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6. Rental rates shall be determined as follows:

a. The base rates shall be those established in publications and revisions thereto entitled “Rental Rate Blue
Book for Construction Equipment” or the “Rental Rate Blue Book for Older Construction Equipment” as
published by K-III, 1735 Technology Drive, Suite 401, San Jose, CA 95110-1313, Phone (408) 467-6700.

b. Attachments (e.g. tractor with ripper and dozer or tractor with loader and backhoe) will be included in the
hourly rental rate only when deemed essential to the work as determined the Engineer. When multiple
attachments are approved for use and are being used interchangeably, the attachment having the higher rental
rate shall be the only one included for payment.

c. No direct payment will be made for necessary accessories (including replenishing blades, augers, teeth,
hoses, bits, etc.) if not listed in the Rental Rate Blue Book.

d. No compensation will be allowed for shop tools having a daily rental rate of less than $10 as set forth in
Section 18 of the Rental Rate Blue Book.

i. If ordered to use equipment not listed in the aforementioned publications, the Engineer will
establish a rental rate for such equipment. CONTRACTOR shall furnish cost data that might assist in
the establishment of such rental rate.

ii. Payment will be made for the actual time that such equipment is in operation on the work.

ii. Authorized standby time for idle equipment shall be paid at 50% of the specified rate, less the
estimated operating cost per hour. No markup will be added for overhead and profit.

iv. Rental rate paid as above provided shall include the cost of fuel, oil, lubrication, small tools,
necessary attachments, repairs and maintenance of any kind, depreciation, storage, insurance and all
incidentals. CONTRACTOR shall provide the Engineer with a complete Force Account Equipment
Listing for each piece of equipment utilized.

e. Sales, consumer, use, and other similar taxes related to the Work, and for which CONTRACTOR is liable,
imposed by Laws and Regulations.

f. Deposits lost for causes other than 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, and royalty payments and
fees for permits and licenses.

g. Losses and damages (and related expenses) caused by damage to the Work, not compensated by insurance
or otherwise, sustained by CONTRACTOR in connection with the performance of the Work, provided such
losses and damages have resulted from causes other than 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
CONTRACTOR's fee.

h. The cost of utilities, fuel, and sanitary facilities at the Site.

1. 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.

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j. When the Cost of the Work is used to determine the value of a Change Order or of a Claim, the cost of
premiums for additional Bonds and insurance required because of the changes in the Work or caused by the
event giving rise to the Claim

k. When all the Work is performed on the basis of cost-plus, the costs of premiums for all Bonds and
insurance CONTRACTOR is required by the Contract Documents to purchase and maintain.

B. Costs Excluded: The term Cost of the Work shall not include any of the following items:

1. Payroll costs and other compensation of CONTRACTOR's officers, executives, principals (of partnerships and
sole proprietorships), general managers, engineers, architects, estimators, attorneys, auditors, accountants,
purchasing and contracting agents, expediters, timekeepers, clerks, and other personnel employed by
CONTRACTOR, whether at the Site or in CONTRACTOR's principal or branch office for general administration
of the Work and not specifically included in the agreed upon schedule of job classifications referred to in paragraph
11.01.A.1 or specifically covered by paragraph 11.01.A.4, all of which are to be considered administrative costs
covered by the CONTRACTOR's fee.

2. Expenses of CONTRACTOR's principal and branch offices other than CONTRACTOR’s office at the Site.

3. Any part of CONTRACTOR's capital expense, including interest on CONTRACTOR's capital employed for the
Work and charges against CONTRACTOR for delinquent payments.

4. Costs due to 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, including but not limited to, the correction of defective
Work, disposal of materials or equipment wrongly supplied, and making good any damage to property.

5. Other overheard or general expense costs of any kind and the costs of any item not specifically and expressly
included in paragraphs 11.01.A and 11.01.B.

C. CONTRACTOR's Fee: When all the Work is performed on the basis of cost-plus, CONTRACTOR's fee shall be
determined as set forth in the Agreement. When the value of any Work covered by a Change Order or when a Claim
for an adjustment in Contract Price is determined on the basis of Cost of the Work, CONTRACTOR’s fee shall be
determined as set forth in paragraph 12.01.C.

D. Documentation: Whenever the cost of the Work for any purpose is to be determined pursuant to paragraphs
11.01.A. and 11.01.B, CONTRACTOR will establish and maintain records thereof in accordance with generally
accepted accounting practices and submit in a form acceptable to ENGINEER as itemized cost breakdown together
with supporting data.

11.02 Cash Allowances

A. 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 performed for such sums as may be acceptable to OWNER and
ENGINEER. CONTRACTOR agrees that:

1. The allowances include the cost to CONTRACTOR (less any applicable trade discounts) of materials and
equipment required by the allowances to be delivered at the Site, and all applicable taxes; and

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
allowances, and no demand for additional payment on account of any of the foregoing will be valid.

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B. 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
correspondingly adjusted.

11.03 Unit Price Work

A. Where the Contract Documents provide that all or part of the 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 unit price for each
separately identified item of Unit Price Work times the estimated quantity of each item as indicated in the Agreement.
The estimated quantities of items of the 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 quantities and
classifications of Unit Price Work performed by CONTRACTOR will be made by ENGINEER subjects to the
provisions of paragraph 9.08

B. 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 separately identified item.

ARTICLE 12 - CHANGE OF CONTRACT PRICE; CHANGE OF CONTRACT TIMES

12.01 Change of Contract Price

A. The Contract Price may only be changed by a Change Order or by a Written Amendment. Any Claim for an
adjustment in the Contract Price shall be based on written notice submitted by the party making the Claim to the
ENGINEER and the other party to the Contract in accordance with the provisions of paragraph 10.05.

B. The value of any Work covered by a Change Order or of any Claim for an adjustment in the Contract Price will be
determined as follows:

1. Where the Work involved is covered by unit prices contained in the Contract Documents, by application of such
unit prices to the quantities of the items involved (subject to the provisions of paragraph 11.03); or

2. Where the Work involved is not covered by unit prices contained in the Contract Documents, by a mutually
agreed lump sum (which may include an allowance for overhead and profit not necessarily in accordance with
paragraph 12.01.C.2); or

3. Where the Work involved is not covered by unit prices contained in the Contract Documents an agreement to a
lump sum is not reached under paragraph 12.01.B.2, on the basis of the cost of the Work (determined as provided
in paragraph 11.01) plus a CONTRACTOR's fee for overhead and profit (determined as provided in paragraph
12.01.C).

C. CONTRACTOR's Fee: The CONTRACTOR's fee for overhead and profit shall be determined as follows:

1. A mutually acceptable fixed fee: or

2. If a fixed fee is not agreed upon, then a fee based on the following percentages of the various portions of the
Cost of the Work:

a. For costs incurred under paragraphs 11.01.A.1 and 11.01.A.2, the CONTRACTOR's fee shall be 15 percent;

b. For costs incurred under paragraph 11.01.A.3, the CONTRACTOR's fee shall be five percent;

c. Where one or more tiers of subcontracts are on the basis of Cost of the Work plus a fee and no fixed fee is
agreed upon, the intent of paragraph 12.01.C.2.a. is that the Subcontractor who actually performs the Work,

at whatever tier, will be paid a fee of 15 percent of the costs incurred by such Subcontractor under paragraphs

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11.01.A.1 and 11.01.A.2 and that any higher tier Subcontractor and CONTRACTOR will each be paid a fee
of five percent of the amount paid to the next lower tier Subcontractor;

d. No fee shall be payable on the basis of costs itemized under paragraphs 11.01.A.4, 11.01.A.5, and 11.01.B;

e. The amount of credit to be allowed by CONTRACTOR to OWNER for any change which results in a net
decrease in cost will be the amount of the actual net decrease in cost plus a deduction in CONTRACTOR's fee
by an amount equal to five percent of such net decrease; and

f. When both addition and credits are involved in any one change, the adjustment in CONTRACTOR's fee
shall be computed on the basis of the net change in accordance with paragraphs 12.01.C.2.a through
12.01.C.2.¢ inclusive.

12.02 Change of Contract Times

A. The Contract Times (or Milestones) may only be changed by a Change Order or by a Written Amendment. Any
Claim for an adjustment in the Contract Times (or Milestones) shall be based on written notice submitted by the party
making the claim to the ENGINEER and the other party to the Contract in accordance with the provisions of
paragraph 10.05.

B. Any adjustment of the contract Times (or Milestones) covered by a Change Order or of any Claim for an
adjustment in the Contract Times (or Milestones) will be determined in accordance with the provisions of this Article
12.

12.03 Delays beyond CONTRACTOR'S Control

A. Where CONTRACTOR is prevented from completing any part of the Work within the Contract Times (or
Milestones) due to delay beyond the control of CONTRACTOR, the Contract Times (or Milestones) will be extended
in an amount equal to the time lost due to such delay if a Claim is made therefore as provided in paragraph 12.02.A.
Delays beyond the control of CONTRACTOR shall include, but not be limited to, acts or neglect by OWNER, acts or
neglect of utility owners or other contractors performing other work as contemplated by Article 7, fires, floods,
epidemics, abnormal weather conditions, or acts of God.

12.04 Delays within CONTRACTOR's Control

A. Contract Times (or Milestones) will not be extended due to delays within the control of CONTRACTOR. Delays
attributable to and within the control of a Subcontractor or Supplier shall be deemed to be delays within the control of
CONTRACTOR.

12.05 Delays beyond OWNER's and CONTRACTOR'S Control
A. Where CONTRACTOR is prevented from completing any part of the Work within the Contract Times (or
Milestones) due to delay beyond the control of both OWNER and CONTRACTOR, an extension of the Contract

Times (or Milestones) in an amount equal to the time lost due to such delay shall be CONTRACTOR's sole and
exclusive remedy for such delay.

12.06 Delay Damages
A. In no event shall OWNER or ENGINEER be liable to CONTRACTOR, any Subcontractor, any Supplier, or any
other person or organization, or to any surety for or employee or agent of any of them, for damages arising out of or

resulting from:

1. Delays caused by or within the control of CONTRACTOR; or

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2. Delays beyond the control of both OWNER and CONTRACTOR including but not limited to fires, flood,
epidemics, abnormal weather conditions, acts of God, or acts or neglect by utility owners or other contractors
performing other work as contemplated by Article 7.

B. Nothing in this paragraph 12.06 bars a change in Contract Price pursuant to this Article 12 to compensate
CONTRACTOR due to delay, interference, or disruption directly attributable to actions or inactions of OWNER or
anyone from whom OWNER is responsible.

ARTICLE 13 - TESTS AND INSPECTIONS; CORRECTION, REMOVAL OR ACCEPTANCE OF
DEFECTIVE WORK

13.01 Notice of Defects

A. Prompt notice of all defective Work of which OWNER or ENGINEER has actual knowledge will be given to
CONTRACTOR. All defective Work may be rejected, corrected, or accepted as provided in this Article 13.

13.02 Access to Work

A. OWNER, ENGINEER, ENGINEER'S Consultants, other representatives and personnel of OWNER, independent
testing laboratories, and governmental agencies with jurisdictional interest will have access to the Site and the Work at
reasonable times for their observation, inspecting, and testing. CONTRACTOR shall provide them proper and safe
conditions for such access and advise them of CONTRACTOR's Site safety procedures and programs so that they may
comply therewith as applicable.

13.03 Tests and Inspections

A. CONTRACTOR shall give ENGINEER timely notice of readiness of the Work for all required inspections, tests, or
approvals and shall cooperate with inspection and testing personnel to facilitate required inspections or tests.

B. OWNER shall employ and pay for the services of an independent testing laboratory to perform all inspections,
tests, or approvals required by the Contract Documents except:

1. For inspections, tests, or approvals covered by paragraphs 13.03.C and 13.03.D below;

2. That costs incurred in connection with tests or inspections conducted pursuant to paragraph 13.04.B shall be
paid as provided in said paragraph 13.04.B; and

3. As otherwise specifically provided in the Contract Documents.

4. That costs incurred by OWNER due to retesting, reinspection, or standby time due to unacceptable materials, or
workmanship provided by the CONTRACTOR, or due to poor scheduling by the CONTRACTOR of tests of
inspections, will be deducted from the payments to the CONTRACTOR. CONTRACTOR shall stop work as
necessary to allow for inspections and tests by OWNER and ENGINEER.

C. If Laws or Regulations of any public body having jurisdiction require any Work (or part thereof) specifically to be
inspected, tested, or approved by an employee or other representative of such public body, CONTRACTOR shall
assume full responsibility for arranging and obtaining such inspections, tests, or approvals, pay all costs in connection
therewith, and furnish ENGINEER the required certificates of inspection or approval.

D. CONTRACTOR shall be responsible for arranging and obtaining and shall pay all costs in connection with any
inspections, tests, or approvals required for OWNER'S and ENGINEER's acceptance of materials or equipment to be
incorporated in the Work; or acceptance of materials, mix designs, or equipment submitted for approval prior to
CONTRACTOR's purchase thereof for incorporation in the Work. Such inspections, tests, or approvals shall be
performed by organizations acceptable to OWNER and ENGINEER.

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E. If any Work (or the work of others) that is to be inspected, tested, or approved is covered by CONTRACTOR
without written concurrence of ENGINEER, it must, if requested by ENGINEER, be uncovered for observation.

F. Uncovering Work as provided in paragraph 13.03.E shall be at CONTRACTOR's expense unless CONTRACTOR
has given ENGINEER timely notice of CONTRACTOR's intention to cover the same and ENGINEER has not acted
with reasonable promptness in response to such notice.

G. The OWNER intends to provide inspection for the project. The inspector will be available during a forty (40) hour
period during the week from Monday through Friday. In the event the CONTRACTOR receives permission from the
OWNER and elects to work more than forty hours during the week or more than 10 hours in one day, or on a Saturday,
Sunday, or legal holiday, the CONTRACTOR shall be responsible for all inspection, engineering and testing costs
incurred during that period. For all inspection and testing work performed on Saturday, Sunday, or legal holidays, the
minimum chargeable time shall be four (4) hours. The OWNER reserves the right to deduct these inspection,
engineering, and testing costs directly from the CONTRACTOR’S payments.

13.04 Uncovering Work

A. 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.

B. 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 pay all
Claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys,
and other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to such
uncovering, exposure, observation, inspection, and testing, and of satisfactory replacement or reconstruction
(including but not limited to all costs of repair or replacement of work of others); and OWNER shall be entitled to an
appropriate decrease in the Contract Price. If the parties are unable to agree as to the amount thereof, OWNER may
make a Claim therefore as provided in paragraph 10.05. 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 Times (or
Milestones), or both, directly attributable to such uncovering, exposure, observation, inspection, testing, replacement,
and reconstruction. If the parties are unable to agree as to the amount or extent thereof, CONTRACTOR may make a
Claim therefore as provided in paragraph 10.05.

13.05 OWNER May Stop the Work

A. If the Work is defective, or CONTRACTOR fails to supply sufficient skilled workers or suitable materials or
equipment, or fails to 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 of 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 nght for the benefit of CONTRACTOR, any Subcontractor, any Supplier, any other
individual or entity, or any surety for, or employee or agent of any of them.

13.06 Correction or Removal of Defective Work

A. CONTRACTOR shall correct all defective Work, whether or not fabricated, installed, or completed, or, if the
Work has been rejected by ENGINEER, remove it from the Project and replace it with Work that is not defective.
CONTRACTOR shall pay all Claims, costs, losses, damages (including but not limited to all fees and charges of
engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs)
arising out of or relating to such correction or removal (including but not limited to all costs of repair or replacement
of work of others).

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13.07 Correction Period

A. If within one year after the date of Substantial Completion 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 documents or by any
specific provision of the Contract Documents, any Work is found to be defective, or if the repair of any damages to the
land or areas made available for CONTRACTOR's use by OWNER or permitted by Laws and Regulations as
contemplated in paragraph 6.11.A is found to be defective, CONTRACTOR shall promptly, without cost to OWNER
and in accordance with OWNER's written instructions: (i) repair such defective land or areas, or (ii) correct such
defective Work or, if the defective Work has been rejected by OWNER, remove it from the Project and replace it with
Work that is not defective, and (111) satisfactorily correct or repair or remove and replace any damage to other Work, to
the work of others or other land or areas resulting there from. 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 corrected or repaired or may have the rejected Work removed and replaced, and all Claims,
costs, losses, and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and
other professionals and all court or arbitration or other dispute resolution costs) arising out of or relating to such
correction or repair or such removal and replacement (including but not limited to all costs of repair or replacement
work of others) will be paid by CONTRACTOR.

B. 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.

C. Where defective Work (and damage to other Work resulting there from) has been corrected or removed and
replaced under this paragraph 13.07, the correction period hereunder with respect to such Work will be extended for
an additional period of one year after such correction or removal and replacement has been satisfactorily completed.

D. CONTRACTOR's obligations under this paragraph 13.07 are in addition to any other obligation or warranty. The
provisions of this paragraph 13.07 shall not be construed as a substitute for or a waiver of the provisions of any
applicable statute of limitation or repose.

13.08 Acceptance of Defective Work

A. If, instead of requiring correction or removal and replacement of defective Work, OWNER (and, prior to
ENGINEER's recommendation of final payment, ENGINEER) prefers to accept it, OWNER may do so,
CONTRACTOR shall pay all Claims, costs, losses, and damages (including but not limited to all fees and charges of
engineers, architects, attorneys, and other professionals and all court or arbitration or other dispute resolution costs)
attributable to OWNER's evaluation of and determination to accept such defective Work (such costs to be approved by
ENGINEER as to reasonableness) and the diminished value of the Work to the extent not otherwise paid by
CONTRACTOR pursuant to this sentence. If any such acceptance occurs prior to ENGINEER's recommendation of
final payment, a Change Order will be issued incorporating the necessary revisions in the Contract Price, reflecting the
diminished value of Work so accepted. If the parties are unable to agree as to the amount thereof, OWNER may make
a Claim therefore as provided in paragraph 10.05. If the acceptance occurs after such recommendation, an appropriate
amount will be paid by CONTRACTOR to OWNER.

13.09 OWNER May Correct Defective Work

A. If CONTRACTOR fails within a reasonable time after written notice from ENGINEER to correct defective Work
or to remove and replace rejected Work as required by ENGINEER in accordance with paragraph 13.06.A, or if
CONTRACTOR fails to perform the Work in accordance with the Contract Documents, or if CONTRACTOR fails to
comply with any other provision of the Contract Documents, OWNER may, after seven days written notice to
CONTRACTOR, correct and remedy any such deficiency.

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B. In exercising the rights and remedies under this paragraph, OWNER shall proceed expeditiously. In connection
with such 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 CONTRACTOR'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 representatives, agents and employees, OWNER's other
contractors, and ENGINEER and ENGINEER's Consultants access to the Site to enable OWNER to exercise the nghts
and remedies under this paragraph.

C. All Claims, costs, losses, and damages (including but not limited to all fees and charges of engineers, architects,
attorneys, and other professionals and all court or arbitration or other dispute resolution costs) incurred or sustained by
OWNER in exercising the rights and remedies under this paragraph 13.09 will be charged against CONTRACTOR,
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. If the parties are unable to
agree as to the amount of the adjustment, OWNER may make a Claim therefore as provided in paragraph 10.05. Such
claims, costs, losses and damages will include but not be limited to all costs of repair, or replacement of work of
others destroyed or damaged by correction, removal, or replacement of CONTRACTOR's defective Work.

D. CONTRACTOR shall not be allowed an extension of the Contract Times (or Milestones) because of any delay in
the performance of the Work attributable to the exercise by OWNER of OWNER's rights and remedies under this
paragraph 13.09.

ARTICLE 14 - PAYMENTS TO CONTRACTOR AND COMPLETION

14.01 Schedule of Values

A. The schedule of values established as provided in paragraph 2.01.A will serve as the basis for progress payments
and will be incorporated into a form of Application for Payment acceptable to ENGINEER. Progress payments on
account of Unit Price Work will be based on the number of units completed.

14.02 Progress Payment

A. Review of Applications.

1. Prior to submittal of Application for Payment to OWNER (but not more often than once a month), the
CONTRACTOR shall submit the monthly progress estimate to the ENGINEER for review and approval.

2. ENGINEER will, within 10 working days after receipt of each progress estimate, either indicate in writing a
recommendation of payment or indicate in writing ENGINEER's reasons for refusing to recommend payment and
return the progress estimate to CONTRACTOR. In the latter case, CONTRACTOR may make the necessary
corrections and resubmit the Application.

3. ENGINEER's recommendation of any payment requested in a progress estimate will constitute a representation by
ENGINEER to OWNER, based on ENGINEER's observations on the Site of the executed Work as an experienced and
qualified design professional and on ENGINEER's review of the Application for Payment and the accompanying date
and schedules, that to the best of ENGINEER's knowledge, information and belief:

a. The Work has progressed to the point indicated;
b. The quality of the Work is generally 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 9.08 and to any other qualifications stated in the recommendation); and

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c. The conditions precedent to CONTRACTOR's being entitled to such payment appears to have been fulfilled
in so far as itis ENGINEER's responsibility to observe the Work.

4. By recommending any such payment ENGINEER will not thereby be deemed to have represented that: (i)
inspections made to check the quality or the quantity of the Work as it has been performed have been exhaustive,
extended to every aspect of the Work in progress, or involved detailed inspections of the Work beyond the
responsibilities specifically assigned to ENGINEER in the Contract Documents; or (11) that there may not be other
matters or issues between the parties that might entitle CONTRACTOR to be paid additionally by OWNER or
entitle OWNER to withhold payment to CONTRACTOR.

5. Neither ENGINEER's review of CONTRACTOR's Work for the purposes of recommending payments nor
ENGINEER's recommendation of any payment, including final payment, will impose responsibility on
ENGINEER to supervise, direct, or control the Work or for the means, methods, techniques, sequences, or
procedures of construction, or the safety precautions and programs incident thereto, or for CONTRACTOR's
failure to comply with Laws and Regulations applicable to CONTRACTOR's performance of the Work.
Additionally, said review or recommendation will not impose responsibility on ENGINEER to make any
examination to ascertain how or for what purposes CONTRACTOR has used the moneys paid on account of the
Contract Price, or to determine that title to any of the Work, materials, or equipment has passed to OWNER free
and clear of any Liens.

6. ENGINEER may refuse to recommend the whole or any part of any payment if, in ENGINEER's opinion, it
would be incorrect to make the representations to OWNER referred to in paragraph 14.02.B.2. ENGINEER may
also refuse to recommend any such payment or, because of subsequently discovered evidence or the results of
subsequent inspections or tests, revise or revoke any such payment recommendation previously made, to such
extent as may be necessary in ENGINEER's opinion to protect OWNER from loss because:

a. The Work is defective, or completed Work has been damaged, requiring correction or replacement;
b. The Contract Price has been reduced by Written Amendment or Change Orders;

c. OWNER has been required to correct defective Work or complete Work in accordance with paragraph
13.09; or

d. ENGINEER has actual knowledge of the occurrence of any of the events enumerated in paragraph 15.02.A.
B. Applications for Payments.

1. CONTRACTOR shall submit to OWNER the ENGINEER recommended Application 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 and evidence that the
materials and equipment are covered by appropriate property insurance or other arrangements to protect OWNER's
interest therein, all of which must be satisfactory to OWNER. Any request for partial or final payment shall
specifically list the work completed. To facilitate the proper and timely payment of applications, the OWNER
requires that all applications must reference a valid PURCHASE ORDER NUMBER, as submitted to
CONTRACTOR under the Notice to Proceed, be in original format; OWNER will not authorize payments from
carbon or Xerox copies, and mailed directly to the following address:

City of Nashua

Accounts Payable

PO Box 2019

Nashua, NH 03061-2019

Attn: Division of Public Works

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Jim Donchess
Mayor e City of Nashua

To: Board of Aldermen
From: Jim Donchess
Date: 9/22/16

Re: Notification of entry into contract with a 3™ party supplier for natural gas supply

Pursuant to NRO § 5-74 {B), which states that a contract that extends from the current fiscal year into
succeeding fiscal year(s) in which no funds have been appropriated nor otherwise designated for this
purpose shall be approved by the full Board of Aldermen before the contract shall become binding on the
City.

The Finance Committee approved and placed on file the notification of the award of the referenced contract
at their September 21, 2016 meeting. | am requesting the concurrence and approval of the full Board of
Aldermen for the award of the following contract:

Contract notification of entry into contract with a 3 party supplier, Direct Energy, for natural gas supply.
Attached please find John Griffin’s Memo regarding this contract. This contract is for three (3) years with
the term beginning June 1, 2017.

229 Main Street » PO Box 2019 + Nashua, New Hampshire 03061-2019
603.589.3260 * fax 603.594.3450 * NashuaMayor@NashuaNH.gov
www.NashuaNH.gov