Common use of Construction Phase Compensation Clause in Contracts

Construction Phase Compensation. 1) CM/GC's construction management fee for the Work performed during the entire construction phase, including punch list completion, is a lump sum of 3.85% of the FLCC ($21,500,000 x 3.50% = $753,000). This includes the cost outlined in any management plan submitted by CM/GC. a) This construction management fee includes overhead, profit for the entire job and personnel who will be managing the project during bidding, construction and closeout, including the warranty period. This fee also includes employment taxes, insurance, workers compensation, as well as salaries and benefits for all personnel that are not identified in Section 2.E.3 below. b) This construction management fee does not include general conditions or the monthly supervision cost described below. As used in this Agreement, “general conditions” means temporary construction costs directly related to the Work. c) This construction management fee is subject to modification by County only as the scope of the work changes, and can be adjusted appropriately as the scope of work changes affect the size and/or duration of the Project. d) Following the establishment of the Guaranteed Maximum Price (“GMP”), CM/GC change order markup, described in Section 6.B.7 below, will compensate CM/GC for the additional overhead and profit associated with a change in scope of Work; however, a decrease in scope of Work and Contract Time prior to or after the establishment of the GMP, shall result in a decrease in the amount of CM/GC’s construction management fee, at the effective percentage rate established in the Proposal, prorated for the amount of Contract Time that is reduced from the original schedule. Similarly, an increase to the scope of Work prior to the establishment of the GMP shall result in an increase in the amount of CM/GC construction management fee at the effective percentage rate established in the Proposal, prorated for the amount of the Contract Time that is added to the original schedule. CM/GC’s construction management fee shall not be increased due to an increase in cost of material, labor, general conditions or site supervision. 2) Compensation for the following items is deemed already included in CM/GC's construction management fee and not subject to any additional payment beyond said fee by County: a) Costs, losses and expenses, including legal and consultant expenses, to the extent they have resulted from the act, fault or negligence of CM/GC, Subcontractor, Sub-subcontractor or supplier at any tier or anyone for whom CM/GC may be liable, including any loss or expense related to securing the property as required by this Agreement or to prevent injury to persons, the correction of defective or nonconforming Work, disposal of materials and equipment wrongly supplied, or making good any damage to property. b) All expenses related to maintaining and operating CM/GC's principal and branch offices. c) Any part of CM/GC's capital expenses, including interest on CM/GC's capital employed for the Work. d) Overhead or general expenses of any kind, except as may be expressly included in Section 3 of this Agreement. e) Food and refreshments for construction meetings or in association with the Project, unless approved in writing and in advance by County based on a showing of benefit to the Project. f) Incentive awards of any kind, unless approved in writing and in advance by County based on a showing of benefit to the Project. g) Training costs either associated or not associated with the Project, unless approved in writing and in advance by County based on a showing of benefit to the Project. 3) The following items, while not part of CM/GC's construction management fee, are to be included in any GMP proposal or approved GMP: a) The total amount of the construction supervision costs shall be a maximum of $758,000 for the duration of the project. b) If County authorizes CM/GC to self-perform portions of the Work, said Work shall be compensated as a cost of the Work and reimbursed at actual cost incurred based on documentation (direct personnel expense, including labor, materials, equipment, etc.) plus a fixed negotiated fee that shall not exceed 7% of the cost of said Work. i. Self-performed work eligible for payment shall only include labor, materials, and equipment provided directly by CM/GC and not by Subcontractor, Sub-subcontractor or supplier at any tier. ii. Self-performed work eligible for payment shall not include items furnished by CM/GC as a general conditions item. c) CM/GC shall be compensated for general conditions and reimbursed for general condition costs in an amount of $344,050. General conditions include such items, to the extent used on the Project, as: construction trailer, office equipment, computers, phones, temporary toilets, and safety precautions including site items such as cost of debris removal, fencing, security and similar items. In order to qualify as a general conditions cost, such item must be necessary for the construction of the Project. i. Rental rates for all necessary machinery and equipment, exclusive of hand tools, used at the site of the Work, whether rented from CM/GC or others, including installation, minor repairs and replacements, dismantling, removal, transportation and delivery costs thereof, shall be at rental charges at actual cost. If the equipment is owned by CM/GC, then the rental rate shall not exceed the demonstrated cost of ownership by CM/GC for the applicable time period. Other than hand tools with a value under $100, equipment that is necessary to be purchased for use on the Project by CM/GC shall first be approved in writing by County. Following the completed use, CM/GC may retain ownership of the equipment upon credit of remaining market value compensated to County, otherwise County shall retain ownership. ii. Large cranes, temporary construction utilities (e.g. water, gas and/or power), and weather conditions (winter protection) are excluded from the general conditions fee. d) Actual payments made by CM/GC to Subcontractor for Work performed pursuant to subcontracts properly entered into under this Agreement. e) Sales, use or similar taxes related to the Work and for which CM/GC is liable and imposed by any governmental authority. f) Actual cost of premiums for insurance, which CM/GC is required by the Contract Documents to purchase and maintain based on the amount of the approved GMP. g) Actual cost of payment and performance bonds based on the amount of the approved GMP.

Construction Phase Compensation. 1) CM/GC's construction management fee for the Work performed during the entire construction phase, including punch list completion, is a lump sum of 3.85% of the FLCC ($21,500,000 4,500,000.00 x 3.503.85% = $753,00041,098.75). This includes the cost outlined in any management plan submitted by CM/GC. a) This construction management fee includes overhead, profit for the entire job and personnel who will be managing the project during bidding, construction and closeout, including the warranty period. This fee also includes employment taxes, insurance, workers compensation, as well as salaries and benefits for all personnel that are not identified in Section 2.E.3 below. b) This construction management fee does not include general conditions or the monthly supervision cost described below. As used in this Agreement, “general conditions” means temporary construction costs directly related to the Work. c) This construction management fee is subject to modification by County only as the scope of the work changes, and can be adjusted appropriately as the scope of work changes affect the size and/or duration of the Project. d) Following the establishment of the Guaranteed Maximum Price (“GMP”), CM/GC change order markup, described in Section 6.B.7 below, will compensate CM/GC for the additional overhead and profit associated with a change in scope of Work; however, a decrease in scope of Work and Contract Time prior to or after the establishment of the GMP, shall result in a decrease in the amount of CM/GC’s construction management fee, at the effective percentage rate established in the Proposal, prorated for the amount of Contract Time that is reduced from the original schedule. Similarly, an increase to the scope of Work prior to the establishment of the GMP shall result in an increase in the amount of CM/GC construction management fee at the effective percentage rate established in the Proposal, prorated for the amount of the Contract Time that is added to the original schedule. CM/GC’s construction management fee shall not be increased due to an increase in cost of material, labor, general conditions or site supervision. 2) Compensation for the following items is deemed already included in CM/GC's construction management fee and not subject to any additional payment beyond said fee by County: a) Costs, losses and expenses, including legal and consultant expenses, to the extent they have resulted from the act, fault or negligence of CM/GC, Subcontractor, Sub-subcontractor or supplier at any tier or anyone for whom CM/GC may be liable, including any loss or expense related to securing the property as required by this Agreement or to prevent injury to persons, the correction of defective or nonconforming Work, disposal of materials and equipment wrongly supplied, or making good any damage to property. b) All expenses related to maintaining and operating CM/GC's principal and branch offices. c) Any part of CM/GC's capital expenses, including interest on CM/GC's capital employed for the Work. d) Overhead or general expenses of any kind, except as may be expressly included in Section 3 of this Agreement. e) Food and refreshments for construction meetings or in association with the Project, unless approved in writing and in advance by County based on a showing of benefit to the Project. f) Incentive awards of any kind, unless approved in writing and in advance by County based on a showing of benefit to the Project. g) Training costs either associated or not associated with the Project, unless approved in writing and in advance by County based on a showing of benefit to the Project. 3) The following items, while not part of CM/GC's construction management fee, are to be included in any GMP proposal or approved GMP: a) The total amount of the construction supervision costs shall be a maximum of $758,000 for the duration of the project. b) If County authorizes CM/GC to self-perform portions of the Work, said Work shall be compensated as a cost of the Work and reimbursed at actual cost incurred based on documentation (direct personnel expense, including labor, materials, equipment, etc.) plus a fixed negotiated fee that shall not exceed 75% of the cost of said Work. i. Self-performed work eligible for payment shall only include labor, materials, and equipment provided directly by CM/GC and not by Subcontractor, Sub-subcontractor or supplier at any tier. ii. Self-performed work eligible for payment shall not include items furnished by CM/GC as a general conditions item. cb) CM/GC shall be compensated for general conditions and reimbursed for general condition costs in but to not exceed an amount of $344,050to increase overall GMP. General conditions include such items, to the extent used on the Project, as: construction trailer, office equipment, computers, phones, temporary toilets, and safety precautions including site items such as cost of debris removal, fencing, security and similar items. In order to qualify as a general conditions cost, such item must be necessary for the construction of the Project. i. Rental rates for all necessary machinery and equipment, exclusive of hand tools, used at the site of the Work, whether rented from CM/GC or others, including installation, minor repairs and replacements, dismantling, removal, transportation and delivery costs thereof, shall be at rental charges at actual cost. If the equipment is owned by CM/GC, then the rental rate shall not exceed the demonstrated cost of ownership by CM/GC for the applicable time period. Other than hand tools with a value under $100, equipment that is necessary to be purchased for use on the Project by CM/GC shall first be approved in writing by County. Following the completed use, CM/GC may retain ownership of the equipment upon credit of remaining market value compensated to County, otherwise County shall retain ownership. ii. Large cranes, temporary construction utilities (e.g. water, gas and/or power), and weather conditions (winter protection) are excluded from the general conditions fee. dc) Actual payments made by CM/GC to Subcontractor for Work performed pursuant to subcontracts properly entered into under this Agreement. ed) Sales, use or similar taxes related to the Work and for which CM/GC is liable and imposed by any governmental authority. fe) Actual cost of premiums for insurance, which CM/GC is required by the Contract Documents to purchase and maintain based on the amount of the approved GMP. gf) Actual cost of payment and performance bonds based on the amount of the approved GMP.