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Design/Build

ERM Subcontract Terms - U.S.

1. Professional License.  When applicable Laws require that the Work be performed by licensed professionals, the Subcontractor shall provide the Work through the performance of qualified persons or entities duly licensed to practice their professions.

2. Design Drawings.  Unless otherwise provided for in the Subcontract, Subcontractor shall provide to ERM, for ERM’s written approval, design documents sufficient to establish the size, quality and character of the Work; its architectural, structural, mechanical and electrical systems; and the materials and such other elements of the Work to the extent required by the Subcontract. Deviations, if any, from the Subcontract shall be disclosed in writing.

3. Construction Drawings.  Unless otherwise provided for in the Subcontract, Subcontractor shall provide construction documents for review and written approval by ERM. The construction documents shall set forth in detail the requirements for construction of the Work. The construction documents shall include drawings and specifications that establish the quality levels of materials and systems required. Deviations, if any, from the Subcontract shall be disclosed in writing. Construction documents may include drawings, specifications, and other documents and electronic data setting forth in detail the requirements for construction of the Work, and shall:

(a) be consistent with the approved design documents;

(b) provide information for the use of those in the building trades; and

(c) include documents customarily required for regulatory agency approvals.

4. Construction.

4.1 The Subcontractor shall perform no construction Work prior to ERM’s review and approval of the construction documents.

4.2 The construction Work shall be in accordance with approved documents and submittals.

4.3 The Subcontractor shall not be relieved of responsibility for errors or omissions in design and construction documents or other submittals such as shop drawings, product data, samples or other submittals by ERM’s approval thereof.

4.4 Unless otherwise provided in the Subcontract, the Subcontractor shall provide or cause to be provided and shall pay for design services, labor, materials, equipment, tools, construction equipment and machinery, transportation and all other facilities and services necessary for proper execution and completion of the Work, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work.

4.5 Subcontractor shall comply with and give notices required by Laws.  It is the Subcontractor’s responsibility to ascertain that the Work is in accordance with applicable Laws.  If the Subcontractor performs Work contrary to applicable Laws, without limiting any other rights or remedies, the Subcontractor shall assume responsibility for such Work and shall bear the costs attributable to correction.

4.6 The Subcontractor shall perform the Work in accordance with the most recent schedules prepared by ERM.

5. Superintendent.

5.1 The Subcontractor shall employ a competent superintendent and necessary assistants who shall be in attendance at the Project Site during performance of the construction portion of the Work.  The superintendent shall represent the Subcontractor, and communications given to the superintendent shall be as binding as if given to the Subcontractor.

5.2 The Subcontractor, prior to the start of the construction portion of the Work, shall furnish in writing to ERM the name and qualifications of a proposed superintendent. ERM may reply within fourteen (14) days to the Subcontractor in writing stating (i) whether ERM has reasonable objection to the proposed superintendent or (ii) that ERM requires additional time to review. Failure of ERM to reply within the fourteen (14) day period shall constitute notice of no reasonable objection.

5.3 The Subcontractor shall not employ a proposed superintendent to whom ERM has made reasonable and timely objection. If ERM makes reasonable objection to the superintendent, based upon the superintendent’s apparent inability to properly supervise the Work, Subcontractor, at no additional charge or expense to ERM, shall promptly replace such superintendent as soon as reasonably practicable with a superintendent acceptable to ERM in the exercise of reasonable judgment. ERM may exercise this right on one or more occasions.  Subcontractor shall not replace the superintendent without prior written consent of ERM (which consent shall not be unreasonably withheld or delayed) until the selection of another superintendent approved by ERM in accordance with the provisions of Section 5.2.

6. Areas of Operations and Site Access.

6.1 The Subcontractor shall confine operations at the Project Site to areas permitted by applicable Laws and the Subcontract and shall not unreasonably encumber the Project Site with materials or equipment.

6.2 Only materials and equipment which are to be used directly in the Work shall be brought to and stored on the Project Site by the Subcontractor.  After equipment is no longer required for the Work, it shall be promptly removed from the Project Site.  Protection of construction material and equipment stored at the Project Site from weather, theft, damage and all other perils is solely the responsibility of the Subcontractor.

6.3 The Subcontractor and any entity for whom the Subcontractor is responsible shall not erect any sign on the Project site without the prior written consent of ERM.

6.4 The Subcontractor shall ensure that the Work, at all times, is performed in a manner that affords reasonable access, both vehicular and pedestrian, to the Project Site and all adjacent areas.  The Work shall be performed, to the fullest extent reasonably possible, in such a manner that public areas adjacent to the Project Site shall be free from all debris, building materials and equipment likely to cause hazardous conditions.  Without limitation of any other provision of the Subcontract, the Subcontractor shall minimize any interference with the occupancy or beneficial use of (1) any area and buildings adjacent to the Project Site, or (2) the Work in the event of partial occupancy.

7. Payments and Completion.  Where the Subcontract is based on a stipulated sum or guaranteed maximum price, the Subcontractor shall submit to ERM, before the first invoice, a schedule of values allocating the entire amounts to be paid under the Subcontract to the various portions of the Work and prepared in such form and supported by such data to substantiate its accuracy as ERM may reasonably require. This schedule, unless objected to by ERM, shall be used as a basis for reviewing the Subcontractor’s invoices.

8. Explosives and other Hazardous Materials.  When use or storage of explosives or other hazardous materials or equipment or unusual methods are necessary for execution of the Work, the Subcontractor shall exercise utmost care and carry on such activities under supervision of properly qualified personnel.

9. Injury or Damage to Person or Property.

9.1 The Subcontractor shall promptly remedy damage and loss caused in whole or in part by the Subcontractor or anyone directly or indirectly employed by Subcontractor, or by anyone for whose acts Subcontractor may be liable and for which the Subcontractor is responsible. 

9.2 The Subcontractor shall designate a responsible member of the Subcontractor’s organization at the Project Site whose duty shall be the prevention of accidents. This person shall be the Subcontractor’s superintendent unless otherwise designated by the Subcontractor in writing to ERM.

9.3 The Subcontractor shall not permit any part of the construction or Project Site to be loaded so as to cause damage or create an unsafe condition.

9.4 If Subcontractor suffers injury or damage to person or property because of an act or omission of ERM, or of others for whose acts ERM is legally responsible, written notice of such injury or damage, whether or not insured, shall be given to ERM within a reasonable time not exceeding fifteen (15) days after discovery. The notice shall provide sufficient detail to enable ERM to investigate the matter.

9.5 The Subcontractor shall promptly report in writing to ERM all accidents arising out of or in connection with the Work which cause death, personal injury, or property damage, giving full details and statement of any witnesses.  In addition, if death, serious personal injuries, or serious property damages are caused, the accident shall be reported immediately by telephone or messenger to ERM.

10. Uncovering and Correction of Work.

10.1 If a portion of the Work is covered contrary to ERM’s request or to requirements specifically expressed in the Subcontract, it must, if requested in writing by ERM, be uncovered for ERM’s examination and be replaced at the Subcontractor’s expense without change in the time to perform the Work.

10.2 The Subcontractor shall promptly correct Work rejected by ERM or failing to conform to the requirements of the Subcontract. Costs of correcting such rejected Work, including additional testing and inspections, the cost of uncovering and replacement, and compensation for ERM’s services and expenses made necessary thereby, shall be at the Subcontractor’s expense.

10.3 The Subcontractor shall remove from the Project Site portions of the Work that are not in accordance with the requirements of the Subcontract and are neither corrected by the Subcontractor nor accepted by ERM or the Client.

10.4 The Subcontractor shall bear the cost of correcting destroyed or damaged construction, whether completed or partially completed. 

10.5 The corrective remedies set forth in this Section 10 are not exclusive and shall not deprive ERM of any action, right or remedy otherwise available to it for breach of any of the provisions of the Subcontract.

10.6 If ERM and/or the Client prefers to accept Work that is not in accordance with the requirements of the Subcontract, they may do so instead of requiring its removal and correction, in which case the amount due under the Subcontract will be reduced as appropriate and equitable. Such adjustment shall be effected whether or not Final Payment has been made.

11. Tests and Inspections.

11.1 Tests, inspections and approvals of portions of the Work shall be made as required by the Subcontract and by applicable Laws. Unless otherwise provided, the Subcontractor shall make arrangements for such tests, inspections and approvals with an independent testing laboratory or entity acceptable to ERM and the Client, or with the appropriate public authority, and shall bear all related costs of tests, inspections and approvals. The Subcontractor shall give ERM timely notice of when and where tests and inspections are to be made so that ERM and/or the Client may be present for such procedures.

11.2 If such procedures for testing, inspection or approval reveal failure of the portions of the Work to comply with requirements established by the Subcontract, all costs made necessary by such failure including those of repeated procedures and compensation for ERM’s services and expenses shall be at the Subcontractor’s expense.

11.3 Required certificates of testing, inspection or approval shall, unless otherwise required by the Subcontract, be secured by the Subcontractor and promptly delivered to ERM.

11.4 Tests or inspections conducted pursuant to the Subcontract shall be made promptly to avoid unreasonable delay in the Work.

12. Disputes.

12.1 A “Dispute” is a demand or assertion by one of the parties seeking, as a matter of right, payment of money, or other relief with respect to the terms of the Subcontract. The term “Dispute” also includes other disputes and matters in question between ERM and Subcontractor arising out of or relating to the Subcontract. The responsibility to substantiate a Dispute shall rest with the party making the Dispute.

12.2 Within fourteen (14) days of the first occurrence of an event that the Subcontractor has any reason to believe might result in a Dispute, or within fourteen (14) days of the Subcontractor’s discovery of the first occurrence of an event that the Subcontractor has any reason to believe might result in a Dispute if the first occurrence of the event was willfully hidden from the Subcontractor, the Subcontractor shall file a written document clearly captioned “Notice of Dispute” with ERM (the “Notice”).  The Notice shall clearly set out the specific matter of Dispute, and the impact or damages which may occur or have occurred as a result thereof, to the extent the impact or damages can be assessed at the time of the Notice.  If the impact or damages cannot be assessed as of the date of the Notice, the Notice shall be amended at the earliest date this is reasonably possible.

12.3 Any Dispute or portion of a Dispute that has not been made the specific subject of a Notice strictly in accordance with the requirements of this section shall be waived and released. It is imperative that ERM has timely, specific notice of any subject, the impact of which ERM may be in a position to mitigate.

12.4 No course of conduct or dealing between the parties, nor implied acceptance of alterations or additions to the Work or changes to the schedule, shall be the basis for any Dispute for an increase in the amount due under the Subcontract or change in the time to perform the Work.

12.5 Pending final resolution of a Dispute, the Subcontractor shall proceed diligently with performance of the Subcontract and ERM shall continue to make payments in accordance with the Subcontract. 

12.6 If adverse weather conditions are the basis for a Dispute for additional time, such Dispute shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction.

12.7 Final Payment shall constitute a waiver of Disputes by the Subcontractor. 

13. Design/Build Schedule.  Prior to commencing the Work, Subcontractor shall provide to ERM information in advance as to its plans for performing each part of the Work.  Further, upon receipt of written notice from ERM, Subcontractor shall submit to ERM for approval a detailed design, fabrication and construction schedule based on a critical path analysis of construction activities and sequence of operations needed for the orderly performance and completion of any separable parts of the Work.  ERM may rely on such schedule in establishing ERM’s construction schedule.  Thereafter and on a monthly basis, Subcontractor shall provide ERM with an updated schedule and a narrative explaining any changes in Subcontractor’s progress and the reason for said changes. 

14. Insurance.  Subcontractor confirms that no exclusions exist within its required professional liability (i.e. errors & omissions) insurance that would preclude coverage for Work intended under the Subcontract.

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ERM Legal Department
March 8, 2010

 

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