when a Claim for an adjustment in Contract Price is determined on the basis of the Cost of the Work, the costs to be
reimbursed to CONTRACTOR will be only those additional or incremental costs required because of the change in
the Work or because of the event giving rise to the Claim. 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 11.01.B.
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. Such employees shall include
without limitation superintendents, foremen, and other personnel employed full time at the Site. Payroll costs of
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' compensation, health and
retirement benefits, bonuses, sick leave, vacation and holiday pay applicable thereto. The expenses of performing
Work outside of regular working hours, on Saturday, Sunday, or legal holidays, shall be included in the above to
the extent authorized by OWNER.
2. Cost of all materials and equipment furnished and incorporated in the Work, including costs of transportation
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 retums from sale of
surplus materials and equipment shall accrue to OWNER, and CONTRACTOR shall make provisions so that they
may be obtained.
3. Payments made by CONTRACTOR to Subcontractors for Work performed by Subcontractors. If required by
OWNER, CONTRACTOR shall obtain competitive bids from subcontractors acceptable to OWNER and
CONTRACTOR and shall deliver such bids to OWNER, who will then determine, with the advice of ENGINEER,
which bids, if any, will be acceptable. If any 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 and fee shall be determined in the same
manner as CONTRACTOR's Cost of the Work and fee as provided in this paragraph 11.01.
4. Costs of special consultants (including but not limited to engineers, architects, testing laboratories, surveyors,
attorneys, and accountants) employed for services specifically related to the Work.
5. Supplemental costs including the following:
a. The proportion of necessary transportation, travel, and subsistence expenses of CONTRACTOR's
employees incurred in discharge of duties connected with the Work.
b. Cost, including transportation and maintenance, of all materials, supplies, equipment, machinery,
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.
c. 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, assembly, dismantling, and removal thereof.
All such costs shall be in accordance with the terms of said rental agreements. The rental of any such
equipment, machinery, or parts shall cease when the use thereof is no longer necessary for the Work.
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.
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