be easy to compute just how much of any tax on the Contractor
should be borne by the Owner when the laws change. The EJCDC document in GCD
'6.13 does, however, use the phrase "applicable at the time of the opening of bids"
in reference to governmental charges and inspection fees.
If the Owner qualifies for state or local tax exemption in the purchase of material
and equipment, appropriate language should be added at SC '6.15 with a proper cross-
reference to the Instructions (see I ,20).

j. Use of Premises

The Contractor must confine his activities to the areas made available by the Owner
(see GCD '4.1 discussed in this chapter at section 5.a) and any additional space he
may acquire on his own. In the 1983 edition of the General Conditions additional
language was added at the end of GCD '6.16 to make clear that if the Contractor
damages property adjacent to the area of the Work, the Contractor will assume re-
sponsibility to the owner of that property and will indemnify the Owner and Engineer
against any claims which are made by any such party on the basis of the Contractor's
performance of the Work.

k. Record Documents
In GCD '6.19 the Contractor is required to maintain in good condition various impor-
tant documents. These are to be annotated to show all changes made during construc-
tion. Experience indicates that Contractors do not pay sufficient attention to the an-
notating. Design professionals should resist the temptation to do it for the Contractors,
particularly because of the liability assumed by undertaking to perform another's ob-
ligations and the possible implication that annotations so made are complete and
include all variations that should be reflected. The marked-up prints, Drawings, and
other data furnished by the Contractor will serve as the basis of the Engineer's prep-
aration of a set of record Drawings (see O-E '1.7.5). It would be unwise to give by
implication or otherwise any assurance that the marked-up set ("as builts", as they are
incorrectly called) is either complete or shows all the variations made during construc-
tion.
Note that the EJCDC's Construction-Related Documents do not indicate who has
responsibility for keeping approved samples, nor do they state for how long the sam-
ples must be kept. It is expected that this matter will be covered in the General Re-
quirements.

I. Safety
i. The Contractor is responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with the Work. Paragraph 6.20 of the General
84 ENGINEERING SERVICE AND CONSTRUOION CONTRAOS

Conditions is the principal place where this obligation is set forth, although as the
discussions above indicate, it has been referred to specifically or by implication in
many other places in the General Conditions. It is the logical conclusion that the
Contractor should be assigned this responsibility-he is to supervise and direct the
Work and is to be in control of the site, and all persons performing the Work are
either to be his employees or will have been hired by him. Because safety is so im-
portant to everyone involved, it is essential that the responsibility for all safety precau-
tions and programs be clearly given to one party with absolute authority to do what
is required and that that party be held responsible for any injury or damage resulting
from his negligent failure to do so. Split authority or responsibility without authority
is not a workable arrangement for such important matters. Paragraph 6.20 states that
the safety precautions are to be taken for the protection of persons and the Work and
also other property at or adjacent to the site, including other structures, utilities, and
Underground Facilities. This latter assignment ties in with the Contractor's responsi-
bilities under GCD '4.3.1.2 "for the safety and protection" of Underground Facilities
and under GCD '6.16 to protect adjacent land and property.

ii. Worker's Compensation laws usually apply to injuries to employees who are
performing the Work. In exchange for elimination of the assumption of risk, contrib-
utory negligence, and other defenses available to the employer, these laws follow the
"no-fault" concept and provide for the payment of a fixed amount of damages to
employees per each different injury suffered regardless of fault or assumed risk. The
fixed amount is quite low in today's market, so injured parties and their attorneys seek
other sources from which to obtain additional damages. Too often the design profes-
sional has been the target of such efforts on the theory that he had a duty in respect
of the safety precautions and programs in connection with performance of the Work,
that duty was for the benefit of the injured party, that duty was breached, and the
breach was the cause of the injury. This is a customary negligence claim. In order to
avoid it, the EJCDC and the AlA in their General Conditions have taken great pains to
eliminate any wording that might possibly give rise to such a duty to the Contractor's
employees and have emphatically stated that safety precautions and programs are not
the design professional's responsibility (see, in particular, O-E n1.6.2.3, 1.6.9.2, 1.6.12
and 7.5.3. and GCD "9.13 and 9.15). They should not be the Engineer's responsibility
since he does not have the right to supervise, direct, or control how the Work is done,
and it is not performed by his employee or those whom he has hired.
Such carefully worded language has proven very helpful to the design professional
in court proceedings. It has not, however, been sufficient in all cases to overcome
contrary language in standard specifications, manuals, and codes of technical societies,
organizations, and associations (see GCD '3.2 and discussion at section 4.c of this
chapter) or contrary activities and behavior undertaken voluntarily by design profes-
sionals which involved them in safety aspects of the Work and thus provide, in the
eyes of the law, a sufficient basis for the creation of a duty by implication that was so
studiously avoided in the contract language. There have been so many serious injuries
and so much money paid in damages to injured parties during construction that design
professionals finally are learning a lesson that safety matters in connection with the
performance of the Work are and should be the responsibility of the Contractor and
that this is an area in which the design professionals should not become involved
directly or indirectly.
Two exceptions should immediately be noted. When a particular aspect of the Work
involves safety hazards or highly technical Work or requires special expertise for safe
construction and the ordinary Contractor could not reasonably be expected to be
aware of the risks, it may be the design professional's duty to warn of the risks he
should be aware of, and at times to specify how they should be handled. Second,
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 85

whenever design professionals are advised to keep clear of safety precautions and
programs, one question in particular is usually raised: "Suppose I observe an unsafe
condition at the site, should I turn my back and walk away?" Of course not. The proper
thing to do is to call the unsafe condition to the Contractor's attention immediately,
but not to take charge or give advice on remedial action.

iii. The right to stop the Work which was given to the Owner and the Engineer in
earlier editions of the General Conditions has been considered by the courts in certain
circumstances to impose a duty to do so when the Work was being performed in an
unsafe manner, and this duty has been held to run for the benefit of injured employees
and third parties. This result was far from what was intended by reservation of that
right. Accordingly, the language of the EJCDC's and AlA's documents have been ma-
terially changed in this respect, as is explained in the discussion of GCD '13.10 at
section 13.c.iv of this chapter). (See also comments re O-E '1.6.3 in Chapter 1 at section
7.f.i i i.)

iv. We have noted that in GCD '6.14.1 the Contractor is obligated by the Contract
Documents to comply with laws and regulations applicable to the performance of the
Work, and we have pointed out that the provisions may be redundant because the
Contractor must to do so anyway. There is a similar provision in GCD '6.20. The reason
for these provisions is much more apparent in GCD '6.20. It is because safety is such
an important issue and also it is essential that the responsibility for initiating, main-
taining, and supervising safety precautions be assigned to some one party with au-
thority, particularly where the provisions of laws and regulations may not indicate who
that party might be.

v. The parenthetical clause at the end of the penultimate sentence of GCD '6.20 has
been discussed in the comments concerning GCD '6.1 at section 7.b of this chapter.
Note that the last sentence of GCD '6.20 recognizes that responsibility for safety
may shift at the time of Substantial Completion, at least as to certain aspects of the
Work.

Reference is made to discussions concerning O-E '3.9 at section 9.f of Chapter 1 and
GCD '6.14.1 at section 7.h of this chapter about the risks inherent in the Engineer's
undertaking to act as a safety engineer or to monitor the Contractor's compliance with
the provisions of various laws and regulations designed to protect persons and prop-
erty from injury. Some engineering firms possess the necessary expertise to qualify
them for acceptance of the assignment, in which case the comments at SC '6.14 are
pertinent.

m. Emergencies

Paragraph 6.22 of the General Conditions emphasizes the importance of quick action
in emergencies, particularly for the safety or protection of persons or property. The
important points to remember here are the requirement for notice to the Engineer
and, if he believes that the consequences of the emergency necessitate a change in
the Contract Documents, the issuance of a Work Directive Change or a Change Order.
This may entitle the Contractor to an adjustment in price or time. The Additional
Services which the Engineer will thus be required to render may, depending upon the
circumstances, be considered Additional Services and entitle him to additional com-
pensation. Note the reference in GeD '10.3 to action taken in emergencies.
86 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

n. Shop Drawings
i. The submission, review, and approval of Shop Drawings is a subject that has
received careful attention since the EJCDC documents were first developed. That at-
tention has been significantly increased as a result of several recent accidents and
court decisions. Certain aspects of the Engineer's participation in the Shop Drawings
process have been discussed in Chapter 1 in connection with his responsibilities under
O-E ~1.6.5 at section 7.f.v. Reference has been made to a recent paper entitled "Focus
on Shop Drawings," wherein there is a very thorough analysis of many of the current
contractual provisions and legal considerations applicable to the procedure of sub-
mission, review, and approval of Shop Drawings. 16 The EJCDC's contractual provisions
appear in O-E '1.6.5, and those in the General Conditions are located primarily in
"6.23-6.28. Because the issues are quite complex and the analysis in the "Focus on
Shop Drawings" paper is lengthy and thorough, it does not appear appropriate to
repeat here all that is said there. Accordingly, the discussions here will touch on the
highlights, with primary reference being made to GCD '6.23-6.28, which are presented
(as they are in "Focus on Shop Drawings") with certain underlinings for emphasis in
the reproduced copy of the General Conditions that is included in the Appendix to
this book.
Since this book first went to press an important ruling has been handed down by
the Missouri Administrative Hearing Commission 39 in a case dealing with the profes-
sional responsibilities of the structural Engineers who were involved in the Kansas City
Hyatt Regency walkway collapse and disaster. Much of the language in that ruling has
a direct bearing on the analysis in "Focus on Shop Drawings", but it is believed that
none of the important conclusions reached or recommendations made by the Com-
mission are in conflict with the comments in "Focus on Shop Drawings"; in fact, some
of them fortify what is said in that paper (see comments in Footnote #39).

ii. Because of the legal exposure entailed in the design professional's participation
in the Shop Drawings process, several writers and practitioners have suggested avoid-
ing involvement entirely, leaving it up to the Contractor to figure out what is called
for, and if he furnishes an unacceptable item, rejecting it at the time of installation.
This approach fails to recognize that the process of submission, review, and approval
of Shop Drawings is here to stay because it has many quite legitimate advantages. It
would be impractical and economically unwise to require a design professional to
prepare his documentation in such detail that no Shop Drawings submittals were
needed. If he were to do so, this would restrict the flexibility and ingenuity of Con-
tractors. The process permits the Engineer to check and clear for purchase at an early
date items with long lead times and to adapt the related aspects of a design to the
specific items that are to be furnished. The Engineer's acceptance of a substitute item
proposed by the Contractor is frequently evidenced by an approved Shop Drawing,
as is provided in GCD '6.7.3.

iii. In calling for Shop Drawings, the Engineer must be careful not to ask for more
submittals than are needed. He should develop a list of Shop Drawings submittals in
conjunction with the Contractor promptly after the Work starts (see GCD n2.6 and
2.9 discussed in this chapter at section 3.e.ii). Time should be allowed for a proper
professional review of all submittals.

iv. The submissions, review, and approval process permits the Engineer to delegate
to the Contractor the responsibilities for developing from generic data provided in the
Contract Documents the details of design for items called for and to submit what he
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 87

can best furnish and provide with his own forces, using his own Subcontractors and
Suppliers. This does not constitute an unprofessional delegation of responsibility be-
cause each submittal is to be reviewed and approved by the Engineer, who in doing
so must be mindful of his responsibilities as a licensed professional (see section 3.b.
of the Introduction). .

v. The review process must be taken seriously, with sufficient time and personnel
devoted to the assignment to permit a professional review. This is because the Engineer
by approving an item covered by a Shop Drawings submittal will be considered as
having stated that that item is as appropriate for the Project's end-result as if the
Engineer had specfically called for it in the Drawings and Specifications that were
included in the Contract Documents. This is true whether the Engineer's action is
described as approval, review, checking, examining, returning without comment, au-
thorization to proceed, not rejecting, or whatever words may be selected. When the
Engineer has had an opportunity to disapprove or reject the item proposed and has
failed to do so, it is believed that the Owner and the Contractor are entitled to assume
an approval by the Engineer, and most certainly the courts will treat the Engineer's
action as such when the item is essential to the integrity of the design concept.

vi. Approval is, however, for a limited purpose. This is because much of the data
contained in Shop Drawing submittals pertains to the fabrication or construction pro-
cess, which is the Contractor's exclusive domain, and it neither relates to the design
concept nor is it in particular response to the information given in the Contract Doc-
uments. The Contractor must check and verify each submittal before passing it on to
the Engineer in order to be certain that the construction-related data is acceptable to
him. A careful Engineer will insist on the Contractor's close adherence to the proce-
dures established. The Engineer's review and approval do not pertain to fabrication-
related or construction-related information that is reflected in the submittal, but only
to that part of the submittal which indicates that the item proposed conforms to the
design concept of the Project and is in compliance with the information given on the
Contract Documents. Hence, the approval is considered limited. Courts have recog-
nized the action of the design professio)lal in reviewing and approving a Shop Draw-
ings submittal is for a different purpose than the Contractor's checking and verifica-
tion. 3

vii. Because a Shop Drawing submittal customarily contains data that should not be
the concern of the design professional, it is firmly believed that approved Shop Draw-
ings should not be considered one of the Contractor Documents. On the other hand,
design-related information in a Shop Drawing submittal that has been approved by
the design professional will be treated as supplementing the requirements of the Con-
tract Documents as provided in GCD '3.5.2 (see section 5.f of this chapter). It is for
this reason also that the General Conditions expressly state that a Shop Drawing ap-
proval does not extend to means, methods, techniques, sequences, and procedures
of construction or to safety precautions or programs incident thereto. Likewise, this is
the reason why most Engineers are quite properly reluctant to use their professional
seals when indicating Shop Drawing approval.

viii. The term design concept, which is used in connection with the Shop Drawing
review and elsewhere in thp. EJCDC documents, refers to the design intent but has
different specific meanings when used in different contexts or applications. The use
88 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

of the term may have been misunderstood, as is explained in the "Focus on Shop
Drawings" paper. 18,39

ix. Experience teaches us that many submittals are not truly responsive to the re-
quirements of the Contract Documents. They contain variations in detail from what is
specified or other subtle differences which are difficult for a reviewing design profes-
sional to detect. In the 1983 edition of EJCDC's General Conditions the language of
GCD '6.25.2 and 6.27 was strengthened to address particularly the Contractor's re-
sponsibility for variations between what is required by the Contract Documents and
what is proposed in a submittal. The Contractor must now call each variation to the
Engineer's attention, and it must receive specific written approval of the Engineer. Note
that the Engineer's approval of a Shop Drawing will not relieve the Contractor of
responsibility for errors or omissions in Shop Drawings or from having performed his
own review and verification as required by GCD '6.25.1 (see also GCD '14.15).

x. Helpful suggestions for the Engineer's stamp and also the Contractor's stamp or
certification of approval are contained in "Focus on Shop Drawings,,,18 which con-
cludes with a list of fourteen suggestions for guidance of design professionals and
others who are involved in the process of submission, review, and approval of Shop
Drawings. The most important points for all parties involved to remember is to take
the process seriously, to recognize separate professional and construction responsi-
bilities associated with the process, and to develop a cooperative working relationship.

o. Continuing the Work

The language of GCD ,6.29 is intended to prevent the Contractor from stopping the
Work while a dispute between him and the Owner is being resolved. Such matters are
to be submitted first to the Engineer and then to arbitration (or to the courts if binding
arbitration is not used). It has proven important to have such a provision in order to
preclude Work stoppages during such disputes.

p. Indemnification
Much has been written and more spoken on the subject of the indemnification pro-
vision in GCD "6.30-6.32, which are quite similar to the language of the AlA General
Conditions although there are slight differences. Statutes have been passed in several
states regulating the extent to which indemnification provisions may run for the benefit
of a design professional. The historical background for the language of GCD "6.30-
6.32 is no longer of current interest, but it is important to understand what the para-
graphs do and do not provide. Contrary to what many people continue to say and
write, no indemnification is required by the Contractor when he has not been negli-
gent. The indemnification provision only applies when the Contractor-indemnitor has
been negligent. If he has been negligent, the law will impose liability on him without
any formal indemnification language. The question is the extent to which liability may
be shared with another.
The difficulty arises where someone else is also negligent, and that is the particular
situation addressed by GCD "6.30-6.32, i.e., when the Owner or Engineer is also
negligent. The law will not require a Contractor to assume the full financial burden of
a loss if he was jointly negligent with another party (unless the other party has no
assets). The courts, in most cases, will not decide which of the two jointly negligent
parties is more negligent than the other, nor will they allocate the responsibility be-
tween them other than on an equal basis (except in states where comparative negli-
gence principles are applied). Those jointly negligent have an equal financial exposure.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 89

The design professionals objected to sharing any liability with Contractor in those cases
where the loss arose from Work performed under the Contractor's supervision and
control and the Contractor had full responsibility for the means, methods, techniques,
sequences, and procedures of construction as well as safety precautions and programs
at the site. In the typical situation, the claimant was an employee of the Contractor
covered by worker's compensation insurance with limited liability exposure for the
Contractor, but there was no worker's compensation limitation of liability available for
the Owner or Engineer. Hence, Engineers and Architects sought indemnification from
the Contractors on the basis that the Contractors were in control of the Work and had
authority to direct how it should be performed, and hence, they were the ones pri-
marily at fault.The Contractors, on the other hand, took the position that some of the
losses during construction might be more attributable to defective design documen-
tation than to the fault of the Contractor; and that certainly was true at times. The
Contractor's insurance carriers steadfastly refused to have anything to do with insuring
against losses resulting from design errors. In fact, many have included language to
that effect in their standard contractual endorsements for Contractors' comprehensive
general liability policies (see GCD '5.4 discussed at section 6.c of this chapter). Hence,
the compromise language was developed. The effect of it is to inpemnify the Owner
and Engineer when there is joint negligence with the Contractor. The indemnification,
however, does not run for the Engineer's benefit where the loss is the result of lithe
preparation or approval of maps, drawings, opinions, reports, surveys, Change Orders,
designs or specifications". Unfortunately, this exclusion pretty well defeats almost all
claims to indemnification that the Engineer may have under GCD '6.30.
One aim of the compromise language was to discourage preparation of separate
indemnification language by various contracting parties and their counsel since the
subject is complex and not widely understood. This effort has failed. There continue
to appear unenforceable, unfair, and unconscionable indemnification provisions in
many contracts which apparently have been prepared by persons not fully versed in
the applicable law. The significance of the language used does not appear to have
been comprehended by the contracting parties. Suffice to say that one should be on
the lookout for such language, particularly language that endeavors to impose indem-
nification responsibility on a party whether or not he was at fault.

8. MULTI-PRIME CONTRACTS
a. General
Because of the increasing number of Projects that are constructed under the multi-
prime contract arrangement, there have been numerous changes in Article 7 of the
General Conditions, which now addresses some of the issues involved in this sort of
arrangement. Others are addressed at SC "7.1-7.5, to which particular attention is
directed. There are, however, many considerations that arise from a multi-prime con-
tract relationship. These must be evaluated for each Project and special provisions
included in the Supplementary Conditions. Only a few have been alluded to in the
EJCDC documents because patterns of customary practice are not yet sufficiently clear.
Because the subject is complex, a great deal of space would be needed to cover what
is being considered by other trade and professional societies.

b. Advance Notice of Others Working at the Site

Paragraph 7.1 of the General Conditions indicates that the Contractor will be entitled
to make a claim for extra time or costs if he believes he has been adversely affected
by the employment of a prime Contractor whose employment was not referred to
initially in the Contract Document. The place to make such reference is in SC '7.1.
90 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

c. Convenant to Cooperate for Benefit of Other Contractors

Each Contractor is obligated by GCD '7.2 to cooperate and coordinate with other prime
Contractors, and each is not to endanger the Work of the others. The last sentence of
GCD '7.2 states that this obligation is expressly undertaken for the benefit of all other
prime Contractors. (lawyers refer to this as the creation of third-party beneficiary rights.)
As a result, each prime Contractor may make a claim directly against any other prime
Contractor for failure to so cooperate and coordinate. It would not be necessary,
therefore, to join the Owner in any such litigation. The Supplementary Conditions, in
SC '7.5, discuss the advisability of precluding any claim against the Owner and the
Engineer by one prime Contractor because of the action or inaction of another prime
Contractor. This paragraph contains specific language that may be used for this pur-
pose.
Note that while the several prime Contractors may thus be given access to direct
legal proceedings against one another because of delays, defects, or deficiencies in
the Work of the others, the Engineer is to be kept abreast of any such disputes (see
GCD ,7.3). This stipulation is included because of the possible effect of disputes on
the completed Project, not to impose on the Engineer any obligation to resolve the
issues that may have arisen between the disagreeing parties.

d. Construction Coordinator

When there are several prime Contractors performing Work at the site at the same
time, it may not be sufficient to require them to cooperate and coordinate their activ-
ities. Scheduling can be difficult, and sharing of construction equipment and temporary
facilities may present problems. The tendency has been to turn to the design profes-
sional for coordination of the activities of the various prime Contractors. This is a
function that few Engineers or Architects are qualified to perform, although many of
them find the money associated with this assignment persuasive. The function involves
having sufficient authority and control over the construction process and over the
several prime Contractors to do the job required; yet, with such authority and control,
there will be associated legal exposure that Engineers and Architects probably do not
intend to assume and which is usually not covered by their professional liability in-
surance (unless an endorsement has been obtained). Accordingly, the EJCDC in its
1983 edition introduced a completely new concept in GCD '7.4 in recognition of the
fact that the relationship between the various prime Contractors and coordination of
their site activities is a complicated and intricate matter requiring special expertise. A
party responsible for such coordination is to be designated in the Supplementary
Conditions. The party who is to have that responsibility and the related authority is
called the "Coordinating Contractor". The EJCDC believes that, except in rare cases,
it is unwise for the Owner or the Engineer to undertake such an assignment. The party
identified may be a "professional" Construction Manager with sole loyalty to the
Owner; he may be a Construction Manager with exposure in respect of the Contract
Price; or he may be one of the prime Contractors. Paragraph 7.4 of the General Con-
ditions introduces this subject. Paragraph 7.4 of the Supplementary Conditions dis-
cusses it in some detail. It is expected that all contractual provisions dealing with these
assignments will appear in the Supplementary Conditions.
This approach differs from that of the AlA's General Conditions, which state that it
is the Owner's responsibility to provide for the coordination among the various prime
Contractors. In such circumstances, the Owner usually turns to the design professional
to provide the coordination services, but GCD '7.4 is intended to prevent this from
happening.

e. Provisions In Owner-Engineer Agreement

services, and in '5

In O-E '3.11 the Owner is obligated to designate a person to provide the coordinating
of the Guide Sheet to that document it is explained that extensive
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 91

revision of the standard documents may be required to adapt them for use when a
Construction Coordinator or Construction Manager is employed. In each of the alter-
nate methods of payment for engineering services, the consequences of a mUlti-prime
contract arrangement and the effect on the Engineer's compensation for Basic Services
are addressed.

9. OWNER'S RESPONSIBILITIES
There is a tendency to overlook or play down the Owner's responsibilities during
construction (except his obligation to make progress and final payments) and to con-
sider the relationship during construction as one between the Contractor and the
Engineer acting on the Owner's behalf. That should not be the case, because the
Engineer is not a party to the Owner-Contractor Agreement, he may act on the Owner's
behalf only to the extent provided in the Contract Documents, and his authority may
not be extended further without written consent of the Owner and the Engineer (see
GCD '9.1 as well as O-E '1.6.1). As a ready reference, Article 8 of the General Conditions
identifies the more important covenants which call for specific action to be taken by
the Owner.

10. ENGINEER'S STATUS

a. General
The status of the Engineer during construction is explained in Article 9 of the General
Conditions. The language in several of the paragraphs follows very closely that of the
O-E Agreement, which, as noted above, refers specifically to the 1983 edition of the
General Conditions. It is important that the Engineer's duties during construction not
differ from those provided in the O-E Agreement without the Engineer's consent and
additional compensation where appropriate. While not actually a party to the the
Owner-Contractor Agreement, the Engineer may be treated as having acceded to and
accepted the duties and responsibilities assigned to him in the General Conditions
when he acts as the representative of the Owner during construction. Accordingly, a
wise Engineer will pay as careful attention to the language of the General Conditions
as to that of his agreement with the Owner. During construction, the Engineer acts on
behalf of the Owner-as his representative-to the extent provided in the Contract
Documents (see GCD 19.1), and his visits to the site are on the Owner's behalf and for
his benefit (see GCD 19.2), not for the benefit of any other party (see GCD 19.13 and
O-E '7.5.3).

b. Visits to the Site

The duties, responsibilities, and authority of the Engineer during his visits to the site
while the Work is in progress have been discussed in great detail in connection with
the provisions of O-E '1.6 and particularly O-E n1.6.2.1 and 1.6.2.3 at section 7.f.ii of
Chapter 1, to which particular reference is made. The extent and limitations of those
duties, responsibilities, and authority is expressed in GCD n9.2, 9.15, and 9.16 using
substantially the same language as is used in the O-E Agreement, although the state-
ment is more comprehensive in the O-E Agreement than in the General Conditions.
This is because it was written a year later, and, since the Engineer's services during
construction at the site are rendered for the Owner's sole benefit (see GCD '9.13 and
O-E '7.5.3), it is logical that the explanation of these relationships be more compre-
hensively stated in the O-E Agreement. The O-E Agreement provides in O-E '1.6.2.1
that the Engineer is obligated to furnish the services of a Resident Project Represen-
tative at the site during construction as part of Basic Services, whereas when GCD '9.3
was written these services were considered optional and to be treated as Additional
Services. The statement of the duties, responsibilities, and limitations of the Resident
92 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Project Representative's authority is to be included in the Supplementary Conditions.

The most important points to remember about the Engineer's visits to the site during
construction are that because the ~ngineer does not purport to possess the expertise
of a contractor, he is not to supervise, direct, or control the Work. His visits to and
observation of the Work (and those of his resident staff) are limited by the constraints
of time and money and the numbers of persons assigned to the task, which are con-
trolled by the Owner's willingness to pay for such services. His responsibilities are
correspondingly limited. His efforts are not directed at how the Work is performed,
but toward the "completed Work". He cannot and does not guarantee that the Con-
tractor's furnishing and performing the Work will be precisely in accordance with the
Contract Documents. One may note that these point~ are all negative in nature; this
is because so much more has been expected of a design professional during construc-
tion than he is prepared or qualified to undertake. It is, however, equally important
to remember what it is that the Engineer does undertake to do on the Owner's behalf
during construction, because his services can be extemely valuable. His services may
be limited, but they are of vital importance to the completion of a successful Project
from the Owner's point of view and also the Contractor's. These points are extensively
analyzed and emphasized in the comments appearing in Chapter 1 at section 7.f.

c. Interpretations and Clarifications

Issuing interpretations and clarifications of the Contract Documents, which is called

for by GCD '9.4, is one of the Engineer's most important functions and one on which
Contractors may frequently rely. These services are discussed at section 7.f.iv of Chap-
ter 1, where the corresponding provisions of O-E '1.6.4 are analyzed. A few additional
points are noted here for emphasis.
The interpretations and clarifications are to be in writing and consistent with or
reasonably inferable from the overall intent of the Contract Documents (see discussion
concerning GCD '3.2 in this chapter at section 4.a). Written interpretations and clari-
fications issued by the Engineer are some of the ways whereby the requirements of
the Contract Documents may be supplemented or minor variations therein authorized
(see discussions concerning GCD '3.5.3 at section 4.f of this chapter). Since exercise
of the power given to the Engineer to supplement the requirements of the Contract
Document, even when properly and fairly exercised, may have an adverse affect on
the Contractor, he is given a chance to request a price or time adjustment if he believes
that to be justified.

d. Field Orders

By issuing a Field Order under GCD '9.5, the Engineer may make minor variations in
the requirements of the Contract Documents which are not intended to affect price
or time. These will be binding on the Owner and the Contractor, but if the Contractor
believes that a Field Order justifies an increase in price or time, he may request it.
Field Orders must be consistent with the overall intent of the Contract Documents,
and under GCD '3.5.1 a Field Order is one of the means whereby the requirements
of the Contract Documents may be supplemented. A Field Order does not have to be
supported by a subsequently issued Change Order.

e. Rejecting Defective Work

One of the purposes of the Engineer's visit to the site relates to monitoring the quality
of the Work as it progresses. Article 13 deals with matters related to the quality of the
Contractor's Work. In GCD '13.1 the Contractor warrants to both the Owner and the
Engineer that the Work will be in accordance with the Contract Documents and not
defective. The Engineer is given the right in GCD '9.6 to reject any Work that he
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 93

considers defective (see also O-E '1.6.3 and discussion in this chapter at 7.f.iii). With
that right, there is a corresponding duty to be observant during his visits and through
the eyes of his resident staff to detect defective Work. As we have seen, there is no
assurance that every aspect of the Work has been, will be, or can be observed or
checked for defects, but the Engineer most certainly must check very closely for defects
in the key and essential aspects of the Work as they progess and as they are completed.
There is no clear line to delineate the extent to which this observing and checking
must go because the duty will vary by Project, type of Work, stage in which the Work
may be, and other considerations. It is clear, however, that the observing is something
less than inspecting (see discussion at section 13.b of this chapter). It may be that as
a result of his observations, the Engineer concludes that some aspect of the Work
should be uncovered, further examined, or specially tested. The Engineer's right to
order that this be done is covered in Article 13. If the Work is defective, the Owner is
given certain rights under Article 13, including the right to stop the Work, to have it
corrected, or to accept defective Work with an appropriate price adjustment. (See
discussions in this chapter at section 13 re quality of the Work.) It is stated in GCD
'14.7.1 that one of the accepted reasons for the Engineer refusing to recommend a
progress payment is that the Work is defective. All of these provisions relate to the
quality of the Work, the contract requirements, and the Contractor's warranty that it
will not be defective, and to the Engineer's right and duty to reject what, on the basis
of his observations, he believes to be defective. This right to reject is considered
sufficient so that the right of the Engineer to stop the Work, which was formerly
included in earlier editions of EJCDC General Conditions, has been given up, as is
explained in this chapter at sections 7.f.iii and 7.1.

f. Unit Price Determinations

The 1983 edition of the General Conditions deals in more detail with payment for Work
performed on the basis of unit prices. The comments in this chapter at section 11.g,
where GCD "11.9.1-11.9.3 are discussed, cover several aspects of this matter that are
covered in the EJCDC's Contract Related Documents. Engineers who provide construc-
tion phase services when the construction contract contains unit price provisions are
reminded that in making determinations of quantities and classifications of such Work,
they must act in good faith and objectively.

g. Decisions on Disputes
Paragraphs 9.11 and 9.12 of the General Conditions deal with the Engineer's authority
as initial interpreter of the Contract Documents and judge of acceptability of the Work.
The exact language of GCD '9.11 merits careful attention, because the Engineer is not
given authority to decide all disputes between the Owner and the Contractor. It is only
those disputes which relate to the "acceptability of the Work or the interpretation of
the requirements of the Contract Documents pertaining to the performance and fur-
nishing of the Work and claims under Articles 11 and 12 in respect of changes in the
Contract Price or Contract Time". Other claims and disputes between the parties must
be submitted to arbitration under Article 16 if that method for resolutions of disputes
has been selected; otherwise the parties may proceed at law. If the Engineer acts
impartially and renders his decision in good faith on those matters which he is autho-
rized to decide, he will have the benefit of a quaSi-judicial privilege or immunity and
not be liable in connection with any interpretation or decision he renders. On the
other hand, we will probably not have such a privilege or immunity in respect of
interpretations and decisions on other matters. This point is discussed further in Chap-
ter 1 at section 7.f.viii.
The time schedule established for claims submitted to the Engineer merits attention.
They must be made within thirty days after occurrence of the event giving rise thereto,
94 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

and supplemental data is to be submitted to the Engineer within sixty days of such
occurrence unless the Engineer allows additional time for submission of more accurate
data. This is precisely the same language as that of GCD "11.2 and 12.1 in respect of
claims for adjustments in Contract Price and Contract Time. The Engineer's decisions
are to be rendered "within a reasonable time"; no specific deadline is provided be-
cause the time required for response to the claim and further inquiries by the Engineer
cannot be gauged with accuracy in advance. However, a decision by the Engineer is a
condition precedent to the right of the complaining party to pursue such remedies as
he may otherwise have under the Contract Documents (mandatory arbitration under
Article 16) or by laws or regulations in respect of the claim, dispute, or other matter
involved. Once the Engineer has rendered his decision, the parties have thirty days in
which to decide to appeal by whatever process is available or the Engineer's decision
becomes "final and binding" on the Owner and the Contractor (see GCD ,16.2).40
Note that while the Engineer is given a reasonable time in which to render decisions
under GCD '9.11, the parties have the right to proceed directly in arbitration under
GCD 116.2 or at law if the Engineer has not rendered his decision in ten days after all
the evidence in the dispute has been presented to him.
As the discussions in Chapter 1 at section 7.f.viii indicate, when rendering decisions
under such circumstances, the Engineer may find himself in a very difficult position
and one with conflicting interests. This has troubled attorneys for many years. In spite
of these apprehensions, the function is needed and the practice continues, because
in the vast majority of cases design professionals have conducted their activities in this
regard in a highly professional manner.

h. Limitations on Engineer's Responsibilities

i. General: the limitations on the Engineer's responsibilities contained in GCD "9.13-
9.16 follow quite logically from the limitations on his authority, which have been dis-
cussed in detail above. There is very little that is new in GCD "9.13-9.16, since most
of what is stated follows or complements what is in the O-E Agreement and elsewhere
in the General Conditions.
While this limiting language may be the subject of criticism as being too defensive
or too favorable from the Engineer's point of view, the EJCDC believes that it correctly
states what the Engineer does intend; namely, that he should not and will not become
responsible for the Contractor's construction activities (see GCD '9.16). There is a clear
statement to both the Owner and the Contractor that the Engineer is not going to
supervise, direct, or have control over the construction process and that the Engineer's
responsibilities do not extend to means, methods, techniques, sequences, and pro-
cedures of construction or to safety precautions or programs incident thereto (see
GCD '9.15). Further, there is a statement that the Engineer does not have any expressed
contractual duty or responsibility to the Contractor, any Subcontractor, Supplier, or
any other person or organization perfoming any of the Work (see GCD ,9.13); rather,
his duties and responsibilities during construction are to and for the benefit of his
prinicpal, the Owner, for whom he is to act as a representative. While this statement
is about as specific as it can be, one must recognize that, either because of actions
voluntarily undertaken by the Engineer or because of the particular circumstances
involved, a court may impose a duty upon the Engineer for the benefit of the Con-
tractor, a Subcontractor, a Supplier, or another party. There are plenty of cases where
that result has been achieved, and at times quite properly so. For instance, where the
Engineer's decisions on a dispute between his client and the Contractor has been
rendered against the Contractor but not in good faith, a court might properly hold
that the Engineer's action constituted a breach of duty to the Contractor. A similar
result may be achieved if interpretations of the Contract Documents under GCD 13.2
are not rendered in good faith.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 95

ii. Dangerous language in specifications: In spite of statements in the General Con-

ditions that the Engineer is not to supervise or direct the Work, contrary language is
frequently found in Specifications to the effect that the Work will be performed lias
ordered", lias directed", etc. Paragraph 9.14, endeavoring to overcome this unfortunate
but ingrained practice, explains that such terms are intended only to indicate the
Engineer's review of the Work involved for compliance with the requirements of the
Contract Documents. If in spite of this helpful language, the Engineer does in fact
order or direct the Contractor's Work, the result intended by the noted language will
be defeated and the Engineer may find himself exposed to legal liability for performing
or not performing acts which were properly the responsibility of others.
iii. Sureties: At the end of GCD '9.13 it is stated that in carrying out his functions
under the Contract Documents as the Owner's representative, the Engineer shall not
be considered as having undertaken any duty or responsibility to any surety of the
Contractor, Subcontractor, Supplier, or others. This is a very important statement.
Other statements in respect of sureties appear in GCD n10.1, 10.5, 14.12, 14.14, and
15.2. The statements in GCD "9.13, 10.1, and 10.5 are in recognition of the fact that
neither the Owner nor the Engineer, as the Owner's representative during construc-
tion, has any duty under the Contract Documents for benefit of the surety to give
notices of changes in the Contract Documents to the surety, or to monitor progress
payments to the Contractor for the surety's benefit, or to reject nonconforming Work
for the surety's benefit, or for any other reason. If a surety is concerned about the
competence or integrity of his Contractor, that should be a matter between him and
his Contractor; most certainly the surety has not employed the Owner or the Engineer
to monitor the Contractor's activities. Consequently, he should not be entitled to the
benefit of any duty on their part to do so. On the other hand, in GCD '14.12 it is
considered appropriate that notice of final payment be given to the surety prior to
final payment. When the Contractor is in default and the Owner is about to terminate
the Contractor's services, it is most important that notice be given to the surety as is
provided in GCD '15.2. Such notice may in fact be required by the terms of the
Performance or Payment Bond. 34
When a surety bond is provided during construction, it is at times tempting for the
Engineer to deal directly with the surety, even before the Contractor is in financial
trouble or before there has been any difficulty as to the adequacy of the Work. This
is usually done by responding to requests about the status of the Work and at times
giving the surety notice of difficulties being experienced with the Contractor. In such
situations it is quite unwise to open a line of communications with the surety. The
Engineer and the Contractor have no obligation to do so. When one volunteers to do
what is not required, unanticipated legal consequences may follow. While no contrac-
tual obligation exists, a duty may be implied from the voluntary dealings. Experience
indicates that many surety companies examine carefully any possible claims they may
be able to assert against a design professional performing Construction Phase services
on the basis of breach of a duty owed to the surety. Not infrequently, surety companies
take the position that the duties of the Engineer in recommending payments to the
Contractor run for the benefit of the surety company as well as the Owner, so an
improperly recommended payment may not only be a defense on the surety bond but
also the basis for a claim against the design professional. In addition, some Contractors
have been known to take the position that it is improper for design professionals to
deal with their sureties about the status of their performance under a particular con-
tract if, as a result of that dealing, the surety company declines to give additional surety
bonds on further work the Contractor proposes to undertake. More than one design
professional who has reported poor Contractor performance to the surety has found
himself the defendant in a lawsuit brought by the Contractor on the basis of defa-
mation. The relationships between the Engineer and the surety after default of the
Contractor require direct communication with the surety and cooperation to complete
96 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

the Project, but are fraught with pitfalls for the Engineer. If the Owner does not provide
legal advice in such matters, as is required by O-E '3.9, the Engineer should consult
his own attorney; it might be wise to do so anyhow. Note that under clauses (2) and
(4) of O-E 12.2.4, the Engineer is entitled to extra compensation for Additional Services
made necessary by the Contractor's defective Work or his default.

11. CHANGES IN THE WORK, PRICE, AND TIME

a. General

Articles 10, 11, and 12 of the General Conditions deal with changes in the Work, the
Contract Price, and the Contract Time. Any change may be ordered by the Owner, and
the Contractor must comply with the order, subject to two considerations. Since the
ultimate authorization for a change must come from a Written Amendment or a Change
Order which has to be signed by the Contractor, he does have power to refuse to sign
and block the official sanction of a change; however, the Owner, on recommendation
of the Engineer, may direct a change at any time by issuing a Work Directive Change
which the Contractor must comply with (see discussion in this chapter of the terms
Change Order and Work Directive Change ,at section 2.d). Secondly, if the Contractor
(or the Owner) believes that any change entitles him to an adjustment in the Contract
Price or the Contract Time, he may ask for it, and, if the parties are unable to agree
on the amount or extent of any adjustment, a formal claim may be made therefor
under Article 11 or 12 as appropriate. This is as provided in GCD '10.2, which carries
out the intent expressed in the last sentence of the definition of the term Work Directive
Change. All such claims are first to be presented to and ruled on by the Engineer.
Minor variations in the Work not involving a change in price or time may be authorized
by the Engineer under GCD '9.5.

b. The Change Order and the Work Directive Change

The term Change Order is defined in Article 1 of the General Conditions, and the
discussion of that definition appears in this chapter at section 2.d. Remember that
Contract Price and Contract Time can -only be changed by a Change (or a Written
Amendment). A suggested form for use in issuing Change Orders has been prepared
by the EJCDC31 which contains spaces for the signatures of the Owner, Contractor,
and Engineer on the front page and instructions for use on the back as well as a
tabulation for use when the change affects price or time. There is also a new EJCDC
form for use when issuing a Work Directive Change; this is responsive to the language
of the definition of that term in Article 1 and provisions for its use in Article 10, and
instructions and general information about its use appear on the reverse side of the
form. 31
Paragraph 10.3 of the General Conditions serves as a reminder that Change Orders
(or Written Amendments) must be signed in certain circumstances, and its provisions
are directed particularly at those Owners who are reluctant to sign Change Orders
even when recommended by their Engineers. The last of the reasons given is to doc-
ument the effect of a decision by the Engineer on Contract Price or Contract Time
unless an appropriate and timely appeal has been taken.

c. Work in Emergencies

Work furnished or performed by the Contractor that is not required by the Contract
Documents (as variously amended or supplemented) will not be paid for by the Owner,
nor will it entitle the Contractor to an extension of the Contract Time except when the
Work was necessary because of an emergency situation (see GCD '6.22) or the Con-
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 97

tractor was required to uncover finished Work so that it may be observed, tested, or
inspected as provided in GCD '13.9.

d. Procedural Matters
Reference is made in several places in the 1983 edition of the General Conditions to
the right of the Owner or the Contractor to submit a claim for an adjustment in
Contract Price in accordance with Article 11 or Contract Time in accordance with Article
12 (see, for instance, GCD "4.2.6,4.3.2, 7.1, 9.4, 9.5, 11.8, 12.2, 13.9, 13.13, 13.14, etc.).
These situations arise when the parties are unable to agree among themselves on the
amount or extent of an adjustment. These references are to make the intent of the
document clearer by stating accepted operating procedures. The claims are to be sub-
mitted in the first instance to the Engineer for decision in accordance with GCD n9.11
and 9.12. The times within which claims are to be made, supporting documents sub-
mitted, and decisions rendered, as well as other operating procedures, are set forth in
GCD ,,9.11, 9.12, 11.2, 12.1, and 16.2 (see also the discussions at section 10.g of this
chapter). It is important for an Engineer to recognize that, except when he considers
additional time is needed for the presentation of more accurate data in support of a
claim, he does not have the power to deviate from the established procedures, even
when the equities might indicate it is appropriate to do so.
In the discussions in this chapter at section 10.h.iii, reference is made to the fact
that the Contract Documents do not create any duty or responsibility on the part of
the Owner or the Engineer for the benefit of any surety of the Contractor. Paragraphs
10.1 and 10.5 of the General Conditions carry out that idea by stating that if any notice
of a change in the Work, price, or time is required to be given to the surety, it is the
Contractor's responsibility to do so.

e. Value of Change Order Work

When an adjustment in the Contract Price is justified because of changes in the Work,
the value of the additional Work that is required and the amount of credit to be allowed
for any Work not to be furnished or performed is to be determined in accordance
with GCD '11.3. When other provisions are not applicable and the parties are unable
to agree, the value of the additional Work involved is to be determined on the basis
of the Cost of the Work, which is defined in GCD "11.4 and 11.5, and the provisions
for determining the effect of the change on the Contractor's Fee are contained in GCD
'11.6. These provisions have been discussed in Chapter 4 in connection with the Cost-
Plus Agreement at sections 9.b and 9.d.

f. Cash Allowances
The language of GCD ,11.8 dealing with cash allowances is more comprehensive than
in earlier editions, particularly as to items of cost that are and are not covered by the
allowance. Note the suggestion at SC '11.8 about including in the General Require-
ments a schedule of allowances and specific allowances in the applicable divisions of
the Specifications. Special details as to bid pricing and cash allowance should appear
in the Instructions.

g. Unit Price Work

The definition of the term Unit Price Work first appeared in the 1983 edition of EJCDC's
General Conditions (see section 2.u of this chapter), and the provisions dealing with
the subject have been expanded in EJCDC's Construction Related Documents, espe-
cially in GCD ,11.9 and at SC '11.9. Particular reference is made to the comments in
the Supplementary Conditions.
98 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

When the unit price basis is to be used as a means for determining payment to the
Contractor, it is customary to include in the Bid Form furnished to prospective bidders
estimated quantities for each unit prke item, and it is specifically noted in GCD '11.1.9
that these quantities are not guaranteed. The following is quoted from ~K of the Com-
mentary to EJCDC's Suggested Bid Form:29

If Unit Prices are requested, whether it be a unit price bid or in connection with a
stipulated contract sum, appropriate guidance for completing the Bid Form should
appear in the Instructions and details with respect to units should be included in
the Supplementary Conditions, General Requirements or appropriate sections of the
Specifications. Clearly identify each unit price item. Provide an estimated quantity
for each item as defined or indicated in the Specifications. Note in Bid Form that
estimated quantities are not guaranteed and are solely for the purpose of compari-
son of Bids and determination of initial Contract Price. Read specifically ~11.9 of
General Conditions and SC-11.9 of Supplementary Conditions.

It is provided in GCD ~11.2 that the Contract Price may only be changed by a Change
Order (or a Written Amendment); accordingly, when Unit Price Work is to be per-
formed, it is explained in GCD '11.9.1 what amount is to be included in the initial
Contract Price on account of the Unit Price Work. It is also provided in GCD ~11.9.3
that if the actual quantity of an item of Unit Price Work differs "materially and signif-
icantly" from the estimated quantity, the Contractor may make a claim for an adjust-
ment in the Contract Price. As is pointed out at SC ~11.9, some Owners prefer to use
fixed percentages instead of the words materially and significantly, in which case al-
ternate language has been provided. Determinations of quantities and classifications
of Unit Price Work are to be made by the Engineer in accordance with GCD ~9.10. His
decision on these matters is either to be final and binding (see alternate language in
SC ,9.10) or subject to appeal if an appeal is taken within ten days of the Engineer's
decision, which is what the language of GCD '~10.9 and 16.2 now provides.
When progress payments are to be made on account of Unit Price Work, the Sched-
ule of Values will probably not be applicable, and it is provided in GCD ~14.1 that such
payments will be based on the number of units completed. It is recognized in GCD
~14.4 that a final determination of quantities and classifications will have to be made
subsequently.

h. Acts of God

Paragraph 12.2 of the General Conditions permits an extension of the Contract Time
because of events which have delayed the Work that are not attributable to the Con-
tractor's fault. These are usually referred to as acts of God. It is important to note here
that an extension of time may be allowed to compensate for time lost due to such
delays, but that no change in the Contract Price will be allowed.

12. WARRANTIES AND GUARANTEES

A very basic and all-important warranty and guarantee is made by the Contractor in
GCD '13.1 that "all Work will be in accordance with the Contract Documents and will
not be defective". Remember that defective is a defined term. This warranty and guar-
antee runs for the benefit of both the Owner and the Engineer, the latter being spe-
cifically intended as a beneficiary thereof even though not a party to the Owner-
Contractor Agreement. This language is of special significance to the Engineer because
it gives him an additional remedy against the Contractor (Le., one for breach of a
warranty) should the Engineer be charged with failing to detect defective Work. Note
that the approach here is different from that of GCD '9.13, which expressly disclaims
any intent that the Engineer's actions or inactions under the Contract Documents are
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 99

to give rise to any duty or benefit to the Contractor.41 Note also the related language
of GCD '14.15, which should further ensure compliance with the requirements of the
Contract Documents; it states that no payment by the Owner, no certificate by the
Engineer, no use or occupancy of the Work, no prior acceptance of any Work, no
approval of a Shop Drawing, no issuance of a notice of acceptability, and no correction
of defective Work by the Owner will constitute an acceptance of Work that is not in
accordance with the Contract Documents. As is stated, the Contractor's obligation to
perform the Work in accordance with the Contract Documents is "absolute" (see GCD
'14.15).
These provisions are fortified by the language of GCD '13.12, which obligates the
Contractor during the year following Substantial Completion to return to the site and
correct or replace Work that is found to be defective. Two points should be emphasized
about this provision. First, the obligation runs for the first year after Substantial Com-
pletion "or such longer period of time as may be prescribed by laws or Regulations
or by the terms of any applicable special guarantee required by the Contract Docu-
ments or any specific provision of the Contract Documents". The undertaking to cor-
rect or replace defective Work during the first year is not a limitation of the Contractor's
obligations in respect of defective Work, nor is it an exclusive remedy provided for
the Owner. It is an additional remedy available to him as explained in GCD '17.4.
Contractors have been known to refer to the language of GCD '13.12 and similar
language in the AlA's General Conditions as the "one-year guarantee" and to take the
position that after that period has elapsed they have no further obligations in respect
to the Project. These arguments have been rejected in recent court decisions. Under
general principles of law, the Contractor's responsibility for any defective Work con-
tinues for the period of the applicable statute of limitations in the state where the
Project is located, and acceptance of the Project by the Owner will not change that
result (unless there has been a specific release as provided in GCD ,14.15).
In addition to the rights and remedies provided by law, other rights and remedies
in respect of defective Work may be available to the Owner by the terms of any special
guarantee or warranty called for in the Contract Documents or other provisions of the
Contract Documents. Suppliers are most reluctant to give special warranties or guar-
antees of their products, and the standard ones they do provide frequently have the
effect of limiting remedies otherwise available to the Owner. Thus, it may be important
for the Owner to have the benefit of a special guarantee of an item of material and
equipment and for the Engineer to call for it in the Specifications, particularly when
specifying a new or untried item or when accepting a substitute item proposed by the
Contractor. Preparation of the wording of special warranties and guarantees is a matter
that ought never to be undertaken by the Engineer; Owner's counsel is the proper
party to whom this aSSignment should be given.
The time period of many warranties and guarantees commences running on the data
of Substantial Completion. If the item is accepted and placed in service prior to Sub-
stantial Completion, the time should usually start running when it is placed in service
(see GCD '13.12, last sentence). If it is an item on the "punch" list, the starting of the
guarantee period should be postponed specifically and in writing. When the certificate
of Substantial Completion is issued, it is expected that there will be a determination
as to when guarantee periods start running (see GCD "14.9 and 14.10 and EJCDC Form
of Certificate of Substantial Completion 42).
An additional warranty and guarantee is made by the Contractor in GCD '14.3 to
the effect that clear title to all Work, materials, and equipment covered by an appli-
cation for payment will pass to the Owner no later than the time of the payment.
It is provided in GCD ,13.9 and in several other places in the General Conditions
that when, because of a mistake, the Contractor is required to bear certain costs (in
this case the cost of uncovering Work that was to be tested before being covered up)
his responsibility extends to all "direct, indirect and consequential costs" including,
among others, "fees and charges of engineers, architects, attorneys and other profes-
100 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

sionals." Once again, if the parties are unable to agree as to the amount of any resulting
adjustment in price or time, a claim may be submitted under Article 11 or Article 12.

13. QUALITY OF WORK

a. Quality Called for by Contract Documents from the Owner's Point of View
There are two principal considerations that determine the quality of the finished Proj-
ect. The first is the design documentation prepared by the Engineer pursuant to the
O-E Agreement. The Engineer's experience, professional sense, and integrity play the
most important part in designing for quality. Economic considerations also have a
significant influence in determining the extent to which good quality may be specified
by the Engineer. We have already noted the importance of the Engineer's discussing
with his client the consequences of specifying an item of lesser quality in order to stay
within the budget. We have also seen that, under O-E '6.2.2.3, the Engineer is given
broad authority in determining the types of materials, equipment, and component
systems and to adjust the general scope, extent, and character of a Project to bring it
within the budgetary limitation (but see also comment re E-AE '6.3.2 at section 9.b of
Chapter 2). Once the Drawings and Specifications have been finalized and are accepted
by both the Owner and the Engineer, there is the matter of constructing the facility in
accordance with the Contract Documents to meet the quality called for therein. This
is the Contractor's responsibility, and he warrants and guarantees that his Work will
be in accordance with the Drawings and Specifications. Experience has taught us that
many Owners and their Projects will benefit from the design professional observing
the "quality" of the Work as it progresses in order to give the Owner a "greater degree
of confidence that the completed work of Contractor(s) will conform generally to the
Contract Documents and that the integrity of the design concept as reflected in the
Contract Documents has been implemented and preserved by the Contractor(s)" (see
O-E '1.6.2 and in particular comments at section 7.f.ii.13 of Chapter 1). As we have
emphasized, this assurance by the Engineer is not a guarantee, but the quoted language
goes to the heart of the assurance that the Owner receives. The best protection that
he can get, of course, rests on the integrity of the Contractor, and no one with expe-
rience in the field can deny that in most cases Contractors have performed their Work
admirably. It is to protect against the others that the Engineer is employed to observe
the Work as it progresses. The Contractor is required to provide proper and safe access
to enable the Engineer and his resident staff to do so (see GCD 113.2).

b. Tests and Inspection

In addition to the Engineer's observations, the Contract Documents, laws, and reg-
ulations may call for certain tests or inspections before the Work may be accepted.
The provisions for this appear in GCD "13.3-13.6. These tests and inspections fall into
three categories: those that are mandated by laws and regulations (see GCD '13.4),
those specifically required by the Contract Documents in addition to what may be
mandated by laws and regulations, and those required by the Engineer when he be-
lieves that Work which has been covered during construction must be uncovered for
special testing or inspection (see GCD '13.9). In the first category, the Contractor is
required to pay all costs in connection with the testing and inspection and, if not
otherwise specified, may select the tester or inspector. In the other categories, the
tester or inspector should be selected by the Owner, acceptable to the Contractor,
and paid for by the Owner. This is to ensure proper objectivity of the tester or inspector
and is in accordance with policy established by EJCDC's parent societies. Although
some may differ, it is considered preferable practice from the Engineer's point of view
that the independent tester or inspector be selected and employed directly by the
Owner and not perform the services under the supervision, direction, or control of
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 101

the Engineer (unless the Engineer is reqUired to or wishes to assume responsibility for
the conduct and results of the testing and inspection). When requiring the uncovering
of Work under GCD '13.9, a wise Engineer will discuss the matter with the Owner.
This is because if, after uncovering and observing, testing, or inspecting the Work in
question, it is determined that such Work was not defective, the Owner might be
required to accept an increase in price or an extension of time because of the uncov-
ering, etc. This consideration should not, however, act as a deterrent to the Engineer's
exercising his rights under GCD '13.9 when he believes it important that further ex-
amination of covered Work be conducted. Note that GCD '13.9 only applies to un-
covering Work for observation, testing, or inspection when the testing or inspection
was not specifically required by the Contract Documents. If it had been specifically so
required or if the Engineer had formally requested that the Work not be covered until
it had been observed, the provisions of GCD "13.6 and 13.B would be applicable.

c. When the Work Is Defective

If, as a result of tests and inspections or on the basis of Engineer's observations of the
"quality" of the Work (see O-E '1.6.2), it is determined that the Work is defective, there
are several courses of action open to the Owner and the Engineer.

i. The Work may be rejected. The Engineer has the right and duty to do this, as we
have seen in GCD '9.6 and O-E '1.6.3 (see also pertinent discussions of those para-
graphs above). This is one of the principal reasons for the Engineer's visits to the site
and the employment of his resident staff. Defective Work is not to be paid for by the
Owner, as indicated in GCD '14.7.

ii. If Work has been rejected, the Contractor must either correct the defect or re-
move and replace the Work with non defective Work, and it is for the Engineer to
decide whether correction or replacement is the acceptable course of action (see GCD
113.11). All costs in connection with correction, removal, and replacement are to be
borne by the Contractor.

iii. It may be that the Owner, with the Engineer's concurrence, will wish to accept
defective Work because the defect is not of a serious nature for the Project's future.
This choice is provided in GCD '13.13, and the Owner is entitled to a credit because
of accepting less desirable Work. The amount of the credit is to be approved by the
Engineer. The mechanics of this choice are spelled out in GCD '13.13.

iv. It may be that the Owner is concerned that because of defective Work, the
completed Work will not conform to the Contract Documents, in which case he may
direct the Contractor to stop the Work until the situation has been remedied, as is
provided in '13.10. Note the specific statement here that this right to stop the Work
does not give rise to any duty on the part of the Owner to do so. This has been
discussed in this chapter at sections 7.1 and 10.e, where it is pointed out that the right
to stop the Work has been greatly limited in recent editions of both EJCDC's and AlA's
General Conditions (see also the language of GCD '14.15).

v. It may be that the Owner has lost confidence in the Contractor's willingness or
ability to correct or remove and replace defective Work in spite of notice from the
Engineer to do so. In such a case the Owner, after appropriate notice, may correct and
102 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

remedy the problem and to the extent necessary exclude the Contractor from the
affected parts of the site. The mechanics involved in the exercise of this choice and a
consequent adjustment in price are explained in GCD '13.14, and it is noted that where
this choice is exercised, the Contractor is not entitled to an extension of the Contract
Time because of interruptions in his Work schedule; however, the Owner is required
to "proceed expeditiously".

vi. It may be that the Owner is so dissatisfied with the Contractor's persistent fur-
nishing and performing defective Work that he wishes to take over the entire job,
completely exclude the Contractor from the site, and terminate the Contractor's ser-
vices, in which case he should proceed under GCD '15.2. Note that this does not
necessarily involve a termination of the contract.

vii. If, prior to final payment, it is apparent that certain parts of the Work are de-
fective and final payment is made, the making and accepting of final payment will
constitute a waiver of all claims that the Owner might have against the Contractor in
respect of the deficiency (as is provided in GCD ,14.16), unless there is a specific
arrarigement to the contrary, which should only be concluded with the advice of Own-
er's legal counsel. This provision is fair to the Contractor, and it is important for both
parties to know that, when final payment is made, all known claims (except those
specifically addressed otherwise) have been taken care of. Claims in respect of defects
appearing after final inspection are not waived. The Contractor's obligations in respect
of these claims are governed by laws and regulations, the provisions of applicable
guarantees (both those contained in GCD '13.1 and those contained in any special
guarantees), and the provisions of GCD '13.12, which has been discussed at section
12 of this chapter.
While much attention as been devoted in the General Conditions to defective Work
because experience has taught the importance of addressing this matter in some detail,
the best preventive medicine to avoid defects in Work is the selection by the Owner
of a competent, dedicated, and thoroughly honest Contractor with an able superin-
tendent on the job and the development of an harmonious relationship of mutual
respect between the Contractor and the Engineer. The successful completion of untold
numbers of Projects is testimony to the fact that these conditions have and can be
met. Note also that in GCD ,14.5 and O-E '1.6.9.1 it is stated that when the Engineer
makes a recommendation of payment, it constitutes a representation by him to the
Owner, based on his observations of the Work, that lito the best of Engineer's knowl-
edge, information and belief, the quality of the Work is in accordance with the Contract
Documents" (with certain exceptions).

14. PAYMENTS TO THE CONTRACTOR

a. General
The locator Guide indicates that terms and conditions dealing with the general prin-
ciples of payment, Applications for progress and final payment, and the justification
for withholding payment are to appear in the General Conditions (with appropriate
supplements and amendments in the Supplementary Conditions or the General Re-
quirements). On the other hand, the specific amounts of the Contract Price and the
retainage provisions are to be included in the Agreement. Article 14 follows this con-
cept. The procedure for submitting Applications for progress and final payment are
explained, as well as the Engineer's responsibility for review and recommendations of
payments (see also SC ,14.2).

b. Schedule of Values
The schedule of values which is established in accordance with GCD '2.9 is to be the
basis for progress payments. It is discussed in this chapter at section 3.e.iii, where
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 103

reference is made to EJCDC's Suggested Form for Application for Payment. 30 The sched-
ule of values will probably not be applicable to payment on account of Unit Price
Work, as explained at section 11.g of this chapter.

c. Submission and Review of Application for Progress Payments

i. The term Application for Payment is defined in Article 1 of the General Conditions
and is discussed at section 2.c of this chapter. The Engineer's responsibility in respect
thereof and his representations to the Owner which are treated as part of a recom-
mendation of payment have been analyzed in the discussion of O-E ~1.6.9 at section
7.f.ix of Chapter 1, to which particular reference is made for an understanding of the
provisions of GCD n14.2, 14.4-14.6, 14.13, and 14.14. The language of GCD ~14.5 on
this point is substantially the same as that of O-E '1.6.9, although the latter has the
benefit of being written two years later. The language of both documents is basic to
an understanding between the Owner and the Engineer on this matter and should be
reviewed most carefully before the O-E Agreement is signed.

ii. The periods of time for submitting Applications for Payment and for the Engineer's
acting thereon have been made more precise in GCD n14.2 and 14.4. The revised
language has been added at the end of GCD ~14.4 to indicate a specific date when
progress payments become due and are to be paid by the Owner, and similar language
appears at the end of GCD ~14.13 in respect of final payment.
The last clause of GCD ~14.2 recognizes that, while the Engineer's recommendation
of payment triggers an obligation of the Owner to pay the Contractor within ten days,
there may be other matters at issue between the Owner and the Contractor to which
the Engineer is not privy or which are not related to his responsibilities under the
Contract Documents. In such a case the Owner might have a setoff against the Con-
tractor that should not be prejudiced by the Engineer's recommendation of payment
(see also similar language at the end of GCD '14.7).
In earlier editions of EJCDC's General Conditions it was provided that Applications
for Payment must be accompanied by such supporting documentation as is required
by the Contract Documents "and as Engineer may reasonably require". The quoted
language has been dropped from GCD ~14.2 as is explained in the discussions at SC
'14.2, and it is now necessary to list specifically in the Contract Documents the sup-
porting documentation which will be required. Also dropped is the requirement that
each Application include an affidavit of the Contractor that previous progress payments
have been applied to discharge in full the Contractor's obligations in connection with
the Work.
When payment is requested on the basis of materials or equipment delivered but
not incorporated in the Work, GCD ~14.2 establishes the procedures to be followed
with the proviso that all the supporting documentation must be satisfactory to the
Owner. It was felt that proper storage and care of and payment for items not incor-
porated in the Work entail consideration as to which others are usually more experi-
enced than the Engineer, although in special circumstances the proper storage of
certain items may be overseen by the Engineer.

iii. The reasons justifying the Engineer's refusal to recommend payment appear in
GCD '14.7. The language is closely coordinated with that in GCD ~15.2, which lists the
various events that constitute defaults by the Contractor and entitle the Owner to
terminate the Contractor's services. In the 1983 edition of the General Conditions a
change was made to exclude from GCD ~14.7 the failure of the Contractor to pay his
Subcontractors or to pay for labor, materials, and equipment. This is in keeping with
the EJCDC's concept (which has been endorsed by the AGC) that in most situations
the Owner and the Engineer should refrain from intervening in the dealings between
104 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

the Contractor and those whom he has employed to do the Work under his supervision
and control. 38 This is discussed at SC '14.7, which recognizes that many Owners may
wish to give their Engineers the right of refusal for this additional reason, but it would
also carry with it a corresponding duty as we have seen. Besides the Engineer's un-
willingness to make representations to the Owner which are included in a recommen-
dation of payment, there are four specific reasons justifying such refusal. These relate
primarily to the Work being defective or to the occurrence of an event which would
constitute an event of default under GCD '15.2, which has a broad application and is
discussed in this chapter at section 15.b.i.

d. Substantial Completion

i. Substantial Completion is a term defined in Article 1 of the General Conditions

which is discussed at section 1.u of this chapter, where reference is made to the
EJCDC's suggested form of Certificate of Substantial Completion. 42 The certificate only
requires the signature of the Engineer, although there is space for the Owner and the
Contractor to sign to indicate their acceptance, as is explained below. Discussions at
SC n1, 14.8, and 14.9 should prove helpful to an understanding of the use of this term
and of the suggested form. They are not repeated here except to note that in exercising
his power to determine the date of Substantial Completion, the Engineer has a duty
to both the Owner and the Contractor to act fairly and with objectivity.

ii. Many events are keyed to the date of Substantial Completion, not the least of
which are the following: a reduction in the retainage when payment is made to the
Contractor (see Stipulated Price Agreement, '5.1.2, Cost-Plus Agreement, "9.1.1.2 and
9.1.2.2, and discussions in Chapter 4 at section 10), the starting of the one-year correc-
tion period under GCD '13.12 and the time period for many guarantees (see discus-
sions at section H.c.vii of this chapter), the starting of many statutory periods of lim-
itations, the date when liquidated damages start to accrue (see O-Kor Agreement ,3.2),
and the date when the Owner may occupy the Project and use it for the purposes
intended and as a result will probably be required to assume responsibility for its
security, operations, safety, maintenance, heat, utilities, and insurance coverage (see
GCD '14.8 and comments re GCD '5.3 at section 6.c of this chapter).

iii. Paragraph 14.8 of the General Conditions sets the procedural steps to be com-
pleted before the Engineer may deliver a definite certificate fixing the date of Substan-
tial Completion. Occasionally, there will be language in the Supplementary Conditions
amending the definition, but the General Requirements should contain all adminis-
trative procedures concerning the issuance of this certificate.
Having been notified by the Contractor that he believes the Work to be substantially
complete, the Engineer must inspect the Project in the company of the Owner and the
Contractor and evaluate their points of view as to whether or not Substantial Comple-
tion has been achieved, and, he must determine for himself the extent of completion.
By such an inspection is intended a more careful review of the Project than is involved
in the customary visits by the Engineer to the site and observations of his resident
staff. The word inspection is used in this context in contrast to the word observation
(which is used elsewhere) to indicate a greater intensity of observation. It involves
reevaluation of the completed (or nearly completed) Project as a functioning whole as
contrasted with observations of the various aspects of the Work in progress under
GCD '9.2 and O-E '1.6.2. It is recognized that by the use of the word inspection a
greater degree of responsibility has been placed on the Engineer, but the EJCDC be-
lieves that the word properly describes the function to be performed. The word in-
spection is also used in GCD ,,14.10 and 14.11 and in O-E '1.6.11, which is discussed
at section 7.f.vii of this chapter.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 105

iv. The Engineer is also to prepare a list (sometimes called the "punch" list) of the
items to be completed or corrected before final payment. It is explained that the
"punch" list is not intended to be all-inclusive and that failure to include an item on
the list does not relieve the Contractor of his obligation to furnish and perform the
Work in accordance with the Contract Documents. The Contractor should realistically
be able to complete all the "punch" list items within the allowed time between Sub-
stantial Completion and final payment as specified in O-Kor Agreement n.1.

v. Substantial Completion contemplates that the Owner will be able to use the
Project or the portion that is substantially complete for the purposes intended and that
the remaining activity of the Contractor will not interfere with that use. In fact, the
Contractor is to be excluded from the area involved (see GCD ~14.9), except to the
extent necessary for him to have access to correct or complete the items on the "punch"
list and any other items that may be identified before final payment. It is, therefore,
necessary to determine who will have the responSibility for security, operation, safety,
maintenance, heat, utilities, and insurance for the areas involved and the effect of
Substantial Completion on the starting of warranties and guarantees. The ultimate
decision in this regard should rest with the Owner and the Contractor. That is the
reason for asking the Owner and the Contractor to sign a certificate of Substantial
Completion indicating their acceptance of the proposed allocation of responsibilities.
Sometimes they cannot agree on the point or may overlook some items of importance.
Accordingly, GCD ~14.8 states that when the Engineer delivers his tentative certificate
of Substantial Completion, the Engineer will make a recommendation as to the allo-
cation of these responSibilities, and, unless the parties agree otherwise, his recom-
mendation will be binding upon the Owner and the Contractor. Earlier editions of the
General Conditions gave the Engineer absolute authority in allocating such responsi-
bilities, but the EJCDC feels that a proper decision is dependent for the most part on
considerations and expertise which the Engineer does not usually possess. If it is
concluded that the Owner will have responsibility for security, maintenance, safety,
etc., after the date of Substantial Completion, a change will be necessary with respect
to the application of the term defective, since it imposes on the Contractor responsi-
bility for correcting defects in the Work after that date and prior to final payment
unless it is specifically assumed by the Owner (see definition of defective and also
GCD '6.20).

e. Partial Utilization
The concept of partial utilization, the mechanics of which are set out in GCD '14.10,
is explained at SC ~14.10. The part of the Work that may be utilized by the Owner
must be "a separately functioning and useable part of the Work that can be used by
the Owner without significant interference with Contractor's performance of the re-
mainder of the Work".
The consequences, particularly to the Contractor, of partial utilization are quite
severe in terms of his activities with respect to the rest of the Work. This thought led
the EJCDC to make provisions for early identification in the Contract Documents of
those portions of the Work which may be subject to partial utilization (i.e., used by
the Owner when substantially complete even though the Project itself is not substan-
tially complete); otherwise, the Owner, Contractor, and Engineer must agree when the
occasion arises that it is appropriate for a part of the Project to be used in advance of
Substantial Completion of the entire Project. While partial utilization usually occurs
when the part of the Work involved is substantially complete and the various steps to
achieving its Substantial Completion have been met, there is also language dealing
with the Owner's taking over operation of a facility that is not substantially complete
but may be separately operated (see GCD '14.10.2).
There may be times when the Contractor does not want the Owner to take over
operation of a part of the Work even though it may have been specifically identified
106 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

for partial udlization in the Contract Documents, or the reverse may be true because
the Owner is reluctant to assume the responsibility involved at the time when the part
is ready for his use. Accordingly, either the Owner or the Contractor may initiate a
partial utilization procedure under GCD '14.10.1; on the other hand, when the part
involved has not been specifically identified in the Contract Documents in advance, it
is the Owner who may initiate the procedure, although partial utilization of any such
a part must be acceptable to the Contractor.
The parties should be mindful of the terms of GCD '14.10.3, which require an en-
dorsement of the property insurance policy for the Project prior to the Owner taking
over occupancy or separate operation of part of the Work (see GCD ,5.15).

f. Final Payment
i. Experience indicates that the time between Substantial Completion and final pay-
ment is sometimes much longer than it should be, and the Contractor's attention may
be diverted from the items on the "punch" list. Accordingly, O-Kor Agreement Article
3 provides a date for Substantial Completion and another date for final completion.

ii. The procedure for final payment is carefully spelled out in GCD "14.11-14.14.
The Contractor's final Application for Payment is to be accompanied by specific sup-
porting data called for by the Contract Documents (usually this appears in the Sup-
plementary Conditions or the Specifications). These are frequently more comprehen-
sive than those needed to support progress payments and would include specific
guarantees, operating and maintenance instructions not previously delivered, certifi-
cates of favourable testing and inspection, and release of liens. The Engineer's obli-
gation with respect to some of these is covered in O-E "1.7.2-1.7.4 and 2.1.12. Since
the procedure for the releasing of liens varies widely from state to state, supplemental
provisions may have to be added to cover local practice. Paragraph GCD 14.12 provides
that lien releases are to be satisfactory to the Owner, who may well need legal advice
as to their efficacy. Obtaining most of the items to be delivered is properly considered
the function and responsibility of the Contractor (his Subcontractors and Suppliers),
although in some cases the Engineer as representative of the Owner may have received
a key certificate of a favourable test or inspection directly from the laboratory or in-
spector. (See discussions re tests and inspections in section 13.6 of this chapter.)
Paragraph 14.12 of the General Conditions contains the requirement that the Con-
tractor must have delivered all maintenance and operating instructions, manuals, or
similar items before he is entitled to final payment. These are to be reviewed by the
Engineer in a general way to see that they are in fact what they purport to be and what
was called for in the Specifications, but his review need not extend to the completeness
or accuracy of the maintenance or operating instructions (see the specific language of
O-E '1.6.10). Where special requirements as to maintenance and operating instructions
or manuals are desired to meet the Owner's particular needs, it is suggested that the
Engineer specify in the Supplementary Conditions or Specifications just what is needed.
However, the Engineer should avoid approving any of the instructions and data so
provided unless he feels qualified to accept full responsibility for the completeness
and accuracy of what has been furnished.

iii. Note that notice to the surety is required under GCD paragraphs 14.12 and 14.14.

iv. The Engineer's right to disapprove of the Application for or to refuse to recom-
mend final payment carries with it a duty to do so under appropriate circumstances.
Paragraph GCD 14.13 provides that the Engineer will give a written notice to the Owner
and the Contractor when he considers the Work "acceptable". This is a sort of certif-
icate of acceptance. Such a certificate should not be confused with the broader certi-
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 107

fications required of Engineers by some Owners (and frequently in publicly financed

work) which have the effect of giving almost complete assurance or a guarantee to the
Owner and the financing agency that the Work has in fact been done in accordance
with the Contract Documents. That in effect would constitute a guarantee by the En-
gineer of the quality of the Contractor's Work and performance. It is contrary to and
goes considerably beyond the specific language of the O-E Agreement (see O-E ~1.6.2.3)
and the General Conditions, and it involves legal exposure the Engineer should accept
reluctantly and only after consultation with his legal and professional liability coun-
selors and negotiations with the client. (See discussion re GCD '14.13 at SC ~14.13.)
The Engineer's certificate of acceptance is also reqUired by O-E ~1.6.11.

v. The Engineer wi", of course, be interested in how his Project functions after
occupancy and use by the Owner and may make visits to the site and valuable obser-
vations on how materials and equipment are serving their intended purposes. The
customary post-construction services are now considered part of Basic Services and
are referred to as Operational Phase services (see O-E ~1.7 and discussion in Chapter
1 at section 7.g and in Chapter 2 at section 5.c).

vi. Paragraph 14.14 of the General Conditions provides a special remedy for the
Contractor where final completion of the Work is delayed for reasons that are not his
fault.

vii. In the discussion at s~ction 12 of this chapter about the Contractor's warranties
and guarantees of the Work, the very carefully worded language of GCD '14.15 was
reviewed. In that paragraph it is stated that the Contractor's obligations to perform
and complete the Work in accordance to the Contract Documents is "absolute", and
none of a series of specifically enumerated actions or inactions on the part of the
Owner or the Engineer wi" relieve the Contractor of that obligation or constitute an
acceptance of defective Work. There is one exception which is provided in ~14.16,
where it is stated that the acceptance of final payment constitutes a waiver of a" known
claims that the Owner and the Contractor may have against each other in respect of
the Work. This applies to claims in existence at the time of final payment, not to those
which may arise later on. Final payment, therefore, constitutes a specific release of
known claims. If any claims are known, the Engineer should not approve final payment
unless the Owner or the Contractor agree in writing to waive the claims that they know
of or otherwise determine how the issues are to be settled. The advice of Owner's
attorney may be indicated in such situations.

15. SUSPENSION AND TERMINATION

a. Suspension

Paragraph 15.1 of the General Conditions gives the Owner the customary right after
appropriate notice to suspend a" or part of the Work without giving any reasons. The
suspension may last for no more than ninety days; if it extends longer, the Contractor
is given certain rights under GCD ~15.5. In the event of a suspension, the Contractor
is allowed an increase in price or an extension of time to the extent "directly attrib-
utable" to the suspension.

b. Termination by Owner
i. Customary "default" language is contained in GCD '15.2, where there is an item-
ization of various events that wi" give the Owner the right to terminate the Contractor's
108 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

services. The first five of these events deal with the Contractor's inability to pay his
debts as they mature and his becoming subject to the provisions of bankruptcy, in-
solvency, and other similar laws affecting the enforcement of creditors' rights. The last
four of the events are related to the Work under the contract and include failure to
perform the Work in accordance with the Contract Documents, failure to adhere to
the progress schedule, and "disregard of the authority of the Engineer". This last pro-
vision is unique to the EJCDC's General Conditions, but it should prove valuable in
those unfortunate situations where the Engineer acting on the Owner's behalf and the
Contractor have not been able to develop any sort of harmonious or practical working
relationship.
Note that upon the occurrence of any of the enumerated events and after notice to
the Contractor and his surety, the Owner's rights arise and they are not automatically
defeated if the default is cured by the Contractor. More important, however, is the
fact that this does not involve a termination of the Agreement; rather, it is a termination
of the Contractor's services, an absolute exclusion of the Contractor from the site, and
a taking of possession of all the Work, materials, and equipment as well as all of the
Contractor's construction equipment, tools, etc. (similar to the Owner's right under
GCD '13.14). It is very difficult to provide effective remedies for an Owner under such
circumstances, and some documents have devoted several pages to this matter without
an appreciably better result. There is little doubt that attorneys for both parties and
the surety and possibly the bankruptcy court will be involved when the Owner exer-
cises his rights under GCD '15.2. The costs (direct, indirect, and consequential) of the
Owner's completing the Work are to be charged to the Contractor as explained. Note
that while these costs are to be approved as to reasonableness by the Engineer (and
probably the surety who will be paying for them will have some input), the Owner is
not required to obtain the lowest price for the Work performed. If a surety is involved,
the provisions of the Performance Bond 34 may also have an effect on these rights and
may even be controlling for practical purposes. Note also that GCD '15.3 makes it
clear that the exercise by the Owner of his rights under GCD '15.2 will not defeat or
adversely affect any other rights or remedies available to the Owner. This follows the
approach stated in GCD ,17.4.

ii. Even if the Contractor is not in default, the Owner may decide to abandon the
Project and terminate the Agreement in accordance with GCD '15.4 without giving any
reason for his action, and the only consequences to him for doing so are to pay for
all Work completed as well as the Contractor's expenses sustained plus reasonable
termination expenses which include direct, indirect, and consequential costs.

c. Termination by the Contractor

Under GCD '15.5 the Contractor is given (in addition to such other rights and remedies
as he may have (see GCD ,17.4) two important rights when he is not at fault. There
are several enumerated events the occurrence of which entitle him to terminate the
Agreement and recover from the Owner for all Work completed plus the Contractor's
expenses sustained and reasonable termination expenses (but direct, indirect, and
consequential costs are not specifically mentioned). In addition, when the events in-
volved are the Engineer's failure to act on an Application for Payment or the Owner's
failure to make payment due (a thirty-day grace period is allowed in each case), the
Contractor, after notice, may stop the Work until he is paid all that is owned. It is
specifically stated, however, that this latter right will not overcome the Contractor's
obligation under GCD '6.29 to carryon the Work during disputes and disagreements
with the Owner.
 STANDARD GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT, NO. 1910-8 109

16. ARBITRATION
The Engineer, as the initial interpreter of the requirements of the Contract Documents
and judge of the acceptability of the Workthereunder, is in the first instance the arbiter
of any claims, disputes, and other issues between the Owner and the Contractor re-
lating to the acceptability of the Work or the interpretation of the requirements of the
Contract Documents pertaining to the performance and furnishing of the Work (see
GCD '9.11 and O-E ,1.6.4). Remember, however, that the Engineer is not the arbiter
of all claims and disputes between the Owner and Contractor that arise out of the
Contract Documents. The Engineer's decisions may be appealed to an arbitration panel
if the appeal is taken within the number of days specified; otherwise, the Engineer's
decisions will become final and binding on the Owner and the Contractor (see GCD
,16.2). Article 16 of the General Conditions deals with formal arbitration of claims and
disputes appealed from the Engineer's decisions as well as disputes over which he
does not have initial jurisdiction. This Article states that such matters shall be decided
by arbitration under the Construction Industry Arbitration Rules of the American Ar-
bitration Association. With two notable exceptions, the same language appears in
O-E '7.5 re disputes between the Owner and the Engineer and in corresponding par-
agraphs in the E-A and E-AE Agreements. The first exception is that in O-E '7.5 there
is a limitation of $200,000 in the amount of any claim or counterclaim that is subject
to arbitration, and the second is a restriction against joinder in the arbitration pro-
ceedings of any person not a party to the agreement involved. The monetary limitation
is experimental and does not appear in the arbitration language of the General Con-
ditions. Many of the comments made at section 13.f of Chapter 1, where the arbitration
provisions of the O-E Agreement are discussed, have equal application to the provisions
of Article 16 of the General Conditions and for brevity are not repeated here. Note
that, as written, mandatory arbitration will apply to disputes that arise after final pay-
ment except those waived by fi nal payment.
The decision of the arbiters appointed by the AAA is to be final and binding and
will be so treated by the courts in many states. Most states will enforce an agreement
by the parties to submit their disputes to arbitration, but some states will do so only
if the parties have agreed to arbitrate after the dispute has arisen. Local legal counsel
should be consulted for any necessary modification of these provisions to adapt them
to particular state law. Many persons feel that the obligation to accept binding arbi-
tration is too severe or unwise, and the same point of view may be shared by particular
Owners and Contractors. Before the Bidding or Negotiation Phase, a prudent Engineer
will seek advice from his client or his client's attorney on the matter of including
provisions for binding arbitration in the Contract Documents. The arbitration proce-
dures developed by the Construction Industry Arbitration Committee of the American
Arbitration Association have been thought out carefully and are well tested. They are
recommended to their respective memberships by representatives of the Associated
General Contractors of America, American Institute of Architects, American Society of
Civil Engineers, Council of Mechanical Specialty Contracting Industries, Inc., American
Consulting Engineers Council, National Society of Professional Engineers, and Con-
struction Specifications Institute. If the recommended provisions are not acceptable
to the Owner, other arbitration provisions can be included or the entire Article deleted.
Such a deletion can be accomplished without making other changes in the documents,
since Article 16 appears on a separate page that may be torn out of the document, as
is explained in SC ,16.40
Since the Engineer is not a party to the Agreement between the Owner and Con-
tractor, it is well to remember that he is not bound by an agreement to arbitrate
contained in Article 16 of the General Conditions. Accordingly, in most jurisdictions
the Engineer could not be joined against his will in the arbitration of a dispute between
the Contractor and the Owner, and any claim by the Contractor against the Engineer
or by the Engineer against the Contractor would have to be made through the courts
110 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

of law unless both agree to settle by arbitration or otherwise. The inability of the Owner
and the Contractor to bring the Engineer into arbitration of claims and disputes be-
tween them is very frequently an important legal benefit to the Engineer; he will be
wise, therefore, to avoid any action during the Construction Phase that would tend to
indicate or imply that he was a party to the O-Kor Agreement, as well as any action
contrary to the express limitations on his authority contained in GCD '9.13-9.16. Recent
court decisions based on language of earlier editions of the documents have required
joinder of the Engineer in arbitration disputes between the Owner and Contractor,
especially where the arbitration language of the O-E Agreement is identical with that
of the General Conditions. The present limitation in the O-E Agreement against joinder
with others not a party to the contract was specifically intended to prevent such joinder
(see O-E '7.5.4) but has been circumvented by some courts. Nevertheless, this is a
significant reason for using the arbitration language of the EJCDC documents or com-
parable language in the AlA documents. Those who object to arbitration as a means
of settling such disputes frequently overlook this advantage. Owners may consider it
a disadvantage.
In addition to the arbitration provisions covered in Article 16 of the General Con-
ditions, it has recently been suggested that a mediation system might be employed by
the parties in an effort to avoid either arbitration or litigation for resolution of disputes.
Under this concept, the parties agree in advance to designate one or more mediators,
who will be available when disputes arise to attempt to use their expertise in the
industry to bring the parties to an agreement on the issues. This role is distinguished
from arbitration in that the mediator has no power to make a binding decision. A
mediation system and procedure has been devised by the National Construction In-
dustry Arbitration Committee, which monitors settlement of construction contract dis-
putes as administered by the American Arbitration Association. Communications to
the mediator should be held in strict confidence, which indicates that the concept of
mediation and arbitration by the same person (a suggestion vehemently advanced by
some but with no track record to back it up) is unworkable.

17. MISCELLANEOUS
The provisions of Article 17 are considered by many to be "boiler plate" because they
deal with legalistic considerations. They will have a material affect on the rights of the
parties, and the terms of GCD '17.1 and 17.2 should be carefully complied with. The
language of GCD '17.4 is quite technical in nature, but of major significance, partic-
ularly when a claim, dispute, or other matter in question arises between the parties.
 6
ADDITIONAL COMMENTS RE SUPPLEMENTARY
CONDITIONS
1. GENERAL
Most of the substantive points covered in the Supplementary Conditions have been
discussed or referred to in the discussion of the applicable paragraphs of the General
Conditions, but a few additional remarks may be helpful. Although the document is a
guide as its title indicates, it is much more comprehensive than any other publication
of its kind. First published in 1979, the Supplementary Conditions was extensively
revised and expanded in 1983 in response to comments and suggestions from many
practitioners as well as representatives of the AGe. The introductory remarks in Chap-
ter 1 should prove quite helpful in explaining to the user the purpose and arrangement
of the Supplementary Conditions. Specific comments in Chapter 3 relate to the com-
parable paragraphs of the General Conditions. Reference is made to the comments
above about those paragraphs.
It seems desirable to re-emphasize advice in the first paragraph at SC ~1 that the
terms defined in Article 1 of the General Conditions should be used in the Supple-
mentary Conditions with precisely the same meanings.

2. SCHEDULE OF EVENTS
The EJCDC's suggested schedule of events, starting with the bid opening and con-
cluding with the date when the Contract Time starts to run, is explained at SC ~2.3,
with an appropriate notation of the various places in the Contract Documents where
changes will have to be made if the schedule is altered.

3. SUBSURFACE DATA

There is a careful discussion at SC n4.2 and 4.3 of the contract provisions dealing with
subsurface conditions. This merits the attention of Owners, Contractors, and Engi-
neers.

4. INSURANCE
The discussions at SC '5.3 et seq. concerning liability and property insurance coverages
required by the General Conditions is quite complete, and, although it does not pur-
port to reach the level of a treatise on these matters, it should be of assistance in
understanding the coverages called for. Once again, the advice of knowledgeable in-
surance counsel is usually needed.

5. SUBCONTRACTORS AND SUPPLIERS

The informative comments at SC ~6.8 concerning approval of Subcontractors and Sup-
pliers should be read in conjunction with the language on the same subject contained
in Chapter 1, section 10 above. See also discussion at section 7.f of Chapter 5.
111
112 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

6. MULTI-PRIME CONTRACTS
a. The provisions of Article 7 of the General Conditions were extensively revised in
1983, when several new ideas were introduced as is explained in Chapter 5 at section
8. The related comments at SC "7.1, 7.2, and 7.4 are important to an understanding
of the issues involved. Note that the Construction Coordinator is to be identified in
SC '7.4, and his duties and the extent of his authority are to be covered in that para-
graph. Many of the points to be addressed here are noted at SC '7.4. One may spec-
ulate that the task of preparing a proper explanation of such duties and authority and
their effect on the other parties involved in the Project will not prove to be a simple
one.
b. As part of the EJCDC's 1983 effort to provide in its documentation language
dealing with many of the issues that are raised when more than one prime Contractor
is employed to perform Work at the site, GCD '7.2 has expressly permitted claims by
one prime Contractor directly against another prime Contractor whose activities or
failure to perform work has injured or damaged the first prime Contractor. As a cor-
ollary to this, it is suggested at SC '7.5 that if one prime Contractor has such a claim
against another, the Owner and Engineer should not be drawn into the dispute, nor
should the Coordinating Contractor if he is in fact a "professional" Construction Man-
ager and not one of the other prime Contractors or a Construction Manager with
exposure as to price and performance by those doing the Work. Suggested language
for this purpose is provided at SC 17.5.

7. UNIT PRICE WORK

The comments concerning Unit Price Work which appear at SC ,9.10 and 11.9 provide
advice on the expanded consideration of this subject in the 1983 edition of the General
Conditions.

8. SPECIAL GUARANTEES
When considering special guarantees that may be required of the Contractor, Subcon-
tractors or Suppliers, reference to the comments at SC '13.12 should be of assistance.

9. CONDITIONS PRECEDENT TO SUBSTANTIAL COMPLETION

The advisability of listing certain principal items or component systems that must be
fully completed, tested, or inspected before Substantial Completion may be achieved
is discussed at SC '14.8 and 14.9.

10. ADDITIONAL MATIERS

Chapter IV contains comments about certain matters that are frequently addressed in
Supplementary Conditions. It also calls attention to the necessity of making major
changes in the General Conditions when a Construction Coordinator or Construction
Manager is employed because EJCDC's Construction Related Documents have been
prepared primarily for use when the Work is let under a single prime Contract. There
are so many variations to the construction management arrangement that no standard
language can yet be arrived at.
 7
ADDITIONAL COMMENTS CONCERNING
INSTRUCTIONS

1. INTRODUCTION TO NEW FORM

Many of the suggested paragraphs of the Instructions relate to provisions of the Gen-
eral Conditions and Supplementary Conditions, and comments about them have been
included above in the discussions of the applicable paragraphs of those documents.
Some points merit further attention here.
The Instructions was completely revised in 1983. It is now presented as a Guide to
the Preparation of Instructions to Bidders. While the subject matter and the paragraph
sequencing are basically similar to those of earlier editions, suggested language for
each paragraph has been presented which has been coordinated with EJCDC's other
Construction Related Documents. The suggested language will be usable for most
Projects, but it is recognized that modifications and additions frequently are required.
Accordingly, the suggested language for each paragraph is followed by "Notes to
Engineer", which appear in italics and contain comments or advice concerning the
subject matter of a suggested paragraph and may include alternate language for such
a paragraph.

2. DEFINITIONS
Certain terms have been defined for use in the Instructions (see I ,3) since they will
not normally be used in the Contract Documents. These include the terms Bidder,
Successful Bidder, and Bidding Documents. The term Bidding Requirements is also
defined and includes only the Advertisement or Invitation to Bid, Instructions, and the
suggested or prescribed Bid Form.

3. QUALIFICATION OF BIDDERS
Advice is contained at I '3 concerning itemizing the known data that all bidders will
be required to submit in order to demonstrate their qualifications for the award. Note
that in I '16 the Owner is given the right to seek additional information concerning
the qualification of the apparent successful bidder. Such information includes data
with respect to Subcontractors and Suppliers proposed for those portions of the Work
for which the identity of Subcontractors and Suppliers must be submitted as provided
in the Supplementary Conditions (see comments in Chapter 5 at section 7.f.ii.2). At
times a method of prequalification of key Subcontractors and Suppliers may be uti-
lized. These matters are considered in great detail in the informative Notes to Engineer
appearing in I '10 and the discussions of GCD '6.8 appearing at section 7.f of Chapter
5.

113
114 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

4. EXAMINATION OF WORK CONDITIONS AND SITE BY BIDDER

Required examinations by each bidder of the conditions at the site that will affect the
Contractor's performance of the Work in accordance with the Contract Documents,
for the Contract Price, and within the Contract Time have been analyzed in connection
with the Contractor's representation contained in the O-Kor Agreement (see Chapter
4, section 11), his obligations to examine and review the Contract Documents (see
Chapter 5, section 3.d), and his obligations to conduct examinations of physical site
conditions in addition to reports identified in SC '4.2 (see Chapter 5, section 5b). All
of these discussions refer to the language of the various subparagraphs of I ~4, which
have been most carefully written and integrated with the language of the comparable
paragraphs of the General Conditions, Supplementary Conditions, Bid Form, and 0-
Kor Agreements. Because the issues addressed in these paragraphs have been the
subject of a considerable number of lawsuits and many more claims, it is suggested
that all parties would benefit from a careful reading of I ~4 and the related provisions
of the Contract Documents. Note specifically the close relationships between the'lan-
guage of I ~4 and the bidders representations in the suggested Bid Form 29 and in the
Contractor's representations in the O-Kor Agreement.

5. ISSUING ADDENDA
In I 15 the time requirements for issuing Addenda are established and it is stated that
interpretations or clarifications of the Bidding Documents will only be binding if issued
by formal written Addenda. Whatever the time schedule, the Engineer must be allowed
sufficient time to consider the issues raised by questions from prospective bidders and
to develop a proper response that may be circulated to all prospective bidders (see
also discussions of term Addenda at section 2.a of Chapter 5).

6. SUBSTITUTE
In connection with I ~9, see the discussions re GCD ~6.7 at Chapter 5, section 7.e.

7. SUBCONTRACTOR AND SUPPLIERS

In connection with I ~10, see the discussions re GCD ~6.8 at Chapter 5, section 7.f,
and .SC ~6.8 at Chapter 6, section 5.

8. FORM OF BID
When deciding on the form for the bid, it is suggested that EJCDC's suggested Bid
Form and the attached commentary be reviewed. 29 This document was prepared for
use with EJCDC's Construction Related Documents. The comments in the Notes to
Engineer at I ~13 contain suggestions with respect to bidding where separate prices or
alternatives and separate sections of the Work and other deviations from a single price
bid are involved. It is important to present clear instructions on these matters and also
for submitting unit prices in a bid.

9. WITHDRAWAL OF BID
The matter of withdrawing a bid because of an error discovered after bids have been
submitted and opened is addressed in I ~13.2. Legal counsel for the Owner should
always be consulted before any action is taken pursuant to this paragraph.
 ADDITIONAL COMMENTS CONCERNING INSTRUCTIONS 115

10. BIDDING PROCEDURE

Copies of the Bidding Documents are to be issued to prospective bidders as provided

in I '2. Practices may vary, but it is important to issue only complete sets. The Con-
tractor should be requested to do the same to his Subcontractors, because pertinent
information for one trade may be contained in data relative to another trade and
general information may affect all trades. While it is accepted practice for an Engineer
to act as custodian for deposits for the Bidding Documents, the Engineer should not
act as custodian for any bid security given in accordance with I 16. The period of time
during which bids are to remain open as provided in I 115 may change if EJCDC's
suggested time schedule of events discussed in SC '2.3 is changed.

11. AWARD
The language of I '16 dealing with awarding the Contract has been expanded in the
1983 edition. The Notes to Engineer review various matters in addition to pricing that
may be considered in making the award and provide suggested language to cover
some of these thoughts. As explained at section 3 of this chapter, good practice dictates
the advance listing of as many as possible of the criteria that will be used in evaluating
the qualifications of bidders. Many of the thoughts expressed in the comments con-
cerning acceptance of Subcontractors and Suppliers (see I '10 and referenced provi-
sions) and the acceptance of substitutes (see I 19 and referenced provisions) may be
considered when deciding on which bidder merits the award (i.e., that in the opinion
of the Owner it will be "in the best interest of the Project"). The Notes to Engineer
contain additional ideas that may be considered in the evaluation and thus should be
mentioned in the Instructions. The suggested schedule of events is reflected in the
times for delivery of documents provided in I '18.

12. SUPPLEMENTARY INSTRUCTIONS

While many changes from the suggested language may be incorporated in each par-
ticular paragraph as the Instructions are prepared for a given Project, there are other
topics that will have to be addressed from time to time in each particular set of In-
structions. Most likely these should appear as additional paragraphs at the end of the
set of Instructions. Several of the topics that frequently are considered, with suggested
language for handling them, appear in the Supplementary Instructions at I 1119-22.
 FOOTNOTES

1. The EJCDC's Construction Related Documents is a loosely defined term referring to the Owner-Con-
tractor Agreements, General Conditions, the Guide to the Preparation of Supplementary Conditions,
Guide to the Preparation of Instructions to Bidders, Suggested Bid Form, Change Order, Certification
of Substantial Completion, Application for Payment, Work Directive Change, Notice of Award, and
Notice to Proceed. Standard forms for these documents have been prepared by the EJCDC and are
available for purchase.
2. The EJCDC's Standard Documents (like the AlA's) have been prepared on the assumption that the
customary three-party relationship will pertain. Accordingly, the EJCDC documents may not be used
without extensive revision when the interest of any two of the three parties are merged as in the case
of the customary design-build and turnkey arrangements. They will also require significant modification
to adapt them for use in most situations where a Construction Manager is involved or there is a multi-
prime contractual relationship for construction.
3. See the case of Waggoner et al. v. W. & W. Steel Co. et al., 657 P.2d 147 (Oklahoma Sup. Ct., No. 1982),
in particular, but there are other recent decisions where courts have accepted this position.
4. See Gagne v. Bertrum, 43 Cal.2d 481, 275P 2d 15 (1954).
5. See Milau v. North Ave. Development, 398 NYS 2d 882 (1977).
6. It is clear, however, that specifically negotiated limitations on liability agreed to by parties of equal
bargaining power after arm's-length negotiations will most likely be enforced in proceedings between
those parties but probably will not be effective to restrict the rights of third parties.
7. In certain special situations the use of a particular means, method, technique, sequence, or procedure
of construction should and will be specified by the Engineer, or special safety requirements will be called
for or particular risk pointed out in the Contract Documents for the Contractor's guidance. This is
recognized in GCD 16.1-see discussion in Chapter 5, section 7.b.
8. The important changes between the 1979 and the 1984 editions of the O-E Agreement are itemized and
discussed in "An Update to Important Changes in EJCDC Standard Agreements for Engineering Ser-
vices", No. 1910-9-B, which also addresses changes between the 1980 and 1985 editions of the E-AE
Agreement.
9. There will be occasions when the Owner will quite properly insist on including in the Project's descrip-
tion a requirement for compliance with certain performance standards, as when a facility is being built
to meet EPA, energy, or other statutory requirements.
10. When the Engineer's compensation is on the basis of a percentage of Construction Cost, language in
O-E 15.1.4 of that method of payment indicates a procedure for determining Construction Costs before
a construction contract has been signed.
11. See EJCDC's Standard Form of Agreement Between Engineer and Consultant for Professional Services,
No. 1910-14.
12. When an Engineer is employed to provide an analysis of the Owner's requirements or to develop a
program for the Project and the Owner does not wish to make a commitment for further professional
services, the EJCDC's Standard Form of Agreement Between Owner and Engineer for Study and Report
Services, No. 1910-19, may be used.
13. In earlier editions, the services were intended to "provide assurance", but the language suggested
"insurance" which was not intended; hence, the present wording-Ita greater degree of confidence".
14. Note that generally no assurance is given that what is designed will solve the Owner's needs (see, for
instance, Allied Properties v. J. A. Blume & Assoc., 25 Cal. App. 3rd 848 (1972)). The assurance is more to
the effect that the Project will be a good professionally designed Project, but there is not a guarantee
that it will solve the Owner's needs unless those needs have been clearly expressed in the Project
description or elsewhere in the O-E Agreement and achievement of a solution has been agreed to in
advance by the Engineer. Owners should be particularly mindful of this point. See discussions at sections
4 and 7.f.xii of Chapter 1.
15. While there are court decisions which go both ways on very similar factual situations, the better rea-
soning is that this duty is not undertaken for the benefit of the Contractor's or any Subcontractor's
employees.
16. See quoted language from court decisions at section 3.b of the Introduction.
17. In GCD 113.10 the Owner is given the right to stop the Work in certain situations (see discussions at
section 13.c.iv of Chapter 5). The AlA's General Conditions are similar on this point. For a cross reference

117
118 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

between the provisions of the EjCDC and AlA General Conditions, see EjCDC Cross Reference etc., No.
1910-11.
18. See "Focus on Shop Drawings", by john R. Clark, Esq., EjCDC No. 1910-9-C (1985 ed.).
19. When the 1984 edition of the O-E Agreement was published, it was agreed to standardize on the use of
the term independent professional associates and consultants to describe those independent (not in-
house) parties whom the Engineer might employ to assist in the performance of professional services.
Heretofore the term special consultants was used, or just consultants as is the case in the 1983 edition
of the General Conditions.
20. EjCDC's Suggested listing of Duties, Responsibilities and limitations of Authority of the Resident Project
Representative, No. 1910-1-A, may be used as a guide in preparing this document. See also suggested
Exhibit B to the O-E Agreement.
21. While the Associate Engineer has no formal agreement with the Owner, there are several legal theories
on which he may make a claim against the Owner for failure to pay for the Associate Engineer's services,
and in some states the Associate Engineer may file a lien against the Project if his documentation is used
and he is not paid for services rendered. Also there are various legal theories on which an Owner may
base a claim against an Associate Engineer.
22. The principal reason for stating that the Associate Engineer is an independent contractor and not a joint
venturer with the Engineer is that the Associate Engineer does not intend sharing financial responsibility
or legal risks with the Engineer, nor does he wish the legal exposure that joint venturers share.
23. It is expected that new documents now being developed by the AlA will remedy the inequities of C141.
24. The terms Bidding Documents and Bidding Requirements are explained at I '1.
25. This concept is being used by the CSI in its Guide Specifications and Manual of Practice Chapters for
Preparation of Division 1 Sections, and by AlA and EjCDC in their Guidelines to the Preparation of
Supplementary Conditions.
26. In an effort to make the O-E Agreement less legalistic in approach and appearance, there is a minimum
of definitions. The word work is not capitalized and there are other examples of a less formal approach
than in the General Conditions.
27. The AlA's Owner-Contractor Agreement on the Basis of Cost-Plus, No. A-111, contains the details of what
items of cost are to be reimbursed and what are not (this is similar to the EjCDC's definition of Cost of
the Work). The formula for determining the cost of Change Order Work which is contained in AlA's
General Conditions is much more brief and as a result somewhat different.
28. See article "Collateral v. CO'st Retainage", by john R. Clark, Esq., in Consulting Engineer Magazine issue
of September 1971.
29. See EjCDC's Suggested Bid Form and Commentary for Use, No. 1910-18 which is sometimes referred to
in this book as the "Bid Form".
30. EjCDC's Application for Payment, No. 1910-8-E, relates to and is intended for use with EjCDC's Construc-
tion Related Documents.
31. See EjCDC's Change Order, No. 1910-8-B, and EjCDC's Work Directive Change, No. 1910-8-F. These
forms have been prepared for use with EjCDC's Constructions Related Documents.
32. The term Contract Documents, which is defined in Article 1 of the General Conditions, is discussed in
some detail at Chapter 3, section 2; Chapter 4, section 12; and Chapter 5, sections 2.a and 2.b.
33. In the AlA's General Conditions the term Subcontractor is defined to include only those who have a
direct contract with the prime Contractor. For cross-reference between the provisions of the EjCDC and
AlA General Conditions, see EjCDC Cross Reference etc., No. 1910-11.
34. See EjCDC's Construction Performance Bond, No. 1910-28(A), and Construction Payment Bond, No. 1910-
28(B). There is a commentary on these documents available through the EjCDC's sponsoring societies.
35. See EjCDC's Engineer's Letter to Owner Suggesting Instructions Re Bonds and Insurance During Con-
struction, No. 1910-20, and Owner's Instructions to Engineer Re Bonds and Insurance During Construc-
tion, No. 1910-21.
36. The term consultants is variously used in the General Conditions and is intended to include all "inde-
pendent professional associates and consultants employed by the Engineer". The latter term is used in
the O-E Agreement and was agreed to in 1984 after the 1983 edition of the General Conditions has been
published. It is expected that the more modern terminology will be used in the next edition of the
General Conditions. The term "consultants" as used in the General Conditions is not defined. See
comment in Footnote 19.
37. See comments in Chapter III, Section 17 of "Commentary on Agreements for Engineering Services and
Contract Documents", by john R. Clark, Esq., No. 1910-9, and in "Safeguards in Specifying New Prod-
ucts", by john S. Martel, appearing in Guidelines for Improving Practice, 1971, published by Victor O.
Shinnerer & Co., Inc., Washington, D.C., as part of the NE Newsletter.
38. There has been pressure from some of the trade associations representing the interest of subcontractors
to produce a different result. A comparison of the AlA's and the AGC's suggested forms for Agreement
Between Contractor and Subcontractor may prove informative.
39. See Missouri Board of Architects, Professional Engineers and Land Surveyors v. D. M. Duncan, J. D. Gil/um
and G. C. E. International Inc. Case, No. AR-84-0239, order dated November 15, 1985. Among other issues
the case involved the question of the professional responsibility of the structural Engineer to review the
details of the structural connections as prepared by the steel fabricator. After an exhaustive analysis of
 FOOTNOTES 119

the testimony, the administrative judge ruled that the defendant Engineers' conduct was significantly
below the required professional standards and recommended disciplinary action by suspension or re-
vocation of the certificate of registration. In the discussion at Pages 194-201 of the typed copy of the
decision, the Commission considered the meaning and purpose of the contractual requirement that the
Engineer review and approve the Shop Drawings of the structural steel connections for compliance with
the information given in the Contract Documents and "for conformance with the design concept". The
Commission states at page 199 that "there can be no other interpretation of the term "design concept"
than as a description of the Engineer's review to assure that all engineering work-both his own and
that of the fabricator-conforms to acceptable engineering standards". On page 200-201 after rejecting
the Engineer's contention, it states:

"We conclude instead that the term "design concept" as used in defining the scope of the engineer's
review of shop drawings means a review of the structural strength, safety and stability of the design,
as reflected in the structural drawings and contract documents and as translated onto the shop draw-
ings. It relates to all engineering work which must be performed by a qualified licensed professional
engineer and includes engineering work done on connections as well as structural members. Review
of shop drawings for conformance to the design concept, coupled with a review for the fabricator's
compliance with the information provided in the contract documents, requires a determination by
the engineer in the owner's behalf that all information-including the engineer's own design work set
forth in the structural drawings-has been understood and properly translated onto the drawings by
the fabricator, and that all engineering work performed separately by the fabricator conforms to
acceptable engineering practice and standards. As stated, ... although such review for design concept
does not constitute a "guarantee" that the "as built" structure will be free of defects, the whole
purpose of such review should be to give the owner reasonable assurances that the "yet-to-be built"
structure will be safe and sound if it is built in accordance with the contract documents and the shop
drawings. Respondents' contention that use of the term "design concept" limited their responsibility
by contract for performing all structural engineering design services on the project is rejected."

This decision is by a tribunal of the first instance. In January 1986 the Missouri Board voted unani-
mously to revoke the licenses of the two individual defendants permanently and to revoke the certificate
of authority of their firm. It is possible that an appeal may be taken. Until a final ruling is issued, one
can expect a plethora of helpful analyses and comments on the meaning and significance of the case.
40. If Article 16 is to be eliminated and page 31 removed, steps should probably be taken to preserve the
language of GCD '16.2, which establishes time limits after which appeals from a decision by the Engineer
may not be taken.
41. Note also that in GCD '6.1 the Contractor has undertaken to see that the "finished Work complies
accurately with the Contract Documents".
42. See EJCDC's Certificate of Substantial Completion, No. 1910-8-D.
 APPENDICES

1. Standard Form of Agreement Between Owner and Engineer for Professional Ser-
vices, No. 1910-1. (Pages 123-171)
2. Standard Form of Agreement Between Engineer and Associate Engineer for Profes-
sional Services, No. 1910-13. (Pages 173-215)
3. Standard Form of Agreement Between Owner and Contractor on the Basis of a
Stipulated Price, No. 1910-8-A-1. (Pages 217-223)
4. Standard Form of Agreement Between Owner and Contractor on the Basis of Cost-
Plus, No. 1910-8-A-2. (Pages 225-232)
5. Standard General Conditions of the Construction Contract, No. 1910-8. (Pages 233-
265)
6. Guide to the Preparation of Supplementary Conditions, No. 1910-17. (Pages 267-296)
7. Standard Form of Instructions to Bidder, No. 1910-12. (Pages 297-311)

121
 This document has important legal consequences; consultation with an attorney is encouraged with
respect to its completion or modification.

STANDARD FORM OF AGREEMENT

BElWEEN OWNER AND ENGINEER
FOR
PROFESSIONAL SERVICES

Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly By

NATIONAL
SOCIETY OF
PROFESSIONAL
ENGINEERS
fOU.OlD m4

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

EJCDC No. 1910-1 (1984 Edition)

123
124 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Copyright 1984 National Society of Professional Engineers

2029 K Street, N.W., Washington, DC 20006
American Consulting Engineers Council
1015 15th Street. N.W .. Washington, DC 20005
American Society of Civil Engineers
345 East 47th Street. New York, NY 10017
Construction Specifications Institute
601 Madison Street. Alexandria. VA 22314

Guide Sheet for Completing Standard Fonn of
Agreement Between Owner and Engineer for
Professional SeIVices
1. Page I-Proper name of partnership, corporation or
governmental body which is Owner should be inserted on
first page and signature page. Make certain person signing
for Owner has authority to do so and that there is an indication
of position or the capacity of the signer. (See Commentary,
1981 edit., paragraph III 2.)
2. Page I-Insert as complete a description of the Project
as possible. Include, to the extent known, a general descrip-
tion of the land where the Project is to be located, any special
requirements as to performance, capacity or function and any
special source of funds for which the Project must qualify. If
a Construction Cost limitation is to be established as a con-
dition to the Agreement as provided in ~6.2.2, a specific
statement to that effect setting forth the amount of the limi-
tation initially agreed to by Owner and Engineer should be
included as part of the Project description. If a limitation is
agreed upon after the Agreement has been signed, a formal
amendment to the Agreement should be signed by Owner and
Engineer to document the understanding. Identify studies,
reports or analyses previously prepared which are being fur-
nished by Owner to Engineer for guidance, such as reports
and studies referred to in ~3.4. Identify other special aspects
or peculiarities ofthe Project. (See Commentary, 1981 edit.,
paragraph III 4.)
3. Section I-Basic Services-Supplemental description in
Exhibit A "Further Description of Basic Engineering Ser-
vices and Related Matters". The Agreement contemplates
that an exhibit will be prepared to describe in more detail the
Basic Services to be rendered during Phases 1 through 6 (see
language following ~~ 1.2.7,1.3.5,1.4.5,1.5.5 and 1.7.6; also
~~ 1.6.1, 1.7.1,2.1 and 2.2). A suggested format for such an
exhibit appears on page vii of this Guide Sheet. The para-
graphs of the exhibit follow the sequence of the description
of Basic Services and should contain a further or expanded
description of each phase of Basic Services as applicable to
the particular Project undertaken (the printed language of the
Agreement being generally applicable to most projects). Exhibit
A should also include an agreed time for performance of Phase
1,2 and 3 Basic Services as indicated in ~~ 4.2,4.3 and 4.4;
and, if there are specific time requirements for performance
of services during the remaining Phases, these should also be
included. If Basic Services are expanded to include services
normally treated as Additional Services, care should be taken
to strike out or modify comparable language in the various
paragraphs of Section 2-Additional Services of Engineer
and to make appropriate changes in the provisions for pay-
ment for professional services (see Section 5). If Engineer
rather than Owner is to furnish services of the types described
in ~~3.4 and 3.5, this information should also be included in
Exhibit A. Reference is also made to Exhibit A in ~5.1.1 of
APPENDIX 1 125
each alternate method of payment. In those places where
supplemental or amending data will not appear in Exhibit A
reference to the Exhibit should be crossed out and initialed
by both parties.
Note that ~I.6.I refers to the ElCDC's Standard General
Conditions and all of the provisions of this Agreement are
based on the assumption that standard ElCDC documents
for design and construction services will be used throughout
(see ~1.4.4) and that the Specifications will follow the 16
Division format of the CSI (see n.4.I). If that is not the case,
extensive changes in this Agreement, particularly with respect
to Basic Services will probably be required.
4. Paragraph 1.6.2.1-Visits to Site; Concerning Project
Representative Services-see discussion in Commentary, 1981
edit., Paragraphs II 1 (b) and III 7 and 20. In the 1984 edition
of this Agreement, regular resident services at the site are
treated as part of Basic Services, although earlier editions
treated them as Additional Services. This is primarily because
most practitioners are unwilling to assume the responsibilities
associated with full Construction Phase services without pro-
viding regular resident services at the site. They feel that the
risks arising from a division of responsibility are unacceptable
and it is in the best interests of all concerned that these
services be performed by the Engineer who has designed the
Project. There is a separate subparagraph in ~5.1.I in which
the particular method of compensation for resident services
may be set out. If a decision regarding employment of a
Resident Project Representative is not to be made until after
the Agreement is signed, it may be wise to treat such services
as Additional Services Requiring Authorization in Advance
by adding an additional subparagraph to Paragraph 2.1. Help-
fullanguage for this purpose may be found in Paragraph 2.3
of the 1979 edition which is worded substantially as follows:
Resident Services During Construction.
1. If requested by OWNER or recommended by ENGI-
NEER and agreed to in writing by the other, a Resident
Project Representative will be furnished and will act as
directed by ENGINEER in order to assist ENGINEER in
observing performance of the work ofContractor(s). Such
services will be paid for by OWNER as indicated in para-
graph 5.1.
2. The duties and responsibilities and the limitations on
the authority of the Resident Project Representative and
assistants will be set forth in Exhibit B which is to be
identified, attached to and made a part of this Agreement
before such services begin.
3. Through more extensive on-site observations of the work
in progress and field checks of materials and equipment by
126 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
the Resident Project Representative (iffurnished) and assis-
tants, ENGINEER shall endeavor to provide further pro-
tection for OWNER against defects and deficiencies in the
work of Contractor(s); but the furnishing of such resident
Project representation will not extend ENGINEER's
responsibilities or authority beyond the limitations set forth
in ~1.6.2.3 or elsewhere in n.6, unless otherwise specifi-
cally noted.
Postponing the decision on resident services until after the
Agreement is signed will necessitate changing ~1.6.2 and all
other provisions of ~1.6 should be reviewed and modified as
appropriate.
Regardless of when the decision is reached, the job site
responsibilities of the Resident Project Representative should
be clarified in writing and this should be attached to the
Agreement. Appropriate language for this purpose is provided
as Exhibit B to the Agreement which is introduced in ~1.6.2.2.
The language of Exhibit B has been taken directly from EJCDC
document No. 191O-1A (1983 edit.) which is entitled "Sug-
gested Listing of Duties, Responsibilities and Limitations of
Authority of Resident Project Representative". It may well
be that the circumstances of a particular Project will dictate
changes in Exhibit B, but it may be used as a guide or check-
off list in preparing a document specially tailored to the par-
ticular assignment.
5. Section 3-Owner's Responsibilities. If OWNER employs
a construction manager or construction coordinator for the
Project, the relationships between OWNER, ENGINEER
and the construction manager or coordinator will require
careful analysis and detailed discussions to determine the
effect thereof on the duties, responsibilities and legal expo-
sure of Engineer. Legal counsel should be consulted. Exten-
sive revisions of the Standard Owner-Engineer Agreement
will be required. The portions of the Standard General Con-
ditions that deal with ENGINEER's functions must be changed.
This most frequently occurs when there are mUlti-prime con-
struction contracts. See ~3.11.
If Owner employs a separate representative to provide on-
site services during construction, ~3.10 calls for the attach-
ment of an exhibit to the Agreement detailing the functions
of such a person and the extent to which that person's employ-
ment will affect the duties and responsibilities of Engineer
and the Resident Project Representative. This will probably
necessitate changes in ~1.6 especially ~~1.6.2 and 1.6.9.
6. Section 4-Period of Service. This Section has been pre-
pared in recognition of the thought expressed in ~4.1 that
there will be a continuous period of service through comple-
tion of the Construction Phase with timely responses from
Owner to Engineer's submittals and with prompt authority
to proceed with each Phase of services after the preceding
Phase has been completed. The stipulated time for performing
Phase I, 2 and 3 services referred to in ~~ 4.2, 4.3 and 4.4
should be determined in recognition of this understanding,
and the agreed upon time periods should be set forth in Exhibit
A. The blank space in ~4.10 should be filled in with whatever
is considered a reasonable time in the particular Project for
ii
the taking of bids or receiving proposals, awarding the con-
tracts and starting construction. If provision is to be included
to the effect that all engineering services or the construction
work is to be completed by a certain date, the necessary
additional language to amend ~~4. 7, 4.8 or 4.10 should appear
in Exhibit A. Any limitation as to the number of hours to be
spent during the Operational Phase should also appear in
Exhibit A. The three-month and one-year periods provided
in ~4.11 may not be appropriate for all Projects and should
be modified as circumstances dictate. Paragraph 4.12 rec-
ognizes the possibility of engineering services during Phases
3, 4 and 5 being separately sequenced because offast -tracking
under one prime construction contract or where the construc-
tion work is to be performed under several prime contracts
with possibly different starting times. In such cases it is
expected that the special timing required for services ren-
dered during Phases 3, 4, 5 and 6 will be set forth in Exhibit
A.
7. Section 5-Methods of Payment. Five different methods
of payment are covered by the attached form of Agreement:
these are Lump Sum, Percentage, Cost Plus a Fixed Fee,
Direct Labor Costs times a factor and Salary Costs times a
factor. Each appears on a separate set of pages so that the
pages for the method selected may be retained and the others
destroyed without affecting the page numbers of the printed
form. If some other method or combination of methods of
payment is to be used, separately-prepared pages may be
inserted in lieu of the printed ones. Each printed form contains
blank spaces that should be filled in, and it is expected that
whatever method is selected the printed provisions will be
supplemented or amended in Exhibit A where appropriate.
When payment is on the basis of a Lump Sum, a Percentage
Fee or Cost Plus a Fixed Fee it is customary to provide for
higher compensation for Engineer in a Project involving sev-
eral prime contracts or in the case of construction contracts
which contain cost-plus or incentive-savings provisions.
Accordingly, blank spaces and alternate choices have been
provided. The blank spaces for the number of prime con-
tractors is intended to be filled in with the number normally
anticipated for a Project of the type involved, such as a
governmentally financed one where the law requires separate
prime contracts. Paragraph 2.1.8 is intended to cover an
additional number, if any, not anticipated at the time Engineer
makes a fee commitment with Owner. In filling the blank
spaces with respect to the anticipated extra services due to
cost-plus or incentive-compensation arrangements with Con-
tractor bear in mind the provisions of ~3.9 which require
Owner to furnish auditing services if it is desired to ascertain
how or for what purposes Contractor has used the moneys
paid under the Construction Contract. Bear in mind also the
provisions of ~3.9 which obligate Owner to provide such
inspection services as Owner may require to ascertain if
Contractor is performing the work in accordance with legal
requirements, such as safety codes, etc.
Note that the terms Construction Cost, Direct Labor Costs,
Salary Costs (formerly called Payroll Costs) and Reimburs-
able Expenses are specifically defined and that in ~5.1.1 of
each alternate method of payment reference is made to Exhibit
A "Further Description of Basic Engineering Services and
Related Matters".

Engineers frequently employ outside or independent profes-
sional associates or consultants to assist in the performance
of Basic Services which is permitted under ~7.5.2. There is
a separate subparagraph in ~5.1.1 in the alternative pages for
the Cost Plus a Fixed Fee, Direct Labor and Salary. Costs
methods of payment in which the particular method of com-
pensation for such services may be set out. In the earlier
editions of this Agreement Engineer's expenses for such ser-
vices was considered Reimbursable Expense. [EJCDC has
prepared three standard forms of agreement which may be
used when Engineer employs an independent professional
associate or consultant; these are Engineer-Architect Agree-
ment, No. 1910-10; Engineer-Associate Engineer Agreement,
No. 1910-13; and, Engineer-Consultant Agreement, No. 1910-
14.]
Where compensation for Basic Services is on the basis of
Cost Plus a Fixed Fee, Direct Labor or Salary Costs, Owners
frequently wish some indication ofthe amount that Engineers
expect to charge for engineering services. Accordingly, a
further paragraph has been added to ~5.1 to provide an esti-
mate of that amount and an agreement to discuss compen-
sation when it becomes apparent that such amount may be
exceeded. This amount will obviously vary depending on the
number of prime contracts, cost-plus or incentive compen-
sation arrangements that actually are used. Blank spaces must
be filled in as applicable and inapplicable language crossed
out. Note that the estimate covers all amounts payable for
Basic Services, including services of Engineer's independent
professional associates and consultants and Resident Project
Representative as well as services during the Operational
Phase, but does not include services of professional associ-
ates, consultants and others which are considered Additional
Services. Also, some Owners may require a schedule of salary
and wage rates for each classification of personnel expected
to be used on the Project.
8. Paragraph 5.1.2-Payment for Additional Services (see
Commentary, 1981 edit., paragraph III 13). Space has been
provided in ~~5.1.2.1 through 5.1.2.3 for different rates of
compensation for different types of Additional Services. Any
inapplicable paragraph should be crossed out and initials
inserted in the margin by both parties. If one method of
compensation is to apply to all Additional Services, be certain
that the cross references are correctly adjusted.
9. Note that ~5.1.3 provides for reimbursement of the
"actual" cost of Reimbursable Expenses. For most items
there is no markup although this sometimes customary. In
the Lump Sum and Percentage methods of payment Reim-
bursable Expenses do not include overtime charges and
expenses of computer time and other specialized equipment
while in the other methods of payment such costs are included
at a factored amount.
10. The blank space in ~5.3.2 should be filled in after con-
sultation with Owner.
11. Paragraph 5.4.1 contemplates the identification of the
key personnel in Engineer's organization who are to be assigned
to the Project (see Commentary, 1981 edit., paragraph III 13)
as to the proper meaning of the term "principals"); this
iii
APPENDIX 1 127
applies to both the Direct Labor Cost and Salary Cost defi-
nitions. In developing the factor for the Salary Cost method
of compensation, bear in mind that ~5.4.1 is set up so that
the factor is applied to the salary, wages and fringe benefits
of all personnel, and Salary Costs of principals (whether they
be corporate officers at fixed salaries or partners with drawing
accounts who share in the profits) are to be itemized. When
using Salary Costs as a basis for compensation, instead of
the detailed accounting required to substantiate the amount
paid for customary and statutory benefits of personnel, a
percentage of salaries and wages may be agreed to in advance
and inserted in the blank space at the end of paragraph 5.4.1;
otherwise the sentence should be crossed out and initialed
by both parties. Note also that periodic adjustments in these
items are expected (see ~5.3.4).
12. Insurance-Paragraph 7.3 deals with general insurance
coverages. Owners frequently require that their Engineers
maintain professional liability insurance, and EJCDC consid-
ers it important that Engineers do so. Language addressing
this matter is set forth below and should be added as additional
subparagraphs to paragraph 7.3 (after the present paragraph
7.3 has been renumbered 7.3.1).
7.3.2. Also ENGINEER shall procure and maintain profes-
sionalliability insurance for protection from claims arising
out of performance of professional services caused by a
negligent error, omission or act for which the insured is
legally liable; such professional liability insurance will pro-
vide for coverage in such amounts, with such deductible
provisions and for such period of time as set forth below,
and certificates indicating that such insurance is in effect
will be delivered to OWNER:
Amount __________________________________
Deductible _________________
Effective Through ______________
7.3.3. ENGINEER will also cause professional associates
and consultants retained by ENGINEER for the Project to
procure and maintain comparable professional liability
insurance coverage.
13. Paragraph 7.6-Arbitration. This provides for com-
pulsory and binding arbitration of all disputes between Owner
and Engineer where the claimed amount at issue is not more
than $200,900. It also restricts joinder in the arbitration pro-
ceedings of others who are not a party to the Agreement. The
Engineers' Joint Contract Documents Committee believes
that arbitration of such disputes under the Construction Industry
Arbitration Rules of the American Arbitration Association is
in the best interest of both Owner and Engineer, but also
recognizes that others may differ, and the laws of all states
are not similar. Accordingly, the form of Agreement has been
prepared so that ~7.6 which deals with arbitration may be
eliminated from the Agreement simply by tearing out the
separate page (page 17) on which it is printed and completing
the information at the bottom of the last page to indicate the
page number as well as the total number of pages that make
up the entire Agreement. The Table of Contents should also
be modified.
14. Paragraph 8.1 contains space for additional or special
provisions required by Owner or Engineer. These may include
128 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
identification of the individuals in Engineer's office who will
be in charge of the Project and identification of Engineer's
professional associates and consultants who will be employed
to assist in the performance of Basic Services.
It is the practice of some engineers to include in their agree-
ments language limiting their liability for negligence to a fixed
dollar amount or a certain percentage of total fee for services.
Any such language should be specifically negotiated with
Owner after consultation with insurance counsel as to rec-
ommended terms. Legal counsel should be consulted as to
the enforceability of such language as well as its relationship
with and bearing on any provisions requiring the maintenance
AGREEMENTS FOR LESS THAN CUSTOMARY FULL ENGINEERING SERVICES
There are an increasing number of engineering assignments
in which Engineer is employed only to provide design ser-
vices. This usually involves Study and Report, Preliminary
Design and Final Design services. When such services are
completed and the Project proceeds to construction, it is
expected that Engineer who designed it will be employed to
provide customary Bidding and Negotiating, Construction
and Operational Phase services either under a separate agree-
ment or as a supplement to the existing Agreement for design
services only. The attached form of Agreement may be used
as the basis for an agreement between Owner and Engineer
for design services only and also as a basis for a supplement
to or amendment of that agreement should Engineer be
employed to provide the last three phases (construction related)
of services.
A. When design services only are to be provided the entire
standard form of Agreement should be reviewed and in par-
ticular the provisions of the following paragraphs should be
modified as appropriate:
(I) If the Project Program or Report on which Engineer's
design documentation will be based was not prepared by
Engineer, that Program or Report should be identified. The
extent to which Engineer may rely on it or is required to
review and comment on it should be stated. Delete the entire
~2.1, Study and Report Phase.
(2) It is customary for Engineer to be employed to provide
services during the Bidding or Negotiating and Construction
Phases in order to interpret and clarify ENGINEER's doc-
umentation, detect at an early date and correct imperfections
in the documentation which must always be expected, issue
addenda, review and approve shop drawings, determine the
acceptability of substitute or or-equal items, prepare work
directive changes and change orders and make recommen-
dations for payment-all in order to give Owner some degree
of assurance (but not a guarantee) that what Contractor pro-
duces is generally in accordance with the Contract Docu-
ments and assurance that the integrity of the design has been
preserved. When Engineer is not permitted to provide such
construction related services, Owner's interest may be prej-
udiced; and, in addition, Engineer may be denied the cus-
tomary opportunity to discuss and analyze the documentation
with Contractor (and, where appropriate, Owner) and avoid
misunderstandings and difficulties that may develop during
construction and afterwards. In such circumstances it is
iv
of professional liability insurance. The language agreed to
should be inserted as a subparagraph onS.I.
15. Paragraph S.2 identifies two Exhibits: Exhibit A "Fur-
ther Description of Basic Engineering Services and Related
Matters" and Exhibit B "Duties, Responsibilities and Lim-
itations of Authority of Resident Project Representative".
The number of pages of each Exhibit should be inserted in
the blank spaces. Other Exhibits should be listed in the space
provided. If either Exhibit A or B is not to be attached, all
reference to the document should be crossed out of the Agree-
ment.
important for Owner and Engineer to recognize in writing the
consequences of limiting Engineer to less than full services
and the risks inherent in having a party other than the preparer
interpret and clarify drawings and specifications, act o.n shop
drawings and substitutions, issue addenda and change orders
and provide other customary services. Suggested language
for this purpose is set forth below and should be inserted at
the end in the Basic Services. [~~l.S, 1.6 and 1.7 would
obviously be eliminated.]
"OWNER acknowledges that it is customary for the engi-
neer who is responsible for the preparation and furnishing
of Drawings and Specifications and other construction-
related documents to be employed to provide profes~ional
services during the Bidding and Construction Phases of the
Project (i) to interpret and clarify the documentation so
furnished and to modify the same as circumstances revealed
during bidding and construction may dictate, (ii) in con-
nection with acceptance of substitute or or-equal items of
materials and equipment proposed by bidders and Con-
tractor(s), (iii) in connection with approval of shop draw-
ings and sample submittals, and (iv) as a result of and in
response to ENGINEER's detecting in advance of perfor-
mance of affected work inconsistencies or irregularities in
such documentation. OWNER agrees that if ENGINEER
is not employed to provide such professional services dur-
ing the Bidding (if the work is put out for bids) and the
Construction Phases of the Project, ENGINEER will not
be responsible for, and OWNER shall indemnify and hold
ENGINEER (and ENGINEER's professional associates
and consultants) harmless from, all claims, damages, losses
and expenses including attorneys' fees arising out of, or
resulting from, any interpretation, clarification, substitu-
tion acceptance, shop drawing or sample approval or mod-
ification of such documentation issued or carried out by
OWNER or others. Nothing contained in this paragraph
shall be construed to release ENGINEER (or ENGI-
NEER's professional associates or consultants) from lia-
bility for failure to perform in accordance with professional
standards any duty or responsibility which ENGINEER
has undertaken or assumed under this Agreement. "
The EJCDC cautions against providing less than whole Con-
struction Phase services (such as shop drawing approval only)
because of the risks and exposures involved when control of
contract administration is out of the hands of the Engineer.

(3) Certain of the Additional Services should be modified
or eliminated. See for instance ~~ 2.1.10,2.1.12,2.2.1,2.2.4,
2.2.5, and 2.2.6.
(4) In Section 3, ~ 3.5 would not be used and ~ 3.9 would
be modified to eliminate reference to inspections during con-
struction. Paragraph 3.11 would also need to be changed to
require Owner to advise Engineer how the construction coor-
dination between the several prime Contractor(s) is to be
addressed in the documentation prepared by Engineer. The
last clause of ~3 .14 should be eliminated.
(5) Section 4 would require revision to eliminate reference
to the Bidding and Negotiating, Construction and Post Con-
struction Phases.
(6) Those portions of the Payment Section which pertain
to services after completion of design would be eliminated.
(7) Section 6 dealing with the responsibility for control over
the cost of the Project and the possible obligation to redesign
should be rewritten after the issues involved have been dis-
cussed with and agreed to by Owner.
B. When the Agreement for design services only is supple-
mented to include construction related services: Since Engineer
will have prepared and will be thoroughly familiar with the
Drawings and Specifications and Contract Documents, it will
be a relatively simple matter to prepare the supplement to
the existing Agreement in order to add the three additional
phases for construction related services. The language of ~~
1.5, 1.6 and 1.7 of 1910-1 may be used almost verbatim in
most cases and with only minor changes in others as noted
below. There will, of course, be such additional changes as
may be necessary to be responsive to the peculiarities of the
individual assignment. It is likely that by the time the sup-
plement is to be prepared, Engineer's design documentation
will have been formally accepted by Owner and decisions
will have been made on the matters ofbiddingvs. negotiating,
whether or not there will be more than one prime Contractor
for construction, whether or not there will be fast-tracking
and if any of the construction contracts will contain a cost
plus or incentive savings or similar provisions. While all of
the provisions of ~~ 1.5, 1.6 and 1.7 should be reviewed care-
fully in each case, the following will probably require change:
(1) ~1.5.1. should be changed to eliminate reference to
Bidding or Negotiating-whichever approach will not be used.
(2) ~1.6.1. may be changed to eliminate reference to the
set of General Conditions to be included in the Contract
Documents since this will already have been decided.
(3) Exhibit B "Duties, Responsibilities and Limitations of
Authority of the Resident Project Representative" referred
to in ~1.6.2.2 will have to be prepared and attached as an
Exhibit to the supplemental agreement.
(4) The ~~ in the Additional Services Section that were
eliminated when the design services only agreement was pre-
pared will probably be reinstated or the description of Basic
Services during Phases 4, 5, and 6 expanded to include such
Additional Services with an appropriate adjustment in Engi-
neer's compensation for Basic Services.
v
APPENDIX 1 129
(5) Since the number of prime Contractors will have been
decided, ~2.1.8 may be eliminated as well as the portions of
~5.1.1 that deal with the same subject matter.
(6) In connection with Owner's obligations, the portions
of ~~3.4 and 3.8 that were deleted in the design services only
agreement should be included in the supplemental agreement.
A decision on the matter of Owner's separate representative
at the site will have been reached so that ~3.1O can be changed,
and, if such a person is to be employed, an appropriate exhibit
prepared and attached to the supplemental agreement.
(7) ~3.11 should be modified to reflect Owner's decisions
on the matter of designating the party who will be responsible
for coordination of the work ofthe various prime Contractors.
(8) As noted in paragraph 5 of the Guide Sheet, if a con-
struction manager is to be employed by Owner extensive
change in the language of~~I.5, 1.6 and 1.7 will be necessary.
(9) The portions of Section 4 that pertain to the Bidding
and Negotiating, Construction and Operational Phases, should
be reinstated and included in the supplemental agreement,
and consideration should be given to fixing an outside date
for completion of construction.
(10) If the construction work is to be performed on a fast-
track basis, the schedule called for in ~4.12 will have to be
developed and appropriate changes made in that paragraph.
(11) Changes in or supplements to the language of the
Payment Section in the Agreement for design services only
should be made. A method of payment different from that
employed during the design of the project may be used in
which case a great deal of the language contained in the
applicable Method of Payment pages of 1910-1 should be
included.
(12) A paragraph will have to be added to set forth the
extent of Engineer's responsibilities for construction cost
control during the last three phases of service.
C. As indicated in the Guide Sheet, the EJCDC does not
recommend Engineer's undertaking less than full services
during the Construction Phase, because the risks and legal
exposure are quite serious when one is responsible for the
administration of a construction contract while not having
control over its administration. This amounts to divided
responsibility that invariably entails serious legal exposure,
and at times it is tantamount to responsibility without author-
ity which can lead to worse consequences. Of particular
concern are the relationships between the parties as to and
responsibilities for quality control, review of applications for
payment and coordination between interpretations, clarifi-
cations, work directive changes, change orders, shop drawing
approvals and acceptance of substitutes. Also, the EJCDC
suggests that Engineers carefully evaluate the legal and
professional exposure involved before undertaking construc-
tion related services when the design documentation has been
prepared by another party. Assignments of this nature have
been successfully carried out, but the problems of reliance
on the documentation of others with an undefined duty to
detect errors and omissions can lead to misunderstandings
and unacceptable legal exposure unless carefully discussed
and resolved and contract language prepared after discussion
130 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

with legal counsel. The language of the previously prepared but it may be too late to change the wording and assigned
Contract Documents will be determinative of Engineer's duties responsibilities after the Contract Documents have been fin-
and responsibilities during the construction related phases, alized by another design professional.

vi
 APPENDIX 1 131

EXHIBIT A TO AGREEMENT BETWEEN OWNER AND

ENGINEER FOR PROFESSIONAL SERVICES, dated
_ _ _ _ , 19_ (for use with No. 1910-1, 1984 Edition).

Further Description of Basic Engineering Services and Related Matters

1. This is an exhibit attached to, made a part of and incorporated by reference into the Agreement made on _ ,
19_ _ between (OWNER) and
(ENGINEER) providing for professional engineering services. The Basic Services of Engineer as described in
Section 1 ofthe Agreement are amended or supplemented as indicated below and the time periods for the performance
of certain services as indicated in Section 4 of the Agreement are stipulated as indicated below.

2. During the Study and Report Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.2.)
The Study and Report Phase Services will be completed and the Report submitted within calendar
days following written authorization from OWNER to ENGINEER to proceed with that phase of services.

3. During the Preliminary Design Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.3.)
The Preliminary Design Phase Services will be completed and ENGINEER's documentation and opinion of costs
submitted within calendar days following written authorization from OWNER to ENGINEER to
proceed with that phase of services.

4. During the Final Design Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.4.)
The Final Design Phase Services will be completed and Contract Documents and ENGINEER's opinion of costs
submitted within calendar days following written authorization from OWNER to ENGINEER to
proceed with that phase of services.
[If the construction work is to be performed under more than one prime contract and the times of performance are
to be staggered, the provisions of paragraph 4.12 will probably apply and it will be necessary to prepare a special
schedule for the Final Design Phase Services.]

5. During the Bidding or Negotiating Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.5.)
[If the construction work is to be performed under more than one prime contract and the times of performance are
to be staggered, the provisions of paragraph 4.12 will probably apply and it will be necessary to prepare a special
schedule for the Bidding or Negotiating Phase Services.]

6. During the Construction Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.6.)'
[If the construction work is to be performed under more than one prime contract and the times of performance are
to be staggered, the provisions of paragraph 4.12 will probably apply and it will be necessary to prepare a special
schedule for the Construction Phase Services.]
[If an outside date for completion of construction is to be added, it should be added here.]
Note: This change has to be coordinated with those in U4.1 and 4.7.

7. During the Operational Phase ENGINEER shall:

(insert amendments or supplements to paragraph 1.7)
[If an outside date for completion of all services is to be added, it should be added here.]
Note: This change is to be coordinated with those in U4.1 and 4.8.

vii
132 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

EXHIBIT B TO AGREEMENT BETWEEN OWNER AND

ENGINEER FOR PROFESSIONAL SERVICES, dated
_ _ _ _ ,19_ (for use with No. 1910-1,1984 Edition).

A LISTING OF THE DUTIES, RESPONSIBILITIES AND

LIMITATIONS OF AUTHORITY OF THE RESIDENT PROJECT REPRESENT ATIVE.
This is an Exhibit attached to, made a part of and incorporated by reference with the Agreement made on _ _ ,
19_ _ , between (OWNER) and (ENGINEER)
providing for professional engineering services.

ENGINEER shall furnish a Resident Project Representative (RPR) , assistants and other field, staff to assist
ENGINEER in observing performance of the work of Contractor.
Through more extensive on-site observations of the work in progress and field checks of materials and equipment
by the RPR and assistants, ENGINEER shall endeavor to provide further protection for OWNER against defects
and deficiencies in the work of CONTRACTOR; but, the furnishing of such services will not make ENGINEER
responsible for or give ENGINEER control over construction means, methods, techniques, sequences or procedures
or for safety precautions or programs, or responsibility for CONTRACTOR's failure to perform the Work in
accordance with the Contract Documents and in particular the specific limitations set forth in paragraph 1.6 of the
Agreement are applicable.
The duties and responsibilities of the RPR are limited to those of ENGINEER in ENGINEER's agreement with
the OWNER and in the construction Contract Documents, and are further limited and described as follows:

A. General
RPR is ENGINEER's agent at the site, will act as directed by and under the supervision of ENGINEER, and
will confer with ENGINEER regarding RPR's actions. RPR's dealings in matters pertaining to the on-site work
shall in general be with ENGINEER and CONTRACTOR keeping OWNER advised as necessary. RPR's dealings
with subcontractors shall only be through or with the full knowledge and approval of CONTRACTOR. RPR shall
generally communicate with OWNER with the knowledge of and under the direction of ENGINEER.

B. Duties and Responsibilities of RPR

1. Schedules: Review the progress schedule, schedule of Shop Drawing submittals and schedule of values
prepared by CONTRACTOR and consult with ENGINEER concerning acceptability.
2. Conferences and Meetings: Attend meetings with CONTRACTOR, such as preconstruction conferences,
progress meetings, job conferences and other project-related meetings, and prepare and circulate copies
of minutes thereof.
3. Liaison:
a. Serve as ENGINEER's liaison with CONTRACTOR, working principally through CONTRACTOR's
superintendent and assist in understanding the intent of the Contract Documents; and assist ENGINEER
in serving as'OWNER's liaison with CONTRACTOR when CONTRACTOR's operations affect OWN-
ER's on-site operations.
b. Assist in obtaining from OWNER additional details or information, when required for proper execution
of the Work.
4. Shop Drawings and Samples:
a. Record date of receipt of Shop Drawings and samples.
b. Receive samples which are furnished at the site by CONTRACTOR, and notify ENGINEER of avail-
ability of samples for examination.
c. Advise ENGINEER and CONTRACTOR ofthe commencement of any Work requiring a Shop Drawing
or sample if the submittal has not been approved by ENGINEER.
5. Review of Work, Rejection of Defective Work, Inspections and Tests:
a. Conduct on-site observations of the Work in progress to assist ENGINEER in determining if the Work
is in general proceeding in accordance with the Contract Documents.
b. Report to ENGINEER whenever RPR believes that any Work is unsatisfactory, faulty or defective or
does not conform to the Contract Documents, or has been damaged, or does not meet the requirements

viii
 APPENDIX 1 133

of any inspection, test or approval required to be made; and advise ENGINEER of Work that RPR
believes should be corrected or rejected or should be uncovered for observation, or requires special
testing, inspection or approval.
c. Verify that tests, equipment and systems startups and operating and maintenance training are conducted
in the presence of appropriate personnel, and that CONTRACTOR maintains adequate records thereof;
and observe, record and report to ENGINEER appropriate details relative to the test procedures and
startups.
d. Accompany visiting inspectors representing public or other agencies havingjurisdiction over the Project,
record the results of these inspections and report to ENG~NEER.
6. Interpretation of Contract Documents: Report to ENGINEER when clarifications and interpretations of
the Contract Documents are needed and transmit to CONTRACTOR clarifications and interpretations as
issued by ENGINEER.
7. Modifications: Consider and evaluate CONTRACTOR's suggestions for modifications in Drawings or
Specifications and report with RPR's recommendations to ENGINEER. Transmit to CONTRACTOR
decisions as issued by ENGINEER.
8. Records:
a. Maintain at the job site orderly files for correspondence, reports of job conferences, Shop Drawings
and samples, reproductions of original Contract Documents including all Work Directive Changes,
Addenda, Change Orders, Field Orders, additional Drawings issued subsequent to the execution of the
Contract, ENGINEER's clarifications and interpretations of the Contract Documents, progress reports,
and other Project related documents.
b. Keep a diary or log book, recording CONTRACTOR hours on the job site, weather conditions, data
relative to questions of Work Directive Changes, Change Orders or changed conditions, list of job site
visitors, daily activities, decisions, observations in general, and specific observations in more detail as
in the case of observing test procedures; and send copies to ENGINEER.
c. Record names, addresses and telephone numbers of all CONTRACTORS, subcontractors and major
suppliers of materials and equipment.
9. Reports:
a. Furnish ENGINEER periodic reports as required of progress of the Work and of CONTRACTOR's
compliance with the progress schedule and schedule of Shop Drawing and sample submittals.
b. Consult with ENGINEER in advance of scheduled major tests, inspections or start of important phases
of the Work.
c. Draft proposed Change Orders and Work Directive Changes, obtaining backup material from CON-
TRACTOR and recommend to ENGINEER Change Orders, Work Directive Changes, and Field Orders.
d. Report immediately to ENGINEER and OWNER upon the occurrence of any accident.
10. Payment Requests: Review applications for payment with CONTRACTOR for compliance with the estab-
lished procedure for their submission and forward with recommendations to ENGINEER, noting partic-
ularly the relationship of the payment requested to the schedule of values, Work completed and materials
and equipment delivered at the site but not incorporated in the Work.
11. Certificates, Maintenance and Operation Manuals: During the course ofthe Work, verify that certificates,
maintenance and operation manuals and other data required to be assembled and furnished by CON-
TRACTOR are applicable to the items actually installed and in accordance with the Contract Documents,
and have this material delivered to ENGINEER for review and forwarding to OWNER prior to final
payment for the Work.
12. Completion:
a. Before ENGINEER issues a Certificate of Substantial Completion, submit to CONTRACTOR a list of
observed items requiring completion or correction.
b. Conduct final inspection in the company of ENGINEER, OWNER, and CONTRACTOR and prepare
a final list of items to be completed or corrected.
c. Observe that all items on final list have been completed or corrected and make recommendations to
ENGINEER concerning acceptance.

ix
134 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

C. Limitations of Authority
Resident Project Representative:
I. Shall not authorize any deviation from the Contract Documents or substitution of materials or equipment,
unless authorized by ENGINEER.
2. Shall not exceed limitations of ENGINEER's authority as set forth in the Agreement or the Contract
Documents.
3. Shall not undertake any of the responsibilities of CONTRACTOR, subcontractors or CONTRACTOR's
superintendent.
4. Shall not advise on, issue directions relative to or assume control over any aspect of the means, methods,
techniques, sequences or procedures of construction unless such advice or directions are specifically
required by the Contract Documents.
5. Shall not advise on, issue directions regarding or assume control over safety precautions and programs in
connection with the Work.
6. Shall not accept Shop Drawing or sample submittals from anyone other than CONTRACTOR.
7. Shall not authorize OWNER to occupy the Project in whole or in part.
8. Shall not participate in specialized field or laboratory tests or inspections conducted by others except as
specifically authorized by ENGINEER.

x
 APPENDIX 1 135

TABLE OF CONTENTS
Page No.
IDENTIFICATION OF THE PARTIES ........................................................... 1

DESCRIPTION OF THE PROJECT .............................................................. .

SECTION I-BASIC SERVICES OF ENGINEER .............................................................. .

1.1. General ......................................................................................... .
1.2. Study and Report Phase ....................................................................... .
1.3. Preliminary Design Phase ...................................................................... 2
1.4. Final Design Phase.............................................................................. 2
1.5. Bidding or Negotiating Phase .................................................................. 3
1.6. Construction Phase ............................................................................. 3
1.7. Operational Phase ............................................................................... 5

SECTION 2-ADDITIONAL SERVICES OF ENGINEER ...................................................... 5

2.1. Services Requiring Authorization in Advance ................................................ 5
2.2. Required Additional Services .................................................................. 7

SECTION 3-OWNER'S RESPONSIBILITIES .................................................................. 7

SECTION 4-PERIODS OF SERVICE ............................................................................ 8

SECTION 5-PAYMENTS TO ENGINEER ...................................................................... 11

5.1. Methods of Payment for Services and Expenses of ENGINEER........... ... .............. 11
5.2. Times of Payment............................................................................... 12
5.3. Other Provisions Concerning Payments ....................................................... 12
5.4. Definitions ....................................................................................... 12

SECTION 6-CONSTRUCTION COST AND OPINIONS OF COST ........................................... 15

6.1. Construction Cost............................................................................... 15
6.2. Opinions of Cost ................................................................................ 15

SECTION 7--GENERAL CONSIDERATIONS .................................................................. 15

7.1. Termination ..................................................................................... 15
7.2. Reuse of Documents ............................................................................ 16
7.3. Insurance ........................................................................................ 16
7.4. Controlling Law ................................................................................. 16
7.5. Successors and Assigns ......................................................................... 16
7.6. Arbitration ....................................................................................... 17

SECTION 8--SPECIAL PROVISIONS, EXHIBITS AND SCHEDULES ...................................... 19

 APPENDIX 1 137

This document has important legal consequences; consultation with an attorney is encouraged with respect to its completion
or modification.

STANDARD FORM OF AGREEMENT

BETWEEN
OWNER AND ENGINEER
FOR
PROFESSIONAL SERVICES

THIS IS AN AGREEMENT made as of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , 19_ __

between __________________________________________________________________________

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (OWNER) and

____________________________________________________ (ENGINEER).

OWNERintendsto _______________________________________________________________

_______________________________________________________ (hereinafter called the Project).

OWNER and ENGINEER in consideration of their mutual covenants herein agree in respect of the performance
of professional engineering services by ENGINEER and the payment for those services by OWNER as set forth
below.

SECTION I-BASIC SERVICES OF ENGINEER 1.2. Study and Report Phase.

After written authorization to proceed, ENGINEER

1.1. General. shall:

1.1.1. ENGINEER shall provide for OWNER profes-

sional engineering services in all phases of the Project
to which this Agreement applies as hereinafter pro-
vided. These services will include serving as OWNER's
professional engineering representative for the Project,
providing professional engineering consultation and
advice and furnishing customary civil, structural,
mechanical and electrical engineering services and cus-
tomary architectural services incidental thereto.
1.2.1. Consult with OWNER to clarify and define
OWNER's requirements for the Project and review
available data.
1.2.2. Advise OWNER as to the necessity of OWN-
ER's providing or obtaining from others data or ser-
vices of the types described in paragraph 3.3, and assist
OWNER in obtaining such data and services.

Page I of ___ pages

138 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
1.2.3. Identify and analyze requirements of govern-
mental authorities having jurisdiction to approve the
design of the Project and participate in consultations
with such authorities.
1.2.4. Provide analyses of OWNER's needs, planning
surveys, site evaluations and comparative studies of
prospective sites and solutions.
1.2.5. Provide a general economic analysis of OWN-
ER's requirements applicable to various alternatives.
1.2.6. Prepare a Report containing schematic layouts,
sketches and conceptual design criteria with appropri-
ate exhibits to indicate clearly the considerations involved
(including applicable requirements of governmental
authorities having jurisdiction as aforesaid) and the
alternative solutions available to OWNER and setting
forth ENGINEER's findings and recommendations. This
Report will be accompanied by ENGINEER's opinion
of probable costs for the Project, including the following
which will be separately itemized: Construction Cost,
allowance for engineering costs and contingencies, and
(on the basis of information furnished by OWNER)
allowances for such other items as charges of all other
professionals and consultants, for the cost of land and
rights-of-way, for compensation for or damages to
properties, for interest and financing charges and for
other services to be provided by others for Owner
pursuant to paragraphs 3.7 through 3.11, inclusive. The
total of all such costs, allowances, etc. are hereinafter
called "Total Project Costs".
1.2.7. Furnish five copies of the Study and Report doc-
uments and review them in person with OWNER.
The duties and responsibilities of ENGINEER during
the Study and Report Phase are amended and supple-
mented as indicated in paragraph 2 of Exhibit A "Fur-
ther Descriptions of Basic Engineering Services and
Related Matters".
1.3. Preliminary Design Phase.
After written authorization to proceed with the Prelim-
inary Design Phase, ENGINEER shall:
1.3.1. In consultation with OWNER and on the basis
of the accepted Study and Report documents, deter-
mine the general scope, extent and character of the
Project.
1.3.2. Prepare Preliminary Design documents consist-
ing of final design criteria, preliminary drawings, outline
specifications and written descriptions of the Project.
Page 2 of _ _ pages
1.3.3. Advise OWNER if additional data or services
of the types described in paragraph 3.4 are necessary
and assist OWNER in obtaining such data and services.
1.3.4. Based on the information contained in the pre-
liminary design documents, submit a revised opinion
of probable Total Project Costs.
1.3.5. Furnish five copies of the above Preliminary
Design documents and present and review them in per-
son with OWNER.
The duties and responsibilities of ENGINEER during
the Preliminary Design Phase are amended and sup-
plemented as indicated in paragraph 3 of Exhibit A
"Further Description of Basic Engineering Services
and Related Matters".
1.4. Final Design Phase.
After written authorization to proceed with the Final
Design Phase, ENGINEER shall:
1.4 .1. On the basis of the accepted Preliminary Design
documents and the revised opinion of probable Total
Project Costs prepare for incorporation in the Contract
Documents final drawings to show the general scope,
extent and character of the work to be furnished and
performed by Contractor(s) (hereinafter called "Draw-
ings") and Specifications (which will be prepared in
conformance with the sixteen division format of the
Construction Specifications Institute).
1.4.2. Provide technical criteria, written descriptions
and design data for OWNER's use in filing applications
for permits with or obtaining approvals of such gov-
ernmental authorities as have jurisdiction to approve
the design of the Project, and assist OWNER in con-
sultations with appropriate authorities.
1.4.3. Advise OWNER of any adjustments to the latest
opinion of probable Total Project Costs caused by
changes in general scope, extent or character or design
requirements of the Project or Construction Costs. Fur-
nish to OWNER a revised opinion of probable Total
Project Costs based on the Drawings and Specifica-
tions.
1.4.4. Prepare for review and approval by OWNER,
its legal counsel and other advisors contract agreement
forms, general conditions and supplementary condi-
tions, and (where appropriate) bid forms, invitations to
bid and instructions to bidders (all of which shall be
consistent with the forms and pertinent guide sheets

prepared by the Engineers Joint Contract Documents
Committee), and assist in the preparation of other related
documents.
1.4.5. Furnish five copies ofthe above documents and
of the Drawings and Specifications and present and
review them in person with OWNER.
The duties and responsibilities of ENGINEER during
the Final Design Phase are amended and supplemented
as indicated in paragraph 4 of Exhibit A "Further
Description of Basic Engineering Services and Related
Matters" .
1.5. Bidding or Negotiating Phase.
After written authorization to proceed with the Bidding
or Negotiating Phase, ENGINEER shall:
1.5.1. Assist OWNER in advertising for and obtaining
bids or negotiating proposals for each separate prime
contract for construction, materials, equipment and
services; and, where applicable, maintain a record of
prospective bidders to whom Bidding Documents have
been issued, attend pre-bid conferences and receive
and process deposits for Bidding Documents.
1.5.2. Issue addenda as appropriate to interpret, clarify
or expand the Bidding Documents.
1.5.3. Consult with and advise OWNER as to the
acceptability of subcontractors, suppliers and other
persons and organizations proposed by the prime con-
tractor(s) (herein called "Contractor(s)") for those por-
tions of the work as to which such acceptability is
required by the Bidding Documents.
1.5.4. Consult with OWNER concerning and deter-
mine the acceptability of substitute materials and equip-
ment proposed by Contractor(s) when substitution prior
to the award of contracts is allowed by the Bidding
Documents.
1.5.5. Attend the bid opening, prepare bid tabulation
sheets and assist OWNER in evaluating bids or pro-
posals and in assembling and awarding contracts for
construction, materials, equipment and services.
The duties and responsibilities of ENGINEER during
the Bidding or Negotiating Phase are amended and
supplemented as indicated in paragraph 5 of Exhibit A
"Further Description of Basic Engineering Services
and Related Matters" .
Page 3 of _ _ pages
APPENDIX 1 139
1.6. Construction Phase.
During the Construction Phase:
1.6.1. General Administration of Construction Con-
tract. ENGINEER shall consult with and advise
OWNER and act as OWNER's representative as pro-
vided in Articles 1 through 17, inclusive, ofthe Standard
General Conditions of the Construction Contract, No.
1910-8 (1983 edition) of the Engineers Joint Contract
Documents Committee. The extent and limitations of
the duties, responsibilities and authority of ENGI-
NEER as assigned in said Standard General Conditions
shall not be modified, except to the extent provided in
paragraph 6 of Exhibit A "Further Description of Basic
Engineering Services and Related Matters" and except
as ENGINEER may otherwise agree in writing. All of
OWNER's instructions to Contractor(s) will be issued
through ENGINEER who will have authority to act on
behalf of OWNER to the extent provided in said Stan-
dard General Conditions except as otherwise provided
in writing.
1.6.2. Visits to Site and Observation of Construction.
In connection with observations of the work of Con-
tractor(s) while it is in progress:
1.6.2.1. ENGINEER shall make visits to the site
at intervals appropriate to the various stages of con-
struction as ENGINEER deems necessary in order
to observe as an experienced and qualified design
professional the progress and quality of the various
aspects of Contractor(s), work. In addition, ENGI-
NEER shall provide the services of a Resident Proj-
ect Representative (and assistants as agreed) at the
site to assist ENGINEER and to provide more con-
tinuous observation of such work. Based on infor-
mation obtained during such visits and on such obser-
vations, ENGINEER shall endeavor to determine in
general if such work is proceeding in accordance with
the Contract Documents and ENGINEER shall keep
OWNER informed of the progress of the work.
1.6.2.2. The Resident Project Representative (and
any assistants) will be ENGINEER's agent or
employee and under ENGINEER's supervision. The
duties and responsibilities of the Resident Project
Representative (and assistants) are set forth in Exhibit
B "Duties, Responsibilities and Limitation of
Authority of Resident Project Representative" .
1.6.2.3. The purpose of ENGINEER's visits to
and representation by the Resident Project Repre-
sentative (and assistants, if any) at the site will be to
enable ENGINEER to better carry out the duties and
140 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
responsibilities assigned to and undertaken by
ENGINEER during the Construction Phase, and, in
addition, by exercise of ENGINEER's efforts as an
experienced and qualified design professional, to pro-
vide for OWNER a greater degree of confidence that
the completed work of Contractor(s) will conform
generally to the Contract Documents and that the
integrity of the design concept as reflected in the
Contract Documents has been implemented and pre-
served by Contractor(s). On the other hand, ENGI-
NEER shall not, during such visits or as a result of
such observations ofContractor(s), work in progress,
supervise, direct or have control over Contractor(s),
work nor shall ENGINEER have authority over or
responsibility for the means, methods, techniques,
sequences or procedures of construction selected by
Contractor(s), for safety precautions and programs
incident to the work ofContractor(s) or for any failure
of Contractor(s) to comply with laws, rules, regula-
tions, ordinances, codes or orders applicable to Con-
tractor(s) furnishing and performing their work.
Accordingly, ENGINEER can neither guarantee the
performance of the construction contracts by Con-
tractor(s) nor assume responsibility for Contrac-
tor(s)' failure to furnish and perform their work in
accordance with the Contract Documents.
1.6.3. Defective Work. During such visits and on the
basis of such observations, ENGINEER may disap-
prove of or reject Contractor(s), work while it is in
progress if ENGINEER believes that such work will
not produce a completed Project that conforms gen-
erally to the Contract Documents or that it will preju-
dice the integrity of the design concept of the Project
as reflected in the Contract Documents.
1.6.4. Interpretations and Clarifications. ENGINEER
shall issue necessary interpretations and clarifications
ofthe Contract Documents and in connection therewith
prepare work directive changes and change orders as
required.
1.6.5. Shop Drawings. ENGINEER shall review and
approve (or take other appropriate action in respect ot)
Shop Drawings (as that term is defined in the aforesaid
Standard General Conditions), samples and other data
which Contractor(s) are required to submit, but only
for conformance with the design concept of the Project
and compliance with the information given in the Con-
tract Documents. Such reviews and approvals or other
action shall not extend to means, methods, techniques,
sequences or procedures of construction or to safety
precautions and programs incident thereto.
1.6.6. Substitutes. ENGINEER shall evaluate and
determine the acceptability of substitute materials and
Page 4 of _ _ pages
equipment proposed by Contractor(s), but subject to
the provision of paragraph 2.2.2.
1.6.7. Inspections and Tests. ENGINEER shall have
authority, as OWNER's representative, to require spe-
cial inspection or testing of the work, and shall receive
and review all certificates of inspections, testings and
approvals required by laws, rules, regulations, ordi-
nances, codes, orders or the Contract Documents (but
only to determine generally that their content complies
with the requirements of, and the results certified indi-
cate compliance with, the Contract Documents).
1.6.8. Disputes between OWNER and Contractor.
ENGINEER shall act as initial interpreter of the
requirements of the Contract Documents and judge of
the acceptability of the work thereunder and make deci-
sions on all claims of OWNER and Contractor(s) relat-
ing to the acceptability of the work or the interpretation
of the requirements of the Contract Documents per-
taining to the execution and progress of the work.
ENGINEER shall not be liable for the results of any
such interpretations or decisions rendered in good faith.
1.6.9. Applications for Payment. Based on ENGI-
NEER's on-site observations as an experienced and
qualified design professional, on information provided
by the Resident Project Representative and on review
of applications for payment and the accompanying data
and schedules:
1.6.9.1. ENGINEER shall determine the amounts
owing to Contractor(s) and recommend in writing
payments to Contractor(s) in such amounts. Such
recommendations of payment will constitute a rep-
resentation to OWNER, based on such observations
and review, that the work has progressed to the point
indicated, and that, to the best of ENGINEER's
knowledge, information and belief, the quality of
such work is generally in accordance with the Con-
tract Documents (subject to an evaluation of such
work as a functioning whole prior to or upon Sub-
stantial Completion, to the results of any subsequent
tests called for in the Contract Documents and to any
other qualifications stated in the recommendation).
In the case of unit price work, ENGINEER's rec-
ommendations of payment will include final deter-
minations of quantities and classifications of such
work (subject to any subsequent adjustments allowed
by the Contract Documents).
1.6.9.2. By recommending any payment ENGI-
NEER will not thereby be deemed to have repre-
sented that exhaustive, continuous or detailed reviews
or examinations have been made by ENGINEER to
check the quality or quantity of Contractor(s), work
 APPENDIX 1 141

as it is furnished and peIformed beyond the respon- erly peIform duties and responsibilities assumed by
sibilities specifically assigned to ENGINEER in this ENGINEER in the Contract Documents.
Agreement and the Contract Documents. ENGI-
NEER's review of Contractor(s), work for the pur-
1.7. Operational Phase.
poses of recommending payments will not impose on
ENGINEER responsibility to supervise, direct or
During the Operational Phase, ENGINEER shall, when
control such work or for the means, methods, tech-
requested by OWNER:
niques, sequences, or procedures of construction or
safety precautions or programs incident thereto or
1.7.1. Provide assistance in the closing of any financial
Contractor(s) compliance with laws, rules, regula-
or related transaction for the Project.
tions, ordinances, codes or orders applicable to their
furnishing and performing the work. It will also not
1.7.2. Provide assistance in connection with the refin-
impose responsibility on ENGINEER to make any
ing and adjusting of any equipment or system.
examination to ascertain how or for what purposes
any Contractor has used the moneys paid on account
1.7.3. Assist OWNER in training OWNER's staff to
of the Contract Price, or to determine that title to
operate and maintain the Project.
any of the work, materials or equipment has passed
to OWNER free and clear of any lien, claims, security
1.7.4. Assist OWNER in developing systems and pro-
interests or encumbrances, or that there may not be
cedures for control of the operation and maintenance
other matters at issue between OWNER and CON-
of and record keeping for the Project.
TRACTOR that might affect the amount that should
be paid.
1. 7 .5. Prepare a set of reproducible record prints of
Drawings showing those changes made during the ~on­
1.6.10. Contraetor(s), Completion Documents. ENGI-
struction process, based on the marked-up prints, draw-
NEER shall receive and review maintenance and oper-
ings and other data furnished by Contractor(s) to ENGI-
ating instructions, schedules, guarantees, bonds and
NEER and which ENGINEER considers significant.
certificates of inspection, tests and approvals which are
to be assembled by Contractor(s) in accordance with
1.7.6. In company with OWNER, visit the Project to
the Contract Documents (but such review will only be
observe any apparent defects in the completed con-
to determine that their content complies with the
struction, assist OWNER in consultations and discus-
requirements of, and in the case of certificates of inspec-
sions with Contractor(s) concerning correction of such
tion, tests and approvals the results certified indicate
deficiencies, and make recommendations as to replace-
compliance with, the Contract Documents); and shall
ment or correction of defective work.
transmit them to OWNER with written comments.
The duties and responsibilities of ENGINEER during
1.6.11. Inspections. ENGINEER shall conduct an
the Operational Phase are amended and supplemented
inspection to determine if the work is substantially
complete and a final inspection to determine if the com- as indicated in paragraph 7 of Exhibit A "Further
Description of Basic Engineering. Services and Related
pleted work is acceptable so that ENGINEER may
Matters".
recommend, in writing, final payment to Contractor(s)
and may give written notice to OWNER and the Con-
tractor(s) that the work is acceptable (subject to any
SECTION 2-ADDITIONAL SERVICES OF
conditions therein expressed), but any such recom-
ENGINEER
mendation and notice will be subject to the limitations
expressed in paragraph 1.6.9.2.

1.6.12. Limitation ofResponsibilities. ENGINEER shall
not be responsible for the acts or omissions of any
Contractor, or of any subcontractor or supplier, or any
of the Contractor(s), or subcontractor's or supplier's
agents or employees or any other persons (except
ENGINEER's own employees and agents) at the site
or otherwise furnishing or performing any of the Con-
tractor(s), work; however, nothing contained in para-
graphs 1.6.1 thru 1.6.11 inclusive, shall be construed
to release ENGINEER from liability for failure to prop-
2.1. Services Requiring Authorization in Advance.
If authorized in writing by OWNER, ENGINEER shall
furnish or obtain from others Additional Services of
the types listed in paragraphs 2.1.1 through 2.1.14,
inclusive. These services are not included as part of
Basic Services except to the extent provided otherwise
in Exhibit A "Further Description of Basic Engineering
Services and Related Matters"; these will be paid for
by OWNER as indicated in Section 5.

Page 5 of _ _ pages
142 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
2.1.1. Preparation of applications and supporting doc-
uments (in addition to those furnished under Basic Ser-
vices) for private or governmental grants, loans or
advances in connection with the Project; preparation
or review of environmental assessments and impact
statements; review and evaluation of the effect on ·the
design requirements of the Project of any such state-
ments and documents prepared by others; and assis-
tance in obtaining approvals of authorities having juris-
diction over the anticipated environmental impact of
the Project.
2.1.2. Services to make measured drawings of or to
investigate existing conditions or facilities, or to verify
the accuracy of drawings or other information furnished
by OWNER.
2.1.3. Services resulting from significant changes in the
general scope, extent or character of the Project or its
design including, but not limited to, changes in size,
complexity, OWNER's schedule, character of con-
struction or method of financing; and revising previ-
ously accepted studies, reports, design documents or
Contract Documents when such revisions are required
by changes in laws, rules, regulations, ordinances, codes
or orders enacted subsequent to the preparation of such
studies, reports or documents, or are due to any other
causes beyond ENGINEERS's control.
2.1.4. Providing renderings or models for OWNER's
use.
2.1.5. Preparing documents for alternate bids requested
by OWNER for Contractor(s)' work which is not exe-
cuted or documents for out-of-sequence work.
2.1.6. Investigations and studies involving, but not lim-
ited to, detailed consideration of operations, mainte-
nance and overhead expenses; providing value engi-
neering during the course of design; the preparation of
feasibility studies, cash flow and economic evaluations,
rate schedules and appraisals; assistance in obtaining
financing for the Project; evaluating processes available
for licensing and assisting OWNER in obtaining process
licensing; detailed quantity surveys of material, equip-
ment and labor; and audits or inventories required in
connection with construction performed by OWNER.
2.1.7. Furnishing services of independent professional
associates and consultants for other than Basic Services
(which include, but are not limited to, customary civil,
structural, mechanical and electrical engineering and
customary architectural design incidental thereto); and
providing data or services of the types described in
Page 6 of _ _ pages
paragraph 3.4 when OWNER employs ENGINEER to
provide such data or services in lieu of furnishing the
same in accordance with paragraph 3.4.
2.1.8. If ENGINEER's compensation is on the basis
of a lump sum or percentage of Construction Cost or
cost-plus a fixed fee method of payment, services
resulting from the award of more separate prime con-
tracts for construction, materials or equipment for the
Project than are contemplated by paragraph 5.1.1.2. If
ENGINEER's compensation is on the basis of a per-
centage of Construction Cost and ENGINEER has been
required to prepare Contract Documents on the
assumption that more than one prime contract will be
awarded for construction, materials and equipment, but
only one prime contract is awarded for construction,
materials and equipment for the Project, services attrib-
utable to the preparation of contract documentation
that was rendered unuseable and any revisions or addi-
tions to contract documentation used that was neces-
sitated by the award of only one prime contract.
2.1.9. Services during out-of-town travel required of
ENGINEER other than visits to the site or OWNER's
office as required by Section 1.
2.1.10. Assistance in connection with bid protests,
rebidding or renegotiating contracts for construction,
materials, equipment or services, except when such
assistance is required to complete services called for
in paragraph 6.2.2.5.
2.1.11. Providing any type of property surveys or related
engineering services needed for the transfer of interests
in real property and field surveys for design purposes
and engineering surveys and staking to enable Con-
tractor(s) to proceed with their work; and providing
other special field surveys.
2.1.12. Preparation ofoperating , maintenance and staff-
ing manuals to supplement Basic Services under para-
graph 1.7.3.
2.1.13. Preparing to serve or serving as a consultant or
witness for OWNER in any litigation, arbitration or
other legal or administrative proceeding involving the
Project (except for assistance in consultations which is
included as part of Basic Services under paragraphs
1.2.3 and 1.4.2).
2.1.14. Additional services in connection with the Proj-
ect, including services which are to be furnished by
OWNER in accordance with Article 3, and services
not otherwise provided for in this Agreement. .

2.2. Required Additional Services.
When required by the Contract Documents in circum-
stances beyond ENGINEER's control, ENGINEER
shall furnish or obtain from others, as circumstances
require during construction and without waiting for
specific authorization from OWNER, Additional Ser-
vices of the types listed in paragraphs 2.2.1 through
2.2.6, inclusive (except to the extent otherwise pro-
vided in Exhibit A "Further Description of Basic Engi-
neering Services and Related Matters' '). These services
are not included as part of Basic Services. ENGINEER
shall advise OWNER promptly after starting any such
Additional Services which will be paid for by OWNER
as indicated in Section 5.
2.2.1. Services in connection with work directive
changes and change orders to reflect changes requested
by OWNER if the resulting change in compensation
for Basic Services is not commensurate with the addi-
tional services rendered.
2.2.2. Services in making revisions to Drawings and
Specifications occasioned by the acceptance of substi-
tutions proposed by Contractor(s); and services after
the award of each contract in evaluating and determin-
ing the acceptability of an unreasonable or excessive
number of substitutions proposed by Contractor.
2.2.3. Services reSUlting from significant delays, changes
or price increases occurring as a direct or indirect result
of material, equipment or energy shortages.
2.2.4. Additional or extended services during con-
struction made necessary by (1) work damaged by fire
or other cause during construction, (2) a significant
amount of defective or neglected work of any Contrac-
tor, (3) acceleration of the progress schedule involving
services beyond normal working hours, and (4) default
by any Contractor.
2.2.5. Services (other than Basic Services during the
Operational Phase) in connection with any partial uti-
lization of any part of the Project by OWNER prior to
Substantial Completion.
2.2.6. Evaluating an unreasonable or extensive num-
ber of claims submitted by Contractor(s) or others in
connection with the work.
SECTION 3-0WNER'S RESPONSIBILITIES
OWNER shall do the following in a timely manner so
as not to delay the services of ENGINEER:
Page 7 of _ _ pages
APPENDIX 1 143
3.1. Designate in writing a person to act as OWNER's
representative with respect to the services to be ren-
dered under this Agreement. Such person shall have
complete authority to transmit instructions, receive
information, interpret and define OWNER's policies
and decisions with respect to ENGINEER's services
for the Project.
3.2. Provide all criteria and full information as to
OWNER's requirements for the Project, including design
objectives and constraints, space, capacity and perfor-
mance requirements, flexibility and expandability, and
any budgetary limitations; and furnish copies of all
design and construction standards which OWNER will
require to be included in the Drawings and Specifica-
tions.
3.3. Assist ENGINEER by placing at ENGINEER's
disposal all available information pertinent to the Proj-
ect including previous reports and any other data rel-
ative to design or construction of the Project.
3.4. Furnish to ENGINEER, as required for perfor-
mance of ENGINEER's Basic Services (except to the
extent provided otherwise in Exhibit A "Further
Description of Basic Engineering Services and Related
Matters"), the following:
3.4.1. data prepared by or services of others,
including without limitation borings, probings and
subsurface explorations, hydrographic surveys, lab-
oratory tests and inspections of samples, materials
and equipment;
3.4.2. appropriate professional interpretations of
all of the foregoing;
3.4.3. environmental assessment and impact
statements;
3.4.4. property, boundary, easement, right-of-way,
topographic and utility surveys;
3.4.5. property descriptions;
3.4.6. zoning, deed and other land use restriction;
and
3.4.7. other special data or consultations not cov-
ered in Section 2;
all of which ENGINEER may use and rely upon in
performing services under this Agreement.
3.5. Provide engineering surveys to establish reference
points for construction (except to the extent provided
144 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
otherwise in Exhibit A "Further Description of Basic
Engineering Services and Related Matters' ') to enable
Contractor(s) to proceed with the layout of the work.
3.6. Arrange for access to and make all provisions for
ENGINEER to enter upon public and private property
as required for ENGINEER to perform services under
this Agreement.
3.7. Examine all studies, reports, sketches, Drawings,
Specifications, proposals and other documents pre-
sented by ENGINEER, obtain advice of an attorney,
insurance counselor and other consultants as OWNER
deems appropriate for such examination and render in
writing decisions pertaining thereto within a reasonable
time so as not to delay the services of ENGINEER.
3.8. Furnish approvals and permits from all govern-
mental authorities having jurisdiction over the Project
and such approvals and consents from others as may
be necessary for completion of the Project.
3.9. Provide such accounting, independent cost esti-
mating and insurance counseling services as may be
required for the Project, such legal services as OWNER
may require or ENGINEER may reasonably request
with regard to legal issues pertaining to the Project
including any that may be raised by Contractor(s), such
auditing service as OWNER may require to ascertain
how or for what purpose any Contractor has used the
moneys paid under the construction contract, and such
inspection services as OWNER may require to ascer-
tain that Contractor(s) are complying with any law,
rule, regulation, ordinance, code or order applicable to
their furnishing and performing the work.
3.10. If OWNER designates a person to represent
OWNER at the site who is not ENGINEER or ENGI-
NEER's agent or employee, the duties, responsibilities
and limitations of authority of such other person and
the affect thereof on the duties and responsibilities of
ENGINEER and the Resident Project Representative
(and any assistants) will be set forth in an exhibit that
is to be identified, attached to and made a part of this
Agreement before such services begin.
3.11. If more than one prime contract is to be awarded
for construction, materials, equipment and services for
the entire Project, designate a person or organization
to have authority and responsibility for coordinating
the activities among the various prime contractors.
3.12. Furnish to ENGINEER data or estimated figures
as to OWNER's anticipated costs for services to be
provided by others for OWNER (such as services pur-
suant to paragraphs 3.7 through 3.lt, inclusive and
Page 8 of _ _ pages
other costs of the types referred to in paragraph 1.2.6)
so that ENGINEER may make the necessary findings
to support opinions of probable Total Project Costs.
3.13. Attend the pre-bid conference, bid opening, pre-
construction conferences, construction progress and
other job related meetings and substantial completion
inspections and final payment inspections.
3.14. Give prompt written notice to ENGINEER
whenever OWNER observes or otherwise becomes
aware of any development that affects the scope or
timing of ENGINEER's services, or any defect or non-
conformance in the work of any Contractor.
3.15. Furnish, or direct ENGINEER to provide, Addi-
tional Services as stipulated in paragraph 2.1 of this
Agreement or other services as required.
3.16. Bear all costs incident to compliance with the
requirements of this Section 3.
SECTION 4-PERIODS OF SERVICE
4.1. The provisions of this Section 4 and the various
rates of compensation for ENGINEER's services pro-
vided for elsewhere in this Agreement have been agreed
to in anticipation of the orderly and continuous progress
of the Project through completion of the Construction
Phase. ENGINEER's obligation to render services
hereunder will extend for a period which may reason-
ably be required for the design, award of contracts,
construction and initial operation of the Project includ-
ing extra work and required extensions thereto. If in
Exhibit A "Further Description of Basic Engineering
Services and Related Matters" specific periods of time
for rendering services are set forth or specific dates by
which services are to be completed are provided and
if such dates are exceeded through no fault of ENGI-
NEER, all rates, measures and amounts of compen-
sation provided herein shall be subject to equitable
adjustment.
4.2. The services called for in the Study and Report
Phase will be completed and the Report submitted within
the stipulated period indicated in paragraph 2 of Exhibit
A "Further Description of Basic Engineering Services
and Related Matters" after written authorization to
proceed with that phase of services which will be given
by OWNER within thirty days after ENGINEER has
signed this Agreement.
4.3. After acceptance by OWNER of the Study and
Report Phase documents indicating any specific mod-

ifications or changes in the general scope, extent or
character ofthe Project desired by OWNER, and upon
written authorization from OWNER, ENGINEER shall
proceed with the performance of the services called for
in the Preliminary Design Phase, and shall submit pre-
liminary design documents and a revised opinion of
probable Total Project Costs within the stipulated period
indicated in paragraph 3 of Exhibit A "Further Descrip-
tion of Basic Engineering Services and Related Mat-
ters" .
4.4. After acceptance by OWNER of the Preliminary
Design Phase documents and revised opinion of prob-
able Total Project Costs, indicating any specific mod-
ifications or changes in the general scope, extent or
character ofthe Project desired by OWNER, and upon
written authorization from OWNER, ENGINEER shall
proceed with the performance of the services called for
in the Final Design Phase; and shall deliver Contract
Documents and a revised opinion of probable Total
Project Costs for all work of Contractor(s) on the Proj-
ect within the stipulated period indicated in paragraph
4 of Exhibit A "Further Description of Basic Engi-
neering Services and Related Matters" .
4.5. ENGINEER's services under the Study and Report
Phase, Preliminary Design Phase and Final Design Phase
shall each be considered complete at the earlier of (1)
the date when the submissions for that phase have been
accepted by OWNER or (2) thirty days after the date
when such submissions are delivered to OWNER for
final acceptance, plus in each case such additional time
as may be considered reasonable for obtaining approval
of governmental authorities having jurisdiction to
approve the design of the Project.
4.6. After acceptance by OWNER of the ENGI-
NEER's Drawings, Specifications and other Final Design
Phase documentation including the most recent opinion
of probable Total Project Costs and upon written autho-
rization to proceed, ENGINEER shall proceed with
performance of the services called for in the Bidding
or Negotiating Phase. This Phase shall terminate and
the services to be rendered thereunder shall be consid-
ered complete upon commencement of the Construc-
tion Phase or upon cessation of negotiations with pro-
spective Contractor(s) (except as may otherwise be
required to complete the services called for in para-
graph 6.2.2.5).
4.7. The Construction Phase will commence with the
execution of the first prime contract to be executed for
the work of the Project or any part thereof, and will
terminate upon written recommendation by ENGI-
NEER of final payment on the last prime contract to
Page 9 of _ _ pages
APPENDIX 1 145
be completed. Construction Phase services may be ren-
dered at different times in respect of separate prime
contracts if the Project involves more than one prime
contract.
4.8. The Operational Phase will commence during the
Construction Phase and will terminate one year after
the date of Substantial Completion of the last prime
contract for construction, materials and equipment on
which substantial completion is achieved.
4.9. If OWNER has requested significant modifications
or changes in the general scope, extent or character of
the Project, the time of performance of ENGINEER's
services shall be adjusted equitably.
4.10. If OWNER fails to give prompt written authori-
zation to proceed with any phase of services after com-
pletion of the immediately preceding phase, or if the
Construction Phase has not commenced within _ _
calendar days (plus such additional time as may be
required to complete the services called for under para-
graph 6.2.2.5) after completion of the Final Design Phase,
ENGINEER may, after giving seven days' written notice
to OWNER, suspend services under this Agreement.
4.11. If ENGINEER's services for design or during
construction of the Project are delayed or suspended
in whole or in part by OWNER for more than three
months for reasons beyond ENGINEER's control,
ENGINEER shall on written demand to OWNER (but
without termination of this Agreement) be paid as pro-
vided in paragraph 5.3.2. If such delay or suspension
extends for more than one year for reasons beyond
ENGINEER's control, or if ENGINEER for any rea-
son is required to render Construction Phase services
in respect of any prime contract for construction, mate-
rials or equipment more than one year after Substantial
Completion is achieved under that contract, the various
rates of compensation provided for elsewhere in this
Agreement shall be subject to equitable adjustment.
4.12. In the event that the work designed or specified
by ENGINEER is to be furnished or performed under
more than one prime contract, or if ENGINEER's ser-
vices are to be separately.sequenced with the work of
one or more prime contractors (such as in the case of
fast-tracking), OWNER and ENGINEER shall, prior
to commencement of the Final Design Phase, develop
a schedule for performance of ENGINEER's services
during the Final Design, Bidding or Negotiating and
Construction Phases in order to sequence and coordi-
nate properly such services as are applicable to the
work under such separate contracts. This schedule is
146 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

to be prepared whether or not the work under such Services and Related Matters", and the provisions of
contracts is to proceed concurrently and is to be included paragraphs 4.4 through 4.lO inclusive, will be modified
in Exhibit A "Further Description of Basic Engineering accordingly.

[The remainder of this page was left blank intentionally.]

Page to of _ _ pages

LUMP SUM METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ENGINEER
5.1. Methods of Payment for Services and Expenses of
ENGINEER.
5.1.1. For Basic Services. OWNER shall pay ENGI-
NEER for Basic Services rendered under Section 1 (as
amended and supplemented by Exhibit A "Further
Description of Basic Engineering Services and Related
Matters") as follows:
5.1.1.1. One Prime Contract. If only one prime
contract is awarded for construction, materials and
equipment for the Project, a lump sum fee of
$ for all Basic Services (except ser-
vices of ENGINEER's Resident Project Represen-
tative (and assistants) furnished under paragraph
1.6.2.1 and Operational Phase services furnished under
paragraph 1.7); but, if the prime contract contains
cost-plus or incentive savings provisions for Con-
~ tractor's basic compensation, a lump sum fee of
:§ $ for such services.
~
r::
~ 5.1.1.2. SeveraLPrimeContracts.Ifmorethanone
gbut less than separate prime contracts are
§ awarded for construction, materials and equipment
:;; for the Project, a lump sum fee of $ _ _ _ _ __
S for all Basic Services (except services of ENGI-
~ NEER's Resident Project Representative (and assis-
~ tants) furnished under paragraph 1.6.2.1 and Oper-
.~ ational Phase services furnished under paragraph 1.7);
~ but, if any prime contract contains cost-plUS or incen-
...... tive savings provisions for Contractor's basic com-
pensation, a lump sum fee of $ for
such services.
5.1.1.3. Resident Project Services. For services of
ENGINEER's Resident Project Representative (and
assistants) furnished under paragraph 1.6.2.1, on the
basis of Salary Costs times a factor of for
services rendered by principals and employees
assigned to resident Project representation.
5.1.1.4. OperationaL Phase Services. For Oper-
ational Phase services furnished under paragraph 1.7,
an amount equal to ENGINEER's Salary Costs times
a factor of for services rendered by prin-
cipals and employees engaged directly on the Project.
5.1.2. For Additional Services. OWNER shall pay
ENGINEER for Additional Services rendered under
Section 2 as follows:
Page 11 of _ _ pages
APPENDIX 1 147
5.1.2.1. General. For Additional Services of
ENGINEER's principals and employees engaged
directly on the Project and rendered pursuant to para-
graph 2.1 or 2.2 (except services as a consultant
or witness under paragraph 2.1.13), on the basis
of ENGINEER's Salary Costs times a factor of
5.1.2.2. Professional Associates and ConsuLtants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Additional Ser-
vices pursuant to paragraph 2.1 or 2.2, the amount
billed to ENGINEER therefor times a factor
of _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ENGINEER's principals and employees as
consultants or witnesses in any litigation, arbitration
or other legal or administrative proceeding in ac-
cordance with paragraph 2.1.13, at the rate of
$ per day or any portion thereof (but com-
pensation for time spent in preparing to appear in
any such litigation, arbitration or proceeding will be
on the basis provided in paragraph 5.1.2.1). Com-
pensation for ENGINEER's independent profes-
sional associates and consultants will be on the basis
provided in paragraph 5.1.2.2.
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
OWNER shall pay ENGINEER the actual costs of all
Reimbursable Expenses incurred in connection with all
Basic and Additional Services.
5.1.4. The terms "Salary Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
5.2. Times of Payments.
5.2.1. ENGINEER shall submit monthly statements
for Basic and Additional Services rendered and for
Reimbursable Expenses incurred. The statements will
be based upon ENGINEER's estimate of the propor-
tion of the total services actually completed at the time
of billing. OWNER shall make prompt monthly pay-
ments in response to ENGINEER's monthly state-
ments.
148 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.3. Other Provisions Concerning Payments.
5.3.1. If OWNER fails to make any payment due
ENGINEER for services and expenses within thirty
days after receipt of ENGINEER's statement therefor,
the amounts due ENGINEER will be increased at the
rate of 1% per month from said thirtieth day, and in
addition, ENGINEER may, after giving seven days'
written notice to OWNER, suspend services under this
Agreement until ENGINEER has been paid in full all
amounts due for services, expenses and charges.
5.3.2. In the event of termination by OWNER under
paragraph 7.1 upon the completion of any phase of the
Basic Services, progress payments due ENGINEER
for services rendered through such phase shall consti-
tute total payment for such services. In the event of
such termination by OWNER during any phase of the
Basic Services, ENGINEER will be paid for services
rendered during that phase on the basis of ENGI-
NEER's Salary Costs times a factor of for
services rendered during that phase to date of termi-
nation by ENGINEER's principals and employees
engaged directly on the Project. In the event of any
such termination, ENGINEER also will be reimbursed
for the charges of independent professional associates
and consultants employed by ENGINEER to render
Basic Services, and paid for all unpaid Additional Ser-
vices and unpaid Reimbursable Expenses, plus all ter-
mination expenses. Termination expenses mean Reim-
bursable Expenses directly attributable to termination,
which, if termination is at OWNER's convenience
shall include an amount computed as a percentage of
total compensation for Basic Services earned by ENGI-
NEER to the date of termination, as follows:
20% if termination occurs after commencement of
the Preliminary Design Phase but prior to commence-
ment of the Final Design Phase; or
10% if termination occurs after commencement of
the Final Design Phase.
5.3.3. Records of ENGINEER's Salary Costs perti-
nent to ENGINEER's compensation under this Agree-
ment will be kept in accordance with generally accepted
accounting practices. Copies will be made available to
OWNER at cost on request prior to final payment for
ENGINEER's services.
5.3.4. Whenever a factor is applied to Salary Costs in
determining compensation payable to ENGINEER that
factor will be adjusted periodically and equitably to
reffect changes in the various elements that comprise
Page 12 of _ _ pages
such factor. All such adjustments will be in accordance
with generally accepted accounting practices as applied
on a consistent basis by ENGINEER and consistent
with ENGINEER's overall compensation practices and
procedures.
5.4. Definitions.
5.4.1. The Salary Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all ENGINEER's personnel engaged directly on the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-
sonnel; plus the cost of customary and statutory ben-
efits including, but not limited to, social security con-
tributions, unemployment, excise and payroll taxes,
workers' compensation, health and retirement benefits
sick leave, vacation and holiday pay and other grou~
benefits. For the purposes ofthis Agreement, the prin-
cipals of ENGINEER and their current hourly Salary
Costs are:
The hourly Salary Costs of principals of ENGINEER
will be adjusted equitably to reffect changes in person-
nel and in ENGINEER's overall compensation pro-
cedures and practices.
The amount of customary and statutory benefits of all
other personnel of ENGINEER will be considered equal
to % of salaries and wages, subject to equi-
table adjustment to reffect changes in ENGINEER's
overall compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual expenses
incurred by ENGINEER or ENGINEER's indepen-
dent professional associates or consultants, directly or
indirectly in connection with the Project, such as
expenses for: tran~portation and subsistence incidental
thereto; obtaining bids or proposals from Contractor( s);
providing and maintaining field office facilities including
furnishings and utilities; subsistence and transportation
of Resident Project Representatives and their assis-
tants; toll telephone calls and telegrams; reproduction
of reports, Drawings, Specifications, Bidding Docu-
ments, and similar Project-related items in addition to
those required under Section 1; and, if authorized in
advance by OWNER, overtime work requiring higher
than regular rates.

PERCENTAGE METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ENGINEER
5.1. Methods of Payment for Services and Expenses of
ENGINEER.
5.1.1. For Basic Services. OWNER shall pay ENGI-
NEER for Basic Services rendered under Section I (as
amended and supplemented by Exhibit A "Further
Description of Basic Engineering Services and Related
Matters") as follows:
5.1.1.1. One Prime Contract. If only one prime con-
tract is awarded for construction, materials and
equipment for the Project, an amount equal to
____ % of the Construction Cost for all Basic
Services (except services of ENGINEER's Resident
Project Representative (and assistants) furnished under
paragraph 1.6.2.1 and Operational Phase services
furnished under paragraph 1.7); but, if the prime
contract contains cost-plus or incentive savings pro-
visions for the Contractor's basic compensation, an
amount equal to % of the Construction
Cost for such services.
::;:.
.g 5.1.1.2. Several Prime Contracts. If more than one
:5 but less than
"I::s
separate prime contracts are
~ awarded for construction, materials and equipment
~
<:l
for the Project, an amount equal to % of
~ the Construction Cost for all Basic Services (except
oS! services of ENGINEER's Resident Project Repre-
~ sentative (and assistants) furnished under paragraph
.§ 1.6.2.1 and Operational Phase services furnished under
~ paragraph 1.7); but, if any prime contract contains
.5 cost-plus or incentive savings provisions for Con-
~ tractor's basic compensation, % of the
e. Construction Cost for such services.
5.1.1.3. Resident Project Services. For services of
ENGINEER's Resident Project Representative (and
assistants) furnished under paragraph 1.6.2.1, on the
basis of Salary Costs times a factor of for
services rendered by principals and employees
assigned to resident Project representation.
5.1.1.4. Operational Phase Services. For Oper-
ational Phase services furnished under paragraph 1.7,
an amount equal to ENGINEER's Salary Costs times
a factor of for services rendered by prin-
cipals and employees engaged directly on the Project.
5.1.2 For Additional Services. OWNER shall pay
ENGINEER for Additional Services rendered under
Section 2 as follows:
Page II of _ _ pages
APPENDIX 1 151
5.1.2.1. General. For Additional Services of
ENGINEER's principals and employees engaged
directly on the Project and rendered pursuant to para-
graph 2.1 or 2.2 (except services as a consultant or
witness under paragraph 2.1.13), on the basis of
ENGINEER's Salary Costs times a factor of
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Additional Ser-
vices pursuant to paragraph 2.1 or 2.2, the amount
billed to ENGINEER therefor times a factor of
5.1.2.3. Serving as a Witness. For services ren-
dered by ENGINEER's principals and employees as
consultants or witnesses in any litigation, arbitration
or other legal or administrative proceeding in accor-
dance with paragraph 2.1.13, at the rate of $ _ _
per day or any portion thereof (but compensation for
time spent in preparing to appear in any such litiga-
tion, arbitration or proceeding will be on the basis
provided in paragraph 5.1.2.1). Compensation for
ENGINEER's independent professional associates
and consultants will be on the basis provided in para-
graph 5.1.2.2.
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
OWNER shall pay ENGINEER the actual costs of all
Reimbursable Expenses incurred in connection with all
Basic and Additional Services .
5.1.4. As used in this paragraph 5.1, the terms "Salary
Costs" and "Reimbursable Expenses" have the mean-
ings assigned to them in paragraph 5.4, and the term
"Construction Cost" has the meaning assigned to it in
paragraph 6.1. When Construction Cost is used as a
basis for payment it will be based on one of the following
sources with precedence in the order listed for work
designed or specified by ENGINEER:
5.1.4.1. For completed construction work, the total
cost of all work performed as designed or specified
by ENGINEER.
5.1.4.2. For work designed or specified but not
constructed, the lowest bona fide bid received from
a qualified bidder for such work; or, if the work is
not bid, the lowest bona fide negotiated proposal for
such work.
152 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.4.3. For work designed or specified but not
constructed upon which no such bid or proposal is
received, the most recent estimate of Construction
Cost, or, if none is available, ENGINEER's most
recent opinion of probable Construction Cost.
Labor furnished by OWNER for the Project will be
included in the Construction Cost at current market
rates including a reasonable allowance for overhead
and profit. Materials and equipment furnished by
OWNER will be included at current market prices. No
deduction is to be made from Construction Costs on
account of any penalty, liquidated damages, or other
amounts withheld from payments to Contractor(s).
5.2. Times of Payments.
5.2.1. ENGINEER shall submit monthly statements
for Basic and Additional Services rendered and for
Reimbursable Expenses incurred. The statements will
be based upon ENGINEER's estimate of the propor-
tion of the total services actually completed at the time
of billing. OWNER shall make prompt monthly pay-
ments in response to ENGINEER's monthly state-
ments.
5.2.2. Upon conclusion of each phase of Basic Ser-
vices, OWNER shall pay such additional amount, if
any, as may be necessary to bring total compensation
paid on account of such phase to the following per-
centages of total compensation payable for all phases
of Basic Services:
Insert Actual
Phase Percentage
Study and Report ---_%
Preliminary Design ---_%
Final Design ---_%
Bidding or Negotiating ---_%
Construction ---_%
Operational ---_%
100 % with generally accepted accounting practices as applied
5.3. Other Provisions Concerning Payments.
5.3.1. If OWNER fails to make any payment due
ENGINEER for services and expenses within thirty
days after receipt of ENGINEER's statement therefor,
the amounts due ENGINEER will be increased at the
rate of 1% per month from said thirtieth day, and in
addition, ENGINEER may, after giving seven days'
written notice to OWNER, suspend services under this
Agreement until ENGINEER has been paid in full all
amounts due for services, expenses and charges.
Page 12 of _ _ pages
5.3.2. In the event of termination by OWNER under
paragraph 7.1 upon the completion of any phase of the
Basic Services, progress payments due ENGINEER
for services rendered through such phase shall consti-
tute total payment for such services. In the event of
such termination by OWNER during any phase of the
Basic Services, ENGINEER will be paid for services
rendered during that phase on the basis of ENGI-
NEER's Salary Costs times a factor of for
services rendered during that phase to date of termi-
nation by ENGINEER's principals and employees
engaged directly on the Project. In the event of any
such termination, ENGINEER also will be reimbursed
for the charges of independent professional associates
and consultants employed by ENGINEER to render
Basic Services, and paid for all unpaid Additional Ser-
vices and unpaid Reimbursable Expenses, plus all ter-
mination expenses. Termination expenses mean addi-
tional Reimbursable Expenses directly attributable to
termination, which, if termination is at Owner's con-
venience, shall include an amount computed as a per-
centage oftotal compensation for Basic Services earned
by ENGINEER to the date of termination, as follows:
20% if termination occurs after commencement of
the Preliminary Design Phase but prior to commence-
ment of the Final Design Phase; or
10% if termination occurs after commencement of
the Final Design Phase.
5.3.3. Records of ENGINEER's Salary Costs perti-
nent to ENGINEER's compensation under this Agree-
ment will be kept in accordance with generally accepted
accounting principles. Copies will be made available to
OWNER at cost on request prior to final payment for
ENGINEER's services.
5.3.4. Whenever a factor is applied to Salary Costs in
determining compensation payable to ENGINEER that
factor will be adjusted periodically and equitably to
reflect changes in the various elements that comprise
such factor. All such adjustments will be in accordance
on a consistent basis by ENGINEER and consistent
with ENGINEER's overall compensation practices and
procedures.
5.4. Definitions.
5.4.1. The Salary Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all ENGINEER's personnel engaged directly on the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-

sonnel; plus the cost of customary and statutory ben-
efits including, but not limited to, social security con-
tributions, unemployment, excise and payroll taxes,
workers' compensation, health and retirement benefits,
sick leave, vacation and holiday and other group ben-
efits. For the purposes of this Agreement, the principals
of ENGINEER and their current hourly Salary Costs
are:
The hourly Salary Costs of principals of ENGINEER
will be adjusted equitably to reflect changes in person-
nel and in ENGINEER's overall compensation pro-
cedures and practices.
The amount of customary and statutory benefits of all
other personnel of ENGINEER will be considered equal
[The remainder of this page was left blank intentionally.J
Page \3 of _ _ pages
APPENDIX 1 153
to % of salaries and wages, subject to equitable
adjustment to reflect changes in ENGINEER's overall
compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual expenses
incurred by ENGINEER or ENGINEER's indepen-
dent professional associates or consultants, directly or
indirectly in connection with the Project, such as
expenses for: transportation and subsistence incidental
thereto; obtaining bids or proposals from Contractor(s);
providing and maintaining field office facilities including
furnishings and utilities; subsistence and transportation
of Resident Project Representatives and their assis-
tants; toll telephone calls and telegrams; reproduction
of reports, Drawings, Specifications, Bidding Docu-
ments, and similar Project-related items in addition to
those required under Section 1; and, if authorized in
advance by OWNER, overtime work requiring higher
than regular rates.
 APPENDIX 1 155

COST PLUS A FIXED FEE METHOD OF PAYMENT

SECTION 5-PAYMENTS TO ENGINEER employees assigned to resident Project representa-

tion.

5.1. Methods of Payment for Services and Expenses
of ENGINEER.
5.1.1. For Basic Services. OWNER shall pay ENGI-
NEER for Basic Services rendered under Section 1 (as
amended and supplemented by Exhibit A "Further
Description of Basic Engineering Services and Related
Matters") as follows:
5.1.1.1. One Prime Contract. If only one prime
contract is awarded for construction, materials
and equipment for the Project, a fixed fee of
$ plus an amount equal to EN-
GINEER's Direct Labor Cost times a factor of
_ _ _ for all Basic Services rendered by principals
and employees engaged directly on the Project (except
for services of ENGINEER's Resident Project Rep-
resentative (and assistants) furnished under para-
graph 1.6.2.1 and for Operational Phase services fur-
nished under paragraph 1.7); but, if the prime con-
tract contains cost-plus or incentive savings provi-
sions for Contractor's basic compensation, the fixed
~ fee will be $ plus the aforesaid
:§ amount based on ENGINEER's Direct Labor Costs
~ for such services.
...
~
5.1.1.4. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Basic Services,
the amount billed to ENGINEER therefor times a
factor of _ __
5.1.1.5. Operational Phase Services. For Oper-
ational Phase services furnished under paragraph 1.7,
an amount equal to ENGINEER's Direct Labor Costs
times a factor of for services rendered by
principals and employees engaged directly on the
Project.
5.1.1.6. Notice of Relationship of Payments to
Estimated Total Compensation. If it becomes appar-
ent to ENGINEER at any time before Basic Services
to be rendered under this Agreement have been about
eighty percent completed that the total amount of
compensation to be paid to ENGINEER on account
of Basic Services pursuant to paragraphs 5.1.1.1,
5.1.1.3, 5.1.1.4 and 5.1.1.5 will exceed
$ or pursuant to paragraphs 5.1.1.2
through 5.1.1.5 inclusive will exceed $ _ _ _ __
(which figures are ENGINEER's estimates of the
amounts that will become payable for such services),

ENGINEER shall give OWNER written notice

~ 5.1.1.2. Several Prime Contracts. If more than
thereof. Promptly thereafter OWNER and ENGI-
§ one, but less than separate prime con-
NEER shall review the matter of compensation for
~ tracts are awarded for construction, materials and
such Basic Services, and either OWNER shall accede
~ equipment for the Project, a fixed fee of
to such compensation exceeding said estimated
'E. $ plus an amount equal to EN-
amounts or OWNER and ENGINEER shall agree to
~ GINEER's Direct Labor Costs times a factor of
a reduction in the remaining services to be rendered
.~ for all Basic Services rendered by principals
by ENGINEER under this Agreement so that total
~ and employees engaged directly on the Project (except
compensation for such Basic Services will not exceed
~ for services of ENGINEER's Resident Project Rep-
such estimated amounts when such services are com-
resentative (and assistants) furnished under para-
pleted.
graph 1.6.2.1 and Operational Phase services fur-
nished under paragraph 1.7); but, if any prime con-
tract contains cost-plus or incentive savings provi- 5.1.2. Additional Services. OWNER shall pay ENGI-
sions for Contractor's basic compensation, the fixed NEER for Additional Services rendered under Section
fee will be $ plus the aforesaid 2 as follows:
amount based on ENGINEER's Direct Labor Costs
for such services. 5.1.2.1. General. For Additional Services of
ENGINEER's principals and employees engaged
5.1.1.3. Resident Project Services. For services of directly on the Project and rendered pursuant to para-
ENGINEER's Resident Project Representative (and graph 2.1 or 2.2 (except services as a consultant or
assistants) furnished under paragraph 1.6.2.1, on the witness under paragraph 2.1.13), on the basis of
basis of Direct Labor Costs times a factor of ENGINEER's Direct Labor Costs times a factor of
_ _ _ for services rendered by principals and

Page II of _ _. pages
156 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.2.2. ProfessionalAssociatesandConsultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Additional Ser-
vices pursuant to paragraph 2.1 or 2.2, the amount
billed to ENGINEER therefor times a factor
of _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ENGINEER's principals and employees as
consultants or witnesses in any litigation, arbitration
or other legal or administrative proceeding in accor-
dance with paragraph 2.1.13, at the rate of $,_ __
per day or any portion thereof (but compensation for
time spent in preparing to appear in any such litiga-
tion, arbitration or proceeding will be on the basis
provided in paragraph 5.1.2.1). Compensation for
ENGINEER's independent professional associates
and consultants will be on the basis provided in para-
graph 5.1.2.2.
5.1.3. Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
OWNER shall pay ENGINEER the actual costs (except
where specifically provided otherwise) of all Reim-
bursable Expenses incurred in connection with all Basic
and Additional Services.
5.1.4. The "Direct Labor Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
5.2. Times of Payments.
5.2.1. ENGINEER shall submit monthly statements
for Basic and Additional Services rendered and for
Reimbursable Expenses incurred. The charge on account
of the fixed fee will be based upon ENGINEER's esti-
mate of the proportion of the total services actually
completed at the time of billing. OWNER shall make
prompt monthly payments in response to ENGI-
NEER's monthly statements.
5.3. Other Provisions Concerning Payments.
5.3.1. If OWNER fails to make any payment due
ENGINEER for services and expenses within thirty
days after receipt of ENGINEER's statement therefor,
the amounts due ENGINEER will be increased at the
rate of 1% per month from said thirtieth day, and in
addition, ENGINEER may, after giving seven days'
written notice to OWNER, suspend services under this
Agreement until ENGINEER has been paid in full all
amounts due for services, expenses and charges.
Page 12 of _ _ pages
5.3.2. In the event of termination by OWNER under
paragraph 7.1 upon the completion of any phase of the
Basic Services, progress payments due ENGINEER
for services rendered through such phase shall consti-
tute total payment for such services. In the event of
such termination by OWNER during any phase of the
Basic Services, ENGINEER also will be reimbursed
for the charges of independent professional associates
and consultants, employed by ENGINEER to render
Basic Services, and paid for services rendered during
that phase on the basis of ENGINEER's Direct Labor
Costs times a factor of for services rendered
during that phase to date of termination by ENGI-
NEER's principals and employees engaged directly on
the Project. In the event of any such termination,
ENGINEER will be paid for all unpaid Additional Ser-
vices and unpaid Reimbursable Expenses, plus all ter-
mination expenses. Termination expenses mean addi-
tional Reimbursable Expenses directly attributable to
termination, which, if termination is at Owner's con-
venience, shall include an amount computed as a per-
centage of total compensation for Basic Services earned
by ENGINEER to the date of termination, as follows:
20% if termination occurs after commencement of
the Preliminary Design Phase but prior to commence-
ment of the Final Design Phase; or
10% if termination occurs after commencement of
the Final Design Phase.
5.3.3. Records of ENGINEER's Direct Labor Costs
pertinent to ENGINEER's compensation under this
Agreement will be kept in accordance with generally
accepted accounting practices. Copies will be made
available to OWNER at cost on request prior to final
payment for ENGINEER's services.
5.3.4. Whenever a factor is applied to Direct Labor
Costs in determining compensation payable to ENGI-
NEER, that factor will be adjusted periodically and
equitably to reflect changes in the various elements that
comprise such factor. All such adjustments will be in
accordance with generally accepted accounting prac-
tices as applied on a consistent basis by ENGINEER
and consistent with ENGINEER's overall compensa-
tion practices and procedures.
5.4. Definitions.
5.4.1. Direct Labor Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all ENGINEER's personnel engaged directly on the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-
sonnel; but does not include indirect payroll related

costs or fringe benefits. For the purposes ofthis Agree-
ment the principals of ENGINEER and their current
hourly Direct Labor Costs ~re:
The hourly Direct Labor Costs of principals of ENGI-
NEER will be adjusted equitably to reflect changes in
personnel and in ENGINEER's overall compensation
procedures and practices.
5.4.2. Reimbursable Expenses mean the actual expenses
incurred by ENGINEER or ENGINEER's indepen-
dent professional associates or consultants, directly or
indirectly in connection with the Project, such as
[The remainder of this page was left blank intentionally.]
Page 13 of _ _ pages
APPENDIX 1 157
expenses for: transportation and subsistence incidental
thereto; obtaining bids or proposals from Contractor(s);
providing and maintaining field office facilities including
furnishings and utilities; subsistence and transportation
of Resident Project Representatives and their assis-
tants; toll telephone calls and telegrams; reproduction
of reports, Drawings, Specifications, Bidding Docu-
ments, and similar Project-related items in addition to
those required under Section I; and, if authorized in
advance by OWNER, overtime work requiring higher
than regular rates. In addition, if authorized in advance
by OWNER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor
of _ __

DIRECT LABOR COSTS METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ENGINEER
5.1. Methods of Payments for Services and Expenses
of ENGINEER.
5.1.1. For Basic Services. OWNER shall pay ENGI-
NEER for Basic Services rendered under Section 1 (as
amended and supplemented by Exhibit A "Further
Description of Basic Engineering Services and Related
Matters") as follows:
5.1.1.1. An amount equal to ENGINEER's Direct
Labor Costs times a factor of for all Basic
Services rendered by principals and employees
engaged directly on the Project (except for services
of ENGINEER's Resident Project Representative
(and assistants) furnished under paragraph 1.6.2.1
and for Operational Phase services furnished under
paragraph 1.7).
5.1.1.2. Resident Project Services. For services of
ENGINEER's Resident Project Representative (and
assistants) furnished under paragraph 1.6.2.1, on the
basis of Direct Labor Costs times a factor of
_ _ _f.or services rendered by principals and
employees assigned to resident Project representa-
tion.
5.1.1.3. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Basic Services,
the amount billed to ENGINEER therefor times a
factor of _ __
5.1.1.4. Operational Phase Services. For Oper-
ational Phase services furnished under paragraph 1.7,
an amount equal to ENGINEER's Direct Labor Costs
times a factor of for services rendered by
principals and employees engaged directly on the
Project.
5.1.1.5. Notice of Relationship of Payments to
Estimated Total Compensation. If it becomes appar-
ent to ENGINEER at any time before Basic Services
to be rendered under this Agreement are about eighty
percent completed that the total amount of compen-
sation to be paid to ENGINEER on account of Basic
Services pursuant to paragraph 5.1.1 will exceed
ENGINEER's estimate of the amount set forth below
which is applicable to the services rendered, ENGI-
NEER shall give OWNER written notice thereof.
Page 11 of _ _ pages
APPENDIX 1 159
Promptly thereafter OWNER and ENGINEER shall
review the matter of compensation for such Basic
Services, and either OWNER shall accede to such
compensation exceeding said estimated amounts or
OWNER and ENGINEER shall agree to a reduction
in the remaining services to be rendered by ENGI-
NEER under this Agreement so that total compen-
sation for such Basic Services will not exceed said
estimated amount when such services are completed.
5.1.1.5.1. If only one prime contract is awarded
for construction, materials, and equipment for the
Project, ENGINEER's estimate of the amount that
will become payable for Basic Services pursuant
to paragraphs 5.1.1.1 through 5.1.1.4 inclusive is
$ ; but, if the prime contract con-
tains cost-plUS or incentive savings provisions for
Contractor's basic compensation, the estimated
amount will be $ _ _ _ _ __
5.1.1.5.2. If more than one but less than _ _
separate prime contracts are awarded for construc-
tion, materials and equipment for the Project,
ENGINEER's estimate of the amount that will
become payable for Basic Services pursuant to
paragraphs 5.1.1.1 through 5.1.1.4 inclusive is
$ ; but, if any prime contract con-
tains cost-plus or incentive savings provisions for
Contractor's basic compensation, the estimated
amount will be $ _ _ _ _ __
5.1.2. Additional Services. OWNER shall pay ENGI-
NEER for Additional Services rendered under Section
2 as follows:
5.1.2.1. General. For Additional Services of
ENGINEER's principals and employees engaged
directly on the Project and rendered pursuant to para-
graph 2.1 or 2.2 (except services as a consultant or
witness under paragraph 2.1.13), on the basis of
ENGINEER's Direct Labor Costs times a factor of
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Additional Ser-
vices pursuant to paragraph 2.1 or 2.2, the amount
billed to ENGINEER therefor times a factor of
5.1.2.3. Serving as a Witness. For services ren-
dered by ENGINEER's principals and employees as
160 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
consultants or witnesses in any litigation, arbitration
or other legal or administrative proceeding in accor-
dance with paragraph 2.1.13, at the rate of $ _ _
per day or any portion thereof (but compensation for
time spent in preparing to appear in any such litiga-
tion, arbitration or proceeding will be on the basis
provided in paragraph 5.1.2.1). Compensation for
ENGINEER's independent professional associates
and consultants will be on the basis provided in para-
graph 5.1.2.2.
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
OWNER shall pay ENGINEER the actual costs (except
where specifically provided otherwise) of all Reim-
bursable Expenses incurred in connection with all Basic
and Additional Services.
5.1.4. The terms "Direct Labor Costs" and "Reim-
bursable Expenses" have the meanings assigned to
them in paragraph 5.4.
5.2. Times of Payments.
5.2.1. ENGINEER shall submit monthly statements
for Basic and Additional Services rendered and for
Reimbursable Expenses incurred. OWNER shall make
prompt monthly payments in response to ENGI-
NEER's monthly statements.
5.3. Other Provisions Concerning Payments.
5.3.1. If OWNER fails to make any payment due
ENGINEER for services and expenses within thirty
days after receipt of ENGINEER's statement therefor,
the amounts due ENGINEER will be increased at the
rate of 1% per month from said thirtieth day, and in
addition, ENGINEER may, after giving seven days'
written notice to OWNER, suspend services under this
Agreement until ENGINEER has been paid in full all
amounts due for services, expenses and charges.
5.3.2. In the event of termination by OWNER under
paragraph 7.1 upon the completion of any phase of the
Basic Services, progress payments due ENGINEER
for services rendered through such phase shall consti-
tute total payment for such services. In the event of
such termination by OWNER during any phase of the
Basic Services, ENGINEER also will be reimbursed
for the charges of independent professional associates
and consultants employed by ENGINEER to render
Basic Services, and paid for services rendered during
that phase on the basis of ENGINEER's Direct Labor
Page 12 of _ _ pages
Costs times a factor of for services rendered
during that phase to date of termination by ENGI-
NEER's principals and employees engaged directly on
the Project. In the event of any such termination,
ENGINEER will be paid for all unpaid Additional Ser-
vices and unpaid Reimbursable Expenses, plus all ter-
mination expenses. Termination expenses mean addi-
tional Reimbursable Expenses directly attributable to
termination, which, if termination is at OWNER's con-
venience, shall include an amount computed as a per-
centage of total compensation for Basic Services earned
by ENGINEER to the date of termination, as follows:
20% if termination occurs after commencement of
the Preliminary Design Phase but prior to commence-
ment of the Final Design Phase; or
10% if termination occurs after commencement of
the Final Design Phase.
5.3.3. Records of ENGINEER's Direct Labor Costs
pertinent to ENGINEER's compensation under this
Agreement will be kept in accordance with generally
accepted accounting practices. Copies will be made
available to OWNER at cost on request prior to final
payment for ENGINEER's services.
5.3.4. Whenever a factor is applied to Direct Labor
Costs in determining compensation payable to ENGI-
NEER, that factor will be adjusted periodically and
equitably to reflect changes in various elements that
comprise such factor. All such adjustments will be in
accordance with generally accepted accounting prac-
tices as applied on a consistent basis by ENGINEER
and consistent with ENGINEER's overall compensa-
tion practices and procedures.
5.4. Definitions.
5.4.1. Direct Labor Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all ENGINEER's personnel engaged directly on the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-
sonnel; but does not include indirect payroll related
costs or fringe benefits. For the purposes of this Agree-
ment the principals of ENGINEER and their current
hourly Direct Labor Costs are:
The hourly Direct Labor Costs of principals of ENGI-
NEER will be adjusted equitably to reflect changes in
 APPENDIX 1 161

personnel and in ENGINEER's overall compensation
procedures and practices.
5.4.2. Reimbursable Expenses mean the actual expenses
incurred by ENGINEER or ENGINEER's indepen-
dent professional associates or consultants, directly or
indirectly in connection with the Project, such as
expenses for: transportation and subsistence incidental
thereto; obtaining bids or proposals from Contractor(s);
providing and maintaining field office facilities including
furnishings and utilities; subsistence and transportation
of Resident Project Representatives and their assis-
tants; toll telephone calls and telegrams; reproduction
of reports, Drawings, Specifications, Bidding Docu-
ments, and similar Project-related items in addition to
those required under Section 1; and, if authorized in
advance by OWNER, overtime work requiring higher
than regular rates. In addition, if authorized in advance
by OWNER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor
of _ _ _ _ __

[The remainder of this page was left blank intentionally.J

Page 13 of _ _ pages

SALARY COSTS METHOD OF PAYMENT
SECTION 5-PA YMENTS TO ENGINEER
5.1. Methods of Payment for Services and Expenses
of ENGINEER.
5.1.1. For Basic Services. OWNER shall pay ENGI-
NEER for Basic Services rendered under Section I (as
amended and supplemented by Exhibit A "Further
Description of Basic Engineering Services and Related
Matters") an amount as follows:
5.1.1.1. An amount equal to ENGINEER's Salary
Cost times a factor of for all Basic Services
rendered by principals and employees engaged directly
on the Project (except for services of ENGINEER's
Resident Project Representative (and assistants) fur-
nished under paragraph 1.6.2.1. and for Operational
Phase Services furnished under paragraph 1.7).
5.1.1.2. Resident Project Services. For services of
ENGINEER's Resident Project Representative (and
assistants) furnished under pragraph 1.6.2.1, on the
basis of Salary Costs times a factor of for
services rendered by principals and employees
assigned to resident Prqject representation.
5.1.1.3. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Basic Services,
the amount billed to ENGINEER therefor times a
factor of _ __
5.1.1.4. Operational Phase Services. For Oper-
ational Phase services furnished under paragraph 1.7,
an amount equal to ENGINEER's Salary Costs times
a factor of for services rendered by princi-
pals and employees engaged directly on the Project.
5.1.1.5. Notice of Relationship of Payments to
Estimated Total Compensation. Ifit becomes appar-
ent to ENGINEER at any time before Basic Services
to be rendered under this Agreement are about eighty
percent completed that the total amount of compen-
sation to be paid to ENGINEER on account of Basic
Services pursuant to paragraph 5.1.1 will exceed
ENGINEER's estimate of the amount set forth below
which is applicable to the services rendered, ENGI-
NEER shall give OWNER written notice thereof.
Promptly thereafter OWNER and ENGINEER shall
review the matter of compensation for such Basic
Services, and either OWNER shall accede to such
Page II of _ _ pages
APPENDIX 1 163
compensation exceeding said estimated amounts or
OWNER and ENGINEER shall agree to a reduction
in the remaining services to be rendered by ENGI-
NEER under this Agreement so that total compen-
sation for such Basic Services will not exceed said
estimated amount when such services are completed.
5.1.1.5 .1. If only one prime contract is awarded
for construction, materials and equipment for the
Project, ENGINEER's estimate of the amount that
will become payable for Basic Services pursuant
to paragraphs 5.1.1.1 through 5.1.1.4 inclusive is
$ ; but, if the prime contract con-
tains cost-plus or incentive savings provisions for
Contractor's basic compensation, the estimated
amount will be $ _ _ _ _ __
5.1.1.5.2. If more than one but less than _ _
separate prime contracts are awarded for construc-
tion, materials and equipment for the Project,
ENGINEER's estimate of the amount that will
become payable for Basic Services pursuant to
paragraphs 5.1.1.1 through 5.1.1.4 inclusive is
$ ; but, if any prime contract con-
tains cost-pIus or incentive savings provisions for
Contractor's basic compensation, the estimated
amount will be $ _ _ _ _ __
5.1.2. For Additional Services. OWNER shall pay
ENGINEER for Additional Services rendered under
Section 2 as follows:
5.1.2.1. General. For Additional Services of
ENGINEER's principals and employees engaged
directly on the Project and rendered pursuant to para-
graph 2.1 or 2.2 (except services as a consultant or
witness under paragraph 2.1.13), on the basis of
ENGINEER's Salary Costs times a factor
of _ __
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ENGINEER to render Additional Ser-
vices pursuant to paragraph 2.1 or 2.2, the amount
billed to ENGINEER therefor times a factor of
5.1.2.3. Serving as a Witness. For services ren-
dered by ENGINEER's principals and employees as
consultants or witnesses in any litigation, arbitration
or other legal or administrative proceeding in accor-
dance with paragraph 2.1.13, at the rate of $ _ _
164 ENGINEERING SERVICE AND CONSTRUalON CONTRAaS
per day or any portion thereof (but compensation for
time spent in preparing to appear in any such litiga-
tion, arbitration or proceeding will be on the basis
provided in paragraph 5.1.2.1). Compensation for
ENGINEER's independent professional associates
and consultants will be on the basis provided in para-
graph 5.1.2.2. . an amount computed as a percentage of total compen-
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
OWNER shall pay ENGINEER the actual costs (except
where specifically provided otherwise) of all Reim-
bursable Expenses incurred in connection with all Basic
and Additional Services.
5.1.4. The terms "Salary Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
5.2. Times of Payments.
5.2.1. ENGINEER shall submit monthly statements
for Basic and Additional Services rendered and for
Reimbursable Expenses incurred. OWNER shall make
prompt monthly payments in response to ENGI-
NEER's monthly statements.
5.3. Other Provisions Concerning Payments.
5.3.1. If OWNER fails to make any payment due
ENGINEER for services and expenses within thirty
days after receipt of ENGINEER's statement therefor,
the amounts due ENGINEER will be increased at the
rate of 1% per month from said thirtieth day, and in
addition, ENGINEER may, after giving seven days'
written notice to OWNER, suspend services under this
Agreement until ENGINEER has been paid in full all
amounts due for services, expenses and charges.
5.3.2. In the event of termination by OWNER under
paragraph 7.1 upon the completion of any phase of the
Basic Services, progress payments due ENGINEER
for services rendered through such phase shall consti-
tute total payment for such services. In the event of
such termination by OWNER during any phase of the
Basic Services, ENGINEER also will be reimbursed
for the charges of independent professional associates
and consultants employed by ENGINEER to render
Basic Services, and paid for services rendered during
that phase on the basis of ENGINEER's Salary Costs
times a factor of for services rendered during
that phase to date of termination by ENGINEER's
principals and employees engaged directly on the Proj-
Page 12 of _ _ pages
ecL In the event of any such termination, ENGINEER
will be paid for all unpaid Additional Services and unpaid
Reimbursable Expenses, plus all termination expenses.
Termination expenses mean additional Reimbursable
Expenses directly attributable to termination, which,
if termination is at Owner's convenience, shall include
sation for Basic Services earned by ENGINEER to the
date of termination, as follows:
20% if termination occurs after commencement of
the Preliminary Design Phase but prior to commence-
ment of the Final Design Phase; or
10% if termination occurs after commencement of
the Final Design Phase.
5.3.3. Records of ENGINEER's Salary Costs perti-
nent to ENGINEER's compensation under this Agree-
ment will be kept in accordance with generally accepted
accounting practices. Copies will be made available to
OWNER at cost on request prior to final payment for
ENGINEER's services.
5.3.4. Whenever a factor is applied to Salary Costs in
determining compensation payable to ENGINEER, that
factor will be adjusted periodically and equitably to
reflect changes in the various elements that comprise
such factor. All such adjustments will be in accordance
with generally accepted accounting practices as applied
on a consistent basis by ENGINEER and consistent
with ENGINEER's overall compensation practices and
procedures.
5.4. Definitions.
5.4.1. The Salary Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all ENGINEER's personnel engaged directly on the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-
sonnel; plus the cost of customary and statutory ben-
efits including, but not limited to, social security con-
tributions, unemployment, excise and payroll taxes,
workers' compensation, health and retirement benefits,
sick leave, vacation and holiday pay and other group
benefits. For the purposes ofthis Agreement, the prin-
cipals of ENGINEER and their current hourly Salary
Costs are:
The hourly Salary Costs of principals of ENGINEER
will be adjusted equitably to reflect changes in person-
 APPENDIX 1 165

nel and in ENGINEER's overall compensation pro-
cedures and practices.
The amount of customary and statutory benefits of all
other personnel of ENGINEER wiD be considered equal
to % of salaries and wages, subject to equitable
adjustment to reflect changes in ENGINEER's overall
compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual expenses
incurred by ENGINEER or ENGINEER's indepen-
dent professional associates or consultants directly or
indirectly in connection with the Project, such as
expenses for: transportation and subsistence incidental
thereto; obtaining bids or proposals from Contractor(s);
providing and maintaining field office facilities including
furnishings and utilities; subsistence and transportation
of Resident Project Representatives and their assis-
tants; toll telephone calls and telegrams; reproduction
of reports, Drawings, Specifications, Bidding Docu-
ments and similar Project-related items in addition to
those required under Section 1; and if authorized in
advance by OWNER, overtime work requiring higher
than regular rates. In addition, if authorized in advance
by OWNER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor
of _ __

[The remainder of this page was left blank intentionally.]

Page 13 of _ _ pages

SECTION 6-CONSTRUCTION COST AND
OPINIONS OF COST
6.1. Construction Cost.
The construction cost of the entire Project (herein referred
to as "Construction Cost") means the total cost to
OWNER of those portions of the entire Project designed
and specified by ENGINEER, but it will not include
ENGINEER's compensation and expenses, the cost of
land, rights-of-way, or compensation for or damages
to, properties unless this Agreement so specifies, nor
will it include OWNER's legal, accounting, insurance
counseling or auditing services, or interest and financ-
ing charges incurred in connection with the Project or
the cost of other services to be provided by others to
OWNER pursuant to paragraphs 3.7 throughh 3.11,
inclusive. [Construction Cost is one of the items com-
prising Total Project Costs which is defined in para-
graph 1.2.5.]
6.2. Opinions of Cost.
6.2.1. Since ENGINEER has no control over the cost
of labor, materials, equipment or services furnished by
others, or over the Contractor(s)' methods of deter-
mining prices, or over competitive bidding or market
conditions, ENGINEER's opinions of probable Total
Project Costs and Construction Cost provided for herein
are to be made on the basis of ENGINEER 's experience
and qualifications and represent ENGINEER's best
judgment as an experienced and qualified professional
engineer, familiar with the construction industry; but
ENGINEER cannot and does not guarantee that pro-
posals, bids or actual Total Project or Construction
Costs will not vary from opinions of probable cost
prepared by ENGINEER. If prior to the Bidding or
Negotiating Phase OWNER wishes greater assurance
as to Total Project or Construction Costs, OWNER
shall employ an independent cost estimator as provided
in paragraph 3.9.
6.2.2. If a Construction Cost limit is established by
written agreement between OWNER and ENGINEER
and specifically set forth in this Agreement as a con-
dition thereto, the following will apply:
6.2.2.1. The acceptance by OWNER at any time
during the Basic Services of a revised opinion of
probable Total Project or Construction Costs in excess
of the then established cost limit will constitute a
corresponding revision in the Construction Cost limit
to the extent indicated in such revised opinion.
Page 15 of _ _ pages
APPENDIX 1 167
6.2.2.2. Any Construction Cost limit so estab-
lished will include a contingency of ten percent unless
another amount is agreed upon in writing.
6.2.2.3. ENGINEER will be permitted to deter-
mine what types of materials, equipment and com-
ponent systems are to be included in the Drawings
and Specifications and to make reasonable adjust-
ments in the general scope, extent and character of
the Project to bring it within the cost limit.
6.2.2.4. If the Bidding or Negotiating Phase has
not commenced within six months after completion
of the Final Design Phase, the established Construc-
tion Cost limit will not be binding on ENGINEER,
and OWNER shall consent to an adjustment in such
cost limit commensurate with any applicable change
in the general level of prices in the construction indus-
try between the date of completion of the Final Design
Phase and the date on which proposals or bids are
sought.
6.2.2.5. If the lowest bona fide proposal or bid
exceeds the established Construction Cost limit,
OWNER shall (1) give written approval to increase
such cost limit, (2) authorize negotiating or rebidding
the Project within a reasonable time, or (3) cooperate
in revising the Project's general scope, extent or
character to the extent consistent with the Project's
requirements and with sound engineering practices.
In the case of(3), ENGINEER shall modify the Con-
tract Documents as necessary to bring the Construc-
tion Cost within the cost limit. In lieu of other com-
pensation for services in making such modifications,
OWNER shall pay ENGINEER, ENGINEER's cost
of such services, all overhead expenses reasonably
related thereto and Reimbursable Expenses, but
without profit to ENGINEER on account of such
services. The providing of such service will be the
limit of ENGINEER's responsibility in this regard
and, having done so, ENGINEER shall be entitled
to payment for services in accordance with this
Agreement and will not otherwise be liable for dam-
ages attributable to the lowest bona fide proposal or
bid exceeding the established Construction Cost.
SECTION 7-GENERAL CONSIDERATION
7.1. Termination.
The obligation to provide further services under this
Agreement may be terminated by either party upon
thirty days' written notice in- the event of substantial
168 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
failure by the other party to perform in accordance with
the terms hereof through no fault of the terminating
party.
7.2. Reuse of Documents.
All documents including Drawings and Specifications
prepared or furnished by ENGINEER (and ENGI-
NEER's independent professional associates and con-
sultants) pursuant to this Agreement are instruments
of service in respect of the Project and ENGINEER
shall retain an ownership and property interest therein
whether or not the Project is completed. OWNER may
make and retain copies for information and reference
in connection with the use and occupancy of the Project
by OWNER and others; however, such documents are
not intended or represented to be suitable for reuse by
OWNER or others on extensions of the Project or on
any other project. Any reuse without written verifica-
tion or adaptation by ENGINEER for the specific pur-
pose intended will be at OWNER's sole risk and without
liability or legal exposure to ENGINEER, or to ENGI-
NEER's independent professional associates or con-
sultants, and OWNER shall indemnify and hold harm-
less ENGINEER and ENGINEER's independent
professional associates and consultants from all claims,
damages, losses and expenses including attorneys' fees
arising out of or resulting therefrom. Any such verti-
fication or adaptation will entitle ENGINEER to further
compensation at rates to be agreed upon by OWNER
and ENGINEER.
7.3. Insurance.
7.3.1. ENGINEER shall procure and maintain insur-
ance for protection from claims under workers' com-
pensation acts, claims for damages because of bodily
injury including personal injury, sickness or disease or
death of any and all employees or of any person other
than such employees, and from claims or damages
because of injury to or destruction of property including
loss of use resulting therefrom.
[The remainder of this page was left blank intentionally.J
Page 16 of _ _ pages
7.4. Controlling Law.
This Agreement is to be governed by the law of the
principal place of business of ENGINEER.
7.5. Successors and Assigns.
7.5.1. OWNER and ENGINEER each is hereby bound
and the partners, successors, executors, administrators
and legal representatives of OWNER and ENGINEER
(and to the extent permitted by paragraph 7.5.2 the
assigns of OWNER and ENGINEER) are hereby bound
to the other party to this Agreement and to the partners,
successors, executors, administrators and legal repre-
sentatives (and said assigns) of such other party, in
respect of all covenants, agreements and obligations of
this Agreement.
7.5.2. Neither OWNER nor ENGINEER shall assign,
sublet or transfer any rights under or interest in (includ-
ing, but without limitation, moneys that may become
due or moneys that are due) this Agreement without
the written consent of the other, except to the extent
that any assignment, subletting or transfer is mandated
by law or the effect of this limitation may be restricted
by law. Unless specifically stated to the contrary in any
written consent to an assignment, no assignment will
release or discharge the assignor from any duty or
responsibility under this Agreement. Nothing con-
tained in this paragraph shall prevent ENGINEER from
employing such independent professional associates
and consultants as ENGINEER may deem appropriate
to assist in the performance of services hereunder.
7.5.3. Nothing under this Agreement shall be con-
strued to give any rights or benefits in this Agreement
to anyone other than OWNER and ENGINEER, and
all duties and responsibilities undertaken pursuant to
this Agreement will be for the sole and exclusive benefit
of OWNER and ENGINEER and not for the benefit
of any other party.

7.6. Arbitration.
7.6.1. All claims, counterclaims, disputes and other
matters in question between the parties hereto arising
out of or relating to this Agreement or the breach thereof
will be decided by arbitration in accordance with the
Construction Industry Arbitration Rules of the Amer-
ican Arbitration Association then obtaining, subject to
the limitations and restrictions stated in paragraphs
7.6.3 and 7.6.4 below. This Agreement so to arbitrate
and any other agreement or consent to arbitrate entered
into in accordance herewith as provided in this para-
graph 7.6 will be specifically enforceable under the
prevailing law of any court having jurisdiction.
7.6.2. Notice of demand for arbitration must be filed
in writing with the other parties to this Agreement and
with the American Arbitration Association. The demand
must be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no
event may the demand for arbitration be made after the
date when institution of legal or equitable proceedings
based on such claim, dispute or other matter in question
would be barred by the applicable statute oflimitations.
7.6.3. All demands for arbitration and all answering
statements thereto which include any monetary claim
must contain a statement that the total sum or value in
controversy as alleged by the party making such demand
or answering statement is not more than $200,000
(exclusive of interest and costs) and the arbitrators will
not have jurisdiction, power or authority to render a
monetary award in response thereto against any party
which totals more than $200,000 (exclusive of interest
[The remainder of this page was left blank intentionally.J
Page 17 of _ _ pages
APPENDIX 1 169
and costs). The arbitrators will not have jurisdiction,
power or authority to consider, or make findings (except
in denial of their own jurisdiction) concerning any claim,
counterclaim, dispute or other matter in question where
the amount in controversy of any such claim, counter-
claim, dispute or matter is more than $200,000 (exclu-
sive of interest and costs).
7.6.4. No arbitration arising out of, or relating to, this
Agreement may include, by consolidation, joinder or
in any other manner, any person or entity who is not
a party to this Agreement.
7.6.5. By written consent signed by all the parties to
this Agreement and containing a specific reference hereto,
the limitations and restrictions contained in paragraphs
7-.6.3 and 7.6.4 may be waived in whole or in part as to
any claim, counterclaim, dispute or other matter spe-
cifically described in such consent. No consent to arbi-
tration in respect of a specifically described claim,
counterclaim, dispute or other matter in question will
constitute consent to arbitrate any other claim, coun-
terclaim, dispute or other matter in question which is
not specifically described in such consent or in which
the sum or value in controversy exceeds $200,000
(exclusive of interest and costs) or which is with any
party not specifically described therein.
7.6.6. The award rendered by the arbitrators will be
final, judgment may be entered upon it in any court
having jurisdiction thereof, and will not be subject to
modification or appeal except to the extent permitted
by Sections 10 and II of the Federal Arbitration Act
(9 U.S.C. §§ 10, Il).
 APPENDIX 1 171

SECTION 8-SPECIAL PROVISIONS, EXHIBITS and SCHEDULES.

8.1. This Agreement is subject to the following special provisions.

8.1.1.

8.2. The following Exhibits are attached to and made a part of this Agreement:

8.2.1. Exhibit A "Further Description of Basic Engineering Services and Related Matters" consisting of _ __
pages.

8.2.2. Exhibit B "Duties, Responsibilities and Limitations of Authority of Resident Project Representative"
consisting of pages.

8.2.3.

8.3. This Agreement (consisting of pages I to , inclusive) together with the Exhibits and schedules
identified above constitute the entire agreement between OWNER and ENGINEER and supersede all prior
written or oral understandings. This Agreement and said Exhibits and schedules may only be amended,
supplemented, modified or cancelled by a duly executed written instrument.

IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement as of the day and year first
above written.

OWNER: ENGINEER:

Address for giving notices: Address for giving notices:

Page _ of _ _ pages
 This document has important legal consequences; consultation with an attorney is encouraged with respect
to its completion or modification.

STANDARD FORM OF AGREEMENT

BETWEEN
ENGINEER AND ASSOCIATE ENGINEER
FOR
PROFESSIONAL SERVICES
(Intended for use between Engineers for continuous services during study, design and construction of a Project.
. When other consultants are employed for special services use Engineer-Consultant Agreement. EJCDC No.
1910-14.)

Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly By

NATIONAL
QOCIETY Of
PROfESSIONAL
ENGINEEI1S
1000.OtD'·.J,A

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

173

EJCDC No. 1910-13 (1985 Edition)

174 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Copyright 1985 National Society of Professional Engineers

1420 King Street, Alexandria, VA 22314
American Consulting Engineers Council
1015 15th Street, N.W., Washington, DC 20005
American Society of Civil Engineers
345 East 47th Street, New York, NY 10017

Guide Sheet for Completing Standard Form of
Agreement Between Engineer and Associate Engineer
for Professional Services
1. This document is intended for use between Engineers
for continuous service during study, design and construction
of a Project. Where other consultants are employed for special
services use Engineer-Consultant Agreement, No. 1910-14.
2. Page I-Since this Agreement is based on Engineer's
agreement with Owner (the "Prime Agreement") and since
Associate Engineer agrees in n.l.l to perform certain ser-
vices for Engineer which Engineer is bound by the Prime
Agreement to perform for Owner, it is important that all
pertinent portions of the Prime Agreement be attached to this
Agreement. The attachment is identified as Exhibit AE-A;
see ~8.2.1. The pertinent portions should include all provi-
sions of the Prime Agreement which will affect Associate
Engineer's rights to payment, such as terms pertaining to the
timing of payments to Engineer which in turn might affect
the timing of payments to Associate Engineer (see ~5.2.2).
3. Page I-Insert as complete a description of the Project
as possible. Include, to the extent known, a description of
the land where the Project is to be located, any special require-
ments as to performance, capacity or function, and any spe-
cial source of funds for which the Project must qualify. If a
Construction Cost limitation for the part of the Project to
which Associate Engineer's services are to apply is to be
established as a condition to the Agreement as provided in
~6.3.2 or if one has been provided as a condition of the Prime
Agreement as provided in ~6.3.3, a specific statement to that
effect setting forth the amount of the limitation initially agreed
to should be included as part of the Project description. If a
specific limitation is established after signing this Agreement,
it should be covered in a formal amendment to this Agree-
ment. Identify studies, reports or analyses previously pre-
pared which are being furnished by Engineer to Associate
Engineer for guidance, such as reports and studies referred
to in ~~3.3 and 3.4. Identify other special aspects or pecu-
liarities of the Project.
4. Page I-Associate Engineer's Services in General. Insert
in the blank space in paragraph B a general description of the
part of the Project to which the Associate Engineer's services
are to apply and also of the scope of Associate Engineer's
responsibilities in order to clarify the extent to which the
portion of the total design responsibilities undertaken by
Associate Engineer will require services of other disciplines
or consultants or the extent to which Associate Engineer may
rely upon such services of others employed by Engineer. The
details ofthe coordination between Associate Engineer's ser-
vices and those of Engineer and other independent profes-
sional associates and consultants should be spelled out in
detail in Exhibit AE-B referred to below.
APPENDIX 2 175
5. Section I-Basic Services-Supplemental description in
Exhibit AE-B "Further Description of Basic Engineering
Services and Related Matters". The Agreement contemplates
that an exhibit will be prepared to describe in more detail the
Basic Services to be rendered during Phases 1 through 5 (see
language following ~~1.2.8, 1.3.3, 1.4.5, 1.5.5 and 1.6.12; also
~2.1). A suggested format for such an exhibit appears on page
_ _ _ _ of this Guide Sheet. The paragraphs of the exhibit
follow the sequence of the description of Basic Services and
should contain a further or expanded description of each
phase of Basic Service as applicable to the particular Project
undertaken (the printed language of the Agreement being
generally applicable to most projects). Exhibit AE-B should
also include an agreed time for performance of Phase 1, 2 and
3 Basic Services as indicated in ~~4.2, 4.3 and 4.4, and if
there is a specific time requirement for performance of ser-
vices during the remaining Phases, these should also be
included. If Basic Services are expanded to include services
normally treated as Additional Services. care should be taken
to strike out or modify comparable language in Section 2-
Additional Services of Associate Engineer and to make
appropriate changes in the provisions for payment for profes-
sional services (see Section 5). Post construction services
should also be described in Exhibit AE-B and ~~2.1.11, 2.1.16
and 2.1.17 modified accordingly. If Associate Engineer rather
than Owner is to furnish services of the types described in
~~3.4 and 3.5, this information should also be included in
Exhibit AE-B. Reference is also made to Exhibit AE-B in
~5.1.1 of each alternate method of payment. In those places
where supplemental or amending data will not appear in Exhibit
AE-B reference to the exhibit should be crossed out and
initialed by both parties.
Note that n.4.4 refers to the EJCDC's standard documents,
including the Standard General Conditions, and all of the
provisions of this Agreement are based on the assumption
that standard EJCDC documents for study, design and con-
struction services will be used throughout and that the Spec-
ifications will follow the 16 division format of the CSI (see
~1.4.1). If that is not the case, extensive changes in this
Agreement with respect to Basic Services will probably be
required.
Note also that in the EJCDC Standard Form of Agreement
between Owner and Engineer, No. 1910-1 (1984 edit.), Engi-
neer's Basic Services include several functions which are
listed as Additional Services in the Engineer-Associate Engi-
neer Agreement.
6. Paragraphs 1.5.3 and 2.1.S-Contractor. The Agreement
has been prepared on the assumption that the work designed
176 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
by Associate Engineer will be constructed pursuant to one
prime contract. Accordingly, the word "Contractor" has been
used in the singular throughout. If the work for This Part of
the Project is to be constructed under more than one prime
contract, ~~1.S.3 and 2.1.8 will require change as well as the
word "Contractor" wherever it is used which is frequently.
In addition, ~S.l.l in the method of payment section may
require change to indicate whether or not Associate Engineer
is to receive additional compensation if more than one prime
contract is involved. (See EJCDC Standard Owner-Engineer
Agreement, No. 1910-1 forlanguage that may be appropriate.)
If the work designed by the Associate Engineer is to be
constructed under one prime contract, but the Project will be
constructed on a mUlti-prime basis, it is important that Asso-
ciate Engineer knows of these arrangements and is given
written instructions (probably in Exhibit AE-B) about how
he is to relate to the several prime contractors whose activities
may affect This Part of the Project.
7. Paragraph 2.2-Resident Project Representative. In the
EJCDC Standard Owner-Engineer Agreement, No. 1910-1
(1984 edit.), it is provided that resident services at the site
are part of Basic Services (see discussion in ~4 of the Guide
Sheet to No. 191O-\). However, such services at the site are
more frequently treated as additional or special services if
and when provided by an Associate Engineer; accordingly,
they are treated as such in this Agreement. If it is understood
at the time of signing the Agreement that a Resident Project
Representative is to be employed by Associate Engineer, this
should be reflected in Exhibit AE-B. However, ~2.2.1 con-
templates that a decision in this regard will not be made until
later, in which case the understanding should be reduced to
writing and attached as an exhibit to this Agreement. Regard-
less of when the decision is reached, the job-site responsi-
bilities of the Associate Engineer's Resident Project Repre-
sentative should be clarified in writing and this should be
attached to the Agreement. This is identified as Exhibit AE-
C in ~~2.2.2 and 8.2.3. The EJCDC has prepared a form
entitled "Suggested Listing of Duties, Responsibilities and
Limitations of Authority of Resident Project Representa-
tive", No. 1910-1-A (1983 edit.) which may be used as a check-
off list in preparing a document specially tailored to the par-
ticular assignment. The exhibitto No. 1910-1 which sets forth
the duties, responsibilities, etc. of the resident follows the
language of No. 191O-I-A very closely.
Great care is necessary in delineating the respective respon-
sibilities and authority of Engineer's and Associate Engi-
neer's residents at the site. Owner may employ a separate
representative to provide on-site services during construction
or a construction manager or construction coordinator may
be employed for the Project; in any such case consideration
should be given to modifying this Agreement to clarify the
working relationships between Associate Engineer and such
parties. (See also discussion in ~6 above concerning multi-
prime construction contracts.)
8. Section 4-Period of Service. This Section has been pre-
pared in recognition of the thought expressed in ~4.1 that
there will be a continuous period of service through comple-
tion of the Construction Phase with timely responses from
11
Engineer to Associate Engineer's submittals and with prompt
authority to proceed with each Phase of services after the
preceding Phase has been completed. The stipulated time for
performing Phase I, 2 and 3 services referred to in ~~4.2, 4.3
and 4.4 should be determined in recognition of this under-
standing, and the agreed upon time periods should be set forth
in Exhibit AE-B. The blank space in ~4.9 should be filled in
with whatever is considered a reasonable time in the particular
Project for the taking of bids or receiving proposals, awarding
the contract and starting construction. If a provision is to be
added setting an outside date for completion of all engineering
services, the necessary additional wording should appear in
Exhibit AE-B. The three-month and one-year periods pro-
vided in ~4.10 may not be appropriate for all Projects and
should be modified as circumstances dictate. If construction
is to be performed under several prime contracts with possibly
different starting times, it could mean that services during
Phases 3, 4 and 5 may have to be specially sequenced; in
such cases, it is expected that the special timing required for
services rendered during Phases 3, 4 and 5 will be set forth
in Exhibit AE-B.
9. Section S-Methods of Payment. Five different methods
of payment are covered by the attached form of Agreement:
these are Lump Sum, Percentage Cost Plus a Fixed Fee,
Direct Labor Costs times a factor and Salary Costs times a
factor. Each appears on a separate set of pages so that the
page for the method selected may be retained and the other
destroyed without affecting the page numbers of the printed
form. If some other method or combination of methods of
payment is to be used, a separately prepared page may be
inserted in lieu ofthe printed ones. Each printed form contains
blank spaces that should be filled in, and it is likely (as indi-
cated in ~S.1.1) that whatever method is selected the printed
provisions will be supplemented or amended in Exhibit AE-
B where appropriate.
Note that when compensation is on the basis of a Percentage
of Construction Cost, ~S.1.1 contains alternate language for
use depending on whether the percentage is applied to the
Construction Cost of the entire Project or Construction Cost
of This Part of the Project. The inapplicable language should
be appropriately deleted.
Note also that the terms Construction Cost, Construction
Cost for This Part of the Project, Direct Labor Costs, Salary
Costs and Reimbursable Expenses are specifically defined.
There are times when an Associate Engineer may employ an
outside or independent professional associate or consultant
to assist in the performance of Basic Services; this is per-
mitted under ~7 .6.2. In the Cost Plus a Fixed Fee, Direct
Labor and Salary Costs methods of payment, Associate Engi-
neer's expenses for such services are included and separately
itemized in ~S.1.1 as payment for Basic Services. There is no
comparable provision in the Lump Sum and Percentage meth-
ods of payment. However, when the professional associate
or consultant provides services categorized as Additional
Services, ~S.1.2.2 of all five methods of payment address the
matter of compensation similarly. This approach to reim-
bursement for charges of independent professional associates

and consultants follows that of the 1984 edition of the Owner-
Engineer Agreement and differs from the earlier editions of
this Agreement.
Where compensation for Basic Services is on the basis of
Cost Plus a Fixed Fee, Direct Labor or Salary Costs, Engineer
should have some indication of the amount that Associate
Engineer expects to charge for engineering services; this is
particularly true when Owner has requested that Engineer
provide an estimate of the amount of total charges for all
engineering services. Accordingly, a further paragraph has
been added to ~5.1.1 of these three methods of payment to
provide an estimate of the amount of Associate Engineer's
charges and an agreement to discuss compensation when it
becomes apparent that such amount may be exceeded. Note
that the estimate covers all amounts payable for Basic Ser-
vices, including services of independent professional asso-
ciates and consultants that Associate Engineer may employ
to assist in Basic Services (payment for which is covered
under ~5.1.1.2), but does not cover any charges for Additional
Services.
Note also the possible relationship between provisions of the
Prime Agreement regarding the timing of payments to Engi-
neer and their effect on the timing of payments to Associate
Engineer under this Agreement (see ~5.2.2).
10. Panlgraph 5.1.2-Paymentfor Additional Services. Space
has been provided in ~~5.1.2.1 through 5.1.2.4 for different
rates of compensation for different types of Additional Ser-
vices. Any inapplicable paragraph should be crossed out and
initials inserted in the margin by both parties. If one method
of compensation is to apply to all Additional Services, be
certain that the cross references are correctly adjusted.
11. Note that ~5.1.3 provides for reimbursement of the
"actual costs" of Reimbursable Expenses without the cus-
tomary markup except in certain cases specifically noted (see
~5.4.2), and that in the Lump Sum and Percentage methods
of payment Reimbursable Expenses do not include overtime
charges and expenses of computer time and charges for other
specialized equipment while such costs are included in the
other methods of payment at a factored rate.
12. Paragraph 5.4.1 contemplates the identification of the
key personnel in Associate Engineer's organization who are
to be assigned to the Project: this applies to both the Direct
Labor Costs and the Salary Costs definitions. In developing
the factor for the Salary Costs method of compensation, bear
in mind that ~5.4.1 is set up so that the factor is applied to
the salaries, wages and fringe benefits of all personnel, and
Salary Costs of principals (whether they be corporate officers
at fixed salaries or partners with drawing accounts who share
in the profits) are to be itemized. When using Salary Costs
as a basis for compensation, instead ofthe detailed accounting
required to substantiate the amount paid for customary and
statutory benefits of personnel, a percentage of salaries and
wages may be agreed to in advance and inserted in the blank
space at the end of ~5.4.1; otherwise the sentence should be
crossed out and initialed by both parties. Note also that
periodic adjustments in these items are expected (see ~5.3.4).
III
APPENDIX 2 177
13. The blank space in ~5.3.2 should be filled in after con-
sultation with Owner.
14. Paragraph 7.4-Insurance. Paragraph 7.4 deals with
general insurance coverages. Specific coverages, amounts,
or deductible provisions may be mandated by law, regulation,
code, etc., or it may be required by Engineer or by Owner
as is noted in ~7.4 in which case the specific requirements
should be set forth in Exhibit AE-B.
Owners frequently require that design professionals involved
on a Project maintain professional liability insurance. EJCDC
considers it important that such coverage be maintained not
only by Engineer and Associate Engineer but by the other
design professionals involved. Language addressing this mat-
ter is set forth below and when appropriate should be added
to ~7.4.
7.4.2. Also Engineer and Associate Engineer shall each pro-
cure and maintain professional liability insurance for protec-
tion from claims arising out of performance of professional
services caused by a negligent error, omission or act for which
the insured is legally liable; such professional liability insur-
ance will provide for coverage in such amounts, with such
deductible provisions and for such periods of time as set forth
below, and certificates indicating that such insurance is in
effect will be exchanged by them:
Associate
Engineer Engineer
Amount
Deductible
Effective Through
7.4.3. Engineer will also cause other independent professional
associates and consultants retained by Engineer for the Project
to procure and maintain comparable professional and other
liability insurance coverage.
It may be that some subprofessionals are unable to meet the
requirement to maintain professional liability insurance. This
would increase the exposure of the insured professional if
the uninsured professional is unable to satisfy a judgment.
Engineer may be held vicariously liable for the acts of the
uninsured professional associate and would be unable to recover
indemnity from the party who is primarily responsible. If the
insured professionals are jointly and severally liable with the
uninsured professional, they may have to satisfy the unin-
sured's share of a judgment and may be unable to recover
contribution. The matter should be discussed with Engineer
and insurance and legal counsel to be certain that coverages
of the insureds are adequate to cover these risks. If the
insurance carried by the design professionals is issued by
different carriers, the extent of the various coverages should
be examined.
An alternate solution to separate professional liability insur-
ance coverages is the purchase of project insurance by Owner
which can be written to cover, among other things, the profes-
sionalliability of all involved design professionals. If project
insurance is to be maintained by Owner, ~~7 .4.2 and 7.4.3
should be changed and appropriate language added to Section
3.
See ~16 of this Guide Sheet for comments concerning the
practice of some Engineers to include in their agreements
178 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
language limiting their liability for negligence to a fixed dollar
amount or a certain percentage of total fee for services.
15. Paragraph 7.7-Arbitration. This provides for com-
pulsory and binding arbitration of all disputes between Engi-
neer and Associate Engineer where the claimed amount at
issue is not more than $200,000. It also restricts joinder in
the arbitration proceedings of others who are not a party to
the Agreement; this would, therefore, exclude the Owner and
other design professionals as well as the Contractor. The
Engineers' Joint Contract Documents Committee believes
that arbitration of such disputes under the Construction Industry
Arbitration Rules of the American Arbitration Association is
in the best interest of both Engineer and Associate Engineer,
but also recognizes that others may differ and the laws of all
states are not similar. Accordingly, the form ofthis Agreement
has been prepared so that ~7.7, which deals with arbitration,
may be eliminated from this Agreement simply by tearing out
the separate page (page _ _) on which it appears and com-
pleting the information at the bottom of the last page to
indicate the page number as well as the total number of pages
that make up the entire Agreement. The Table of Contents
should also be modified.
16. Paragraph 8.1 contains space for additional or special
provisions required by Owner or Engineer. These may include
identification of the individuals in Engineer's office who will
be in charge of the Project and identification of Associate
Engineer's independent professional associates and consul-
tants who will be employed to assist in the performance of
Basic Services.
It is the practice of some engineers to include in their agree-
ments language limiting their liability for negligence to a fixed
dollar amount or a certain percentage oftotal fee for services.
If such language is included in the Prime Agreement, its effect
on the rights of the parties under this Agreement should be
discussed with legal and insurance counsel. If any such lan-
guage is to be included in this Agreement, it should be spe-
cifically negotiated after consultation with insurance and legal
iv
counsel as to recommended terms. Legal counsel should be
consulted as to the enforceability of such language as well as
its relationship with and bearing on any provisions requiring
maintenance of professional liability insurance and its effect
on possible claims made by Owner. The language agreed to
should be inserted as a subparagraph of ~8.1. Provisions
requiring the maintenance of professional liability insurance
should be added to ~7.4 as noted above and the relationship
with any language limiting liability discussed with legal coun-
sel. If any design professional involved in the Project has the
benefit of language limiting liability for professional negli-
gence, which is not available to the others, this, too, should
be discussed with legal counsel. Engineer should be partic-
ularly aware of the ramifications of agreeing to limit the lia-
bility of a professional associate where Engineer's liability is
not similarly limited in the Prime Agreement.
If Engineer wishes Associate Engineer to identify indepen-
dent professional associates and consultants who will be
employed to assist in the performance of Basic Services, this
may be done in a subparagraph of ~8.1.
17. Paragraph 8.2 identifies three Exhibits: Exhibit EA-A,
the Prime Agreement or pertinent portions thereof; Exhibit
EA-B "Further Description of Basic Engineering Services
and Related Matters" and Exhibit EA-C "Duties, Respon-
sibilities and Limitations of Authority of Associate Engineer's
Resident Project Representative". The number of pages of
each Exhibit should be inserted in the blank spaces. Other
Exhibits should be listed in the space provided. If Exhibit
EA-A, EA-B or EA-C is not to be attached, reference to the
document should be crossed out of the Agreement.
[Because of the similarity between the Owner-Engineer
Agreement, No. /9/0-/ and this Agreement, reference is
made to the Guide Sheet for Completing the Owner-Engineer
Agreement. For further discussion ofthe Agreement between
Engineer and Associate Engineer, see Commentary on Con-
tract Documents, No. /9/0-9.]
 APPENDIX 2 179

EXHIBIT AE-B TO AGREEMENT BETWEEN ENGINEER

AND ASSOCIATE ENGINEER FOR PROFESSIONAL
SERVICES dated
19 (for use with No. 1910-13, 1985 Edition.)

Further Description of Basic Engineering Services and Related Matters

1. This is an exhibit attached to, made a part of and incorporated by reference into the Agreement made on
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , 19 between (Engineer)
and (Associate Engineer) providing
for professional engineering services. The Basic Services of Associate Engineer as described in Section I of the
Agreement are amended or supplemented as indicated below and the time periods for the performance of certain
services as indicated in Section 4 of the Agreement are stipulated as indicated below.

2. During the Study and Report Phase ASSOCIATE ENGINEER shall:

(insert amendments or supplements to paragraph 1.2)
The Study and Report Phase Services will be completed and the Report submitted within calendar
days
following written authorization from ENGINEER to ASSOCIATE ENGINEER to proceed with that phase of
services.

3. During the Preliminary Design Phase ASSOCIATE ENGINEER shall:

(insert amendments or supplements to paragraph 1.3)
The Preliminary Design Phase Services will be completed and ASSOCIATE ENGINEER's documentation and
opinion of costs submitted within _ _ calendar days following written authorization from ENGINEER to ASSO-
CIATE ENGINEER to proceed with that pha.se of services.

4. During the Final Design Phase ASSOCIATE ENGINEER shall:

(insert amendments or supplements to paragraph 1.4)
The Final Design Phase Services will be completed, and ASSOCIATE ENGINEER's Final Design Phase docu-
mentation and opinion of costs submitted within _ _ calendar days following written authorization from ENGI-
NEER to ASSOCIATE ENGINEER to proceed with that phase of services.

5. During the Bidding or Negotiating Phase ASSOCIATE ENGINEER shall:

(insert amendments or supplements to paragraph 1.5)

6. During the Construction Phase ASSOCIATE ENGINEER shall:

(insert amendments or supplements to paragraph 1.6)
[Note: If an outside date for completion of construction is to be added, it should be added here.]

v
180 ENGINEERING SERVICE AND CONSTRUf:TION CONTRACTS

TABLE OF CONTENTS
Page No.
IDENTIFICATION OF THE PARTIES AND
GENERAL DESCRIPTION OF THE PROJECT

SECTION I-BASIC SERVICES OF ASSOCIATE ENGINEER................................................ 2

1.1. General .......................................................................................... 2
1.2. Study and Report Phase ........................................................................ 2
1.3. Preliminary Design Phase ...................................................................... 2
1.4. Final Design Phase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 3
1.5. Bidding or Negotiating Phase .... ...... ......... ...... ...... ..... .... ....... ... ...... ... ....... 3
1.6. Construction Phase ............................................................................. 3

SECTION 2-ADDITIONAL SERVICES OF ASSOCIATE ENGINEER ...................................... 6

2.1. General .......................................................................................... 6
2.2. Resident Services During Construction ....................................................... 7

SECTION 3-ENGINEER'S RESPONSIBILITIES .............................................................. 7

SECTION 4-PERIOD OF SERVICE.............................................................................. 9

SECTION 5-PAYMENTS TO ASSOCIATE ENGINEER ....................................................... II

5.1. Methods of Payments for Services and Expenses
of ASSOCIATE ENGINEER..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. II
5.2. Times of Payments ...................................... '........................................ 12
5.3. Other Provisions Concerning Payments ....................................................... 12
5.4. Definitions ....................................................................................... 13

SECTION 6-CONSTRUCTION COST AND OPINIONS OF COST........................................... 15

6.1. Construction Cost ............................................................................... 15
6.2. Opinions of Cost ................................................................................ 15

SECTION 7-GENERAL CONSIDERATIONS................................................................... 17

7.1. Termination ...................................................................................... 17
7.2. Reuse of Documents ............................................................................ 17
7.3. Records .......................................................................................... 17
7.4. Insurance ........................................................................................ 17
7.5. Controlling Law ................................................................................. 17
7.6. Successors and Assigns ........................................................................ 17
7.7. Arbitration ....................................................................................... 18

SECTION 8-SPECIAL PROVISIONS, EXHIBITS AND SCHEDULES ...................................... 19

8.1. Special Provisions .......................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19
8.2. Exhibits and Schedules ......................................................................... 19

VI
 APPENDIX 2 181

This document has important legal consequences; consultation with an attorney is encouraged with respect
to its completion or modification.

STANDARD FORM OF AGREEMENT

BETWEEN
ENGINEER AND ASSOCIATE ENGINEER

THIS IS AN AGREEMENT made as of _ _ _ _ _ _ _ _ _ _ _ _ _ _ , 19 _ _

between _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (ENGINEER)

and _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (ASSOCIATE ENGINEER).

A. ENGINEER has made an agreement dated _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , 19 _ __

with , OWNER,
which is herein referred to as the Prime Agreement and which provides for ENGINEER's performing professional
services in connection with the Project described therein. A copy of all portions of the Prime Agreement pertinent
to ASSOCIATE ENGINEER's responsibilities, compensation and timing of services hereunder is attached, made
a part hereof and marked Exhibit AE-A. The Project is described in the Prime Agreement as follows:

ASSOCIATE ENGINEER has been furnished a copy of the OWNER's latest program for the Project to the extent
available, and will be furnished additional Drawings, Specifications, schedules and other material pertinent to
ASSOCIATE ENGINEER's services hereunder as they become available to ENGINEER.

B. THE professional engineering services which ENGINEER has employed ASSOCIATE ENGINEER to perform
under this Agreement are generally described as follows:
(Describe services)

The part of the Project for which ASSOCIATE ENGINEER is to perform such services is herein referred to as
This Part of the Project.

ENGINEER and ASSOCIATE ENGINEER agree as set forth below.

ASSOCIATE ENGINEER shall perform services under this Agreement as ENGINEER's independent professional
associate for This Part of the Project, shall be responsible for the means and methods used in performing engineering
services under this Agreement and is not a joint-venturer with ENGINEER. ENGINEER shall be the general
administrator and coordinator of the professional services for the Project, and shall facilitate the exchange of
information among the independent professional associates and consultants retained by ENGINEER for the Project
as necessary for the coordination of their services.

Page 1 of _ pages
182 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
SECTION I-BASIC SERVICES OF ASSOCIATE
ENGINEER
1.1. General.
1.1.1. ASSOCIATE ENGINEER shall collaborate with
ENGINEER in connection with This Part of the Project
and shall be bound to perform the professional engi-
neering services undertaken hereunder for ENGI-
NEER in the same manner and to the same extent that
ENGINEER is bound by the Prime Agreement to per-
form such services for OWNER. All of ASSOCIATE
ENGINEER's communications with OWNER or
ENGINEER's other independent professional associ-
ates and consultants will be through or with the knowl-
edge of ENGINEER. Except as set forth herein ASSO-
CIATE ENGINEER will not have any duties or respon-
sibilities for any other part of the Project. ASSOCIATE
ENGINEER shall perform services in character,
sequence and timing so that they will be coordinated
with those of ENGINEER and other independent
professional associates and consultants for the Project.
ASSOCIATE ENGINEER shall cooperate with ENGI-
NEER in determining the proper share of the construc-
tion budget which shall be allocated to This Part of the
Project. ASSOCIATE ENGINEER agrees to a mutual
exchange of Drawings and Specifications for the Project
with ENGINEER and other independent professional
associates and consultants.
1.1.2. ASSOCIATE ENGINEER's Basic Services
shall be divided into five phases as described below.
1.2. Study and Report Phase.
During the Study and Report Phase ASSOCIATE
ENGINEER shall, after written authorization from
ENGINEER to proceed:
1.2.1. Consult with ENGINEER to determine the
requirements for This Part of the Project and confirm
such requirements to ENGINEER.
1.2.2 .. Advise ENGINEER as to the necessity of pro-
viding or obtaining from others services or data of the
types described in paragraph 3.4 and cooperate with
ENGINEER in connection with any such services.
1.2.3. Identify and analyze for ENGINEER require-
ments of governmental authorities having jurisdiction
to approve the design of This Part of the Project and
participate in consultations with such authorities.
1.2.4. Consult with and make recommendations to
ENGINEER in respect of an analysis of OWNER's
Page 2 of _
needs, planning surveys, site evaluations and compar-
ative studies of prospective sites and solutions.
1.2.5. Consult with and make recommendations to
ENGINEER in respect of a general economic analysis
of OWNER's requirements applicable to various alter-
natives.
1.2.6. Consult with and make recommendations to
ENGINEER relative to the preparation of Study and
Report documents for This Part of the Project, which
are to be in sufficient detail to indicate clearly the con-
siderations involved (including the applicable require-
ments of governmental authorities having jurisdiction
as aforesaid) and the alternative solutions available to
OWNER.
1.2.7. Prepare schematic layouts, sketches and pre-
liminary design criteria for This Part of the Project; and
prepare an opinion of probable costs of This Part of the
Project, including the following which will be separately
itemized: Construction Cost of This Part of the Project,
allowances for charges of all professionals and consul-
tants employed by ASSOCIATE ENGINEER and for
other services to be provided to OWNER or ENGI-
NEER at the request of ASSOCIATE ENGINEER.
The total of all such costs, allowances, etc. are here-
inafter called 'Total Project Costs of This Part of the
Project".
1.2.8. Furnish five copies of the Study and Report
documents.
The duties and responsibilities of ASSOCIATE ENGI-
NEER during the Study and Report Phase are amended
and supplemented as indicated in paragraph 2 of Exhibit
EA-B "Further Description of Basic Engineering Ser-
vices and Related Matters".
1.3. Preliminary Design Phase.
After written authorization from ENGINEER to pro-
ceed with the Preliminary Design Phase, ASSOCIATE
ENGINEER shall:
1.3.1. On the basis of the Study and Report docu-
ments for This Part of the Project accepted by OWNER
as confirmed by ENGINEER, prepare Preliminary
Design documents for This Part of the Project consisting
of final design criteria, preliminary drawings and outline
specifications, and written descriptions of This Part of
the Project, all of which are to be approved by ENGI-
NEER and accepted by OWNER.
1.3.2. Based on the information contained in the Pre-
liminary Design documents, submit a revised opinion
pages

of probable Total Project Costs for This Part of the
Project.
1.3.3. Furnish five copies of the above Preliminary
Design documents.
The duties and responsibilities of ASSOCIATE ENGI-
NEER during the Preliminary Design Phase are amended
and supplemented as indicated in paragraph 3 of Exhibit
AE-B "Further Description of Basic Engineering Ser-
vices and Related Matters".
1.4. Final Design Phase.
After written authorization from ENGINEER to pro-
ceed with the Final Design Phase, ASSOCIATE ENGI-
NEER shall:
1.4.1. On the basis of the accepted Preliminary Design
documents and the revised opinion of probable Total
Project Costs as confirmed by ENGINEER, prepare
for incorporation in the Contract Documents, final
drawings to show the general scope, extent and char-
acter of the work to be performed by the contractor
(hereinafter called the "Drawings") of, and Specifi-
cations for, This Part of the Project. The Specifications
will be prepared in conformance with the sixteen divi-
sion format of the Construction Specifications Institute
and otherwise will be in such form as ENGINEER may
reasonably require, and they are to be approved by
ENGINEER and accepted by OWNER. Advise ENGI-
NEER as to any special provisions pertinent to This
Part of the Project that should be included in the Bidding
Documents or the Contract Documents.
1.4.2. Furnish to ENGINEER technical criteria, writ-
ten descriptions and design data pertinent to This Part
of the Project for OWNER's use in filing applications
for permits with or obtaining approvals of such gov-
ernmental authorities as have jurisdiction to approve
the design of This Part of the Project, and assist ENGI-
NEER in connection therewith.
1.4.3. Advise ENGINEER of any adjustments to
ASSOCIATE ENGINEER's latest opinion of probable
Total Project Costs for This Part of the Project caused
by changes in general scope, extent or character or
design requirements or Construction Cost for This Part
of the Project, and furnish a revised opinion of probable
Total Project Costs for This Part of the Project based
on said Drawings and Specifications.
1.4.4. If required by ENGINEER, assist in preparing
those portions of the Bidding Documents and the Con-
tract Documents that pertain to This Part of the Project
(all of which shall be consistent with the forms and
Page 3 of _
APPENDIX 2 183
pertinent guide sheets prepared by the Engineers' Joint
Contract Documents Committee).
1.4.5. Furnish five copies of the Drawings and Spec-
ifications.
The duties and responsibilities of ASSOCIATE ENGI-
NEER during the Final Design Phase are amended and
supplemented in paragraph 4 of Exhibit AE-B "Further
Description of Basic Engineering Services and Related
Matters".
1.5. Bidding or Negotiating Phase.
After written authorization from ENGINEER to pro-
ceed with the Bidding or Negotiating Phase, ASSO-
CIATE ENGINEER shall:
1.5.1. Assist ENGINEER in advertising for and
obtaining bids or negotiating proposals for construc-
tion, materials, equipment and services for This Part
of the Project, and where applicable, attend pre-bid
conferences.
1.5.2. Assist ENGINEER to issue addenda as appro-
priate to interpret, clarify or expand the Bidding Doc-
uments for This Part of the Project.
1.5.3. Consult with and advise ENGINEER as to the
acceptability of subcontractors, suppliers and other
persons and organizations proposed by the prime con-
tractor (hereinafter called the "Contractor") for those
portions of the work for This Part of the Project as to
which such acceptability is required by the Contract
Documents.
1.5.4. Consult with and advise ENGINEER concern-
ing, and determine the acceptability of, substitute mate-
rials and equipment proposed by Contractor when sub-
stitution prior to award of the contract is allowed by
the Bidding Documents.
1.5.5. Attend the bid opening and assist ENGINEER
in preparing bid tabulation sheets and in evaluating bids
or proposals and in assembling and awarding the con-
tract for This Part of the Project.
The duties and responsibilities of ASSOCIATE ENGI-
NEER during the Bidding or Negotiating Phase are
amended and supplemented as indicated in paragraph
5 of Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters".
1.6. Construction Phase.
During the Construction Phase, ASSOCIATE ENGI-
NEER shall:
pages
184 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
1.6.1. General Administration of Construction Con-
tract. ASSOCIATE ENGINEER shall consult with,
advise and assist ENGINEER to act as the represen-
tative of OWNER with respect to This Part of the
Project. All of ASSOCIATE ENGINEER's commu-
nications to Contractor will be through, or with the
knowledge of, ENGINEER.
1.6.2. Visits to Site and Observation ofConstruction.
In connection with observations of the work of Con-
tractor on This Part ofthe Project while it is in progress:
1.6.2.1. ASSOCIATE ENGINEER shall make vis-
its to the site at intervals appropriate to the various
stages of construction as ASSOCIATE ENGINEER
deems necessary, or as ENGINEER may request, in
order to observe as an experienced and qualified
design professional the progress and quality of the
various aspects of Contractor's work on This Part of
the Project. Based on information obtained during
such visits and on such observations, ASSOCIATE
ENGINEER shall endeavor to determine in general
if such work is proceeding in accordance with the
Contract Documents and shall keep ENGINEER
informed of the progress of the work on This Part of
the Project.
1.6.2.2. The purpose of ASSOCIATE ENGI-
NEER's visits to the site will be to enable ASSO-
CIATE ENGINEER to better carry out the duties
and responsibilities assigned to and undertaken by
ASSOCIATE ENGINEER during the Construction
Phase, and, in addition, by exercise of ASSOCIATE
ENGINEER's efforts as an experienced and quali-
fied design professional, to provide for OWNER and
ENGINEER a greater degree of confidence that the
completed work of Contractor on This Part of the
Project will conform generally to the Contract Doc-
uments for This Part of the Project and that the integ-
rity of the design concept as reflected in the said
Contract Documents has been implemented and pre-
served by Contractor. On the other hand, ASSOCI-
ATE ENGINEER shall not, during such visits or as
a result of such observations of Contractor's work
in progress, supervise, direct or have control over
Contractor's work nor shall ASSOCIATE ENGI-
NEER have authority over or responsibility for the
means, methods, techniques, sequences or proce-
dures of construction selected by Contractor for This
Part of the Project, for safety precautions and pro-
grams incident to said work of Contractor or for any
failure of Contractor to comply with laws, rules,
regulations, ordinances, codes or orders applicable
to Contractor furnishing and performing its work.
Accordingly, ASSOCIATE ENGINEER can neither
guarantee the performance of the construction con-
Page 4 of _
tract by Contractor nor assume responsibility for
Contractor's failure to furnish and perform its work
in accordance with the Contract Documents.
1.6.3. Defective Work. During such visits and on the
basis of such observations, ASSOCIATE ENGINEER
shall consider the acceptability of Contractor's work
while it is in progress, and shall consult with and advise
ENGINEER whenever ASSOCIATE ENGINEER
believes that such work will not produce This Part of
the Project in general conformity with the Contract
Documents or that such work will prejudice the integ-
rity of the design concept of This Part of the Project as
reflected in the Contract Documents.
1.6.4. Interpretations and Clarifications. ASSOCI-
ATE ENGINEER shall assist ENGINEER in issuing
necessary interpretations and clarifications of the Con-
tract Documents and in connection therewith prepare
work directive changes and change orders as required.
1.6.5. Shop Drawings. ASSOCIATE ENGINEER shall
review and approve (or take other appropriate action
in respect 00 Shop Drawings (as that term is defined
in the Standard General Conditions of the Construction
Contract, No. 1910-8 (1983 edit.) ofthe Engineers' Joint
Contract Documents Committee), samples and other
data which Contractor is required to submit for This
Part of the Project, but only for conformance with the
design concept of the Project and compliance with the
information given in the Contract Documents. Such
reviews and approvals or other action shall not extend
to means, methods, techniques, sequences, or proce-
dures of construction or to safety precautions and pro-
grams incident thereto.
1.6.6. Substitutes. ASSOCIATE ENGINEER shall
consult with and advise ENGINEER concerning, and
determine the acceptability of, substitute materials and
equipment proposed by Contractor for This Part of the
Project, but subject to the provision of paragraph 2.1.9.
1.6.7. Inspections and Tests. ASSOCIATE ENGI-
NEER shall make recommendations to ENGINEER
concerning special inspection or testing of Contractor's
work, and the receipt and review of all certificates of
inspections, testings and approvals required by laws,
rules, regulations, ordinances, codes, orders or the
Contract Documents (but only to determine generally
that their content complies with the requirements of,
and the results certified indicate compliance with, the
Contract Documents for this Part of the Project).
1.6.8. Disputes between OWNER and Contractor.
ASSOCIATE ENGINEER shall assist ENGINEER in
acting as initial interpreter of the requirements of the
pages

Contract Documents for This Part of the Project and
judge of the acceptability of the work thereunder and
in making decisions on all claims of OWNER and Con-
tractor relating to the acceptability of such work or the
interpretation of the requirements of the Contract Doc-
uments pertaining to the execution and progress of such
work. ASSOCIATE ENGINEER shall not be liable for
the results of any such interpretations or decisions ren-
dered in good faith.
1.6.9. Applications for Payment. Based on ASSO-
CIATE ENGINEER's on-site observations as an expe-
rienced and qualified design professional and on review
of applications for payment and the accompanying data
and schedules:
1.6.9.1. ASSOCIATE ENGINEER shall assist
ENG INEER to determine the amounts owing to Con-
tractor and, if requested by ENGINEER, recom-
mend in writing to ENGINEER payments to Con-
tractor in such amounts; such recommendations of
payment will constitute a representation to ENGI-
NEER, based on such observations and review, that
the work for This Part of the Project has progressed
to the point indicated, that, to the best of ASSOCI-
ATE ENGINEER's knowledge, information and
belief, the quality of such work is generally in accor-
dance with the Contract Documents (subject to an
evaluation of such work as a functioning whole prior
to or upon Substantial Completion, to the results of
any subsequent tests called for in the Contract Doc-
uments and to any other qualifications stated in the
recommendation). In the case of unit price work,
ASSOCIATE ENGINEER's recommendations of
payment will include final determinations of quanti-
ties and classifications of such work (subject to any
subsequent adjustments allowed by the Contract
Documents).
J.6.9.2. By recommending any payment ASSO-
CIATE ENGINEER shall not thereby be deemed to
have represented that exhaustive, continuous or
detailed reviews or examinations have been made by
ASSOCIATE ENGINEER to check the quality or
quantity of Contractor's work as it is furnished and
provided beyond the responsibilities specifically
assigned to ASSOCIATE ENGINEER in this Agree-
ment and the Contract Documents for This Part of
the Project. ASSOCIATE ENGINEER's review of
Contractor's work for the purposes of recommending
payments will not impose on ASSOCIATE ENGI-
NEER responsibility to supervise, direct or control
such work, or for the means, methods, techniques,
sequences, or procedures of construction or safety
precautions or programs incident thereto or Con-
tractor's compliance with laws, rules, regulations,
Page 5 of _
APPENDIX 2 185
ordinances, codes or orders applicable to its furnish-
ing and performing the work. It shall also not impose
responsibility on ASSOCIATE ENGINEER to make
any examination to ascertain how or for what pur-
poses Contractor has used the moneys paid on account
of the Contract Price, to determine that title to any
of the work, materials or equipment has passed to
OWNER free and clear of any lien, claims, security
interests or encumbrances, or that there may not be
other matters at issue between OWNER and Con-
tractor that might affect the amount that should be
paid.
J.6.10. Contractor's Completion Documents. ASSO-
CIATE ENGINEER shall receive and review mainte-
nance and operating instructions, schedules, guaran-
tees, bonds and certificates of inspection, tests and
approvals which are to be assembled by Contractor in
accordance with the Contract Documents for This Part
ofthe Project (but such review will only be to determine
generally that their content complies with the require-
ments of, and in the case of certificates of inspection,
tests or approvals indicates compliance with, such Con-
tract Documents); and shall transmit them to ENGI-
NEER with written comments.
1.6.1 J. Inspections. ASSOCIATE ENGINEER shall
assist ENGINEER in conducting an inspection to
determine if the work for This Part of the Project is
substantially complete and a final inspection to deter-
mine if the completed work is acceptable so that ENGI-
NEER may recommend, in writing, final payment to
Contractor and may give written notice to OWNER
and Contractor that the work for This Part of the Project
is acceptable (subject to any conditions therein
expressed), but any such recommendation and notice
will be subject to the limitations expressed in paragraph
1.6.9.2.
] .6. ]2. Limitation of Responsibilities. ASSOCIATE
ENGINEER shall not be responsible for the acts or
omissions of Contractor, or of any subcontractor or
supplier, or any of Contractor's or subcontractor's or
supplier's agents or employees or any other person
(except ASSOCIATE ENGINEER's own employees
and agents) at the site or otherwise furnishing or per-
forming any of Contractor's work; however, nothing
contained in paragraphs 1.6.1 through] .6.] ], inclusive,
shall be construed to release ASSOCIATE ENGI-
NEER from liability for failure to properly perform
duties and responsibilities assumed by ASSOCIATE
ENGINEER in the Contract Documents.
The duties and responsibilities of ASSOCIATE ENGI-
NEER during the Construction Phase are amended and
supplemented in paragraph 6 of Exhibit AE-B "Further
pages
186 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
Description of Basic Engineering Services and Related
Matters".
SECTION 2-ADDITIONAL SERVICES OF
ASSOCIATE ENGINEER
2.1. General.
If authorized in writing by ENGINEER, ASSOCIATE
ENGINEER shall furnish or obtain from others Addi-
tional Services of the types listed in paragraphs 2.1.1
through 2.1.19, inclusive. These services are not included
as part of Basic Services except to the extent provided
otherwise in Exhibit AE-B "Further Description of
Basic Engineering Services and Related Matters"; these
will be paid for by ENGINEER, as indicated in Section
5.
2.1.1. Assisting ENGINEER in the preparation of
applications and supporting documents (in addition to
those furnished under Basic Services) for private or
governmental grants, loans or advances in connection
with the Project; in the preparation or review of envi-
ronmental assessments and impact statements; review
and evaluation of the effect on the design requirements
of the Project of any such statements and documents
prepared by others; and in obtaining approvals of
authorities having jurisdiction over the anticipated
environmental impact of the Project.
2.1.2. Services to make measured drawings of or to
investigate existing conditions or facilities or to verify
the accuracy of drawings or other information furnished
by OWNER.
2.1.3. Services resulting from significant changes in
the general scope, extent or character of This Part of
the Project or its design including, but not limited to,
changes in size, complexity, OWNER's schedule, or
character of construction or method of financing; and
revising previously accepted studies, reports, design
documents or Contract Documents when such revi-
sions are required by changes in laws, rules, regula-
tions, ordinances, codes or orders enacted subsequent
to the preparation of such studies, reports or documents
or are due to any other causes beyond ASSOCIATE
ENGINEER's control.
2.1.4. Providing renderings or models for OWNER's
use.
2.1.5. Preparing documents for alternate bids requested
by OWNER for Contractor's work which is not exe-
cuted or documents for out-of-sequence work.
Page 6 of _
2.1.6. Investigations and studies involving, but not
limited to, detailed consideration of operations, main-
tenance and overhead expenses; providing value engi-
neering during the course of design; the preparation of
feasibility studies, cash flow and economic evaluations,
rate schedules and appraisals; assistance in obtaining
financing for the Project; evaluating processes available
for licensing and assisting OWNER in obtaining process
licensing; detailed quantity surveys of material, equip-
ment and labor; and audits or inventories required in
connection with construction performed by OWNER.
2.1. 7. Furnishing services of independent profes-
sional associates and consultants for other than Basic
Services (which include, but are not limited to, custom-
ary civil, structural, mechanical and electrical engi-
neering and customary architectural services incidental
thereto); and providing data or services of the types
described in paragraph 3.4 when ENGINEER employs
ASSOCIATE ENGINEER to provide such data or ser-
vices in lieu of furnishing the same in accordance with
paragraph 3.4.
2.1.8. When ASSOCIATE ENGINEER's compen-
sation for Basic Services is on the basis of a lump sum
or percentage of construction cost or cost plus a fixed
fee method of payment:
2.1.8.1. services resulting from the award of more
than one prime contract for construction, materials
or equipment for This Part of the Project; and
2.1.8.2. services resulting from the arranging for
performance by persons other than the principal prime
Contractor of services for OWNER and administer-
ing OWNER's contracts for such services.
2.1.9. Services in connection with work directive
changes and change orders to reflect changes requested
by OWNER if the resulting change in compensation
for Basic Services is not commensurate with the ser-
vices rendered; services in making revisions to Draw-
ings and Specifications occasioned by the acceptance
of substitutions proposed by Contractor and services
after the award of the contract in evaluating and deter-
mining the acceptability of an unreasonable or exces-
sive number of substitutions proposed by Contractor;
and, services resulting from significant delays, changes
or price increases occurring as a direct or indirect result
of material, equipment or energy shortages.
2.1.10. Services during out-of-town travel required of
ASSOCIATE ENGINEER other than visits to the site
or OWNER's or ENGINEER's office as required by
Section 1.
pages

2.1.11. Furnishing for ENGINEER, on request, a set
of reproducible record prints of Drawings showing
changes made during the construction process, based
on the marked-up prints, Drawings and other data for
This Part of the Project furnished by the Contractor
and which ASSOCIATE ENGINEER considers sig-
nificant.
2.1.12. Assistance in connection with bid protests,
rebidding or renegotiating the contract for construction
of This Part ofthe Project, except when such assistance
is required to complete services called for in paragraphs
6.3.2. and 6.3.3.
2.1.13. Services in connection with any partial utili-
zation of any part of This Part ofthe Project by OWNER
prior to substantial completion.
2.1.14. Additional or extended services during the
construction of This Part of the Project made necessary
by (1) work damaged by fire or other cause during
construction, (2) a significant amount of defective or
neglected work of Contractor, (3) acceleration of the
progress schedule involving services beyond normal
working hours, and (4) default by Contractor.
2.1.15. Evaluating an unreasonable number of claims
submitted by Contractor or others in connection with
the work.
2.1.16. Preparation of operating, maintenance and
staffing manuals; protracted or extensive assistance in
refining and adjusting any equipment or system (such
as initial startup, testing, adjusting and balancing);
assisting OWNER to train OWNER's staff to operate
and maintain This Part of the Project; and, assisting
OWNER in developing systems and procedures for
control of the operation and maintenance of and record-
keeping for This Part of the Project.
2.1.17. Services or consultation after completion of
the Construction Phase, such as inspection during any
guarantee period and reporting observed discrepancies
under guarantees called for in the construction contract
for This Part of the Project (except as agreed to under
Basic Services).
2.1.18. Preparing to serve or serving as a consultant
or witness for OWNER in any litigation, arbitration or
other legal or administrative proceeding involving the
Project (except for assistance in consultations which is
included as part of Basic Services under paragraphs
1.2.3 and 1.4.2).
2.1.19. Additional services in connection with This
Part of the Project, including services which are to be
Page 7 of _
APPENDIX 2 187
furnished by OWNER or ENGINEER in accordance
with Article 3 and services not otherwise provided for
in this Agreement.
2.2. Resident Services During Construction.
2.2.1. If requested by ENGINEER and agreed to in
writing by OWNER, an ASSOCIATE ENGINEER's
Resident Project Representative (and assistants) will
be furnished and will act as directed by ASSOCIATE
ENGINEER in observing performance of the work of
the Contractor on This Part of the Project. Such services
will be paid for by ENGINEER as indicated in para-
graph 5.1.2.4.
2.2.2. The duties and responsibilities and the limita-
tions on the authority of ASSOCIATE ENGINEER's
Resident Project Representative and assistants will be
set forth in Exhibit AE-C which is to be identified,
attached to and made a part of this Agreement before
such services begin.
2.2.3. Through more extensive on-site observations
of the work in progress and field checks of materials
and equipment by ASSOCIATE ENGINEER's Resi-
dent Project Representative (if furnished) and assis-
tants, ASSOCIATE ENGINEER shall endeavor to pro-
vide further protection for OWNER and ENGINEER
against defects and deficiencies in the work of Con-
tractor for This Part of the Project, but the furnishing
of such resident Project representation will not extend
ASSOCIATE ENGINEER's responsibilities or author-
ity beyond the limitations set forth in paragraph 1.6.2.2
or elsewhere in paragraph 1.6 unless otherwise specif-
ically noted.
SECTION 3-ENGINEER'S RESPONSIBILITIES
ENGINEER shall do the following in a timely manner
so as not to delay the services of ASSOCIATE ENGI-
NEER:
3.1. Designate in writing a person to act as ENGI-
NEER's representative with respect to the services to
be rendered for This Part of the Project. Such person
shall have complete authority to transmit instructions,
receive information, interpret and define OWNER's
policies and decisions with respect to ASSOCIATE
ENGINEER's services for This Part of the Project.
3.2. Provide all criteria and full information as to
OWNER's and ENGINEER's requirements for This
Part of the Project, including design objectives and
pages
188 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
constraints, space, capacity and performance require-
ments, flexibility and expandability, and any budgetary
limitations; and furnish copies of all design and con-
struction standards which OWNER and ENGINEER
will require to be included in the Drawings and Spec-
ifications.
3.3. Make available to ASSOCIATE ENGINEER all
information pertinent to This Part ofthe Project, which
ENGINEER knows is reasonably available; this will
include previous reports and any other data relative to
design and construction of the Project.
3.4. Request from OWNER at OWNER's expense
and furnish to ASSOCIATE ENGINEER, as required
for performance of Basic Services for This Part of the
Project (except to the extent provided otherwise in
Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters' ') the following:
3.4.1. data prepared by or services of others,
including without limitation borings, probings and
subsurface explorations, hydrographic surveys, lab-
oratory tests and inspections of samples, materials
and equipment;
3.4.2. appropriate professional interpretations of all
the foregoing;
3.4.3. environmental assessment and impact state-
ments;
3.4.4. property, boundary, easement, rights-of-way,
topographic and utility surveys;
3.4.5. property descriptions;
3.4.6. zoning, deed and other land use restrictions;
and
3.4.7. other special data or consultations not cov-
ered in Section 2;
all of which ASSOCIATE ENGINEER may use and
rely upon in performing services under this Agreement.
3.5. Request OWNER to provide engineering surveys
to establish reference points for construction (except
to the extent provided otherwise in Exhibit AE-B "Fur-
ther Description of Basic Engineering Services and
Related Matters' ') to enable Contractor to proceed with
the layout of the work for This Part of the Project.
3.6. Request OWNER to arrange for access to and
make all provisions for ASSOCIATE ENGINEER to
enter upon public and private property as required for
Page 8 of _
ASSOCIATE ENGINEER to perform services under
this Agreement.
3.7. Request OWNER to provide such accounting,
independent cost estimating and insurance counseling
services as may be required for This Part ofthe Project,
such legal services as OWNER may require or ENGI-
NEER or ASSOCIATE ENGINEER may reasonably
request with regard to legal issues pertaining to This
Part of the Project including any that may be raised by
Contractor, such auditing service as OWNER may
require to ascertain how or for what purpose Contractor
has used the moneys paid under the construction con-
tract, and such inspection services as OWNER may
require to ascertain that Contractor is complying with
any law, rule, regUlation, ordinance, code or order
applicable to Contractor's furnishing and performing
the work.
3.8. Consult with ASSOCIATE ENGINEER before
issuing interpretations or clarifications of ASSOCIATE
ENGINEER's Drawings or Specifications, and obtain
the prompt written consent of ASSOCIATE ENGI-
NEER before acting upon Shop Drawings, samples or
other submittals of Contractor or upon work directive
changes or change orders affecting This Part of the
Project, and assume full responsibility for any such
action taken without such consultation or consent.
3.9. Give prompt written notice to ASSOCIATE
ENGINEER whenever ENGINEER observes or oth-
erwise becomes aware of any development that affects
the scope and timing of ASSOCIATE ENGINEER's
services, or any defect or non-conformance in the work
of Contractor affecting This Part of the Project.
3.10. Advise ASSOCIATE ENGINEER of the iden-
tity of other independent professional associates or
consultants participating in the design or construction
administration of This Part of the Project and the scope
of their services.
3.11. When ASSOCIATE ENGINEER has requested
the right to participate in any decision to accept a par-
ticular contractor, subcontractor or supplier for This
Part of the Project, consult with ASSOCIATE ENGI-
NEER to determine if ASSOCIATE ENGINEER after
due investigation has reasonable objection to any such
contractor, subcontractor or supplier, before ENGI-
NEER makes a determination as to such acceptability.
3.12. Furnish ASSOCIATE ENGINEER a copy of
each of the following to the extent that it pertains to
ASSOCIATE ENGINEER's services for This Part of
the Project: opinions or probable cost as submitted to
OWNER, Bidding Documents, bid tabulations and
pages

Contract Documents (including work directive changes
and change orders as issued).
3.13. The information and services to be provided by
ENGINEER under this Section 3 will be without cost
to ASSOCIATE ENGINEER.
SECTION 4-PERIOD OF SERVICE
4.1. The provisions of this Section 4, and the various
rates of compensation for ASSOCIATE ENGINEER's
services provided for elsewhere in this Agreement have
been agreed to in anticipation of the orderly and con-
tinuous progress of This Part of the Project through
completion of the Construction Phase. ASSOCIATE
ENGINEER's obligation to render services hereunder
shall extend for a period which may reasonably be
required for the design, award of contracts and con-
struction of the Project including extra work and required
extensions thereto. If in Exhibit AE-B "Further
Description of Basic Engineering Services and Related
Matters" specific periods of time for rendering services
are set forth or specific dates by which services are to
be completed are provided and if such dates are exceeded
through no fault of ASSOCIATE ENGINEER, all rates,
measures and amounts of compensation provided herein
shall be subject to equitable adjustment.
4.2. The services called for in the Study and Report
Phase will be completed and ASSOCIATE ENGI-
NEER's Study and Report documents and opinion of
probable Total Project Costs for This Part of the Project
submitted within the stipulated period indicated in para-
graph 2 of Exhibit AE-B" Further Description of Basic
Engineering Services and Related Matters" after writ-
ten authorization to proceed with that phase of services
which will be given by ENGINEER within thirty days
after ENGINEER and ASSOCIATE ENGINEER have
signed this Agreement.
4.3. After acceptance by ENGINEER of ASSOCI-
ATE ENGINEER's Study and Report Phase docu-
ments and indication (if any) by ENGINEER of specific
modifications or changes in the general scope, extent
or character of the Project desired, and upon written
authorization from ENGINEER, ASSOCIATE ENGI-
NEER shall proceed with the performance of the ser-
vices called for in the Preliminary Design Phase, and
submit Preliminary Design documents and a revised
opinion of probable Total Project Costs for This Part
of the Project within the stipulated period indicated in
paragraph 3 of Exhibit AE-B "Further Description of
Basic Engineering Services and Related Matters".
Page 9 of _
APPENDIX 2 189
4.4. After acceptance by ENGINEER of the Prelim-
inary Design Phase documents and revised opinion of
probable Total Project Costs for This Part ofthe Project
and indication (if any) by ENGINEER of any specific
modifications or changes in the general scope, extent
or character of the Project desired by ENGINEER, and
upon written authorization from ENGINEER, ASSO-
CIATE ENGINEER shall proceed with the perfor-
mance of the services called for in the Final Design
Phase of this Agreement, so as to deliver final Drawings,
Specifications for all work of Contractor on This Part
of the Project and a revised opinion of probable Total
Project Costs for This Part of the Project within the
stipulated period indicated in paragraph 4 of Exhibit
AE-B "Further Description of Basic Engineering Ser-
vices and Related Matters".
4.5. ASSOCIATE ENGINEER's services under the
Study and Report Phase, Preliminary Design Phase and
Final Design Phase shall each be considered complete
at the earlier of (1) the date when the submissions for
that phase have been accepted by ENGINEER or (2)
thirty days after the date when such submissions are
delivered to ENGINEER for final acceptance plus in
each case such additional time as may be considered
reasonable for obtaining approval of governmental
authorities having jurisdiction to approve the design of
the Project.
4.6. After acceptance by ENGINEER of the Draw-
ings, Specifications and other Final Design Phase doc-
umentation including the most recent opinion of prob-
able Total Project Costs for This Part of the Project and
upon written authorization from ENGINEER, ASSO-
CIATE ENGINEER shall proceed with performance
of the services called for in the Bidding or Negotiating
Phase. This Phase shall terminate and the services to
be rendered thereunder shall be considered complete
upon commencement of the Construction Phase or upon
cessation of negotiations with Contractor (except as
may otherwise be required to complete the services
called for in paragraphs 6.3.2 and 6.3.3).
4.7. The Construction Phase will commence with the
execution of the construction contract for the work of
This Part of the Project, and will terminate upon written
recommendation by ENGINEER of final payment
thereunder.
4.8. If ENGINEER has requested significant modi-
fications or changes in the general scope, extent or
character of This Part of the Project, the time of per-
formance of ASSOCIATE ENGINEER's services shall
be adjusted equitably.
4.9. If ENGINEER fails to give prompt written autho-
rization to proceed with any phase of services after
pages
190 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
completion of the immediately preceding phase, or if
the Construction Phase has not commenced within
_ _ _ _ _ _ calendar days (Plus such additional time
as may be required to complete the services called for
under paragraphs 6.3.2 and 6.3.3) after completion of
the Final Design Phase, ASSOCIATE ENGINEER may,
after giving seven days' written notice to ENGINEER,
suspend services under this Agreement.
4.10. If ASSOCIATE ENGINEER's services for design
or during construction of This Part of the Project are
delayed or suspended in whole or in part for more than
[The remainder of this page was left blank intentionally.]
Page to of _
three months for reasons beyond ASSOCIATE ENGI-
NEER's control, ASSOCIATE ENGINEER shall on
written demand to ENGINEER (but without termina-
tion ofthis Agreement) be paid as provided in paragraph
5.3.2. If such delay or suspension extends for more
than one year for reasons beyond ASSOCIATE ENGI-
NEER's control, or if ASSOCIATE ENGINEER for
any reason is required to render services more than one
year after Substantial Completion of This Part of the
Project, the various rates of compensation provided for
elsewhere in this Agreement shall be subject to equi-
table adjustment.
pages

LUMP SUM METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ASSOCIATE
ENGINEER
5.1. Methods of Payment for Services and Expenses of
ASSOCIATE ENGINEER.
5.1.1. For Basic Services. ENGINEER shall pay
ASSOCIATE ENGINEER for all Basic Services ren-
dered under Section 1 (as amended and supplemented
by Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters") a lump sum fee
of $ ; but, if the construction contract
contains cost plus or incentive savings provisions for
Contractor's basic compensation, a lump sum fee of
$ for such services.
5.1.2. For Additional Services. ENGINEER shall pay
ASSOCIATE ENGINEER for Additional Services ren-
dered under Section 2 as follows:
5.1.2.1. General. For Additional Services of ASSO-
CIATE ENGINEER's principals and employees
engaged directly on This Part of the Project and ren-
dered pursuant to Section 2 (except services as a
consultant or witness under paragraph 2.1.18), on the
basis of ASSOCIATE ENGINEER's Salary Cost times
a factor of _ _ _ _ __
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Additional Services pursuant to Section 2, the amount
billed to ASSOCIATE ENGINEER therefor times a
factor of _ _ _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ASSOCIATE ENGINEER's principals and
employees as consultants or witnesses in any litiga-
tion, arbitration or other legal or administrative pro-
ceeding in accordance with paragraph 2.1.18, at the
rate of $ per day or any portion
thereof (but compensation for time spent in preparing
to appear in any such litigation, arbitration or pro-
ceeding will be on the basis provided in paragraph
5.1.2.1). Compensation for ASSOCIATE ENGI-
NEER's independent professional associates and
consultants will be on the basis provided in paragraph
5.1.2.2.
5.1.2.4.
Resident Project Services. For services of
ASSOCIATE ENGINEER's Resident Project Rep-
Page 11 of _
APPENDIX 2 191
resentative (and assistants) furnished under para-
graph 2.2.1, on the basis of ASSOCIATE ENGI-
NEER's Salary Costs times a factor of _ _ __
for services rendered by principals and employees
assigned to resident Project representation.
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
ENGINEER shall pay ASSOCIATE ENGINEER the
actual costs of all Reimbursable Expenses incurred in
connection with all Basic and Additional Services.
5.1.4. The terms "Salary Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
5.2. Times of Payments.
5.2.1. ASSOCIATE ENGINEER shall submit monthly
statements for Basic and Additional Services rendered
and for Reimbursable Expenses incurred. The state-
ments will be based upon ASSOCIATE ENGINEER's
estimate of the proportion of the total services actually
completed at the time of billing. If ENGINEER objects
to any statement submitted by ASSOCIATE ENGI-
NEER, ENGINEER shall so advise ASSOCIATE
ENGINEER in writing giving reasons therefor within
fourteen days of receipt of such statement. If no such
objection is made, the statement will be considered
acceptable to ENGINEER.
5.2.2. ENGINEER shall bill OWNER monthly on
account of ASSOCIATE ENGINEER's services and
expenses and shaH pay ASSOCIATE ENGINEER within
fourteen days of the time ENGINEER receives pay-
ment from OWNER on account thereof. It is intended
that payments to ASSOCIATE ENGINEER will be
made as ENGINEER is paid by OWNER under the
Prime Agreement and that ENGINEER shall exert
reasonable and diligent efforts to collect prompt pay-
ment from OWNER. However, whether or not OWNER
pays ENGINEER in full, ENGINEER shall pay all
amounts due ASSOCIATE ENGINEER within a
reasonable time after completion of ENGINEER 's ser-
vices under the Prime Agreement.
5.3. Other Provisions Concerning Payments.
5.3.1. If ENGINEER has received an acceptable
statement from ASSOCIATE ENGINEER (as pro-
vided in paragraph 5.2.1) for services or expenses and
if thereafter ENGINEER fails to pay ASSOCIATE
pages
192 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
ENGINEER for the services and expenses covered by
such statement (i) within fourteen days after receipt of
payment from OWNER for such services and expenses
(as provided in paragraph 5.2.2) or (ii) within sixty days
after receipt of said acceptable statement from ASSO-
CIATE ENGINEER, then after said fourteenth or six-
tieth day, whichever occurs first, (a) the amounts cov-
ered by such statement will be increased at the rate of
1% per month from the date which first occurs, and (b)
ASSOCIATE ENGINEER may, after giving seven days'
written notice to ENGINEER, suspend services under
this Agreement until payment in full of all amounts
covered by ASSOCIATE ENGINEER's acceptable
statements for services and expenses.
5.3.2. In the event of a termination by ENGINEER
under paragraph 7.1 upon the completion of any phase
of Basic Services, progress payments due ASSOCIATE
ENGINEER for services rendered through such phase
shall constitute total payment for such services. In the
event of such termination by ENGINEER during any
phase of Basic Services, ASSOCIATE ENGINEER
will be paid for services rendered during that phase on
the basis of ASSOCIATE ENGINEER's Salary Costs
times a factor of for services rendered
during that phase to date of termination by ASSOCI-
[The remainder of this page was left blank intentionally.]
Page 12 of _
ATE ENGINEER's principals and employees engaged
directly on This Part of the Project. In the event of any
such termination, ASSOCIATE ENGINEER also will
be reimbursed for the charges of independent profes-
sionals and consultants employed by ASSOCIATE
ENGINEER to render Basic Services, and will be paid
for all unpaid Additional Services and unpaid Reim-
bursable Expenses. ENGINEER shall not be obligated
to pay ASSOCIATE ENGINEER any other termina-
tion expenses.
5.3.3. Fiscal records of ASSOCIATE ENGINEER
pertinent to ASSOCIATE ENGINEER's compensa-
tion and payments under this Agreement will be kept
in accordance with generally accepted accounting prac-
tices.
5.3.4. Whenever a factor is applied to Salary Costs
in determining compensation payable to ASSOCIATE
ENGINEER, that factor will be adjusted periodically
and equitably to reflect changes in the various elements
that comprise such factor. All such adjustments will be
in accordance with generally accepted accounting prac-
tices as applied on a consistent basis by ASSOCIATE
ENGINEER and consistent with ASSOCIATE ENGI-
NEER's overall compensation practices and proce-
dures.
pages

5.4. Definitions.
5.4.1. The Salary Costs used as a basis for payment
mean the salaries and wages (basic and incentive) paid
to all ASSOCIATE ENGINEER's personnel engaged
directly on This Part of the Project, including, but not
limited to, engineers, architects, surveyors, designers,
draftsmen, specification writers, estimators, other
technical and business personnel; plus the cost of cus-
tomary and statutory benefits including, but not limited
to, social security contributions, unemployment, excise
and payroll taxes, workers' compensation, health and
retirement benefits, sick leave, vacation and holiday
pay and other group benefits. For the purposes of this
Agreement, the principals of ASSOCIATE ENGI-
NEER and their current hourly Salary Costs are:
[The remainder of this page was left blank intentionally.]
Page 13 of _
APPENDIX 2 193
The hourly Salary Costs of principals of ASSOCIATE
ENGINEER will be adjusted equitably to reflect changes
in personnel and in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
The amount of customary and statutory benefits of all
other personnel will be considered equal to %
of salaries and wages, subject to equitable adjustment
to reflect changes in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual
expenses incurred by ASSOCIATE ENGINEER or
ASSOCIATE ENGINEER's independent professional
associates or consultants, directly or indirectly in con-
nection with This Part of the Project, such as expenses
for: transportation and subsistence incidental thereto;
obtaining bids or proposals from contractor(s); provid-
ing and maintaining field office facilities including fur-
nishings and utilities; subsistence and transportation of
Resident Project Representatives and their assistants;
toll telephone calls and telegrams; reproduction of
reports, Drawings, Specifications, Bidding Documents
and similar Project-related items in addition to those
required under Section 1; and, if authorized in advance
by ENGINEER, overtime work requiring higher than
regular rates.
pages

PERCENTAGE METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ASSOCIATE
ENGINEER
~ 5.1. Methods of Payment for Services and Expenses of
:§ ASSOCIATE ENGINEER.
~
§ 5.1.1. For Basic Services. ENGINEER shall pay
~ ASSOCIATE ENGINEER for all Basic Services ren-
~ dered under Section 1 (as amended and supplemented
~ by Exhibit AE-B "Further Description of Basic Engi-
~ neering Services and Related Matters") an amount equal
~ to % of the Construction Cost for the
~ entire Project (for This Part of the Project) as defined
~ in paragraph 5.1.5 (5.1.6) and Section 6; but, if the
.~ construction contract contains cost plus or incentive
~ savings provisions for Contractor's basic compensa-
:::. tion, % of the Construction Cost for
the entire Project (for This Part of the Project) as so
defined for such services.
5.1.2. For Additional Services. ENGINEER shall pay
ASSOCIATE ENGINEER for Additional Services ren-
dered under Section 2 as follows:
5.1.2.1. General. For Additional Services of ASSO-
CIATE ENGINEER's principals and employees
engaged directly on This Part of the Project and ren-
dered pursuant to Section 2 (except services as a
consultant or witness under paragraph 2.1.18), on the
basis of ASSOCIATE ENGINEER's Salary Costs
times a factor of _ _ _ _ __
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Additional Services pursuant to Section 2, the amount
billed to ASSOCIATE ENGINEER therefor times a
factor of _ _ _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ASSOCIATE ENGINEER's principals and
employees as consultants or witnesses in any litiga-
tion, arbitration or other legal or administrative pro-
ceeding in accordance with paragraph 2.1.18, at the
rate of $ per day or any portion
thereof (but compensation for time spent in preparing
to appear in any such litigation, arbitration or pro-
ceeding will be on the basis provided in paragraph
5.1.2.1). Compensation for ASSOCIATE ENGI-
NEER's independent professional associates and
Page II of _
APPENDIX 2 195
consultants will be on the basis provided in paragraph
5.1.2.2.
5.1.2.4. Resident Project Services. For services of
ASSOCIATE ENGINEER's Resident Project Rep-
resentative (and assistants) furnished under para-
graph 2.2.1, on the basis of ASSOCIATE ENGI-
NEER's Salary Costs times a factor of _ _ __
for services rendered by principals and emloyees
assigned to resident Project representation.
5.1.3. For Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
ENGINEER shall pay ASSOCIATE ENGINEER the
actual costs of all Reimbursable Expenses incurred in
connection with all Basic and Additional Services .
5.1.4. As used in this paragraph 5.1, the terms "Salary
Costs" and "Reimbursable Expenses" have the mean-
ings assigned to them in paragraph 5.4, the term "Con-
struction Cost" will have the meaning assigned to it in
paragraphs 5.1.5 and 6.1, and the term "Construction
Cost for This Part of the Project" will have the meaning
assigned to it in paragraphs 5.1.6 and 6.2.
5.1.5. When Construction Cost of the entire Project
is used as a basis for payment to ASSOCIATE ENGI-
NEER, it will be based on one of the following sources
with precedence in the order listed for work designed
or specified by or under the supervision of ASSOCIATE
ENGINEER:
5.1.5.1. For completed construction work, the total
cost of all work performed as designed or specified
by ASSOCIATE ENGINEER.
5.1.5.2. For worltdesigned or specified but not con-
structed, the lowest bona fide bid received from a
qualified bidder for such work; or, if the work is not
bid, the lowest bona fide negotiated proposal for such
work.
5.1.5.3. For work designed or specified but not con-
structed upon which no such bid or proposal is
received, the most recent estimate of Construction
Cost, or, if none is available, ENGINEER's most
recent opinion of probable Construction Cost.
5.1.6. When Construction Cost for This Part of the
Project is used as a basis for payment to ASSOCIATE
ENGINEER, it will be based on one of the following
sources with precedence in the order listed for work
designed or specified by ASSOCIATE ENGINEER:
pages
196 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.6.1. For completed construction work the total
cost of all such work.
5.1.6.2. For work designed or specified but not con-
structed, .the lowest bona fide bid received from a
qualified bidder for all such work; or, if the work is
not bid, the lowest bona fide negotiated proposal for
all such work.
5.1.6.3. For work designed or specified but not con-
structed upon which no such bid or proposal is
received, the most recent estimate of Construction
Cost for This Part of the Project, or, if none is avail-
able, ASSOCIATE ENGINEER's most recent opin-
ion of probable Construction Cost for This Part of
the Project.
5.1.7. In determinations pursuant to paragraphs 5.1.5
and 5.1.6, labor furnished by OWNER for the Project
will be included in the Construction Cost at current
market rates including a reasonable allowance for over-
head and profit; materials and equipment furnished by
OWNER will be included at current market prices; and,
no deduction is to be made from Construction Costs
on account of any penalty, liquidated damages, or other
amounts withheld from payments to Contractor.
5.2. Times of Payments.
5.2.1. ASSOCIATE ENGINEER shall submit monthly
statements for Basic and Additional Services rendered
and for Reimbursable Expenses incurred. The state-
ments will be based upon ASSOCIATE ENGINEER's
estimate of the proportion of the total services actually
completed at the time of billing. Upon conclusion of
each phase of Basic Services, ASSOCIATE ENGI-
NEER shall submit a statement to ENGINEER cov-
ering such additional amount, if any, as may be nec-
essary to bring total compensation paid on account of
such phase to the following percentages of total com-
pensation payable for all phases of Basic Services:
Phase Insert Actual Percentage
Study and Report ---_%
Preliminary Design ---_%
Final Design ---_%
Bidding or Negotiating ---_%
Construction ---_%
TOTAL 100%
If ENGINEER objects to any statements submitted by
ASSOCIATE ENGINEER, ENGINEER shall so advise
ASSOCIATE ENGINEER in writing giving reasons
therefor within fourteen days of receipt of such state-
ment. If no such objection is made, the statement will
be considered acceptable to ENGINEER.
Page 12 of _
5.2.2. ENGINEER shall bill OWNER monthly on
account of ASSOCIATE ENGINEER's services and
expenses and shall pay ASSOCIATE ENGINEER within
fourteen days of the time ENGINEER receives pay-
ment from OWNER on account thereof. It is intended
that payments to ASSOCIATE ENGINEER will be
made as ENGINEER is paid by OWNER under the
Prime Agreement and that ENGINEER shall exert
reasonable and diligent efforts to collect prompt pay-
ment from OWNER. However, whether or not OWNER
pays ENGINEER in full, ENGINEER shall pay all
amounts due ASSOCIATE ENGINEER within a
reasonable time after completion of ENGINEER's ser-
vices under the Prime Agreement.
5.3. Other Provisions Concerning Payments.
5.3.1. If ENGINEER has received an acceptable
statement from ASSOCIATE ENGINEER (as pro-
vided in paragraph 5.2.1) for services or expenses and
if thereafter ENGINEER fails to pay ASSOCIATE
ENGINEER for the services and expenses covered by
such statement (i) within fourteen days after receipt of
payment from OWNER for such services and expenses
(as provided in paragraph 5.2.2) or (ii) within sixty days
after receipt of said acceptable statement from ASSO-
CIATE ENGINEER, then after said fourteenth or six-
tieth day, whichever occurs first, (a) the amounts cov-
ered by such statement will be increased at the rate of
1% per month from the date which first occurs, and (b)
ASSOCIATE ENGINEER may, after giving seven days'
written notice to ENGINEER, suspend services under
this Agreement until payment in full of all amounts
covered by ASSOCIATE ENGINEER's acceptable
statements for services and expenses.
5.3.2. In the event of termination by ENGINEER
under paragraph 7.1, upon the completion of any phase
of Basic Services, progress payments due ASSOCIATE
ENGINEER for services rendered through such phase
shall constitute total payment for such services. In the
event of such termination by ENGINEER during any
phase of Basic Services, ASSOCIATE ENGINEER
will be paid for services rendered during that phase on
the basis of ASSOCIATE ENGINEER's Salary Costs
times a factor of for services rendered
during that phase to date of termination by ASSOCI-
ATE ENGINEER's principals and employees engaged
directly on This Part of the Project. In the event of any
such termination, ASSOCIATE ENGINEER also will
be reimbursed for the charges of independent profes-
sional associates and consultants employed by ASSO-
CIATE ENGINEER to render Basic Services, and will
be paid for all unpaid Additional Services and unpaid
Reimbursable Expenses. ENGINEER shall not be obli-
pages

gated to pay ASSOCIATE ENGINEER any other ter-
mination expenses.
5.3.3. Fiscal records of ASSOCIATE ENGINEER's
Salary Costs pertinent to ASSOCIATE ENGINEER's
compensation and payments under this Agreement will
be kept in accordance with generally accepted account-
ing practices.
5.3.4. Whenever a factor is applied to Salary Costs
in determining compensation payable to ASSOCIATE
ENGINEER, that factor will be adjusted periodically
and equitably to reflect changes in various elements
that comprise such factor. All such adjustments will be
in accordance with generally accepted accounting prac-
tices as applied on a consistent basis by ASSOCIATE
ENGINEER and consistent with ASSOCIATE ENGI-
NEER's overall compensation practices and proce-
dures.
5.4. Definitions.
5.4.1. The Salary Costs used as a basis for payment
mean the salaries and wages (basic and incentive) paid
to all ASSOCIATE ENGINEER's personnel engaged
directly on This Part of the Project, including, but not
limited to, engineers, architects, surveyors, designers,
draftsmen, specification writers, estimators, other
technical and business personnel; plus the cost of cus-
tomary and statutory benefits including, but not limited
to, s<h:iaI security contributions, unemployment, excise
and payroll taxes, workers' compensation, health and
retirement benefits, sick leave, vacation and holiday
pay and other group benefits. For the purposes of this
Agreement, the principals of ASSOCIATE ENGI-
NEER and their current hourly Salary Costs are:
[The remainder of this page was left blank intentionally.]
Page 13 of _
APPENDIX 2 197
The hourly Salary Costs of principals of ASSOCIATE
ENGINEER will be adjusted equitably to reflect changes
in personnel and in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
The amount of customary and statutory benefits of all
other personnel will be considered equal to _ _ __
% of salaries and wages, subject to equitable adjustment
to reflect changes in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual
expenses incurred by ASSOCIATE ENGINEER and
ASSOCIATE ENGINEER's independent professional
associates and consultants, directly or indirectly in con-
nection with This Part of the Project, such as expenses
for: transportation and subsistence incidental thereto;
obtaining bids or proposals from contractor(s); provid-
ing and maintaining field office facilities; including fur-
nishings and utilities; subsistence and transportation of
Resident Project Representatives and their assistants;
toll telephone calls and telegrams; reproduction of
reports, Drawings, Specifications, Bidding Documents
and similar Project-related items in addition to those
required under Section 1; and, if authorized in advance
by ENGINEER, overtime work requiring higher than
regular rates.
pages

COST PLUS A FIXED FEE METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ASSOCIATE
ENGINEER
5.1. Methods of Payment for Services and Expenses of
ASSOCIATE ENGINEER.
5.1.1. For Basic Services. ENGINEER shall pay
ASSOCIATE ENGINEER for all Basic Services ren-
dered under Section I (as amended and supplemented
by Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters") as follows:
5.1.1.1. A fixed fee of $ plus an
amount equal to ASSOCIATE ENGINEER's Direct
Labor Costs times a factor of for all
Basic Services rendered by principals and employees
engaged directly on This Part of the Project; but, if
the construction contract contains cost plus or incen-
tive savings provisions for Contractor's basic com-
pensation, the fixed fee will be $ plus
the aforesaid amount based on ASSOCIATE ENGI-
NEER's Direct Labor Costs for such services.
5.1.1.2. Professional Associates and Consultants.
For services and Reimsursable Expenses of indepen-
dent professional associates and consultants employed
by ASSOCIATE ENGINEER to render Basic Ser-
vices, the amount billed to ASSOCIATE ENGI-
NEER therefor times a factor of _ _ _ _ __
5.1.1.3. Notice ofRelationship ofPayments to Esti-
mated Total Compensation. If it becomes apparent
to ASSOCIATE ENGINEER at any time before Basic
Services to be rendered under this Agreement have
been about eighty percent completed that the total
amount of compensation to be paid to ASSOCIATE
ENGINEER on account of Basic Services pursuant
to paragraph 5.1.1 will exceed $, _ _ _ _ __
(which figure is ASSOCIATE ENGINEER's esti-
mate of the amount that will become payable for such
services), ASSOCIATE ENGINEER shaH give
ENGINEER written notice thereof. Promptly there-
after ENGINEER and ASSOCIATE ENGINEER
shall review the matter of compensation for such
Basic Services, and either ENGINEER shall accede
to such compensation exceeding said estimated
amounts or ENGINEER and ASSOCIATE ENGI-
NEER shall agree to a reduction in the remaining
services to be rendered by ASSOCIATE ENGI-
NEER under this Agreement so that total compen-
sation for such Basic Services will -not exceed such
Page II of _
APPENDIX 2 199
estimated amounts when such services are com-
pleted.
5.1.2. Additional Services. ENGINEER shall pay
ASSOCIATE ENGINEER for Additional Services ren-
dered under Section 2 as follows:
5.1.2.1. General. For Additional Services of ASSO-
CIATE ENGINEER's principals and employees
engaged directly on This Part of the Project and ren-
dered pursuant to Section 2 (except services as a
consultant or witness under paragraph 2.1.18), on the
basis of ASSOCIATE ENGINEER's Direct Labor
Costs times a factor of _ _ _ _ __
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Additional Services pursuant to Section 2, the amount
billed to ASSOCIATE ENGINEER therefor times a
factor of _ _ _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ASSOCIATE ENGINEER's principals and
employees as consultants or witnesses in any litiga-
tion, arbitration or other legal or administrative pro-
ceeding in accordance with paragraph 2.1.18, at the
rate of $ per day or any portion
thereof (but compensation for time spent in preparing
to appear in any such litigation, arbitration or pro-
ceeding will be on the basis provided in paragraph
5.1.2.0. Compensation for ASSOCIATE ENGI-
NEER's independent professional associates and
consultants will be on the basis provided in paragraph
5.1.2.2.
5.1.2.4. Resident Project Services. For services of
ASSOCIATE ENGINEER's Resident Project Rep-
resentative (and assistants) furnished under para-
graph 2.2.1, on the basis of ASSOCIATE ENGI-
NEER's Direct Labor Costs times a factor of _ _
for services rendered by principals and employees
assigned to resident Project representation.
5.1.3. Reimbursable Expenses. In addition to pay-
ments provided for in paragraphs 5.1.1 and 5.1.2,
ENGINEER shall pay ASSOCIATE ENGINEER the
actual costs (except where specifically provided other-
wise) of all Reimbursable Expenses incurred in con-
nection with all Basic and Additional Services.
pages
200 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.4. The "Direct Labor Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
5.2. Times of Payments.
5.2.1.. ASSOCIATE ENGINEER shall submit monthly
statements for Basic and Additional Services rendered
and for Reimbursable Expenses incurred. The charge
on account of ASSOCIATE ENGINEER's fixed fee
will be based upon ASSOCIATE ENGINEER's esti-
mate of the proportion of the total services actually
completed at the time of billing. If ENGINEER objects
to any statement submitted by ASSOCIATE ENGI-
NEER, ENGINEER shall so advise ASSOCIATE
ENGINEER in writing giving reasons therefor within
fourteen days of receipt of such statement. If no such
objection is made, the statement will be considered
acceptable to ENGINEER.
5.2.2. ENGINEER shall bill OWNER monthly on
account of ASSOCIATE ENGINEER's services and
expenses and shall pay ASSOCIATE ENGINEER within
fourteen days of the time ENGINEER receives pay-
ment from OWNER on account thereof. It is intended
that payments to ASSOCIATE ENGINEER will be
made as ENGINEER is paid by OWNER under the
Prime Agreement and that ENGINEER shall exert
reasonable and diligent efforts to collect prompt pay-
ment from OWNER. However, whether or not OWNER
pays ENGINEER in full, ENGINEER shall pay all
amounts due ASSOCIATE ENGINEER within a
reasonable time after completion of ENGINEER's ser-
vices under the Prime Agreement.
5.3. Other Provisions Concerning Payments.
53.1. If ENGINEER has received an acceptable
statement from ASSOCIATE ENGINEER (as pro-
vided in paragraph 5.2.1) for services or expenses and
if thereafter ENGINEER fails to pay ASSOCIATE
ENGINEER for the services and expenses covered by
such statement (i) within fourteen days after receipt of
payment from OWNER for such services and expenses
(as provided in paragraph 5.2.2) or (ii) within sixty days
after receipt of said acceptable statement from ASSO-
[The remainder of this page was left blank intentionally.]
Page 12 of _
CIATE ENGINEER, then after said fourteenth or six-
tieth day, whichever occurs first, (a) the amounts cov-
ered by such statement will be increased at the rate of
1% per month from the date which first occurs, and (b)
ASSOCIATE ENGINEER may, after giving seven days'
written notice to ENGINEER, suspend services under
this Agreement until payment in full of all amounts
covered by ASSOCIATE ENGINEER's acceptable
statements for services and expenses.
5.3.2. In the event of termination by ENGINEER
under paragraph 7.1 upon the completion of any phase
of Basic Services, progress payments due ASSOCIATE
ENGINEER for services rendered through such phase
shall constitute total payment fot such services. In the
event of such termination by ENGINEER during any
phase of Basic Services, ASSOCIATE ENGINEER
will be paid for services rendered during that phase on
the basis of ASSOCIATE ENGINEER's Direct Labor
Costs times a factor of for services
rendered during that phase to date of termination by
ASSOCIATE ENGINEER's principals and employees
engaged directly on This Part of the Project. In the
event of any such termination, ASSOCIATE ENGI-
NEER also will be reimbursed for the charges of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render Basic
Services and will be paid for all unpaid Additional Ser-
vices and unpaid Reimbursable Expenses. ENGI-
NEER shall not be obligated to pay ASSOCIATE
ENGINEER any other termination expenses.
5.3.3. Fiscal records of ASSOCIATE ENGINEER
pertinent to ASSOCIATE ENGINEER's compensa-
tion and payments under this Agreement will be kept
in accordance with generally accepted accounting prac-
tices.
5.3.4. Whenever a factor is applied to Direct Labor
Costs in determining compensation payable to ASSO-
CIATE ENGINEER, that factor will be adjusted peri-
odically and equitably to reflect changes in the various
elements that comprise such factor. All such adjust-
ments will be in accordance with generally accepted
accounting practices as applied on a consistent basis
by ASSOCIATE ENGINEER and consistent with
ASSOCIATE ENGINEER's overall compensation
practices and procedures.
pages

5.4 Definitions.
5.4.1. Direct Labor Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all personnel engaged directly on This Part of the Proj-
ect, including, but not limited to, engineers, architects,
surveyors, designers, draftsmen, specification writers,
estimators, other technical and business personnel; but
does not include indirect payroll-related costs or fringe
benefits. For the purposes of this Agreement the prin-
cipals of ASSOCIATE ENGINEER and their current
hourly Direct Labor Costs are:
[The remainder of this page was left blank intentionaIly.]
Page 13 of _
APPENDIX 2 201
The hourly Direct Labor Costs of principals of ASSO-
CIATE ENGINEER will be adjusted equitably to reflect
changes in personnel and in ASSOCIATE ENGI-
NEER's overall compensation procedures and prac-
tices.
5.4.2. Reimbursable Expenses mean the actual
expenses incurred by ASSOCIATE ENGINEER and
ASSOCIATE ENGINEER's independent professional
associates or consultants, directly or indirectly in con-
nection with This Part of the Project, such as expenses
for: transportation and subsistence incidental thereto;
obtaining bids or proposals from contractor(s); provid-
ing and maintaining field office facilities including fur-
nishings and utilities; subsistence and transportation of
Resident Project Representatives and their assistants;
toll telephone calls and telegrams; reproduction of
reports, Drawings, Specifications, Bidding Documents
and similar Project-related items in addition to those
required under Section 1; and, if authorized in advance
by ENGINEER, overtime work requiring higher than
regular rates. In addition, if authorized in advance by
ENGINEER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor of
pages

DIRECT LABOR COSTS METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ASSOCIATE
ENGINEER
5.1. Methods of Payments for Services and Expenses
of ASSOCIATE ENGINEER.
5.1.1. For Basic Services. ENGINEER shall pay
ASSOCIATE ENGINEER for all Basic Services ren-
dered under Section I (as amended and supplemented
by Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters") as follows:
5.1.1.1. An amount equal to ASSOCIATE ENGI-
NEER's Direct Labor Costs times a factor of _ _
for all Basic Services rendered by principals and
employees engaged directly on This Part of the Proj-
ect.
5.1.1.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Basic Services, the amount billed to ASSOCIATE
ENGINEER therefor times a factor of _ _ __
5.1.1.3. Notice ofRelationship ofPayments to Esti-
mated Total Compensation. If it becomes apparent
to ASSOCIATE ENGINEER at any time before Basic
Services to be rendered under this Agreement are
about eighty percent completed that the total amount
of compensation to be paid to ASSOCIATE ENGI-
NEER on account of Basic Services pursuant to
paragraph 5.1.1 will exceed ASSOCIATE ENGI-
NEER's estimate of the amount set forth below which
is applicable to the services rendered, ASSOCIATE
ENGINEER shall give ENGINEER written notice
thereof. Promptly thereafter ENGINEER and
ASSOCIATE ENGINEER shall review the matter
of compensation for such Basic Services, and either
OWNER shall accede to such compensation exceed-
ing said estimated amounts or ENGINEER and
ASSOCIATE ENGINEER shall agree to a reduction
in the remaining services to be rendered by ASSO-
CIATE ENGINEER under this Agreement so that
total compensation for such Basic Services will not
exceed said estimated amount when such services
are completed.
5.1.1.3.1. ASSOCIATE ENGINEER's estimate
of the amount that will become payable for Basic
Page 11 of _
APPENDIX 2 203
Services is $ if the construction
contract does not contain cost plus or incentive
savings provisions for Contractor's basic compen-
sation.
5.1.1.3.2. ASSOCIATE ENGINEER's estimate
of the amount that will become payable for Basic
Services is $ if the construction
contract contains cost plus or incentive savings
provisions for Contractor's basic compensation.
5.1.2. Additional Services. ENGINEER shall pay
ASSOCIATE ENGINEER for Additional Services ren-
dered under Section 2 as follows:
5.1.2.1. General. For Additional Services of
ASSOCIATE ENGINEER's principals and employ-
ees engaged directly on This Part of the Project and
rendered pursuant to Section 2 (except services as a
consultant or witness under paragraph 2.1.18), on the
basis of ASSOCIATE ENGINEER's Direct Labor
Costs times a factor of _ _ _ _ __
5.1.2.2. Professional Associates and ConsuLtants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Additional Services pursuant to Section 2, the amount
billed to ASSOCIATE ENGINEER therefor times a
factor of _ _ _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ASSOCIATE ENGINEER's principals and
employees as consultants or witnesses in any litiga-
tion, arbitration or other legal or administrative pro-
ceeding in accordance with paragraph 2.1.18, at the
rate of $ per day or any portion
thereof (but compensation for time spent in preparing
to appear in any such litigation, arbitration or pro-
ceeding will be on the basis provided in paragraph
5.1.2.0. Compensation for ASSOCIATE ENGI-
NEER's independent professional associates and
consultants will be on the basis provided in paragraph
5.1.2.2.
5.1.2.4. Resident Project Services. For services of
ASSOCIATE ENGINEER's Resident Project Rep-
resentative (and assistants) furnished under para-
graph 2.2.1, on the basis of ASSOCIATE ENGI-
NEER's Direct Labor Costs times a factor of _ _
for services rendered by principals and employees
assigned to resident Project representation.
pages
204 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.3. For Reimbursable Expenses. In addition to
payments provided for in paragraphs 5.1.1 and 5.1.2,
ENGINEER shall pay ASSOCIATE ENGINEER the
actual costs (except where specifically provided other-
wise) of all Reimbursable Expenses incurred in con-
nection with all Basic and Additional Services.
5.1.4. The terms "Direct Labor Costs" and "Reim-
bursable Expenses" have the meanings assigned to
them in paragraph 5.4.
5.2. Times of Payments.
5.2.1. ASSOCIATE ENGINEER shall submit monthly
statements for Basic and Additional Services rendered
and for Reimbursable Expenses incurred. If ENGI-
NEER objects to any statement submitted by ASSO-
CIATE ENGINEER, ENGINEER shall so advise
ASSOCIATE ENGINEER in writing giving reasons
therefor within fourteen days of receipt of such state-
ment. If no such objection is made, the statement will
be considered acceptable to ENGINEER.
5.2.2. ENGINEER shall bill OWNER monthly on
account of ASSOCIATE ENGINEER's services and
expenses and shall pay ASSOCIATE ENGINEER within
fourteen days of the time ENGINEER receives pay-
ment from OWNER on account thereof. It is intended
that payments to ASSOCIATE ENGINEER will be
made as ENGINEER is paid by OWNER under the
Prime Agreement and that ENGINEER shall exert
reasonable and diligent efforts to collect prompt pay-
ment from OWNER. However, whether or not OWNER
pays ENGINEER in full, ENGINEER shall pay all
amounts due ASSOCIATE ENGINEER within a
reasonable time after completion of ENGINEER's ser-
vices under the Prime Agreement.
5.3. Other Provisions Concerning Payments.
5.3.1. If ENGINEER has received an acceptable
statement from ASSOCIATE ENGINEER (as pro-
vided in paragraph 5.2.1) for services or expenses and
if thereafter ENGINEER fails to pay ASSOCIATE
ENGINEER for the services and expenses covered by
such statement (i) within fourteen days after receipt of
payment from OWNER for such services and expenses
(as provided in paragrah 5.2.2) or (ii) within sixty days
[The remainder of this page was left blank intentionally.]
Page 12 of _
after receipt of said acceptable statement from ASSO-
CIATE ENGINEER, then after said fourteenth or six-
tieth day, whichever occurs first, (a) the amounts cov-
ered by such statement will be increased at the rate of
1% per month from the date which first occurs, and (b)
ASSOCIATE ENGINEER may, after giving seven days'
written notice to ENGINEER, suspend services under
this Agreement until payment in full of all amounts
covered by ASSOCIATE ENGINEER's acceptable
statements for services and expenses.
5.3.2. In the event of termination by ENGINEER
under paragraph 7.1 upon the completion of any phase
of Basic Services, progress payments due ASSOCIATE
ENGINEER for services rendered through such phase
shall constitute total payment for such services. In the
event of such termination by ENGINEER during any
phase of Basic Services, ASSOCIATE ENGINEER
will be paid for services rendered during that phase on
the basis of ASSOCIATE ENGINEER's Direct Labor
Costs times a factor of for services
rendered during that phase to date of termination by
ASSOCIATE ENGINEER's principals and employees
engaged directly on This Part of the Project. In the
event of any such termination, ASSOCIATE ENGI-
NEER also will be reimbursed for the charges of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render Basic
Services, and will be paid for all unpaid Additional
Services and unpaid Reimbursable Expenses. ENGI-
NEER shall not be obligated to pay ASSOCIATE
ENGINEER any other termination expense.
5.3.3. Fiscal records of ASSOCIATE ENGINEER's
Direct Labor Costs pertinent to ASSOCIATE ENGI-
NEER's compensation and payments under this Agree-
ment will be kept in accordance with generally accepted
accounting practices.
5.3.4. Whenever a factor is applied to Direct Labor
Costs in determining compensation payable to ASSO-
CIATE ENGINEER, that factor will be adjusted peri-
odically and equitably to reflect changes in the various
elements that comprise such factor. All such adjust-
ments will be in accordance with generally accepted
accounting practices as applied on a consistent basis
by ASSOCIATE ENGINEER and consistent with
ASSOCIATE ENGINEER's overall compensation
practices and procedures.
pages

5.4. Definitions.
5.4.1. Direct Labor Costs used as a basis for payment
mean salaries and wages (basic and incentive) paid to
all personnel engaged directly on This Part of the Proj-
ect, including, but not limited to, engineers, architects,
surveyors, designers, draftsmen, specification writers,
estimators, other technical and business personnel; but
does not include indirect payroll-related costs or fringe
benefits. For the purposes of this Agreement the prin-
cipals of ASSOCIATE ENGINEER and their current
hourly Direct Labor Costs are:
[The remainder of this page was left blank intentionally.]
Page 13 of _
APPENDIX 2 205
The hourly Direct Labor Costs of principals of ASSO-
CIATE ENGINEER will be adjusted equitably to reflect
changes in personnel and in ASSOCIATE ENGI-
NEER's overall compensation procedures and prac-
tices.
5.4.2. Reimbursable Expenses mean the actual
expenses incurred by ASSOCIATE ENGINEER and
ASSOCIATE ENGINEER's independent professional
associates or consultants, directly or indirectly in con-
nection with This Part ofthe Project, such as expenses
for: transportation and subsistence incidental thereto;
obtaining bids or proposals from contractor(s); provid-
ing and maintaining field office facilities including fur-
nishings and utilities; subsistence and transportation of
Resident Project Representatives and their assistants;
toll telephone calls and telegrams; reproduction of
reports; Drawings, Specifications, Bidding Documents
and similar Project-related items in addition to those
required under Section 1; and if authorized in advance
by ENGINEER, overtime work requiring higher than
regular rates. In addition, if authorized in advance by
ENGINEER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor of
pages

DIRECT LABOR COSTS METHOD OF PAYMENT
SECTION 5-PAYMENTS TO ASSOCIATE
ENGINEER
5.1. Methods of Payments for Services and Expenses
of ASSOCIATE ENGINEER.
5.1.1. For Basic Services. ENGINEER shall pay
ASSOCIATE ENGINEER for all Basic Services ren-
dered under Section I (as amended and supplemented
by Exhibit AE-B "Further Description of Basic Engi-
neering Services and Related Matters") as follows:
5.1.1.1. An amount equal to ASSOCIATE ENGI-
NEER's Direct Labor Costs times a factor of _ _
for all Basic Services rendered by principals and
employees engaged directly on This Part of the Proj-
ect.
5.1.1.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Basic Services, the amount billed to ASSOCIATE
ENGINEER therefor times a factor of _ _ __
5.1.1.3. Notice ofRelationship ofPayments to Esti-
mated Total Compensation. If it becomes apparent
to ASSOCIATE ENGINEER at any time before Basic
Services to be rendered under this Agreement are
about eighty percent completed that the total amount
of compensation to be paid to ASSOCIATE ENGI-
NEER on account of Basic Services pursuant to
paragraph 5.1.1 will exceed ASSOCIATE ENGI-
NEER's estimate of the amount set forth below which
is applicable to the services rendered, ASSOCIATE
ENGINEER shall give ENGINEER written notice
thereof. Promptly thereafter ENGINEER and
ASSOCIATE ENGINEER shall review the matter
of compensation for such Basic Services, and either
OWNER shall accede to such compensation exceed-
ing said estimated amounts or ENGINEER and
ASSOCIATE ENGINEER shall agree to a reduction
in the remaining services to be rendered by ASSO-
CIATE ENGINEER under this Agreement so that
total compensation for such Basic Services will not
exceed said estimated amount when such services
are completed.
5.1.1.3.1. ASSOCIATE ENGINEER's estimate
of the amount that will become payable for Basic
Page II of _
APPENDIX 2 207
Services is $ if the construction
contract does not contain cost plus or incentive
savings provisions for Contractor's basic compen-
sation.
5.1.1.3.2. ASSOCIATE ENGINEER's estimate
of the amount that will become payable for Basic
Services is $ if the construction
contract contains cost plus or incentive savings
provisions for Contractor's basic compensation.
5.1.2. Additional Services. ENGINEER shall pay
ASSOCIATE ENGINEER for Additional Services ren-
dered under Section 2 as follows:
5.1.2.1. General. For Additional Services of
ASSOCIATE ENGINEER's principals and employ-
ees engaged directly on This Part of the Project and
rendered pursuant to Section 2 (except services as a
consultant or witness under paragraph 2.1.18), on the
basis of ASSOCIATE ENGINEER's Direct Labor
Costs times a factor of _ _ _ _ __
5.1.2.2. Professional Associates and Consultants.
For services and Reimbursable Expenses of inde-
pendent professional associates and consultants
employed by ASSOCIATE ENGINEER to render
Additional Services pursuant to Section 2, the amount
billed to ASSOCIATE ENGINEER therefor times a
factor of _ _ _ _ __
5.1.2.3. Serving as a Witness. For services ren-
dered by ASSOCIATE ENGINEER's principals and
employees as consultants or witnesses in any litiga-
tion, arbitration or other legal or administrative pro-
ceeding in accordance with paragraph 2.1.18, at the
rate of $ per day or any portion
thereof (but compensation for time spent in preparing
to appear in any such litigation, arbitration or pro-
ceeding will be on the basis provided in paragraph
5.1.2.1). Compensation for ASSOCIATE ENGI-
NEER's independent professional associates and
consultants will be on the basis provided in paragraph
5.1.2.2.
5.1.2.4. Resident Project Services. For services of
ASSOCIATE ENGINEER's Resident Project Rep-
resentative (and assistants) furnished under para-
graph 2.2.1, on the basis of ASSOCIATE ENGI-
NEER's Direct Labor Costs times a factor of _ _
for services rendered by principals and employees
assigned to resident Project representation.
pages
208 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
5.1.3. For Reimbursable Expenses. In addition to
payments provided for in paragraphs 5.1.1 and 5.1.2,
ENGINEER shall pay ASSOCIATE ENGINEER the
actual costs (except where specifically provided other-
wise) of all Reimbursable Expenses incurred in con-
nection with all Basic and AdditionalServices.
5.1.4. The terms "Salary Costs" and "Reimbursable
Expenses" have the meanings assigned to them in para-
graph 5.4.
S.2. Times of Payments.
5.2.1. ASSOCIATE ENGINEER shall submit monthly
statements for Basic and Additional Services rendered
and for Reimbursable Expenses incurred. If ENGI-
NEER objects to any statement submitted by ASSO-
CIATE ENGINEER, ENGINEER shall so advise
ASSOCIATE ENGINEER in writing giving reasons
therefor within fourteen days of receipt of such state-
ment. If no such objection is made, the statement will
be considered acceptable to ENGINEER.
5.2.2. ENGINEER shall bill OWNER monthly on
account of ASSOCIATE ENGINEER's services and
expenses and shall pay ASSOCIATE ENGINEER within
fourteen days of the time ENGINEER receives pay-
ment from OWNER on account thereof. It is intended
that payments to ASSOCIATE ENGINEER will be
made as ENGINEER is paid by OWNER under the
Prime Agreement and that ENGINEER shall exert
reasonable and diligent efforts to collect prompt pay-
ment from OWNER. However, whether or not OWNER
pays ENGINEER in full, ENGINEER shall pay all
amounts. due ASSOCIATE ENGINEER within a
reasonable time after completion of ENGINEER's ser-
vices under the Prime Agreement.
5.3. Other Provisions Concerning Payments.
5.3.1. If ENGINEER has received an acceptable
statement from ASSOCIATE ENGINEER (as pro-
vided in paragraph 5.2.1) for services or expenses and
if thereafter ENGINEER fails to pay ASSOCIATE
ENGINEER for the services and expenses covered by
such statement (i) within fourteen days after receipt of
payment from OWNER for such services and expenses
(as provided in paragraph 5.2.2) or (ii) within sixty days
[fhe remainder of this page was left blank intention~lIy.]
Page 12 of _
after receipt of said acceptable statement from ASSO-
CIATE ENGINEER, then after said fourteenth or six-
tieth day, whichever occurs first, (a) the amounts cov-
ered by such statement will be increased at the rate of
1% per month from the date which first occurs, and (b)
ASSOCIATE ENGINEER may, after giving seven days'
written notice to ENGINEER, suspend services under
this Agreement until payment in full of all amounts
covered by ASSOCIATE ENGINEER's acceptable
statements for services and expenses.
5.3.2. In the event of termination by ENGINEER
under paragraph 7.1 upon the completion of any phase
of Basic Services, progress payments due ASSOCIATE
ENGINEER for services rendered through such phase
shall constitute total payment for such services. In the
event of such termination by ENGINEER during any
phase of Basic Services, ASSOCIATE ENGINEER
will be paid for services rendered during that phase on
the basis of ASSOCIATE ENGINEER's Salary Costs
times a factor of for services rendered
during that phase to date of termination by ASSOCI-
ATE ENGINEER's principals and employees engaged
directly on This Part of the Project. In the event of any
such termination, ASSOCIATE ENGINEER also will
be reimbursed for the charges of independent profes-
sional associates and consultants employed by ASSO-
CIATE ENGINEER to render Basic Services and will
be paid for all unpaid Additional Services and unpaid
Reimbursable Expenses. ENGINEER shall not be obli-
gated to pay ASSOCIATE ENGINEER any other ter-
mination expenses.
5.3.3. Fiscal records of ASSOCIATE ENGINEER's
Salary Costs pertinent to ASSOCIATE ENGINEER's
compensation and payments under this Agreement will
be kept in accordance with generally accepted account-
ing practices.
5.3.4. Whenever a factor is applied to Salary Costs
in determining compensation payable to ASSOCIATE
ENGINEER, that factor will be adjusted periodically
and equitably to reflect changes in the various elements
that comprise such factor. All such adjustments will be
in accordance with generally accepted accounting prac-
tices as applied on a consistent basis by ASSOCIATE
ENGINEER and consistent with ASSOCIATE ENGI-
NEER's overall compensation practices and proce-
dures.
pages

5.4. Definitions.
5.4. I. The Salary Costs used as a basis for payment
mean the salaries and wages (basic and incentive) paid
to all personnel engaged directly on This Part of the
Project, including, but not limited to, engineers, archi-
tects, surveyors, designers, draftsmen, specification
writers, estimators, other technical and business per-
sonnel; plus the cost of customary and statutory ben-
efits including, but not limited to, social security con-
tributions, unemployment, excise and payroll taxes,
workers' compensation, health and retirement benefits,
sick leave, vacation and holiday pay and other group
benefits. For the purposes of this Agreement, the prin-
cipals of ASSOCIATE ENGINEER and their current
hourly Salary Costs are:
[The remainder of this page was left blank intentionally.]
Page 13 of _
APPENDIX 2 209
The hourly Salary Costs of principals of ASSOCIATE
ENGINEER will be adjusted equitably to reflect changes
in personnel and in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
The amount of customary and statutory benefits of all
other personnel will be considered equal to _ _ __
% of salaries and wages, subject to equitable adjustment
to reflect changes in ASSOCIATE ENGINEER's over-
all compensation procedures and practices.
5.4.2. Reimbursable Expenses mean the actual
expenses incurred by ASSOCIATE ENGINEER and
ASSOCIATE ENGINEER's independent professional
associates or consultants, directly or indirectly in con-
nection with This Part of the Project, such as expenses
for: transportation and subsistence incidental thereto;
obtaining bids or proposals from contractor(s); provid-
ing and maintaining field office facilities including fur-
nishings and utilities; subsistence and transportation of
Resident Project Representatives and their assistants;
toll telephone calls and telegrams; reproduction of
reports, Drawings, Specifications, Bidding Documents
and similar Project-related items in addition to those
required under Section 1; and, if authorized in advance
by ENGINEER, overtime work requiring higher than
regular rates. In addition, if authorized in advance by
ENGINEER, Reimbursable Expenses will also include
expenses incurred for computer time and other highly
specialized equipment, including an appropriate charge
for previously established programs and expenses of
photographic production techniques times a factor of
pages

SECTION 6-CONSTRUCTION COST AND
OPINIONS OF COST
6.1. Construction Cost
The construction cost ofthe entire Project (herein referred
to as "Construction Cost") means the total cost to
OWNER of those portions of the entire Project designed
and specified by or under the supervision of ENGI-
NEER, but it will not include ASSOCIATE ENGI-
NEER's or ENGINEER's compensation and expenses,
the cost of land, rights-of-way, or compensation for or
damages to properties unless this Agreement so spec-
ifies, nor will it include OWNER's legal, accounting,
insurance counseling or auditing services, or interest
and financing charges incurred in connection with the
Project. [Construction Cost is one of the items com-
prising Total Project Costs which is defined in paragraph
1.2.7.J
6.2. Construction Cost for This Part of the Project
means the portion of the Construction Cost appliCable
to This Part of the Project.
6.3. Opinions of Cost.
6.3.1. Since ASSOCIATE ENGINEER has no con-
trol over the cost of labor, materials, equipment or
services furnished by others, or over the Contractor's
method of determining prices, or over competitive bid-
ding or market conditions, ASSOCIATE ENGI-
NEER's opinions of probable Total Project Costs and
Construction Cost for This Part of the Project provided
for herein are to be made on the basis of experience
and qualifications and represent ASSOCIATE ENGI-
NEER's best judgment as an experienced and qualified
professional engineer, familiar with the construction
industry; but ASSOCIATE ENGINEER cannot and
does not guarantee that proposals, bids, or actual Total
Project or Construction Costs for This Part of the Proj-
ect will not vary from opinions of probable cost pre-
pared by ASSOCIATE ENGINEER. If prior to the
Bidding or Negotiating Phase greater assurance as to
Total Project or Construction Costs is desired, ENGI-
NEER shall employ an independent cost estimator or
request OWNER to do so as provided in paragraph 3.7.
6.3.2. If a limit of Construction Cost for This Part of
the Project is established by written agreement between
ENGINEER and ASSOCIATE ENGINEER and spe-
cifically set forth in this Agreement as a condition thereto,
the following will apply:
Page 15 of _
APPENDIX 2 211
6.3.2.1. The acceptance by ENGINEER at any time
during Basic Services of a revised opinion of probable
Total Project or Construction Costs for This Part of
the Project in excess ofthe then established cost limit
will constitute a corresponding revision in the appli-
cable Construction Cost limit to the extent indicated
in such revised opinion.
6.3.2.2. Any Construction Cost limit so established
will include a contingency often percent unless another
amount is agreed upon in writing.
6.3.2.3. If the Bidding or Negotiating Phase has not
commenced within six months after completion of
the Final Design Phase, the established limit of Con-
struction Cost for This Part of the Project will not be
binding on ASSOCIATE ENGINEER, and ENGI-
NEER shall consent to an adjustment in such cost
limit commensurate with any applicable change in
the general level of prices in the construction industry
between the date of completion of the Final Design
Phase and the date on which proposals or bids are
sought.
6.3.2.4. If the lowest bona fide proposal or bid
exceeds the established Construction Cost limit,
ENGINEER shall request OWNER to (I) give writ-
ten approval to increase such cost limit, (2) authorize
negotiating or rebidding the Project within a reason-
able time, or (3) cooperate in revising the Project's
general scope, extent or character to the extent con-
sistent with the Project's requirements and with sound
engineering practices. In the case of (3), ASSOCI-
ATE ENGINEER shall modify the Contract Docu-
ments for This Part of the Project as necessary to
bring the Construction Cost within the cost limit. In
lieu of other compensation for services in making
such modifications, ENGINEER shall pay ASSO-
CIATE ENGINEER the cost of such services to
ASSOCIATE ENGINEER, all overhead expenses
reasonably related thereto and Reimbursable
Expenses, but without profit to ASSOCIATE ENGI-
NEER on account of such services.
6.3.3. If as a condition of the Prime Agreement a limit
of Construction Cost for the Project is established as
aforesaid, but no limit of Construction Cost for This
Part of the Project is established in accordance with
paragraph 6.3.2, ENGINEER may at any time prior to
commencement of the Construction Phase for This Part
of the Project require ASSOCIATE ENGINEER with-
out additional compensation to modify ASSOCIATE
ENGINEER's Drawings and Specifications as neces-
sary to make them bear a reasonable portion of any
reduction in the Construction Cost for the Project
pages
212 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
required to bring it within the cost limit specified in the
Prime Agreement. In lieu of other compensation for
services in making such modifications, ENGINEER
shall pay ASSOCIATE ENGINEER the cost of such
services to ASSOCIATE ENGINEER, all overhead
expenses reasonably related thereto and Reimbursable
Expenses, but without profit to ASSOCIATE ENGI-
NEER on account of such services.
[The remainder of this page was left blank intentionally.]
Pdge 16 of _
6.3.4. The providing of the services called for by para-
graphs 6.3.2 and 6.3.3 shall be the limit of ASSOCIATE
ENGINEER's responsibility in this regard and having
done so, ASSOCIATE ENGINEER shall be entitled
to payment for services in accordance with this Agree-
ment,and will not otherwise be liable for damages
attributable to the lowest bona fide proposal or bid
exceeding the established Construction Cost.
pages

SECTION 7-GENERAL CONSIDERATIONS
7.1. Termination.
7.1.1. The obligation to provide further services under
this Agreement may be terminated by either party upon
thirty days' written notice in the event of substantial
failure by the other party to perform in accordance with
the terms hereof through no fault of the terminating
party.
7.1.2. This Agreement will terminate automatically
upon termination of the Prime Agreement. ENGI-
NEER shall promptly notify ASSOCIATE ENGI-
NEER of such termination.
7.2. Reuse of Documents.
All documents including Drawings and Specifications
prepared or furnished by ASSOCIATE ENGINEER
pursuant to this Agreement are instruments of service
in respect ofthe Project and ASSOCIATE ENGINEER
may retain an ownership and property interest therein
whether or not the Project is completed. ENGINEER
and OWNER may make and retain copies for infor-
mation and reference in connection with the use and
occupancy of the Project by OWNER and others or
ENGINEER's additional design services for the Proj-
ect or extensions thereof; however, such documents
are not intended or represented to be suitable for reuse
by ENGINEER, OWNER or others on extensions of
the Project or on any other project. Any reuse without
written verification or adaptation by ASSOCIATE
ENGINEER for the specific purpose intended will be
at the reuser's sole risk and without liability or legal
exposure to ASSOCIATE ENGINEER or to ASSO-
CIATE ENGINEER's independent professional asso-
ciates or consultants; and ENGINEER shall indemnify
and hold harmless ASSOCIATE ENGINEER and
ASSOCIATE ENGINEER's independent professional
associates and consultants from all claims, damages,
losses and expenses including attorney's fees arising
out of or resulting from ENGINEER's reuse without
such adaptation or verification. Any such verification
or adaptation will entitle ASSOCIATE ENGINEER to
further compensation at rates to be agreed upon by
ENGINEER and ASSOCIATE ENGINEER.
7.3. Records.
7.3.1. ASSOCIATE ENGINEER shall maintain all
records (fiscal and other) and design calculations on file
in legible form. A copy of these shall be available to
ENGINEER at ASSOCIATE ENGINEER's expense,
Page 17 of _
APPENDIX 2 213
and the originals shall not be disposed of by ASSO-
CIATE ENGINEER until after sixty days' prior written
notice to ENGINEER.
7.3.2. ASSOCIATE ENGINEER's records and design
calculations will be available for examination and audit
if and as required by the Prime Agreement.
7.4. Insurance.
7.6.1. ENGINEER and ASSOCIATE ENGINEER
shall each procure and maintain insurance (other than
life insurance) for protection from claims under work-
ers' compensation acts, claims for damages because of
bodily injury including personal injury, sickness or dis-
ease or death of any and all employees or of any person
other than such employees, and from claims or damages
because of injury to or destruction of property including
loss of use resulting therefrom, and any other insurance
prescribed by laws, rules, regulations, ordinances, codes
or orders, as well as insurance required by the Prime
Agreement or ENGINEER as set forth in Exhibit AE-
B "Further Description of Basic Engineering Services
and Related Matters". Certificates indicating that all
such insurance is in effect will be exchanged by them.
7.5. Controlling Law.
This Agreement is to be governed by the law of the
principal place of business of ENGINEER.
7.6. Successors and Assigns.
7.6.1. ENGINEER and ASSOCIATE ENGINEER
each is hereby bound, and the partners, successors,
executors, administrators and legal representatives of
each (and to the extent permitted by paragraph 7.6.2
the assigns of ENGINEER and ASSOCIATE ENGI-
NEER) are hereby bound, to the other party to this
Agreement and to the partners, successors, executors,
administrators and legal representatives (and said assigns)
of such other party, in respect of all covenants, agree-
ments and obligations of this Agreement.
7.6.2. Neither ENGINEER nor ASSOCIATE ENGI-
NEER shall assign, sublet or transfer any rights under
or interest in (including, but without limitation, moneys
that may become due or moneys that are due) this
Agreement without the written consent of the other,
except to the extent that any assignment, subletting or
transfer is mandated by law or the effect of this limi-
tation may be restricted by law. Unless specifically
stated to the contrary in any written consent to an
assignment, no assignment will release or discharge the
assignor from any duty or responsibility under this
pages
214 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
Agreement. Nothing contained in this paragraph shall
prevent ASSOCIATE ENGINEER from employing such
independent professional associates and consultants as
ASSOCIATE ENGINEER may deem appropriate to
assist in the performance of services hereunder.
7.6.3. Nothing herein shall be construed to give any
rights or benefits hereunder to anyone other than
ENGINEER and ASSOCIATE ENGINEER, and all
duties and responsibilities undertaken pursuant to this
Agreement will be for the sole and exclusive benefit of
ENGINEER and ASSOCIATE ENGINEER and not
for the benefit of any other party.
7.7. Arbitration.
7.7.1. All claims, counterclaims, disputes and other
matters in question between the parties hereto arising
out of or relating to this Agreement or the breach thereof
will be decided by arbitration in accordance with the
Construction Industry Arbitration Rules of the Amer-
ican Arbitration Association then obtaining, subject to
the limitations and restrictions stated in paragraphs
7.7.3 and 7.7.4 below. This agreement so to arbitrate
and any other agreement or consent to arbitrate entered
into in accordance herewith as provided in this para-
graph 7.7 will be specifically enforceable under the
prevailing arbitration law of any court having jurisdic-
tion.
7.7.2. Notice of demand for arbitration must be filed
in writing with the other parties to this Agreement and
with the American Arbitration Association. The demand
must be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no
event may the demand for arbitration be made after the
date when institution of legal or equitable proceedings
based on such claim, dispute or other matter in question
would be barred by the applicable statute oflimitations.
7.7.3. All demands for arbitration and all answering
statements thereto which include any monetary claim
[The remainder of this page was left blank intentionally.]
Page 18 of _
must contain a statement that the total sum or value in
controversy as alleged by the party making such demand
or answering statement is not more than $200,000
(exclusive of interest and costs); and the arbitrators will
not have jl1risdiction, power or authority to render a
monetary award in response thereto against any party
which totals more than $200,000 (exclusive of interest
and costs). The arbitrators will not have jurisdiction,
power or authority to consider, or make findings (except
in denial of their own jurisdiction) concerning any claim,
counterclaim, dispute or other matter in question where
the amount in controversy of any suchclaim, counter-
claim, dispute or matter is more than $200,000 (exclu-
sive of interest and costs).
7.7.4. No arbitration arising out of, or relating to, this
Agreement may include, by consolidation, joinder or
in any other manner, any person or entity who is not a
party to this Agreement.
7.7.5. By written consent signed by all the parties to
this Agreement and containing a specific reference hereto,
the limitations and restrictions contained in paragraphs
7.7.3 and 7.7.4 may be waived in whole or in part as to
any claim, counterclaim, dispute or other matter spe-
cifically described in such consent. No consent to arbi-
tration in respect of a specifically described claim,
counterclaim, dispute or other matter in question will
constitute consent to arbitrate any other claim, coun-
terclaim, dispute or other matter in question which is
not specifically described in such consent or in which
the sum or value in controversy exceeds $200,000
(exclusive of interest and costs) or which is with any
party not specifically described therein.
7.7.6. The award rendered by the arbitrators will be
final, judgment may be entered upon it in any court
having jurisdiction thereof, and will not be subject to
modification or appeal except to the extent permitted
by Sections 10 and 11 of the Federal Arbitration Act (9
U.S.C. §10.11).
pages
 APPENDIX 2 215

SECTION 8-SPECIAL PROVISIONS, EXHIBITS AND SCHEDULES

S.l. Special Provisions.

This Agreement is subject to the following special provisions.
8.1.1.

S.2. Exhibits and Schedules.

The following Exhibits are attached to and made a part of This Agreement:
8.2.1. Exhibit EA-A-copy of portions of Prime Agreement consisting of _ _ _ _ pages plus the following
exhibits and schedules:

8.2.2. Exhibit EA-B "Further Description of Basic Engineering Services and Related Matters" consisting of
_ _ _ _ pages.

8.2.3. Exhibit EA-C "Duties, Responsibilities and Limitations of Authority of Associate Engineer's Resident
Project Representative" consisting of pages.
8.2.4.

S.3. This Agreement (consisting of pages 1 to , inclusive) together with the Exhibits and schedules
identified above constitute the entire agreement between ENGINEER and ASSOCIATE ENGINEER and supersede
all prior written or oral understandings. This Agreement and said Exhibits and schedules may only be amended,
supplemented, modified or cancelled by a duly executed written instrument.

IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement as of the day and year first
above written.

ENGINEER ASSOCIATE ENGINEER

Address for Giving Notices: Address for Giving Notices:

Page 19 of _ pages
 This document has important legal consequences; consultation with an attorney is encouraged with
respect to its completion or modification.

STANDARD FORM OF AGREEMENT

BETWEEN OWNER AND CONTRACTOR
ON THE BASIS OF A STIPULATED PRICE
Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly By

• ~

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

This document has been approved and endorsed by

The Associated General Contractors of America

This Standard Form of Agreement has been prepared for use with the Standard General Conditions of
the Construction Contract, No. 1910-8, 1983 edition. Their provisions are interrelated and a change in
one may necessitate a change in the others. The suggested language for instructions to bidders contained
in the Guide to the Preparation of Instructions to Bidders, No. 1910-12, 1983 edition, is also carefully
interrelated with the language of this Agreement. Comments concerning their usage are contained in the
Commentary on Agreements for Engineering Services and Contract Documents, No. 1910-9, 1981
edition. See also Guide to the Preparation of Supplementary Conditions, No. 1910-17, 1983 edition.

EJCDC No. J91O-8-A-J (1983 Edition)

217
218 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

NOTE TO USER
Certain states and federal agencies require provisions in public contracts which permit Contractors to deposit
acceptable securities with Owner or a stakeholder in lieu of retainage. Many Owners will not accept this
procedure except where required by Laws or Regulations. In the event such a procedure is required, the
provisions of this Agreement and possibly those of the other Contract Documents dealing with retainage
should be amended, and an attorney should be consulted to prepare the revised language. Among the issues
to be addressed by such language are: initial and subsequent valuations of the securities, right to withdraw
excess collateral and obligation to deposit additional collateral as market value changes, who is entitled to
interest and dividends on deposited collateral, rights of construction lender in deposited collateral, respon-
sibilities of stakeholder, may collateral be freely sold in the event of Contractor default and method of such
sale, and application of Uniform Commercial Code and state and federal security laws to the arrangement.

© 1983 National Society of Professional Engineers

2029 K Street, N.W., Washington, DC 20006

American Consulting Engineers Council

1015 15th Street, N.W., Washington, DC 20005

American Society of Civil Engineers

345 East 47th Street, New York, NY 10017

Construction Specifications Institute

601 Madison Street, Alexandria, VA 22314
 APPENDIX 3 219

EJCDe
STANDARD FORM OF AGREEMENT
BETWEEN OWNER AND CONTRACTOR
ON THE BASIS OF A STIPULATED PRICE
THIS AGREEMENT is dated as of the _ _ _ _ _ _ _ day of _ _ _ _ _ _ _ _ _ _ in the
year 19_ _ _ _ by and between _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (hereinafter called OWNER) and

(hereinafter called CONTRACTOR).

OWNER and CONTRACTOR, in consideration of the mutual covenants hereinafter set forth, agree as follows:

Article 1. WORK.

CONTRACTOR shall complete all Work as specified or indicated in the Contract Documents. The Work is
generally described as follows:

The Project for which the Work under the Contract Documents may be the whole or only a part is generally
described as follows:

Article 2. ENGINEER.

The Project has been designed by

who is hereinafter called ENGINEER and who is to act as OWNER's representative, assume all duties and
responsibilities and have the rights and authority assigned to ENGINEER in the Contract Documents in
connection with completion of the Work in accordance with the Contract Documents.

Article 3. CONTRACT TIME.

3.1. The Work will be substantially completed on or before , 19_ _ , and

completed and ready for final payment in accordance with paragraph 14.13 of the General Conditions on
or before , 19 _ _ .

3.1. The Work will be substantially completed within days from the date when the Contract
Time commences to run as provided in paragraph 2.3 of the General Conditions, and completed and
ready for final payment in accordance with paragraph 14.13 of the General Conditions within _ _ __
days from the date when the Contract Time commences to run.
3.2. Liquidated Damages. OWNER and CONTRACTOR recognize that time is of the essence of this
Agreement and that OWNER ,¥ill suffer financial loss if the Work is not completed within the times
specified in paragraph 3.1 above, plus any extensions thereof allowed in accordance with Article 12 of
the General Conditions. They also recognize the delays, expense and difficulties involved in proving in
a legal or arbitration proceeding the actual loss suffered by OWNER if the Work is not completed on
time. Accordingly, instead of requiring any such proof, OWNER and CONTRACTOR agree that as
liquidated damages for delay (but not as a penalty) CONTRACTOR shall pay OWNER _ _ _ _ __
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ dollars ($ ) for each day
that expires after the time specified in paragraph 3.1 for Substantial Completion until the Work is
substantially complete. After Substantial Completion if CONTRACTOR shall neglect, refuse or fail to
complete the remaining Work within the Contract Time or any proper extension thereof granted by
220 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

OWNER, CONTRACTOR shall pay OWNER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

_ _ _ _ _ _ _ _ _ dollars ($ ) for each day that expires after the time
specified in paragraph 3.1 for completion and readiness for final payment.

Article 4. CONTRACT PRICE.

4.1. OWNER shall pay CONTRACTOR for completion of the Work in accordance with the Contract
Documents in current funds as follows:

[here insert a lump sum, unit prices or both, if necessary attach exhibits and list them in Article
8.]

[CONTRACTOR's Bid may be attached as an exhibit to avoid lengthy retyping of unit price
schedules, formulae for escalation of prices, information as to alternatives, etc.]

Article S. PAYMENT PROCEDURES.

CON'fRACTOR shall submit Applications for Payment in accordance with Article 14 of the General Condi-
tions. Applications for Payment will be processed by ENGINEER as provided in the General Conditions.
5.1. Progress Payments. OWNER shall make progress payments on account of the Contract Price on
the basis of CONTRACTOR's Applications for Payment as recommended by ENGINEER, on or about
the day of each month during construction as provided below. All progress payments will be
on the basis of the progress of the Work measured by the schedule of values established in paragraph 2.9
of the General Conditions (and in the case of Unit Price Work based on the number of units completed)
or, in the event there is no schedule of values, as provided in the General Requirements.
5.1.1. Prior to Substantial Completion, progress payments will be made in an amount equal to the
percentage indicated below, but, in each case, less the aggregate of payments previously made and
less such amounts as ENGINEER shall determine, or OWNER may withhold, in accordance with
paragraph 14.7 of the General Conditions.
_ _ _% of Work completed. If Work has been 50% completed as determined by ENGI-
NEER, and if the character and progress of the Work have been satisfactory to OWNER
and ENGINEER, OWNER on recommendation of ENGINEER, may determine that as
long as the character and progress of the Work remain satisfactory to them. there will be
no additional retainage on account of Work completed in which case the remaining progress
payments prior to Substantial Completion will be in an amount equal to 100% of the Work
completed.
_ _ _% of materials and equipment not incorporated in the Work (but delivered, suitably
stored and accompanied by documentation satisfactory to OWNER as provided in para-
graph 14.2 of the General Conditions).

5.1.2. Upon Substantial Completion, in an amount sufficient to increase total payments to CON-
TRACTOR to % of the Contract Price, less such amounts as ENGINEER shall determine,
or OWNER may withhold, in accordance with paragraph 14.7 of the General Conditions.
5.2. Final Payment. Upon final completion and acceptance of the Work in accordance with paragraph
14.13 of the General Conditions, OWNER shall pay the remainder ofthe Contract Price as recommended
by ENGINEER as provided in said paragraph 14.13.

Article 6. INTEREST.

All moneys not paid when due as provided in Article 14 of the General Conditions shall bear interest at the
maximum rate allowed by law at the place of the Project.

2
 APPENOIX 3 221

Article 7. CONTRACTOR'S REPRESENTATIONS.

In order to induce OWNER to enter into this Agreement CONTRACTOR makes the following representations:
7.1. CONTRACTOR has familiarized itself with the nature and extent of the Contract Documents, Work,
site, locality, and all local conditions and Laws and Regulations that in any manner may affect cost,
progress, performance or furnishing of the Work.

7.2. CONTRACTOR has studied carefully all reports of explorations and tests of subsurface conditions
and drawings of physical conditions which are identified in the Supplementary Conditions as provided in
paragraph 4.2 of the General Conditions, and accepts the determination set forth in paragraph SC-4.2 of
the Supplementary Conditions of the extent of the technical data contained in such reports and drawings
upon which CONTRACTOR is entitled to reply.

7.3. CONTRACTOR has obtained and carefully studied (or assumes responsibility for obtaining and
carefully studying) all such examinations, investigations, explorations, tests, reports and studies (in
addition to or to supplement those referred to in paragraph 7.2 above) which pertain to the subsurface or
physical conditions at or contiguous to the site or otherwise may affect the cost, progress, performance
or furnishing of the Work as CONTRACTOR considers necessary for the performance or furnishing of
the Work at the Contract Price, within the Contract Time and in accordance with the other terms and
conditions of the Contract Documents, including specifically the provisions of paragraph 4.2 of the
General Conditions; and no additional examinations, investigations, explorations, tests, reports, studies
or similar information or data are or will be required by CONTRACTOR for such purposes.
7.4. CONTRACTOR has reviewed and checked all information and data shown or indicated on the
Contract Documents with respect to existing Underground Facilities at or contiguous to the site and
assumes responsibility for the accurate location of said Underground Facilities. No additional examina-
tions, investigations, explorations, tests, reports, studies or similar information or data in respect of said
Underground Facilities are or will be required by CONTRACTOR in order to perform and furnish the
Work at the Contract Price, within the Contract Time and in accordance with the other terms and
conditions of the Contract Documents, including specifically the provisions of paragraph 4.3 of the
General Conditions.

7.5. CONTRACTOR has correlated the results of all such observations, examinations, investigations,
explorations, tests, reports and studies with the terms and conditions of the Contract Documents.

7.6. CONTRACTOR has given ENGINEER written notice of all conflicts, errors or discrepancies that
he has discovered in the Contract Documents and the written resolution thereof by ENGINEER is
acceptable to CONTRACTOR.

Article 8. CONTRACT DOCUMENTS.

The Contract Documents which comprise the entire agreement between OWNER and CONTRACTOR
concerning the Work consist of the following:
8.1. This Agreement (pages 1 to _ _ _ , inclusive).
8.2. Exhibits to this Agreement (pages _ _ _ to _ _ _ , inclusive).

8.3. Performance and other Bonds, identified as exhibits _ _ _ _ _ _ _ _ _ _ and consisting of

pages.

8.4. Notice of Award.

8.5. General Conditions (pages to , inclusive).

8.6. Supplementary Conditions (pages to , inclusive).

3
222 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

8.7. Specifications bearing the title _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

and consisting of _ _- divisions and _ _ _ pages, as listed in table of contents thereof.

8.8. Drawings, consisting of a cover sheet and sheets numbered _ _ _ through _ _ _ , inclusive with
each sheet bearing the following general title:

[Fill in, and, if a set of Drawings is not attached to each signed counterpart of Agreement, so
indicate, in which case OWNER and CONTRACTOR should initial or otherwise appropriately
identify all Drawings.]

8.9. Addenda numbers _ _ _ to _ _ _ , inclusive.

8.10. CONTRACTOR's Bid (pages _ _ _ to _ _ _ , inclusive) marked exhibit _ __

[Attach Bid Form only in special circumstances.]

8.11. Documentation submitted by CONTRACTOR prior to Notice of Award (pages _ _ _ _ _ to

_ _ _ _ _ , inclusive).

8.12. The following which may be delivered or issued after the Effective Date of the Agreement and are
not attached hereto: All Written Amendments and other documents amending, modifying, or supple-
menting the Contract Documents pursuant to paragraphs 3.4 and 3.5 of the General Conditions.

8.13. The documents listed in paragraphs 8.2 et seq. above are attached to this Agreement (except as
expressly noted otherwise above).

There are no Contract Documents other than those listed above in this Article 8. The Contract Documents
may only be amended, modified or supplemented as provided in paragraphs 3.4 and 3.5 of the General
Conditions.

Article 9. MISCELLANEOUS.

9.1. Terms used in this Agreement which are defined in Article 1 of the General Conditions will have the
meanings indicated in the General Conditions.

9.2. No assignment by a party hereto of any rights under or interests in the Contract Documents will be
binding on another party hereto without the written consent of the party sought to be bound; and
specifically but without limitation moneys that may become due and moneys that are due may not be
assigned without such consent (except to the extent that the effect of this restriction may be limited by
law), and unless specifically stated to the contrary in any written consent to an assignment no assignment
will release or discharge the assignor from any duty or responsibility under the Contract Documents.

9.3. OWNER and CONTRACTOR each binds itself, its partners, successors, assigns and legal represen-
tatives to the other party hereto, its partners, successors, assigns and legal representatives in respect of
all covenants, agreements and obligations contained in the Contract Documents.

4
 APPENDIX 3 223

Article 10. OTHER PROVISIONS.

IN WITNESS WHEREOF, OWNER and CONTRACTOR have signed this Agreement in triplicate. One
counterpart each has been delivered to OWNER, CONTRACTOR and ENGINEER. All portions of the
Contract Documents have been signed or identified by OWNER and CONTRACTOR or by ENGINEER on
their behalf.

This Agreement will be effective on _ _ _ _ _ _ _ _ _ _ _ _ _ _ , 19_ __

OWNER _ _ _ _ _ _ _ _ _ _ _ __ CONTRACTOR ___________________

By ______________________________ By ______________________________

[CORPORATE SEAL] [CORPORATE SEAL]

Attest _ _ _ _ _ _ _ _ _ _ _ _ _ __ Attest _ _ _ _ _ _ _ _ _ _ _ _ _ ___

Address for giving notices Address for giving notices

(If OWNER is a public body, attach evidence of License No. _ _ _ _ _ _ _ _ _ _ _ __

authority to sign and resolution or other documents
authorizing execution of Agreement.) Agent for service of process: _____________

(If CONTRACTOR is a corporation, attach evi-

dence of authority to sign.)

5
 This document has important legal consequences; consultation with an attorney is encouraged with
respect to its completion or modification.

STANDARD FORM OF AGREEMENT

BETWEEN OWNER AND CONTRACTOR
ON THE BASIS OF COST-PLUS
Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly By

NATIONAL
~OClEn Of
PROH~~IONAl
ENGINHR~
H)UIDfO I'J,A

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

This document has been approved and endorsed by

The Associated General Contractors of America

This Standard Form of Agreement has been prepared for use with the Standard General Conditions of
the Construction Contract, No. 1910-8, 1983 edition. Their provisions are interrelated and a change in
one may necessitate a change in the others. The suggested language for instructions of bidders contained
in the Guide to the Preparation of Instructions to Bidders, No. 1910-12, 1983 edition, is also carefully
interrelated with the language of this Agreement. Comments concerning their usage are contained in the
Commentary on Agreements for Engineering Services and Contract Documents, No. 1910-9, 1981
edition. See also Guide to the Preparation of Supplementary Conditions, No. 1910-17, 1983 edition.

EJCDC No. J9JO-8-A-2 (1983 Edition) 225

226 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Note to User
Certain states and federal agencies require provisions in public contracts which permit Contractors to deposit
acceptable securities with Owner or a stakeholder in lieu of retainage. Many Owners will not accept this
procedure except where required by Laws or Regulations. In the event such a procedure is required, the
provisions of this Agreement and possibly those of the other Contract Documents dealing with retainage
should be amended, and an attorney should be consulted to prepare the revised language. Among the issues
to be addressed by such language are: initial and subsequent valuations of the securities, right to withdraw
excess collateral and obligation to deposit additional collateral as market value changes, who is entitled to
interest and dividends on deposited collateral, responsibilities of stakeholder, may collateral be freely sold in
the event of Contractor default and method of such sale, and application of Uniform Commercial Code and
state and federal security laws to the arrangement.

© 1983 National Society of Professional Engineers

2029 K Street, N.W., Washington, D.C. 20006

American Consulting Engineers Council

1015 15th Street, N.W., Washington, D.C. 20005

American Society of Civil Engineers

345 East 47th Street, New York, NY lool7

Construction Specifications Institute

601 Madison Street, Alexandria, VA 22314
 APPENDIX 4 227

STANDARD FORM OF AGREEMENT

BETWEEN OWNER AND CONTRACTOR
ON THE BASIS OF COST-PLUS

THIS AGREEMENT is dated as of the _ _ _ _ _ day of _ _ _ _ _ _ _ _ _ in the year 19 __

by and between _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (hereinafter called OWNER) and

(hereinafter called CONTRACTOR).

OWNER and CONTRACTOR, in consideration of the mutual covenants hereinafter set forth, agree as follows:

Article 1. WORK.

CONTRACTOR shall complete all Work as specified or indicated in the Contract Documents. The Work is
generally described as follows:

The Project for which the Work under the Contract Documents may be the whole or only a part is generally
described as follows:

Article 2. ENGINEER.

The Project has been designed by

who is hereinafter called ENGINEER and who is to act as OWNER's representative, assume all duties and
responsibilities and have the rights and authority assigned to ENGINEER in the Contract Documents in
connection with completion of the Work in accordance with the Contract Documents.

Article 3. CONTRACT TIME.

3.1. The Work will be substantially completed on or before , 19 , and

completed and ready for final payment in accordance with paragraph 14.13 of the General Conditions on
or before , 19 _ __
3.1. The Work will be substantially completed within . days from the date when the Contract
Time commences to run as provided in paragraph 2.3 of the General Conditions, and completed and
ready for final payment in accordance with paragraph 14.13 of the General Conditions within _ _ __
days from the date when the Contract Time commences to run.
3.2. Liquidated Damages. OWNER and CONTRACTOR recognize that time is of the essence of this
Agreement and that OWNER will suffer financial loss if the Work is not completed within the times
specified in paragraph 3.1 above, plus any extensions thereof allowed in accordance with Article 12 of
the General Conditions. They also recognize the delays, expense and difficulties involved in proving in
a legal or arbitration proceeding the actual loss suffered by OWNER if the Work is not completed on
time. Accordingly, instead of requiring any such proof, OWNER and CONTRACTOR agree that as
liquidated damages for delay (but not as a penalty) CONTRACTOR shall pay OWNER _ _ _ __
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ dollars ($ ) for each day

1
228 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

that expires after the time specified in paragraph 3.1 for Substantial Completion until the Work is
substantially complete. After Substantial Completion if CONTRACTOR shall neglect, refuse or fail to
complete the remaining Work within the Contract Time or any proper extension thereof granted by
OWNER, CONTRACTOR shall pay OWNER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
- -_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ dollars ($ ) for each day
that expires after the time specified in paragraph 3.1 for completion and readiness for final payment.

Article 4. CONTRACT PRICE.

OWNER shall pay CONTRACTOR for completion of the Work in accordance with the Contract Documents
an amount in current funds equal to the Cost of the Work plus a Contractor's Fee for overhead and profit,
both of which shall be determined as provided below.

Article S. COST OF WORK.

Cost of the Work shall be determined as provided in paragraphs 11.4 and 11.5 of the General Conditions, but,
in addition to any limitations therein set forth, it shall not include costs in excess to any Guaranteed Maximum
Contract Price as set forth in Article 7 hereof. Whenever any portion of the Work is to be performed for
CONTRACTOR by Subcontractors, CONTRACTOR shall have identified in writing, given to OWNER prior
to the Notice of Award, those portions of the Work that he proposes to subcontract, and after the Notice of
Award may only subcontract other portions of the Work with OWNER's written consent.

Article 6. CONTRACTOR'S FEE.

The Contractor's Fee shall be determined as follows:
6.1. A fixed fee of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ _ _ _ _ _ dollars ($ ) which shall be subject to increases or
decreases for changes in the Work as provided in paragraph 8. 1 below.
6.1. A fee based on the following percentages of the various portions of the Cost of the Work:

Payroll costs (see paragraph 11.4.1 of General Conditions) _ _ _ _ _ %,

Material and equipment costs (see paragraph 11.4.2 of General Conditions) _ _ _ _ _ %,
Amounts paid to Subcontractors (see paragraph 11.4.3 of General Conditions) _ _ _ _ _ %,
Amounts paid to special consultants (see paragraph 11.4.4 of General Conditions) _ _ _ _ _ %, and
Supplemental costs (see paragraph 11.4.5 of General Conditions) %.
No fee shall be payable on the basis of costs itemized in paragraph 11.5 of the General Conditions.
The provisions in paragraph 11.6 of the General Conditions shall apply only to changes in the Work.
CONTRACTOR guarantees that the maximum amount payable by OWNER in accordance with this
paragraph 6.1 as a percentage fee will not exceed _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ _ _ _ _ _ _ _ _ _ dollars ($ ) subject to increases or decreases for
changes in the Work as provided in paragraph 8.3 below.

Article 7. GUARANTEED MAXIMUM CONTRACT PRICE.

CONTRACTOR guarantees that the maximum cost to OWNER ofthe Cost ofthe Work and the Contractor's
Fee will not exceed _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ _ _ _ _ _ dollars ($ _ _ _ _ _ _ _ _ _ ) subject to increases or decreases for changes
in the Work.

2
 APPENDIX 4 229

Article 8. CHANGES IN THE WORK.

The amount of any increases or decreases in the Contractor's Fee and in any Guaranteed Maximum Contract
Price or Fee which results from a Change Order shall be set forth in the applicable Change Order subject to
the following:
8.1. If the Contractor's Fee is a fixed fee: any increase or decrease in the Contractor's Fee resulting
from net additions or decreases in the Cost of the Work shall be determined in accordance with paragraph
11.6.2 of the General Conditions.
8.2. If the Contractor's Fee is a percentage fee not subject to any guaranteed maximum limitation:
Contractor's Fee will adjust automatically as the Cost of the Work changes.
8.3. Wherever there is a Guaranteed Maximum Contract Price or Fee: in the case of net additions in the
Work, the amount of any increase in the Guaranteed Maximum shall be determined in accordance with
paragraphs 11.3 through 11.6, inclusive, of the General Conditions; and in the case of net deletions in the
Work, the amount of any such decrease shall be determined in accordance with paragraph 11.6.2 of the
General Conditions and any Guaranteed Maximum shall be reduced by mutual agreement.
Article 9. PAYMENT PROCEDURES.
Contractor shall submit Applications for Payment in accordance with Article 14 of the General Conditions.
Applications for Payment will indicate the amount of the Contractor's Fee then payable. Applications for
Payment will be processed by ENGINEER as provided in the General Conditions.
9.1. ,Progress Payments. OWNER shall make progress payments on account of the Contract Price on
the basis of CONTRACTOR's Applications for Payment as recommended by ENGINEER, on or about
the day of each month during construction as provided below. All such payments will be
subject to the limitations of any Guaranteed Maximum Contract Price or Fee and will be measured by
the schedule of values established in paragraph 2.9 of the General Conditions (and in the case of Unit
Price Work based on the number of units completed) or, in the event there is no schedule of values, as
provided in the General Requirements.
9.1.1. For Cost of Work: Progress payments on account of the Cost of the Work will be made:
9.1.1.1. Prior to Substantial Completion, progress payments will be made in an amount equal
to the percentage indicated below, but, in each case, less the aggregate of payments previously
made and less such amounts as ENGINEER shall determine, or OWNER may withhold, in
accordance with paragraph 14.7 of the General Conditions:
_ _ _ _ _ % of Cost of the Work completed. If Work has been 50% completed
as determined by ENGINEER, and if the character and progress of the Work have
been satisfactory to OWNER and ENGINEER, OWNER on recommendation of
ENGINEER, may determine that as long as the character and progress of the Work
remain satisfactory to them, there will be no additional retainage on account of Work
completed in which case the remaining progress payments prior to Substantial Com-
pletion will be in an amount equal to 100% of the Work completed.
_ _ _ _ _ % of Cost of the Work applicable to materials and equipment not
incorporated in the Work (but delivered, suitably stored and accompanied by docu-
mentation satisfactory to OWNER as provided in paragraph 14.2 of the General
Conditions).
9.1.1.2. Upon Substantial Completion, in an amount sufficient to increase the total payments
to CONTRACTOR to % of the Cost of the Work, less such amounts as ENGI-
NEER shall determine, or OWNER may withhold, in accordance with paragraph 14.7 of the
General Conditions.
9.1.2. For Contractor's Fee: Progress payments on account of the Contractor's Fee will be made:
9.1.2.1. If the Contractor's Fee is a fixed fee: payments prior to Substantial Completion will be
in an amount equal to % of such fee earned to the date of the approved Application
for Payment (less in each case payments previously made on account of such fee) based on the

3
230 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

progress of the Work measured by the schedule of values established as provided in paragraph
2.9 of the General Conditions, (and in the case of Unit Price Work on the number of units
completed) and upon Substantial Completion in an amount sufficient to increase total payments
to CONTRACTOR on account of his fee to % of the Contractor's Fee. In the
event there is no schedule of values the progress of the Work will be measured as provided in
the General Requirements.
9.1.2.2 ..If the Contractor's Fee is a percentage fee: payments prior to Substantial Completion
will be in an amount equal to % of such fee (less in each case payments previously
made on account of such fee) based on the Cost of the Work completed, and upon Substantial
Completion in an amount sufficient to increase total payments to CONTRACTOR on account
of that fee to % of the Contractor's Fee.
9.2. Final Payment. Upon final completion and acceptance of the Work in accordance with paragraph
14.13 of the General Conditions, OWNER shall pay the remainder ofthe Contract Price as recommended
by ENGINEER as provided in said paragraph 14.13.

Article 10. INTEREST.

All moneys not paid when due as provided in Article 14 of the General Conditions shall bear interest at the
maximum rate allowed by law at the place of the Project.

Article 11. CONTRACTOR'S REPRESENTATIONS.

In order to induce OWNER to enter into this Agreement CONTRACTOR makes the following representations:
11.1. CONTRACTOR has familiarized itself with the nature and extent of the Contract Documents,
Work, site, locality, and all local conditions and Laws and Regulations that in any manner may affect
cost, progress, performance or furnishing ofthe Work.
11.2. CONTRACTOR has studied carefully all reports of explorations and tests of subsurface conditions
and drawings of physical conditions which are identified in the Supplementary Conditions as provided in
paragraph '4.2 of the General Conditions and accepts the determination set forth in paragraph SC-4.2 of
the Supplementary Conditions of the extent of the technical data contained in such reports and drawings
upon which CONTRACTOR is entitled to rely.
11.3. CONTRACTOR has obtained and carefully studied (or assumes responsibility for obtaining and
carefully studying) all such examinations, investigations, explorations, tests, reports and studies (in
addition to or to supplement those referred to in paragraph 11.2 above) which pertain to the subsurface
or physical conditions at or contiguous to the site or otherwise may affect the cost, progress, performance
or furnishing of the Work as CONTRACTOR considers necessary for the performance or furnishing of
the Work at the Contract Price, within the Contract Time and in accordance with the other terms and
conditions of the Contract Documents, including specifically the provisions of paragraph 4.2 of the
General Conditions; and no additional examinations, investigations, explorations, tests, reports, studies
or similar information or data are or will be required by CONTRACTOR for such purposes.
11.4. CONTRACTOR has reviewed and checked all information and data shown or indicated on the
Contract Documents with respect to existing Underground Facilities at or contiguous to the site and
assumes responsibility for the accurate location of said Underground Facilities. No additional examina-
tions, investigations, explorations, tests, reports, studies or similar information or data in respect of said
Underground Facilities are or will be required by CONTRACTOR in order to perform and furnish the
Work at the Contract Price, within the Contract Time and in accordance with the other terms and
conditions of the Contract Documents, including specifically the provisions of paragraph 4.3 of the
General Conditions.
11.5. CONTRACTOR has correlated the results of all such observations, examinations, investigations,
explorations, tests, reports and studies with the terms and conditions of the Contract Documents.
11.6. CONTRACTOR has given ENGINEER written notice of all conflicts, errors or discrepancies that
he has discovered in the Contract Documents and the written resolution thereof by ENGINEER is
acceptable to CONTRACTOR.

4
 APPENDIX 4 231

Article 12. ACCOUNTING RECORDS.

CONTRACTOR shall check all materials, equipment and labor entering into the Work and shall keep such
full and detailed accounts as may be necessary for proper financial management under this Agreement, and
the accounting methods shall be satisfactory to OWNER. OWNER shall be afforded access to all CON-
TRACTOR's records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and
similar data relating to the Cost of the Work and Contractor's Fee. CONTRACTOR shall preserve all such
documents for a period of three years after the final payment by OWNER.

Article 13. CONTRACT DOCUMENTS.

The Contract Documents which comprise the entire agreement between OWNER and CONTRACTOR
concerning the Work consist of the following:
13.1. This Agreement (pages 1 to , inclusive).
13.2. Exhibits to this Agreement (pages _ _ _ _ _ to _ _ _ _ _ , inclusive).
13.3. Performance and other Bonds, identified as exhibits _ _ _ _ _ and consisting of _ _ _ __
pages.
13.4. Notice of Award.
13.5. General Conditions (pages _ _ _ _ _ to _ _ _ _ _ , inclusive).
13.6. Supplementary Conditions (pages _ _ _ _ _ to _ _ _ _ _ , inclusive).
13.7. Specifications bearing the title _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
and consisting of divisions and pages, as listed in table of contents thereof.
13.8. Drawings, consisting of a cover sheet and sheets numbered through _ _ _ __
inclusive with each sheet bearing the following general title:

[Fill in, and, if a set of Drawings is not attached to each signed counterpart of Agreement, so
indicate in which case OWNER and CONTRACTOR should initial or otherwise appropriately
identify all Drawings.]

13.9. Addenda numbers to , inclusive.

13.10. CONTRACTOR's Bid (pages to , inclusive) marked exhibit _ _ .
[Attach Bid Form only in special circumstances.]
13.11. Documentation submitted by CONTRACTOR prior to Notice of Award (pages _ _ _ _ _ to
_ _ _ _ _ , inclusive).
13.12. The following which may be delivered or issued after the Effective Date of the Agreement and
are not attached hereto: All Written Amendments and other documents amending, modifying or supple-
menting the Contract Documents pursuant to paragraphs 3.4 and 3.5 of the General Conditions.
13.13. The documents listed in paragraphs 13.2 et seq. above are attached to this Agreement (except as
expressly noted otherwise above).
There are no Contract Documents other than those listed above in this Article 13. The Contract Documents
may only be amended, modified or supplemented as provided in paragraphs 3.4 and 3.5 of the General
Conditions.

Article 14. MISCELLANEOUS.

14.1. Terms used in this Agreement which are defined in Article 1 of the General Conditions will have
the meanings indicated in the General Conditions.
14.2. No assignment by a party hereto of any rights under or interests in the Contract Documents will
be binding on another party hereto without the written consent of the party sought to be bound; and
specifically but without limitation moneys that may become due and moneys that are due may not be

5
232 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

assigned without such consent (except to the extent that the effect of this restriction may be limited by
law), and unless specifically stated to the contrary in any written consent to an assignment no assignment
will release or discharge the assignor from any duty or responsibility under the Contract Documents.
14.3. OWNER and CONTRACTOR each binds itself, its partners, successors, assigns and legal repre-
sentatives to the other party hereto, its partners, successors, assigns and legal representatives in respect
to all covenants, agreements and obligations contained in the Contract Documents.

Article 15. OTHER PROVISIONS.

IN WITNESS WHEREOF, OWNER and CONTRACTOR have signed this Agreement in triplicate. One
counterpart each has been delivered to OWNER, CONTRACTOR and ENGINEER. All portions of the
Contract Documents have been signed or identified by OWNER and CONTRACTOR or by ENGINEER on
their behalf.

This Agreement will be effective on _ _ _ _ _ _ _ _ _ _ _ _ , 19_ _ _ __

OWNER _________________________ CONTRACTOR ___________________

By _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ By _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___

[CORPORATE SEAL] [CORPORATE SEAL]

Attest _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Attest _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Address for giving notices Address for giving notices

(If OWNER is a public body, attach evidence of License No. _ _ _ _ _ _ _ _ _ _ _ _ __

authority to sign and resolution or other documents
authorizing execution of Agreement.) Agent for service of process: _ _ _ _ _ _ __

(If CONTRACTOR is a corporation, attach evi-

dence of authority to sign).

6
 This document has important legal consequences: consultation with an attorney is encouraged with
respect to its completion or modification.

STANDARD
GENERAL CONDITIONS
OF THE
CONSTRUCTION CONTRACT
Prepared by

Engineers' Joint Contract Documents Committee

and

Issued and Published Jointly By

NATIONAL
SOCIETY Of
PROfESSIONAL
ENGINEERS
IOU'OID l'lA

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

This document has been approved and endorsed by

Contractors of America

These General Conditions have been prepared for use with the Owner-Contractor Agreements (No.
191O-8-A-1 or 191O-8-A-2, 1983 editions). Their provisions are interrelated and a change in one may
necessitate a change in the others. Comments concerning their usage are contained in the Commeatary
on Agreements for Engineering Services and Contract Documents, No. 1910-9, 1981 edition. For
guidance in the preparation of Supplementary Conditions, see Guide to the Preparation of Supple-
mentary Conditions (No. 1910-17, 1983 edition). When bidding is involved, the Standard Form of
Instructions to Bidders (No. 1910-12, 1983 edition) may be used.
233
No. \910-8 (1983 Edition)
234 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

©1983 N~tional Society of Professional Engineers

2029 K Street, N.W., Washington, D.C. 20006

American Consulting Engineers Council

1015 15th Street, N.W., Washington, D.C. 20005

American Society of Civil Engineers

345 East 47th Street, New York, NY 10017

Construction Specifications Institute

60 I Madison St., Alexandria, VA 22314
 APPENDIX 5 235

TABLE OF CONTENTS OF GENERAL CONDITIONS

Article
Number Title Page
DEFINITIONS.. .. .. .. .. .. ..... .. .. .. .. .. .......... .. . .. .. ... .. ..... 7
2 PRELIMINARY MATTERS. .................. .............. ....... 8
3 CONTRACT DOCUMENTS:
INTENT, AMENDING AND REUSE............................... 9
4 AVAILABILITY OF LANDS; PHYSICAL CONDITIONS;
REFERENCE POINTS... ............ .................. ............. to
5 BONDS AND INSURANCE ........................................ 11
6 CONTRACTOR'S RESPONSIBILITIES ............................ 14
7 OTHER WORK ..................................................... 18
8 OWNER'S RESPONSIBILITIES.................................... 19
9 ENGINEER'S STATUS DURING CONSTRUCTION .............. 19
to CHANGES IN THE WORK ............................. , . .. .. .. .... 21
11 CHANGE OF CONTRACT PRICE.................................. 21
12 CHANGE OF CONTRACT TIME.. ........ ..... .. .. .. . .. ... .. .. .. .. 24
\3 WARRANTY AND GUARANTEE; TESTS AND
INSPECTIONS; CORRECTION, REMOVAL OR
ACCEPTANCE OF DEFECTIVE WORK ........................ ... 24
14 PAYMENTS TO CONTRACTOR AND COMPLETION ............ 26
15 SUSPENSION OF WORK AND TERMINATION ..... ............. 29
16 ARBITRATION..................................................... 31
17 MISCELLANEOUS. .. ....... .. .. .. .. ... .. ... .. .. .. .. .. ... .. .. .. ... . 32

3
 236 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
INDEX TO GENERAL CONDITIONS
Article or Paragraph
Number
Acceptance ofInsurance ............................. 5.13
Access to the Work .................................. 13.2
Addenda-definition of (see definition of
Specifications) ........................................ 1
Agreement-definition of ................................ 1
All Risk Insurance ..................................... 5.6
Amendment, Written ............................. 1,3.1.1
Application for Payment-definition of .................. 1
Application for Payment, Final ...................... 14.12
Application for Progress Payment .................... 14.2
Application for Progress Payment-review of .... 14.4-14.7
Arbitration ............................................. 16
Authorized Variation in Work ......................... 9.5
Availability of Lands .................................. 4.1
Award, Notice of-defined .............................. 1
Before Starting Construction ...................... 2.5-2.7
Bid-definition of ....................................... 1
Bonds and Insurance-in general ........................ 5
Bonds-definition of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1
Bonds, Delivery of ............................... 2.1,5.1
Bonds, Performance and Other .................... 5.1-5.2
Cash Allowances ..................................... 11.8
Change Order-definition of ............................. 1
Change Orders-to be executed ...................... 10.4
Changes in the Work ................................... 10
Claims, Waiver of-on Final Payment ............... 14.16
Clarifications and Interpretations ...................... 9.4
Cleaning ............................................. 6.17
Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Completion, Substantial ......................... 14.8-14.9
Conference, Preconstruction .......................... 2.8
Conflict, Error, Discrepancy-Contractor
to Report ...................................... 2.5, 3.3
Construction Machinery, Equipment, etc .............. 6.4
Continuing Work ..................................... 6.29
Contract Documents-amending and
supplementing .................................. 3.4-3.5
Contract Documents-definition of ...................... 1
Contract Documents-Intent ...................... 3.1-3.3
Contract Documents-Reuse of ....................... 3.6
Contract Price, Change of .............................. 11
Contract Price-definition ............................... 1
Contract Time, Change of .............................. 12
Contract Time, Commencement of .................... 2.3
Contract Time-definition of ............................ 1
Contractor-definition of ................................ 1
Contractor May Stop Work or Terminate ............. 15.5
Contractor's Continuing Obligation .................. 14.15
Contractor's Duty to Report Discrepancy
in Documents .................................. 2.5, 3.2
Contractor's Fee-Cost Plus ... 11.4.5.6,11.5.1,11.6-11.7
Contractor's Liability Insurance ....................... 5.3
Contractor's Responsibilities-in general ................ 6
4
Contractor's Warranty of Title ........................ 14.3
Contractors---other ...................................... 7
Contractual Liability Insurance ........................ 5.4
Coordinating Contractor-definition of ................ 7.4
Coordination .......................................... 7.4
Copies of Documents .................................. 2.2
Correction or Removal of Defective Work ............ 13.11
Correction Period, One year ........................ 13.12
Correction, Removal or Acceptance of Defective
Work-in general ........................... 13.11-13.14
Cost-net decrease ................................. 11.6.2
Cost of Work .................................... 11.4-11.5
Costs, Supplemental ................................ 11.4.5
Day-definition of ....................................... 1
Defective-definition of ................................. 1
Defective Work, Acceptance of ...................... 13.13
Defective Work, Correction or Removal of .......... 13.11
Defective Work-in general ............... 13,14.7,14.11
Defective Work, Rejecting ............................. 9.6
Definitions .............................................. 1
Delivery of Bonds ..................................... 2.1
Determination for Unit Prices ........................ 9.10
Disputes, Decisions by Engineer ................. 9.11-9.12
Documents, Copies of ................................. 2.2
Documents, Record .................................. 6.19
Documents, Reuse .................................... 3.6
Drawings-definition of ................................. 1
Easements ............................................ 4.1
Effective date of Agreement-definition of . . . . . . . . . . . . . .. 1
Emergencies ......................................... 6.22
Engineer-definition of .................................. 1
Engineer's Decisions ............................ 9.10-9.12
Engineer's-Notice Work is Acceptable ............. 14.13
Engineer's Recommendation of Payment ...... 14.4,14.13
Engineer's Responsibilities, Limitations
on .................................. 6.6,9.11,9.13-9.16
Engineer's Status During Construction-in general ...... 9
Equipment, Labor, Materials and .................. 6.3-6.6
Equivalent Materials and Equipment .................. 6.7
Explorations of physical conditions ................... 4.2
Fee, Contractor's-Costs Plus ........................ 11.6
Field Order-definition of ............................... 1
Field Order-issued by Engineer ................ 3.5.1,9.5
Final Application for Payment ....................... 14.12
Final Inspection ..................................... 14.11
Final Payment and Acceptance ...................... 14.13
Final Payment, Recommendation of ........... 14.13-14.14
General Provisions .............................. 17.3-17.4
General Requirements-<iefinition of . . . . . . . . . . . . . . . . . . . .. 1
General Requirements-principal
references to ................. 2.6,4.4,6.4,6.6-6.7,6.23

Giving Notice ........................................ 17.1
Guarantee of Work-by Contractor ................... 13.1
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6.30-6.32, 7.5
Inspection, Final .................................... 14.11
Inspection, Tests and ................................. 13.3
Insurance, Bonds and-in general ....................... 5
Insurance, Certificates of ........................... 2.7, 5
Insurance-completed operations ...................... 5.3
Insurance, Contractor's Liability ...................... 5.3
Insurance, Contractual Liability ....................... 5.4
Insurance, Owner's Liability .......................... 5.5
Insurance, Property .............................. 5.6-5.13
Insurance-Waiver of Rights ......................... 5.11
Intent of Contract Documents ................... 3.3,9.14
Interpretations and Clarifications ...................... 9.4
Investigations of physical conditions ................... 4.2
Labor, Materials and Equipment .................. 6.3-6.5
Laws and Regulations-definition of ..................... I
Laws and Regulations-general ....................... 6.14
Liability Insurance-Contractor's ..................... 5.3
Liability Insurance-Owner's ......................... 5.5
Liens-definitions of ................................ 14.2
Limitations on Engineer's
Responsibilities ..................... 6.6,9.11,9.13-9.16
Materials and equipment-furnished by Contractor .... 6.3
Materials and equipment-not
incorporated in Work .............................. 14.2
Materials or equipment-equivalent ................... 6.7
Miscellaneous Provisions ............................... 17
Multi-prime contracts ................................... 7
Notice, Giving of ..................................... 17.1
Notice of Acceptability of Project ................... 14.13
Notice of Award-definition of .......................... I
Notice to Proceed-definition of ......................... I
Notice to Proceed-giving of .......................... 2.3
"Or-Equal" Items ..................................... 6.7
Other contractors ....................................... 7
Other work .............................................. 7
Overtime Work-prohibition of ........................ 6.3
Owner-definition of .................................... I
Owner May Correct Defective Work ................. 13.14
Owner May Stop Work ............................... 13.10
Owner May Suspend Work, Terminate .......... 15.1-15.4
Owner's Duty to Execute Change Orders ............. 11.8
Owner's Liability Insurance ........................... 5.5
Owner's Representative-Engineer to serve as ........ 9.1
Owner's Responsibilities-in general .................... 8
Owner's Separate Representative at site ............... 9.3
Partial Utilization .................................. 14.10
Partial Utilization-definition of ......................... I
Partial Utilization-Property Insurance ............... 5.15
Patent Fees and Royalties ............................ 6.12
Payments, Recommendation of ........... 14.4-14.7, 14.13
Payments to Contractor-in general .................... 14
5
APPENDIX 5 237
Payments to Contractor-when due ........... 14.4, 14.13
Payments to Contractor-withholding ................ 14.7
Performance and other Bonds ..................... 5.1-5.2
Permits ............................................... 6.13
Physical Conditions ................................... 4.2
Physical Conditions-Engineer's review ............. 4.2.4
Physical Conditions-existing structures ............. 4.2.2
Physical Conditions-explorations and reports . . . . . .. 4.2.1
Physical Conditions-possible document change ..... 4.2.5
Physical Conditions-price and time adjustments .... 4.2.5
Physical Conditions-report of differing ............. 4.2.3
Physical Conditions-Underground Facilities .......... 4.3
Preconstruction Conference ........................... 2.8
Preliminary Matters ..................................... 2
Premises, Use of ................................ 6.16-6.18
Price, Change of Contract .............................. 11
Price-Contract-definition of ............................ 1
Progress Payment, Applications for ................... 14.2
Progress Payment-retainage ......................... 14.2
Progress schedule ............... 2.6, 2.9,6.6,6.29, 15.2.6
Project-definition of .................................... 1
Project Representation-provision for ................. 9.3
Project Representative, Resident-definition of .......... 1
Project, Starting the ................................... 2.4
Property Insurance ............................... 5.6-5.13
Property Insurance-Partial Utilization ............... 5.15
Property Insurance-Receipt and Application
of Proceeds ................................... 5.12-5.13
Protection, Safety and ........................... 6.20-6.21
Punch list ........................................... 14.11
Recommend~tion of Payment....... .. .. ....... 14.4, 14.13
Record Documents ................................... 6.19
Reference Points ...................................... 4.4
Regulations, Laws and ............................... 6.14
Rejecting Defective Work ............................. 9.6
Related Work at Site .............................. 7.1-7.3
Remedies Not Exclusive ............................. 17.4
Removal or Correction of Defective Work ........... 13.11
Resident Project Representative-definition of ........... I
Resident Project Representative-provision for ........ 9.3
Responsibilities, Contractor's--in general ............... 6
Responsibilities, Engineer's-in general ................. 9
Responsibilities, Owner's-in general .................... 8
Retainage ............................................ 14.2
Reuse of Documents .................................. 3.5
Rights of Way ......................................... 4.1
Royalties, Patent Fees and ........................... 6.12
Safety and Protection ............................ 6.20-6.21
Samples ......................................... 6.23-6.28
Schedule of progress ........ 2.6,2.8-2.9,6.6,6.29, 15.2.6
Schedule of Shop D~awing
submissions ...................... 2.6, 2.8-2.9, 6.23, 14.1
Schedule of values ...................... 2.6,2.8-2.9,14.1
Schedules, Finalizing .................................. 2.9
Shop Drawings and Samples ..................... 6.23-6.28
Shop Drawings-definition of . . . . . . . . . . . . . . . . . . . . . . . . . . .. I
Shop Drawings, use to approve
substitutions ...................................... 6.7.3
238 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
Site, Visits to-by Engineer ........................... 9.2
Specifications-definition of ............................. 1
Starting Construction, Before. . . . . . . . . . . . . . . . . . . . .. 2.5-2.8
Starting the Project .................................... 2.4
Stopping Work-by Contractor ....................... 15.5
Stopping Work-by Owner .......................... 13.10
Subcontractor---definition of .............................. 1
Subcontractors-in general ....................... 6.8-6.11"
Subcontracts-required provisions ............ 5.11.1, 6.11
11.4.3
Substantial Completion-certification of .............. 14.8
Substantial Completion---definition of , . . . . . . . . . . . . . . . . . .. 1
Substitute or "Or-Equal" Items ....................... 6.7
Subsurface Conditions ............................. 4.2-4.3
Supplemental costs ................................. 11.4.5
Supplementary Conditions-definition of ................ 1
Supplementary Conditions-principal
references to .. 2.2,4.2, 5.1, 5.3, 5.6-5.8, 6.3, 6.13, 6.23,
7.4,9.3
Supplementing Contract Documents ............... 3.4-3.5
Supplier---definition of ................................... 1
Supplier-principal references to ... 3.6,6.5,6.7-6.9,6.20,
6.24,9.13,9.16,11.8,13.4,14.12
Surety-consent to payment .................. 14.12,14.14
Surety-Engineer has no duty to ..................... 9.13
Surety-notice to .......................... 10.1, 10.5, 15.2
Surety-qualification of ............................ 5.1-5.2
Suspending Work, by Owner ......................... 15.1
Suspension of Work and Termination-in general ....... 15
Superintendent-Contractor's ......................... 6.2
Supervision and Superintendence .................. 6.1-6.2
Taxes-Payment by Contractor ....................... 6.15
Termination-by Contractor .......................... 15.5
Termination-by Owner ......................... 15.2-15.4
Termination, Suspension of Work and-in general ...... 15
Tests and Inspections ........................... 13.3-13.7
Time, Change of Contract ............................... 12
6
Time, Computation of ................................ 17.2
Time, Contract---definition of ............................ 1
Uncovering Work ............................... 13.8-13.9
Underground Facilities-definition of .................... 1
Underground Facilities-not shown or indicated ..... 4.3.2
Underground Facilities-protection of ........... 4.3,6.20
Underground Facilities-shown or indicated ......... 4.3.1
Unit Price Work---definition of .......................... 1
Unit Price Work-general ................. 11.9,14.1,14.5
Unit Prices ......................................... 11.3.1
Unit Prices, Determinations for ....................... 9.10
Use of Premises ................................. 6.16-6.18
Utility owners .......................... 6.13,6.20,7.2-7.3
Values, Schedule of ......................... 2.6, 2.9, 14.1
Variations in Work-Authorized ............ 6.25,6.27,9.5
Visits to Site-by Engineer ............................ 9.2
Waiver of Claims-on Final Payment ................ 14.16
Waiver of Rights by insured parties ............. 5.10, 6.11
Warranty and Guarantee-by Contractor ............. 13.1
Warranty of Title, Contractor's ....................... 14.3
Work, Access to ..................................... 13.2
Work-by others ........................................ 7
Work Continuing During Disputes .................... 6.29
Work, Cost of ................................... 11.4-11.5
Work---definition of ..................................... 1
Work Directive Change---definition of ................... 1
Work Directive Change-principal
references to ............................ 3.4.3, 10.1-10.2
Work, Neglected by Contractor ..................... 13.14
Work, Stopping by Contractor ........................ 15.5
Work, Stopping by Owner ....................... 15.1-15.4
Written Amendment---definition of ...................... 1
Written Amendment-principal
referencesto ..................... 3.4.1,10.1,11.2,12.1

GENERAL CONDITIONS
ARTICLE I-DEFINITIONS
Wherever used in these General Conditions or in the other
Contract Documents the following terms have the meanings
indicated which are applicable to both the singular and plural
thereof:
Addenda-Written or graphic instruments issued prior to the
opening of Bids which clarify, correct or change the bidding
documents or the Contract Documents.
Agreement-The written agreement between OWNER and
CONTRACTOR covering the Work to be performed; other
Contract Documents are attached to the Agreement and made
a part thereof as provided therein.
Application for Payment-The form accepted by ENGI-
NEER which is to be used by CONTRACTOR in requesting
progress or final payments and which is to include such sup-
porting documentation as is required by the Contract
Documents.
Bid-The offer or proposal of the bidder submitted on the
prescribed form setting forth the prices for the Work to be
performed.
Bonds-Bid, performance and payment bonds and other
instruments of security.
Change Order-A document recommended by ENGINEER,
which is signed by CONTRACTOR and OWNER and autho-
rizes an addition, deletion or revision in the Work, or an
adjustment in the Contract Price or the Contract Time, issued
on or after the Effective Date of the Agreement.
Contract Documents-The Agreement, Addenda (which per-
tain to the Contract Documents), CONTRACTOR's Bid
(including documentation accompanying the Bid and any post-
Bid documentation submitted prior to the Notice of Award)
when attached as an exhibit to the Agreement, the Bonds,
these General Conditions, the Supplementary Conditions, the
Specifications and the Drawings as the same are more spe-
cifically identified in the Agreement, together with all amend-
ments, modifications and supplements issued pursuant to
paragraphs 3.4 and 3.5 on or after the Effective Date of the
Agreement.
Contract Price-The moneys payable by OWNER to CON-
TRACTOR under the Contract Documents as stated in the
Agreement (subject to the provisions of paragraph 11.9.1 in
the case of Unit Price Work).
Contract Time-The number of days (computed as provided
in paragraph 17.2) or the date stated in the Agreement for the
completion of the Work.
CONTRACTOR-The person, firm or corporation with whom
OWNER has entered into the Agreement.
7
APPENDIX 5 239
defective-An adjective which when modifying the word Work
refers to Work that is unsatisfactory, faulty or deficient, or
does not conform to the Contract Documents, or does not
meet the requirements of any inspection, reference standard,
test or approval referred to in the Contract Documents, or
has been damaged prior to ENGINEER's recommendation
offinal payment (unless responsibility for the protection thereof
has been assumed by OWNER at Substantial Completion in
accordance with paragraph 14.8 or 14.10).
Drawings-The drawings which show the character and scope
of the Work to be performed and which have been prepared
or approved by ENGINEER and are referred to in the Con-
tract Documents.
Effective Date of the Agreement-The date indicated in the
Agreement on which it becomes effective, but if no such date
is indicated it means the date on which the Agreement is
signed and delivered by the last of the two parties to sign and
deliver.
ENGINEER-The person, firm or corporation named as such
in the Agreement.
Field Order-A written order issued by ENGINEER which
orders minor changes in the Work in accordance with para-
graph 9.5 but which does not involve a change in the Contract
Price or the Contract Time.
General Requirements-Sections of Division 1 of the Speci-
fications.
Laws and Regulations; Laws or Regulations-Laws, rules,
regulations, ordinances, codes and/or orders.
Notice of Award-The written notice by OWNER to the
apparent successful bidder stating that upon compliance by
the apparent successful bidder with the conditions precedent
enumerated therein, within the time specified, OWNER will
sign and deliver the Agreement.
Notice to Proceed-A written notice given by OWNER to
CONTRACTOR (with a copy to ENGINEER) fixing the date
on which the Contract Time will commence to run and on
which CONTRACTOR shall start to perform CONTRAC-
TOR'S obligations under the Contract Documents.
OWNER-The public body or authority, corporation, asso-
ciation, firm or person with whom CONTRACTOR has entered
into the Agreement and for whom the Work is to be provided.
Partial Utilization-Placing a portion of the Work in service
for the purpose for which it is intended (or a related purpose)
before reaching Substantial Completion for all the Work.
Project-The total construction of which the Work to be
provided under the Contract Documents may be the whole,
or a part as indicated elsewhere in the Contract Documents.
Resident Project Representative-The authorized represen-
tative of ENGINEER who is assigned to the site or any part
thereof.
240 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
Shop Drawings-All drawings, diagrams, illustrations,
schedules and other data which are specifically prepared by
or for CONTRACTOR to illustrate some portion of the Work
and all illustrations, brochures, standard schedules, perfor-
mance charts, instructions, diagrams and other information
prepared by a Supplier and submitted by CONTRACTOR to
illustrate material or' equipment for some portion of the Work.
Specifications-Those portions of the Contract Documents
consisting of written technical descriptions of materials,
equipment, construction systems, standards and workman-
ship as applied to the Work and certain administrative details
applicable thereto.
Subcontractor-An individual, firm or corporation having a
direct contract with CONTRACTOR or with any other Sub-
contractor for the performance of a part of the Work at the
site.
Substantial Completion-The Work (or a specified part thereoO
has progressed to the point where, in the opinion of ENGI-
NEER as evidenced by ENGINEER's definitive certificate
of Substantial Completion, it is sufficiently complete, in
accordance with the Contract Documents, so that the Work
(or specified part) can be utilized for the purposes for which
it is intended; or if there be no such certificate issued, when
final payment is due in accordance with paragraph 14.13. The
terms "substantially complete" and "substantially com-
pleted" as applied to any Work refer to Substantial Comple-
tion thereof.
Supplementary Conditions-The part of the Contract Docu-
ments which amends or supplements these General Condi-
tions.
Supplier-A manufacturer, fabricator, supplier, distributor,
materialman or vendor.
Underground Facilities-All pipelines, conduits, ducts, cables,
wires, manholes, vaults, tanks, tunnels or other such facilities
or attachments, and any encasements containing such facil-
ities which have been installed underground to furnish any of
the following services or materials: electricity, gases, steam,
liquid petroleum products, telephone or other communica-
tions, cable television, sewage and drainage removal, traffic
or other control systems or water.
Unit Price Work-Work to be paid for on the basis of unit
prices.
Work-The entire completed construction or the various sep-
arately identifiable parts thereof required to be furnished
under the Contract Documents. Work is the result of per-
forming services, furnishing labor and furnishing and incor-
porating materials and equipment into the construction, all
as required by the Contract Documents.
Work Directive Change-A written directive to CONTRAC-
TOR, issued on or after the Effective Date of the Agreement
and signed by OWNER and recommended by ENGINEER,
8
ordering an addition, deletion or revision in the Work, or
responding to differing or unforeseen physical conditions under
which the Work is to be performed as provided in paragraph
4.2 or 4.3 or to emergencies under paragraph 6.22. A Work
Directive Change may not change the Contract Price or the
Contract Time, but is evidence that the parties expect that
the change directed or documented by a Work Directive
Change will be incorporated in a subsequently issued Change
Order following negotiations by the parties as to its effect, if
any, on the Contract Price or Contract Time as provided in
paragraph 10.2.
Written Amendment-A written amendment of the Contract
Documents, signed by OWNER and CONTRACTOR on or
after the Effective Date of the Agreement and normally deal-
ing with the nonengineering or nontechnical rather than strictly
Work-related aspects ofthe Contract Documents.
ARTICLE 2-PRELIMINARY MATTERS
Delivery of Bonds:
2.1. When CONTRACTOR delivers the executed Agree-
ments to OWNER, CONTRACTOR shall also deliver to
OWNER such Bonds as CONTRACTOR may be required to
furnish in accordance with paragraph 5.1.
Copies of Documents:
2.2. OWNER shall furnish to CONTRACTOR up to ten
copies (unless otherwise specified in the Supplementary Con-
ditions) of the Contract Documents as are reasonably nec-
essary for the execution of the Work. Additional copies will
be furnished, upon request, at the cost of reproduction.
Commencement of Contract Time; Notice to Proceed:
2.3. The Contract Time will commence to run on the
thirtieth day after the Effective Date of the Agreement, or, if
a Notice to Proceed is given, on the day indicated in the
Notice to Proceed. A Notice to Proceed may be given at any
time within thirty days after the Effective Date of the Agree-
ment. In no event will the Contract Time commence to run
later than the seventy-fifth day after the day of Bid opening
or the thirtieth day after the Effective Date of the Agreement,
whichever date is earlier.
Starting the Project:
2.4. CONTRACTOR shall start to perform the Work on
the date when the Contract Time commences to run, but no
Work shall be done at the site prior to the date on which the
Contract Time commences to run.
Before Starting Construction:
2.5. Before undertaking each part of the Work, CON-
TRACTOR shall carefully study and compare the Contract
Documents and check and verify pertinent figures shown

thereon and all applicable field measurements. CONTRAC-
TOR shall promptly report in writing to ENGINEER any
conflict, error or discrepancy which CONTRACTOR may
discover and shall obtain a written interpretation or clarifi-
cation from ENGINEER before proceeding with any Work
affected thereby; however, CONTRACTOR shalI not be lia-
ble to OWNER or ENGINEER for failure to report any
conflict, error or discrepancy in the Contract Documents,
unless CONTRACTOR had actual knowledge thereof or should
reasonably have known thereof.
2.6. Within ten days after the Effective Date of the Agree-
ment (unless otherwise specified in the General Require-
ments), CONTRACTOR shall submit to ENGINEER for
review:
2.6.1. an estimated progress schedule indicating the
starting and completion dates of the various stages of the
Work;
2.6.2. a preliminary schedule of Shop Drawing sub-
missions; and
2.6.3. a preliminary schedule of values for alI of the
Work which will include quantities and prices of items
aggregating the Contract Price and will subdivide the Work
into component parts in sufficient detail to serve as the
basis for progress payments during construction. Such
prices will include an appropriate amount of overhead and
profit applicable to each item of Work which will be con-
firmed in writing by CONTRACTOR at the time of sub-
mission.
2.7. Before any Work at the site is started, CONTRAC-
TOR shalI deliver to OWNER, with a copy to ENGINEER,
certificates (and other evidence of insurance requested by
OWNER) which CONTRACTOR is required to purchase and
maintain in accordance with paragraphs 5.3 and 5.4, and
OWNER shall deliver to CONTRACTOR certificates (and
other evidence of insurance requested by CONTRACTOR)
which OWNER is required to purchase and maintain in
accordance with paragraphs 5.6 and 5.7.
Preconstruction Conference:
2.8. Within twenty days after the Effective Date of the
Agreement, but before CONTRACTOR starts the Work at
the site, a conference attended by CONTRACTOR, ENGI-
NEER and others as appropriate will be held to discuss the
schedules referred to in paragraph 2.6, to discuss procedures
for handling Shop Drawings and other submittals and for
processing Applications for Payment, and to establish a working
understanding among the parties as to the Work.
Finalizing Schedules:
2.9. At least ten days before submission of the first Appli-
cation for Payment a conference attended by CONTRAC-
TOR, ENGINEER and others as appropriate will be held to
finalize the schedules submitted in accordance with para-
9
APPENDIX 5 241
graph 2.6. The finalized progress schedule will be acceptable
to ENGINEER as providing an orderly progression of the
Work to completion within the Contract Time, but such
acceptance will neither impose on ENGINEER responsibility
for the progress or scheduling ofthe Work nor relieve CON-
TRACTOR from fulI responsibility therefor. The finalized
schedule of Shop Drawing submissions will be acceptable to
ENGINEER as providing a workable arrangement for pro-
cessing the submissions. The finalized schedule of values will
be acceptable to ENGINEER as to form and substance.
ARTICLE 3-CONTRACT DOCUMENTS: INTENT,
AMENDING, REUSE
Intent:
3.1. The Contract Documents comprise the entire agree-
ment between OWNER and CONTRACTOR concerning the
Work. The Contract Documents are complementary; what is
calIed for by one is as binding as if calIed for by alI. The
Contract Documents will be construed in accordance with
the law of the place of the Project.
3.2. It is the intent of the Contract Documents to describe
a functionally complete Project (or part thereof) to be con-
structed in accordance with the Contract Documents. Any
Work, materials or equipment that may reasonably be inferred
from the Contract Documents as being required to produce
the intended result will be supplied whether or not specificalIy
calIed for. When words which have a welI-known technical
or trade meaning are used to describe Work, materials or
equipment such words shalI be interpreted in accordance with
that meaning. Reference to standard specifications, manuals
or codes of any technical society, organization or association,
or to the Laws or Regulations of any governmental authority,
whether such reference be specific or by implication, shalI
mean the latest standard specification, manual, code or Laws
or Regulations in effect at the time of opening of Bids (or, on
the Effective Date of the Agreement if there were no Bids),
except as may be otherwise specifically stated. However, no
provision of any referenced standard specification, manual
or code (whether or not specifically incorporated by reference
in the Contract Documents) shalI be effective to change the
duties and responsibilities of OWNER, CONTRACTOR or
ENGINEER, or any of their consuitants, agents or employ-
ees from those set forth in the Contract Documents, nor shalI
it be effective to assign to ENGINEER, or any of ENGI-
NEER's consultants, agents or employees, any duty or
authority to supervise or direct the furnishing or performance
of the Work or any duty or authority to undertake responsi-
bility contrary to the provisions of paragraph 9.15 or 9.16.
Clarifications and interpretations of the Contract Documents
8hall be issued by ENGINEER as provided in paragraph 9.4.
3.3. If, during the performance of the Work, CONTRAC-
TOR finds a conflict, error or discrepancy in the Contract
Documents, CONTRACTOR shall so report to ENGINEER
in writing at once and before proceeding with the Work affected
thereby shall obtain a written interpretation or clarification
242 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
from ENGINEER; however, CONTRACTOR shall not be
liable to OWNER or ENGINEER for failure to report any
conflict, error or discrepancy in the Contract Documents
unless CONTRACTOR had actual knowledge thereof or should
reasonably have known thereof.
Amending and Supplementing Contract Documents:
3.4. The Contract Documents may be amended to pro-
vide for additions, deletions and revisions in the Work or to
modify the terms and conditions thereof in one or more of
the following ways:
3.4.1. a formal Written Amendment,
3.4.2. a Change Order (pursu.ant to paragraph 10.4),
or
3.4.3. a Work Directive Change (pursuant to para-
graph 10.1).
As indicated in paragraphs 11.2 and 12.1, Contract Price and
Contract Time may only be changed by a Change Order or a
Written Amendment.
3.5. In addition, the requirements of the Contract Docu-
ments may be supplemented, and minor variations and devia-
tions in the Work may be authorized, in one or more of the
following ways:
3.5.1. a Field Order (pursuant to paragraph 9.5),
3.5.2. ENGINEER's approval of a Shop Drawing or
sample (pursuant to paragraphs 6.26 and 6.27), or
3.5.3. ENGINEER's written interpretation or clarifi-
cation (pursuant to paragraph 9.4).
Reuse of Documents:
3.6. Neither CONTRACTOR nor any Subcontractor or
Supplier or other person or organization performing or fur-
nishing any of the Work under a direct or indirect contract
with OWNER shall have or acquire any title to or ownership
rights in any of the Drawings, Specifications or other docu-
ments (or copies of any thereof) prepared by or bearing the
seal of ENGINEER; and they shall not reuse any of them on
extensions of the Project or any other project without written
consent of OWNER and ENGINEER and specific written
verification or adaptation by ENGINEER.
ARTICLE 4-A VAILABILITY OF LANDS; PHYSICAL
CONDITIONS; REFERENCE POINTS
Availability of Lands:
4.1. OWNER shall furnish, as indicated in the Contract
Documents, the lands upon which the Work is to be per-
formed, rights-of-way and easements for access thereto, and
10
such other lands which are designated for the use of CON-
TRACTOR. Easements for permanent structures or perma-
nent changes in existing facilities will be obtained and paid
for by OWNER, unless otherwise provided in the Contract
Documents. If CONTRACTOR believes that any delay in
OWNER's furnishing these lands, rights-of-way or ease-
ments entitles CONTRACTOR to an extension of the Con-
tract Time, CONTRACTOR may make a claim therefor as
provided in Article 12. CONTRACTOR shall provide for all
additional lands and access thereto that may be required for
temporary construction facilities or storage of materials and
equipment.
Physical Conditions:
4.2.1. Explorations and Reports: Reference is made
to the Supplementary Conditions for identification of those
reports of explorations and tests of subsurface conditions
at the site that have been utilized by ENGINEER in prep-
aration of the Contract Documents. CONTRACTOR may
rely upon the accuracy of the technical data contained in
such reports, but not upon nontechnical data, interpreta-
tions or opinions contained therein or for the completeness
thereof for CONTRACTOR's purposes. Except as indi-
cated in the immediately preceding sentence and in para-
graph 4.2.6, CONTRACTOR shall have full responsibility
with respect to subsurface conditions at the site.
4.2.2. Existing Structures: Reference is made to the
Supplementary Conditions for identification of those
drawings of physical conditions in or relating to existing
surface and subsurface structures (except Underground
Facilities referred to in paragraph 4.3) which are at or
contiguous to the site that have been utilized by ENGI-
NEER in preparation of the Contract Documents. CON-
TRACTOR may rely upon the accuracy of the technical
data contained in such drawings, but not for the complete-
ness thereof for CONTRACTOR's purposes. Except as
indicated in the immediately preceding sentence and in
paragraph 4.2.6, CONTRACTOR shall have full respon-
sibility with respect to physical conditions in or relating
to such structures.
4.2.3. Report of Differing Conditions: If CONTRAC-
TOR believes that:
4.2.3.1. any technical data on which CONTRAC-
TOR is entitled to rely as provided in paragraphs 4.2.1
and 4.2.2 is inaccurate, or
4.2.3.2. any physical condition uncovered or
revealed at the site differs materially from that indi-
cated, reflected or referred to in the Contract Docu-
ments,
CONTRACTOR shall, promptly after becoming aware
thereof and before performing any Work in connection
therewith (except in an emergency as permitted by para-
graph 6.22), notify OWNER and ENGINEER in writing
about the inaccuracy or difference.

4.2.4. ENGINEER's Review: ENGINEER will
promptly review the pertinent conditions, determine the
necessity of obtaining additional explorations or tests with
respect thereto and advise OWNER in writing (with a copy
to CONTRACTOR) of ENGINEER's findings and con-
clusions.
4.2.5. Possible Document Change: If ENGINEER
concludes that there is a material error in the Contract
Documents or that because of newly discovered condi-
tions a change in the Contract Documents is required, a
Work Directive Change or a Change Order will be issued
as provided in Article 10 to reflect and document the
consequences of the inaccuracy or difference.
4.2.6. Possible Price and Time Adjustments: In each
such case, an increase or decrease in the Contract Price
or an extension or shortening of the Contract Time, or any
combination thereof, will be allowable to the extent that
they are attributable to any such inaccuracy or difference.
If OWNER and CONTRACTOR are unable to agree as to
the amount or length thereof, a claim may be made therefor
as provided in Articles II and 12.
Physical Conditions-Underground Facilities:
4.3.1. Shown or Indicated: The information and data
shown or indicated in the Contract Documents with respect
to existing Underground Facilities at or contiguous to the
site is based on information and data furnished to OWNER
or ENGINEER by the owners of such Underground Facil-
ities or by others. Unless it is otherwise expressly pro-
vided in the Supplementary Conditions:
4.3.1.1. OWNER and ENGINEER shall not be
responsible for the accuracy or completeness of any
such information or data; and,
4.3.1.2. CONTRACTOR shall have full responsi-
bility for reviewing and checking all such information
and data, for locating all Underground Facilities shown
or indicated in the Contract Documents, for coordina-
tion of the Work with the owners of such Underground
Facilities during construction, for the safety and pro-
tection thereof as provided in paragraph 6.20 and
repairing any damage thereto resulting from the Work,
the cost of all of which will be considered as having
been included in the Contract Price.
4.3.2. Not Shown or Indicated. If an Underground
Facility is uncovered or revealed at or contiguous to the
site which was not shown or indicated in the Contract
Documents and which CONTRACTOR could not reason-
ably have been expected to be aware of, CONTRACTOR
shall, promptly after becoming aware thereof and before
performing any Work affected thereby (except in an emer-
gency as permitted by paragraph 6.22), identify the owner
of such Underground Facility and give written notice thereof
to that owner and to OWNER and ENGINEER. ENGI-
NEER will promptly review the Underground Facility to
11
APPENDIX 5 243
determine the extent to which the Contract Documents
should be modified to reflect and document the conse-
quences of the existence of the Underground Facility, and
the Contract Documents will be amended or supplemented
to the extent necessary. During such time, CONTRAC-
TOR shall be responsible for the safety and protection of
such Underground Facility as provided in paragraph 6.20.
CONTRACTOR shall be allowed an increase in the Con-
tract Price or an extension of the Contract Time, or both,
to the extent that they are attributable to the existence of
any Underground Facility that was not shown or indicated
in the Contract Documents and which CONTRACTOR
could not reasonably have been expected to be aware of.
Ifthe parties are unable to agree as to the amount or length
thereof, CONTRACTOR may make a claim therefor as
provided in Articles II and 12.
Reference Points:
4.4. OWNER shall provide engineering surveys to estab-
lish reference points for construction which in ENGINEER's
judgment are necessary to enable CONTRACTOR to proceed
with the Work. CONTRACTOR shall be responsible for lay-
ing out the Work (unless otherwise specified in the General
Requirements), shall protect and preserve the established
reference points and shall make no changes or relocations
without the prior written approval of OWNER. CONTRAC-
TOR shall report to ENGINEER whenever any reference
point is lost or destroyed or requires relocation because of
necessary changes in grades or locations, and shall be respon-
sible for the accurate replacement or relocation of such ref-
erence points by professionally qualified personnel.
ARTICLE 5-BONDS AND INSURANCE
Performance and Other Bonds:
5.1. CONTRACTOR shall furnish performance and pay-
ment Bonds, each in an amount at least equal to the Contract
Price as security for the faithful performance and payment of
all CONTRACTOR's obligations under the Contract Docu-
ments. These Bonds shall remain in effect at least until one
year after the date when final payment becomes due, except
as otherwise provided by Law or Regulation or by the Con-
tract Documents. CONTRACTOR shall also furnish such
other Bonds as are required by the Supplementary Condi-
tions. All Bonds shall be in the forms prescribed by Law or
Regulation or by the Contract Documents and be executed
by such sureties as are named in the current list of "Com-
panies Holding Certificates of Authority as Acceptable Sure-
ties on Federal Bonds and as Acceptable Reinsuring Com-
panies" as published in Circular 570 (amended) by the Audit
Staff Bureau of Accounts, U.S. Treasury Department. All
Bonds signed by an agent must be accompanied by a certified
copy of the authority to act.
5.2. If the surety on any Bond furnished by CONTRAC-
TOR is declared a bankrupt or becomes insolvent or its right
to do business is terminated in any state where any part of
244 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
the Project is located or it ceases to meet the requirements
of paragraph 5.1, CONTRACTOR shall within five days
thereafter substitute another Bond and Surety, both of which
must be acceptable to OWNER.
Contractor's Liability Insurance:
5.3. CONTRACTOR shall purchase and maintain such
comprehensive general liability and other insurance as is
appropriate for the Work being performed and furnished and
as will provide protection from claims set forth below which
may arise out of or result from CONTRACTOR's perfor-
mance and furnishing of the Work and CONTRACTOR's
other obligations under the Contract Documents, whether it
is to be performed or furnished by CONTRACTOR, by any
Subcontractor, by anyone directly or indirectly employed by
any of them to perform or furnish any of the Work, or by
anyone for whose acts any of them may be liable:
5.3.1. Claims under workers' or workmen's compen-
sation, disability benefits and other similar employee ben-
efit acts;
5.3.2. Claims for damages because of bodily injury,
occupational sickness or disease, or death of CONTRAC-
TOR's employees;
5.3.3. Claims for damages because of bodily injury,
sickness or disease, or death of any person other than
CONTRACTOR's employees;
5.3.4. Claims for damages insured by personal injury
liability coverage which are sustained (a) by any person
as a result of an offense directly or indirectly related to
the employment of such person by CONTRACTOR, or
(b) by any other person for any other reason;
5.3.5. Claims for damages, other than to the Work
itself, because of injury to or destruction of tangible prop-
erty wherever located, including loss of use resulting
therefrom;
5.3.6. Claims arising out of operation of Laws or Reg-
ulations for damages because of bodily injury or death of
any person or for damage to property; and
5.3.7. Claims for damages because of bodily injury or
death of any person or property damage arising out of the
ownership, maintenance or use of any motor vehicle.
The insurance required by this paragraph 5.3 shall include
the specific coverages and be written for not less than the
limits of liability and coverages provided in the Supplemen-
tary Conditions, or required by law, whichever is greater.
The comprehensive general liability insurance shall include
completed operations insurance. All of the policies of insur-
ance so required to be purchased and maintained (or the
certificates or other evidence thereoO shall contain a provi-
sion or endorsement that the coverage afforded will not be
cancelled, materially changed or renewal refused until at least
12
thirty days' prior written notice has been given to OWNER
and ENGINEER by certified mail. All such insurance shall
remain in etTect until final payment and at all times thereafter
when CONTRACTOR may be correcting, removing or
replacing defective Work in accordance with paragraph 13.12.
In addition, CONTRACTOR shall maintain such completed
operations insurance for at least two years after final payment
and furnish OWNER with evidence of continuation of such
insurance at final payment and one year thereafter.
Contractual Liability Insurance:
5.4. The comprehensive general liability insurance required
by paragraph 5.3 will include contractual liability insurance
applicable to CONTRACTOR's obligations under paragraphs
6.30 and 6.31.
Owner's Liability Insurance:
5.5. OWNER shall be responsible for purchasing and
maintaining OWNER's own· 'liability insurance and, at
OWNER's option, may purchase and maintain such insur-
ance as will protect OWNER against claims which may arise
from operations under the Contract Documents.
Property Insurance:
5.6. Unless otherwise provided in, the Supplementary
Conditions, OWNER shall purchase and maintain property
insurance upon the Work at the site to the full insurable value
thereof (subject to such deductible amounts as may be pro-
vided in the Supplementary Conditions or required by Laws
and Regulations). This insurance shall include the interests
of OWNER, CONTRACTOR, Subcontractors, ENGINEER
and ENGINEER's consultants in the Work, all of whom shall
be listed as insureds or additional insured parties, shall insure
against the perils of fire and extended coverage and shall
include "all risk" insurance for physical loss and damage
including theft, vandalism and malicious mischief, collapse
and water damage, and such other perils as may be provided
in the Supplementary Conditions, and shall include damages,
losses and expenses arising out of or resulting from any insured
loss or incurred in the repair or replacement ,of any insured
property (including but not limited to fees and charges of
engineers, architects, attorneys and other professionals). If
not covered under the "all risk" insurance or otherwise pro-
vided in the Supplementary Conditions, CONTRACTOR shall
purchase and maintain similar property insurance on portions
of the Work stored on and otT the site or in transit when such
portions of the Work are to be included in an Application for
Payment.
5.7. OWNER shall purchase and maintain such boiler and
machinery insurance or additional property insurance as may
be required by the Supplementary Conditions or Laws and
Regulations which will include the interests of OWNER,
CONTRACTOR, Subcontractors, ENGINEER AND
ENGINEER's consultants in the Work, all of whom shall be
listed as insured or additional insured parties.

5.8. All the policies of insurance (or the certificates or
other evidence thereoO required to be purchased and main-
tained by OWNER in accordance with paragraphs 5.6 and
5.7 will contain a provision or endorsement that the coverage
afforded will not be cancelled or materially changed or renewal
refused until at least thirty days' prior written notice has been
given to CONTRACTOR by certified mail and will contain
waiver provisions in accordance with paragraph 5.11.2.
5.9. OWNER shall not be responsible for purchasing and
maintaining any property insurance to protect the interests
of CONTRACTOR, Subcontractors or others in the Work to
the extent of any deductible amounts that are provided in the
Supplementary Conditions. The risk of loss within the
deductible amount, will be borne by CONTRACTOR, Sub-
contractor or others suffering any such loss and if any of them
wishes property insurance coverage within the limits of such
amounts, each may purchase and maintain it at the purchas-
er's own expense.
5.10. If CONTRACTOR requests in writing that other
special insurance be included in the property insurance pol-
icy, OWNER shall, if possible, include such insurance, and
the cost thereof will be charged to CONTRACTOR by appro-
priate Change Order or Written Amendment. Prior to com-
mencement of the Work at the site, OWNER shall in writing
advise CONTRACTOR whether or not such other insurance
has been procured by OWNER.
Waiver of Rights:
5.11.1. OWNER and CONTRACTOR waive all rights
against each other for all losses and damages caused by
any of the perils covered by the policies of insurance
provided in response to paragraphs 5.6 and 5.7 and any
other property insurance applicable to the Work, and also
waive all such rights against the Subcontractors, ENGI-
NEER, ENGINEER's consultants and all other parties
named as insureds in such policies for losses and damages
so caused. As required by paragraph 6.11, each subcon-
tract between CONTRACTOR and a Subcontractor will
contain similar waiver provisions by the Subcontractor in
favor of OWNER, CONTRACTOR, ENGINEER, ENGI-
NEER's consultants and all other parties named as insureds.
None of the above waivers shall extend to the rights that
any of the insured parties may have to the proceeds of
insurance held by OWNER as trustee or otherwise P!lY-
able under any policy so issued.
5.11.2. OWNER and CONTRACTOR intend that any
policies provided in response to paragraphs 5.6 and 5.7
shall protect all ofthe parties insured and provide primary
coverage for all losses and damages caused by the perils
covered thereby. Accordingly, all such policies shall con-
tain provisions to the effect that in the event of payment
of any loss or damage the insurer will have no rights of
recovery against any of the parties named as insureds or
additional insureds, and if the insurers require separate
waiver forms to be signed by ENGINEER or ENGI-
NEER's consultant OWNER will obtain the same, and if
13
APPENDIX 5 245
such waiver forms are required of any Subcontractor,
CONTRACTOR will obtain the same.
Receipt and AppUcation of Proceeds:
5.12. Any insured loss under the policies of insurance
required by paragraphs 5.6 and 5.7 will be adjusted with
OWNER and made payable to OWNER as trustee for the
insureds, as their interests may appear, subject to the require-
ments of any applicable mortgage clause and of paragraph
5.13. OWNER shall deposit in a separate account any money
so received, and shall distribute it in accordance with such
agreement as the parties in interest may reach. If no other
special agreement is reached the damaged Work shall be
repaired or replaced, the moneys so received applied on
account thereof and the Work and the cost thereof covered
by an appropriate Change Order or Written Amendment.
5.13. OWNER as trustee shall have power to adjust and
settle any loss with the insurers unless one of the parties in
interest shall object in writing within fifteen days after the
occurrence of loss to OWNER's exercise of this power. If
such objection be made, OWNER as trustee shall make set-
tlement with the insurers in accordance with such agreement
as the parties in interest may reach. If required in writing by
any party in interest, OWNER as trustee shall, upon the
occurrence of an insured loss, give bond for the proper per-
formance of such duties.
Acceptance of Insurance:
5.14. If OWNER has any objection to the coverage afforded
by or other provisions of the insurance required to be pur-
chased and maintained by CONTRACTOR in accordance
with paragraphs 5.3 and 5.4 on the basis of its not complying
with the Contract Documents, OWNER shall notify CON-
TRACTOR in writing thereof within ten days of the date of
delivery of such certificates to OWNER in accordance with
paragraph 2.7. If CONTRACTOR has any objection to the
coverage afforded by or other provisions of the policies of
insurance required to be purchased and maintained by OWNER
in accordance with paragraphs 5.6 and 5.7 on the basis of
their not complying with the Contract Documents, CON-
TRACTOR shall notify OWNER in writing thereof within ten
days of the date of delivery of such certificates to CON-
TRACTOR in accordance with paragraph 2.7. OWNER and
CONTRACTOR shall each provide to the other such addi-
tional information in respect of insurance provided by each
as the other may reasonably request. Failure by OWNER or
CONTRACTOR to give any such notice of objection within
the time provided shall constitute acceptance of such insur-
ance purchased by the other as complying with the Contract
Documents.
Partial Utilization-Property Insurance:
5.15. If OWNER finds it necessary to occupy or use a
portion or portions of the Work prior to Substantial Comple-
tion of all the Work, such use or, occupancy may be accom-
plished in accordance with paragraph 14.10; provided that no
246 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
such use or occupancy shall commence before the insurers
providing the property insurance have acknowledged notice
thereof and in writing effected the changes in coverage neces-
sitated thereby. The insurers providing the property insur-
ance shall consent by endorsement on the policy or policies,
but the property insurance shall not be cancelled or lapse on
account of any such partial use or occupancy.
ARTICLE 6--CONTRACTOR'S RESPONSIBILITIES
Supervision and Superintendence:
6.1. CONTRACTOR shall supervise and direct the Work
competently and efficiently, devoting such attention thereto
and applying such skills and expertise as may be necessary
to perform the Work in accordance with the Contract Doc-
uments. CONTRACTOR shall be solely responsible for the
means, methods, techniques, sequences and procedures of
construction, but CONTRACTOR shall not be responsible
for the negligence of others in the design or selection of a
specific means, method, technique, sequence or procedure
of construction which is indicated in and required by the
Contract Documents. CONTRACTOR shall be responsible
to see that the finished Work complies accurately with the
Contract Documents.
6.2. CONTRACTOR shall keep-on the Work at all times
during its progress a competent resident superintendent, who
shall not be replaced without written notice to OWNER and
ENGINEER except under extraordinary circumstances. The
superintendent will be CONTRACTOR's representative at
the site and shall have authority to act on behalf of CON-
TRACTOR. All communications given to the superintendent
shall be as binding as if given to CONTRACTOR.
Labor, Materials and Equipment:
6.3. CONTRACTOR shall provide competent, suitably
qualified personnel to survey and layout the Work and per-
form construction as required by the Contract Documents.
CONTRACTOR shall at all times maintain good discipline
and order at the site. Except in connection with the safety or
protection of persons or the Work or property at the site or
adjacent thereto, and except as otherwise indicated in the
Contract Documents, all Work at the site shall be performed
during regular working hours, and CONTRACTOR will not
permit overtime work or the performance of Work on Sat-
urday, Sunday or any legal holiday without OWNER's writ-
ten consent given after prior written notice to ENGINEER.
6.4. Unless otherwise specified in the General Require-
ments, CONTRACTOR shall furnish and assume full respon-
sibility for all materials, equipment, labor, transportation,
construction equipment and machinery, tools, appliances,
fuel, power, light, heat, telephone, water, sanitary facilities,
temporary facilities and all other facilities and incidentals
necessary for the furnishing, performance, testing, start-up
and completion ofthe Work.
14
6.5. All materials and equipment shall be of good quality
and new, except as otherwise provided in the Contract Doc-
uments. If required by ENGINEER, CONTRACTOR shall
furnish satisfactory evidence (including reports of required
tests) as to the kind and quality of materials and equipment.
All materials and equipment shall be applied, installed, con-
nected, erected, used, cleaned and conditioned in accordance
with the instructions of the applicable Supplier except as
otherwise provided in the Contract Documents; but no pro-
vision of any such instructions will be effective to assign to
ENGINEER, or any of ENGINEER's consultants, agents or
employees, any duty or authority to supervise or direct the
furnishing or performance of the Work or any duty or author-
ity to undertake responsibility contrary to the provisions of
paragraph 9.15 or9.16.
Adjusting Progress Schedule:
6.6. CONTRACTOR shall submit to ENGINEER for
acceptance (to the extent indicated in paragraph 2.9) adjust-
ments in the progress schedule to reflect the impact thereon
of new developments; these will conform generally to the
progress schedule then in effect and additionally will comply
with any provisions of the General Requirements applicable
thereto.
Substitutes or "Or-Equal" Items:
6.7.1. Whenever materials or equipment are specified
or described in the Contract Documents by using the name
of a proprietary item or the name of a particular Supplier
the naming of the item is intended to establish the type,
function and quality required. Unless the name is followed
by words indicating that no substitution is permitted,
materials or equipment of other Suppliers may be accepted
by ENGINEER if sufficient information is submitted by
CONTRACTOR to allow ENGINEER to determine that
the material or equipment proposed is equivalent or equal
to that named. The procedure for review by ENGINEER
will include the following as supplemented in the General
Requirements. Requests for review of substitute items of
material and equipment will not be accepted by ENGI-
NEER from anyone other than CONTRACTOR. If CON-
TRACTOR wishes to furnish or use a substitute item of
material or equipment, CONTRACTOR shall make writ-
ten application to ENGINEER for acceptance thereof,
certifying that the proposed substitute will perform ade-
quately the functions and achieve the results called for by
the general design, be similar and of equal substance to
that specified and be suited to the same use as that spec-
ified. The application will state that the evaluation and
acceptance of the proposed substitute will not prejudice
CONTRACTOR's achievement of Substantial Comple-
tion on time, whether or not acceptance ofthe substitute
for use in the Work will require a change in any of the
Contract Documents (or in the provisions of any other
direct contract with OWNER for work on the Project) to
adapt the design to the proposed substitute and whether
or not incorporation or use of the substitute in connection
with the Work is subject to payment of any license fee or

royalty. All variations of the proposed substitute from that
specified will be identified in the application and available
maintenance, repair and replacement service will be indi-
cated. The application will also contain an itemized esti-
mate of all costs that will result directly or indirectly from
acceptance of such substitute, including costs of redesign
and claims of other contractors affected by the resulting
change, all of which shall be considered by ENGINEER
in evaluating the proposed substitute. ENGINEER may
require CONTRACTOR to furnish at CONTRACTOR's
expense additional data about the proposed substitute.
6.7.2. Ifa specific means, method, technique, sequence
or procedure of construction is indicated in or required by
the Contract Documents, CONTRACTOR may furnish or
utilize a substitute means, method, sequence, technique
or procedure of construction acceptable to ENGINEER,
if CONTRACTOR submits sufficient information to allow
ENGINEER to determine that the substitute proposed is
equivalent to that indicated or required by the Contract
Documents. The procedure for review by ENGINEER
will be similar to that provided in paragraph 6.7.1 as applied
by ENGINEER and as may be supplemented in the Gen-
eral Requirements.
6.7.3. ENGINEER will be allowed a reasonable time
within which to evaluate each proposed substitute. ENGI-
NEER will be the sole judge of acceptability, and no
substitute will be ordered, installed or utilized without
ENGINEER's prior written acceptance which will be evi-
denced by either a Change Order or an approved Shop
Drawing. OWNER may require CONTRACTOR to fur-
nish at CONTRACTOR's expense a special performance
guarantee or other surety with respect to any substitute.
ENGINEER will record time required by ENGINEER
and ENGINEER's consultants in eva!uating substitutions
proposed by CONTRACTOR and in making changes in
the Contract Documents occasioned thereby. Whether or
not ENGINEER accepts a proposed substitute, CON-
TRACTOR shall reimburse OWNER for the charges of
ENGINEER and ENGINEER's consultants for evaluat-
ing each proposed substitute.
Concerning Subcontractors, Suppliers and Others:
6.8.1. CONTRACTOR shall not employ any Subcon-
tractor, Supplier or other person or organization (including
those acceptable to OWNER and ENGINEER as indi-
cated in paragraph 6.8.2), whether initially or as a substi-
tute, against whom OWNER or ENGINEER may have
reasonable objection. CONTRACTOR shall not be required
to employ any Subcontractor, Supplier or other person or
organization to furnish or perform any ofthe Work against
whom CONTRACTOR has reasonable objection.
6.8.2. If the Supplementary Conditions require the
identity of certain Subcontractors, Suppliers or other per-
sons or organizations (including those who are to furnish
the principal items of materials and equipment) to be sub-
mitted to OWNER in advance of the specified date prior
to the Effective Date of the Agreement for acceptance by
15
APPENDIX 5 247
OWNER and ENGINEER and if CONTRACTOR has
submitted a list thereof in accordance with the Supple-
mentary Conditions, OWNER's or ENGINEER's accept-
ance (either in writing or by failing to make written objec-
tion thereto by the date indicated for acceptance or objec-
tion in the bidding documents or the Contract Documents)
of any such Subcontractor, Supplier or other person or
organization so identified may be revoked on the basis of
reasonable objection after due investigation, in which case
CONTRACTOR shall submit an acceptable substitute, the
Contract Price will be increased by the difference in the
cost occasioned by such substitution and an appropriate
Change Order will be issued or Written Amendment signed.
No acceptance by OWNER or ENGINEER of any such
Subcontractor, Supplier or other person or organization
shall constitute a waiver of any right of OWNER or ENGI-
NEER to reject defective Work.
6.9. CONTRACTOR shall be fully responsible to OWNER
and ENGINEER for all acts and omissions of the Subcon-
tractors, Suppliers and other persons and organizations per-
forming or furnishing any of the Work under a direct or
indirect contract with CONTRACTOR just as CONTRAC-
TOR is responsible for CONTRACTOR's own acts and omis-
sions. Nothing in the Contract Documents shall create any
contractual relationship between OWNER or ENGINEER
and any such Subcontractor, Supplier or other person or
organization, nor shall it create any obligation on the part of
OWNER or ENGINEER to payor to see to the payment of
any moneys due any such Subcontractor, Supplier or other
person or organization except as may otherwise be required
by Laws and Regulations.
6.10. The divisions and sections of the Specifications and
the identifications of any Drawings shall not control CON-
TRACTOR in dividing the Work among Subcontractors or
Suppliers or delineating the Work to be performed by any
specific trade.
6.11. All Work performed for CONTRACTOR by a Sub-
contractor will be pursuant to an appropriate agreement
between CONTRACTOR and the Subcontractor which spe-
cifically binds the Subcontractor to the applicable terms and
conditions of the Contract Documents for the benefit of
OWNER and ENGINEER and contains waiver provisions
as required by paragraph 5.11. CONTRACTOR shall pay
each Subcontractor a just share of any insurance moneys
received by CONTRACTOR on account of losses under pol-
icies issued pursuant to paragraphs 5.6 and 5.7.
Patent Fees and Royalties:
6.12. CONTRACTOR shall pay all license fees and roy-
alties and assume all costs incident to the use in the perfor-
mance of the Work or the incorporation in the Work of any
invention, design, process, product or device which is the
subject of patent rights or copyrights held by others. If a
particular invention, design, process, product or device is
specified in the Contract Documents for use in the perfor-
mance ofthe Work and if to the actual knowledge of OWNER
248 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
or ENGINEER its use is subject to patent rights or copyrights
calling for the payment of any license fee or royalty to others,
the existence of such rights shall be disclosed by OWNER in
the Contract Documents. CONTRACTOR shall indemnify
and hold harmless OWNER and ENGINEER and anyone
directly or indirectly employed by either of them from and
against all claims, damages, losses and expenses (including
attorneys' fees and court and arbitration costs) arising out of
any infringement of patent rights or copyrights incident to
the use in the performance of the Work or resulting from the
incorporation in the Work of any invention, design, process,
product or device not specified in the Contract Documents,
and shall defend all such claims in connection with any alleged
infringement of such rights.
Permits:
6.13. Unless otherwise provided in the Supplementary
Conditions, CONTRACTOR shall obtain and pay for all con-
struction permits and licenses. OWNER shall assist CON-
TRACTOR, when necessary, in obtaining such permits and
licenses. CONTRACTOR shall pay all governmental charges
and inspection fees necessary for the prosecution of the Work,
which are applicable at the time of opening of Bids, or if there
are no Bids on the Effective Date of the Agreement. CON-
TRACTOR shall pay all charges of utility owners for con-
nections to the Work, and OWNER shall pay all charges of
such utility owners for capital costs related thereto such as
plant investment fees,
Laws and Regulations:
6.14.1. CONTRACTOR shall give all notices and
comply with all Laws and Regulations applicable to fur-
nishing and performance of the Work. Except where oth-
erwise expressly required by applicable Laws and Regu-
lations, neither OWNER nor ENGINEER shall be respon-
sible for monitoring CONTRACTOR's compliance with
any Laws or Regulations.
6.14.2. If CONTRACTOR observes that the Specifi-
cations or Drawings are at variance with any Laws or
Regulations, CONTRACTOR shall give ENGINEER
prompt written notice thereof, and any necessary changes
will be authorized by one of the methods indicated in
paragraph 3.4. If CONTRACTOR performs any Work
knowing or having reason to know that it is contrary to
such Laws or Regulations, and without such notice to
ENGINEER, CONTRACTOR shall bear all costs arising
therefrom; however, it shall not be CONTRACTOR's pri-
mary responsibility to make certain that the Specifications
and Drawings are in accordance with such Laws and
Regulations.
Taxes:
6.15. CONTRACTOR shall pay all sales, consumer, use
and other similar taxes required to be paid by CONTRAC-
TOR in accordance with the Laws and Regulations of the
16
place of the Project which are applicable during the perfor-
mance of the Work.
Use of Premises:
6.16. CONTRACTOR shall confine construction equip-
ment, the storage of materials and equipment and the oper-
ations of workers to the Project site and land and areas iden-
tified in and permitted by the Contract Documents and other
land and areas permitted by Laws and Regulations, rights-
of-way, permits and easements, and shall not unreasonably
encumber the premises with construction equipment or other
materials or equipment. CONTRACTOR shall assume full
responsibility for any damage to any such land or area, or to
the owner or occupant thereof or of any land or areas contig-
uous thereto, resulting from the performance of the Work.
Should any claim be made against OWNER or ENGINEER
by any such owner or occupant because of the performance
of the Work, CONTRACTOR shall promptly attempt to settle
with such other party by agreement or otherwise resolve the
claim by arbitration or at law. CONTRACTOR shall, to the
fullest extent permitted by Laws and Regulations, indemnify
and hold OWNER and ENGINEER harmless from and against
all claims, damages, losses and expenses (including, but not
limited to, fees of engineers, architects, attorneys and other
professionals and court and arbitration costs) arising directly,
indirectly or consequentially out of any action, legal or equi-
table, brought by any such other party against OWNER or
ENGINEER to the extent based on a claim arising out of
CONTRACTOR's performance ofthe Work.
6.17. During the progress of the Work, CONTRACTOR
shall keep the premises free from accumulations of waste
materials, rubbish and other debris resulting from the Work.
At the completion of the Work CONTRACTOR shall remove
all waste materials, rubbish and debris from and about the
premises as well as all tools, appliances, construction equip-
ment and machinery, and surplus materials, and shall leave
the site clean and ready for occupancy by OWNER. CON-
TRACTOR shall restore to original condition all property not
designated for alteration by the Contract Documents.
6.18. CONTRACTOR shall not load nor permit any part
of any structure to be loaded in any manner that will endanger
the structure, nor shall CONTRACTOR subject any part of
the Work or adjacent property to stresses or pressures that
will endanger it.
Record Documents:
6.19. CONTRACTOR shall maintain in a safe place at
the site one record copy of all Drawings, Specifications,
Addenda, Written Amendments, Change Orders, Work
Directive Changes, Field Orders and written interpretations
and clarifications (issued pursuant to paragraph 9.4) in good
order and annotated to "Show all changes made during con-
struction. These record documents together with all approved
samples and a counterpart of all approved Shop Drawings
will be available to ENGINEER for reference. Upon com-

pletion of the Work, these record documents, samples and
Shop Drawings will be delivered to ENGINEER for OWNER.
Safety and Protection:
6.20. CONTRACTOR shall be responsible for initiating,
maintaining and supervising all safety precautions and pro-
grams in connection with the Work. CONTRACTOR shall
take all necessary precautions for the safety of, and shall
provide the necessary protection to prevent damage, injury
or loss to:
6.20.1. all employees on the Work and other persons
and organizations who may be affected thereby;
6.20.2. all the Work and materials and equipment to
be incorporated therein, whether in storage on or off the
site; and
6.20.3. other property at the site or adjacent thereto,
including trees, shrubs, lawns, walks, pavements, road-
ways, structures, utilities and Underground Facilities not
designated for removal, relocation or replacement in the
course of construction.
CONTRACTOR shall comply with all applicable Laws and
Regulations of any public body having jurisdiction for the
safety of persons or property or to protect them from damage,
injury or loss; and shall erect and maintain all necessary
safeguards for such safety and protection. CONTRACTOR
shall notify owners of adjacent property and of Underground
Facilities and utility owners when prosecution of the Work
may affect them, and shall cooperate with them in the pro-
tection, removal, relocation and replacement of their prop-
erty. All damage, injury or loss to any property referred to
in paragraph 6.20.2 or 6.20.3 caused, directly or indirectly,
in whole or in part, by CONTRACTOR, any Subcontractor,
Supplier or any other person or organization directly or indi-
rectly employed by any of them to perform or furnish any of
the Work or anyone for whose acts any of them may be liable,
shall be remedied by CONTRACTOR (except damage or loss
attributable to the fault of Drawings or Specifications or to
the acts or omissions of OWNER or ENGINEER or anyone
employed by either of them or anyone for whose acts either
of them may be liable, and not attributable, directly or indi-
rectly, in whole or in part, to the fault or negligence of CON-
TRACTOR). CONTRACTOR's duties and responsibilities
for the safety and protection of the Work shall continue until
such time as all the Work is completed and ENGINEER has
issued a notice to OWNER and CONTRACTOR in accord-
ance with paragraph 14.13 that the Work is acceptable (except
as otherwise expressly provided in connection with Substan-
tial Completion).
6.21. CONTRACTOR shall designate a responsible rep-
resentative at the site whose duty shall be the prevention of
accidents. This person shall be CONTRACTOR's superin-
tendent unless otherwise designated in writing by CON-
TRACTOR to OWNER.
NOTE: Underlining added by author; see p. 86 of text.
17
APPENDIX 5 249
Emergencies:
6.22. In emergencies affecting the safety or protection of
persons or the Work or property at the site or adjacent thereto,
CONTRACTOR, without special instruction or authorization
from ENGINEER or OWNER, is obligated to act to prevent
threatened damage, injury or loss. CONTRACTOR shall give
ENGINEER prompt written notice if CONTRACTOR believes
that any significant changes in the Work or variations from
the Contract Documents have been caused thereby. IfENGI-
NEER determines that a change in the Contract Documents
is required because of the action taken in response to an
emergency, a Work Directive Change or Change Order will
be issued to document the consequences of the changes or
variations.
Shop Drawings and Samples:
6.23. After checking and verifying all field measurements
and after complying with applicable procedures specified in
the General Requirements, CONTRACTOR shall submit to
ENGINEER for review and approval in accordance with the
accepted schedule of Shop Drawing submissions (see para-
graph 2.9), or for other appropriate action if so indicated in
the Supplementary Conditions, five copies (unless otherwise
specified in the General Requirements) of all Shop Drawings,
which will bear a stamp or specific written indication that
CONTRACTOR has satisfied CONTRACTOR's responsi-
bilities under the Contract Documents with respect to the
review of the submission. All submissions will be identified
as ENGINEER may require. The data shown on the Shop
Drawings will be complete with respect to quantities, dimen-
sions, specified performance and design criteria, materials
and similar data to enable ENGINEER to review the infor-
mation as required.
6.24. CONTRACTOR shall also submit to ENGINEER
for review and approval with such promptness as to cause
no delay in Work, all samples required by the Contract Doc-
uments. All samples will have been checked by and accom-
panied by a specific written indication that CONTRACTOR
has satisfied CONTRACTOR's responsibilities under the
Contract Documents with respect to the review of the sub-
mission and will be identified clearly as to material, Supplier,
pertinent data such as catalog numbers and the use for which
intended.
6.25.1. Before submission of each Shop Drawing or
sample CONTRACTOR shall have determined and veri-
fied all quantities, dimensions, specified performance cri-
teria, installation requirements, materials, catalog num-
bers and similar data with respect thereto and reviewed
or coordinated each Shop Drawing or sample with other
Shop Drawings and samples and with the requirements of
the Work and the Contract Documents.
6.25.2. At the time of each submission, CONTRAC-
TOR shall give ENGINEER specific written notice of each
variation that the Shop Drawings or samples may have
from the requirements of the Contract Documents, and,
in addition, shall cause a specific notation to be made on
250 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
each Shop Drawing submitted to ENGINEER for review
and approval of each such variation.
6.26. ENGINEER will review and approve with reason-
able promptness Shop Drawings and samples, but ENGI-
NEER's review and approval will be only for conformance
with the design concept of the Project and for compliance
with the information given in the Contract Documents and
shall not extend to means, methods, techniques, sequences
or procedures of construction (except where a specific means,
method, technique, sequence or procedure of construction is
indicated in or required by the Contract Documents) or to
safety precautions or programs incident thereto. The review
and approval of a separate item as such will not indicate
approval of the assembly in which the item functions. CON-
TRACTOR shall make corrections required by ENGINEER,
and shall return the required number of corrected copies of
Shop Drawings and submit as required new samples for review
and approval. CONTRACTOR shall direct specific attention
in writing to revisions other than the corrections called for
by ENGINEER on previous submittals.
6.27. ENGINEER's review and approval of Shop Draw-
ings or samples shall not relieve CONTRACTOR from
responsibility for any variation from the requirements of the
Contract Documents unless CONTRACTOR has in writing
called ENGINEER's attention to each such variation at the
time of submission as required by paragraph 6.25.2 and
ENGINEER has given written approval of each such varia-
tion by a specific written notation thereof incorporated in or
accompanying the Shop Drawing or sample approval; nor
will any approval by ENGINEER relieve CONTRACTOR
from responsibility for errors or omissions in the Shop Draw-
ings or from responsibility for having complied with the pro-
visions of paragraph 6.25.1.
6.28. Where a Shop Drawing or sample is required by the
Specifications, any related Work performed prior to ENGI-
NEER's review and approval ofthe pertinent submission will
be the sole expense and responsibility of CONTRACTOR.
Continuing the Work:
6.29. CONTRACTOR shall carry on the Work and adhere
to the progress schedule during all disputes or disagreements
with OWNER. No Work shall be delayed or postponed pend-
ing resolution of any disputes or disagreements, except as
permitted by paragraph 15.5 or as CONTRACTOR and
OWNER may otherwise agree in writing.
Indemnification:
6.30. To the fullest extent permitted by Laws and Regu-
lations CONTRACTOR shall indemnify and hold harmless
OWNER and ENGINEER and their consultants, agents and
employees from and against all claims, damages, losses and
expenses, direct, indirect or consequential (including but not
limited to fees and charges of engineers, architects, attorneys
and other professionals and court and arbitration costs) aris-
ing out of or resulting from the performance of the Work,
NOTE: Underlining added by author; see p. 86 of text.
18
provided that any such claim, damage, loss or expense (a) is
attributable to bodily injury, sickness, disease or death, or to
injury to or destruction of tangible property (other than the
Work itselO including the loss of use resulting therefrom and
(b) is caused in whole or in part by any negligent act or
omission of CONTRACTOR, any Subcontractor, any person
or organization directly or indirectly employed by any of them
to perform or furnish any of the Work or anyone for whose
acts any of them may be liable, regardless of whether or not
it is caused in part by a party indemnified hereunder or arises
by or is imposed by Law and Regulations regardless of the
negligence of any such party.
6.31. In any and all claims against OWNER or ENGI-
NEER or any of their consultants, agents or employees by
any employee of CONTRACTOR, any Subcontractor, any
person or organization directly or indirectly employed by any
of them to perform or furnish any of the Work or anyone for
whose acts any of them may be liable, the indemnification
obligation under paragraph 6.30 shall not be limited in any
way by any limitation on the amount or type of damages,
compensation or benefits payable by or for CONTRACTOR
or any such Subcontractor or other person or organization
under workers' or workmen's compensation acts, disability
benefit acts or other employee benefit acts.
6.32. The obligations of CONTRACTOR under para-
graph 6.30 shall not extend to the liability of ENGINEER,
ENGINEER's'consultants, agents or employees arising out
of the preparation or approval of maps, drawings, opinions,
reports, surveys, Change Orders, designs or specifications.
ARTICLE 7-0THER WORK
Reillted Work at Site:
7.1. OWNER may perform other work related to the Proj-
ect at the site by OWNER's own forces, have other work
performed by utility owners or let other direct contracts therefor
which shall contain General Conditions similar to these. If
the fact that such other work is to be performed was not noted
in the Contract Documents, written notice thereof will be
given to CONTRACTOR prior to starting any such other
work; and, if CONTRACTOR believes that such perfor-
mance will involve additional expense to CONTRACTOR or
requires additional time and the parties are unable to agree
as to the extent thereof, CONTRACTOR may make a claim
therefor as provided in Articles II and 12.
7.2. CONTRACTOR shall afford each utility owner and
other contractor who is a party to such a direct contract (or
OWNER, if OWNER is performing the additional work with
OWNER's employees) proper and safe access to the site and
a reasonable opportunity for the introduction and storage of
materials and equipment and the execution of such work, and
shall properly connect and coordinate the Work with theirs.
CONTRACTOR shall do all cutting, fitting and patching of
the Work that may be required to make its several parts come
together properly and integrate with such other work. CON-

TRACTOR shall not endanger any work of others by cutting,
excavating or otherwise altering their work and will only cut
or alter their work with the written consent of ENGINEER
and the others whose work will be affected. The duties and
responsibilities of CONTRACTOR under this paragraph are
for the benefit of such utility owners and other contractors
to the extent that there are comparable provisions for the
benefit of CONTRACTOR in said direct contracts between
OWNER and such utility owners and other contractors.
7.3. If any part of CONTRACTOR's Work depends for
proper execution or results upon the work of any such other
contractor or utility owner (or OWNER), CONTRACTOR
shall inspect and promptly report to ENGINEER in writing
any delays, defects or deficiencies in such work that render
it unavailable or unsuitable for such proper execution and
results. CONTRACTOR's failure so to report will constitute
an acceptance of the other work as fit and proper for integra-
tion with CONTRACTOR's Work except for latent or non-
apparent defects and deficiencies in the other work.
Coordination:
7.4. If OWNER contracts with others for the perfor-
mance of other work on the Project at the site, the person or
organization who will have authority and responsibility for
coordination of the activities among the various prime con-
tractors will be identified in the Supplementary Conditions,
and the specific matters to be covered by such authority and
responsibility will be itemized, and the extent of such author-
ity and responsibilities will be provided, in the Supplementary
Conditions. Unless otherwise provided in the Supplementary
Conditions, neither OWNER nor ENGINEER shall have any
authority or responsibility in respect of such coordination.
ARTICLE 8-0WNER'S RESPONSIBILITIES
8.1. OWNER shall issue all communications to CON-
TRACTOR through ENGINEER.
8.2. In case of termination of the employment of ENGI-
NEER, OWNER shall appoint an engineer against whom
CONTRACTOR makes no reasonable objection, whose sta-
tus under the Contract Documents shall be that of the former
ENGINEER. Any dispute in connection with such appoint-
ment shall be subject to arbitration.
8.3. OWNER shall furnish the data required of OWNER
under the Contract Documents promptly and shall make pay-
ments to CONTRACTOR promptly after they are due as
provided in paragraphs 14.4 and 14.13.
8.4. OWNER's duties in respect of providing lands and
easements and providing engineering surveys to establish
reference points are set forth in paragraphs 4.1 and 4.4. Para-
graph 4.2 refers to OWNER's identifying and making avail-
able to CONTRACTOR copies of reports of explorations and
tests of subsurface conditions at the site and in existing struc-
19
APPENDIX 5 251
tures which have been utilized by ENGINEER in preparing
the Drawings and Specifications.
8.5. OWNER's responsibilities in respect of purchasing
and maintaining liability and property insurance are set forth
in paragraphs 5.5 through 5.8.
8.6. OWNER is obligated to execute Change Orders as
indicated in paragraph 10.4.
8.7. OWNER's responsibility in respect of certain
inspections, tests and approvals is set forth in paragraph 13.4.
8.8. In connection with OWNER's right to stop Work or
suspend Work, see paragraphs 13.10 and 15.1. Paragraph 15.2
deals with OWNER's right to terminate services of CON-
TRACTOR under certain circumstances.
ARTICLE 9-ENGINEER'S STATUS DURING
CONSTRUCTION
Owner's Representative:
9.1. ENGINEER will be OWNER's representative dur-
ing the construction period. The duties and responsibilities
and the limitations of authority of ENGINEER as OWNER's
representative during construction are set forth in the Con-
tract Documents and shall not be extended without written
consent of OWNER and ENGINEER.
Visits to Site:
9.2. ENGINEER will make visits to the site at intervals
appropriate to the various stages of construction to observe
the progress and quality of the executed Work and to deter-
mine, in general, if the Work is proceeding in accordance
with the Contract Documents. ENGINEER will not be required
to make exhaustive or continuous on-site inspections to check
the quality or quantity of the Work. ENGINEER's efforts
will be directed toward providing for OWNER a greater degree
of confidence that the completed Work will conform to the
Contract Documents. On the basis of such visits and on-site
observations as an experienced and qualified design profes-
sional, ENGINEER will keep OWNER informed ofthe prog-
ress of the Work and will endeavor to guard OWNER against
defects and deficiencies in the Work.
Project Representation:
9.3. If OWNER and ENGINEER agree, ENGINEER
will furnish a Resident Project Representative to assist
ENGINEER in observing the performance ofthe Work. The
duties, responsibilities and limitations of authority of any
such Resident Project Representative and assistants will be
as provided in the Supplementary Conditions. If OWNER
designates another agent to represent OWNER at the site
who is not ENGINEER's agent or employee, the duties,
responsibilities and limitations of authority of such other
person will be as provided in the Supplementary Conditions.
252 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
Clarifications and lnterpreliltions:
9.4. ENGINEER will issue with reasonable promptness
such written clarifications or interpretations of the require-
ments of the Contract Documents (in the form of Drawings
or otherwise) as ENGINEER may determine necessary, which
shall be consistent with or reasonably inferable from the
overall intent of the Contract Documents. If CONTRACTOR
believes that a written clarification or interpretation justifies
an increase in the Contract Price or an extension of the
Contract Time and the parties are unable to agree to the
amount or extent thereof, CONTRACTOR may make a claim
therefor as provided in Article 11 or Article 12.
Authorized Variations in Work:
9.5. ENGINEER may authorize minor variations in the
Work from the requirements of the Contract Documents which
do not involve an adjustment in the Contract Price or the
Contract Time and are consistent with the overall intent of
the Contract Documents. These may be accomplished by a
Field Order and will be binding on OWNER, and also on
CONTRACTOR who shall perform the Work involved
promptly. If CONTRACTOR believes that a Field Order
justifies an increase in the Contract Price or an extension of
the Contract Time and the parties are unable to agree as to
the amount or extent thereof, CONTRACTOR may make a
claim therefor as provided in Article 11 or 12.
Rejecting Defective Work:
9.6. ENGINEER will have authority to disapprove or
reject Work which ENGINEER believes to be defective. and
will also have authority to require special inspection or testing
of the Work as provided in paragraph 13.9, whether or not
the Work is fabricated, installed or completed.
Shop Drawings, Change Orders and Payments:
9.7. In connection with ENGINEER's responsibility for
Shop Drawings and samples, see paragraphs 6.23 through
6.29 inclusive.
9.8. In connection with ENGINEER's responsibilities as
to Change Orders, see Articles 10, 11 and 12.
9.9. In connection with ENGINEER's responsibilities in
respect of Applications for Payment, etc., see Article 14.
Determinationsfor Unit Prices:
9.10. ENGINEER will determine the actual quantities
and classifications of Unit Price Work performed by CON-
TRACTOR. ENGINEER will review with CONTRACTOR
ENGINEER's preliminary determinations on such matters
before rendering a written decision thereon (by recommen-
dation of an Application for Payment or otherwise). ENGI-
NEER's written decisions thereon will be final and binding
upon OWNER and CONTRACTOR, unless, within ten days
after the date of any such decision, either OWNER or CON-
TRACTOR delivers to the other party to the Agreement and
20
to ENGINEER written notice of intention to appeal from
such a decision.
Decisions on Disputes:
9.11. ENGINEER will be the initial interpreter of the
requirements of the Contract Documents and judge of the
acceptability of the Work thereunder. Claims, disputes and
other matters relating to the acceptability of the Work or the
interpretation ofthe requirements ofthe Contract Documents
pertaining to the performance and furnishing of the Work and
claims under Articles 11 and 12 in respect of changes in the
Contract Price or Contract Time will be referred initially to
ENGINEER in writing with a request for a formal decision
in accordance with this paragraph, which ENGINEER will
render in writing within a reasonable time. Written notice of
each such claim, dispute and other matter will be delivered
by the claimant to ENGINEER and the other party to the
Agreement promptly (but in no event later than thirty days)
after the occurrence of the event giving rise thereto, and
written supporting data will be submitted to ENGINEER and
the other party within sixty days after such occurrence unless
ENGINEER allows an additional period oftime to ascertain
more accurate data in support of the claim.
9.12. When functioning as interpreter and judge under
paragraphs 9.10 and 9.11, ENGINEER will not show par-
tiality to OWNER or CONTRACTOR and will not be liable
in connection with any interpretation or decision rendered in
good faith in such capacity. The rendering of a decision by
ENGINEER pursuant to paragraphs 9.10 and 9.11 with respect
to any such claim, dispute or other matter (except any which
have been waived by the making or acceptance of final pay-
ment as provided in paragraph 14.16) will be a condition
precedent to any exercise by OWNER or CONTRACTOR
of such rights or remedies as either may otherwise have under
the Contract Documents or by Laws or Regulations in respect
of any such claim, dispute or other matter.
Limitations on ENGINEER's Responsibilities:
9.13. Neither ENGINEER's authority to act under this
Article 9 or elsewhere in the Contract Documents nor any
decision made by ENGINEER in good faith either to exercise
or not exercise such authority shall give rise to any duty or
responsibility of ENGINEER to CONTRACTOR, any Sub-
contractor, any Supplier, or any other person or organization
performing any of the Work, or to any surety for any of them.
9.14. Whenever in the Contract Documents the terms "as
ordered", "as directed", "as required", "as allowed", "as
approved" or terms of like effect or import are used, or the
adjectives "reasonable", "suitable", "acceptable", "proper"
or "satisfactory" or adjectives of like effect or import are
used to describe a requirement, direction, review or judgment
of ENGINEER as to the Work, it is intended that such
requirement, direction, review or judgment will be solely to
evaluate the Work for compliance with the Contract Docu-
ments (unless there is a specific statement indicating other-
wise). The use of any such term or adjective shall not be

effective to assign to ENGINEER any duty or authority to
supervise or direct the furnishing or performance of the Work
or any duty or authority to undertake responsibility contrary
to the provisions of paragraph 9.15 or 9.16.
9.15. ENGINEER will not be responsible for CON-
TRACTOR's means, methods, techniques, sequences or pro-
cedures of construction, or the safety precautions and pro-
grams incident thereto, and ENGINEER will not be respon-
sible for CONTRACTOR's failure to perform or furnish the
Work in accordance with the Contract Documents.
9.16. ENGINEER will not be responsible for the acts or
omissions of CONTRACTOR or of any Subcontractor, any
Supplier, or of any other person or organization performing
orfurnishing any of the Work.
ARTICLE to-CHANGES IN THE WORK
10.1. Without invalidating the Agreement and without notice
to any surety, OWNER may, at any time or from time to
time, order additions, deletions or revisions in the Work;
these will be authorized by a Written Amendment, a Change
Order, or a Work Directive Change. Upon receipt ofany such
document, CONTRACTOR shall promptly proceed with the
Work involved which will be performed under the applicable
conditions of the Contract Documents (except as otherwise
specifically provided).
10.2. If OWNER and CONTRACTOR are unable to agree
as to the extent, if any, of an increase or decrease in the
Contract Price or an extension or shortening of the Contract
Time that should be allowed as a result of a Work Directive
Change, a claim may be made therefor as provided in Article
II or Article 12.
10.3. CONTRACTOR shall not be entitled to an increase
in the Contract Price or an extension of the Contract Time
with respect to any Work performed that is not required by
the Contract Documents as amended, modified and supple-
mented as provided in paragraphs 3.4 and 3.5, except in the
case of an emergency as provided in paragraph 6.22 and
except in the case of uncovering Work as provided in para-
graph 13.9.
10.4. OWNER and CONTRACTOR shall execute appro-
priate Change Orders (or Written Amendments) covering:
10.4.1. changes in the Work which are ordered by
OWNER pursuant to paragraph 10.1, are required because
of acceptance of defective Work under paragraph 13.13 or
correcting defective Work under paragraph 13.14, or are
agreed to by the parties;
10.4.2. changes in the Contract Price or Contract Time
which are agreed to by the parties; and
21
APPENDIX 5 253
10.4.3. changes in the Contract Price or Contract Time
which embody the substance of any written decision ren-
dered by ENGINEER pursuant to paragraph 9.11;
provided that, in lieu of executing any such Change Order,
an appeal may be taken from any such decision in accordance
with the provisions ofthe Contract Documents and applicable
Laws and Regulations, but during any such appeal, CON-
TRACTOR shall carryon the Work and adhere to the prog-
ress schedule as provided in paragraph 6.29.
10.5. If notice of any change affecting the general scope
of the Work or the provisions of the Contract Documents
(including, but not limited to, Contract Price or Contract
Time) is required by the provisions of any Bond to be given
to a surety, the giving of any such notice will be CONTRAC-
TOR's responsibility, and the amount of each applicable Bond
will be adjusted accordingly.
ARTICLE II-CHANGE OF CONTRACT PRICE
11.1. The Contract Price constitutes the total compen-
sation (subject to authorized adjustments) payable to CON-
TRACTOR for performing the Work. All duties, responsibil-
ities and obligations assigned to or undertaken by CON-
TRACTOR shall be at his expense without change in the
Contract Price.
11.2. The Contract Price may only be changed by a Change
Order or by a Written Amendment. Any claim for an increase
or decrease in the Contract Price shall be based on written
notice delivered by the party making the claim to the other
party and to ENGINEER promptly (but in no event later than
thirty days) after the occurrence of the event giving rise to
the claim and stating the general nature of the claim. Notice
of the amount of the claim with supporting data shall be
delivered within sixty days after such occurrence (unless
ENGINEER allows an additional period oftime to ascertain
more accurate data in support of the claim) and shall be
accompanied by claimant's written statement that the amount
claimed covers all known amounts (direct, indirect and con-
sequential) to which the claimant is entitled as a result of the
occurrence of said event. All claims for adjustment in the
Contract Price shall be determined by ENGINEER in accor-
dance with paragraph 9.11 if OWNER and CONTRACTOR
cannot otherwise agree on the amount involved. No claim
for an adjustment in the Contract Price will be valid if not
submitted in accordance with this paragraph 11.2.
11.3. The value of any Work covered by a Change Order
or of any claim for an increase or decrease in the Contract
Price shall be determined in one of the following ways:
11.3.1. Where the Work involved is covered by unit
prices contained in the Contract Documents, by applica-
tion of unit prices to the quantities of the items involved
(subject to the provisions of paragraphs II. 9.1. through
11.9.3, inclusive).
254 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
11.3.2. By mutual acceptance of a lump sum (which
may include an allowance for overhead and profit not
necessarily in accordance with paragraph 11.6.2.1).
11.3.3. On the basis of the Cost of the Work (deter-
mined as provided in paragraphs 11.4 and 11.5) plus a
CONTRACTOR's Fee for overhead and profit (deter-
mined as provided in paragraphs 11.6 and 11.7).
Costo/the Work:
11.4. The term Cost of the Work means the sum of all
costs necessarily incurred and paid by CONTRACTOR in
the proper performance of the Work. Except as otherwise
may be agreed to in writing by OWNER, such costs shall be
in amounts no higher than those prevailing in the locality of
the Project, shall include only the following items and shall
not include any of the costs itemized in paragraph 11.5:
11.4.1. Payroll costs for employees in the direct employ
of CONTRACTOR in the performance of the Work under
schedules of job classifications agreed upon by OWNER
and CONTRACTOR. Payroll costs for employees not
employed full time on the Work shall be apportioned on
the basis of their time spent on the Work. Payroll costs
shall include, but not be limited to, salaries and wages
plus the cost of fringe benefits which shall include social
security contributions, unemployment, excise and payroll
taxes, workers' or workmen's compensation, health and
retirement benefits, bonuses, sick leave, vacation and hol-
iday pay applicable thereto. Such employees shall include
superintendents and foremen at the site. The expenses of
performing Work after regular working hours, on Satur-
day, Sunday or legal holidays, shall be included in the
above to the extent authorized by OWNER.
11.4.2. Cost of all materials and equipment furnished
and incorporated in the Work, including costs of trans-
portation and storage thereof, and Suppliers' field services
required in connection therewith. All cash discounts shall
accrue to CONTRACTOR unless OWNER deposits funds
with CONTRACTOR with which to make payments, in
which case the cash discounts shall accrue to OWNER.
All trade discounts, rebates and refunds and all returns
from sale of surplus materials and equipment shall accrue
to OWNER, and CONTRACTOR shall make provisions
so that they may be obtained.
11.4.3. Payments made by CONTRACTOR to the
Subcontractors for Work performed by Subcontractors.
If required by OWNER, CONTRACTOR shall obtain
competitive bids from Subcontractors acceptable to CON-
TRACTOR and shall deliver such bids to OWNER who
will then determine, with the advice of ENGINEER, which
bids will be accepted. If a subcontract provides that the
Subcontractor is to be paid on the basis of Cost of the
Work Plus a Fee, the Subcontractor's Cost of the Work
shall be determined in the same manner as CONTRAC-
TOR's Cost of the Work. All subcontracts shall be subject
22
to the other provisions of the Contract Documents insofar
as applicable.
11.4.4. Costs of special consultants (including but not
limited to engineers, architects, testing laboratories, sur-
veyors, attorneys and accountants) employed for services
specifically related to the Work.
11.4.5. Supplemental costs including the following:
11.4.5.1. The proportion of necessary transporta-
tion, travel and subsistence expenses of CONTRAC-
TOR's employees incurred in discharge of duties con-
nected with the Work.
11.4.5.2. Cost, including transportation and main-
tenance, of all materials, supplies, equipment, machin-
ery, appliances, office and temporary facilities at the
site and hand tools not owned by the workers, which
are consumed in the performance of the Work, and cost
less market value of such items used but not consumed
which remain the property of CONTRACTOR.
11.4.5.3. Rentals of all construction equipment and
machinery and the parts thereof whether rented from
CONTRACTOR or others in accordance with rental
agreements approved by OWNER with the advice of
ENGINEER, and the costs of transportation, loading,
unloading, installation, dismantling and removal
thereof-all in accordance with terms of said rental
agreements. The rental of any such equipment, machin-
ery or parts shall cease when the use thereof is no longer
necessary for the Work.
11.4.5.4. Sales, consumer, use or similar taxes
related to the Work, and for which CONTRACTOR is
liable, imposed by Laws and Regulations.
11.4.5.5. Deposits lost for causes other than negli-
gence of CONTRACTOR, any Subcontractor or any-
one directly or indirectly employed by any of them or
for whose acts any of them may be liable, and royalty
payments and fees for permits and licenses.
11.4.5.6. Losses and damages (and related
expenses), not compensated by insurance or otherwise,
to the Work or otherwise sustained by CONTRACTOR
in connection with the performance and furnishing of
the Work (except losses and damages within the
deductible amounts of property insurance established
by OWNER in accordance with paragraph 5.9), pro-
vided they have resulted from causes other than the
negligence of CONTRACTOR, any Subcontractor, or
anyone directly or indirectly employed by any of them
or for whose acts any of them may be liable. Such
losses shall include settlements made with the written
consent and approval of OWNER. No such losses,
damages and expenses shall be included in the Cost of
the Work for the purpose of determining CONTRAC-
TOR's Fee. If, however, any such loss or damage

requires reconstruction and CONTRACTOR is placed
in charge thereof, CONTRACTOR shall be paid for
services a fee proportionate to that stated in paragraph
11.6.2.
11.4.5.7. The cost of utilities, fuel and sanitary
facilities at the site.
11.4.5.8. Minor expenses such as telegrams, long
distance telephone calls, telephone service at the site,
expressage and similar petty cash items in connection
with the Work.
11.4.5.9. Cost of premiums for additional Bonds
and insurance required because of changes in the Work
and premiums for property insurance coverage within
the limits of the deductible amounts established by
OWNER in accordance with paragraph 5.9.
11.5. The term Cost of the Work shall not include any of
the following:
11.5.1. Payroll costs and other compensation of CON-
TRACTOR's officers, executives, principals (of partner-
ship and sole proprietorships), general managers, engi-
neers, architects, estimators, attorneys, auditors, accoun-
tants, purchasing and contracting agents, expeditors,
timekeepers, clerks and other personnel employed by
CONTRACTOR whether at the site or in CONTRAC-
TOR's principal or a branch office for general administra-
tion of the Work and not specifically included in the agreed
upon schedule of job classifications referred to in para-
graph 11.4.1 or specifically covered by paragraph 11.4.4-
all of which are to be considered administrative costs
covered by the CONTRACTOR's Fee.
11.5.2. Expenses of CONTRACTOR's principal and
branch offices other than CONTRACTOR's office at the
site.
11.5.3. Any part of CONTRACTOR's capital expenses,
including interest on CONTRACTOR'S capital employed
for the Work and charges against CONTRACTOR for
delinquent payments.
11.5.4. Cost of premiums for all Bonds and for all
insurance whether or not CONTRACTOR is required by
the Contract Documents to purchase and maintain the
same (except for the cost of premiums covered by sub-
paragraph 11.4.5.9 above).
11.5.5. Costs due to the negligence of CONTRAC-
TOR, any Subcontractor, or anyone directly or indirectly
employed by any of them or for whose acts any of them
may be liable, including but not limited to, the correction
of defec:th't" Work, disposal of materials or equipment
wrongly su ... .';~d a .. j making good any damage to prop-
erty.
11.5.6. Other overhead or general expense costs of
any kind and the costs of any item not specifically and
expressly included in paragraph 11.4.
23
APPENDIX 5 255
CONTRACTOR's Fee:
11.6. The CONTRACTOR's Fee allowed toCONTRAC-
TOR for overhead and profit shall be determined as follows:
11.6.1. a mutually acceptable fixed fee; or if none can
be agreed upon,
11.6.2. a fee based on the following percentages of the
various portions of the Cost of the Work:
11.6.2.1. for costs incurred under paragraphs 11.4.1
and 11.4.2, the CONTRACTOR's Fee shall be fifteen
percent;
11.6.2.2. for costs incurred under paragraph 11.4.3,
the CONTRACTOR's Fee shall be five percent; and if
a subcontract is on the basis of Cost of the Work Plus
a Fee, the maximum allowable to CONTRACTOR on
account of overhead and profit of all Subcontractors
shall be fifteen percent;
11.6.2.3. no fee shall be payable on the basis of
costs itemized under paragraphs 11.4.4, 11.4.5 and 11.5;
11.6.2.4. the amount of credit to be allowed by
CONTRACTOR to OWNER for any such change which
results in a net decrease in cost will be the amount of
the actual net decrease plus a deduction in CONTRAC-
TOR's Fee by an amount equal to ten percent of the
net decrease; and
11.6.2.5. when both additions and credits are
involved in anyone change, the adjustment in CON-
TRACTOR's Fee shall be computed on the basis of the
net change in accordance with paragraphs 11.6.2.1
through 11.6.2.4, inclusive.
11.7. Whenever the cost of any Work is to be determined
pursuant to paragraph 11.4 or 11.5, CONTRACTOR will
submit in form acceptable to ENGINEER an itemized cost
breakdown together with supporting data.
Cash Allowances:
11.8. It is understood that CONTRACTOR has included
in the Contract Price all allowances so named in the Contract
Documents and shall cause the Work so covered to be done
by such Subcontractors or Suppliers and for such sums within
the limit of the allowances as may be acceptable to ENGI-
NEER. CONTRACTOR agrees that:
11.8.1. The allowances include the cost to CON-
TRACTOR (less any applicable trade discounts) of mate-
rials and equipment required by the allowances to be deliv-
ered at the site, and all applicable taxes; and
11.8.2. CONTRACTOR's costs for unloading and
handling on the site, labor, installation costs, overhead,
profit and other expenses contemplated for the allowances
have been included in the Contract Price and not in the
256 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
allowances. No demand for additional payment on account
of any thereof will be valid.
Prior to final payment, an appropriate Change Order will be
issued as recommended by ENGINEER to reflect actual
amounts due CONTRACTOR on account of Work covered
by allowances, and the Contract Price shall be correspond-
ingly adjusted.
Unit Price Work:
11.9.1. Where the Contract Documents provide that
all or part ofthe Work is to be Unit Price Work, initially
the Contract Price will be deemed to include for all Unit
Price Work an amount equal to the sum of the established
unit prices for each separately identified item of Unit Price
Work times the estimated quantity of each item as indi-
cated in the Agreement. The estimated quantities of items
of Unit Price Work are not guaranteed and are solely for
the purpose of comparison of Bids and determining an
initial Contract Price. Determinations of the actual quan-
tities and classifications of Unit Price Work performed by
CONTRACTOR will be made by ENGINEER in accor-
dance with Paragraph 9.10.
11.9.2. Each unit price will be deemed to include an
amount considered by CONTRACTOR to be adequate to
cover CONTRACTOR's overhead and profit for each sep-
arately identified item.
11.9.3. Where the quantity of any item of Unit Price
Work performed by CONTRACTOR differs materially
and significantly from the estimated quantity of such item
indicated in the Agreement and there is no corresponding
adjustment with respect to any other item of Work and if
CONTRACTOR believes that CONTRACTOR has
incurred additional expense as a result thereof, CON-
TRACTOR may make a claim for an increase in the Con-
tract Price in accordance with Article 11 if the parties are
unable to agree as to the amount of any such increase.
ARTICLE 12-CHANGE OF CONTRACT TIME
12.1. The Contract Time may only be changed by a Change
Order or a Written Amendment. Any claim for an extension
or shortening of the Contract Time shall be based on written
notice delivered by the party making the claim to the other
party and to ENGINEER promptly (but in no event later than
thirty days) after the occurrence of the event giving rise to
the claim and stating the general nature of the claim. Notice
of the extent of the claim with supporting data shall be deliv-
ered within sixty days after such occurrence (unless ENGI-
NEER allows an additional period of time to ascertain more
accurate data in support of the claim) and shall be accom-
panied by the claimant's written statement that the adjust-
ment claimed is the entire adjustment to which the claimant
has reason to believe it is entitled as a result of the occurrence
of said event. All claims for adjustment in the Contract Time
24
shall be determined by ENGINEER in accordance with para-
graph 9.11 if OWNER and CONTRACTOR cannot otherwise
agree. No claim for an adjustment in the Contract Time will
be valid if not submitted in accordance with the requirements
of this paragraph 12.1.
12.2. The Contract Time will be extended in an amount
equal to time lost due to delays beyond the control of CON-
TRACTOR if a claim is made therefor as provided in para-
graph 12.1. Such delays shall include, but not be limited to,
acts or neglect by OWNER or others performing additional
work as contemplated by Article 7, or to fires, floods, labor
disputes, epidemics, abnormal weather conditions or acts of
God.
12.3. All time limits stated in the Contract Documents
are of the essence of the Agreement. The provisions of this
Article 12 shall not exclude recovery for damages (including
but not limited to fees and charges of engineers, architects,
attorneys and other professionals and court and arbitration
costs) for delay by either party.
ARTICLE 13-WARRANTY AND GUARANTEE;
TESTS AND INSPECTIONS;
CORRECTION, REMOVAL OR
ACCEPTANCE OF DEFECTIVE WORK
Warranty and Guarantee:
13.1. CONTRACTOR warrants and guarantees to
OWNER and ENGINEER that all Work will be in accor-
dance with the Contract Documents and will not be defective.
Prompt notice of all defects shall be given to CONTRAC-
TOR. All defective Work, whether or not in place, may be
rejected, corrected or accepted as provided in this Article 13.
Access to Work:
13.2. ENGINEER and ENGINEER's representatives,
other representatives of OWNER, testing agencies and gov-
ernmental agencies withjurisdittional interests will have access
to the Work at reasonable, times for their observation, inspecting
and testing. CONTRACTOR shall provide proper and safe
conditions for such access.
Tests and Inspections:
13.3. CONTRACTOR shall give ENGINEER timely notice
of readiness of the Work for all required inspections, tests or
approvals.
13.4. If Laws or Regulations of any public body having
jurisdiction require any Work (or part thereot) to specifically
be inspected, tested or approved, CONTRACTOR shall
assume full responsibility therefor, pay all costs in connection
therewith and furnish ENGINEER the required certificates
of inspection, testing or approval. CONTRACTOR shall also

be responsible for and shall pay all costs in connection with
any inspection or testing required in connection with OWN-
ER's or ENGINEER's acceptance ofa Supplier of materials
or equipment proposed to be incorporated in the Work, or of
materials or equipment submitted for approval prior to CON-
TRACTOR's purchase thereoffor incorporation in the Work.
The cost of all inspections, tests and approvals in addition to
the above which are required by the Contract Documents
shall be paid by OWNER (unless otherwise specified).
13.5. All inspections, tests or approvals other than those
required by Laws or Regulations of any public body having
jurisdiction shall be performed by organizations acceptable
to OWNER and CONTRACTOR (or by ENGINEER if so
specified).
13.6. If any Work (including the work of others) that is
to be inspected, tested or approved is covered without written
concurrence of ENGINEER, it must, if requested by ENGI-
NEER, be uncovered for observation. Such uncovering shall
be at CONTRACTOR's expense unless CONTRACTOR has
given ENGINEER timely notice of CONTRACTOR's inten-
tion to cover the same and ENGINEER has not acted with
reasonable promptness in response to such notice.
13.7. Neither observations by ENGINEER nor inspec-
tions, tests or approvals by others shall relieve CONTRAC-
TOR from CONTRACTOR's obligations to perform the Work
in accordance with the Contract Documents.
Uncovering Work:
13.8. If any Work is covered contrary to the written request
of ENGINEER, it must, if requested by ENGINEER, be
uncovered for ENGINEER's observation and replaced at
CONTRACTOR's expense.
13.9. If ENGINEER considers it necessary or advisable
that covered Work be observed by ENGINEER or inspected
or tested by others, CONTRACTOR, at ENGINEER's
request, shall uncover, expose or otherwise make available
for observation, inspection or testing as ENGINEER may
require, that portion of the Work in question, furnishing all
necessary labor, material and equipment. If it is found that
such Work is defective. CONTRACTOR shall.bear all direct,
indirect and consequential costs of such uncovering, expo-
sure, observation, inspection and testing and of satisfactory
reconstruction, (including but not limited to fees and charges
of engineers, architects, attorneys and other professionals),
and OWNER shall be entitled to an appropriate decrease in
the Contract Price, and, if the parties are unable to agree as
to the amount thereof, may make a claim therefor as provided
in Article II. If, however, such Work is not found to be
defective. CONTRACTOR shall be allowed an increase in
the Contract Price or an extension of the Contract Time, or
both, directly attributable to such uncovering, exposure,
observation. inspection. testing and reconstruction; and, if
the parties are unable to agree as to the amount or extent
25
APPENDIX 5 257
thereof, CONTRACTOR may make a claim therefor as pro-
vided in Articles 11 and 12.
Owner May Stop the Work:
13.10. If the Work is defective. or CONTRACTOR fails
to supply sufficient skilled workers or suitable materials or
equipment, or fails to furnish or perform the Work in such a
way that the completed Work will conform to the Contract
Documents, OWNER may order CONTRACTOR to stop the
Work, or any portion thereof, until the cause for such order
has been eliminated; however, this right of OWNER to stop
the Work shall not give rise to any duty on the part of OWNER
to exercise this right for the benefit of CONTRACTOR or
any other party.
Correction or Removal of Defective Work:
13.11. If required by ENGINEER, CONTRACTOR shall
promptly, as directed, either correct all defective Work,
whether or not fabricated, installed or completed, or, if the
Work has been rejected by ENGINEER, remove it from the
site and replace it with nondefective Work. CONTRACTOR
shall bear all direct, indirect and consequential costs of such
correction or removal (including but not limited to fees and
charges of engineers, architects, attorneys and other profes-
sionals) made necessary thereby.
One Year Correction Period:
13.12. If within one year after the date of Substantial
Completion or such longer period of time as may be pre-
scribed by Laws or Regulations or by the terms of any appli-
cable special guarantee required by the Contract Documents
or by any specific provision of the Contract Documents, any
Work is found to be defective. CONTRACTOR shall promptly,
without cost to OWNER and in accordance with OWNER's
written instructions, either correct such defective Work, or,
if it has been rejected by OWNER, remove it from the site
and replace it with nondefective Work. If CONTRACTOR
does not promptly comply with the terms of such instructions,
or in an emergency where delay would cause serious risk of
loss or damage, OWNER may have the defective Work cor-
rected or the rejected Work removed and replaced, and all
direct, indirect and consequential costs of such removal and
replacement (including but not limited to fees and charges of
engineers, architects, attorneys and other professionals) will
be paid by CONTRACTOR. In special circumstances where
a partiCUlar item of equipment is placed in continuous service
before Substantial Completion of all the Work, the correction
period for that item may start to run from an earlier date if
so provided in the Specifications or by Written Amendment.
Acceptance of Defective Work:
13.13. If, instead of requiring correction or removal and
replacement of defective Work, OWNER (and, prior to
ENGINEER's recommendation of final payment, also
ENGINEER) prefers to accept it, OWNER may do so. CON-
TRACTOR shall bear all direct, indirect and consequential
 258 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
costs attributable to OWNER's evaluation of and determi-
nation to accept such defective Work (such costs to be approved
by ENGINEER as to reasonableness and to include but not
be limited to fees and charges of engineers, architects, attor-
neys and other professionals). If any such acceptance occurs
prior to ENGINEER's recommendation of final payment, a
Change Order will be issued incorporating the necessary revi-
sions in the Contract Documents with respect to the Work;
and OWNER shall be entitled to an appropriate decrease in
the Contract Price, and, if the parties are unable to agree as
to the amount thereof, OWNER may make a claim therefor
as provided in Article II. If the acceptance occurs after such
recommendation, an appropriate amount will be paid by
CONTRACTOR to OWNER.
OWNER May Co"ect Defective Work:
13.14. If CONTRACTOR fails within a reasonable time
after written notice of ENGINEER to proceed to correct and
to correct defective Work or to remove and replace rejected
Work as required by ENGINEER in accordance with para-
graph 13 .11, or if CONTRACTOR fails to perform the Work
in accordance with the Contract Documents, or if CON-
TRACTOR fails to comply with any other provision of the
. Contract Documents, OWNER may, after seven days' writ-
ten notice to CONTRACTOR, correct and remedy any such
deficiency. In exercising the rights and remedies under this
paragraph OWNER shall proceed expeditiously. To the extent
necessary to complete corrective and remedial action, OWNER
may exclude CONTRACTOR from all or part of the site, take
possession of all or part of the Work, and suspend CON-
TRACTOR's services related thereto, take possession of
CONTRACTOR's tools, appliances, construction equipment
and machinery at the site and incorporate in the Work all
materials and equipment stored at the site or for which OWNER
has paid CONTRACTOR but which are stored elsewhere.
CONTRACTOR shall allow OWNER, OWNER's represen-
tatives, agents and employees such access to the site as may
be necessary to enable OWNER to exercise the rights and
remedies under this paragraph. All direct, indirect and con-
sequential costs of OWNER in exercising such rights and
remedies will be charged against CONTRACTOR in an amount
approved as to reasonableness by ENGINEER, and a Change
Order will be issued incorporating the necessary revisions in
the Contract Documents with respect to the Work; and
OWNER shall be entitled to an appropriate decrease in the
Contract Price, and, if the parties are unable to agree as to
the amount thereof, OWNER may make a claim therefor as
provided in Article II. Such direct, indirect and consequen-
tial costs will include but not be limited to fees and charges
of engineers, architects, attorneys and other professionals,
all court and arbitration costs and all costs of repair and
replacement of work of others destroyed or damaged by
correction, removal or replacement of CONTRACTOR's
defective Work. CONTRACTOR shall not be allowed an
extension of the Contract Time because of any delay in per-
formance ofthe Work attributable to the exercise by OWNER
of OWNER's rights and remedies hereunder.
26
ARTICLE 14-PAYMENTS TO CONTRACTOR AND
COMPLETION
Schedule of Values:
14.1. The schedule of values established as provided in
paragraph 2.9 will serve as the basis for progress payments
and will be incorporated into a form of Application for Pay-
ment acceptable to ENGINEER. Progress payments on
account of Unit Price Work will be based on the number of
units completed.
Application for Progress Payment:
14.2. At least twenty days before each progress payment
is scheduled (but not more often than once a month), CON-
TRACTOR shall submit to ENGINEER for review an Appli-
cation for Payment filled out and signed by CONTRACTOR
covering the Work completed as of the date of the Application
and accompanied by such supporting documentation as is
required by the Contract Documents. If payment is requested
on the basis of materials and equipment not incorporated in
the Work but delivered and suitably stored at the site or at
another location agreed to in writing, the Application for
Payment shall also be accompanied by a bill of sale, invoice
or other documentation warranting that OWNER has received
the materials and equipment free and clear of all liens, charges,
security interests and encumbrances (which are hereinafter
in these General Conditions referred to as "Liens") and
evidence that the materials and equipment are covered by
appropriate property insurance and other arrangements to
protect OWNER's interest therein, all of which will be sat-
isfactory to OWNER. The amount of retainage with respect
to progress payments will be as stipulated in the Agreement.
CONTRACTOR's Warranty of Tille:
14.3. CONTRACTOR warrants and guarantees that title
to all Work, materials and equipment covered by any Appli-
cation for Payment, whether incorporated in the Project or
not, will pass to OWNER no later than the time of payment
free and clear of all Liens.
Review of Applications for Progress Payment:
14.4. ENGINEER will, within ten days after receipt of
each Application for Payment, either indicate in writing a
recommendation of payment and present the Application to
OWNER, or return the Application to CONTRACTOR indi-
cating in writing ENGINEER's reasons for refusing to rec-
ommend payment. In the latter case, CONTRACTOR may
make the necessary corrections and resubmit the Applica-
tion. Ten days after presentation of the Application for Pay-
ment with ENGINEER's recommendation, the amount rec-
ommended will (subject to the provisions of the last sentence
of paragraph 14.7) become due and when due will be paid by
OWNER to CONTRACTOR.
14.5. ENGINEER's recommendation of any payment
requested in an Application for Payment will constitute a

representation by ENGINEER to OWNER, based on ENGI-
NEER's on-site observations of the Work in progress as an
experienced and qualified design professional and on ENGI-
NEER's review of the Application for Payment and the
accompanying data and schedules that the Work has pro-
gressed to the point indicated; that, to the best of ENGI-
NEER's knowledge, information and belief, the quality of
the Work is in accordance with the Contract Documents
(subject to an evaluation of the Work as a functioning whole
prior to or upon Substantial Completion, to the results of any
subsequent tests called for in the Contract Documents, to a
final determination of quantities and classifications for Unit
Price Work under paragraph 9.10, and to any other qualifi-
cations stated in the recommendation); and that CONTRAC-
TOR is entitled to payment of the amount recommended.
However, by recommending any such payment ENGINEER
will not thereby be deemed to have represented that exhaus-
tive or continuous on-site inspections have been made to
check the quality or the quantity of the Work beyond the
responsibilities specifically assigne~ to ENGINEER in the
Contract Documents or that there may not be other matters
or issues between the parties that might entitle CONTRAC-
TOR to be paid additionally by OWNER or OWNER to
withhold payment to CONTRACTOR.
14.6. ENGINEER's recommendation of final payment
will constitute an additional representation by ENGINEER
to OWNER that the conditions precedent to CONTRAC-
TOR's being entitled to final payment as set forth in paragraph
14.13 have been fulfilled.
14.7. ENGINEER may refuse to recommend the whole
or any part of any payment if, in ENGINEER's opinion, it
would be incorrect to make such representations to OWNER.
ENGINEER may also refuse to recommend any such pay-
ment, or, because of subsequently discovered evidence or
the results of subsequent inspections or tests, nullify any such
payment previously recommended, to such extent as may be
necessary in ENGINEER's opinion to protect OWNER from
loss because:
14.7.1. the Work is defective, or completed Work has
been damaged requiring correction or replacement,
14.7.2. the Contract Price has been reduced by Writ-
ten Amendment or Change Order,
14.7.3. OWNER has been required to correct defec-
tive Work or complete Work in accordance with paragraph
13.14, or
14.7.4. of ENGINEER's actual knowledge of the
occurrence of any of the events enumerated in paragraphs
15.2.1 through 15.2.9 inclusive.
OWNER may refuse to make payment of the full amount
recommended by ENGINEER because claims have been
made against OWNER on account of CONTRACTOR's per-
formance or furnishing of the Work or Liens have been filed
in connection with the Work or there are other items entitling
27
APPENDIX 5 259
OWNER to a set-off against the amount recommended, but
OWNER must give CONTRACTOR immediate written notice
(with a copy to ENGINEER) stating the reasons for such
action.
Substantial Completion:
14.8. When CONTRACTOR considers the entire Work
ready for its intended use CONTRACTOR shall notify
OWNER and ENGINEER in writing that the entire Work is
substantially complete (except for items specifically listed by
CONTRACTOR as incomplete) and request that ENGI-
NEER issue a certificate of Substantial Completion. Within
a reasonable time thereafter, OWNER, CONTRACTOR and
ENGINEER shall make an inspection of the Work to deter-
mine the status of completion. If ENGINEER does not con-
sider the Work substantially complete, ENGINEER will notify
CONTRACTOR in writing giving the reasons therefor. If
ENGINEER considers the Work substantially complete,
ENGINEER will prepare and deliver to OWNER a tentative
certificate of Substantial Completion which shall fix the date
of Substantial Completion. There shall be attached to the
certificate a tentative list of items to be completed or cor-
rected before final payment. OWNER shall have seven days
after receipt of the tentative certificate during which to make
written objection to ENGINEER as to any provisions of the
certificate or attached list. If, after considering such objec-
tions, ENGINEER concludes that the Work is not substan-
tially complete, ENGINEER will within fourteen days after
submission of the tentative certificate to OWNER notify
CONTRACTOR in writing, stating the reasons therefor. If,
after consideration of OWNER's objections, ENGINEER
considers the Work substantially complete, ENGINEER will
within said fourteen days execute and deliver to OWNER
and CONTRACTOR a definitive certificate of Substantial
Completion (with a revised tentative list of items to be com-
pleted or corrected) reflecting such changes from the tentative
certificate as ENGINEER believes justified after consider-
ation of any objections from OWNER. At the time of delivery
of the tentative certificate of Substantial Completion ENGI-
NEER will deliver to OWNER and CONTRACTOR a written
recommendation as to division of responsibilities pending
final payment between OWNER and CONTRACTOR with
respect to security, operation, safety, maintenance, heat,
utilities, insurance and warranties. Unless OWNER and
CONTRACTOR agree otherwise in writing and so inform
ENGINEER prior to ENGINEER's issuing the definitive
certificate of Substantial Completion, ENGINEER's afore-
said recommendation will be binding on OWNER and CON-
TRACTOR until final payment.
14.9. OWNER shall have the right to exclude CON-
TRACTOR from the Work after the date of Substantial Com-
pletion, but OWNER shall allow CONTRACTOR reasonable
access to complete or correct items on the tentative list.
Partial UtiliZlllion:
14.10. Use by OWNER of any finished part of the Work,
which has specifically been identified in the Contract Docu-
260 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
ments, or which OWNER, ENGINEER and CONTRAC-
TOR agree constitutes a separately functioning and useable
part of the Work that can be used by OWNER without sig-
nificant interference with CONTRACTOR's performance of
the remainder of the Work, may be accomplished prior to
Substantial Completion of all the Work subject to the follow-
ing:
14.10.1. OWNER at any time may request CON-
TRACTOR in writing to permit OWNER to use any such
part of the Work which OWNER believes to be ready for
its intended use and substantially complete. If CON-
TRACTOR agrees, CONTRACTOR will certify to OWNER
and ENGINEER that said part ofthe Work is substantially
complete and request ENGINEER to issue a certificate of
Substantial Completion for that part of the Work. CON-
TRACTOR at any time may notify OWNER and ENGI-
NEER in writing that CONTRACTOR considers any such
part of the Work ready for its intended use and substan-
tially complete and request ENGINEER to issue a certif-
icate of Substantial Completion for that part of the Work.
Within a reasonable time after either such request, OWNER,
CONTRACTOR and ENGINEER shall make an inspec-
tion of that part of the Work to determine its status of
completion. If ENGINEER does not consider that part of
the Work to be substantially complete, ENGINEER will
notify OWNER and CONTRACTOR in writing giving the
reasons therefor. If ENGINEER considers that part of the
Work to be substantially complete, the provisions of para-
graphs 14.8 and 14.9 will apply with respect to certification
of Substantial Completion of that part of the Work and the
division of responsibility in respect thereof and access
thereto.
14.10.2. OWNER may at any time request CON-
TRACTOR in writing to permit OWNER to take over
operation of any such part of the Work although it is not
substantially complete. A copy of such request will be
sent to ENGINEER and within a reasonable time there-
after OWNER, CONTRACTOR and ENGINEER shall
make an inspection of that part of the Work to determine
its status of completion and will prepare a list of the items
remaining to be completed or corrected thereon before
final payment. If CONTRACTOR does not object in writ-
ing to OWNER and ENGINEER that such part of the
Work is not ready for separate operation by OWNER,
ENGINEER will finalize the list of items to be completed
or corrected and will deliver such list to OWNER and
CONTRACTOR together with a written recommendation
as to the division of responsibilities pending final payment
between OWNER and CONTRACTOR with respect to
security, operation, safety, maintenance, utilities, insur-
ance, warranties and guarantees for that part of the Work
which will become binding upon OWNER and CON-
TRACTOR at the time when OWNER takes over such
operation (unless they shall have otherwise agreed in writ-
ing and so informed ENGINEER). During such operation
and prior to Substantial Completion of such part of the
Work, OWNER shall allow CONTRACTOR reasonable
.access to complete or correct items on said list and to
complete other related Work.
28
14.10.3. No occupancy or separate operation of part
of the Work will be accomplished prior to compliance with
the requirements of paragraph 5.15 in respect of property
insurance.
Final Inspection:
14.11. Upon written notice from CONTRACTOR that the
entire Work or an agreed portion thereof is complete, ENGI-
NEER will make a final inspection with OWNER and CON-
TRACTOR and will notify CONTRACTOR in writing of all
particulars in which this inspection reveals that the Work is
incomplete or defective. CONTRACTOR shall immediately
take such measures as are necessary to remedy such defi-
ciencies.
Final Application for Payment:
14.12. After CONTRACTOR has completed all such cor-
rections to the satisfaction of ENGINEER and delivered all
maintenance and operating instructions, schedules, guaran-
tees, Bonds, certificates of inspection, marked-up record
documents (as provided in paragraph 6.19) and other docu-
ments-all as required by the Contract Documents, and after
ENGINEER has indicated that the Work is acceptable (sub-
ject to the provisions of paragraph 14.16), CONTRACTOR
may make application for final payment following the pro-
cedure for progress payments. The final Application for Pay-
ment shall be accompanied by all documentation called for
in the Contract Documents, together with complete and legally
effective releases or waivers (satisfactory to OWNER) of all
Liens arising out of or filed in connection with the Work. In
lieu thereof and as approved by OWNER, CONTRACTOR
may furnish receipts or releases in full; an affidavit of CON-
TRACTOR that the releases and receipts include all labor,
services, material and equipment for which a Lien could be
filed, and that all payrolls, material and equipment bills, and
other indebtedness connected with the Work for which
OWNER or OWNER's property might in any way be respon-
sible, have been paid or otherwise satisfied; and consent of
the surety, if any, to final payment. If any Subcontractor or
Supplier fails to furnish a release or receipt in full, CON-
TRACTOR may furnish a Bond or other collateral satisfac-
tory to OWNER to indemnify OWNER against any Lien.
Final Payment and Acceptance:
14.13. If, on the basis of ENGINEER's observation_of
the Work during construction and final inspection, and
ENGINEER's review of the final Application for Payment
and accompanying documentation-all as required by the
Contract Documents, ENGINEER is satisfied that the Work
has been completed and CONTRACTOR's other obligations
under the Contract Documents have been fulfilled, ENGI-
NEER will, within ten days after receipt of the final Appli-
cation for Payment, indicate in writing ENGINEER's rec-
ommendation of payment and present the Application to
OWNER for payment. Thereupon ENGINEER will give
written notice to OWNER and CONTRACTOR that the Work
is acceptable subject to the provisions of paragraph 14.16.

Otherwise, ENGINEER will return the Application to CON-
TRACTOR, indicating in writing the reasons for refusing to
recommend final payment, in which case CONTRACTOR
shall make the necessary corrections and resubmit the Appli-
cation. Thirty days after presentation to OWNER of the
Application and accompanying documentation, in appropri-
ate form and substance, and with ENGINEER's recommen-
dation and notice of acceptability, the amount recommended
by ENGINEER will become due and will be paid by OWNER
to CONTRACTOR.
14.14. If, through no fault of CONTRACTOR, final com-
pletion of the Work is significantly delayed and if ENGI-
NEER so confirms, OWNER shall, upon receipt of CON-
TRACTOR's final Application for Payment and recommen-
dation of ENGINEER, and without terminating the Agree-
ment, make payment of the balance due for that portion of
the Work fully completed and accepted. If the remaining
balance to be held by OWNER for Work not fully completed
or corrected is less than the retainage stipulated in the Agree-
ment, and if Bonds have been furnished as required in para-
graph 5.1, the written consent of the surety to the payment
of the balance due for that portion of the Work fully com-
pleted and accepted shall be submitted by CONTRACTOR
to ENGINEER with the Application for such payment. Such
payment shall be made under the terms and conditions gov-
erning final payment, except that it shall not constitute a
waiver of claims.
Contractor's Continuing Obligation:
14.15. CONTRACTOR's obligation to perform and com-
plete the Work in accordance with the Contract Documents
shall be absolute. Neither recommendation of any progress
or final payment by ENGINEER, nor the issuance of a cer-
tificate of Substantial Completion, nor any payment by
OWNER to CONTRACTOR under the Contract Documents,
nor any use or occupancy of the Work or any part thereof by
OWNER, nor any act of acceptance by OWNER nor any
failure to do so, nor any review and approval of a Shop
Drawing or sample submission, nor the issuance of a notice
of acceptability by ENGINEER pursuant to paragraph 14.13,
nor any correction of defective Work by OWNER will con-
stitute an acceptance of Work not in accordance with the
Contract Documents or a release of CONTRACTOR's obli-
gation to perform the Work in accordance with the Contract
Documents (except as provided in paragraph 14.16).
Waiver of Claims:
14.16. The making and acceptance of final payment will
constitute:
14.16.1. a waiver of all claims by OWNER against
CONTRACTOR, except claims arising from unsettled
Liens, from defective Work appearing after final inspec-
tion pursuant to paragraph 14.11 or from failure to comply
with the Contract Documents or the terms of any special
guarantees specified therein; however, it will not consti-
tute a waiver by OWNER of any rights in respect of
29
APPENDIX 5 261
CONTRACTOR's continuing obligations under the Con-
tract Documents; and
14.16.2. a waiver of all claims by CONTRACTOR
against OWNER other than those previously made in writ-
ing and still unsettled.
ARTICLE IS-SUSPENSION OF WORK AND
TERMINATION
Owner May Suspend Work:
15.1. OWNER may, at any time and without cause, sus-
pend the Work or any portion thereoffor a period of not more
than ninety days by notice in writing to CONTRACTOR and
ENGINEER which will fix the date on which Work will be
resumed. CONTRACTOR shall resume the Work on the date
so fixed. CONTRACTOR shall be allowed an increase in the
Contract Price or an extension of the Contract Time, or both,
directly attributable to any suspension if CONTRACTOR
makes an approved claim therefor as provided in Articles II
and 12.
Owner May Terminate:
15.2. Upon the occurrence of anyone or more of the
following events:
15.2.1. if CONTRACTOR commences a voluntary case
under any chapter of the Bankruptcy Code (Title 11, United
States Code), as now or hereafter in effect, or if CON-
TRACTOR takes any equivalent or similar action by filing
a petition or otherwise under any other federal or state
law in effect at such time relating to the bankruptcy or
insolvency;
15.2.2. if a petition is filed against CONTRACTOR
under any chapter of the Bankruptcy Code as now or
hereafter in effect at the time of filing, or if a petition is
filed seeking any such equivalent or similar relief against
CONTRACTOR under any other federal or state law in
effect at the time relating to bankruptcy or insolvency;
15.2.3. if CONTRACTOR makes a general assignment
for the benefit of creditors;
15.2.4. if a trustee, receiver, custodian or agent of
CONTRACTOR is appointed under applicable law or under
contract, whose appointment or authority to take charge
of property of CONTRACTOR is for the purpose of
enforcing a Lien against such property or for the purpose
of general administration of such property for the benefit
of CONTRACTOR's creditors;
15.2.5. if CONTRACTOR admits in writing an inabil-
ity to pay its debts generally as they become due;
15.2.6. if CONTRACTOR persistently fails to perform
the Work in accordance with the Contract Documents
262 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS
(including, but not limited to, failure to supply sufficient
skilled workers or suitable materials or equipment or
failure to adhere to the progress schedule established under
paragraph 2.9 as revised from time to time);
15.2.7. if CONTRACTOR disregards Laws or Regu-
lations of any public body having jurisdiction;
15.2 ..8. if CONTRACTOR disregards the authority of
ENGINEER; or
15.2.9. if CONTRACTOR otherwise violates in any
substantial way any provisions of the Contract Docu-
ments;
OWNER may, after giving CONTRACTOR (and the surety,
if there be one) seven days' written notice and to the extent
permitted by Laws and Regulations, terminate the services
of CONTRACTOR, exclude CONTRACTOR from the site
and take possession of the Work and of all CONTRACTOR's
tools, appliances, construction equipment and machinery at
the site and use the same to the full extent they could be used
by CONTRACTOR (without liability to CONTRACTOR for
trespass or conversion), incorporate in the Work all materials
and equipment stored at the site or for which OWNER has
paid CONTRACTOR but which are stored elsewhere, and
finish the Work as OWNER may deem expedient. In such
case CONTRACTOR shall not be entitled to receive any
further payment until the Work is finished. If the unpaid
balance ofthe Contract Price exceeds the direct, indirect and
consequential costs of completing the Work (including but
not limited to fees and charges of engineers, architects, attor-
neys and other professionals and court and arbitration costs)
such excess will be paid to CONTRACTOR. If such costs
exceed such unpaid balance, CONTRACTOR shall pay the
difference to OWNER. Such costs incurred by OWNER will
be approved as to reasonableness by ENGINEER and incor-
porated in a Change Order, but when exercising any rights
or remedies under this paragraph OWNER shall not be required
to obtain the lowest price for the Work performed.
[The remainder of this page was left blank intentionally.]
30
15.3. Where CONTRACTOR's services have been so
terminated by OWNER, the termination will not affect any
rights or remedies of OWNER against CONTRACTOR then
existing or which may thereafter accrue. Any retention or
payment of moneys due CONTRACTOR by OWNER will
not release CONTRACTOR from liability.
15.4. Upon seven days' written notice to CONTRAC-
TOR and ENGINEER, OWNER may, without cause and
without prejudice to any other right or remedy, elect to aban-
don the Work and terminate the Agreement. In such case,
CONTRACTOR shall be paid for all Work executed and any
expense sustained plus reasonable termination expenses, which
will include, but not be limited to, direct, indirect and con-
sequential costs (including, but not limited to, fees and charges
of engineers, architects, attorneys and other professionals
and court and arbitration costs).
Contractor May Stop Work or Terminate:
15.5. If, through no act or fault of CONTRACTOR, the
Work is suspended for a period of more than ninety days by
OWNER or under an order of court or other public authority,
or ENGINEER fails to act on any Application for Payment
within thirty days after it is submitted, or OWNER fails for
thirty days to pay CONTRACTOR any sum finally deter-
mined to be due, then CONTRACTOR may, upon seven
days' written notice to OWNER and ENGINEER, terminate
the Agreement and recover from OWNER payment for all
Work executed and any expense sustained plus reasonable
termination expenses. In addition and in lieu of terminating
the Agreement, if ENGINEER has failed to act on an Appli-
cation for Payment or OWNER has failed to make any pay-
ment as aforesaid, CONTRACTOR may upon seven days'
written notice to OWNER and ENGINEER stop the Work
until payment of all amounts then due. The provisions of this
paragraph shall not relieve CONTRACTOR of the obligations
under paragraph 6.29 to carry on the Work in accordance
with the progress schedule and without delay during disputes
and disagreements with OWNER.

ARTICLE I6-ARBITRATION
16.1. All claims, disputes and other matters in question
between OWNER and CONTRACTOR arising out of, or
relating to the Contract Documents or the breach thereof
(except for claims which have been waived by the making or
acceptance of final payment as provided by paragraph 14.16)
will be decided by arbitration in accordance with the Con-
struction Industry Arbitration Rules of the American Arbi-
tration Association then obtaining subject to the limitations
of this Article 16. This agreement so to arbitrate and any
other agreement or consent to arbitrate entered into in accor-
dance herewith as provided in this Article 16 will be specifi-
cally enforceable under the prevailing law of any court having
jurisdiction.
16.2. No demand for arbitration of any claim, dispute or
other matter that is required to be referred to ENGINEER
initially for decision in accordance with paragraph 9.11 will
be made until the earlier of (a) the date on which ENGINEER
has rendered a decision or (b) the tenth day after the parties
have presented their evidence to ENGINEER if a written
decision has not been rendered by ENGINEER before that
date. No demand for arbitration of any such claim, dispute
or other matter will be made later than thirty days after the
date on which ENGINEER has rendered a written decision
in respect thereof in accordance with paragraph 9.11; and the
failure to demand arbitration within said thirty days' period
shall result in ENGINEER's decision being final and binding
upon OWNER and CONTRACTOR. If ENGINEER renders
a decision after arbitration proceedings have been initiated,
such decision may be entered as evidence but will not supersede
the arbitration proceedings, except where the decision is
acceptable to the parties concerned. No demand for arbitra-
tion of any written decision of ENGINEER rendered in
accordance with paragraph 9.10 will be made later than ten
days after the party making such demand has delivered writ-
ten notice of intention to appeal as provided in paragraph
9.10.
16.3. Notice of the demand for arbitration will be filed in
writing with the other party to the Agreement and with the
[The remainder of this page was left blank intentionally.J
31
APPENDIX 5 263
American Arbitration Association, and a copy will be sent to
ENGINEER for information. The demand for arbitration will
be made within the thirty-day or ten-day period specified in
paragraph 16.2 as applicable, and in all other cases within a
reasonable time after the claim, dispute or other matter in
question has arisen, and in no event shall any such demand
be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limi-
tations.
16.4. No arbitration arising out of or relating to the Con-
tract Documents shall include by consolidation, joinder or in
any other manner any other person or entity (including
ENGINEER, ENGINEER's agents, employees or consul-
tants) who is not a party to this contract unless:
16.4.1. the inclusion of such other person or entity is
necessary if complete relief is to be afforded among those
who are already parties to the arbitration,
16.4.2. such other person or entity is substantially
involved in a question of law or fact which is common to
those who are already parties to the arbitration and which
will arise in such proceedings, and
16.4.3. the written consent of the other person or entity
sought to be included and of OWNER and CONTRAC-
TOR has been obtained for such inclusion, which consent
shall make specific reference to this paragraph; but no
such consent shall constitute consent to arbitration of any
dispute not specifically described in such consent or to
arbitration with any party not specifically identified in such
consent.
16.5. The award rendered by the arbitrators will be final,
judgment may be entered upon it in any court having juris-
diction thereof, and will not be subject to modification or
appeal except to the extent permitted by Sections 10 and II
of the Federal Arbitration Act (9 U.S.C. §§10,11).

ARTICLE 17-MISCELLANEOUS
Giving Notice:
17.1. Whenever any provision of the Contract Docu-
ments requires the giving of written notice, it will be deemed
to have been validly given if delivered in person to the indi-
vidual or to a member of the firm or to an officer of the
corporation for whom it is intended, or if delivered at or sent
by registered or certified mail, postage prepaid, to the last
business address known to the giver of the notice.
Computation of Time:
17.2.1. When any period of time is referred to in the
Contract Documents by days, it will be computed to exclude
the first and include the last day of such period. If the last
day of any such period falls on a Saturday or Sunday or
on a day made a legal holiday by the law of the applicable
jurisdiction, such day will be omitted from the computa-
tion.
17.2.2. A calendar day oftwenty-four hours measured
from midnight to the next midnight shall constitute a day.
General:
17.3. Should OWNER or CONTRACTOR suffer injury
or damage to person or property because of any error, omis-
33
APPENDIX 5 265
sion or act of the other party or of any of the other party's
employees or agents or others for whose acts the other party
is legally liable, claim will be made in writing to the other
party within a reasonable time of the first observance of such
injury or damage. The provisions of this paragraph 17.3 shall
not be construed as a substitute for or a waiver of the pro-
visions of any applicable statute of limitations or repose.
17.4. The duties and obligations imposed by these Gen-
eral Conditions and the rights and remedies available here-
under to the parties hereto, and, in particular but without
limitation, the warranties, guarantees and obligations imposed
upon CONTRACTOR by paragraphs 6.30, 13.1, 13.12, 13.14,
14.3 and 15.2 and all of the rights and remedies available to
OWNER and ENGINEER thereunder, are in addition to,
and are not to be construed in any way as a limitation of, any
rights and remedies available to any or all of them which are
otherwise imposed or available by Laws or Regulations, by
special warranty or guarantee or by other provisions of the
Contract Documents, and the provisions of this paragraph
will be as effective as if repeated specifically in the Contract
Documents in connection with each particular duty, obliga-
tion, right and remedy to which they apply. All representa-
tions, warranties and guarantees made in the Contract Doc-
uments will survive final payment and termination or com-
pletion of the Agreement.
 This document has important legal consequences; consultation with an attorney is encouraged with
respect to its completion or modification.

GUIDE
TO THE

PREPARATION OF
SUPPLEMENTARY CONDITIONS

Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly by

NATIONAL
'>O(lfTY Of
PROff'>'>IONAl
fNGINffil'>
'(xJlOiD ":\A

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

This document has been approved and endorsed by

The Associated General Contractors of America

EJeDe No. 1910-17 (1983 Edition)

267
268 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

C>1983 National Society of Professional Engineers

2029 K Street, N.W., Washington, DC 20006

American Consulting Engineers Council

1015 15th Street, N.W., Washington, DC 20005

American Society of Civil Engineers

345 East 47th Street, New York, NY 10017

Construction Specifications Institute

601 Madison Street, Alexandria, VA 22314
 APPENDIX 6 269

TABLE OF CONTENTS
Page Page
I. Introduction .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . I SC-5.15. Partial Utilization.......... ...... 16
A. Relationship of Supplementary SC-6.3. Labor, Materials and Equipment 16
Conditions to Other Contract SC-6.5. Quality and Installation of
Documents ........................... I Materials and Equipment ..... . 16
B. Arrangement of Subject Matter......... 2 SC-6.7. Substitute or "Or-Equal"
C. Use of this Guide ....................... 2 Items ......................... . 16
D. Bibliography............................ 3 SC-6.S-6.9. Concerning Subcontractors,
Suppliers and Others. .. .. .... 16
II. Standard Language for Supplementary SC-6.13. Permits.......................... 17
Conditions ............................... 5 SC-6.14. Laws and Regulations............ IS
A. Table of Contents. . . . . . . . . . . . . . . . . . . . . . . 5 SC-6.15. Sales Taxes...................... IS
B. Caption and Introductory Statement .... 5 SC-6.20. Safety ........................... IS
C. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . 5 SC-6.23-6.2S. Shop Drawings and Samples IS
D. Complete Paragraph Change............ 5 SC-6.30-6.32. Indemnification.............. 19
E. Change within a Paragraph . . . . . . . . . . . . . . 5 SC-6.33. Assignment of Procurement
F. Additional Language . . . . . . . . . . . . . . . . . . . . 6 Contracts from Owner to
G. Additional Paragraph ................... 6 Contractor . . . . . . . . . . . . . . . . . . . . . 19
H. General................................. 6 SC-7.1-7.2. Related Work at the Site....... 19
SC-7.4. Coordination..................... 19
III. Specific Comments ......................... 7 SC-7.5. Separate Contractor Claims...... 20
SC-1. Definitions ....................... 7 SC-S. Owner's Responsibilities......... 21
SC-2.1. Delivery of Bonds ............... S SC-9. Engineer's Status................ 21
SC-2.2. Copies of Documents ............ S SC-9.3. Project Representation........... 21
SC-2.3. Commencement of Contract SC-9.1O. Determinations for Unit Prices... 22
Time; Notice to Proceed....... S SC-9.11. Decisions on Disputes ........... 22
SC-2.6. Preliminary Schedules ........... S SC-I1.2. Change of Contract Price ........ 22
SC-2.7. Exchange ofInsurance Data ..... S SC-II.4-11.6. Cost of Work ................ 22
SC-2.S. Preconstruction Conference, etc. S SC-II.S. Cash Allowances ................ 22
SC-2.9. Finalizing Schedules............. 9 SC-II.9. Unit Price Work................. 23
SC-3.2. Intent of Documents............. 9 SC-12.1. Change of Contract Time ........ 23
SC-4.1. Availability of Lands, etc. ....... 9 SC-13.4-13.5. Tests and Inspections........ 24
SC-4.2-4.3. Physical Conditions............ 9 SC-13.12. Special Guarantees .............. 24
SC-5.1. Performance and Other Bonds ... II SC-14. Provisions Concerning Payment 24
SC-5.3. Contractor's Liability Insurance II SC-14.1. Schedules........................ 24
SC-5.4. Contractual Endorsement........ 13 SC-14.2. Application for Progress Payment 24
SC-5.5. Owner's Liability Insurance...... 13 SC-14.4-14.7. Review of Applications for
SC-5.6. Property Insurance .............. 13 Progress Payment ......... 25
SC-5.7. Boiler, Machinery and Other SC-14.8-14.9. Substantial Completion ...... 25
Property Insurance ............ 15 SC-14.1O. Partial Utilization ................ 25
SC-5.9. Deductible Provisions............ 15 SC-14.12. Final Application for Payment ... 25
SC-5.11. Waiver of Rights..... .. .......... 15 SC-14.13. Final Payment and Acceptance... 26
SC-5.12. Receipt and Application of SC-16. Arbitration....................... 26
Proceeds ...................... 15
SC-5.l4. Acceptance of Insurance......... 16 IV. Additional Comments ...................... 27
270 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

I. Introduction

A. Relationship of Supplementary Conditions to Other Contract Documents

No two construction projects are the same. Owners, such as institutional clients or governmental bodies,
have their own special requirements. Legal requirements applicable to the Work vary by locality. The character
of differing project requirements calls for different documentation. Standard forms for use as standard contract
documents have been prepared by the Engineers' Joint Contract Documents Committee, which is referred to
herein as the "EJCDC". The more important of these forms are:

-Guide to the Preparation of Instructions to Bidders, No. 1910-12 (1983 ed.), herein referred to as the
"Instructions" ;
-Suggested Bid Form and Commentary for Use, No. 1910-18 (1983 ed.), herein referred to as the "Bid
Form";
-Standard Form of Agreement between Owner and Contractor on the Basis of a Stipulated Price, No.
191O-8-A-l (1983 ed.), herein referred to as the "Agreement" or the "Stipulated Price Agreement";
-Standard Form of Agreement between Owner and Contractor on the Basis of Cost-Plus, No. 1910-8-
A-2 (1983 ed.), herein referred to as the "Agreement" or the "Cost-Plus Agreement"; and
-Standard General Conditions of the Construction Contract, No. 1910-8 (1983 ed.), herein referred to
as the "General Conditions" .

However, the standard documents usually need to be amended or supplemented for specific adaptation to
each project. Where the amending or supplementing language should best appear in the Contract Documents
is discussed in the Uniform Location of Subject Matter jointly issued by the American Consulting Engineers
Council, American Society of Civil Engineers, American Institute of Architects, Construction Specifications
Institute and National Society of Professional Engineers (Document No. 1910-16). This is generally referred
to as the "Locator Guide". It is the purpose of this Guide to the Preparation of Supplementary Conditions
to discuss and give suggestions for the preparation of Supplementary Conditions following the concepts of
the Locator Guide. Attention is also directed to the EJCDC's recently issued set offour standard Procurement
Documents that may be used when an Owner purchases materials or equipment directly from the provider
for use on an Engineer-designed project. These Procurement Documents are itemized in the Bibliography in
paragraph I D below.
This Guide and the other Contract Documents prepared and issued by the EJCDC assume acceptance of the
Project Manual concept of the Construction Specifications Institute which provides for an organizational
format for location of all bound documentary information for a construction project: namely, Bidding Require-
ments, Contract Forms, Bonds and Certificates, Conditions of the Contract, and Specifications. The last
grouping, Specifications, are divided into 16 Divisions, the first of which, Division 1, is entitled "General
Requirements of the Specifications" and is referred to herein as the "General Requirements". The Project
Manual concept is explained in the Manual of Practice issued by the Construction Specifications Institute.
The Supplementary Conditions is one of the Contract Documents; the others include the Agreement, the
General Conditions, the Drawings and the Specifications (General Requirements and Divisions 2-16). The
term "Contract Documents" is defined in Article 1 of the General Conditions. The Bidding Requirements are
not considered part of the Contract Documents because much of their substance pertains to the relationships
prior to the award of the contract and have little effect or impact thereafter and because many contracts are
awarded without going through the bidding process. In some cases, however, the actual bid may be attached
as an exhibit to the Agreement to avoid extensive retyping. As used in this Guide, the term "Bidding
Requirements" refers to the Advertisement or Invitation to Bid, the Instructions and to any bid form that
may be suggested or prescribed, all of which provide information and guidance for all bidders, but those terms
do not refer also to the Contract Documents that may be included in the Bidding Documents, which are the
documents to be signed by Owner and the successful bidder and will govern the performance of the Work
and completion of the project. (The term "Bidding Documents", which is defined in the Instructions, includes
both the Bidding Requirements and the Contract Documents).

1
 APPENDIX 6 271

Basic information as to time, price, retainage and description of the project should appear in the Agreement,
and the fundamental provisions affecting the rights and duties of the parties which are typical of most projects
should appear in the General Conditions. Supplements to and amendments of the General Conditions should
appear in the Supplementary Conditions or General Requirements as indicated in the Locator Guide.
In general, the General Requirements should contain all general requirements of construction specifications,
those provisions which are work related, pertain to the performance of the Work, are strictly administrative
or procedural in nature, or have a common application to other divisions of the Specifications. Language to
modify the fundamental relationships between the parties or to supplement the framework set forth in the
General Conditions or to change the language of the General Conditions should appear in the Supplementary
Conditions. Examples of the latter are a change in the definition of Substantial Completion or supplemental
language dealing with the details of insurance coverages. The substance of the General Requirements falls
generally into three categories: (i) administrative requirements, such as summary of work, allowances,
coordination, alternatives (materials, equipment or price), substitution and product options, project meetings
and project close-out; (ii) work-related provisions, such as temporary facilities, cutting and patching and
cleaning; and (iii) general provisions applicable to more than one section, such as general stipulations regarding
equipment.

B. Arrangement of Subject Matter

This Guide is arranged in the same order as the paragraphs in the 1983 edition of the General Conditions, and
the paragraphs herein bear comparable numbers to those of the General Conditions but with the prefix "SC".
Where the matter to be discussed pertains to a topic covered in the Instructions, the Bid Form or the
Agreement, reference will be made to the appropriate paragraph numbers of the 1983 editions of those
documents as well as the pertinent paragraph of the General Conditions. Some topics mentioned below are
not dealt with in the General or Supplementary Conditions and these are mentioned at the end of this Guide.
In addition, this Guide will point out the most common places where modification or expansion ofthe General
Conditions is to be handled in the General Requirements rather than the Supplementary Conditions; in such
cases, no references are required in the Supplementary Conditions.
For brevity, paragraph numbers of the General Conditions are referred to herein with the prefix "GC", and
those of the Instructions with the prefix "I".

C. Use of this Guide

There appears below suggested language for some of the paragraphs of the Supplementary Conditions, but
for the most part the topics to be considered are discussed and the drafting of specific language is left to the
preparer of the Contract Documents. In either case, Engineer should bear in mind that most contractual
provisions have important legal consequences. The desirability of consultation with legal counsel before
finalization of any amendment or supplement should not be overlooked.
Many sets of Supplementary Conditions examined by the EJCDC contain typical or "boilerplate" language
that has accumulated like moss over the years and appears to have no legal or practical significance; rather,
it is there because someone saw comparable language in another set and it sounded good. Such language is
not recommended and will not be discussed further in this Guide. Provisions of the Supplementary Conditions
should address a particular point in the other Contract Documents or cover a particular topic. The Supple-
mentary Conditions should not be a repository for general language of vague meaning for which another
location cannot be readily found.
This Guide assumes a general familiarity with the other Contract Documents prepared by the EJeDC, and
when drafting language, specific attention to them is encouraged. Standard documents or prescribed forms of
governmental bodies or other Owners may differ materially from the documents of the EJCDC so that careful
correlation of any amending or supplementing language is essential. The loose practice of stating that any
provision in one document that is inconsistent with another is superseded, or that one document always takes
precedence over another in the event of a conflict in language or requirements, is to be discouraged since the
resulting legal consequences are frequently an hodgepodge and quite different from what was anticipated.

2
272 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

The General Conditions are printed and use carefully chosen language. They set forth the basic responsibilities
of the parties in respect of fundamental matters and legal consequences. Their provisions should be altered
only where mandated by the specific requirements of a given project and the consequences of any modification
thoroughly understood.
A further word of caution about any change in the printed forms. They have been carefully prepared, terms
are used uniformly throughout, their provisions carefully integrated and they are quite dependent on one
another. A change in one document may necessitate a change in another, and a change in one paragraph may
necessitate a change in other language of the same document. No change should be made until its full effect
on the rest of the General Conditions and other Contract Documents has been considered.
Lastly, one should bear in mind that an Engineer is neither qualified nor licensed to give advice to others on
the legal consequences oftheir contracts. All of the Contract Documents have important legal consequences.
Owners should be encouraged to seek the advice of an attorney before accepting any modification of the
printed forms, before the documents are sent out for bidding and most assuredly before signing any agreement.

D. Bibliography
There are several documents to which one may tum for additional assistance in the preparation of Supple-
mentary Conditions. These include:
Uniform Location of Subject Matter Information in Construction Documents, jointly issued by EJCDC (No.
1910-16) and by AlA (No. A521)

EJCDC Publications (1)

-Guide to the Preparation of Instructions to Bidders, No. 1910-12
-Suggested Bid Form and Commentary for Use, No. 1910-18
-Standard Form of Agreement between Owner and Contractor on the Basis of a StipUlated Price, No.
1910-8-A-l
-Standard Form of Agreement between Owner and Contractor on the Basis of Cost-Plus, No. 1910-8-
A-2
-Standard General Conditions of the Construction Contract, No. 1910-8
-Change Order, No. 1910-8-B
-Certificate of Substantial Completion, No. 191O-8-D
-Application for Payment, No. 1910-8-E
-Work Directive Change, No. 1910-8-F
-Guide to the Preparation of Supplementary Conditions, No. 1910-17
-Commentary on Agreements for Engineering Services and Contract Documents, by John R. Clark,
Esq., No. 1910-9
-Engineer's Letter to Owner Requesting Instructions re Bonds and Insurance During Construction,
No. 1910-20
-Owner's Instructions to Engineer re Bonds and Insurance during Construction, No. 1910-21
-Notice of Award, No. 1910-22
-Notice to Proceed, No. 1910-23
-Standard Form of Procurement Agreement Between Owner and Contractor, No. 1910-26-A
-Procurement General Conditions, No. 1910-26-B
-Guide to the Procurement Supplementary Conditions, No. 1910-26-C
-Instructions to Bidders for Procurement Contracts, No. 1910-26-D
-Commentary on Procurement Documents by John R. Clark, Esq., No. 1910-26-E
 APPENDIX 6 273

-Standard Form of Agreement between Owner and Engineer for Professional Services, No. 1910-1
-Suggested Listing of Duties, Responsibilities and Limitations of Authority of Resident Project Rep-
resentative, No. 1910-1-A
-Standard Form of Agreement between Owner and Project Manager for Professional Services, No.
1910-15
-Contract Documents Bibliography, No. 1910-24

CSI Manual of Practice Chapters (2)

MP-I-I Introduction to Construction Documents and the Project Manual
MP-I-2 Bidding Requirements
MP-I-3 Types of Bidding and Contracts
MP-I-5 Conditions of the Contract
MP-I-6 Division I-General Requirements
MP-I-8 Changes to Contract Documents
MP-2-1 MASTERFORMAT-Master List of Section Titles and Numbers

Construction Sciences Research Foundation (CSRF)

Master Guide Specifications (2)
All SPECTEXT Division I Sections

AlA Documents (3)

Recommended Guide for Bidding Procedures and Contract Awards, No. A501; AGC
Document 23
Guide for Supplementary Conditions, No. A511
Architect's Handbook of Professional Practice, No. MI04
-Insurance and Bonds of Suretyship (HBC-B-2)
-General Conditions ofthe Contract for Construction (HBC-D-3)
-Construction Documents-Project Manual (HBC 14)
-Owner-Contractor and Contractor-Subcontractor Agreements (HBC 17)
-Construction Contract Administration (HBC 18)
Owner's Instructions for Bonds and Insurance, No. G610
Certificate of Insurance, No. G705

Other Publications
Insurance for Contractors, by Walter T. Derk, Fifth Edition (1981)
Construction Bonds and Insurance Guide, by Bernard B. Rothschild, FAIA; (1973)

NOTES:
(1) EJCDC publications may be obtained by writing to NSPE headquarters, 2029 K St., N.W., Washington,
DC 20006; ACEC headquarters, 1015 15th St., N.W., Washington, DC 20005; ASCE headquarters, 345
East 47th St., New York, NY 10017; or CSI headquarters, 601 Madison St., Alexandria, VA 22314.
(2) CSI publications may be obtained by writing to CSI headquarters at the above address.
(3) AlA publications may be obtained from most local AlA Chapter offices or by writing to AlA headquarters,
1735 New York Ave., N.W., Washington, DC 20006.

4
274 ENGINEERING SERVICE AND CONSTRUOION CONTRAOS

ll. Standard Language for Supplementary Conditions

Suggested wording for some of the more mechanical portions of the Supplementary Conditions appears below.

A. Table of Contents
The inclusion of a table of contents will be of benefit to the user of the Supplementary Conditions, especially
if additional articles (beyond the seventeen Articles of the General Conditions) are added for the purpose of
including mandated or other provisions as suggested in paragraph IV 3 below.

B. Caption and Introductory Statement

The following is a suggestion for use at the beginning ofthe Supplementary Conditions:

Supplementary Conditions
These Supplementary Conditions amend or supplement the Standard General Conditions of the Con-
struction Contract (No. 1910-8, 1983 ed.) and other provisions of the Contract Documents as indicated
below. All provisions which are not so amended or supplemented remain in full force and effect.

C. Defined Terms
The terms used in the Supplementary Conditions which are defined in the General Conditions should be used
with exactly the same meanings. This is true for all of the Contract Documents. Accordingly, the following
language may be used in the Supplementary Conditions:

SCot.
The terms used in these Supplementary Conditions which are defined in the Standard General Conditions
of the Construction Contract (No. 1910-8, 1983 ed.) have the meanings assigned to them in the General
Conditions.

D. Complete Paragraph Change

When completely superseding a paragraph of the General Conditions, the following language may be used:

SC-S.4.2.
Delete paragraph 5.4.2 of the General Conditions in its entirety and insert the following in its place:_

E. Change within a Paragraph

When changing language within a paragraph of the General Conditions, the following language may be used:

SC-6.2t.4.
Amend the second sentence of paragraph 6.21.4 of the General Conditions to read as follows (or by
striking out the following words):

and as so amended paragraph 6.21.4 remains in effect.

5
 APPENDIX 6 275

F. Additional Language
When adding language to an existing paragraph of the General Conditions, the idea may be expressed as
follows:

SC-9.3.4.
Add the following language at the end of the second sentence of paragraph 9.3.4 of the General
Conditions: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

G. Additional Paragraph
If it is desired to add a new paragraph to the General Conditions, the thought may be expressed as follows:

SC-8.6.4.
Add a new paragraph immediately after paragraph 8.6.3 of the General Conditions which is to read as
follows: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

H. General
Whenever a provision of the General Conditions is amended or supplemented, it is preferred practice, strongly
endorsed by most attorneys, to so indicate at the appropriate place in the General Conditions. If a paragraph
or language within a paragraph is cancelled or superseded, it should be crossed out physically. In addition,
cross reference should be made to the Supplementary Conditions, thus: "See ~SC-8.6.4 of Supplementary
Conditions" or "See Supplementary Conditions". Where space on the printed form does not permit inserting
such language, an asterisk may be used with a footnote at the bottom of the page containing the same
information. The common practice of failing to indicate in the General Conditions those parts that have been
affected by amendments or supplements in the Supplementary Conditions may lead to a misunderstanding of
the full import of a provision of the Supplementary Conditions and of the intent of the parties. In addition to
the introductory statement referred to in paragraph II B above, it is important to employ some means of
alerting the parties whenever a provision of the General Conditions is changed by the Supplementary Con-
ditions. The main point to remember is that it is easier and more economical to make the documents readily
understandable at the outset than to argue about meaning and intent at a later date.

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276 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

ID. Specific Comments

There is set forth below a series of comments for guidance in preparing Supplementary Conditions. These
comments relate to the comparable paragraph numbers of the General Conditions. Where no comment is
pertinent, there is no paragraph, although there will be other points to be considered in each particular project.

SC-l. Definitions
When a term defined in Article 1 of the General Conditions is used in the Supplementary Conditions, it should
be used with the exact same meaning as indicated in Article 1 of the General Conditions, unless a modification
of that definition is provided in the Supplementary Conditions. It is desirable to use solid capitals or initial
capitals as indicated in the General Conditions. The defined word defective is written in italics in the General
Conditions; however, many firms will not have this special printing capability, in which case the word may
be underlined or printed in quotations when used in the Supplementary Conditions or the Specifications.
Where none of these solutions is practicable, special care should be taken that the word defective is used as
it is defined in the General Conditions.
The term "Change Order" is defined to require the recommendation of Engineer (in writing) and is to be
signed by both Owner and Contractor. Some standard forms of General Conditions require Engineer's
signature; others do not require that Contractor sign. The newly defined term "Work Directive Change" does
not require Contractor's signature. This practice may differ from that of some firms in which case a change
of these definitions should be made in SC-l. Before doing so, however, a careful review should be made of
numerous contexts in which the terms "Change Order" and "Work Directive Change" are used in the
Contract Documents. Care should also be taken that when those terms are used in the General Requirements
or Divisions 2-16 they are used as defined.
It may be that the parties do not contemplate giving a Notice of Award or a Notice to Proceed and wish to
eliminate reference to these terms in the General Conditions. Such changes may be accomplished in SC-l.
However, in any such case, all references to the defined term appearing elsewhere in the General Conditions
should be eliminated. The term "Notice to Proceed" is used primarily in GC-2.3 and any change with respect
to it should be accomplished in SC-2.3. The term "Notice of Award" is used primarily in the Instructions,
Bid Form and Agreement; any required corresponding changes should be made directly in those documents
rather than by the Supplementary Conditions.
The term "Subcontractor" is defined to include only those firms and corporations performing part of the
Work at the site and includes various tiers of Subcontractors so long as they are working at the site. The term
"Supplier" is defined as a manufacturer, fabricator, supplier, distributor, materialman or vendor and thus
includes one having a contract to fabricate or manufacture materials or equipment at Suppliers own plant.
Note that some standard forms of General Conditions define Subcontractor to include only firms and corpo-
rations having a direct contract with the prime Contractor to perform work at the site and thus excludes
subcontractors and others working at the site. Before any change is made in the EJCDC's definitions, a careful
review should be made of the various contexts in which the terms "Subcontractor" and "Supplier" are used
in the General Conditions (see index to General Conditions for preliminary guidance, GC-5.6, 5.11, 6.7 and
6.8 and the Instructions).
If the definition of Substantial Completion is to be amended, the change should be made in SC-I; an example
would be when some party in addition to Engineer will be required to sign the definitive Certificate of
Substantial Completion. [Note: this might necessitate further amendments of the General Conditions, as for
instance GC-14.8 which would be accomplished under SC-14.8.] It is frequently desirable to expand the
definition of Substantial Completion to add specific requirements in this regard for a given project or to add
more details to clarify the words "can be utilized for the purpose for which it is intended". If it is necessary
to expand the definition of Substantial Completion, the additional language should appear in SC-14.8. Changes
in the administrative procedures concerning Substantial Completion should appear in the General Require-
ments.

7
 APPENDIX 6 277

The addition of more defined terms for general use in the Contract Documents should also be accomplished
in SCOt. Such definitions might include "Construction Manager", "Project Manager" and "Owner's Site
Representative". Obviously, the addition of any of those terms would necessitate changes throughout the
General Conditions. The word "consultant" has been used in several places (see, for instance, GC-5.6, 5.11
and 6.30), but it is not specifically defined in the documents. If it is desired that the word have special
application to a particular consultant or a professional associate of Engineer or Owner, it would be wise to
include a statement to that effect in the Supplementary Conditions and this may be accomplished by appro-
priately defining the word "Consultant" in SCot which should then be written with an initial capital whenever
used in the Contract Documents.

SC-2.1. Delivery of Bonds

If Contractor will not be required to furnish a Performance or Labor and Material Bond, it may be desirable
to strike out GC-2.1, 5.1 and 5.2. Such changes should be accomplished in SC-2.1, 5.1 and 5.2, and further
changes may be required in GC-IO.5, 14.12 and 14.14 where reference is made to the surety. In addition,
corresponding changes may be required in other Bidding Documents.

SC-2.2. Copies of Documents

If it is desired to change the number of copies of the Contract Documents to be furnished Contractor, this
should be accomplished in SC-2.2.

SC-2.3. Commencement of Contract Time; Notice to Proceed

The printed forms of Instructions, Suggested Bid Form, Agreement and General Conditions establish a
schedule of events from the opening of bids to the date when the Contract Time starts to run. This contemplates
a bid opening on Day 1. The suggested language in 1-10.1 of the Instructions provides that by Day 7 the
apparent Successful Bidder is to submit to Owner a list of all Subcontractors, Suppliers and others who must
be identified for acceptance by Owner and Engineer prior to Notice of Award. The Notice of Award is to be
given to Contractor by Day 45 (see ~1-16.7 and ~~2 and D of the Suggested Bid Form). Contractor must return
the signed Agreement and other data to Owner by Day 60, and Owner must sign and deliver one signed
counterpart to Contractor by Day 70 (see ~1-18). This is usually the Effective Date of the Agreement and the
date on which the Contract Time starts running (see GC-2.3). If a Notice to Proceed is used, it must be given
within thirty days of the Effective Date of the Agreement, but the Contract Time will start running no later
than Day 75 (or thirty days after the Effective Date of the Agreement if that is earlier).
Any change in this carefully integrated schedule will probably necessitate changes in all of the documents. In
many federally-funded projects, it is customary to give a tentative Notice of Award and the actual award may
be issued some time later. Amendments of GC-2.3 should be accomplished in SC-2.3. Changes in the
Instructions, Suggested Bid Form and Agreement should be accomplished directly in those documents rather
than by the Supplementary Conditions.

SC-2.6. Preliminary Schedules

Supplemental information with respect to the matters covered in these paragraphs are considered administra-
tive in nature or work-related and should be covered in the General Requirements.

SC-2. 7. Exchange of Insurance Data

Paragraph GC-2.7 may require modification if the insurance requirements of Article 5 are changed.

SC-2.S. Preconstruction Conference, etc.

If one of the schedules called for or the time of submitting for review is to be changed, it should be done in
SC-2.6.

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 278 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Additional requirements as to preconstruction conferences, schedules of submittals and administrative pro-

cedures should appear in the General Requirements.

SC-2.9. Finalizing Schedules

If one of the schedules called for or the time of submission for acceptance is to be changed, it should be done
in SC-2.9.

SC-3.2. Intent of Documents

The words "except as may be otherwise specifically stated" which appear at the end of the fourth sentence
of GC-3.2 customarily refer to a change or supplement to be added in the Specifications rather than in the
Supplementary Conditions.
Frequently, the technical portions of the Specifications make reference to standard specifications, manuals
or codes of technical societies, organizations or associations. These references are intended to amplify the
descriptions of materials, equipment, construction systems, standards and workmanship; however, as indi-
cated in paragraph GC-3.2, they are not intended to revise or supersede the provisions of the General
Conditions or Supplementary Conditions except in special circumstances and then only if specifically so
stated. Where such special circumstances pertain, the Specifications should clearly indicate the extent to
which the provisions of the General Conditions or Supplementary Conditions are to be superseded by the
referenced provisions. On the other hand, if there is no such intent, it may be advisable to include in SC-3.2
a statement that if there is any conflict between the provisions of the Contract Documents and any such
referenced provisions, the language of the Contract Documents will take precedence over that of any standard
specification, manual or code.

SC-4.1. Availability of Lands, etc.

The reference in GC-4.1 to other provisions of the Contract Documents refers to further information to be
contained in the General Requirements or on the Drawings. Other than an explanation of special circumstances
such as a delay in the acquisition of lands because of condemnation or for some other reason, no statement
on this subject is contemplated in the Supplementary Conditions.

SC-4.2-4.3. Physical Conditions

The 1983 edition of the EJCDC's General Conditions has a different philosophical approach from that of
earlier editions. Paragraph GC-4.2 and 4.3 follow EJCDC's recommendations with respect to the sharing of
responsibility by Owners and Contractors for unforeseen subsurface or physical conditions.
The EJCDC continues to recommend strongly that Contractor be advised (in the Supplementary Co.nditions)
of the identity of all reports of tests and explorations of subsurface conditions at the site and of drawings of
physical conditions in or related to existing surface or subsurface structures (other than Underground Facilities
discussed below) which are at or contiguous to the site to the extent that Engineer has utilized any such
reports or drawings in the preparation of the Contract Documents. In the 1983 edition of the General
Conditions, Contractor is entitled to rely on the "technical data" contained in the documents so identified
but not on non-technical data, interpretations or opinions. Note that the term "technical data" has not been
defined specifically in the General Conditions because of its different application in varying circumstances.
In addition, because such reports and drawings do not usually address questions relative to the Contractor's
particular methods of construction or construction procedures, such reports and drawings are not represented
as being complete for Contractor's purposes. Thus, except for such reliance as indicated above, Contractor
is given full responsibility with respect to all subsurface conditions at the site and for physical conditions in
or relating to existing structures, and must determine that information. Information differing from that on
which Contractor is entitled to rely is to be reported to and reviewed by Engineer. If Engineer considers it
appropriate, a Work Directive Change or Change Order will follow which mayor may not result in a change
in Contract Price or Time.

9
 APPENDIX 6 279

Since the meaning and application of the term "technical data" will vary by project, it is important for
Engineer to determine and establish in the Supplementary Conditions those portions of the reports of tests
and explorations of subsurface conditions which Engineer considers to be technical data on which Contractor
will be entitled to rely as permitted by GC-4.2. Examples of what might properly be considered technical data
in such reports are: the boring method, plan and logs, level of subsurface water, laboratory test methods and
results and similar factual data, all as of the dates made. As a general rule, all of the factual information
contained in drawings of physical conditio~s in or related to existing surface or subsurface structures (other
than Underground Facilities) which are at or contiguous to the site will qualify as technical data on which
Contractor should be entitled to rely; however, if reliance on such drawings is to be limited, Engineer should
identify in the Supplementary Conditions the information or data contained in, or the part of, such drawings
on which Contractor may not rely.
The division of responsibility with regard to Underground Facilities (which term is defined in Article 1 of the
General Conditions) also has been changed in the 1983 edition of the General Conditions. Owner and Engineer
specifically deny responsibility for any information contained in the Contract Documents with respect to
Underground Facilities at or contiguous to the site, because such data is most frequently based on information
supplied to them by owners of the Underground Facilities. In such cases, full responsibility is placed on
Contractor as to such Underground Facilities. On the other hand, if any Underground Facility is uncovered
that was not shown or indicated by Engineer in the Contract Documents and which Contractor could not
reasonably have been expected to anticipate, it must be reported to and reviewed by Engineer. If Engineer
considers it appropriate, a Work Directive Change or Change Order will follow and Contractor will be entitled
to an increase in price or extension of time to the extent attributable thereto.
The approach in previous editions of the General Conditions was to identify all such reports and drawings of
subsurface and physical conditions in the Supplementary Conditions (but not to include them as part of the
Contract Documents) with neither Owner nor Engineer vouching for the accuracy or completeness of any
aspect thereof. Full responsibility was placed on Contractor who was only entitled to an adjustment in price
or time because of an unforeseen subsurface or physical condition if Engineer concluded that the discovered
condition differed materially from what was reflected in the Contract Documents and Contractor could not
reasonably have been expected to anticipate it.
The practices with regard to subsurface and physical conditions vary by type of construction and locality of
site as well as Owner's preference. Many Owners are unwilling to guarantee the accuracy of data identified
or referred to in the Contract Documents, while Contractors believe it unfair and uneconomical to require
them to assume full responsibility for the unknown. On the other hand, it is the practice of cert~~n Owners in
heavily built up urban areas, usually in contracts for pipeline and related construction, to assume the full risk
of differing underground conditions and to allow price and time adjustments to the extent justified by a
subsurface surprise which Contractor could not have been expected to foresee regardless of what was or was
not disclosed in the Contract Documents.
If the provisions for the sharing of the responsibility for unforeseen subsurface or physical conditions are to
be changed, this should be accomplished in SC-4.2 and 4.3. Any such changes should be carefully considered
and worded and the responsibilities for protection and repair of and safety related to a newly discovered
condition specifically addressed (See GC-6.20).
The language of 1-4.2 and 4.3 is closely integrated with that of GC-4.2 and 4.3. Also, in the Suggested Bid
Form (see paragraph 3(b», the Owner-Contractor Agreements (see paragraph 7.3 of the Stipulated Price
Agreement and 11.3 of the Cost-Plus Agreement) and the Instructions (see paragraph 4.8) there are represen-
tations by Contractor that Contractor has made such investigations, explorations, studies, etc. with respect
to subsurface and physical conditions at or contiguous to the site in addition to those identified in the Contract
Documents as are necessary to enable Contractor to do the work at the Contract Price, within the Contract
Time and in accordance with the other terms and conditions of the Contract Documents. Thus, a change in
GC-4.2 and 4.3 may well require change in these other construction related documents.
While the 1983 edition of the General Conditions provides that the Contractor will be entitled to rely upon
certain aspects ("technical data") of the reports and drawings identified in the Supplementary Conditions, it
continues to be important that said reports and drawings not be made a part of the Contract Documents; and
it is so provided in 1-4.2 and in the suggested language below. The reason is to overcome any possible claim

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280 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

that by implication Contractor was entitled to rely on the accuracy of any other information contained in the
referenced documents, but this will not defeat Contractor's basic right to rely on such "technical data" as
provided in GC-4.2. Where it is practical, the technical data should be separated from other information and
included with the Bidding Documents.
The following is appropriate language for identification of the particular information utilized by Engineer in
the preparation of the Contract Documents and for identification of what is considered technical data:

SC-4.2.
In the preparation of Drawings and Specifications, ENGINEER has relied upon:
4.2.1. The following reports of explorations and tests of subsurface conditions at the site of the Work:
4.2.1.1. Report dated May 21, 1977 prepared by Aye and Bea, Consulting Engineers, Philadel-
phia, Pa., entitled: Results of Investigation of Subsoil Conditions and Professional
Recommendations for Foundations ofIron Foundry at South and Front Streets, Pembrig,
N.J. consisting of 42 pages. The technical data contained in such report upon which
CONTRACTOR may rely is _ _ _ __
4.2.1.2. Report dated May 2, 1977 prepared by Ecks, Wye and Tszee, Inc., Baltimore, Md.,
entitled: Tests of Water Quality in Mixter River at Pembrig, N .J ., consisting of 26 pages.
The technical data contained in such report upon which CONTRACTOR may rely
is _ _ _ __
4.2.2. The following drawings of physical conditions in or relating to existing surface and subsurface
structures (except Underground Facilities) which are at or contiguous to the site of the Work:
4.2.2.1. Drawings dated March 2,1966 of Route 24A Overpass Abutment, prepared by Dea &
Associates, Inc., Wilmington, Delaware, entitled: Record Drawings: Route No. 24A
Overpass Abutment, consisting of twelve sheets, numbered to _ _ __
inclusive. All of the information in such drawings constitutes technical data on which
CONTRACTOR may rely, except appearing on Drawing
No. and appearing on Drawing No. _ _ _ __
Copies of these reports and drawings that are not included with Bidding Documents may be
examined at (insert location) during regular business hours. These reports and
drawings are not part of the Contract Documents, but the technical data contained therein upon
which CONTRACTOR is entitled to rely as provided in GC-4.2 and as identified and established
above are incorporated therein by reference.

SC·S.l. Performance and Other Bonds

As mentioned above, if Contractor will not be required to furnish Performance or Labor and Material Bonds,
it may be desirable to strike out GC-2.1, 5.1 and 5.2 and this may require further changes in GC-1O.5, 14.12
and 14.14. Where reference is made to the surety, corresponding changes may be required in other Contract
Documents as well. Paragraph 1-6.1 refers to GC-5.1 where certain requirements for surety companies are set
forth. If these requirements are to be changed or if Contractor will be required to furnish Bonds other than
those prescribed in GC-5.1 or if the form of any Bond is to be prescribed, or if the time when any Bond is to
remain effective is to be altered (see especially discussion under SC-14.10), this information should appear in
SC-5.1.
Some Owners prefer prequalification of proposed sureties or acceptance of the apparent Successful Bidder's
proposed surety prior to the award; in either such case, care must be taken to explain the procedure involved,
the consequences to the Bidder of failing to designate an acceptable surety and the Owner's rights to make
the award to an higher Bidder who has designated an acceptable surety. This information should appear in J-
6.1 of the Instructions.

SC·S.3. Contractor's Liability Insurance

Few Engineers are competent to act as insurance counselors, and providing insurance advice is specifically
excluded from coverage under most professional liability insurance policies for Engineers. Before completing
the paragraphs of the Supplementary Conditions dealing with insurance, it is very important for Engineer to

11
 APPENDIX 6 281

request Owner to obtain the advice of competent insurance counsel. As indicated in GC-5.3, Contractor's
liability insurance is to include the specific coverages and be written for not less than the limits of liability
and coverages provided in the Supplementary Conditions or required by Laws or Regulations, whichever is
greater. Particular projects may require special types of coverage, such as railroad or airport protective
liability coverage. Engineer must, therefore, obtain from Owner (or its insurance counselor) information as
to coverages and amounts to enable Engineer to set forth in SC-5.3 the minimum requirements for liability
insurance. For a general understanding regarding insurance protection during the construction process,
attention is directed to AlA's Insurance and Bonds of Suretyship, Construction Bonds and Insurance Guide
by B. B. Rothschild and to Insurance for Contractors by Walter T. Derk, Fifth Edition (1981). The EJCDC
has prepared a helpful suggestion for a prototype letter from Engineer to Owner requesting instructions as to
coverages and amounts of insurance to be provided by Owner and Contractor (see Engineer's Letter to Owner
Requesting Instructions re Bonds and Insurance during Construction, No. 1910-20). In addition, Owner's
Instructions to Engineer re Bonds and Insurance during Construction, No. 1910-21 may prove to be a helpful
guide to Owner and his insurance counselor. AlA's Certificate of Insurance, No. G705 is also a useful
document.

The following is suggested language that may be used in preparing SC-5.3 after Owner's requirements have
been determined:
SC-S.3.
The limits ofliability for the insurance required by paragraph 5.3 of the General Conditions shall provide
coverage for not less than the following amounts or greater where required by Laws and Regulations:
5.3.1. and 5.3.2. Workers' Compensation, etc. under paragraphs 5.3.1 and 5.3.2 of the General Condi-
tions:
(I) State: Statutory
(2) Applicable Federal (e.g. Longshoreman's): Statutory
(3) Employer's Liability: $-------
5.3.3,5.3.4,5.3.5 and 5.3.6. Comprehensive General Liability (under paragraphs 5.3.3 through 5.3.6 of
the General Conditions):
(I) Bodily Injury (including completed operations and prod-
ucts liability):
$,----- Each Occurrence
$,----- Annual Aggregate

Property Damage:
$,----- Each Occurrence
$,----- Annual Aggregate
or a combined single limit of $-------
(2) Property Damage liability insurance will provide Explo-
sion, Collapse and Underground coverages where appli-
cable.
(3) Personal Injury, with employment exclusion deleted
$,------ Annual Aggregate
5.3.7. Comprehensive Automobile Liability:
Bodily Injury:
$,----- Each Person
$,----- Each Occurrence
Property Damage:
$ Each Occurrence
or combined single limit of $_ _ _ _ _ _ __
5.3.8. [Here list additional types and amounts of insurance that may be required by OWNER.]

The reference to a "combined single limit" for bodily injury and property damage will permit the insurance
broker to negotiate the most advantageous arrangement for the insureds and either alternative should be
acceptable.

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282 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

It may be that Owner will wish some control over the identity of the insurance carriers issuing Contractor's
liability insurance. Since retention of the absolute right of approval without listing any objective criteria has
definite drawbacks, it may be preferable to refer to some approved list of insurance carriers similar to that
mentioned for sureties in GC-5.1.
The provision for maintenance of completed operations insurance for two years after final payment may not
be appropriate in all cases and may be changed by use ofthe following prototype sentence:

The completed operations insurance required by paragraph 5.3 ofthe General Conditions shall be maintained
by CONTRACTOR for at least [four] years after Substantial Completion, and CONTRACTOR shall furnish
OWNER with evidence of continuation of such insurance at Substantial Completion and annually thereafter
for [three] years.

SC-S.4. Contractual Endorsement

Paragraph GC-5.4 requires contractual liability coverage with respect to Contractor's obligations under GC-
6.30 in respect of indemnification. After the extent of the required coverages has been ascertained, it may be
expressed by using the following language:
SC-S.4.
The Contractual Liability required by paragraph 5.4 of the General Conditions shall provide coverage
for not less than the following amounts:
5.4.1. Bodily Injury:
$ Each Occurrence
5.4.2. Property Damage:
$,----- Each Occurrence
$,----- Annual Aggregate

SC-S.S. Owner's Liability Insurance

Paragraph GC-5.5 indicates that if Owner wishes to purchase liability coverage in addition to that required to
be maintained by Contractor under GC-5.3 and 5.4, Owner, of course, may do so. In cases where Owner
does not wish to purchase such coverage, it may be acceptable to include Owner and Engineer as additional
insureds under Contractor's general liability policy, even though broader coverage will most likely be available
if Owner obtains protective liability coverage in Owner's name (including coverage for Engineer). Satisfactory
protection for Owner and Engineer may be accomplished by either an endorsement of Contractor's Compre-
hensive General Liability policy or by Contractor's carrier issuing a separate Protective Liability policy.
After the arrangements have been clarified, appropriate language should be included as part of SC-5.5.
Consideration should also be given to extending any coverage provided for Engineer to include Engineer's
consultants (see discussion in last paragraph of SCot above).

SC-S.6. Property Insurance

What has been said above about the necessity of obtaining advice of expert insurance counsel applies to
property insurance as well as liability insurance, and the comments concerning the risks to Engineer of
professing insurance expertise are equally applicable. The General Conditions contemplate that the liability
insurance will be provided by Contractor since, for the most part, Contractor is in control of the activities at
the site that might give rise to liability, while the property insurance is to be provided by Owner since, in
most cases, Owner gets title to all of the Work as it is accomplished. There are two relatively common
variations of this arrangement: one in which Owner, through what is called a "wrap-up" policy, purchases
and maintains both liability and property insurance for the project, and the other is just the opposite in which
Contractor is obligated to do so. The latter arises most frequently when the Work is done on property not
owned by Owner (such as a pipeline) or where Contractor has complete control of a construction site that is
removed from Owner's other activities. These variations are quite complicated and must be studied carefully
before being accepted. Any language to modify the standard language of the General Conditions should appear
in the Supplementary Conditions and must be prepared with understanding and precision.

13
 APPENDIX 6 283

Assuming, however, that the customary arrangement for property insurance will apply, it is desirable for
Owner to advise Contractor of the extent of the property insurance Owner will provide during construction
and, in fact, in GC-2.7 and 5.14 the parties are required to exchange information about the coverages obtained.
Accordingly, Engineer's request to Owner for instructions concerning required liability insurance coverages
should elicit the necessary information about the property insurance that Owner will provide. Once obtained,
that information should be set forth in SC-5.6. The amount of this insurance is established as the full insurable
value of the Work (subject to deductibles, see comment at SC-5.9) which is usually less than the Contract
Price, but Owner's insurance counselor should make this determination. "All-risk" coverage is required, but
it is well to bear in mind that such coverage does not extend to all types of risks. The particular policy must
be reviewed for application to the particular project and Contractor (and his Subcontractors) advised of the
extent of the exclusions so that they may obtain their own insurance protection against losses or risks not
covered. Examples of such special considerations are theft, protection for material and equipment at the site
but not yet incorporated in the Work, collapse and water damage coverage, and earthquake and flood coverage.
The form of property insurance for construction is called "Builder's Risk" and can be obtained on either a
"completed value" or "reporting" form. The determination of which form is to be used should be made by
Owner and the decision reflected in SC-5.6.
In GC-5.6 provision is made for coverage of the interests of Engineer and Engineer's consultants, but this
may not be workable because some insurers may take the position that Engineer and Engineer's consultants
do not have an "insurable interest" in the project. It may also develop that the Owner will prefer that the
interests of Engineer and consultants not be included because of the difficulty of complying with the waiver
of rights provisions in GC-5.11. If the interests of Engineer and consultants are not to be included, it will be
necessary to amend GC-5.6 to eliminate reference to Engineer and Engineer's consultants; this change should
be made in SC-5.6.
If Owner wants Contractor to provide the property insurance, a major revision of GC-5.6 will be required,
and it will also be necessary to modify several other related paragraphs. The advisability of selecting this
method for property insurance coverage is, of course, within Owner's prerogative. If that approach is selected
and if there are several prime Contractors involved in the project, the Supplementary Conditions must clearly
indicate which of the several Contractors is to maintain the property insurance and that the interests of each
other Contractor and its Subcontractors are to be included. Under certain circumstances, "all-risk" insurance
may not be available in this sort of an arrangement. If Contractor is to provide the property insurance and
there are no other extenuating circumstances, the following language may be included to amend GC-5.6 in its
entirety:
SC-5.6.
Delete Paragraph 5.6 ofthe General Conditions in its entirety and insert the following in its place:
5.6. CONTRACTOR shall purchase and maintain until final payment property insurance upon the Work
at the site to the full insurable value thereof (subject to such deductible amounts as may be provided in
these Supplementary Conditions or required by Laws and Regulations). This insurance shall include
the interests of OWNER, CONTRACTOR, Subcontractors, ENGINEER and Engineer's consultants
in the Work (all of whom shall be listed as insureds or additional insured parties), shall insure against
the perils of fire and extended coverage, shall include "all-risk" insurance for physical loss and damage
including theft, vandalism and malicious mischief, collapse and water damage, and such other perils as
may be provided in these Supplementary Conditions, and shall include damages, losses and expenses
arising out of or resulting from any insured loss or incurred in the repair or replacement of any insured
property (including but not limited to fees and charges of engineers, architects, attorneys and other
professionals). If not covered under the "all-risk" insurance or otherwise provided in these Supple-
mentary Conditions, CONTRACTOR shall purchase and maintain similar property insurance on por-
tions of the Work stored on and off the site or in transit when such portions of the Work are to be
included in an Application for Payment. The policies of insurance required to be purchased and
maintained by CONTRACTOR in accordance with this paragraph 5.6 shall comply with the requirements
of GC-5.8.

In all cases, however, advice of Owner's insurance counsel is essential before finalizing the wording of any
such change. When Contractor is to provide the property insurance and GC-5.6 is so amended, GC-5.7 also
may have to be amended correspondingly to indicate that such boiler and machinery insurance as is to be

14
284 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

provided will be obtained by Contractor. In addition, changes will be necessary in GC-2.7 and 5.14 which call
for the exchange of information about the coverages each party is required to obtain, in GC-5.9 which deals
with deductible amounts, in GC-5.10 which deals with other special property insurance and in GC-5.12 and
5.13 which provide that Owner may adjust property insurance losses and may receive and hold in trust
amounts paid on account of losses.

SC·S. 7. Boner, Machinery and Other Property Insurance

If Owner will purchase and maintain boiler, machinery and other property insurance as indicated in GC-5. 7,
it should be so indicated in SC-5.7.

SC-S.9. Deductible Provisions

It is most important to include in the information furnished to Contractor and his Subcontractors the amount
of any deductible provision to be included in Owner's property insurance since GC-5.9 states that they and
not Owner will be responsible for all their own losses within the deductible amount. If Owner is to be
responsible for any loss suffered by Contractor or any Subcontractor within the deductible amount, the change
should be accomplished in SC-5.9. On cost-plus and guaranteed maximum price contracts, the manner in
which losses within the deductible amount are to be charged should be covered in SC-5.9 if not covered
elsewhere in the Contract Documents. If Contractor is to provide the property insurance, the different
consequences to Owner and Contractor of any deductible provision should be analyzed and language to
accomplish a pertinent change in GC-5.9 should appear in SC-5.9.

SC-S.ll. Waiver of Rights

When an insurance carrier that has issued property insurance under GC-5.6 or 5.7 pays a claim for a loss, it
is possible that the insurer may wish to be subrogated to the rights of the party that suffered the loss so that
the insurer may bring suit against the negligent party. It is the intent of GC-5.11.2 to preclude any such
subrogation and suit by the insurer against Owner, Contractor, Subcontractors, Engineer and Engineer's
consultants. It is believed that those parties are all involved in one way or another in the project and such
claims among them should be discouraged iffor no other reason than the difficulty of identifying responsibility
for errors. In addition, the carrier has in theory been paid a fair premium for the risks it insured. As indicated
in the second sentence of GC-5.11.2, it may be necessary for Engineer, Subcontractors and others involved
in the project who are not parties to the construction contract to sign formal written waivers similar to that
provided in the first sentence ofGC-5.11.1; in fact, GC-6.11 requires this of each Subcontractor. It is usually
desirable that all such waivers extend not only to the benefit of Engineer but also to Engineer's consultants
in which case it may be necessary for the consultants as well as Engineer to sign formal written waivers.
Once the exact manner in which these matters are to be handled has been resolved after consultation with
Owner and his insurance counselor, detailed or supplemental requirements should appear in SC-5.11.1. GC-
5.11.2 recognizes that some insurance policies do not permit any waiver of rights and others permit it only
by special endorsement to the insurer's prescribed form. In fact, under some "all-risk" property insurance
policies, the automatic waiver of rights contained in GC-5.11.1 may void the entire coverage. This is a
particularly vexatious aspect of insurance coverage that had best be left to Owner's insurance counselor.
Note also that the interests of Engineer and Engineer's consultants may not be included in the property
insurance coverage as discussed under SC-5.6; if that is the case, a change should be made in GC-5.11 by
appropriate language in SC-5.11.

SC-S.12. Receipt and Application or Proceeds

If Contractor is to purchase the property insurance (see discussion and alternate language under SC-5.6),
Owner's right to adjust insured losses and receive insurance moneys under GC-5.12 may not be appropriate.
It would require separate negotiation with the insurance carrier. Any modification ofGC-5.12 should be made
in SC-5.12.

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 APPENDIX 6 285

SC-S.14. Acceptance oflnsurance

Attention is directed to the complementary provisions of GC-2.7 and GC-5.l4 which require Owner and
Contractor each to furnish the other appropriate evidence that the insurance each is required to purchase and
maintain is in fact in effect. Any modification of this arrangement will require a change in GC-2.7 as well as
GC-5.14.

SC-S.lS. Partial Utilization

Where it is anticipated that Owner will require temporary access to some parts of the Work prior to Substantial
Completion for some special purpose (such as' placing a part of the Work in operation before reaching
Substantial Completion of the entire Work), appropriate arrangements must be made for endorsements on
the property insurance policies (which normally do not permit this) so that the interests of all parties are
protected, because property insurance policies usually do not permit the split coverage required in the event
of Partial Utilization. If this is anticipated before start of construction, a provision to that effect should be
included in SC-5.15 or SC-14.1O.3 which are complementary. If Owner requires or the actual policy issued
provides that the property insurance policy involved does not require a special endorsement in the event of
Partial Utilization, an amendment of SC-5.15 and GC-14.1O.3 should be made.

SC-6.3. Labor, Materials and Equipment

The words "except as may be otherwise indicated in the Contract Documents" which appear in the middle
of this paragraph customarily refer to the section of the General Requirements wherein any special require-
ments as to the Work, scheduling, not working under inclement conditions, etc. should appear. This would
include matters such as a limitation as to the time during which or the date by which certain work on a project
could be performed (i.e., the interconnections between a new facility and an existing operating one).

SC-6.S. Quality and Installation of Materials and Equipment

If there is to be any variation in or supplement to the requirements ofthis paragraph, it will probably be work-
related and thus should be covered in the Specifications. The words "except as otherwise provided in the
Contract Documents" which appear twice in this paragraph refer to information shown on the Drawings or
requirements appearing in the detailed Specifications.

SC-6.7. Substitute or "Or-Equal" Items

Amplification of the requirements of GC-6. 7 which deals with substitute or equivalent materials or equipment
should appear in the General Requirements. Attention is directed to paragraph 1-9 which states that substitute
or "or-equal" items will not be considered until after both parties have signed the Agreement. If this concept
is to be modified, the change should be made in the Instructions with any required new language for GC-6.7
appearing in SC-6. 7.

SC-6.S. Concerning Subcontractors, Suppliers and Others

In many projects, it is desirable for Owner and Engineer to retain a degree of control over Contractor's
selection of certain Subcontractors, Suppliers and other persons and organizations (including those who are
to furnish the principal items of material and equipment) whom the bidder (or Contractor) proposes to employ
for the Work, although it is generally recognized that Contractors should be entitled to employ those oftheir
own choosing. Paragraph GC-6.8 gives Owner and Engineer certain rights after the Effective Date of the
Agreement to require Contractor to substitute acceptable Subcontractors, Suppliers and others when those
proposed or being used by Contractor are not acceptable to Owner and Engineer. If the acceptability of a
Subcontractor, Supplier or other organization becomes an issue after the Effective Date ofthe Agreement,
an adjustment in the Contract Price may be allowed to the extent attributable to any such change as provided
in GC-6.8.

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286 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Some Owners prefer to require that bidders must qualify certain Subcontractors, Suppliers and others prior
to submission of bids. This approach may not be available in public works projects and requires great care in
drafting pertinent language which should appear in 1-10 (with possible supporting language in 1-3 and 1-16.3).
Because of the difficulties of pre-qualification within the limited time while bids are being solicited, the EJCDC
endorses an approach that contemplates that prior to the opening of bids there will be no acceptance of those
Subcontractors, Suppliers and others whose identity has been required by the Supplementary Conditions.
However, within seven days of the bid opening and before the Notice of Award, the apparent successful
bidder may be required to identify certain Subcontractors, Suppliers and others if such identification is
required by the Supplementary Conditions. Paragraph SC-6.8 is the place where that requirement should
appear, and all types of Work as to which such acceptance will be required should be listed there. It is believed
that the right to disapprove or reject Subcontractors, Suppliers or others proposed by bidders is exercised
infrequently and it should be exercised with appropriate supporting data, circumspectly and cau~iously. On
the other hand, there are many occasions when because of the peculiarities of a given project it will be
important for Owner and Engineer to require the apparent successful bidder to so identify and for Owner and
Engineer to have the right to reject any party so identified. Those Subcontractors, Suppliers and others as to
whom this right will apply must be listed in SC-6.8. Otherwise, the right will not exist and the right to reject
or to require employment of an acceptable Subcontractor, Supplier or other organization may only be exercised
after the Effective Date of the Agreement. Requiring the apparent successful bidder (or Contractor) to provide
an acceptable substitute Subcontractor, Supplier or other party may have an effect on the initial bid price or
the Contract Price depending upon the provisions of the Instructions and the General Conditions. Paragraph
1-10 provides alternate approaches to the resolution ofthis problem. It is recognized that other approaches
may be preferable for given projects. If the contract is to be negotiated rather than bid, the date by which
acceptance of the listed Subcontractors, Suppliers and other parties is to be obtained should be indicated in
SC-6.8 and other changes made where necessary.
Any change in GC-6.8 should be made in SC-6.8; this might include language to detail under GC-6.8 the
consequences of requiring a substitute for any Subcontractor, Supplier or other party whose identity is not
required by SC-6.8. Paragraph 1-10 is the location in which to deal with all rules and requirements in this
regard that are applicable during the period prior to the Notice of Award. In cases where there will be clearance
and approval both before and after the Notice of Award, it may be desirable to set forth all applicable rules
and requirements in one place to avoid duplication; that place would be SC-6.8.
Bear in mind the meaning assigned to the words "Subcontractor" and "Supplier" in Article 1 ofthe General
Conditions and see comment under SC-l above.

SC-6.9. Concerning Subcontractors, Suppliers and Others

Previous editions of the General Conditions specifically permitted Owner or Engineer to furnish to Subcon-
tractors, Suppliers or others information as to the amounts paid by Owner on account of Work done. If it is
anticipated that Owner or Engineer may want to or in fact will furnish such information, it would be wise to
supplement GC-6.9 by the addition of the following language:

"OWNER or ENGINEER may furnish to any such Subcontractor, Supplier or other person or organization,
to the extent practicable, evidence of amounts paid to CONTRACTOR in accordance with CONTRACTOR's
Applications for Payment ...

SC-6.13. Permits
Paragraph GC-6.13 refers specifically to the inclusion in the Supplementary Conditions of possible additional
information about obtaining permits and licenses. Owners may prefer or be required to obtain these permits.
Where there is more than one prime Contractor, the responsibility under GC-6.13 should specifically be
assigned to one or more Contractors. All such provisions should be included in SC-6.13.

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 APPENDIX 6 287

SC-6.14. Laws and Regulations

Frequently, when there is governmental funding of a project, the administering agency requires that the
Contract Documents contain actual language from or reference to certain statutory or regulatory requirements
applicable to the condition or performance of the Work. The required information should be included in SC-
6.14, or reference should be made to copies of the governmental documents bound with the Contract
Documents. On the other hand, it is unwise to include specific reference to a particular statute or regulation
when that is not ~quired since such reference creates an implication that the requirement to "comply with
all Laws and Regulations applicable to the performance of the Work" means less than it says. A specific
requirement to comply with a particular Law or Regulation is not desirable unless there is a provision in the
Law or Regulation mandating inclusion of specific language in the Contract Documents. It is customary to
include such requirements at the end ofthe Supplementary Conditions. Note that some governmental agencies
require that certain language be quoted verbatim in the Bidding Documents. See paragraph IV.3 below. Note
also that the term "Laws and Regulations" is defined in Article 1 ofthe General Conditions.
There are times when Engineer will agree to monitor Contractor's compliance with certain Laws or Regula-
tions. This arises most frequently with respect to compliance with local building codes, the Davis-Bacon Act
or safety regulations applicable to performance of the Work where Engineer possesses special expertise
qualifying Engineer for the assignment (and probably adequate insurance coverage). Such an undertaking
would require an amendment of Article 3 ('3.8 of the 1979 ed.) ofthe Standard Form of Agreement between
Owner and Engineer for Professional Services (No. 1910-1) because this is not a responsibility customarily
assumed by Engineer. It would also require an amendment of the General Conditions which should appear at
SC-6.14, and in SC-9 where matters pertaining to Engineer's status are dealt with. If the monitoring activities
pertain to compliance with safety regulations. GC-6.20 will have to be amended in SC-6.20 and, depending
on the nature of the undertaking, other provisions of the General Conditions may need changing. If the
monitoring activities pertain to financial matters, provisions of GC-14 will probably require change which
should appear in SC-14. If such monitoring duties are to be performed for Owner by a party other than
Engineer (such as Owner's site representative, a construction manager, a special inspecting engineer or a
party with responsibility to coordinate the work and activities of the various prime Contractors), comparable
changes would be required in GC-6.14 and probably other provisions of the General Conditions (especially
GC-8 and also GC-9 to explain the interrelationships between that party and ENGINEER); these should
appear in the Supplementary Conditions.

SC-6.15. Sales Taxes

If Owner qualifies for a state or local sales tax exemption in the purchase of certain materials and equipment,
appropriate language in this respect should be prepared by Owner's attorney and included in SC-6.15. There
should also be a cross reference to SC-6.15 in the Instructions or the suggested language of the Instructions
should be supplemented as indicated in 1-20.

SC-6.lO. Safety
See comment in second paragraph under SC-6.14 above.

SC-6.23-6.28. Shop DrawiDgs and Samples

The provisions of GC-6.23-6.28 set forth the fundamental relationships between the parties as to review and
approval (or other appropriate action) of Shop Drawing and sample submissions. They are so basic to the
duties and responsibilities of those involved that the printed language should be changed rarely, and if changed
at aU it should be done with the advice of counsel. Any such change should be made in the Supplementary
Conditions. There are, however, many strictly procedural aspects of the Shop Drawing submission, review
and approval process that require further amplification (viz., number of copies, address where submittals are
to be sent. etc.); all language to that effect should appear in the General Requirements.
Some engineering firms are reluctant to "approve" Shop Drawing and sample submittals (see discussion in
Section 24 of Chapter III of Commentary on Agreements for Engineering Services and Contract Documents,

18
288 ENGINEERrNG SERVICE AND CONSTRUCTION CONTRACTS

No. 1910-9). At times the review is only "for conformance with the design concept" ofthe project and is not
intended to extend to other requirements of the Contract Documents. If any wording other than that contained
in GC-6.23-6.27 is to be used to describe Engineer's responsibility with respect to Shop Drawing and sample
submittals, it should appear in SC-6.23-27 as an amendment of GC-6.23-27. That such changes are contem-
plated is recognized in GC-6.23 by the clause "or for other appropriate action if so indicated in the Supple-
mentary Conditions".

SC-6.30-6.32. Indemnification
If the language of the General Conditions with respect to indemnification is to be changed, the change should
be made by SC-6.30-6.32. The laws of many states apply to these provisions and consultation with an attorney
is important before any modification is undertaken. Further, attempts to change the printed language of GC-
6.30-6.32 may result in Contractor being unable to obtain the contractual liability endorsement on the policy
of general liability insurance required by GC-5.4. Reference is made to the discussion ofthis topic in Section
38 of Chapter III of the Commentary on Agreements for Engineering Services and Contract Documents (No.
1910-9).

SC-6.33. Assignment of Procurement Contracts from Owner to Contractor

If it is contemplated that some of the material or equipment contracts will be taken in the name of Owner
initially and subsequently assigned to Contractor, language to this effect explaining the procedure to be
followed and identifying the particular items so to be purchased should appear in the Supplementary Condi-
tions. It would be well to make reference in the Instructions to such requirements (see 1-22). The Contractor
should be advised where he may examine the procurement contracts he will be required to assume. The
procedure and contractual provisions for this sort of an arrangement are quite complicated and need the input
of an attorney. Also it should be indicated if the assignment will relieve Owner from all liability on each
procurement contract.
The EJCDC has prepared a set of Procurement Documents (referred to in the Bibliography in paragraph I D
above) for use when Owner purchases materials or equipment directly from the provider for use on an
Engineer designed project when the provider will not perform any of the construction or installation work at
the site.

SC-7.1-7.2. Related Work at the Site

Frequently, work at the site is to be performed by more than one prime Contractor or by Owner or a utility
company. This fact should be noted in the Contract Documents so that when submitting a price quotation
each bidder can take into consideration the problems of relating to others at the site. SC-7.1 is an appropriate
place to provide such information. If the contractual arrangements between Owner and the separate prime
Contractors will not be basically similar, this should also be noted. The importance of such similarity is
illustrated by the last sentence of GC-7.2 which is discussed in SC-7.5 below.

SC-7.4. Coordination
Coordination of the site activities of the various prime Contractors is a most complicated matter and one
fraught with legal exposure. At times, Owner will undertake this responsibility either with Owner's own
personnel or by employing a construction manager. Frequently, the assignment of construction coordinator
is given to one of the prime Contractors (but this may be prohibited by state law as in New York) or to a
separate party with construction expertise. GC-7.4 requires a statement in SC-7.4 identifying the construction
coordinator. It is suggested that that party be referred to and defined as the "Construction Coordinator"
which is the practice followed in this Guide. The extent of the Construction Coordinator's authority and
responsibility must be explained with precision so that the various parties affected thereby and who may
place reliance thereon will be fully advised. Very few construction coordination or construction management
arrangements are the same, but for any such arrangement the Supplementary Conditions should address in
detail the authority and responsibility of the Construction Coordinator in respect of safety precautions and

19
 APPENDIX 6 289

procedures at the site (GC-6.20), obtaining permits (GC-6.13), monitoring compliance with Laws and Regu-
lations applicable to the peIformance ofthe Work (GC-6.14), property insurance (GC-5.6 and 5.7), keeping
the site clean during construction (GC-6.17), coordinating tests and inspections (GC-13 .4-6), review of Appli-
cations for Payment (GC-14), use of temporary construction facilities, scheduling purchase and delivery times,
scheduling and coordinating the work of the various Contractors at the site, and any number of other matters
usually included as Contractor's responsibilities under the General Requirements. GC-7.4 provides that neither
Owner nor Engineer will have any responsibility for such coordination (but this is contrary to some standard
forms of General Conditions which place the entire responsibility for coordination on Owner). If the design
professional is to be the Construction Coordinator, the EJCDC's Standard Form of Agreement between
Owner and Project Manager for Professional Services, No. 19lO-17, is available.

SC-7.S. Separate Contractor Claims

When several prime Contractors are working at the site, it often develops that claims arise among them.
Contractors are required to work togetherfor the benefit of the completed project (see GC-7.2 and 7.3). GC-
7.2 states that this obligation to cooperate is expressly made by each prime Contractor for the benefit of the
other prime Contractors. Accordingly, if one Contractor has a claim against another, it is appropriate that
they settle it between themselves and not include Owner or Engineer in the dispute because neither Owner
nor Engineer have direct involvement with the construction process or authority or control over the construc-
tion activities and might have had nothing to do with the cause of the dispute. Many jurisdictions do not allow
such a suit by one prime Contractor against another because there is no contract between them (i.e., a lack
of privity); to overcome this the last sentence of GC-7. 2 expressly states that the obligation to cooperate is
made for the benefit of other prime Contractors who are similarly situated. Under such circumstances, the
prime Contractors involved will have access to the courts to settle their differences, and it will no longer be
necessary to bring suit against Owner or Engineer (who are passive parties) in order to get at or reach another
prime Contractor. In these situations and as a complement to the last sentence of GC-7 .2, it has proven helpful
to include a provision precluding suit by one prime Contractor against the Owner or Engineer because of the
action or inaction of another prime Contractor. Where the Construction Coordinator may be considered a
"professional" project manager who has no financial involvement in or control over the construction contract
or activities and is merely functioning as Owner's administrative coordinator (see Owner-Project Manager
Agreement, No. 1910-17), the same would apply.

Suggested language for this purpose may be included as SC-7.5 and is:

"SC-7.5. Should CONTRACTOR cause damage to the work or property of any separate contractor at the
site, or should any claim arising out of CONTRACTOR's performance of the Work at the site be made by
any separate contractor against CONTRACTOR, OWNER, ENGINEER, the Construction Coordinator or
any other person, CONTRACTOR shall promptly attempt to settle with such other contractor by agreement,
or to otherwise resolve the dispute by arbitration or at law. CONTRACTOR shall, to the fullest extent
permitted by Laws and Regulations, indemnify and hold OWNER, ENGINEER and the Construction Coor-
dinator harmless from and against all claims, damages, losses and expenses (including, but not limited to,
fees of engineers, architects, attorneys and other professionals and court and arbitration costs) arising directly,
indirectly or consequentially out of any action, legal or equitable, brought by any separate contractor against
OWNER, ENGINEER or the Construction Coordinator to the extent based on a claim arising out of
CONTRACTOR's performance of the Work. Should a separate contractor cause damage to the Work or
property of CONTRACTOR or should the performance of Work by any separate contractor at the site give
rise to any other claim, CONTRACTOR shall not institute any action, legal or equitable, against OWNER,
ENGINEER or the Construction Coordinator or permit any action against any of them to be maintained and
continued in its name or for its benefit in any court or before any arbiter which seeks to impose liability on
or to recover damages from OWNER, ENGINEER or the Construction Coordinator on account of any such
damage or claim. If CONTRACTOR is delayed at any time in performing or furnishing Work by any act or
neglect of a separate contractor and OWNER and CONTRACTOR are unable to agree as to the extent of any
adjustment in Contract Time attributable thereto, CONTRACTOR may make a claim for an extension of time
in accordance with Article 12. An extension of the Contract Time shall be CONTRACTOR's exclusive remedy
with respect to OWNER, ENGINEER and Construction Coordinator for any delay, disruption, interference
or hinderance caused by any separate contractor. This paragraph does not prevent recovery from OWNER,
ENGINEER or Construction Coordinator for activities that are their respective responsibilities.

20
290 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Because the Construction Coordinator's functions are frequently more in the nature of scheduling, coordi-
nation and general construction activities as contrasted with giving Owner greater confidence that the com-
pleted project will conform to the overall design, these coordinating activities will most likely be provided by
one with construction experience. That party will probably have a financial commitment or exposure vis-a-
vis the Contract Price and such a degree of responsibility at the site or participation in the construction process
as to be considered as having control over the activities of various prime Contractors. Under such circum-
stances, it would not be appropriate to preclude suit against the Construction Coordinator in which case all
reference to the Construction Coordinator should be stricken from the suggested language.

SC-8. Owner's Responsibilities

Note that much of GC-S involves cross referencing to other paragraphs of the General Conditions. If the
referenced paragraphs are changed, a change in GC-S will be required and should be accomplished in SC-S.
If Owner undertakes responsibilities customarily assigned to Engineer, or employs its own site representative
or a special inspector to monitor compliance with safety regulations or an accountant to audit applications
for payment, these would be addressed by supplemental language in SC-S. See also discussion in second
paragraph of SC-6.14. If Owner undertakes to coordinate the activities of the several prime Contractors, this
should be reflected in SC-S as well as in SC-7. Whenever Owner's responsibilities are changed from those
normally undertaken, it is important to review and probably make complementary modifications in Engineer's
responsibilities, especially the various specific paragraphs ofGC-9 and related paragraphs wherein Engineer's
functions are described, such as GC-6.23-6.27, 13.S-13.9, 14.4-14.6, 14.S and 14.13.

SC-9. Engineer's Status

At times, Owner will not wish Engineer to perform the customary services during construction, and this will
usually be reflected in the Owner-Engineer Agreement. The terms and conditions of GC-9 follow very closely
those of the Standard Form of Agreement between Owner and Engineer for Professional Services, No. 1910-
1. Accordingly, a change in one would necessitate a change in the other. Such a change in the General
Conditions should be made in the Supplementary Conditions. It may be that Engineer's duties during
construction are expanded (viz. by inclusion of certain types of services listed as additional services in the
Owner-Engineer Agreement or for reasons discussed under SC-6.14, 7.4 and S above); here again the supple-
menting language should appear in the Supplementary Conditions. See also discussion in last sentence of
paragraph SC-S.

SC-9.3. Project Representation

Provisions concerning representation at the site, whether by Owner's employee (sometimes called the Owner's
site representative), or by Engineer's employee (usually referred to as the Resident Project Representative),
or by a Construction Coordinator or construction manager are to appear in the Supplementary Conditions. It
is important to set forth clearly the extent of the responsibilities and authority of the persons at the site, not
only as they affect Engineer and Contractor but also as between themselves if more than one is to be involved.
This information should be included in SC-9.3 or attached as an exhibit to the Supplementary Conditions.
The Engineers' Joint Contract Documents Committee has prepared a form entitled "Suggested Listing of
Duties, Responsibilities and Limitations of Authority of Resident Project Representative" (No. 1910-1-A)
which may be used as a guide in preparing the Resident Project Representative's instructions. Responsibilities
and instructions of the Owner's site representative or a Construction Coordinator or construction manager
are to appear in other paragraphs of the Supplementary Conditions as discussed above (see especially SC-7
and S) and all provisions of GC-9 should be carefully coordinated with those supplementing paragraphs.

21
 APPENDIX 6 291

SC-9.10. Determination for Unit Prices

Many Owners prefer and it is common practice to provide that Engineer's decisions on such matters are final
(subject to change by Engineer to correct a mistake or to reflect subsequently discovered data) and binding
on all parties. To accomplish such a change, the following language may be included to amend GC-9.10 in its
entirety:

SC-9.10.
Delete Paragraph 9.10 of the General Conditions in its entirety and insert the foUowing in its place:
9.10. ENGINEER wiD have authority to determine the actual quantities and classifications of items of
Unit Price Work performed by CONTRACfOR, and the written decisions of ENGINEER on such
matters wiD be final, binding on OWNER and CONTRACfOR and not subject to appeal (except as
modified by ENGINEER to reRect changed factual conditions).

It may be that the right of appeal is considered appropriate but the appeal period is to be changed; such a
change should be accomplished in SC-9.IO.
Attention is directed to the last sentence of GC-16.2 wherein reference is made to the allowable time within
which an appeal may be made from an Engineer's decision under GC-9.IO. If either of the changes discussed
above are made, a change in GC-16.2 will be required and should be made in SC-16.2.

SC-9.11. Decisions on ......tes

Paragraph GC-9.11 calls for initial decisions by Engineer on certain matters at issue between Owner and
Contractor, but Engineer's authority in this respect does not extend to all disputes that may arise between
them. The arbitration provisions in GC-16 have broader application and cover most disputes between Owner
and Contractor with respect to the project. However, at times the parties do not wish to provide for arbitration
of disputes in which case GC-16 can be deleted; such a deletion will not require further changes in the General
Conditions other than to note the elimination of Article 16. See SC-16 below. If Article 16 is deleted, GC-9.11
may remain unchanged.

SC-ll.1. CIumge of Contract Price

If it is desired to change the time limitations with respect to filing and supporting claims for a change in the
Contract Price, this should be accomplished in SC-ll.2. (Note that the time limitations in GC-ll.2 and 12.1
are identical.)

SC-ll.4-11.6. Cost of Work

If there are to be changes in the method of determining the Cost of the Work as set forth in GC-ll.4 and 11.5
or in how Contractor's fee for cost-plUS or change order work is to be determined, the changes should be
made in SC-ll.4-11.6. The amount of Contractor's fee as weD as the percentage to be used for progress
payments will appear in the Agreement (see Articles 6 and 9 of Standard Fonn of Agreement between Owner
and Contractor on the Basis of Cost-Plus, No. 1910-8-A-2) and should not be included in the Supplementary
Conditions.

SC-ll.S. Cash Allowances

It is usually not necessary to modify the provisions of GC-ll.8, but a schedule of allowances with particular
reference to the applicable sections of the Specifications should appear in the General Requirements and the
specific allowances should be set forth in the applicable division of the Specifications. Details as to bid pricing
requirements on base bid alternatives, cash allowances, unit prices and acceptable combinations should be
set forth in the Instructions.

22
292 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

SC-ll.9. Unit Price Work

Unit prices provide an effective and equitable tool for dealing with the matter of quantities of certain work
that cannot be determined in advance of its performance. Unit prices can be used as an additional item on a
lump sum contract, such as a fixed or bidable unit price for each cubic yard of rock excavated, or the entire
contract can be composed of unit price items, which is common practice for utility and highway projects. The
same principal is applicable in either case. Bid forms frequently contain estimated quantities for each unit
price item (see Bid Form, 1f K). These estimated quantities serve two purposes: to give all bidders a uniform
basis for planning their work, and to provide a uniform basis for the comparison of bids. Variations between
the estimated and the actual quantities encountered during the Work can be expected and are unavoidable.
GC-l1.9.3 provides for adjustment in unit prices when the actual quantities ofthe Work performed "differs
materially and significantly from the estimated quantities". This paragraph recognizes that engineeringjudg-
ment must be used in administering the construction contract. In some cases, an overrun or underrun in the
quantity of a unit price item can have a significant impact on the Contractor.
Because ofthe difficulty in reaching agreement after the fact on what may be "material and significant", some
Engineers and Owners prefer to provide in the Contract Documents that reevaluation of a unit price will be
made if the quantity actually encountered varies by more than a fixed percentage (usually somewhere between
15 and 25 percent) from the estimate. Some Engineers and Owners also prefer to limit the reevaluation of unit
prices to items that have a significant value in relation to the total Contract Price (such values may range from
5 to 10 percent). To provide for such reevaluations, the following paragraph may be used:

SC-l1.9.3. Paragraph 11.9.3 ofthe General Conditions is hereby deleted in its entirety and the following is
substituted in its place:
"The unit price of an item of Unit Price Work shall be subject to reevaluation and adjustment under the
following conditions:
11.9.3.1. if the total cost ofa particular item of Unit Price Work amounts to % or more of the
Contract Price and the variation in the quantity of that particular item of Unit Price Work performed
by Contractor differs by more than % from the estimated quantity of such item indicated in
the Agreement; and
11.9.3.2. if there is no corresponding adjustment with respect to any other item of Work; and

11.9.3.3. if CONTRACTOR believes that CONTRACTOR has incurred additional expense as a result
thereof;
CONTRACTOR may make a claim for an increase in the Contract Price in accordance with Article 11 if the
parties are unable to agree as to the amount of any such increase."

Since the adjustments pursuant to GC-l1.9.3 are only for the benefit of Contractors, some Engineers and
Owners may desire to revise GC-l1.9.3 to provide an equal right for Owners to claim an adjustment in a unit
price in the event that quantity variations would justify such a change by use of the following language instead
ofthe last clause and the last sentence of SC-l1. 9.3:
"11.9.3.3. if CONTRACTOR believes that it has incurred additional expense as a result thereof; or
11.9.3.4. if OWNER believes that the quantity variation entitles it to an adjustment in the unit price,
either OWNER or CONTRACTOR may make a claim for an adjustment in the Contract Price in accordance
with Article 11 if the parties are unable to agree as to the effect of any such variations in the quantity of Unit
Price Work performed."

SC-12.1. Change of Contract Time

If it is desired to change the time limitations with respect to filing and supporting claims for a change in the
Contract Time, this should be accomplished in SC-12.1. (Note that the time limitations in GC-l1.2 and 12.1
are identical.)

23
 APPENDIX 6 293

SC-13.4. Tests and Inspections

If the arrangements in GC-13.4 with respect to inspections, tests and payment therefor are to be changed, the
change should appear in the Supplementary Conditions. Detailed requirements as to any test should be
included in the appropriate Specification. If Owner requires Engineer to certify as to compliance with any
test or inspection standard before acceptance of any Work, changes should be made in SC-13.4, and in SC-9
as to Engineer's duties. The additional specific condition for payment should appear in the General Require-
ments. Customary conditions precedent to payment appear in GC-14.7 (see discussion below).

SC-13.5. Tests and Inspections

If inspectors or testing laboratories are also to be acceptable to Engineer, this should be provided in SC-13.5.

SC-13.12. Special Guarantees

Any change in the language ofGC-13.12 should be made in the Supplementary Conditions. On the other hand,
a requirement that Contractor furnish special guarantees of materials or equipment is to appear in the General
Requirements or in an appropriate section of the detailed Specifications. Legally effective warranties and
guarantees are difficult to draft; the advice of Owner's attorney is suggested. It is well to bear in mind that
GC-13.12 does not contain a guarantee. Contractor's general warranties and guarantees appear in GC-13.1
and 14.3 as supplemented by GC-14.15 and by remedies provided by Laws and Regulations. Special guarantees
are usually provided in response to GC-6.7.3 or the Specifications. Also, GC-13.12 is not a limitation of
Contractor's liability, rather it provides an additional remedy available to Owner; this is explained in GC-
17.4. See also discussion under SC-14.1O and Commentary on Agreements for Engineering Services and
Contract Documents (No. 1910-9) Chapter III, ~ 31.

SC-14. Provisions Concerning Payment

The terms of the understanding between Owner and Contractor as to Contract Price or Time, the basic
provisions as to payment, provisions as to guaranteed maximum price, sharing of cost savings or incentive
compensation, provisions for liquidated damages and provisions as to retainage (including changes thereof
upon partial satisfactory completion and other arrangements in lieu of retainage) , all belong in the Agreement
(see Standard Forms of Agreement between Owner and Contractor, Nos. 191O-8-A-l and 191O-8-A-2) and not
in the Supplementary Conditions. If the terms of GC-14 are to be changed, the change should be made in the
Supplementary Conditions. Language to further expand what is set forth in GC-14 to include additional details
for the processing of applications for payment or the contents thereof should appear in the General Require-
ments. (See generally the Locator Guide, No. 1910-16).

SC-14.1. Schedules
Any change in requirements with respect to schedules should appear in SC-2.6 and 2.9 or in the General
Requirements.

SC-14.2. Applications for Progress Payment

GC-14.2 requires that Contractor's Application for Payment be supported by "such ... documentation as is
required by the Contract Documents" . Some forms of General Conditions currently in use add the requirement
"and also as Engineer may reasonably require" as did earlier editions of the EJCDC's General Conditions,
No. 1910-8. Owners frequently expect the Applications for Payment will be accompanied by various supporting
data while Engineers and Contractors have other ideas. It is important to clarify for all three parties what
supporting documentation will be required. Language for this purpose may appear in SC-14.2 or in the General
Requirements. (See also comment at SC-14.12.) Note also that the EJCDC's Standard Form of Agreement
between Owner and Engineer for Professional Services (No. 1910-1) provides in Article 3 (~3.8 of the 1979
ed.) that it is not a customary responsibility of Engineer to furnish auditing services to give Owner assurance
as to how or for what purpose Contractor has used moneys paid on account of Work performed.

24
294 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

SC-14.4. Review of Applications for Progress Payment

GC-14.4 provides that Contractor's Applications for Payment will become due and payable ten days after
presentation of the Application with Engineer's recommendation to Owner. Any change in the time period
required for Owner's review and action on the Application should be made in SC-14.4. Provisions for the
payment of interest on moneys not paid when due are included in the Agreement (see Article 60fthe 1910-8-
A-I and Article 10 of 1910-8-A-2). If these provisions are to be changed, the changes should be made in the
Agreement and not in the Supplementary Conditions or the General Requirements.

SC-14.7. Review of Application for Progress Payment

The usual conditions precedent that Contractor must comply with before being entitled to payment, or to put
it another way the reasons for withholding a requested payment from Contractor, are itemized in GC-14.7.
Although not recommended by the EJCDC, many Owners and Engineers prefer to include as one of these
conditions or reasons Contractor's "failure to make payment to Subcontractors or Suppliers or for labor".
See also discussion under SC-6.9. When the Agreement contains provision for liquidated damages, it may be
that Owner will wish to add to the list of reasons why Engineer may refuse to recommend payment the fact
that "liability for liquidated damages has been incurred by Contractor" . If amending language is to be added,
it may appear as SC-14.7.5 and SC-14.7.6. See also discussion under SC-13.4 above.

SC-14.8-14.9. Substantial Completion

For some projects, it may help to avoid disputes between Owner and Contractor if specific items of the Work
are identified as required or not required to be fully completed at the time of Substantial Completion. This
may be accomplished in SC-14.8 by adding language to expand GC-14.8 to list certain principal items that
must be ready for continuous service by Owner, or to list such items as fencing, landscaping or signing, the
completion of which may not be a requirement for Substantial Completion. [See comments under SC-l above
concerning definition of "Substantial Completion"].

SC-14.10. Partial Utilization

Provisions are made in GC-14.1O for the Owner to utilize a finished part of the Work, which has been
specifically identified in the Contract Documents, prior to Substantial Completion of aU the Work. The
description or limits of the Work to be so utilized should be set forth in the General Requirements with
supplementary work-related details covered in the detailed Specifications. When the early acceptance of a
finished part of the Work is accomplished in this manner, the ECJDC recommends that consideration be given
to starting the one-year correction period (see GC-13.12) for that part ofthe Work at the time of Substantial
Completion of that part of the Work. In such a case, Owner may wish the correction period to run for more
than the customary one year. Similarly, the time period of any special guarantee applicable to that part of the
Work might commence to run on the date of Substantial Completion ofthe finished part of the Work. Also to
be considered is the period of time after Substantial Completion of a finished part of the Work during which
any Performance Bond will be applicable to that part of the Work. If the understanding is clear at the time
when the Agreement is signed, the change with respect to the one-year correction period should appear in
SC-13.12 or in the portion of the Contract Documents where the part of the Work that may be so utilized is
identified (with a cross reference in SC-13.12); otherwise, it can be negotiated and accomplished by agreement
at the time of Substantial Completion of the finished part of the Work.

SC-14.10.3. Partial Utilization

See discussion under SC-5.15.

SC-14.12. Final Application for Payment

GC-14.12, like GC-14.2, requires that Contractor's final Application for Payment "be accompanied by aU
documentation called for in the Contract Documents". Some forms of General Conditions currently in use

25
 APPENDIX 6 295

add the requirement "and such other data and schedules as Engineer may reasonably require" as did the
earlier editions of the EJCDC's General Conditions, No. 1910-8. Owners often expect that final Applications
for Payment will be accompanied by various supporting data, and lending or financing institutions may have
special requirements. It is important that Owner, Contractor and Engineer know in advance what will be
required and that either Engineer be given the right (and thus the duty) to ask for additional supporting
documentation as appropriate or that all the documentation that will be required be listed in advance in the
Contract Documents. Language for this purpose should appear in SC-14.12 or in the General Requirements.
See also discussion in SC-14.13 as to the possibility of requiring a special certificate from Engineer or another
party as condition to final payment.

SC-14.13. Final Payment and Acceptance

There is significant legal exposure to an Engineer when giving any certification at completion of the Work.
Paragraph GC-14.13 calls for a formal recommendation of final payment and a written notice that the Work
is acceptable (with certain exceptions).
While the notice of acceptability should be sufficient, many Owners require additional written assurance in
the form of specific certifications from their Engineer especially in connection with project financing. If any
such certification is to be given at completion of the Work, the requirements for it should be understood at
the outset and set forth in the Supplementary Conditions. See discussions of certifications by Engineer in
Commentary on Agreements for Engineering Services and Contract Documents (No. 1910-9). Engineer should
consult with legal and insurance counsel as to acceptability of the language of any certification Engineer will
be required to give in addition to the notice of acceptability. If any such special certification by Engineer (or
any other party) will be a condition precedent to Contractor's right to final payment, Contractor should be
apprised of the requirement for and substance of the certification. This should be accomplished in SC-14.13
(or as a supplement to SC-14.12).

SC-16. Arbitration
At times, the parties will wish to eliminate the provisions for mandatory and binding arbitration. This can be
done by tearing out the separate page on which GC-16 appears without affecting any other provision of the
Contract Documents, in which case a sentence to that effect should appear at the bottom of the immediately
preceding page such as "Article 16 deleted and page _ _omitted intentionally". If, on the other hand, it is
desired to amend some of the printed language ofGC-16, that too should be accomplished in SC-16. Extreme
caution must be exercised before embarking on any language changes which should only be undertaken with
the advice of Owner's attorney. Owner should be requested to confirm specifically if it wishes the Contract
Documents to provide for mandatory and binding arbitration.
See discussion under SC-9.1O as to possible change in GC-16.2.

26
296 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

IV. Additional Comments

1. Language amplifying the bid security requirements should, to the extent practicable, be included in the
Instructions since such requirements will have no legal effect as to Contractor after the Agreement is signed.
2. Any requirement with respect to liquidated damages should appear in the Owner-Contractor Agreement
(see paragraph 3.2 of Document Nos. 1910-8-A-l and 1910-8-A-2) although it may be desirable to include in
the Instructions a cross reference to any such provisions. The EJCDC and the Locator Guide recommend
against inclusion of liquidated damages provisions in the Supplementary Conditions.
3. It is frequently mandated by Laws or Regulations that the full text of a given statutory provision or
regulation be included in the Contract Documents. At times Owner will wish to do so voluntarily. Although
these statutory provisions are occasionally added as appendices to the Supplementary Conditions, it is
considered better practice and more customary to include the required language in a separately numbered
article ofthe Supplementary Conditions. These may be reproductions ofthe prescribed language. The types
of information to which these comments apply include:
Certification of Equal Employment Opportunity
Labor Standard Provisions
Certification of Wage Rates
Certification of Non-Segregated Facilities
Affirmative Action Contract Compliance Requirements
Value Engineering Incentive
Specific Project Requirements
Statutory Declarations
When the contract is to be awarded after bidding, it may be necessary to attach certain of those requirements
to the actual bid.
Assistance in identifying the applicable provisions should be obtained from Owner's attorney.
4. If a construction manager or Construction Coordinator is to be involved, extensive changes will be required
in the General Conditions especially Articles 8 and 9. The EJCDC's General Conditions (No. 1910-8) have
been prepared for use where one prime Contractor is involved on the project but may be modified to adapt
to a mUlti-prime arrangement as indicated in the comments under SC-7 above. Since construction management
and construction coordination arrangements vary widely (especially on the matter of whether the manager is
to function strictly as Owner's representative and coordinator of the various prime contractors or whether
the manager will have exposure as to the Contract Price and really be functioning as another contractor) no
standard language has been prepared by the EJCDC. Experience indicates that most of the provisions of the
General Conditions (No. 1910-8) are applicable to any such arrangement but at times changes are so extensive
that complete retyping of the General Conditions would be necessary.

27
 This document has important legal consequences; consultation with an attorney is encouraged with
respect to its completion or modification.

GUIDE
TO THE

PREPARATION OF
INSTRUCTIONS TO BIDDERS
Prepared by
ENGINEERS' JOINT CONTRACT DOCUMENTS COMMITTEE
and
Issued and Published Jointly By

NATIONAL
SOCIETY Of
PROfESSIONAL
ENGINEERS
r~.otD "lA

PROFESSIONAL ENGINEERS IN PRIVATE PRACTICE

A practice division of the
NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

AMERICAN CONSULTING ENGINEERS COUNCIL

AMERICAN SOCIETY OF CIVIL ENGINEERS

CONSTRUCTION SPECIFICATIONS INSTITUTE

This document has been approved and endorsed by

The Associated General Contractors of America

The suggested language contained in this Guide to the Preparation of Instructions to Bidders has been
prepared for use with the Owner-Contractor Agreements (No. 1910-8-A-l or No. 191O-8-A-2, 1983
editions) and the Standard General Conditions of the Construction Contract, No. 1910-8, 1983 edition.
The suggested language is carefully integrated with that of the Guide to the Preparation of Supplementary
Conditions (No. 1910-17,1983 edition) and the Suggested Bid Form, No. 1910-18, 1983 edition. See also
Commentary on Agreements for Engineering Services and Contract Documents, No. 1910-9, 1981
edition.

EJene No. 1910-12 (1983 Edition) 297

298 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

© 1983 National Society of Professional Engineers

2029 K Street, N.W., Washington, D.C. 20006

American Consulting Engineers Council

1015 15th Street, N.W., Washington, D.C. 20005

American Society of Civil Engineers

345 East 47th Street, New York, NY 10017

Construction Specifications Institute

601 Madison Street, Alexandria, VA 22314
 APPENDIX 7 299

Index
Page
Number
Award of Contract ...................................................................................... 9

Bid Form ................................................................................................ 7

Bid Security ............................................................................................. 4

Bids to Remain Subject to Acceptance ................................................................ 8

Contract Time ........................................................................................... 5

Copies of Bidding Documents .......................................................................... 2

Defined Terms. ....... ..... ....... ................ ... ... ....... .......................................... 2

Examination of Contract Documents and Site ........................................................ 3

Interpretations and Addenda ........................................................................... 4

Liquidated Damages .................................................................................... 5

Modification and Withdrawal of Bids .................................................................. 8

Opening of Bids ......................................................................................... 8

Contract Security ..................... '.................................................................. 10

Qualifications of Bidders .......................................................... ;.................... 2

Signing of Agreement ................................................................................... 10

Subcontractors, Suppliers and Others ................................................................. 6

Submission of Bids ...................................................................................... 7

Substitute or "Or Equal" Items........................................................................ 5

Supplementary Instructions ............................................................................ 11

300 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

Introduction
This Guide to the Preparation of Instructions to Bidders (herein sometimes called "Instructions") has been
prepared for use with Owner-Contractor Agreement (No. 1910-8-A-l or 1910-8-A-2, 1983 editions) and with
the Standard General Conditions of the Construction Contract (No. 1910-8, 1983 edition). Their provisions
are interrelated and a change in one may necessitate a change in the others. Comments concerning their usage
are contained in the Commentary on Agreements for Engineering Services and Contract Documents, No.
1910-9, 1981 edition. For guidance in the preparation of Supplementary Conditions and relationship to
Instructions to Bidders, see Guide to the Preparation of Supplementary Conditions, No. 1910-17, 1983 edition.
See also Suggested Bid Form, No. 1910-18, 1983 edition. The EJCDC has not prepared a suggested form of
Advertisement or Invitation to Bid because such documents will vary widely in response to statutory require-
ments.
This Guide and the other Bidding Documents prepared and issued by the EJCDC assume acceptance of
the Project Manual concept of the Construction Specifications Institute which provides for an organizational
format for location of all bound documentary information for a construction project, namely: Bidding Require-
ments (which term refers to the Advertisement or Invitation to Bid, the Instructions and to any bid form that
may be suggested or prescribed, all of which provide information and guidance for all Bidders) and the
Contract Documents (defined in Article 1 of the General Conditions) which include the Agreement, Bonds
and Certificates, the General Conditions, the Supplementary Conditions, the Drawings and the Specifications
(General Requirements and Divisions 2-16). The Bidding Requirements are not considered part of the Contract
Documents because much of their substance pertains to the relationships prior to the award of the contract
and have little effect or impact thereafter and because many contracts are awarded without going through the
bidding process. In some cases, however, the actual bid may be attached as an exhibit to the Agreement to
avoid extensive retyping. (The term' 'Bidding Documents", which is defined in paragraph 1 of the Suggested
Language for Instructions to Bidders, includes both the Bidding Requirements and the Contract Documents).
The Project Manual concept is explained in the Manual ofPractice issued by the Construction Specifications
Institute.
Suggested language is presented herein with Notes to Engineer to assist in preparing the Instructions. Much
of the language should be usable on most projects but modifications and additional provisions will often be
necessary. The suggested language has been coordinated with the other standard forms produced by the
EJCDC. When modifying the suggested language or writing additional provisions, the Engineer must check
the other documents thoroughly for conflicts and coordination of language usage, and make appropriate
revisions in all affected documents.
Refer to "Guide to the Preparation of Supplementary Conditions" for a bibliography of documents which
will be helpful in preparing the Instructions to Bidders.
For brevity, referenced paragraphs of the General Conditions are referred to in the Notes to Engineer with
prefix "GC", those ofthe Supplementary Conditions with the prefix "SC" and those of this Guide with the
prefix "I".

NOTES:
(1) EJCDC publications may be obtained by writing to NSPE headquarters, 2029 K St., N.W., Washington,
DC 20006; ACEC headquarters, 1015 15th St., N.W., Washington, DC 20005; ASCE headquarters, 345
East 47th St., New York, NY 10017; or CSI headquarters, 601 Madison St., Alexandria, VA 22314.
(2) CSI publications may be obtained by writing to CSI headquarters at the above address.
(3) AlA publications may be obtained from most local AlA Chapter offices or by writing to AlA headquarters,
1735 New York Ave., N.W., Washington, DC 20006.
1
 APPENDIX 7 301

Suggested Language for Instructions to Bidders

1. Defined Terms.
Terms used in these Instructions to Bidders which are defined in the Standard General Conditions of the
Construction Contract (No. 1910-8, 1983 ed.) have the meanings assigned to them in the General Conditions.
The term "Bidder" means one who submits a Bid directly to Owner, as distinct from a sub-bidder, who
submits a bid to a Bidder. The term "Successful Bidder" means the lowest, qualified, responsible and
responsive Bidder to whom Owner (on the basis of Owner's evaluation as hereinafter provided) makes an
award. The term "Bidding Documents" includes the Advertisement or Invitation to Bid, Instructions to
Bidders, the Bid Form, and the proposed Contract Documents (including all Addenda issued prior to receipt
of Bids).
NOTES TO ENGINEER
1. In the event additional terms are to be defined in the Bidding Documents, such terms should be defined
by using the following introductory language:
Other terms used in the Bidding Documents and not defined elsewhere have the following meanings which are applicable
to both the singular and plural thereof:

Defined terms should be written and used uniformly with initial capitals. Note the term "Bidding Require-
ments" means only the Advertisement or Invitation to Bid, Instructions and any suggested or prescribed
Bid Form.

2. Copies of Bidding Documents.

2.1. Complete sets of the Bidding Documents in the number and for the deposit sum, if any, stated in the
Advertisement or Invitation to Bid may be obtained from Engineer. The deposit will be refunded to document
holders of record who return the Bidding Documents in good condition within thirty days after opening of
Bids.
2.2. Complete sets of Bidding Documents must be used in preparing Bids; neither Owner nor Engineer assume
any responsibility for errors or misinterpretations resulting from the use of incomplete sets of Bidding
Documents.
2.3. Owner and Engineer in making copies of Bidding Documents available on the above terms do so only
for the purpose of obtaining Bids on the Work and do not confer a license or grant for any other use.
NOTES TO ENGINEER
2. Practices vary in the manner of issuing Bidding Documents, recording the names of document holders,
requiring deposits and refunding of deposits. If a change is desired in Article 1-2, such as in 1-2.1 wherein
the manner of handling deposits is described or the office where additional sets of Bidding Documents
may be obtained, the Article should be modified.

3. Qualifications of Bidders.
To demonstrate qualifications to perform the Work, each Bidder must be prepared to submit within five days
of Owner's request written evidence, such as financial data, previous experience, present commitments and
other such data as may be called for below (or in the Supplementary Instructions). Each Bid must contain
evidence of Bidder's qualification to do business in the state where the Project is located or covenant to obtain
such qualification prior to award of the contract.
NOTES TO ENGINEER
3. It is desirable to itemize in sufficient detail to be of guidance to Bidders the known data that all Bidders
will be required to submit in order tq demonstrate their qualifications for the award. This data should
appear in 1-3 in its entirety, or if voluminous in a supplement to the Instructions as indicated above, and
may include specific language required by statute or regulation.
It is usually good practice to consult Owner regarding Bidder qualifications.
Owner may wish to prequalify Bidders. The mechanical procedures and intricacies involved in the pre-
qualification of Bidders, which is usually not permitted in public works, require careful consideration
before appropriate language is drafted.

2
302 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

4. Examination of Contract Documents and Site.

4.1. It is the responsibility of each Bidder before submitting a Bid, to (a) examine the Contract Documents
thoroughly, (b) visit the site to become familiar with local conditions that may affect cost, progress, perfor-
mance or furnishing of the Work, (c) consider federal, state and local Laws and Regulations that may affect
cost, progress, performance or furnishing ofthe Work, (d) study and carefully correlate Bidder's observations
with the Contract Documents, and (e) notify Engineer of all conflicts, errors or discrepancies in the Contract
Documents.
4.2. Reference is made to the Supplementary Conditions for identification of:
4.2.1. those reports of explorations and tests of subsurface conditions at the site which have been utilized by
Engineer in preparation of the Contract Documents. Bidder may rely upon the accuracy of the technical data
contained in such reports but not upon non-technical data, interpretations or opinions contained therein or
for the completeness thereoffor the purposes of bidding or construction.
4.2.2. those drawings of physical conditions in or relating to existing surface and subsurface conditions
(except Underground Facilities) which are at or contiguous to the site which have been utilized by Engineer
in preparation of the Contract Documents. Bidder may rely upon the accuracy of the technical data contained
in such drawings but not upon the completeness thereof for the purposes of bidding or construction.
Copies of such reports and drawings will be made available by Owner to any Bidder on request. Those reports
and drawings are not part of the Contract Documents, but the technical data contained therein upon which
Bidder is entitled to rely as provided in Paragraphs 4.2.1 and 4.2.2 are incorporated therein by reference.
Such technical data has been identified and established in the Supplementary Conditions.
NOTES TO ENGINEER
4.2. It is essential that the technical data upon which Contractor may rely be identified and established in
the Supplementary Conditions. (See discussion in SC-4.2.)
The language of1-4.2 and 4.3 has been closely and meticulously related to that ofGC-4.2 and 4.3. Also.
the Suggested Bid Form (No. 1910-18) and the Owner-Contractor Agreements (Nos. 1910-8-A-1 and
191O-8-A-2) contain representations by Contractor similar to those contained in 1-4.8 below.
On projects where compliance with the provisions in 1-4.5 will require extensive investigation. reasonable
time must be allowed in the bidding period to permit Bidders to perform the necessary explorations.
In the event there are no data of the types referred to in 1-4.2 or 4.3. it may be appropriate to delete any
or all of 1-4.2 or 4.3 and to amend 1-4.5 as indicated below.
The term "Underground Facilities" is defined in the General Conditions.

4.3. Information and data reflected in the Contract Documents with respect to Underground Facilities at or
contiguous to the site is based upon information and data furnished to Owner and Engineer by owners of such
Underground Facilities or others, and Owner does not assume responsibility for the accuracy or completeness
thereof unless it is expressly provided otherwise in the Supplementary Conditions.
NOTES TO ENGINEER
4.3. See Notes under paragraph 4.2 above.

4.4. Provisions concerning responsibilities for the adequacy of data furnished to prospective Bidders on
subsurface conditions, Underground Facilities and other physical conditions, and possible changes in the
Contract Documents due to differing conditions appear in Paragraphs 4.2 and 4.3 of the General Conditions.
4.5. Before submitting a Bid, each Bidder will, at Bidder's own expense, make or obtain any additional
examinations, investigations, explorations, tests and studies and obtain any additional information and data
which pertain to the physical conditions (surface, subsurface and Underground Facilities) at or contiguous to
the site or otherwise which may affect cost, progress, performance or furnishing of the Work and which
Bidder deems necessary to determine its Bid for performing and furnishing the Work in accordance with the
time, price and other terms and conditions of the Contract Documents.
NOTES TO ENGINEER
4. In the event there are not data of the types referred to in 1-4.2 or 4.3, it may be appropriate to delete any
or all ofl-4.2 or 4.3, to revise 1-4.4, to amend 1-4.5 in a manner similar to the following and to renumber
some of these paragraphs:

3
 APPENDIX 7 303

4.5. Before submitting a Bid each Bidder will be responsible to make or obtain such explorations, tests and data
concerning physical conditions (surface, subsurface and Underground Facilities) at or contiguous to the site, or
otherwise which may affect cost, progress, performance or furnishing of the Work and which Bidder deems necessary
to determine its Bid for performing and furnishing the Work in accordance with the time, price and other terms and
conditions of the Contract Documents.

4.6. On request in advance, Owner will provide each Bidder access to the site to conduct such explorations
and tests as each Bidder deems necessary for submission of a Bid. Bidder shall fill all holes, clean up and
restore the site to its former condition upon completion of such explorations.
4.7. The lands upon which the Work is to be performed, rights-of-way and easements for access thereto and
other lands designated for use by Contractor in performing the Work are identified in the Contract Documents.
All additional lands and access thereto required for temporary construction facilities or storage of materials
and equipment are to be provided by Contractor. Easements for permanent structures or permanent changes
in existing structures are to be obtained and paid for by Owner unless otherwise provided in the Contract
Documents.
NOTES TO ENGINEER
4.7. Any conditions set forth in easements obtained by Owner which may affect performance or furnishing
of the Work must be disclosed to Bidder. If the information is available at the time documents are
prepared, it should be added to paragraph 1-4.7 or the exact language of the easement or right-of-way
should be included in the General Requirements .Ifimportant information is not yet available, appropriate
statements should be made concerning assumptions to be made by Bidder and upon which Bidder may
rely.
4.8. The submission of a Bid will constitute an incontrovertible representation by Bidder that Bidder has
complied with every requirement of this Article 4, that without exception the Bid is premised upon performing
and furnishing the Work required by the Contract Documents and such means, methods, techniques, sequences
or procedures of construction as may be indicated in or required by the Contract Documents, and that the
Contract Documents are sufficient in scope and detail to indicate and convey understanding of all terms and
conditions for performance and furnishing of the Work.

5. Interpretations and Addenda.

5.1. All questions about the meaning or intent of the Contract Documents are to be directed to Engineer.
Interpretations or clarifications considered necessary by Engineer in response to such questions will be issued
by Addenda mailed or delivered to all parties recorded by Engineer as having received the Bidding Documents.
Questions received less than ten days prior to the date for opening of Bids may not be answered. Only
questions answered by formal written Addenda will be binding. Oral and other interpretations or clarifications
will be without legal effect.
5.2. Addenda may also be issued to modify the Bidding Documents as deemed advisable by Owner or
Engineer ..
NOTES TO ENGINEER
5. In the event the Bidding Documents are issued by an issuing office other than Engineer, it may be
appropriate to amend Article 1-5.

6. Bid Security.
6.1. Each Bid must be accompanied by Bid security made payable to Owner in an amount of five percent of
the Bidder's maximum Bid price and in the form of a certified or bank check or a Bid Bond (on form attached,
if a form is prescribed) issued by a surety meeting the requirements of Paragraph 5.1 of the General Conditions.
6.2. The Bid security of the Successful Bidder will be retained until such Bidder has executed the Agreement
and furnished the required contract security, whereupon the Bid security will be returned. If the Successful
Bidder fails to execute and deliver the Agreement and furnish the required contract security within fifteen
days after the Notice of Award, Owner may annul the Notice of Award and the Bid security of that Bidder
will be forfeited. The Bid security of other Bidders whom Owner believes to have a reasonable chance of
receiving the award may be retained by Owner until the earlier of the seventh day after the Effective Date of
the Agreement or the forty-sixth day after the Bid opening, whereupon Bid security furnished by such Bidders
will be returned. Bid security with Bids which are not competitive will be returned within seven days after
the Bid opening.

4
304 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

NOTES TO ENGINEER
6. Reference should be made to statutory requirements and applicable governmental regulations in respect
ofBid security required on public projects. Owner should also be consulted. It may be necessary to delete
Article 1-6 in its entirety and replace it with specific language required by law or regulations. In the event
such language does not provide for the release of Bid security to Bidders who decline to substitute
subcontractors, suppliers or other persons or organizations as provided in 1-10, it may be necessary to
amend 1-10.

7. Contract Time.
The numbers of days within which, or the dates by which, the Work is to be substantially completed and also
completed and ready for final payment (the Contract Time) are set forth in the Bid Form and the Agreement.

NOTES TO ENGINEER
7. Article 1-7 as written anticipates that the times for Substantial Completion andfinal completion (as defined
in GC Article 1 and supplemented in SC-16.9) will be specified. However, it may be preferable to permit
Bidder to designate such times in the Bid in which case Article 1-7 should be amended in a manner similar
to the following:
7. Contract Time.
The time for Substantial Completion and final completion are to be set forth by Bidder in the Bid and will be included
in the Agreement. The times will be taken into consideration by Owner during the evaluation of Bids, and it will be
necessary for the Successful Bidder to satisfy Owner of Bidder's ability to achieve Substantial Completion and final
completion within the times designated in the Bid. Substantial Completion is desired on or before _ _ _ _ __

8. Liquidated Damages.
Provisions for liquidated damages, if any, are set forth in the Agreement.

NOTES TO ENGINEER
8. In the event liquidated damages are not established, delete Article 1-8 and renumber subsequent para-
graphs.

9. Substitute or "Or-Equal" Items.

The Contract, if awarded, will be on the basis of materials and equipment described in the Drawings or
specified in the Specifications without consideration of possible substitute or "or-equal" items. Whenever it
is indicated in the Drawings or specified in the Specifications that a substitute or "or-equal" item of material
or equipment may be furnished or used by Contractor if acceptable to Engineer, application for such accep-
tance will not be considered by Engineer until after the Effective Date of the Agreement. The procedure for
submission of any such application by Contractor and consideration by Engineer is set forth in Paragraphs
6.7.1,6.7.2 and 6.7.3 of the General Conditions and may be supplemented in the General Requirements.

NOTES TO ENGINEER
9. Article 1-9 as written provides that no substitute or "or equal" materials or equipment will be considered
until after the Effective Date of the Agreement. This practice is recommended by the ElCDC; however, it
is recognized that some practitioners do consider requests for substitutions during the bidding period and
issue addenda when a substitute is accepted. In such cases, Article 1-9 should be amended in a manner
similar to the following:
9. Substitute or "Or Equal" Items.
The materials and equipment described in the Bidding Documents establish a standard of required function, dimension,
appearance and quality to be met by any proposed substitution. No substitution will be considered unless written
request for approval has been submitted by the Bidder and has been received by Engineer at least fifteen days prior to
the date for receipt of Bids. Each such request shall include the name of the material or equipment for which it is to be
substituted and a complete description of the proposed substitute including drawings, cuts, performance and test data
and any other information necessary for an evaluation. A statement setting forth any changes in other materials,
equipment or Work that incorporation of the substitute would require shall be included. The burden of proof of the
merit of the proposed substitute is upon the Bidder. The Engineer's decision of approval or disapproval of a proposed
substitution shall be final. If Engineer approves any proposed substitution, such approval will be set forth in an Addendum
issued to all prospective Bidders. Bidders shall not rely upon approvals made in any other manner.
If Article 1-9 is changed in this manner, it will also be necesssary to amend GC-6.7.1, 6.7.2 and 6.7.3 in
the Supplementary Conditions.

5
 APPENDIX 7 305

10. Subcontractors, Suppliers and Others.

NOTES TO ENGINEER
10. The matter of Owner and Engineer retaining the right to disapprove of or reject certain Subcontractors.
Suppliers and other persons or organizations (including those who are to furnish the principal items of
material and equipment) which the apparent Successful Bidder proposes for the Work has not been
approached uniformally nor with unanimous endorsement by various interested organizations. Qualifi-
cation of certain Subcontractors. Suppliers and others prior to the submission of Bids is one approach.
but the mechanical procedures and intricacies involved require careful consideration and this approach
may not be permitted in public works projects. Provisions dealing with this matter after the Effective
Date of the Agreement are contained in Paragraph 6.8 of the General Conditions. The EJCDC believes
that as a general principle Contractors should be entitled to employ Subcontractors. Suppliers and others
of their own choosing. that occasions when Owner and Engineer will wish to disapprove or reject will
arise infrequently. and that the right to reject should be exercised only with appropriate supporting data.
circumspectly and cautiously. It is recognized. however. that there will be situations in which. because
of the peculiarities of a given project. it will be important for Owner and Engineer to have the right to
reject certain Subcontractors. Suppliers and others who are proposedfor the Work.
Provisions dealing with the prequalification of Subcontractors. Suppliers and others prior to the opening
of Bids should be set forth in 1-10. as should provisions dealing with Owner's and Engineer's right to
disapprove between the time of the opening of Bids and the giving of the Notice of Award. Coordination
of the language with 1-3 and 1-16.3 should not be overlooked. It is important to remember that Owner's
and Engineer' s right to reject will apply only to those Subcontractors. Suppliers and others whose identity
is to be submitted to Owner and Engineer as required by the Supplementary Conditions (see SC-6.8);
accordingly. unless a particular trade. manufacturer. etc. has been so singled out. the right to reject
would not exist (except as generally provided in GC-6.8).
Set forth below is language that may be used in 1-10 to address some of these considerations. Requiring
the apparent Successful Bidder to employ a substitute Subcontractor. Supplier or other person that is
acceptable to Owner and Engineer may have a serious affect on the Bid price first submitted. and there
are various ways of dealing with the situation should it arise. Accordingly. alternative language is
furnished below. Some Owners may favor the first approach as being more equitable to Contractors and
for its tendency to produce a lower initial Bid price. Others may prefer the second approach because of
legal constraints applicable to public works projects or because of the desire to hold firm the initial Bid
price even though this may result generally in higher Bid prices. There are other sound ways to address
these problems. The entire matter should be reviewed with Owner and its attorney prior to finalizing the
Instructions.
10.1. If the Supplementary Conditions require the identity of certain Subcontractors. Suppliers and other persons and
organizations (including those who are to furnish the principal items of material and equipment) to be submitted to
Owner in advance of the specified date prior to the Effective Date of the Agreement. the apparent Successful Bidder,
and any other Bidder so requested. shall within seven days after the Bid opening submit to Owner a list of all such
Subcontractors, Suppliers and other persons and organizations proposed for those portions of the Work for which
such identification is required. Such list shall be accompanied by an experience statement with pertinent information
regarding similar projects and other evidence of qualification for each such Subcontractor. Supplier, person or
organization if requested by Owner. If Owner or Engineer after due investigtion has reasonable objection to any
proposed Subcontractor, Supplier, other person or organization, either may before the Notice of Award is given
request the apparent Successful Bidder to submit an acceptable substitute
in which case the apparent Successful Bidder shall submit an acceptable substitute, that Bidder's Bid price will
be increased (or decreased) by the difference in cost occasioned by such substitution and Owner may consider
such price adjustment in evaluating Bids and making the contract award.
or
without an increase in Bid price.
If apparent Successful Bidder declines to make any such substitution, Owner may award the contract to the next
lowest Bidder that proposes to use acceptable Subcontractors, Suppliers and other persons and organizations. The
declining to make requested substitutions will not constitute grounds for sacrificing the Bid security of any Bidder.
Any Subcontractor, Supplier, other person or organization listed and to whom Owner or Engineer does not make
written objection prior to the giving ofthe Notice of Award will be deemed acceptable to Owner and Engineer subject
to revocation of such acceptance after the Effective Date of the Agreement as provided in Paragraph 6.8.2 of the
General Conditions.

10.2. In contracts where the Contract Price is on the basis of Cost-of-the-Work Plus a Fee, the apparent
Successful Bidder, prior to the Notice of Award, shall identify in writing to Owner those portions of the Work
that such Bidder proposes to subcontract and after the Notice of Award may only subcontract other portions
of the Work with Owner's written consent.
10.3. No Contractor shall be required to employ any Subcontractor, Supplier, other person or organization
against whom Contractor has reasonable objection.

6
306 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

NOTES TO ENGINEER
10. Reference should be made to statutory requirements and applicable governmental regulations in respect
of Subcontractors. Specific provisions may be required by Laws or Regulations, in which case Article 1-
10 may require amending or deletion and replacement with the required language. Note also that Article
1-10 as written contemplates that the Subcontractors, Suppliers and other persons and organizations
required to be identified by the apparent Successful Bidder prior to award of the contract will be indicated
in the Supplementary Conditions. In the event no Subcontractors, Suppliers or others are required to be
identified, it may be appropriate to delete Article 1-10. In the event Owner wishes to know the identity of
any or all Subcontractors, Suppliers, etc., whether or not listed in the Supplementary Conditions, the
beginning oftheftrst sentence in Paragraph 10.1 may be modified to read asfollows:
If Owner requests the identity of any Subcontractors, Suppliers, or other persons or organizations to be submitted to
Owner in advance of the _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Note that if 1-10.1 is changed in this manner, it will be necessary to make corresponding changes in 1-
16.3 and the Supplementary Conditions to modify paragraph 6.8.2 in the General Conditions.

11. Bid Form.

11.1. The Bid Form is included with the Bidding Documents; additional copies may be obtained from Engineer
(or the issuing office).
11.2. All blanks on the Bid Form must be completed in ink or by typewriter.
11.3. Bids by corporations must be executed in the corporate name by the president or a vice-president (or
other corporate officer accompanied by evidence of authority to sign) and the corporate seal must be affixed
and attested by the secretary or an assistant secretary. The corporate address and state of incorporation must
be shown below the signature.
11.4. Bids by partnerships must be executed in the partnership name and signed by a partner, whose title
must appear under the signature and the official address of the partnership must be shown below the signature.
11.5. All names must be typed or printed below the signature.
11.6. The Bid shall contain an acknowledgement of receipt of all Addenda (the numbers of which must be
filled in on the Bid Form).
11.7. The address and telephone number for communications regarding the Bid must be shown.
NOTES TO ENGINEER
11. Article 1-11 as written contemplates a single Bid on the basis of a stipulated price (which may include a
unit price schedule) or on the basis of cost-plus. However, the Bid Form in many cases may provide for
separate prices for alternatives or separate sections of the Work or other deviations from a single price
Bid. The Bid Form may also include cash allowances as provided in GC-ll.8. For references on Bid
pricing requirements concerning unit prices, see GC-ll.9. In the event separate prices are to be offered
for separate sections or alternatives, or if cash allowances are specified, Article 1-11 should be supple-
mented in a manner similar to the following:
11.8. Bidders may submit a Bid for any of the separate sections defined in the Contract Documents or any combination
of sections as provided for in the Bid Form.
or
11.8. Bids must be priced on a lump sum basis for the base contract and include a separate price for each alternative
described in the Specifications as provided for in the Bid Form. The price of the Bid for each alternative will be the
amount to be added to or deducted from the price of the base Bid if Owner selects the alternative.
11.9. The Bid price shall include such amounts as the Bidder deems proper for overhead and profit on account of cash
allowances named in the Contract Documents as provided in OC-l1.8.
See Suggested Bid Form No. 1910.18.

12. Submission of Bids.

Bids shall be submitted at the time and place indicated in the Advertisement or Invitation to Bid and shall be
enclosed in an opaque sealed envelope, marked with the Project title (and, if applicable. the designated portion
of the Project for which the Bid is submitted) and name and address of the Bidder and accompanied by the
Bid security and other requ~red documents. If the Bid is sent through the mail or other delivery system the
sealed envelope shall be enclosed in a separate envelope with the notation "BID ENCLOSED" on the face
of it.

7
 APPENDIX 7 307

NOTES TO ENGINEER
12. Practices vary in respect of the documentation required to be submitted with Bids. It is usually necessary
to supplement Article 1-12. Language may be added as follows:
Prospective Bidders are furnished one copy of the Bidding Documents with one separate unbound copy each of the
Bid Form and the Bid Bond. The Bidding Documents may be retained by the Bidder. The unbound copy of the Bid
Form is to be completed and submitted with the Bid security and the following data:

The above language may be modified to require return of a bound copy of the Bidding Documents intact
with the Bid.

13. Modification and Withdrawal of Bids.

13.1. Bids may be modified or withdrawn by an appropriate document duly executed (in the manner that a
Bid must be executed) and delivered to the place where Bids are to be submitted at any time prior to the
opening of Bids.
13.2. If, within twenty-four hours after Bids are opened, any Bidder files a duly signed, written notice with
Owner and promptly thereafter demonstrates to the reasonable satisfaction of Owner that there was a material
and substantial mistake in the preparation of its Bid, that Bidder may withdraw its Bid and the Bid security
will be returned. Thereafter, that Bidder will be disqualified from further bidding on the Work to be provided
under the Contract Documents.

NOTES TO ENGINEER
13. Withdrawal of any Bid which is demonstrated to contain a substantial mistake is permitted under 1-13.2.
This practice is in accordance with written policies of various professional societies and governmental
agencies. However. it is recognized that some Owners' policies may differ and that it may be necessary
to delete 1-13.2.

14. Opening of Bids.

Bids will be opened and (unless obviously non-responsive) read aloud publicly. An abstract of the amounts
of the base Bids and major alternates (if any) will be made available to Bidders after the opening of Bids.

NOTES TO ENGINEER
14. Article 1-14 as written presumes a public opening. If Bids are to be opened privately, Article 1-14 must
be amended. An example follows:
14. Opening of Bids.
Bids will be opened privately. An abstract of the amounts of the base Bid and major alternates (if any) will be made
available to Bidders within seven days after the date of Bid opening.

15. Bids to Remain Subject to Acceptance.

All bids will remain subject to acceptance for forty-five days after the day of the Bid opening, but Owner
may, in its sole discretion, release any Bid and return the Bid security prior to that date.

NOTES TO ENGINEER
15. Article 1-15 as written provides for Bids to remain open for forty-five days. This time period appears in
the standard form because of the delays usually encountered when federal funds are involved in the
project. However. better Bid prices may be offered if this time can be shortened. and it may be advan-
tageous to amend the Article to provide thirty days or less for acceptance.
Note that provisions on the commencement of Contract Time appear in GC-2.3 and that the period of
time during which Bids are to remain open and by which a Notice ofAward is to be given are interrelated
with the date when the Contract Time commences to run. The EJCDC suggested schedule of events
between the opening of Bids and the starting of the Contract Time is discussed in SC-2.3. Any changes
must be carefully coordinated among all of the Bidding Documents.

8
308 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

16. Award of Contract.

16.1. Owner reserves the right to reject any and all Bids, to waive any and all informalities not involving
price, time or changes in the Work and to negotiate contract terms with the Successful Bidder, and the right
to disregard all nonconforming, nonresponsive, unbalanced or conditional Bids. Also, Owner reserves the
right to reject the Bid of any Bidder if Owner believes that it would not be in the best interest of the Project
to make an award to that Bidder, whether because the Bid is not responsive or the Bidder is unqualified or of
doubtful financial ability or fails to meet any other pertjnent standard or criteria established by Owner.
Discrepancies in the multiplication of units of Work and unit prices will be resolved in favor of the unit prices.
Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved
in favor of the correct sum.
16.2. In evaluating Bids, Owner will consider the qualifications of the Bidders, whether or not the Bids
comply with the prescribed requirements, and such alternates, unit prices and other data, as may be requested
in the Bid Form or prior to the Notice of Award.
16.3. Owner may consider the qualifications and experience of Subcontractors, Suppliers, and other persons
and organizations proposed for those portions of the Work as to which the identity of Subcontractors,
Suppliers, and other persons and organizations must be submitted as provided in the Supplementary Condi-
tions. Owner also may consider the operating costs, maintenance requirements, performance data and
guarantees of major items of materials and equipment proposed for incorporation in the Work when such data
is required to be submitted prior to the Notice of Award.

NOTES TO ENGINEER
Note particularly the relationship ofl-16.3 to 1-10.1 and see Notes to Engineer there.
16.4. Owner may conduct such investigations as Owner deems necessary to assist in the evaluation of any
Bid and to establish the responsibility, qualifications and financial ability of Bidders , proposed Subcontractors,
Suppliers and other persons and organizations to perform and furnish the Work in accordance with the
Contract Documents to Owner's satisfaction within the prescribed time.
16.5. If the contract is to be awarded, it will be awarded to the lowest Bidder whose evaluation by Owner
indicates to Owner that the award will be in the best interests of the Project.
16.6. If the contract is to be awarded, Owner will give the Successful Bidder a Notice of Award within forty-
five days after the day of the Bid opening. .

NOTES TO ENGINEER
16. Many factors not included in Article 1-16 as written may be important to consider in evaluating Bids for
any particular project, and it will often be necessary to amend Article 1-16. When factors in addition to
price will be significant in comparing Bids, the manner in which comparisons will be made should befully
described. In the event major equipment is included in the Work, it may be appropriate to consider
differences in operating efficiency and service support facilities. When Bidder is permitted to designate
the Contract Time, it is necessary to explain the manner in which differences in time will be evaluated.
Examples of such amendments are asfollows:
The evaluation of manufacturer's data on _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
submitted upon request prior to the Notice of Award will include consideration ofthe efficiency and related operating
expense during the anticipated useful life of the equipment and the availability of service support facilities. Costs
related to efficiency will be calculated as follows:
Anticipated useful life 15 years.
Annual service 4,000 hours.
Average energy costs 8¢lkwh.
Capitalization at 10% interest.
or
Bid prices will be compared after adjusting for differences in the time designated in the Bid for Substantial Completion.
The adjusting amount will be determined at the rate set forth in the Contract Documents for liquidated damages
indicated for Substantial Completion for each day after the desired date appearing in Article 1-7.
Note that if no liquidated damages are specified it will be necessary to set an amount for comparing
Bids.
Note also that if 1-15 is changed to provide a shorter time for Bids to remain open, a corresponding
change is required in /-16.6 and the Supplementary Conditions.

9
 APPENDIX 7 309

17. Contract Security.

Paragraph 5.1 of the General Conditions and the Supplementary Conditions set forth Owner's requirements
as to performance and payment Bonds. When the Successful Bidder delivers the executed Agreement to
Owner, it must be accompanied by the required performance and payment Bonds.

NOTES TO ENGINEER
17. In the event no bonds are required, it would be appropriate to delete Article 1-17.

18. Signing of Agreement.

When Owner gives a Notice of Award to the Successful Bidder, it will be accompanied by the required number
of unsigned counterparts of the Agreement with all other written Contract Documents attached. Within fifteen
days thereafter Contractor shall sign and deliver the required number of counterparts of the Agreement and
attached documents to Owner with the required Bonds. Within ten days thereafter Owner shall deliver one
fully signed counterpart to Contractor. Each counterpart is to be accompanied by a complete set of the
Drawings with appropriate identification.

NOTES TO ENGINEER
18. Practices vary widely, and it is recognized that the procedures described in Article 1-18 may often require
amending. See SC-2.3 for discussion of EJCDC suggested scheduling of events prior to starting of the
Contract Time.

10
310 ENGINEERING SERVICE AND CONSTRUCTION CONTRACTS

SUPPLEMENTARY INSTRUCTIONS
The foregoing portion of this Guide, when used as intended with the other standard forms of documents
produced by the ElCnC for construction contracts, includes articles addressing the basic subject matter
required for the most usual projects. However, it is often necessary to supplement the Instructions to Bidders
with additional articles such as:
(a) statements required by federal, state or local Laws or Regulations, funding agencies or appropriate
reference thereto (for example, some states require provisions concerning Contractor's license);
(b) instructions regarding prebid conferences;
(c) prepurchasing by Owner and subsequent assignment of procurement contracts to Contractor; and
(d) Owner's special tax exemption.
Examples of supplementary articles are presented in Articles 1-19 through 1-22.

19. Prebid Conference.

A prebid conference will be held at a.m. on the day of at _---'-_ __
Representatives of Owner and Engineer will be present to discuss the Project. Bidders are encouraged to
attend and participate in the conference. Engineer will transmit to all prospective Bidders of record such
Addenda as Engineer considers necessary in response to questions arising at the conference.

NOTES TO ENGINEER
19. Engineer is advised to record the prospective Bidders in attendance and to keep minutes ofthe conference.

20. Sales and Use Taxes.

Owner is exempt from State Sales and Use Taxes on materials
and equipment to be incorporated in the Work (exemption No. ). Said taxes shall not be included
in the Contract Price. Refer to Supplementary Conditions SC-6.15 for additional information.

NOTES TO ENGINEER
20. Note GC-6.15 and SC-6.15 for conflicts and modify this Article ifnecessary.

21. Retainage.
Provisions concerning retainage and Contractors' rights to deposit securities in lieu of retainage are set forth
in the Agreement.

NOTES TO ENGINEER
21. Reference should be made to statutory requirements on retainage for public projects.

22. Contracts to be Assigned.

Owner has executed contracts with _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
_ _ _ _ _ _ _ _ _ for _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____
~

and for _ _ _ _ _ _ _ _ _ ~

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. The materials and equipment

provided for in these contracts are to be furnished and delivered to the Project site for installation by
Contractor.
The contracts will be assigned by Owner to Contractor.
Identification of the materials and equipment and the procedures to be followed appear in Paragraph SC-6.33
of the Supplementary Conditions.
Bidders may examine the contract documents for these contracts at _ _ _ _ _ _ _ _ _ _ _ _ ____

11
 APPENDIX 7 311

NOTES TO ENGINEER
22. The suggested language pertains to procurement contracts to be assigned. However, Owner often
executes procurement contracts without intention of such assignment. In such an event, Article 1-22
should be modified and reference should be made to the General Requirements instead of the Supple-
mentary Conditions for details concerning the furnishing and delivery of materials and equipment by
others for installation by Contractor.
Reference to EJCDC standardformsfor Procurement Contracts, Series No. /9/0-26, is recommended.

12

Acts of God, 98
Addenda, 10,42, 114
definition of, 59
Additional Services (O-E), 22-23
compensation for, 31
requiring advance authorization, 22-25
requiring no advance authorization, 25
Additional Services (E-AE), 43
Adjusting compensation, 32
Adjustment in Price or Time, 97
AGe. See Associated General Contractors
of America
Agreement
definition of, 59
Effective Date of the, 59, 62, 78, 81
substance of, 48
AlA. See American Institute of Architects
American Arbitration Association (AAA),
37, 109, 110
American Institute of Architects (AlA), v,
2, 14, 15, 75, 76
Contractor's responsibilities and, 77,
79, 84, 85, 88
Documents Review Board of, 47-48
EJCDC documents compared to, 29-30,
79,98
Applications for Payment, 20, 59-60, 103-
104, 106
definition of, 59-60
representations of Engineer in
approving, 20, 104
Arbitration, 36-37, 93-94, 109-110
As-builts, 22, 83
Assignment of rights
in Owner-Contractor Agreements, 57
in Owner-Engineer Agreements, 35-36
Associate Engineer. See Engineer-
Associate Engineer Agreement
(E-AE Agreement)
Associated General Contractors of
America, The (AGC) vi, 47, 72, 80,
81, 103
"Assume responsibility for Contractor(s')
failure to furnish and perform their
Work in accordance with the
Contract Documents", 15
Attorneys, use of, xii
Availability of lands, 71-72
Award,115
Basic Services (E-AE), 41-43
accepting substitutes, 42
interpretations and clarifications, 41-42
less than full services, 42
post-construction services, 42-43
SUBJECT INDEX
Basic Services (O-E), 6-22
Bidding and Negotiating Phase, 10
Construction Phase, 11-12
Exhibit A, 7
Final Design Phase, 9-10, 9-10
general description of, 6-7
interpretations and clarifications, 17, 19,
68-69,92
Operational Phase, 22
Preliminary Design Phase, 8-9
Study and Report Phase, 7-8
Bidders
definition of, 113
examination of Work conditions at site
by, 114
Instruction to, 113
qualifications of, 113
Bidding and Negotiating Phase, 10, 30
Bidding Documents, 48, 113
Bidding Procedure, 115
Bidding Requirements, 47, 59, 113
Bids
form of, 59, 98, 114
withdrawal of, 114
Bonds
delivery of, 66
Performance and Payment, 74-75
surety,95-96
Cash allowances, 97
Certificate of Acceptance-Engineer's, 14,
21,23, 106
Certificate of Substantial Completion, 52,
76
Change Order, 17,41, 52, 54, 61, 70, 73,
79, 85, 92, 96, 97, 98
definition of, 60
Communications, Engineer-Associate
Engineer, 40-41
"Completed work", 14, 16-17
"Completed protect", 16-17
"Comply with laws, rules, regulations,
ordinances, and orders applicable
to furnishing and performing", 15
"Conform generally", 14
Construction Coordinator, 28-29, 90-91,
112
Construction Cost, 45-46
definition of, 32
estimates of, 4-6, 28
exceeding the limit of, 33
limit for, 33, 46
for This Part of the Project, 45
Construction Industry Arbitration Rules,
37,109
Construction Managers, 112
Construction Phase, 11-22, 30, 95
General Conditions and, 9, 11
Construction Related Documents, 47-48,
75, 83, 113. See also Instructions to
Bidders; General Conditions;
Supplementary Conditions;
Stipulated Price Agreement; Cost-
Plus Agreement
Consultation, 7, 24, 42, 43
Contract Documents, 12-20,47,68-71,
77-80, 94-96, 98-99
amending and supplementing, 70-71
controlling law and, 70
definition of, 56, 60-61
examination of, by Contractor, 66-67
General Conditions, 47
intent of, 68-69
interpretations and clarifications of, 17,
19, 68-69, 92
listing of, 56-57
order of preference in, 69
quality of Work, 100-102
record set of, 83
reference standards in, 69-70
report of inconsistencies, 70
reuse of, 71
supplementing requirements of, 71
Contractors
Application for Payment of, 20, 103-104,
106
examination of Contract Documents, 66
functions of, xi-xii .
intent, amendment, and reuse of
Contract Documents, 68-71
liability insurance of, 76
Owner's Agreements with, 47. See also
Stipulated Price Agreement; Cost-
Plus Agreement
payments to, 102-107
final payment, 106-107
general, 102
partial utilization, 105-106
schedule of values, 102-103
submission and review of Application
for progress payments, 103-104
Substantial Completion, 104-105
representations of, in O-Kor
Agreements, 55-56, 114
responsibilities of, 77-89
compliance with laws, 82-83
continuing the Work, 88
record documents, 83
emergencies, 85
following instruction concerning
construction, 77-78
indemnification, 88-89
313
314 SUBJECT INDEX
Contractors (Continued)
responsibilities of (Continued)
labor, material, and equipment, 78
permits, 82
safety, 83-85
Shop Drawings and samples, 86-88
Subcontractors, Suppliers, and
others, 80-82
substitute or "or-equal" items, 10, 18,
24, 25, 42, 78-80, 114, 115
supervision, x, 11, 13-15, 77, 84
taxes, 83
use of premises, 83
right to stop Work of, 16
termination by, 108
Contractor's Fee, 54, 97
Contractor's Representations, 55-56, 114
Contract Price, 27, 28, 53-55, 60, 70, 81
change of, 97
Contractor's Fee, 54
Cost of the Work, 53
definition of, 53, 61
guaranteed maximum price, 54-55
Contracts. See Multi-prime contracts;
Single prime contracts
Contract Time, 52, 60, 66, 70, 111
change of, 97
definition of, 61
Control, xi
Cooperation, xii
Coordination
Construction Coordinator, 28-29, 90-91,
112
Engineer-Associate Engineer, 40
Correction period-one year, 99
Cost of the Work, 53-54
Cost-Plus Agreement, 47, 50-57, 61
Contractor's Fee, 54
Contractor's representations, 55-56
Contract Price, 53-55
Contractor's Fee, 54
Cost of the Work, 53-54
definition, 53, 61
guaranteed maximum price, 54-55
records of costs, 54
Contract Time, 52
defined terms in, 50
Engineer as Owner's representative, 52
liquidated damages, 53
listing of Contract Documents, 56-57
materials and equipment, 50-51
payment procedures, 55
records of costs, 54
times of performance, 52-53
Cost-Plus method of payment for
Engineer's service, 6, 31
Cross Reference between EjCDC Standard
General Conditions of the
Construction Contract and AlA
General Conditions of the Contract
for Construction, No. 1910-11, xii
Defective, 54, 92-93, 98-99, 101-102, 104,
105, 107
definition of, 62
Design concept
integrity of, 14
use of term, 87-88
Design documentation
alternate, 24
redoing, 23-24
Design services, timing of, 30
Direct labor Cost method of payment, 6,
24,31,32
Disputes. See also Arbitration
decisions on, 93-94
Documents, Contract. See Contract
Documents
Drawings, definition of, 9, 62
Drawings and Specifications, 18
interpretations and clarifications of, 17,
19,42-43,68-69,92
reuse of, 33, 62, 68, 71, 100
E-AE Agreement. See Engineer-Associate
Engineer Agreement
Effective Date of the Agreement,
definition of, 59, 62, 78, 81
EjCDC. See Engineers joint Contract
Documents Committee (EjCDC)
Emergencies, 85
Work in, 96-97
Engineer-Associate Engineer Agreement
(E-AE Agreement), 38-46
Basic Services, 41-43
accepting Subcontractors and
Suppliers, 42
accepting substitutes, 42
interpretation and clarifications, 41-
42
less than full services, 42
post-construction services, 42-43
Engineer's Responsibilities, 43-44
complete set of documents, 43-44
identity of other professional, 43
obligation to consult, 43
general considerations for, 46
Guide Sheet, 39-40
identifying exhibits, 39-40
professional liability Insurance, 39
services at the site, 39
single prime construction contract,
39
method of payment, 44-45
period of service, 44
post construction services, 42-43
Project description and This Part of the
Project of, 38-39
underlying concepts, 40-41
communications, 40-41
coordination, 40
independent contractor, 40
Engineer-client relationship. See also O-E
Agreement (Owner-Engineer
Agreement)
meeting of the minds, 1
Engineers
decisions on disputes, 93
Drawings and Specifications of, 33-34
duties and responsibilities of, x-xi
functions of, xi-xii
guarantee-"can neither ... ", 15, 107
less than full services. See O-E Guide
Sheet
observation by, 13, 91-92
representative in approving
Applications for Payment, 20, 104
site visits of, 11-22, 91-92
standard of care, viii-ix, 17-18
status of, 91-96
decisions on disputes, 93-94
generally, x-xi, 7 et seq., 91 et seq.
interpretations and clarifications of
Contract Documents and, 19,92
limitations on responsibilities, 14-15,
20,21,26,94-%
rejecting defective Work, 16-17, 68-
71,92-93
Shop Drawings, 18, 86-88
substitute or "or-equal" items, 10, 18,
24,25,42,78-80,114,115
unit price determinations, 93
visits to the site, 11-16, 91-92
Engineers joint Contract Documents
Committee (EjCDC), v-xiii
Construction related Documents, 47-49
Standard Forms and Guides of, 9
Environmental impact statements, 23
Events, schedule of, 111
Exhibit A, to O-E Agreement, 7, 29
Exhibit B, to O-E Agreement, 15-16
Exhibits, identifying, 39-40
Fairness, vii-viii
Fast-tracking, 30
Federal Copyright law, 33-34
Field Orders, 71, 92
definition of, 62-63
Final Design Phase, 9-10
"Focus on Shop Drawings", 86
General Conditions, 2, 48, 58-110, 111,
113
arbitration, 109-110
availability of lands, 71-n
bonds and insurance, 74-77
contractor's liability insurance, 76
liability and property insurance in
general,75
owner's liability insurance, 76
performance and payment bonds,
74-75
property insurance, 76-77
Construction Phase, 9, 11-22
Contractor's responsibilities, 77-89
compliance with laws, 82-83
continuing the Work, 88
emergencies, 85
following instructions concerning
construction, 77-78
indemnification, 88-89
labor, materials, and equipment, 78
means, methods, techniques,
sequences and procedures of
construction, xi, 15, 77
permits, etc., 82
progress schedule, 78

record documents, 83
safety, 15, 77, 83-85
Shop Drawings, 86-88
Subcontractors, suppliers, and
others, 80-82
substitute or "or-equal" items, 10, 18,
24,25,42,78-80,114,115
supervision, x, 11, 13-15, 77, 84
taxes, 83
timely performance, 52
use of premises, 83
definition of terms in, 58-66
Engineer's status in, 91-96
decisions on disputes, 93-94
general, 91
interpretations and clarifications, 19,
68-69,92
limitations on Engineer's
responsibilities, 94-%
rejecting defective Work, 16-17, 92-93
review of Applications for Payment,
103-4
unit price determinations, 93
visits to the site, 91-92
generally introduced, 58
intent, amendment, and reuse of
Contract Documents, 68-71
amending and supplementing, 70-71
controlling law, 70
order of preference, 69
reference standards, 69-70
report of inconsistencies in, 70
multi-prime construction contracts, 89-
91, 112
advance notice of others working at
the site, 89
Construction Coordinator, 28, 80, 90-
91, 112
convenant to cooperate for benefit of
other Contractors, 90
general, 89
provisions in Owner-Engineer
Agreement, 31, 90-91
Owner's responsibilities, 91
payment to the Contractor, 102-107
final payment, 106-107
general, 102
partial utilization, 105-106
procedures, 55
schedule of values, 102-103
submission and review of application
for progress payments, 103-104
Substantial Completion, 104-105
preliminary matters, 66-68
commencement of Contract Time:
Notice to Proceed, 66
delivery of bonds, 66
examination of Contract Documents,
66-67
schedules, 66-67
starting the Work, 66
quality of Work, 100-102
called for by Contract Documents
from the Owner's point of view,
100
tests and inspections, 100-101
when the Work is defective, 101-102
reference pOints, 74
reuse of documents, 33
subsurface and latent physical
condition, 72-74
suspension and termination, 107-108
warranties and guarantees, 98-100
Work, Price, and Time changes, 96-98
acts of God, 98
cash allowances, 97
Change Orders and the Work
Directive Changes, 96
general, 96
procedural matters, 97
Unit Price Work, 97-98
value of Change Order Work, 97
Work in emergenCies, 96-97
General liability insurance, 2-3, 34, 76
General Requirements, 48
Governmental approvals, 27
Governmental clearances, 8
Guaranteed maximum price, 54-55
Guarantees by Contractor, 98-100, 107,
112
Guarantees by Engineer, absence of, ix,
xi, 15, 107
Guide Sheets
E-AE,39
O-E., 7, 30-34, 42
Guide to Preparation of Instructions to
Bidders, 113
Hold-harmless provisions, ix, 2, 88-89
Indemnification, ix, 2, 88-89
Independent professional associates and
consultants, 6-7, 24
Inspections, 18-19, 21, 91, 100-101, 104
Instructions to Bidders, 47,113-115
award, 115
bidding procedure, 115
definitions, 113
examination of work conditions and
site, 114
form of bid, 114
issuing addenda, 114
qualification of bidders, 113
subcontractors and suppliers, 114
su bstitutes, 114
supplementary instructions, 115
withdrawal of bids, 114
Insurance, 111
Contractor's liability, 76
general liability, 2-3, 34, 75, 76
Owner's liability, 76
professional liability, 2-3, 27, 34-35
property, 76-77, 81, 111
in general, 75
"Integrity of the design concept", 14
Interpretations and clarifications, 17, 19,
42-43, 68-69, 92
Interpretations of requirements of
Contract Documents, 17, 19, 42-43,
68-69,92
SUBJECT INDEX 315
Lands, availability of, 71-72
Laws
compliance with, 82-83
controlling, 70
jurisdiction of, 35
monitoring compliance with, 28
Less Than Full Services, 42
liability insurance, 111
Contractor's, 76
general, 2-3, 34, 75
Owner's, 76
licensed professional, viii-x
limitation-of-liability language, ix-x
liquidated damages, 53
Locator guide, 47-49, 52, 55, 56, 76, 102
lump Sum payment for Engineer's
services, 6, 31
Maintenance and operating Manuals, 106
Materials and equipment, 78
definition of, 50-51
Means, methods, techniques, sequences,
and procedures of construction, xi,
15,77
Meeting of the minds, viii-x, xii, 1
Methods of Payment for Engineer's
Services, 6, 30
Multi-prime construction contracts, 28-29,
89-91, 112
advance notice of others working at the
site and, 89
affect on Engineer's services, 24
Construction Coordinator, 28, 90-91,
112
convenant to cooperate for benefit of
other Contractors, 90
generally, 89
payment for Engineer's services, 31
provisions in Owner-Engineer
Agreement, 31, 90-91
National Construction Industry
Arbitration Committee, 110
Notice of Award, definition of, 63
Notice to Proceed, definition of, 63
Objectivity, vii-viii
Occupational Safety and Health
Administration (OSHA), 2
O-E Agreement. See Owner-Engineer
Agreement
O-Kor Agreement. See Owner-Contractor
Agreement
Operational Phase, 22
Orderly progress, 29-30
"Or-equal" (substitute) items, 10, 18, 24,
25, 42, 78-80, 114, 115
OSHA (Occupational Safety and Health
Administration), 2, 28
Owner-Contractor Agreement (O-Kor
Agreement), 11, 50-57, 83, 105, 106,
110, 114. See a/so Stipulated Price
Agreement; Cost-Plus Agreement
316 SUBJECT INDEX
Owner-Engineer Agreement (O-E
Agreement)
Additional Services in, 22-23
advance authorization needed, 22-25
no advance authorization needed, 25
payment for, 31
Basic Services in, 6-22
Bidding and Negotiating Phase, 10,
30
Construction Phase, 11-22, 30
Exhibit A, 7
Final Design Phase, 9-10
general description, 6-7
less than full services, 42
Operational Phase, 22
methods of payment, 31
Preliminary Design Phase, 8-9
Study and Report Phase of, 7-8
Bidding Phase Services, 30
construction cost and opinions of
costs, 32-33
definition, 32
construction cost estimates, 4-6
Construction Phase Services, 11-22
Drawings, definition of, 9, 62
fast-tracking, 30
general considerations, 33-37
arbitration, 36-37
professional liability insurance, 34-35
reuse of documents, 33-34
termination, 33
what law governs, 35
less than full services, 42
meeting of the minds, 1
methods of payment, 6, 24, 30-32
additional services, 31
adjusting compensation, 32
for Basic Services, 31
definitions, 32
estimating charges, 31
general, 30-31
multi-prime and Cost-Plus, 31
progress payments, 32
reimbursable expenses, 32
multi-prime construction contracts and,
31,90-91
orderly progress of work, 29-30
Owner's form vs., 2-3
Owner's responsibilities in, 25-29
construction coordinator, 28-29, 90-
91, 112
governmental approvals, 27
monitoring compliance with laws, 28
other trained experts, 28
Owner bears costs, 29
Owner's representative, 26
special on-site, 28
physical and other site conditions,
26-27
Project requirements, 26
surveys for construction, 27
periods of service, 29-30
Project described in, 3-4
special provisions of, 27
Agreement is Complete, 37
Supplemental Provisions, 37
timing of design services, 30
Owners
form of agreement, 2-3
liability insurance, 76
representative, 26
special on-site, 28
responsibilities of, 25-29
stopping the Work by, 85, 93, 101
termination by, 107-108
Partial utilization, 105-106
Payment, Application for, 20, 59-60, 103-
104,106
Payment methods
in Engineer-Associate Engineer
Agreement, 44-45
in Owner-Engineer Agreement, 24, 30-
32
Payroll Costs. See Salary Costs
Percentage Fee Payment, 6, 31
Performance and Payment Bonds, 74-75
Permits, 82
Post-construction services, 22, 42-43
Preliminary Design Phase, 8-9
Professional liability insurance, 27, 34-35,
39
limits of, 2-3
Progress payments, 32
Progress schedules, 67-68, 78
Project
definition of, 51, 63
description of, 3-4, 38-39
Property insurance, 76-77, 81, 111
in general, 75
"Punch" list, 104-105
Qualification of Bidders, 113
Records of Contractor's Costs, 54
Redesigning to reduce construction costs,
33,45-46
Reference Standards, 69, 85
Reimbursable Expenses, 32
Resident Project Representative, 12, 39,
91-92
definition of, 63-64
Resident project services, 43
Reuse of documents, 33, 46, 71
Safety, xi, 15, 83-85, 105
"Safety precautions and programs
incident to the work", 15
Salary Costs method of payment, 6, 24,
31,32
Sample approvals, 71
Schedules, 67-68, 78, 98, 102-103, 111, 115
Shop Drawings, 18, 79, 86-88
definition of, 64
effect on Contract Documents, 71
schedules of, 67-68
Single prime contracts, 39
Site
conditions and facilities at, 23
Engineer's services at, 39
Engineer's visits to, 11-16, 91-92
subsurface and latent physical
conditions at, 26-27, 72-74
Specifica~ions, definition of, 9
Standard of Care, viii-x
Standard Form of Agreement between
Engineer and Associate Engineer
for Professional Services. See
Engineer-Associate Engineer
Agreement
Standard Form of Agreement between
Owner and Engineer for
Professional Services. See Owner-
Engineer Agreement
Standard Forms and Guides, 9-10
Standard Form of General Conditions.
See General Conditions
Stipulated Price Agreement, 47, 50-57, 61
Contractor's representations, 55-56
Contract Price, 53-55
definition, 53, 61
Contract Time, 52
definited terms in, 50
Engineer as Owner's representative, 52
liquidated damages, 53
listing of Contract Documents, 56-57
materials and equipment, 50-51
payment procedures, 55
times of performance, 52-53
Stopping the Work, 16, 85, 95, 101, 108
Study and Report Phase, 7-8
Subcontractor, 42, 80-82, 103, 111, 113-
115
accepting or rejecting, 10, 42
definition of, 64
Substantial Completion, 52, 104-105, 99
conditions precedent to, 112
definition of, 64
Substitute or "or-equal" items, 10, 18, 24,
25, 42, 78-80, 114, 115
Subsurface and I~tent physical
conditions, 23, 72-74, 111
Successful Bidder, 113
Suggested Bid Form, 59
Supervision, x, 11, 13-15, 77, 84
Supplementary Conditions, 47, 48, 90, 92,
106,113
conditions precedent to Substantial
Completion, 112
general, 111
General Conditions vs., 69
insurance discussed in, 111
multi-prime contracts, 112
schedule of events, 111
special guarantees, 112
Subcontractors and Suppliers, 111
Substitute or or-equal items, 114
subsurface data, 72-74, 111
Unit Price Work, 112

Suppliers, 42, 80-82, 111, 113-115
accepting or rejecting, 10, 42
definition of, 65
Surety, 20, 95-96, 106, 108
Surveys, engineering, 27
Suspension of work, 107
Taxes, 83
Technical data, 73
Termination, 107-108
by Contractor, 108
by Owner, 107-108
Tests, 18, 19, 100-101
This Part of the Project, 38-39
Construction Cost for, 45
Drawings and Specifications for, 41
Timely performance by Contractor, 52-53
Total Project Costs,S, 28, 29, 32
SUBJECT INDEX 317
Underground Facilities, 73-74 in emergencies, 96-97
definition of, 65 progress of, 20
Unit Price Work, 55, 61, 93, 97-98, 112 quality of, 100-102
definition of, 65 called for by Contract Documents
from the Owner's point of view,
Value of Change Order Work, 97 100
Values, schedule of, 67-68, 98, 102-103 tests and inspections, 100-101
when the Work is defective, 101-102
Warranties of Contractor, 98-100, 107 right to stop, 16, 85
Warranties of Engineer, ix, xi, 15, 107 starting the, 66
Work stopping the
acceptable, 21, 23,106-107 by Contractor, 108
completed, 14 by Owner, 85, 93, 101
continuing, 88 visits to site. See Site visits
Cost of the, 53-54 Work Directive Changes, 17,41, 60, 70,
defective, 14, 16-17, 54, 62, 92-93, 98- 73,85,96
99, 101-102, 104, 105, 107 definition of, 65
definition of, 51, 65 Written agreements, 59, 65-66, 70, 98
disapproval or rejection of, 16 Written Amendment, definition of, 65-66
 CROSS REFERENCE INDEX

The following cross reference tabulation indicates the pages in the book where the reader may find refer-
ences to discussions of those articles, sections and paragraphs of the standard EJCDC documents to which
reference is made in the text of the book.

o-E AGREEMENT Sections Pagers) Sections Pagers)

1.7.4 106 4.11 32,33
Sections Pagers) 1.7.5 22,83 4.12 30
1.1.1 38 2.1 1,22 5.1.1 7,24,31
1.2 30 2.1.1 8,23,27 5.1.1.2 31
1.2.1 7,8 2.1.2 23 5.1.1.3 31
1.2.2 7 2.1.3 3,17,23,74 5.1.1.4 6
1.2.3 8,9,23,27 2.1.5 24 5.1.1.5 6,31
1.2.4 8 2.1.6 9 5.1.1.5.1 24
1.2.6 5,8,29,32 2.1.7 6,31 5.1.1.5.2 24
1.2.7 8,9 2.1.8 24,31 5.1.1.6 31
1.3 30 2.1.10 24, 25 5.1.2 31
1.3.2 8 2.1.11 25,74 5.1.2.2 24,25
1.3.3 7,8 2.1.12 106 5.1.3 8,32
1.3.4 5,9 2.1.13 25 5.1.4 117
1.3.5 8,9 2.1.14 6 5.2 32
1.4 30 2.2 25,43,80 5.2.2 32
1.4.1 9,62 2.2.1 17,23,74 5.3.2 33
1.4.2 8,9,23,27 2.2.2 18,24,25 5.3.4 32
1.4.3 5,9 2.2.4 96 5.4.1 32
1.4.4 9 2.2.6 25 5.4.2 8,32
1.4.5 8 2.11 27 6.1 5,32
1.5 30 3.1 26 6.2.1 5,28,33
1.5.1 10 3.1.3 10 6.2.2 5,33
1.5.2 10 3.2 3,4,26 6.2.2.1 5
1.5.4 25 3.4-3.11 6 6.2.2.2 5
1.5.5 10 3.4 6, 7, 8, 23, 24, 26, 27, 72 6.2.2.3 5,45,100
1.6 2, 11, 13, 21, 91 3.4.3 23 6.2.2.4 32
1.6.1 9,11,52,91 3.5 6, 7, 25, 27, 74 6.2.2.5 5, 6, 10, 30, 46
1.6.2 11,15,16,43, 101, 104 3.6 6 7.1 33
1.6.2.1 12, 13, 14, 31, 63, 91 3.7 5,6,30 7.2 33,71
1.6.2.3 12, 13, 14,20,21,70,77,84,91, 3.8 5, 6, 8, 23, 27 7.3.1 34
107 3.9 2, 5, 6, 15, 20, 28, 33, 54, 59, 7.3.2 34, 35
1.6.3 14, 16, 17, 62, 74, 85, 91, 101 82,85,96 7.3.3 34,35
1.6.4 17,68,92,109 3.10 5,6 7.4 35
1.6.5 14, 18, 64, 71, 86 3.11 5, 6, 28, 29, 90 7.5 109
1.6.6 18,25,80 3.12 28 7.5.1 35,57
1.6.7 19,21 3.13 10 7.5.2 24,35,57
1.6.8 19 4.1 29 7.5.3 36,84,91
1.6.9 14,103 4.2 30 7.5.4 110
1.6.9.1 102 4.3 30 7.6 36, 37
1.6.9.2 12, 20, 21, 77, 84 4.4 30 7.6.3 36
1.6.10 21, 106 4.5 29,30 7.6.4 37,46
1.6.11 14,21, 104, 107 4.6 10,30 8.1 32,33
1.6.12 4, 13,21,52, 77,82,84 4.7 30 8.2 7,37
1.7 22,42,107 4.8 22 8.2.2 16
1.7.2 106 4.9 32 8.3 1,37
1.7.3 106 4.10 10,32 12 34

318
 CROSS REFERENCE INDEX 319

E-AE AGREEMENT Sections Pagers) Sections Pagers)

4.3 27, 56, 65, 72, 74 9.13- 17, 36, 52, 82, 84, 91, 94, 95, 98,
Sections Pagers)
4.3.1.1 74 9.16 110
B 39 4.3.1.2 74, 84 9.14 94
1.1 6,8 4.3.2 74,97 9.15 70, 77,84,91,94
1.1.1 38, 40, 43, 45 4.4 25,27,74 9.16 77,91,94
1.2.7 45 5.1 74,75,309 10.1 70,95
1.3.1 40 5.1.1 31 10.2 96
1.3.2 45 5.3 76,104 10.3 85,96
1.4.1 41 5.4 76, 89 10.4 62
1.4.3 45 5.6.5 76 10.5 95
1.5.2 42 5.8 76 10.9 98
1.5.3 42 5.9 76 11.1.9 98
1.6.1 41 5.14 66,75 11.2 61, 94, 97, 98
1.6.4 41 5.15 77, 106 11.3 97
1.6.5 41 6.1 56, 67, 70, 77, 79, 85, 117 11.4 53,54,97
1.6.6 42 6.2 11,77 11.4.3 54,81
2.1.8 39 6.4 71 11.5 53,97
2.2 43 6.5 70 11.6 54,55,97
3.8 41,42,43 6.6 67 11.6.2 81
3.11 42,43 6.7 18, 25, 42, 114 11.8 97
3.12 44 6.7.1 79 11.9 65,97,98
5.1.2 39 6.7.2 79 11.9.1-
5.1.3 45 6.7.3 18, 25, 64, 77, 79, 80, 86 11.9.3 93, 98
5.2.1 44 6.8 42,61,63,80, 113, 114 11.9.2 93,98
5.2.2 39,44,45 6.9 80,81,82 11.9.3 93,98
5.3.1 44 6.11 76,81 12.1 52, 61, 62, 94, 97
6.2 45 6.12 76 12.2 61,97, 98
6.3.2.4 45 6.13 82,83 12.3 52,61
6.3.1 45 6.14 56 13.1 16, 92, 98, 102
6.3.2 45, 100 6.14.1 28,82,85 13.2 100
6.3.3 46 6.14.2 67,77,83 13.3 19, 100
7.2 46 6.15 310 13.4 100
7.3 46 6.16 71, 76, 83, 84 13.5 100
7.6.3 46 6.19 83 13.6 100, 101
7.7.4 46 6.20 15, 28, 56, 67, 70, 77, 82, 83, 84, 13.8 101
85, 105 13.9 19, 97, 99, 100, 101
6.22 85, 96 13.10 14, 85, 101, 117
6.23 64,86 13.11 101
GENERAL CONDITIONS 6.23- 13.12 99, 102, 104
6.28 64,86 13.13 97, 101
Sections Pagers) 6.24 64, 86 13.14 97,102,108
2.1 66 6.25 64, 86 14.1 59, 67, 98
2.3 51, 52, 63, 66, 307 6.25.1 88 14.2 55,59,103
2.4 66 6.25.2 71,88 14.3 20,99
2.5 56, 66, 67, 70 6.26 14, 18, 64, 86 14.4 52,98,103
2.6 41,59,64,86 6.27 64,86, 71, 88 14.5 20, 102, 103
2.6.3 67 6.28 64, 86 14.6 20, 103
2.7 66,75 6.29 88,108 14.7 101, 103
2.8 66 6.30 76,89 14.7.1 93
2.9 41,55,59,64, 67, 68, 86, 102 6.31 88 14.8 14, 52, 62, 64, 76, 104, 105
3.1 68,69,70 6.32 88 14.9 99,105
3.2 14, 17, 56, 68, 69, 70, 84, 92, 94 7.1 97 14.10 77, 99, 104, 105
3.3 66,67,70 7.2 90, 112 14.10.1 106
3.4 57, 60, 66, 70, 92 7.3 90 14.10.2 105
3.5 57, 66, 70 7.4 28,29,90 14.10.3 106
3.5.1 61,92 8.1 11 14.11-
3.5.2 87 9.1 2, 11, 52, 91 14.14 106
3.5.3 92 9.2 14, 16, 91, 104 14.11 104, 106
3.6 33 9.3 16, 63, 91 14.12 21,59,95, 106
4.1 71,83 9.4 16,17,67,68,92,97 14.13 14, 20, 21, 52, 64, 103, 106, 107
4.2 27, 56, 72, 74 9.5 62, 92, 96, 97 14.14 95, 103, 106, 107
4.2.3 73 9.6 62,92,101 14.15 17,88,99,101,107
4.2.4 73 9.10 65, 98 14.16 102, 107
4.2.5 73 9.11 19,61,93, 94, 97, 109 15.2 95, 102, 103, 104, 107, 108
4.2.6 73,97 9.12 19,93,97 15.2.6 67
320 CROSS REFERENCE INDEX

GENERAL CONDITIONS Sections Pagers) Sections Pagers)

14.12 60 7 50, 55, 56, 66
Sections Pagers) 7.2 56
14.13 107
15.3 108 16 109 7.3 56
15.4 108 16.9 304 7.4 56
15.5 107,108 8 47,50,56
16.1 120 8.3 66
16.2 94, 97, 98, 109, 120 OWNER-CONTRACTOR COST 8.4 63
17.1 110 8.10 61
PLUS AGREEMENT 57,61
17.2 61, 110 8.12
17.4 99, 108, 110 Sections Pagers) 9 50
9.1 50
1 50 9.2 57
SUPPLEMENTARY CONDITIONS 2 50
13.3 66
3 50
Sections Pagers) 4 50, 53
1 64,111 5 50,53
6 50, 54 O-KOR AGREEMENT
2.3 51,63,81,111, 115, 309
3.2 66 6.1 54
Sections Pagers)
4.2 56, 72, 73, 111, 114, 302 7 50, 54
8 50 1 51
4.2.1 302
8.1 54 3 61
4.2.2 302
8.2 54 3.1 105
4.3 56,72,111
8.3 55,66 3.2 104
5.1 75
9 SO, 55 3.3 53, 54
5.3 75,76,111
9.1.2 55 4 53,61
5.4 75,76
5.5 75 9.1.1.2 104
5.6 75,76 9.1.2.2 104
5.7 75 9.12 55 INSTRUCTIONS
5.8 75 10 50
10.2 54 Sections Pagers)
5.9 75,76
5.10 75 10.4 54 2 301
5.11 75,76 11 20, 50, 55, 56, 66 2.1 301
5.12 75 11.2 56 3 301, 305
5.13 75 11.3 56 4.2 302
5.14 75 11.4 56 4.3 302
5.15 75, 77 12 50, 54 4.4 302
6.7 18,42 13 50, 56 4.5 302
6.8 10,42,63,80,81,111,114,305 13.3 66 4.7 303
6.9 82 13.4 63 5 303
6.14 82,85 13.10 61 6 304
6.15 83,310 13.12 57,61 7 304, 308
6.33 310 14 50 8 304
7.1 89, 112 14.1 50 9 304
7.2 89, 112 14.2 57 10 305,306
7.3 89 16 47 10.1 306,307
7.4 29,89,112 11 306
7.5 76, 89, 90, 112 12 307
9.3 16,64 STIPULA TED PRICE AGREEMENT 13.2 307
9.10 65,98,112 14 307
11.8 97 Sections Pagers) 15 307, 308
11.9 97,98,112 50 16 308
13.12 112 2 50 16.3 305, 308
14.2 60, 82, 102, 103 3 50 16.6 308
14.7 104 4 50,53 17 309
14.8 104,112 5 50, 55 18 309
14.9 104,112 5.1.2 104 19-22 310
14.10 105 6 50 22 311