1 CONTRACT LANGUAGE CONVENTION 2004 Concerns of Precast Manufacturers Presented by: HAGEN LAMBERT & TRAVIS FOX

Click to edit Master text styles Second level Third level Fourth level Fifth level Broad–Form Indemnification - Practically all subcontracts contain language whereby making Subcontractors responsible to indemnify and hold harmless Owners and Contractors and others for all claims caused by, arising out of, or occurring in connection with Subcontractor’s Work. Practically all subcontracts contain language whereby making Subcontractors responsible to indemnify and hold harmless Owners and Contractors and others for all claims caused by, arising out of, or occurring in connection with Subcontractor’s work.

Click to edit Master text styles Second level Third level Fourth level Fifth level Broad–Form Indemnification How this could affect you…

Click to edit Master text styles Second level Third level Fourth level Fifth level To the fullest extent permitted by law, Subcontractor shall indemnify and hold harmless the Owner and Contractor, their agents and employees from and against claims, damages, losses and expenses, including but not limited to attorney’s fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than to the Work itself) including loss of use resulting therefrom, but only to the extent caused in whole or in part by negligent acts or omissions of the Subcontractor, a sub-subcontractor, or anyone directly employed by them for the construction of the Work, or anyone for whose acts they may be liable. Broad–Form Indemnification Preferred Language:

Click to edit Master text styles Second level Third level Fourth level Fifth level Note: Broad-Form Indemnification is also attempted by making Subcontractor’s insurance policies “primary and non-contributory” thereby making Subcontractor’s insurance responsible for paying all claims associated with Subcontractor’s Work without any contribution from Owner’s, Contractor’s, or others’ insurance policies even if Owner, Contractor, or others are at fault. Broad–Form Indemnification

Click to edit Master text styles Second level Third level Fourth level Fifth level Most Subcontracts contain language such as “Subcontractor’s commencement of its work shall constitute acceptance of the related substrate conditions and Subcontractor shall be responsible for all costs arising therefrom, etc…”  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements

Click to edit Master text styles Second level Third level Fourth level Fifth level Most Subcontracts will state explicitly that Subcontractor shall verify the prior work of others before performing any portion of Subcontractor’s work, etc. This language defeats the purpose of bidding/fabricating work in accordance with the Contract Documents and places an undue burden on Subcontractors whose work depends on the proper preceding work of others and furthermore makes scheduling impractical if not impossible. This acceptance/verifying language usually extends to the Contract Documents whereby making Subcontractor responsible for discovering errors and omissions in the Contract Documents.  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements

Click to edit Master text styles Second level Third level Fourth level Fifth level  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements Slab Is 2” Out. In accordance with the contract, precaster must field measure contractor’s structure and react to the problems with the structure by modifying or re-casting panels.

Click to edit Master text styles Second level Third level Fourth level Fifth level Field measure and produce precast in accordance with as-built conditions.  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements

Click to edit Master text styles Second level Third level Fourth level Fifth level  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements Preferred Language: Subcontractor’s commencement of its Work, preceded by a reasonable inspection of supporting and/or contiguous work shall not constitute a waiver of Contractor’s obligation to construct its work in accordance with tolerances and quality levels specified in the Contract Documents. Neither Subcontractor nor its Sub-subcontractors shall be responsible or liable in any way for errors and omissions in the Work of others, including the Contract Documents. Subcontractor does agree to make a reasonable effort to coordinate its Work with the Work of other trades and report any deficiencies it finds as part of performing its Work.

Click to edit Master text styles Second level Third level Fourth level Fifth level A more radical version for the preceding slide is: “Neither Subcontractor nor its Sub-subcontractors shall be responsible or liable in any way for reviewing, reporting, verifying, analyzing, or evaluating the work of others, including the Contract Documents.”  Acceptance of Substrate Conditions  Verifying The Work of Others  Field Measurements

Click to edit Master text styles Second level Third level Fourth level Fifth level Protection/Risk of Loss Most Subcontracts attempt to make Subcontractor responsible for protecting its work in place until final acceptance by Owner.

Click to edit Master text styles Second level Third level Fourth level Fifth level Protection/Risk of Loss ARE YOU AT RISK BECAUSE CONTRACTOR DOESN’T HAVE SAFETY CABLES? A forklift accidentally knocks a panel off of the sixth floor of a parking deck and damages several others beyond repair.

Click to edit Master text styles Second level Third level Fourth level Fifth level Protection/Risk of Loss

Click to edit Master text styles Second level Third level Fourth level Fifth level Preferred Language: “Subcontractor agrees to exercise reasonable care in protecting the existing construction and improvements from damage during the performance of its Work. Protection of Subcontractor’s Work once installed on the structure is excluded. Furthermore, the Risk of Loss of Subcontractor’s Work passes to the Owner and/or Contractor once installed on the structure, but only to the extent such loss or damage is not caused by acts or omissions of Subcontractor. Subcontractor is not responsible for the repair of damage to its Work caused by others.” Protection/Risk of Loss

Click to edit Master text styles Second level Third level Fourth level Fifth level No Compensation for Delays Most Subcontracts contain language that basically states that if Subcontractor is delayed in the performance of its work, Subcontractor’s “sole and exclusive” remedy shall be an extension of time; hence, Subcontractor shall not receive any compensation except to the extent caused by and paid by Owner if allowed by the Owner contract.

Click to edit Master text styles Second level Third level Fourth level Fifth level No Compensation for Delays Original Precast Erection Schedule: 500 Pieces 10 pieces erected per day for 50 days/10 Weeks PRECAST ERECTION NOV.DEC.JAN. Scenario: P.I.P. Concrete Subcontractor Is Behind Schedule. JAN.DEC.NOV. PRECAST ERECTION Adjusted Precast Erection Schedule: 500 Pieces 20 pieces erected per day for 25 days Requires 2 Crews: (1 day/1 night)

Click to edit Master text styles Second level Third level Fourth level Fifth level No Compensation for Delays Preferred Language: In the event Subcontractor is delayed by or has any other claim for damages and/or an extension of time caused by Contractor or other Subcontractors, Subcontractor will negotiate its compensation and/or extension of time with Contractor. An extension of time may not be Subcontractor’s sole remedy for such delays. Subcontractor may, but shall not be required to, make up time for delays not directly caused by Subcontractor (including but not limited to delays caused by inclement weather).

Click to edit Master text styles Second level Third level Fourth level Fifth level Mutual Schedule Contractor and Subcontractor start with a Bid Schedule. It is not reasonable for Contractor’s schedule to be materially modified from the original Bid Schedule while maintaining that Subcontractor “begin Subcontractor’s Work as soon as instructed by Contractor” and “furnish additional shifts of labor, work overtime, pay premium costs” as stated in most Subcontracts.

Click to edit Master text styles Second level Third level Fourth level Fifth level Mutual Schedule AUGUST JULY JUNE MAY APRIL MARCH FEBRUARY JANUARY CourthouseMixed Use Tower3 SchoolsGarageOffice TowerConvention Ctr. Delivery Schedule for Plant CourthouseMixed Use Tower3 SchoolsGarageOffice TowerConvention Ctr. AUGUST JULY JUNE MAY APRIL MARCH FEBRUARY JANUARY Problem: Two jobs’ delivery dates slide to positions where production and delivery schedules are to capacity.

Click to edit Master text styles Second level Third level Fourth level Fifth level Preferred Language: All project schedules for the Work (including schedules for submittals) and any revisions thereto, shall be mutually agreed upon by Contractor and Subcontractor. Subcontractor agrees to use every means available to comply with Contractor’s reasonable schedule revisions for compensation, if any, mutually agreed upon by Contractor and Subcontractor. If Subcontractor cannot comply, Subcontractor shall not be penalized in any way for its noncompliance. Mutual Schedule

Click to edit Master text styles Second level Third level Fourth level Fifth level Pay When Paid/Pay If Paid Represents a “Business Risk,” not an “Insurable Risk.”

Click to edit Master text styles Second level Third level Fourth level Fifth level Pay When Paid/Pay If Paid If Subcontractor is not comfortable with Owner’s ability to pay, Subcontractor may ask for language such as the following: “Acceptance of the conditional payment terms is conditioned on the understanding that those terms apply solely to monies withheld by Owner due to some deficiency of Subcontractor. If Owner fails to pay Contractor for reasons unrelated to the Work of Subcontractor, Contractor shall have a reasonable time to make payment to Subcontractor following the time when such payment would normally be due. If Contractor is not paid by Owner for any reason, Subcontractor agrees to cooperate and assist Contractor in obtaining such payment. Subcontractor does not assume the risk of non-payment by Owner to Contractor.

Click to edit Master text styles Second level Third level Fourth level Fifth level Avoiding Contract Problems Clarify Scope Related Issues: Don’t get hooked into extra scope items that you did not estimate or intend to do. Items include: Grouting Crane Issues Mobilizations Layout/Control Lines Schedule Duration Erection Sequence Extensive Mockups Cleaning