Agreement Between Owner and Construction Manager

Agreement between Owner and Construction Manager for Services in Overseeing a Construction Project

Agreement made on the day of , 20 , between

, a corporation organized and existing under the laws of the state of , with its principal office located at referred to herein as Owner, and

, a corporation organized and existing under the laws of the state of , with its principal office located at referred to herein as the Construction Manager.

Whereas, Owner intends to construct a , hereinafter referred to as the Project, and to coordinate the development and improvement of adjacent property for access and parking for the Project; and

Whereas, , a corporation organized and existing under the laws of the state of , with its principal office located at referred to herein as the Contractor, has entered into an Agreement with the Owner to build the Project; and

Whereas, Owner desires to have the Project well constructed in an expeditious, economic and efficient manner; and

Whereas, Owner deems it advisable to have an independent firm:

• Oversee the administration of design and construction for the Project

• Inspect the work of Contractor;

• Coordinate the work of Contractor with the work of other contractors engaged by Owner for the Project; and

• Monitor the overall planning, budgets and schedules of the Project; and

Whereas, Construction Manager is an independent firm which employs professionals who have the education, training and experience needed to perform the duties set forth herein.

Now, therefore, for and in consideration of the mutual covenants and conditions herein contained, the parties hereto agree as follows:

I. Employment of the Construction Manager.

A. Agreement to Serve. Owner hereby retains Construction Manager to perform the duties set forth herein during the design and construction of the Project. Construction Manager hereby agrees to perform all of its duties set forth herein and those duties of the Owner's Representative as described in that certain Construction Agreement dated between Contractor and Owner, hereinafter referred to as the Construction Agreement.

B. Services of Construction Manager. The services of Construction Manager shall be performed under the general direction of Owner and shall consist of consulting with, advising, making recommendations to Owner and of coordinating all Owner aspects of the planning and construction of the Project for Owner in order to expedite the completion of the Project in accordance with the Construction Agreement.

II. Pre-Construction Services.

A. Consultation during Project Development. Construction Manager shall review the final construction documents for the Project, including:

1. The site plans and specifications;

2. The foundation plans and specifications;

3. The structural plans and specifications;

4. The architectural plans and specifications;

5. The mechanical plans and specifications;

6. The electrical plans and specifications; and

7. The plumbing plans and specifications.

B. Construction Manager shall advise Owner on the selection of systems and materials as contained in the preliminary studies, schematic design studies and the design development documents.

C. Budget. Construction Manager shall revise and update the approved the Budget of construction costs for the Project. The updated Budget shall be based on the Construction Agreement and scope changes approved by Owner.

D. Equipment and Project Support Facilities. Construction Manager shall investigate and recommend a schedule for the design and construction of support facilities and for purchase or lease and installation of Owner furnished equipment as set forth in Exhibit B.

E. Value Engineering. Construction Manager shall evaluate any Contractor value engineering proposals submitted and make recommendations to Owner.

III. Construction Phase Services

A. Project Control. Construction Manager shall:

1. Coordinate and assist the activities and responsibilities of Owner and make recommendations to permit the completion of the Project in accordance with Owner's objectives of cost, time and quality;

2. Maintain a competent staff at the Project site as required with authority to achieve these objectives.

3. Establish an on-site organization and lines of authority to effectively carry out all phases of the Project on a coordinated basis as the Owner's designated representative.

4. Provide for its site offices, including necessary utilities, telephone, secretarial and message services as required by the Construction Manager.

B. Organizational Chart. Construction Manager shall prepare and submit to the Owner an organizational chart, which shall include a time schedule, Construction Manager's proposed job-site and home-office staff, identified by name, and the job classification and salary of each member of said staff.

C. Meetings. Construction Manager shall participate in all pre-construction and construction and progress meetings with trade contractors and Contractor.

D. Progress Records. Construction Manager shall keep accurate and detailed written records of the progress of the Project during all stages of planning and construction and shall submit weekly and monthly written progress reports to Owner.

E. Contract Defaults. Construction Manager shall:

1. Recommend courses of action to Owner when requirements of the Construction Agreement are not being fulfilled.

2. Determine the need for and recommend to Owner the institution of partial or complete default proceedings against Contractor and/or the termination of any separate direct contracts.

3. Assist in evaluating back charges or other damages or penalties to be assessed.

F. Cost Control. Construction Manager shall revise and refine the approved budget of construction cost for the Project and provide regular monitoring of the approved Budget of Project construction cost.

G. Change Orders. Construction Manager shall review all requests for Change Orders and assist in negotiating cost of Change Orders.

H. Payment Procedures. Construction Manager shall develop and implement a procedure for the review and processing of applications by Contractor for the Project for progress and final payments.

I. Inspection. The Construction Manager shall inspect the work of Contractor as set forth in the Construction Agreement.

J. Contract Performance. Construction Manager shall review the work of Contractor on the Project until final completion and acceptance of the Project by Owner.

K. Shop Drawings, etc. Construction Manager shall review shop drawings, catalogs and samples for compliance with the contract documents and make recommendations to the Owner.

L. Start-up. Construction Manager shall, with Owner's maintenance personnel, assist in the checkout of utilities, operational systems and equipment for readiness and assist in their initial start-up and testing.

M. Owner-Purchased Items. Construction Manager shall accept delivery and arrange storage, protection and security for all Owner-purchased materials, systems and equipment.

N. Owner's Consultants. Construction Manager shall assist Owner in selecting and retaining professional services of special consultants and testing laboratories and coordinate these services.

O. Tests. Construction Manager shall review all tests of cement, concrete, structural or reinforcing steel or of any other material or equipment required to be tested under the contract documents.

P. Reports and Records. Construction Manager shall record progress, submit written reports, keep a daily log, review as-built drawings, and maintain records at the Project site.

Q. Substantial Completion. Construction Manager shall inspect the Project with Owner and prepare punch lists and a detailed report of discrepancies and deficiencies.

R. Final Completion. Construction Manager shall inspect the Project with Owner upon completion of construction and provide a final detailed written report.

S. Claims and Litigation. Construction Manager shall diligently render to Owner any and all assistance which Owner may require.

T. Duration of Contract. The services of the Construction Manager shall commence as of the date hereof and continue until Final Acceptance.

U. Time of the Essence. Construction Manager shall use its best efforts to effect completion of the Project on or before the Project Completion Date.

IV. Construction Manager Personnel

A. Communications in Writing. All recommendations and communications by Construction Manager to Owner that will affect the cost or completion date of the Project shall be made or confirmed in writing.

B. Construction Manager/Independent Contractor. The relationship of Construction Manager to Owner shall be that of independent contractor.

C. No Third Party Beneficiaries. Nothing contained herein shall be deemed to create a contractual relationship between or among Construction Manager, Contractor, subcontractors or material suppliers.

D. Construction Manager's Personnel. Construction Manager shall designate, within ten days after execution of this Agreement, in writing, one person who shall be responsible for the coordination of all services.

E. Responsibilities of Construction Manager. Construction Manager specifically agrees that its consultants, agents or employees shall possess the experience and knowledge necessary to qualify them individually for the duties they perform.

F. Construction Manager's Employees. It is agreed that all personnel and other consultants of Construction Manager are employees of Construction Manager and not of the Owner.

V. Termination.

A. Termination for Convenience. Owner shall have the right, upon thirty (30) days' written notice to Construction Manager, to postpone, delay, suspend or terminate all or any portion of the services to be performed.

B. Default, Termination for Cause. In the event that Construction Manager fails to perform any of the terms, covenants or provisions of this Agreement, Owner may terminate this Agreement for cause.

C. Ownership of Working Papers. All office diaries, daily records, notes, designs, reports, drawings, tracings, estimates, schedules and other documents prepared by or for Construction Manager shall become the property of Owner.

VI. Construction Manager’s Fee.

A. Payment. Owner shall pay to Construction Manager as compensation for Basic Services a total fee of $ , payable as set forth in Section VI-D herein.

B. Construction Manager's Fee. The Fee shall constitute full compensation to Construction Manager.

C. Changes in Construction Manager's Scope of Work; Additional Services. At the discretion of the Owner, the scope of work may be modified, increased or decreased.

D. Method of Payment of Fee. The Fee shall be paid in monthly installments and based on the percentage of the Construction Manager's work completed.

E. Payment Not a Waiver. Neither the approval or making of any payment to the Contractor, nor the partial or entire use or occupancy of the Project by the Owner shall be an acceptance of any portion of Project by Owner or a waiver of any rights of the Owner.

G. The Right of Owner to Withhold Payment. Owner may withhold or nullify the whole or part of any payment to Construction Manager.

H. Accounting Records. Construction Manager shall maintain complete, detailed and accurate cost and accounting records as to all its costs.

I. Construction Manager to Perform Properly. Construction Manager shall be liable to Owner for all losses, expenses and damage caused by the failure of Construction Manager to properly perform its obligations.

VII. Insurance.

A. Insurance. Construction Manager shall purchase and maintain the following insurance to cover Construction Manager's operations under this Agreement.

1. Worker's Compensation insurance with minimum limits of liability in the amount of $ for each occurrence.

2. Comprehensive automobile liability insurance with minimum limits:

(i) Bodily Injury Liability -- $ each person;

(ii) Property Damage Liability -- $ each occurrence.

3. Comprehensive general liability insurance including Independent Contractor's coverage:

(i) Bodily Injury Liability: $ each occurrence;

$ aggregate-operations; and

$ aggregate-products and completed operations.

(ii) Property Damage Liability: $ each occurrence;

$ aggregate-operations; and

$ aggregate-products and completed operations.

(iii) Broad Form Contractual Liability: $ each occurrence; and $ aggregate.

(iv) Coverage Endorsements

• Premises—Operations Liability;

• Independent Contractor Liability;

• Products and Completed Operations Liability;

• Contractual Liability Insurance (Blanket Coverage-Broad Form);

• Personal Injury Liability Insurance (Hazards A, B, C, D) with Exclusion (c) and Exclusion (a) deleted;

• Broad Form Property Damage Liability Insurance (including completed operations); and

• Blanket X, C and U Coverage

(v) Umbrella Liability Insurance with limits no less than: $ each occurrence; and $ each aggregate.

(vi) Construction Manager's comprehensive general liability policy shall also include blanket contractual liability coverage.

B. Errors and Omissions. Construction Manager shall furnish and maintain Professional Liability Errors and Omissions Insurance in the amount of $ .

C. Certificates. Construction Manager shall furnish to Owner promptly following the execution of this Agreement, certificates evidencing the maintenance of said insurance.

D. Waiver of Subrogation.

1. Construction Manager hereby waives any and all rights against the Owner for damages caused by perils covered by insurance required under this Section VII.

2. If the policies of insurance referred to in this Section require an endorsement to provide for continued coverage where there is a waiver of subrogation, the Construction Manager will cause such policies to be so endorsed.

VIII. Indemnification.

A. Indemnification by the Construction Manager. To the fullest extent permitted by law, the Construction Manager shall indemnify, defend and hold harmless Owner, its officers, directors and its agents and employees from and against all claims, damages, injuries, losses, costs, fees and expenses including attorney's fees.

IX. Miscellaneous.

A. Assignment. This Agreement shall not be assigned, delegated or transferred in whole or in part by the Construction Manager.

B. Owner's Designated Representative. Owner shall upon execution of this Agreement, designate its authorized representative.

C. Conflict of Interest. Construction Manager covenants that neither it nor any of its officers has any interest which would conflict in any manner or degree with the performance by Construction Manager of its services hereunder.

D. No Discrimination. No person on the ground of handicap, age, race, color, religion, sex, veteran status, or national origin will be excluded from participation in, or be denied the benefits of, or be otherwise subjected to discrimination.

E. Confidentiality. Construction Manager agrees to treat as secret and confidential all information identified by Owner as confidential and not to disclose such information without written approval.

F. Severability. The invalidity of any portion of this Agreement will not be deemed to affect the validity of any other provision.

G. No Waiver. The failure of either party to insist upon performance of any terms shall not be construed as waiving such terms.

H. Governing Law. This Agreement shall be governed by the laws of the State of .

I. Notices. Any notice provided for or concerning this Agreement shall be in writing and sent by certified or registered mail.

J. Attorney’s Fees. In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party shall pay a reasonable sum for the successful party's attorney fees.

K. Mandatory Arbitration. Any dispute under this Agreement shall be required to be resolved by binding arbitration.

L. Entire Agreement. This Agreement shall constitute the entire agreement between the parties.

M. Modification of Agreement. Any modification shall be binding only if placed in writing and signed by each party.

N. Counterparts. This Agreement may be executed in any number of counterparts.

O. Compliance with Laws. In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules will be followed and complied with in all respects by both parties.

WITNESS our signatures as of the day and date first above stated.