GENERAL PROVISIONS FOR CONSTRUCTION PROJECTS

2016

HAWAII DEPARTMENT OF

TRANSPORTATION

AIR AND WATER TRANSPORTATION

FACILITIES DIVISION

GENERAL PROVISIONS

FOR

CONSTRUCTION PROJECTS

TABLE OF CONTENTS

ARTICLE I – TERMS, ABBREVIATIONS, AND DEFINITIONS

Section 1.1 Specified Publications............................................................................

Section 1.2 Abbreviations..........................................................................................

Section 1.3 Definitions ...............................................................................................

ARTICLE II – STANDARD PROVISIONS FOR COMPETITIVE

SEALED BIDS AND AWARDS

Section 2.1 Purpose ...................................................................................................

Section 2.2 Contractor’s License ..............................................................................

Section 2.3 Qualification of Bidders .........................................................................

Section 2.4 Contents of Invitations for Bids.............................................................

Section 2.5 Estimated Quantities ..............................................................................

Section 2.6 Examination of Plans, Specifications, and Site of Work;

Patent Ambiguities; Requests for Clarification....................................

Section 2.7 Request for Substitution of Specified Materials and

Equipment Before Bid Opening.............................................................

Section 2.8 Preparation and Delivery of Bid.............................................................

Section 2.9 Irregular Bids...........................................................................................

Section 2.10 Disqualification of Bidders ....................................................................

Section 2.11 Bid Security.............................................................................................

Section 2.12 Pre-Opening Modification or Withdrawal of Bids.................................

Section 2.13 Cancellation of Invitation for Bids Before Bid Opening ......................

Section 2.14 Public Opening of Bids ..........................................................................

Section 2.15 Acceptance of Bids; Correction of Mistakes........................................

Section 2.16 Preferences .............................................................................................

Section 2.17 Certification for Safety and Health Program for Bids in

Excess of $100,000 .................................................................................

Section 2.18 Certification of Employment of State of Hawaii Residents ................

Section 2.19 Cancellation of Invitation for Bids After Bid Opening .........................

Section 2.20 Bid Evaluation and Award......................................................................

Section 2.21 Waiver to Competitive Sealed Bid.........................................................

Section 2.22 Cancellation of Award ............................................................................

Section 2.23 Return of Bid Security............................................................................

Section 2.24 Requirements of Contract Bonds..........................................................

Section 2.25 Execution of Contract.............................................................................

ARTICLE III – (Reserved)

ARTICLE IV – SCOPE OF WORK

Section 4.1 Intent of Contract, Duty of Contractor ..................................................

Section 4.2 Changes...................................................................................................

Section 4.3 Field Orders.............................................................................................

Section 4.4 Duty of Contractor to Provide Change Proposals ...............................

Section 4.5 Contract Change Orders ........................................................................

Section 4.6 Methods of Price Adjustment ................................................................

Section 4.7 Variations in Estimated Quantities........................................................

Section 4.8 Differing Site Conditions........................................................................

Section 4.9 Maintenance of Traffic............................................................................

Section 4.10 Construction and Maintenance of Detours...........................................

Section 4.11 Use of Explosives ...................................................................................

Section 4.12 Utilities and Services..............................................................................

Section 4.13 Illumination of Work ...............................................................................

Article V – CONTROL OF WORK

Section 5.1 Authority..................................................................................................

Section 5.2 Submittals ...............................................................................................

Section 5.3 Shop Drawings........................................................................................

Section 5.4 Review and Acceptance Process ..........................................................

Section 5.5 Interpretations of the Contract Documents; Conflicts and

Ambiguity ................................................................................................

Section 5.6 (Reserved)

Section 5.7 Examination of Contract Documents and Project Site........................

Section 5.8 Coordination Between the Contractor and the State...........................

Section 5.9 Coordination Between Contractors; Impacts.......................................

Section 5.10 Construction Stakes, Lines, and Grades..............................................

Section 5.11 Inspection of the Work and Materials ...................................................

Section 5.12 Removal of Non-Conforming and Unauthorized Work:

Performance of Corrective or Remedial Work......................................

Section 5.13 Maintenance............................................................................................

Section 5.14 Storage and Handling of Materials and Equipment .............................

Section 5.15 Value Engineering Incentive Proposal..................................................

Section 5.16 Subcontracts...........................................................................................

Section 5.17 Dimensions, Performance Standards, and Other Values

Required by the Contract.......................................................................

ARTICLE VI – CONTROL OF MATERIAL

Section 6.1 Source of Supply and Quality Requirements.......................................

Section 6.2 Material Sources.....................................................................................

Section 6.3 Unauthorized Excavation.......................................................................

Section 6.4 Material Sample and Testing .................................................................

Section 6.5 Sample Submittals..................................................................................

Section 6.6 Notice of Change ....................................................................................

Section 6.7 Certificate of Compliance.......................................................................

Section 6.8 Non-Conforming Materials.....................................................................

Section 6.9 State-Furnished Material........................................................................

Section 6.10 Payment for Deleted Materials...............................................................

Section 6.11 (Reserved)

Section 6.12 Assignment of Antitrust Claims for Overcharges for Goods

and Materials Purchased........................................................................

Section 6.13 Substitution of Materials and Equipment After Bid Opening..............

ARTICLE VII – LEGAL RELATIONS AND RESPONSIBILITY TO PUBLIC

Section 7.1 Insurance Requirements........................................................................

Section 7.2 Employment of State of Hawaii Residents ...........................................

Section 7.3 Permits and Licenses.............................................................................

Section 7.4 Working Hours; Night Work...................................................................

Section 7.5 Overtime and Night Work.......................................................................

Section 7.6 Overtime and Night Payment for State Inspection Service.................

Section 7.7 Contractor Duty Regarding Public Convenience.................................

Section 7.8 Assignment or Change of Name............................................................

Section 7.9 Laws to be Observed; Indemnity...........................................................

Section 7.10 Patented Devices, Materials, and Processes .......................................

Section 7.11 Furnishing Right-Of-Way .......................................................................

Section 7.12 Safety: Accident Prevention .................................................................

Section 7.13 Protection of Persons and Property......................................................

Section 7.14 Pollution Control and Protection Of Archeological,

Historical, and Burial Sites ....................................................................

Section 7.15 Responsibility for Damage Claims; Indemnity.....................................

Section 7.16 Disputes and Claims...............................................................................

Section 7.17 Contaminated or Hazardous Items and Material; Regulated

Items and Material; Waste......................................................................

Section 7.18 Right to Audit Records, Records Maintenance, Retention,

and Access..............................................................................................

Section 7.19 Conflicts of Interest ................................................................................

Section 7.20 Sanitation Provisions .............................................................................

ARTICLE VIII – PROSECUTION AND PROGRESS

Section 8.1 Notice to Proceed (NTP).........................................................................

Section 8.2 Prosecution of Work...............................................................................

Section 8.3 Preconstruction Data Submittal ............................................................

Section 8.4 Character and Proficiency of Workers..................................................

Section 8.5 Contract Time..........................................................................................

Section 8.6 Progress Schedules ...............................................................................

Section 8.7 Weekly Meeting.......................................................................................

Section 8.8 Liquidated Damages for Failure to Complete the Work or

Portions of the Work on Time................................................................

Section 8.9 Fines and Other Penalties......................................................................

Section 8.10 Suspension of Work ...............................................................................

Section 8.11 Termination of Contract for Cause........................................................

Section 8.12 Termination for Convenience ................................................................

Section 8.13 Pre-Final and Final Inspections.............................................................

Section 8.14 Final Acceptance ....................................................................................

Section 8.15 Use of Structure or Improvement..........................................................

Section 8.16 Contractor’s Responsibility for Work; Risk of Loss or

Damage....................................................................................................

Section 8.17 Guarantee of Work..................................................................................

Section 8.18 No Waiver of Contract Obligations........................................................

Section 8.19 Final Settlement of Contract..................................................................

ARTICLE IX – MEASUREMENT AND PAYMENT

Section 9.1 Schedule of Values.................................................................................

Section 9.2 Payment is not Acceptance ...................................................................

Section 9.3 Measurement of Quantities....................................................................

Section 9.4 Full Compensation; Changes ................................................................

Section 9.5 Allowances for Overhead and Profit.....................................................

Section 9.6 Force Account Provisions and Compensation ....................................

Section 9.7 Assignment of Payments.......................................................................

Section 9.8 Progress Payments ................................................................................

Section 9.9 Prompt Payment .....................................................................................

Section 9.10 Retainage; Withholding of Payment for Unsatisfactory

Progress ..................................................................................................

Section 9.11 Final Payment..........................................................................................

Section 9.12 Records, Accounts, And Documents....................................................

ARTICLE I - TERMS, ABBREVIATIONS, AND DEFINITIONS 1

1.1 Specified Publications. When a publication is specified, it refers to the

most recent date of issue, including interim publications, before the bid opening

date for the project, unless a specific date or year of issue is provided.

1.2 Abbreviations. Meanings of abbreviations used in the specifications,

on the plans, or in other contract documents are as follows:

AASHTO American Association of State Highway and

Transportation Officials

ACI American Concrete Institute

ADA Americans with Disabilities Act

AGC Associated General Contractors of America

AIA American Institute of Architects

AISC American Institute of Steel Construction

AISI American Iron and Steel Institute

ANSI American National Standards Institute

ASA American Standards Association

ASTM American Society for Testing and Materials

AWG American Wire Gauge

AWS American Welding Society

AWWA American Water Works Association

BMP Best Management Practice

CFR Code of Federal Regulations

CRSI Concrete Reinforcing Steel Institute

DCAB Disability and Communication Access Board, Department of

Health, State of Hawaii

DOT–A

Hawaii Department of Transportation, Airports Division

DOT-HAR Hawaii Department of Transportation, Harbors Division

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DOTAX Department of Taxation, State of Hawaii

EPA U.S. Environmental Protection Agency

FAA

Federal Aviation Administration

FHWA Federal Highway Administration,

U.S. Department of Transportation

HAR

Hawaii Administrative Rules

HDOT Department of Transportation, State of Hawaii

HIOSH Occupational Safety and Health, Department of Labor and

Industrial Relations, State of Hawaii

HMA Hot Mix Asphalt

HRS Hawaii Revised Statutes

IBC International Building Code

IEEE Institute of Electrical and Electronic Engineers

IRS Internal Revenue Service

ITE Institute of Transportation Engineers

MUTCD Manual on Uniform Traffic Control Devices for Streets and

Highways, FHWA, U.S. Department of Transportation

NEC National Electric Code

NEMA National Electrical Manufacturers Association

NFPA National Fire Protection

NPDES National Pollutant Discharge Elimination System

OSHA Occupational Safety and Health Administration/Act,

U.S. Department of Labor

SI International Systems of Units

UL Underwriter's Laboratory

USGS U.S. Geological Survey

VECP Value Engineering Cost Proposal

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1.3 Definitions. Whenever the following words and terms are used in the

contract documents, unless otherwise prescribed therein and without regards to

the use or omission of uppercase letters, the meaning and intent shall be as

follows:

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Addendum (plural - Addenda) - A written or graphic document, including

drawings and specifications, issued by the Director during the bidding period.

This document modifies or interprets the bidding documents by additions,

deletions, clarifications, or corrections. An addendum supersedes all prior

conflicting documents.

Advertisement - A public announcement inviting bids for work to be performed

or materials to be furnished.

Airport - Any area of land or water which is used or intended for use for the

landing and takeoff of aircraft, and any appurtenant areas which are used or

intended for use for airport buildings or other airport facilities.

Award - Written notification to the bidder that the State intends to enter a

contract with the bidder but does not create any contractual rights.

Bad Weather Day (or Unworkable Day) - A day when weather or other

conditions prevent a minimum of four hours of work with the Contractor’s normal

work force on critical path work at the site.

Bid - The executed document submitted by a bidder, in response to an invitation

for bids or other solicitation request, to perform the work required by the

proposed contract documents, for the price quoted, and within the time allotted.

Bidder - An individual, partnership, corporation, joint venture, or other legal entity

submitting, directly or through a duly authorized representative or agent,

a bid for

the work or construction contemplated.

Bid Security - The security, in conformity with the bidding documents, furnished

by bidders from which the State may recover its damages in the event the

selected bidder breaches its promise to enter into a contract with the State.

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Blue Book - “Rental Rate Blue Book for Construction Equipment” published by

Equipment Watch, A Premedia Business Directories and Book Group.

Calendar Day - See Day.

Change Order (or Contract Change Order) - A written order signed by the

Engineer, issued with or without the consent of the Contractor, directing changes

in all or any portion of the work for i) the work to be performed and/or ii) contract

time and/or iii) contract price. The purposes of a change order include, but are

not limited to (i) establishing a price or time adjustment for changes in the work;

(ii) establishing full payment for direct, indirect, and consequential costs,

including costs of delay; (iii) establishing a price or time adjustment for work

covered and affected by one or more field orders; or (iv) settling Contractor’s

claims for direct, indirect, and consequential costs or for additional contract time,

in whole or in part.

Completion Date - The date specified by the contract for the substantial

completion of all work on the project or of a designated portion of the project.

Construction – the process of building, altering, repairing, improving, or

demolishing any public structure or building, or other public improvements of any

kind to any public real property. The term includes the routine operation, routine

repair, or routine maintenance of existing structures, buildings, or real property.

Contract - The written agreement between the State and the Contractor setting

forth the obligations of the parties thereunder, including, but not limited to, the

performance of the work, the furnishing of labor and materials, the completion

date, and the basis of payment. The contract comes into existence only upon

delivery to the Contractor of the written agreement containing all necessary

signatures and certifications of the State and the Contractor. The contract

includes the notice to bidders; instructions to bidders; addenda; proposal

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(including wage schedule, list of subcontractors, and other documentations

accompanying the bid); contract form and contract bond(s); specifications;

general and special provisions; general and detailed plans; field orders, orders

for minor changes, and change orders; all approved or accepted submittals;

notice to proceed; written operational instructions; and restrictions and limitations

on the Contractor, including, but not limited to, those described in the

Contractor’s Training Guide and FAA Advisory Circulars.

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Contract Bond(s) - The approved form of security, executed by the Contractor

and his Surety or Sureties, guaranteeing the completion of the work in

accordance with the terms of the contract (Performance Bond) and guaranteeing

full payment of all claims for labor, materials, and supplies used or incorporated

in the work (Payment Bond).

Contract Item (Pay Item) - A specific unit of work for which there is a price in the

contract.

Contract Price - The amount designated on the face of the contract base bid

amount for the performance of work.

Contract Time (or Contract Duration) - The number of calendar or working

days provided for completion of the contract, or any portion of the work for which

there is a separate completion date, inclusive of authorized time extensions. The

number of days shall commence on the effective date in the notice to proceed.

If, in lieu of providing a number of calendar or working days, the contract requires

completion by a certain date, the work shall be completed by that date.

Contracting Officer - See Engineer.

Contractor - Any individual, partnership, firm, corporation, joint venture, or other

legal entity undertaking the execution of the work under the terms of the contract

with the State and acting directly or through its agents or employees.

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Critical Path - Longest logical sequence of activities that must be completed on

schedule for the entire project to be completed on schedule.

Day - Any day shown on the calendar, beginning at midnight and ending at

midnight the following day. If no designation of calendar or working day is made,

"day" shall mean calendar day.

Department - The Department of Transportation of the State of Hawaii

(abbreviated HDOT).

Director - The Director of the HDOT acting directly or through duly authorized

representatives.

Drawings - The contract documents in graphic or pictorial form, including the

notes, tables, and other notations thereon indicating the design, location,

character, dimensions, and details of the work, in printed or electronic format.

Effective Date - The date the Contractor receives the contract that has been fully

and properly executed by all parties thereto and endorsed by the Comptroller

with a certificate that there is available unexpended appropriations, over and

above all outstanding contracts sufficient to cover the amount required by the

contract.

Engineer - The Engineering Program Manager or the authorized person

delegated to act on the Engineering Program Manager’s behalf.

Equipment - All machinery, tools, and apparatus, together with the supplies

necessary for their upkeep and maintenance, needed to perform and/or required

to complete the contract.

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Field Order - A written order issued by the Engineer, or the Engineer’s

authorized representative, to the Contractor requiring a change or changes to the

contract work. A field order may (1) establish a price adjustment or time

adjustment; (2) may declare that no adjustment will be made to contract price or

contract time; or (3) may request the Contractor submit a proposal for an

adjustment to the contract price or contract time.

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Final Acceptance Date - The calendar day on which the Engineer accepts the

project as completed.

Float - The amount of time between when an activity can start and when an

activity must start, i.e., the time available to complete non-critical activities

required for the performance of the work without affecting the critical path.

Guarantee - Legally enforceable assurance of the duration of satisfactory

performance or quality of equipment and work.

Harbors - A harbor or off-shore mooring facility which is primarily for the

movement of commercial cargo, passenger, and fishing vessels entering,

leaving, or traveling within the State and facilities and supporting services for

loading, off-loading, and handling of cargo, passengers, and vessels.

Hawaii Administrative Rules - Rules adopted by the State in accordance with

Chapter 91, H.R.S.

Holidays - The days of each year which are set apart and established as State

holidays pursuant to Chapter 8, H.R.S., as amended.

Inspector - The Engineer's authorized representative assigned to make detailed

inspections of contract performance, prescribed work, and materials supplied.

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Invitation for Bids - The published solicitation notice, bid requirements, bid

forms, and the proposed contract documents, including all addenda and

clarifications issued prior to receipt of the bid, whether attached, referenced

therein, or incorporated by reference.

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Laws - All Federal, State, and local laws, executive orders, and regulations

having the force of law.

Liquidated Damages - The amount prescribed in Section 8.8 Liquidated

Damages for Failure to Complete the Work or Portions of the Work on Time to be

paid to the State or to be deducted from any payments payable to or which may

become payable to the Contractor.

Lump Sum (LS) - When used as a payment method means complete payment

for the item of work described in the contract documents.

Material - Any natural or manmade substance or item specified in the contract to

be incorporated in the work.

Notice to Bidders - The advertisement for invitation for bids for all work and

materials on which bids are required. Such advertisement will describe the

nature and location of the work to be done and the time and place for the

opening of bids.

Notice to Proceed - Written notice from the Engineer to the Contractor

identifying the date on which work is to begin. This date shall also be the

beginning of contract time.

Offer - See Bid.

Offeror - See Bidder.

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Plans - See Drawings. 253

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Proposal - See Bid.

Public Traffic - Vehicular or pedestrian movement on a public way.

Punchlist - A list compiled by the Engineer specifying work yet to be completed

or corrected by the Contractor in order to substantially complete or finally

complete the contract.

Questionnaire - The specified forms on which the bidder shall furnish required

information as to its ability to perform and finance the work.

Request for Proposal - A written notice, from the Engineer to the Contractor,

requesting that the Contractor provide a price and/or time proposal for

contemplated changes preparatory to the issuance of a field order or change

order.

Resident – a person who is physically present in the State at the time the person

claims to have established the person’s domicile in the State and shows the

person’s intent is to make Hawaii the person’s primary residence.

Road (Roadway, Street) - A facility designed, intended, and set aside for use by

vehicles, equipment, bicyclists, or pedestrians.

Section and Subsection - Section or subsection shall be understood to refer to

these specifications unless otherwise specified.

Shop Drawings - All drawings, diagrams, illustrations, schedules, and other data

or information which are specifically prepared or assembled, by or for the

Contractor, and submitted by the Contractor to illustrate some portion of the

work.

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Shortage Trade – a construction trade in which there is a shortage of Hawaii

residents qualified to work in the trade, as determined by the Department of

Labor and Industrial Relations.

Shoulder - The portion of the roadway next to the traveled way for

accommodation of stopped vehicles, placement of underground facilities,

emergency use, and lateral support of base and surface courses.

Sidewalk - That portion of the roadway primarily constructed for use by

pedestrians.

Solicitation - See Invitations for Bids.

Specifications - Compilation of provisions and requirements to perform

prescribed work.

(a) Standard Specifications. Specifications by the State intended

for general application and repetitive use for all projects.

(b) Special Provisions. Revisions and additions to the standard

specifications applicable to an individual project.

Standard Plans - Drawings provided by the State for specific items of work

approved for repetitive use.

State - The State of Hawaii, its Departments, and agencies acting through its

authorized representative(s).

State Waters - All waters, fresh, brackish, or salt, around and within the State,

including, but not limited to, coastal waters, streams, rivers, drainage ditches,

ponds, reservoirs, canals, ground waters, and lakes; provided that drainage

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ditches, ponds, and reservoirs required as a part of a water pollution control

system are excluded.

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Structures - Bridges, piers, culverts, catch basins, drop inlets, retaining walls,

cribbing, manholes, endwalls, buildings, sewers, service pipes, underdrains,

foundation drains, and other such features that may be encountered in the work.

Subcontract - Any written agreement between the Contractor and its

subcontractors which contains the conditions under which the subcontractor is to

perform a portion of the work for the Contractor.

Subcontractor - An individual, partnership, firm, corporation, joint venture, or

other legal entity which enters into an agreement with the Contractor to perform a

portion of the work.

Substantial Completion - The status of the project or a portion of the project

subject to a separate completion date, when the Contractor has completed the

work, except for plant establishment, and each of the following requirements are

met:

(1) All utilities and services are connected and working;

(2) All equipment is in acceptable working condition;

(3) Additional activity by the Contractor to correct punchlist items will

not prevent or disrupt use of the work or the facility in which the work is

located; and

(4) The building, structure, improvement, or facility can be used for its

intended purpose.

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For bridge and roadway work, in addition to the above requirements,

substantial completion is the point at which all bridge deck, parapet, pavement

structure, shoulder, drainage, traffic signal, guardrail, safety appurtenance, traffic

barrier, lighting, and required signs and markings work are complete.

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Superintendent - The employee of the Contractor who, at the work site, is

responsible for all the work and is a Contractor’s agent for communications to

and from the State.

Surety - The qualified individual, firm, or corporation, other than the Contractor,

which executes a bond with and for the Contractor to insure the Contractor’s

acceptable performance of the contract.

Unsuitable Material - Materials that contain organic matter, muck, humus, peat,

sticks, debris, chemicals, toxic matter, or other deleterious materials not suitable

for use in earthwork or otherwise fail to meet the contract requirements.

Utility - A line, facility, or system for producing, transmitting, or distributing

communications, power, electricity, heat, cooling, gas, oil, fuel, water, steam,

waste, or storm water.

Utility Owner - The entity, whether private or owned by a State, Federal, or

County governmental body, that has the power and responsibility to grant

approval for or undertake construction work involving a particular utility.

Water Pollutant - Dredged spoil, solid refuse, incinerator residue, sewage,

garbage, sewage sludge, munitions, chemical waste, biological materials,

radioactive materials, heat, wrecked or discarded equipment, rock, sand, soil,

sediment, cellar dirt and industrial, municipal, and agricultural waste.

Water Pollution - (1) Such contamination or other alteration of the physical,

chemical, or biological properties of any state waters, including change in

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temperature, taste, color, turbidity, or odor of the waters; or (2) Such discharge

of any liquid, gaseous, solid, radioactive, or other substances into any state

waters, as will or is likely to, create a nuisance or render such waters

unreasonably harmful, detrimental, or injurious to public health, safety, or

welfare, including harm, detriment, or injury to public water supplies, fish and

aquatic life and wildlife, recreational purposes, and agricultural and industrial

research and scientific uses of such waters as will or is likely to violate any water

quality standards, effluent standards, treatment and pretreatment standards, or

standards of performance for new sources adopted by the Department of Health.

Work - The furnishing of all labor, material, equipment, and other incidentals

necessary or convenient for the successful execution of all the duties and

obligations imposed by the contract. Items, whether or not complete, arising out

of a Contractor’s efforts exerted in performance of the contract.

Working Day - A calendar day in which a Contractor is capable of working four

or more hours with its normal work force, exclusive of:

(1) Saturdays, Sundays, and recognized legal State holidays and such

other days specified by the contract documents as non-working days, and

(2) A day in which the Engineer suspends work for four or more hours

through no fault of the Contractor.

END OF ARTICLE I

ARTICLE II - STANDARD PROVISIONS FOR COMPETITIVE 1

SEALED BIDS AND AWARDS

2.1 Purpose. The provisions in this Article are standard provisions that are 4

deemed incorporated by reference into all invitations for competitive sealed bids. 5

If language in any invitation for competitive sealed bids varies from these 6

standard provisions, the language in the invitation shall control. These standard 7

provisions are intended to conform with all laws and regulations governing the 8

competitive sealed bid process. In the event of any variance between these 9

standard provisions and the procurement laws and the procurement regulations, 10

the laws and regulations shall control. 11

2.2 Contractor’s License. Attention is directed to the provisions of Chapter 13

444, H.R.S., and related regulations in Title 16, Chapter 77, H.A.R., regarding the 14

licensing of contractors in the State. Holders of the General Engineering “A” and 15

General Building “B” licenses are deemed to hold the additional specialty 16

licenses specified therein. 17

If a specialty contractor’s license is required by law for the performance of

the work which is called for in this bid and the bidder does not hold such a

required license, the bidder must list in the proposal the name of each joint

contractor and subcontractor that the bidder intends to engage to perform work

on the project that holds such required license. Each such required license must

be held by the named joint contractor or subcontractor at the time of bid opening

as stated in the invitation. For federal–aid projects, the bidder and all named

joint contractors and subcontractors must hold each such required license prior

to the award of contract. The bidder shall also describe, in the proposal, t

nature and scope of work to be performed by each such licensee.

Construction bids that do not comply with this requirement are non-

responsive and shall be rejected. However, upon petition of a rejected bidder

and submission of any evidence requested by the Department, such a bid may

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be accepted if acceptance is in the best interest of the State, as determined by

the Department, and the value of the work to be performed by the unnamed

specialty licensee is equal to or less than one percent of the total bid amount.

2.3 Qualification of Bidders. In accordance with Section 103D-310,

H.R.S., the Department may require any bidder or prospective bidder (hereinafter

collectively referred to in this section as “bidder”) to submit answers to questions

contained in a qualification questionnaire for prospective bidders, on a form

furnished by the Department, properly executed and notarized, setting forth a

complete statement of the experience of such prospective bidder and its

organization in performing similar work and a statement of the equipment

proposed to be used, together with adequate proof of the availability of such

equipment. Whenever it appears to the Department, from answers to the

questionnaire or otherwise, that the bidder is not fully qualified and able to

perform the intended work, the Department will, after affording the bidder an

opportunity to be heard and if still of the opinion that the bidder is not fully

qualified to perform the work, make a written determination of non-responsibility

and refuse to consider any bid offered by the bidder. All information contained in

the answers to the questionnaire shall be kept confidential except disclosure may

be made to law enforcement agencies as provided in Chapter 92F, H.R.S.

Failure to complete the qualification questionnaire will be sufficient cause

for the Department to disqualify a prospective bidder.

The Department, in its sole discretion, may declare a bidder to be non-

responsible if (1) the bidder; (2) a corporation or other business entity owned

substantially by the bidder; (3) a substantial stockholder or an officer of the

bidder; or (4) a partner or substantial investor of the bidder is in arrears in

payments owed to the State of Hawaii or its political subdivisions, is in default as

a surety, or has failed or is failing to properly perform existing or previous

contracts with the State.

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2.4 Contents of Invitations for Bids. The Department will make available

to prospective bidders an invitation for bids, which will state the location and

description of the contemplated work, an estimate of the various quantities and

items of work to be performed or materials to be furnished, and a proposal

schedule of items for which bid prices are required. The invitation for bids will

also state the time within which the work must be completed; the date, time, and

place of the bid opening; and the maximum time from bid opening in which the

Department may make the award.

The plans, specifications, and other documents designated or

incorporated by reference in the invitation for bids are also a part thereof,

whether attached or not.

2.5 Estimated Quantities. All quantities appearing in the proposal

schedule, for which unit prices must be entered by the bidder, are estimates.

The State does not expressly or impliedly warrant that the actual amount of work

will correspond with the estimated quantities. Payment to the Contractor will be

made only for the actual quantities of work performed and accepted or materials

furnished in accordance with the contract, and no change will be made in the

contract unit prices if overruns and underruns occur except as provided for in the

General Provisions for Construction Projects.

2.6 Examination of Plans, Specifications, and Site of Work; Patent

Ambiguities; Requests for Clarification.

(a) A bidder has an obligation to carefully review the plans, specs, and

other contract documents. If a bidder discovers a patent ambiguity, i.e.,

any discrepancy, omission, conflict, or other obvious error or ambiguity in

the contract documents that affects its ability to prepare a complete and

accurate bid, it must submit a written request for clarification as described

in the subsection below.

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(b) The Department shall make the site of work available for inspection

by prospective bidders. However, the Department may limit the site

inspection to a one time only opportunity either in connection with a pre-

bid meeting and invitation for bids or at a time scheduled by the

Department. The submission of a bid is a warranty that the bidder is fully

aware of all conditions to be encountered in performing the work and of

the requirements in the invitation for bids.

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The bidder shall have the sole responsibility of satisfying himself

concerning the nature and location of work and the general and local

conditions and particularly, but without limitation, with respect to the

following: those affecting transportation access; disposal, handling, and

storage of materials; availability and quality of labor, water, and electric

power; availability and condition of roads; climatic conditions and seasons;

physical conditions at the worksites and the project area as a whole;

topography and ground surface conditions; the nature and quantity of

surface and subsurface materials to be encountered as described in or

may reasonably be inferred from information contained in the invitation for

bids; equipment and facilities needed preliminary to and during

performance of the contract; and all other matters which can in any way

affect performance of the contract or the time and/or the cost associated

with such performance. The failure of the Contractor to acquaint himself

with any applicable condition will not relieve it from the responsibility for

properly estimating either the difficulties, the time, or the costs of

successfully performing the contract. If, as a result of its review and

consideration of the foregoing, the bidder discovers a patent ambiguity,

i.e., any discrepancy, omission, conflict or other obvious error or ambiguity

that affects its ability to prepare a complete and accurate bid, it must

submit a written request for clarification as described in the subsection

below.

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Department for review at the earliest date possible; but, in any event, such

request must be received at the Project Manager’s Office designated in

the invitation for bids not later than fourteen (14) calendar days before the

bid opening date, not including the bid opening date. It shall be titled

“Request for Clarification”. All bidders on the Department’s plan holders

list will be notified of all Departmental responses by an addendum to the

invitation for bids.

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If a patent ambiguity is not brought to the attention of the

Department within the timeframe specified herein, the Department

reserves the right to deny the successful bidder any adjustment in contract

price or time in order to meet contract requirements as determined by the

Department.

2.7 Request for Substitution of Specified Materials and Equipment

Before Bid Opening. When the invitation for bids specify materials or

equipment by make and or model to indicate a quality, style, appearance, or

performance, the bidder will be assumed to have based its bid on one of the

specified products. Where a bidder intends to use a material or equipment of an

unspecified brand, make, or model, the bidder must submit a request to the

Department for review and approval at the earliest date possible; but, in any

event, such request must be received at the Project Manager’s Office designated

in the invitation for bids not later than fourteen (14) calendar days before the bid

opening date, not including the bid opening date.

It shall be the responsibility of the bidder to submit, in quintuplicate,

sufficient evidence based upon which a determination can be made by the

Department that the alternate brand is a qualified equivalent. The bidder must

list in its submission all deviations and variances from the requirements of the

contract documents. The Department reserves the right to reject an approved

substitution during construction if it discovers unlisted deviations or variances

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that result in noncompliance with the contract requirements. In the event of such

rejection, the bidder will not be entitled to any adjustment in contract price or time

in order to meet contract requirements.

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If the evidence accompanying a request for substitution is insufficient to

qualify a particular brand, make, or model, the request shall be denied. All

bidders on the Department’s plan holders list will be notified of all approved

substitution requests by an addendum to the invitation for bids.

2.8 Preparation and Delivery of Bid. The bidder shall submit the bid upon

the forms furnished by the Department or a facsimile thereof. The bidder shall

specify prices in numerals for each pay item as required on the proposal

schedule. The bidder shall also show in numerals the products of any unit prices

and their estimated quantities in the column provided for that purpose. The

bidder shall enter the total amount of the bid obtained by adding the amounts of

all pay items. All numerals shall be in ink or typed.

When an item in the bid contains a choice to be made by the bidder, the

bidder shall indicate its choice in accordance with the invitation for bids for that

particular item.

The bid must be signed with ink by the person or persons legally

authorized to submit a bid on behalf of the bidder.

When a bid is signed by an agent, proof of the authority to sign the bid for

the bidder must be on file with the State prior to the opening of bids or shall be

submitted with the bid; otherwise, the bid will be rejected as irregular and

unauthorized.

The bidder shall submit the bid in a sealed envelope bearing on the

outside the identity of the project and the name of the bidder. A bid not received

at the place specified in the invitation for bids prior to the time set for the opening

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2.9 Irregular Bids. Bids will be considered irregular and may be rejected

for any of the following reasons:

(1) If the bid is in a form other than that furnished by the

Department or if the form is altered or any part thereof is missing.

(2) If there are additions or irregularities of any kind which make

the bid incomplete, indefinite, or ambiguous as to its meaning.

(3) If the bid does not contain a bid price for each pay item

listed.

(4) Unbalanced proposals in which the prices for some items

are out of proportion to the prices for other items.

2.10 Disqualification of Bidders. Any of the following reasons shall result in

the disqualification of a bidder and the rejection of its bid(s).

(1) More than one bid for the same work from an individual, firm,

or corporation under the same or different name.

(2) Evidence of collusion among bidders.

(3) Evidence of assistance from a person who has been an

employee of the Department within the preceding two years and

who participated while in State office or employment in the matter

with which the contract is directly concerned, pursuant to Section

84-15, H.R.S.

(4) Lack of bid security.

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(5) Unsigned bid that is not correctable or waivable.

(6) Any provisions added reserving the right to accept or reject

an award or to enter into a contract pursuant to an award.

2.11 Bid Security.

(a) Unless directed otherwise in the invitation for bids, each bid shall

be accompanied by bid security which is intended to protect the

Department against the failure or refusal of a bidder to execute the

contract for the work bid or to supply the required performance and

payment bonds. Bid security shall be in an amount equal to at least five

percent of the base bid and additive alternates.

Bid security shall be in one of the following forms:

(1) A deposit of legal tender;

(2) A valid surety bid bond, underwritten by a company licensed

to issue bonds in the State of Hawaii; or

(3) A certificate of deposit; credit union share certificate; or

cashier’s, treasurer’s, teller’s, or official check drawn by or a

certified check accepted by a bank, savings institution, or credit

union insured by the Federal Deposit Insurance Corporation (FDIC)

or the National Credit Union Administration (NCUA) and payable at

sight or unconditionally assigned to the Department. These

instruments may be utilized only to a maximum of one hundred

thousand dollars ($100,000.00). If the required amount totals over

one hundred thousand dollars ($100,000.00), more than one

instrument not exceeding one hundred thousand dollars

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($100,000.00) each and issued by different financial institutions

shall be accepted.

(b) If a bidder fails to accompany its bid with the bid security, the bid

shall be deemed nonresponsive, unless the failure to comply is

determined by the Department to be nonsubstantial where:

(1) Only one bid is received, and there is not sufficient time to

resolicit the contract;

(2) The amount of the bid security submitted, though less than

the amount required by the solicitation, is equal to or greater than

the difference in the price stated in the next higher acceptable bid

plus an amount to cover reasonable administrative costs and

expenses, including the cost of rebidding the project, resulting from

the failure of the bonded bidder to enter into a contract for the work

bid; or

(3) The bid security becomes inadequate as a result of the

correction of a mistake in the bid or bid modification, if the bidder

increases the amount of security to required limits within the time

established by the Department.

refusal of a bidder to execute the contract for the work bid or to supply the

required performance and payment bonds. Such damages will be equal

to the difference between the defaulting bidder’s bid and the price stated

in the next higher acceptable bid, plus an amount to cover reasonable

administrative and legal costs and expenses, including the cost of

rebidding the project. If the amount of bid security is greater than the

Department’s damages, only an amount equal to the damages shall be

recovered from the bid security. If the amount of bid security is insufficient

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to cover the Department’s damages, the Department shall have the right

to recover the balance of the damages from the defaulting bidder.

2.12 Pre-Opening Modification or Withdrawal of Bids. Bids may be

modified or withdrawn prior to the due date and time established for bid opening

by the following documents:

(a) Modification of bids.

(1) A written notice accompanying the actual modified bid

proposal, in its entirety, conforming to all the requirements of an

original bid proposal, delivered and received in the same manner

as the original bid proposal designated in the invitation for bids, and

stating that a modification to the bid is submitted; or

(2) A facsimile or electronic notice accompanying the actual

modification submitted either by facsimile machine, electronic mail,

or an electronic procurement system, pursuant to Section 3-122-9,

H.A.R., to the office designated in the invitation for bids; provided if

other than through an electronic system, the bidder submits the

actual written notice and the modified bid proposal, in its entirety,

conforming to all the requirements of an original bid proposal,

delivered and received in the same manner as the original bid

proposal within two working days of receipt of the facsimile or the

electronic transmittal.

(b) Withdrawal of bids.

(1) A written notice received in the office designated in the

invitation for bids; or

(2) A notice by facsimile machine or other electronic method,

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pursuant to Section 3-122-9, H.A.R., to the office designated in the

invitation for bids.

2.13 Cancellation of Invitation for Bids Before Bid Opening. An invitation

for bids may be cancelled prior to bid opening for reasons including, but not

limited to, the following:

(1) The Department no longer requires the construction;

(2) The Department no longer can reasonably expect to fund the

construction;

(3) Proposed amendments to the invitation for bids would be of

a magnitude that a new invitation for bids is desirable; or

(4) A determination by the Department that a cancellation is in

the public interest.

2.14 Public Opening of Bids. Bids will be opened and the name of the

bidder, the bid price, and such other information deemed necessary by the

Department shall be read aloud publicly in the presence of one or more

witnesses at the date, time, and place(s) indicated in the invitation for bids.

Bidders, their authorized agents, and other interested parties are invited to be

present.

2.15 Acceptance of Bids; Correction of Mistakes.

(a) Bids shall be unconditionally accepted without alteration or

correction, except as allowed in Subsection 2.12(a) Modification of Bids.

(b) A bid containing a mistake discovered after the deadline for receipt

of bids but prior to award may be:

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(1) Corrected or the mistake waived under the following

conditions:

(A) If the mistake is attributable to an arithmetical error,

the Department shall so correct the mistake with or without a

request or concurrence by the affected bidder. In case of

error in the extension of the bid price, the unit price shall

govern;

(B) If the mistake is a minor informality which shall not

affect price, quantity, quality, delivery, or contractual

conditions, the Department may waive the informalities or

allow the bidder to request correction by submitting

documentation that demonstrates a mistake was made.

Examples of mistakes include:

(i) Typographical errors;

(ii) Transposition errors;

(iii) Failure of a bidder to sign the bid or provide an

original signature, but only if the unsigned bid or

photocopy is accompanied by other material

indicating the bidder’s intent to be bound; or

is not allowable under subparagraphs (A) and (B) but is an

obvious mistake that if allowed to be corrected or waived is

in the best interest of the Department and is fair to other

bidders.

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(2) Withdrawn, if the mistake is attributable to an obvious error

that shall affect price, quantity, quality, delivery, or contractual

conditions, provided:

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(A) The bidder requests withdrawal by submitting

documentation that demonstrates a mistake was made; and

(B) The Department prepares a written approval or denial

in response to this request.

corrected or withdrawn if the Department makes a written determination

that it would be unreasonable not to allow the mistake to be remedied or

withdrawn.

(d) Any determination required by this section shall be final and

conclusive unless clearly erroneous, arbitrary, capricious, or contrary to

law.

2.16 Preferences. Unless otherwise stated in the invitation for bids, all

preferences applicable to any invitation for bids shall be considered solely for the

comparison of bids to determine the low bidder. The contract amount will be at

the bid price exclusive of any preferences.

2.17 Certification for Safety and Health Program for Bids in Excess of

$100,000. In accordance with Sections 103D-327 and 396-18, H.R.S., the

bidder or offeror, by signing and submitting a bid, certifies that a written safety

and health plan for this project will be available and implemented by the notice to

proceed date for this project. Details of the requirements of this plan may be

obtained from said Statute or the Department of Labor and Industrial Relations,

Occupational Safety and Health Division (HIOSH).

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2.18 Certification of Employment of State of Hawaii Residents. The

bidder, by signing and submitting a bid, certifies that if awarded the contract, it

will ensure that State of Hawaii residents will compose not less than 80% of the

workforce employed by the bidder to perform the contract and all subcontracts of

$50,000 or more as calculated by the method described in 7.2(a).

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2.19 Cancellation of Invitation for Bids After Bid Opening. An invitation

for bids may be cancelled after bid opening but prior to award for reasons

including, but not limited to, the following:

(1) The construction being procured is no longer required;

(2) Ambiguous or otherwise inadequate specifications were part

of the invitation for bids;

(3) The invitation for bids did not provide for consideration of all

factors of significance to the Department;

(4) Prices exceed available funds and it would not be

appropriate to adjust project scope to come within available funds;

(5) All otherwise acceptable offers received are at clearly

unreasonable prices;

(6) There is reason to believe that the bids may not have been

independently arrived at in open competition, may have been

collusive, or may have been submitted in bad faith; or

(7) A determination by the Department that a cancellation is in

the public interest.

2.20 Bid Evaluation and Award.

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(a) The award shall be made to the lowest, responsive, responsible

bidder within 60 days after bid opening and shall be based on the criteria

set forth in the invitation for bids. The Department may request the

bidders to allow the Department to consider the bids for the issuance of an

award beyond the 60 day period. Agreement to such an extension must

be made by a bidder in writing. Only bidders who have agreed to such an

extension will be eligible for the award.

(b) No bid shall be withdrawn or corrected for a period of 60 days after

bid opening except for a mistake as described in this article; however, a

bidder may withdraw a bid without penalty anytime prior to award of the

contract if it finds it is unable to comply with the provisions regarding the

employment of State of Hawaii residents as described in Section 7.2 and

103B-3, H.R.S.

copies of the following documents as proof of compliance with the

requirements with Section 103D-310(c), H.R.S.:

(1) A tax clearance certificate from the Department of Taxation

and the Internal Revenue Service, subject to Section 103D-328,

H.R.S., current within six months of issuance date;

(2) A certificate of compliance for Chapters 383, 386, 392, and

393, H.R.S., from the Department of Labor and Industrial Relations,

current within six months of issuance date; and

(3) A certificate of good standing from the business registration

division of the Department of Commerce and Consumer Affairs,

current within six months of issuance date.

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In lieu of the certificates referenced in subsection (c), the bidder

may make available proof of compliance through the Hawaii Compliance

Express or any other designated certification process. Bidders may apply

and register at the “Hawaii Compliance Express” website:

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The documents shall be submitted to the Department within 14

days after bid opening unless otherwise specified in the invitation for bids

or an extension is granted in writing by the Department.

If the required documents are not submitted on a timely basis, the

Department may disqualify the bidder.

(d) The successful bidder will be notified by letter mailed to the address

shown in its bid that is has been awarded the contract.

2.21 Waiver to Competitive Sealed Bid. If, for a given invitation for bids,

there is only one responsive, responsible bidder:

(1) An award may be made to the single bidder, provided:

(A) The Department determines in writing that the price

submitted is fair and reasonable, and that either:

(i) Other prospective bidders had reasonable

opportunity to respond; or

(ii) There is not adequate time for resolicitation; or

(B) The bid exceeds available funds as certified by the

Department and the price is negotiated, pursuant to Section

103D-302(h), H.R.S.;

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(2) The bid may be rejected and new bids or offers may be

solicited if the Conditions in paragraph (1) are not met;

(3) The proposed procurement may be cancelled at the

discretion of the Department; or

(4) An alternative procurement method may be conducted to

include, but not be limited to, direct negotiations with the sole

bidder first and then with any contractor should negotiations with

the sole bidder fail, provided the Department determines in writing

that the need for the construction continues but that the price of the

one bid is not fair and reasonable and either that:

(A) There is no time for resolicitation, or

(B) Resolicitation would likely be futile.

2.22 Cancellation of Award. The State reserves the right to cancel the

award of a contract at any time before the execution of said contract by all parties

without any liability to the successful bidder or any other bidder.

2.23 Return of Bid Security. All bid securities, except those of the lowest

two bidders, will be returned immediately following the opening and checking of

the proposals. The bid security of the second lowest bidder, if not a bid bond, will

be returned within ten (10) calendar days following the execution of a contract.

The successful bidder’s bid security, if not a bid bond, will be returned after a

satisfactory contract bond has been furnished and the contract has been

executed.

2.24 Requirements of Contract Bonds. 542

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(a) A contract performance bond indemnifies the State against loss

resulting from the failure of the contractor to perform a contract, including

the Contractor’s warranty obligations, in accordance with the plans,

specifications, and other contract documents.

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(b) A contract payment bond guarantees payment and protection for

those furnishing labor and materials to the contractor or its subcontractors

for the work bonded.

good and sufficient performance bond and payment bond on the forms

furnished by the Department, each in the amount equal to 100% of the

contract price plus the amount estimated by the Department required for

overruns in estimated quantities and change orders.

(d) Acceptable contract performance and payment bonds, pursuant to

Sections 103D-323 and 103D-324, H.R.S., shall be limited to:

(1) Surety bond underwritten by a company licensed to issue

bonds in this State;

(2) Legal tender; or

(3) A certificate of deposit; credit union share certificate; or

cashier’s, treasurer’s, teller’s, or official check drawn by or a

certified check accepted by a bank, a savings institution, or credit

union insured by the Federal Deposit Insurance Corporation or the

National Credit Union Administration, and payable at sight or

unconditionally assigned to the Department advertising for bids.

These instruments may be utilized only to a maximum of $100,000.

If the required amount totals over $100,000, more than one

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instrument not exceeding $100,000 each and issued by different

financial institutions shall be accepted.

(e) All documentation provided to the Department shall contain the

original signatures signed in ink.

2.25 Execution of Contract. The contract shall be executed by the

successful bidder and returned within ten (10) days after the award of the

contract or within such further time as the Department may allow after the bidder

has received the contract for execution, along with the required bonds and

Chapter 104, H.R.S., Compliance Certificate. The contract shall not bind the

State in any way unless said contract has been fully and properly executed by all

the parties thereto, the Comptroller has endorsed thereon its certificate that there

is available an unexpended appropriation over and above all outstanding

contracts, sufficient to cover the amount required by the contract, and the fully

executed contract is received by the Contractor. If the Contractor fails to execute

the contract and file acceptable bond(s) within ten (10) days after the award of

the contract, or within such further time as the Department may allow, the

Department may cancel the award and award the contract to the next lowest,

responsive and responsible bidder. The Department may recover its damages

against the bid security as described in Subsection 2.11(c) herein.

END OF ARTICLE II

ARTICLE IV - SCOPE OF WORK

4.1 Intent of Contract, Duty of Contractor. The intent of the contract is to

provide for the construction, complete in every detail, of the work described by

the contract documents at the accepted bid price and within the time established

by the contract. The Contractor has the duty to furnish all labor, materials,

equipment, tools, transportation, incidentals, and supplies and to determine the

means, methods, and schedules required to complete the work in accordance

with the contract documents.

4.2

Changes. The Engineer may at any time after execution of contract, by

written order and without notice to the sureties, make changes in the work found

to be necessary or desirable. Such changes shall not invalidate the contract nor

release the surety, and the Contractor will perform the work as changed, as

though it had been a part of the original contract.

(a) Minor Changes. The Engineer may direct minor changes in the

work with no changes in contract price or contract time of performance. If

the Contractor believes a minor change directive justifies an increase in

contract price or contract time it mu

st follow the oral and written notice

requirements set forth in Subsection 4.2(b) Orders and Directives.

(b) Orders and Directives. Except for minor change directives

referred to in Subsection (a) above, only a duly issued change order or

field order may alter the contract and work requirements. Any order,

direction, instruction, interpretation, or determination, from the Engineer or

any other person, that is not a field order or change order may be

considered as a compensable change only if the Contractor gives the

Engineer an oral notice not later than noon of the following working day of

its intent to treat such order, direction, instruction, interpretation, or

determination as a change directive. Such notice must be given before

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the Contractor acts in conformity with the order, direction, instruction,

interpretation, or determination. The oral notice shall be followed by a

written notice of a potential claim that must be delivered to the Engineer

within five days after communication of the order, direction, instruction,

interpretation, or determination to the Contractor. The written notice of a

potential claim shall state the date, circumstances, source of the order,

direction, instruction, interpretation, or determination that the Contractor

regards as a compensable change and provide a detailed justification for

additional payment or time. Such written notice may not be waived and

shall be a condition precedent to the filing of any claim by the Contractor.

Unless the Contractor acts in accordance with this procedure, any such

order, direction, instruction, interpretation, or determination shall not be

treated as a change for which the Contractor may make a claim for an

increase in the contract time, compensation, or contract price related to

such work.

No more than ten working days after receipt of the written notice of

a potential claim from the Contractor, a written response shall be issued

for the subject work if the State agrees that it constitutes a change. The

Contractor shall deem it a rejection of its potential claim if a written

response is not issued in the time established. If the Contractor objects to

the Engineer’s position, it shall file a written claim with the Engineer within

30 days after delivery to the Engineer of the Contractor’s written notice of

a potential claim. Failure by the Contractor to submit a written notice of a

potential claim in the time specified waives all rights for an increase in

contract time or compensation related to such work. The claim shall be

determined as provided in Section 7.16 Disputes and Claims. In all cases,

the Contractor shall proceed with the work as specified in the order,

direction, instruction, interpretation, or determination immediately upon

providing the Engineer with the oral notice described above, unless

otherwise directed in writing by the Engineer.

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The penal sum of the surety performance and payment bonds will be

adjusted by the amount of each and every contract change order.

104.02

4.3 Field Orders. Upon receipt of the field order, the Contractor shall

proceed with the work as changed by the field order without delay. If the

Contractor does not agree with any of the terms or conditions or the adjustment

or nonadjustment to the contract price, contract time, or both, set forth therein,

the Contractor shall file a written notice of potential claim with the Engineer not

later than five days after receipt of the field order. No more than ten working

days after receipt of the written notice of a potential claim from the Contractor, a

written response shall be issued for the subject work if the State agrees that it

constitutes a change. The Contractor shall deem it a rejection of its potential

claim if a written response is not issued in the time established. If the Contractor

objects to the Engineer’s position, it shall file a written claim with the Engineer

within 30 days after delivery to the Engineer of the Contractor’s written notice of a

potential claim. Failure to file the written notice of a potential claim or to protest

any portion(s) of the field order by the time specified shall constitute agreement

on the part of the Contractor with all the terms, conditions, amounts and

adjustment or non-adjustment to contract price, contract time, or both, set forth in

the field order or the non-protested portion of the field order. Timely written

notice shall be a non-waivable condition precedent to the assertion of a claim.

4.4 Duty of Contractor to Provide Change Proposals. A field order may

request the Contractor supply the Engineer with a detailed proposal for an

adjustment to the contract price, contract time, or both, for the work described

therein. Any such request for a proposal shall not affect the duty of the

Contractor to proceed as ordered with the work described in the field order.

At any time without the issuance of a field order, the Engineer may

request the Contractor supply the Engi

neer with a detailed proposal for an

adjustment to the contract price, contract time, or both, for contemplated changes

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in the work. The request for change proposal is not a directive for the Contractor

to perform the work described therein.

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The Contractor shall submit a detailed written proposal in a time span

allowed by the Engineer; however, if a time span is not stated by the Engineer, it

shall be within 15 days after receipt of a request for change proposal or field

order containing a request for proposal. The format shall set forth all charges the

Contractor proposes for the change and a detailed justification for the proposed

adjustment of the contract time, all properly itemized and supported by sufficient

substantiating data to permit evaluation. The proposal shall be certified by the

Contractor as accurate, complete, and current. The Engineer will determine

whether the proposal is acceptable.

Unless otherwise authorized by the Engineer in writing, no payment shall

be allowed to Contractor for cost incurred for pricing, negotiating, and

researching for proposed or actual changes or designing of construction means

and methods for proposed or actual changes. No time extensions will be granted

for delay caused by late Contractor pricing of changes or proposed changes or

time spent in negotiation.

The Engineer may accept the entire proposal, any discrete cost item

contained within the proposal, or the proposed adjustment to contract time by a

notice in writing to the Contractor delivered to the Contractor within 30 days after

receipt of the proposal. The written acceptance by the Engineer of all or part of

the Contractor’s proposal shall create a binding agreement between the parties

for that aspect of the change.

If the Engineer refuses to accept the Contractor’s entire proposal, the

Engineer may issue a field order for all or part of the proposed work. If a field

order has already been issued, the Engineer may issue a supplemental field

order establishing new contract prices and further adjudgments to contract price

and/or contract time for the ordered changes. If the Contractor disagrees with

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any term, condition, or adjustment contained in such field order or supplemental

field order, it shall follow the protest procedures set forth in and be subject to the

other terms of Section 4.3 Field Orders.

4.5 Contract Change Orders. The Engineer will issue contract change

orders when it deems appropriate during the contract period. Such change

orders shall be a signed writing designated or indicated thereon to be a change

order. A contract change order may contain the adjustment(s) in contract price,

as described in Section 4.6 Methods of Price Adjustment, modification(s) in

contract time, as described in Section 8.5 Contract Time, or both, for a number of

field orders. In all cases, the Contractor shall proceed with the work as changed

by the contract change order. No payment for any changes will be made until the

contract change order is issued. If the Contractor does not agree with any of the

terms or conditions of the adjustment or nonadjustment to either the contract

price or contract time set forth therein, the Contractor shall file a written notice of

potential claim with the Engineer not later than five days after receipt of the

contract change order.

04.05

4.6 Methods of Price Adjustment.

(a) Any adjustment in the contract price pursuant to a change or claim

shall be made in one or more of the following ways:

(1) By written agreement on a fixed price adjustment before

commencement of the pertinent performance or as soon thereafter

as practicable.

(2) By unit prices or other price adjustments specified in the

contract or subsequently agreed upon before commencement of

the pertinent performance.

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(3) The Engineer may base the adjustment for a lump sum item

on a calculated proportionate unit price. The Engineer will calculate

the proportionate unit price by dividing the original contract lump

sum price by the actual or original estimated quantity established

by the contract documents.

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(4) In such other lawful manner as the parties may mutually

agree.

(5) At the sole option of the Engineer, work may be paid for on a

force account basis in accordance with Section 9.6 Force Account

Provisions and Compensation. However, for all change orders with

a reasonably calculated value not exceeding $50,000, payment

shall be made on a force account basis.

(6) By determination by the Engineer of the reasonable and

necessary costs attributed to the event or situation caused by the

change, plus appropriate profit or fee, all computed by the generally

accepted accounting principles and applicable sections of Chapters

3-123 and 3-126, H.A.R., and using Section 9.5 Allowances for

Overhead and Profit herein, as the method for calculating overhead

and profit.

(b) The Contractor will not be compensated for loss of anticipated

profits on deleted work.

4.7 Variations in Estimated Quantities. Where the quantity of a unit price

item in this contract is estimated on the proposal schedule and where the actual

quantity of such pay item varies more than 15 percent above or below the

estimated quantity stated in this contract, an adjustment in the contract price

shall be made upon demand of either party, providing the following conditions are

met:

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(1) The adjustment shall be limited to any increase or decrease

in direct costs; and

(2) Such increase or decrease in costs is due solely to the

variation above 115 percent or below 85 percent of the estimated

quantity. The adjustment shall be limited to any increase or

decrease in direct costs due solely to the variation above 115

percent or below 85 percent of the estimated quantity. The

adjustment shall be subject to Section 4.6 Methods of Price

Adjustment and Section 9.5 Allowances for Overhead and Profit.

4.8 Differing Site Conditions. The Contractor shall promptly and before

such conditions are disturbed, notify the Engineer of:

(1) Subsurface or latent physical conditions at the site differing

materially from those indicated in this contract; or

(2) Unknown physical conditions at the site of an unusual

nature, which differ materially from those ordinarily encountered

and generally recognized as inherent in work of the character

provided for in this contract.

(a) Timeliness of Notice. No claim of the Contractor for any

adjustment for contract price or contract time under this subsection shall

be allowed unless the Contractor gives both:

(1) A verbal notice within 12 hours of discovery or by 10 A.M. of

the next working day, whichever is later, of the differing site

condition; and

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(2) Written notification of a potential claim to the Engineer no

later than 5 days after the discovery of the differing site condition.

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The Engineer, in writing, may extend the time prescribed in this

subsection for giving verbal and written notice. The notices to the

Engineer are non-waivable conditions precedent to any claim under this

section.

(b) Adjustments of Price or Time. After receipt of the notice, the

Engineer shall promptly investigate the site and if it is found that the

conditions do materially differ and so cause an increase in the

Contractor’s cost of or the time required for performance of any part of the

work under this contract, whether or not changed as a result of the

conditions, an equitable adjustment will be made and the contract

modified by contract change order. Any such adjustment in contract price

or contract time shall be determined in accordance with the relevant

adjustment subsections of this contract.

for additional cost or time to the contract shall be allowed if asserted after

final payment under this contract.

(d) Knowledge. Nothing contained in this subsection shall be

grounds for an adjustment in contract price or contract time if the

Contractor had knowledge of the existence of such conditions prior to the

submission of the bids.

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(a) Roadway and Pedestrian Traffic. The Contractor shall keep all

roads and necessary accesses within the working area open to all traffic

during the progress of the work or provide adequate detour roads as

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specified or directed.

The Contractor shall plan and provide appropriate detours, signs,

flashers, personnel, warnings, barricades, and other devices for safely and

legally handling pedestrian, bicycle, and motor traffic. The Engineer may

direct additional measures to be undertaken by the Contractor at no cost

to the State when the Engineer determines the Contractor’s measures are

inadequate or inappropriate.

All such protective facilities, precautions to be taken, and control of

traffic through the construction area shall conform and be in accordance

with the latest edition of the "Manual on Uniform Traffic Control Devices

for Streets and Highways", published by the U.S. Federal Highway

Administration and any amendments or revisions thereof as may be made

from time to time.

No material or equipment shall be stored where it will interfere with

the free and safe passage of public traffic. At the end of each day's work

or when construction operations are suspended for any reason, the

Contractor shall remove all obstructions to the free and safe passage of

public traffic.

(b) Airport and Harbor Traffic. The Contractor shall provide for the

free and unobstructed movement of aircrafts, vessels, passengers, aircraft

and vessel crews and service personnel, and equipment in the operations

area of the airport or harbor where the work is being performed to the

greatest extent possible. The Contractor shall provide for uninterrupted

operation of visual and electronic signals (including power supplies

thereto) used in the guidance of aircraft and vessels while operating to,

from, and upon the airport or harbor.

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4.10 Construction and Maintenance of Detours. The Contractor shall con-284

struct and maintain detours for the use, convenience, and safety of all traffic. 285

Unless indicated otherwise in the contract, all such work for the use, 286

convenience, and safety of all traffic shall be considered incidental to the work of 287

the various pay items of the contract and no additional payment will be allowed 288

therefor. 289

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All detours and related signage shall be approved in writing by the

Engineer.

4.11 Use of Explosives. The use of explosives will not be permitted without

the expressed written permission of the Engineer and shall be in conformance

with all terms and conditions for their use set by the Engineer.

4.12 Utilities and Services.

(a) Contractor’s Duty to Coordinate Utility Work. The Contractor

shall contact the Hawaii One Call Center prior to any planned excavation

and comply with all other requirements of 269E, H.R.S. In addition, the

Contractor shall contact and cooperate with each affected utility owner in

order for the work to progress on schedule and without unreasonable

disruption of such utility services. If the work calls for permanent utility

service installations or corrections to or modifications of existing utilities,

the Contractor is responsible for scheduling and coordinating such work

with appropriate utility owners. If the work required by the contract

documents conflicts with the instructions, demands, or requirements of a

utility owner, the Contractor shall notify the Engineer immediately. The

Contractor shall furnish the Engineer with evidence that the Contractor

has provided all relevant utility owners reasonable opportunity to review

the drawings.

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When the State has a separate agreement with utility owners for

work to be performed within the worksite, at the direction of the Engineer,

the Contractor shall make available all portions of the work and the

worksite necessary for the utility owners to do their work.

The Contractor hereby holds the State harmless against all risks

arising from acts or omissions of utility owners that damage the work or

create delays, disruptions, and additional cost to the Contractor in the

performance of the work. Contract time may be extended in accordance

with Subsection 8.5(b) Modifications of Contract Time, on account of acts

and omissions of utility owners that delay the work without fault of the

Contractor.

Unless otherwise noted in the contract documents, the Contractor

may relocate or adjust the utility lines or service connections for its

convenience with the permission of the owner of the utility and the

Engineer, at no increase in contract price or contract time.

(b) Contractor’s Duty to Locate and Protect Utilities. Before

beginning any work at the worksite, the Contractor shall:

(1) Ascertain and mark the exact location and depth of all

utilities within the project area including taking reasonable steps to

detect the existence and location of utilities not shown on the

drawings.

(2) Acquaint all personnel working near utilities with the type,

size, location, and depth of the utilities as well as the consequences

that might result from disturbances.

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(3) Take reasonable steps to protect the utilities and prevent

service disruption.

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discovery of a utility that was not shown to exist in the contract

documents, or is found at a location that is substantially different than

shown in the contract documents, the Contractor shall promptly notify the

Engineer before the utility and its surrounding area are further disturbed.

The Contractor shall be responsible for the safety and protection of the

public and the utility, subject to further direction from the Engineer.

Whenever the Contractor damages a utility or causes any interruption to

any utility service, the Contractor shall promptly notify the Engineer, the

affected utility owner, and the appropriate governmental authorities. The

Contractor shall cooperate with the affected utility owner and the

appropriate governmental authorities in the restoration of service. If the

damage is to a utility that is known or should have been discovered before

the damage occurred, the Contractor shall be responsible for all costs

associated with its repair and restoration of service, at no increase in

contract price or contract time.

(d) Temporary Utilities During Construction.

(1) Water and Sanitation: The Contractor shall provide

temporary drinking and sanitary facilities for the field personnel.

The facilities shall be in accordance with the applicable health

regulations and shall be maintained clean and operable until the

conclusion of the construction work.

(2) Telephone: The Contractor shall have a telephone available

for the State’s use for communications with field personnel.

Cellular telephones are acceptable. The Contractor shall install the

telephone immediately upon starting work and maintain service until

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the project is completed. All costs associated with obtaining and

maintaining telephone service shall be borne by the Contractor.

(3) Electricity: Contractor shall obtain or provide temporary

electric power and shall pay for all connections and energy charges

incurred during construction.

(4) Metering: Water and electrical services shall be metered

and payment for meters and services shall be borne by the

Contractor. Temporary connections for water shall include

installation of a meter and backflow preventer at the point of

connection according to State standards at the Contractor’s cost.

The Contractor shall submit requests for temporary connections in

writing to the Engineer fourteen (14) calendar days prior to the

connection and shall include a description of work and a sketch of

the proposed installation.

4.13 Illumination of Work. When any work is performed at night or where

daylight is obscured, the Contractor shall, as part of the contract price, provide

artificial light sufficient to permit the work to be carried on efficiently,

satisfactorily and safely and to permit thorough inspection. Contractor shall

submit for review by the DOT a lighting plan that shall ensure conformance to all

federal and state laws and codes and regulations as well as to ensure all lighting

is shielded or fully cut off to prevent any illumination to the dark sky. Lighting

shall be installed so as not to cause glare or reflection to persons operating

aircraft, vessels, or other equipment at State Airports and Harbors or to traffic

controllers in any control tower or illumination to the dark sky. Access to the

place of work shall also be clearly illuminated under the same provisions. All

wiring for electric light and power shall be properly installed and maintained,

securely fastened in place, and shall be kept as far as possible from telephone

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wires and signal wires. The DOT reserves the right to modify the plans,

equipment/fixtures as required.

END OF ARTICLE IV

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3 5.1 Authority.

ARTICLE V – CONTROL OF WORK

5 (a) Authority of the Engineer. The Engineer is the representative

6 of the Department who will make decisions on all questions that may arise

7 regarding the contract, such as, but not limited to:

9 (1) Interpretation of the contract documents.

11 (2) Acceptability of the materials furnished and work performed.

13 (3) Manner of performance and rate of progress of the work.

15 (4) Acceptable fulfillment of the contract on the part of the

16 Contractor.

18 (5) Compensation under the contract.

20 The Engineer’s decisions on questions, claims, and disputes will be

21 final and conclusive subject to Section 7.16 Disputes and Claims.

23 The Engineer may delegate specific authority to act for the

24 Engineer to a specific person or persons. Such delegation of authority

25 shall be established in writing and shall become effective upon delivery to

26 the Contractor.

(b)

Authority of the Inspectors. Inspectors, as a representative of

29 the Engineer or other agencies, will inspect the work done and materials

30 furnished. Such inspection may extend to the preparation, fabrication, or

31 manufacture of the materials to be used. The Inspector does not have the

32 authority vested in the Engineer unless specifically delegated in writing.

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33 The Inspector may not alter or waive the provisions of the contract, issue

34 instructions contrary to the contract, or act as agent or representative of

35 the Contractor.

37 Failure of an Inspector, at any time, to reject non-conforming work

38 shall not be considered a waiver of the State’s right to require work in strict

39 conformity with the contract documents as a condition of final acceptance.

41 (c) Authority of the Consultant and Construction Manager. The

42 State may engage Consultants and Construction Managers to perform

43 duties in connection with the work. Such retained consultants and

44 construction managers shall have no greater authority than an inspector

45 except to the extent delegated in writing by the Engineer.

47 (d) Notices to the State. Any written notice to be given to the State

48 or the Department shall be either:

50 (1) Delivered in person to the Engineer or his delegated rep,

52 (2) Mailed to the Engineer or his delegated rep at the address or

53 addresses as directed in writing by the Engineer or, in the absence

54 of written direction, to the address of the State or Department

55 appearing on the contract, or

57 (3) By electronic transmission such as email, to the email

58 address or addresses as directed in writing by the Engineer.

60 5.2 Submittals. The contract contains the description of various items that

61 the Contractor must submit to the Engineer for review and acceptance. The

62 Contractor shall review all submittals for correctness, conformance with the

63 requirements of the contract documents, and completeness before submitting

64 them to the Engineer. The submittal shall indicate the contract items and

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65 specifications subsections for which the submittal is provided. The submittal

66 shall be legible and clearly indicate what portion of the submittal is being

67 submitted for review. The Contractor shall provide six copies of the required

68 submissions at the earliest possible date.

70 Failure to furnish acceptable submittal(s) may result in the suspension of

71 payments due the Contractor.

73 The Contractor shall not add onto the submittal(s) any conditions or

74 disclaimers that conflict with the contract requirements.

76 5.3 Shop Drawings.

78 (a) Shop Drawing Requirements. The Contractor shall prepare,

79 thoroughly check, approve, and submit all shop drawings to the Engineer

80 for review. Whenever possible, electronic files, in a format designated by

81 the Engineer, shall be submitted with the hard copies. The Contractor

82 shall indicate its approval by stamping and signing each submittal of shop

83 drawing. Any shop drawing submitted without being reviewed, stamped,

84 and signed will be returned as an incomplete submittal, and any delay

85 caused thereby shall be the Contractor’s responsibility.

87 All drawings which require an engineering stamp shall be stamped

88 by professional engineers licensed in the State of Hawaii. Unless

89 otherwise noted in the contract documents, shop drawings shall indicate,

90 in detail, all parts of an item of work, including erection and setting

91 instructions and engagements with work of other trades or other separate

92 contractors. Shop drawings for structural steel, millwork, pre-cast

93 concrete and falsework, formwork or centering with heights of 40 feet or

94 more, or open spans of 20 feet or more shall consist of calculations,

95 fabrication details, erection drawings, and other shop drawings necessary

96 to show the details, dimensions, sizes of members, anchor bolt plans,

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insert locations and other information necessary for the complete

fabrication and erection of the structure to be constructed. Shop drawings

shall also include stress sheets, drawings, bending diagrams for reinforcing

steel, and plans for erection, falsework, framework, cofferdam, and other

items or such other similar data required for the successful completion

of the work.

All shop drawings, as required by the contract or as determined by

the Engineer to be necessary to illustrate details of the work, shall be

submitted to the Engineer with such promptness as to cause no delay in

the work or the work of any other Contractor. Delay caused by the failure

of the Contractor to submit shop drawings on a timely basis to allow for

review, possible resubmittal, and acceptance will not be considered as a

justifiable reason for a contract time extension. Contractor, at its own risk,

may proceed with the work affected by the shop drawings after they are

submitted but before receiving acceptance. The State shall not be liable

for any increase in contract price or contract time required for the

correction of work done without the benefit of accepted shop drawings.

The Contractor shall not make changes to the accepted shop

drawings without submitting a written request to the Engineer and

receiving and reviewing a written acceptance of the change by the

Engineer.

By approving and submitting shop drawings, the Contractor thereby

represents that it has determined and verified all field measurements and

field construction criteria, or will do so, and that it has checked and

coordinated each shop drawing with the requirements of the work and the

contract documents. When shop drawings are prepared and processed

before field measurements and field construction criteria can be or have

been determined or verified, the Contractor shall make all necessary

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adjustments in the work or resubmit further shop drawings, all at no

increase in contract price or contract time.

The shop drawing submitted must be accompanied by a transmittal

giving a list of the titles and numbers of the drawings. Each series shall

be numbered consecutively for ready reference, and the submittal shall be

marked with enough information to identify itself including date; project

name and number; name of the submitting Contractor or subcontractor;

revision number and revision box, which gives the date of the revision and

what the revisions changed.

The size of the sheets that shop drawings are prepared on shall be

appropriate to suit the drawing being presented so that the information is

clearly and legibly depicted. The Engineer will determine what size is

appropriate.

When required by the contract, the Contractor shall submit to the

Engineer descriptive sheets such as brochures, catalogs, and illustrations,

which will completely describe the material, product, equipment, furniture,

or appliances to be used in the project as shown in the drawings and

specifications and indicate such conformity by marking, or stamping, and

signing each sheet.

(b) Submittal for Deviations and Variances. The Contractor shall

include, with the submittal, written notification clearly identifying and

summarizing all deviations or variances from the contract drawings,

specifications, and other contract documents. The variances shall also be

clearly indicated and marked as “Variance” on the shop drawing,

descriptive sheet, and material sample or color sample. Failure to so

notify of and identify such variance shall be grounds for rejection of the

related work or materials, notwithstanding that the Engineer accepted the

submittal. If the variances are not acceptable to the Engineer, the

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Contractor will be required to furnish the item as specified or indicated on

the contract documents at no increase in contract price or contract time.

5.4 Review and Acceptance Process. The Engineer will complete the

review of the submittal within 30 days from the date of receipt unless a different

review time is established by the contract documents. The Engineer will advise

the Contractor, in writing, as to the acceptability of the submittal. Should the

Engineer partially or totally reject the submittal, the Contractor shall modify the

submittal as required by the Engineer and resubmit the item within 15 days. At

this time, the review and acceptance cycle described above shall begin again.

The review and acceptance cycle shall begin again, as described above, each

time the submittal is returned to the Contractor for modification. If the volume of

the shop drawings submitted at any time for review is unusually large, the

Contractor shall inform the Engineer of its preferred order for reviews, and the

Engineer will use reasonable efforts to accommodate the Contractor’s priority.

The acceptance by the Engineer of the Contractor’s submittal relates only

to their sufficiency and compliance with the intention of the contract. Acceptance

by the Engineer of the Contractor’s submittal does not relieve the Contractor of

any responsibility for accuracy of dimensions, details, quantities and proper fit,

and for agreement and conformity of submittal with the contract drawings and

specifications. Nor will the Engineer’s acceptance relieve the Contractor of

responsibility for variance from the contract documents unless the Contractor, at

the time of submittal, has provided notice and identification of such variances

required by this section. Acceptance of a variance shall not justify a contract

price or time adjustment unless the contractor requests such adjustment at the

time of submittal, and the adjustment is explicitly agreed to in writing by the

Engineer. Any such request shall include price details and proposed scheduling

modifications. Acceptance of a variance is subject to all contract terms,

stipulations, and covenants and is without prejudice to any and all rights under

the surety bond.

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If the Engineer returns a submittal to the Contractor that has been rejected,

the Contractor, so as not to delay the work, shall promptly make a resubmittal

conforming to the requirements of the contract documents and indicating in writing

on the transmittal and the subject submittal what portions of the resubmittal have

been altered in order to meet the acceptance of the Engineer. Any other

differences between the resubmittal and the prior submittal shall also be

specifically described in the transmittal.

No mark or notation made by the Engineer on or accompanying the return

of any submittal to the Contractor shall be considered a request or order for a

change in work. If the Contractor believes any such mark or notation constitutes

a request for a change in the work for which it is entitled to an adjustment in

contract price, contract time, or both, the Contractor must follow the procedures

established in Section 4.2 Changes or lose its right to claim for an adjustment.

5.5 Interpretations of the Contract Documents; Conflicts and Ambiguity.

The contract documents are complementary. Any requirement occurring in one

document is as binding as though occurring in all. A stricter requirement, as

determined by the Engineer, prevails over any less strict requirement. The

stricter requirement will be the requirement that provides the greater product life,

durability, strength, and function.

The Contractor shall not take advantage of any apparent error or omission

in the contract documents. The Contractor shall carefully study and compare the

contract documents with each other, with field conditions, and with the

information furnished by the State and shall immediately report to the Engineer

errors, conflicts, ambiguities, inconsistencies, or omissions discovered. Should

an item not be sufficiently detailed or explained in the contract documents, the

Contractor shall report to the Engineer immediately and request the Engineer’s

clarification and interpretation. The Engineer will issue a clarification or

interpretation that is consistent with the intent of and reasonably inferred from the

contract documents.

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The technical specifications and contract drawings within a trade heading,

title, or discipline do not necessarily describe or incorporate all work required for

the project involving a specific trade. It is the Contractor’s responsibility to review

the entire project documents to identify the work for a specific trade.

The design and performance requirements specified in the plans and

specifications prevail over any listed approved manufacturer or supplier. The

listing of an approved manufacturer or supplier in the contract documents does

not constitute a representation by the State that such manufacturer or supplier

can provide the materials or equipment required for the job.

5.6 (Reserved)

5.7 Examination of Contract Documents and Project Site. The

Contractor shall carefully examine the project site to become familiar with the

conditions to be encountered in performing the work and the requirements of the

contract documents. The Contractor shall be charged with knowledge of all

conditions at the site that may affect the work, including the storage of materials

and equipment and access thereto, that would normally be discovered by a

reasonable pre-bid site inspection.

When the contract drawings include a log of test borings showing a record

of the data obtained by the State’s investigation of subsurface conditions, said

log represents only the finding of the State as to the character of material

encountered in its test borings and only at the location of each boring.

Underground site conditions in Hawaii vary widely. Accordingly, there is no

warranty, either expressed or implied, that the conditions indicated are

representative of those existing throughout the work or any part of it or that other

conditions may not occur.

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5.8 Coordination Between the Contractor and the State.

(a) Drawings and Special Provisions. If available, the State will

furnish the Contractor with extra bid sets of the project plans and special

provisions. The project plans furnished will be the same size as that

issued for bidding purposes. If none are available, the Contractor shall be

responsible for making his own copies of project plans and special

provisions. The Contractor shall have and maintain at least one set of

plans and specifications on the work site at all times.

Revisions to the drawings may be made and, when deemed

necessary by the Engineer during progress of the work, additional detailed

drawings will be furnished to the Contractor. These additional drawings

will be considered as forming part of the Contract.

The Contractor shall maintain on the job site a set of full-size

contract drawings, marking them in red to show all variations between the

construction actually provided and that indicated or specified in the

contract documents, including buried or concealed construction. Actual

location of work shall be clearly recorded as the work progresses,

including all changes to the contract and equipment size and type.

Drawings shall be available at the site at all times for inspection.

The Contractor, at his own expense, shall incorporate all field

changes, Post Construction Document (PCD) Changes, etc. in a clearly

legible manner utilizing the symbols of the Contract drawings onto the

contract drawings. All underground stubouts shall be dimensionally

located from the building structure. Monthly and final payments to the

Contractor shall be subject to prior approval of the drawings. On

completion of all work under the contract, two sets of marked-up record

drawings, signed and dated, shall be delivered to the Engineer and shall

be subject to approval before acceptance.

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(b) Contractor’s Authorized Representative. Before starting work,

the Contractor shall designate an authorized representative to represent

and act for the Contractor, shall inform the Engineer in writing of the name

and address of such representative together with a clear definition of the

scope of his authority to represent and act for the Contractor, and shall

specify any and all limitations of such authority. Such representative shall

be present or be duly represented at the site of work at all times when

work is in progress. During periods when work is suspended,

arrangements acceptable to the Engineer shall be made for any

communications to the Contractor which may be required. The

Contractor's authorized representative shall be supported by competent

assistants, as necessary, and the authorized representative and his

assistants shall be satisfactory to the Engineer. All directions, instructions,

and other communications given to the authorized representative by the

Engineer shall be construed as if given to the Contractor.

superintendent on the work site while work is being performed under the

contract. The superintendent shall be able to read and understand the

contract documents, shall be experienced in the type of project being

undertaken and the work being performed, and shall be fluent in the

English language. If a superintendent is not present at the work site, the

Engineer shall have the right to suspend the work as described under

Subsection 8.10 Suspension of Work.



The Contractor shall provide the Engineer a written statement

giving the name of the superintendents assigned to the project. The

Contractor shall be responsible for notifying the Engineer in writing of any

change in the superintendents in a timely manner.

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5.9 Coordination Between Contractors; Impacts.

(a) General. Other work by other Contractors may be in progress

within or near the project limits. Each Contractor shall conduct work so as

not to hinder the progress of the work by other Contractors within or near

the project limit. Each Contractor shall be responsible for any damage it

causes to work of another Contractor. Contractors shall cooperate with

each other, including, but not limited to:

(1) Coordinating their work schedules and traffic control plans.

(2) Placing and disposing of the materials used.

(3) Operating and storage of equipment.

The State is not obligated to modify contract time or price on

account of any inconvenience, delay, or loss experienced by the

Contractor because of the presence and operations of other contractors

working within or near the limits of the project.

In the event of a disputed coordination issue between Contractors,

they shall submit the dispute in writing to the Engineer who shall make the

final determination.

(b) Responsibility for Impact on Another State Contractor;

Retention. In the event the Contractor unreasonably delays or

otherwise interferes with the work of another State construction contractor

during the course of the work, resulting in a claim against the State by the

impacted contractor, the Contractor shall defend against any such claim,

and shall indemnify and hold the State harmless for all damages, costs

and legal fees resulting from the Contractor’s unreasonable delays and

other interference. The Engineer, upon finding good cause in support of

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the impacted contractor’s claim, may deduct up to but not more than 10%

from the subsequent progress payments due the Contractor until the full

amount of the claim has been retained. This right of retention is separate

from and in addition to any other retainage rights created by contract or

law.

Upon final resolution of the impact claim, the Engineer may deduct

the amount of the claim from the retained funds described herein, and

from any other funds held by the State for the account of the Contractor.

If the retained funds are insufficient to pay the entire claim, the Engineer

may deduct up to 10% from future progress payments, or from the

final payment for the contracted work without limitation until the claim

amount is paid in full, or recover the deficit from the Contractor by any

other means authorized by law. If the retained funds exceed the amount

of the final resolution of the impact claim, the Engineer shall pay the

Contractor that portion of the retained funds that the Contractor would

otherwise be entitled to as of the time of payment.

The Contractor may contest the Engineer’s finding, and should a

determination be made that the impacted contractor’s claim was not

caused by the Contractor, any monies being withheld for the impacted

contractor’s claim, will be released to the Contractor. Until such

determination is made, the Contractor will not be entitled to any monies

being withheld for the impacted contractor’s claim.

5.10 Construction Stakes, Lines, and Grades.

(a) General. The Contractor shall survey and stake out the work

including verification and establishment of all lines, grades, dimensions, and

elevations. The Contractor shall prepare and maintain field notes and

supporting data in a manner acceptable to the Engineer. The field notes

and supporting data shall be made available to the Engineer immediately

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upon request. The personnel doing the survey work and preparing the

calculations derived therefrom shall be made available by the Contractor to

the Engineer for explanation, clarification, or both, immediately upon

request.

The Contractor shall immediately correct or replace deficient or

inaccurate layout and construction work at no increase in contract price or

contract time.

(b) Survey and Staking Requirements. The Engineer will furnish

necessary control points for the project limits, points of intersection, and

benchmarks set by the Engineer or others. The Contractor shall be

responsible for the laying out of all other necessary work from the given

information. The Contractor shall reset the layout as many times as

necessary to perform the work.

The Contractor shall preserve all survey features, including, but not

limited to, control points, stakes, marks, or monuments that the Engineer

or others have furnished. If the Contractor destroys or disturbs any such

survey feature, the Contractor shall replace or restore these items at no

cost to the State.

5.11 Inspection of the Work and Materials. Materials and each part of the

details of the work shall be subject to inspection and testing for conformance by

the Engineer. Unless otherwise specified, all such testing shall be at the

Contractor’s expense as part of the contract price. The Contractor shall furnish

the Engineer information, assistance, and provide appropriate safeguards and

equipment to allow a complete inspection to be made

The Engineer may inspect the production, fabrication, and manufacture of

materials and items that are to be incorporated into the work. The Contractor

shall ensure that the producer, fabricator, and manufacturer provide access to

the Engineer, without adjustment in contract price or contract time, at the source

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of such materials and items or at any other place such materials or items may be

located before they are incorporated into the work. The Engineer will comply

with safety procedures established by the facility. When any government agency

or any utility company is to pay a portion of the cost of the work covered by this

contract, they shall have the right to inspect the work. Such inspection shall not

make that government agency or utility company a party to this contract.

For any inspection, the Contractor shall expose or uncover such portions

of the work as requested by the Engineer. After inspection, the Contractor shall

restore that portion of the work to the standard required by the contract. When

the Engineer orders an inspection that is not considered a normal daily, pre-final,

or final inspection that requires uncovering or results in damage to or destruction

of work in place:

(1) If the exposed and inspected work conforms to the contract

requirements, the State will reimburse the reasonable costs of exposing,

inspecting, and restoring the work as extra work and extend contract time

as appropriate.

(2) If the exposed and inspected work is non-conforming or

otherwise non-acceptable, the costs and time relating to exposing,

inspecting, and restoring the work is not reimbursable.

(3) No reimbursement will be allowed for the costs and time of

exposing, inspecting, and restoring work that the Engineer had not been

given reasonable opportunity to inspect before it was covered.



When the contract documents or a written directive from the Engineer

require that certain work not proceed until the Engineer is given notice and the

opportunity to inspect, the Engineer may order the work done or materials used

without the Engineer having been given notice and opportunity to inspect to be

removed and replaced at no increase in contract price or contract time.

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Inspections are performed for the exclusive benefit of the State. The

inspection of or the failure to inspect the work shall not relieve the Contractor of

obligations to fulfill the contract as prescribed, to correct defective work, and to

replace unsuitable or rejected materials regardless of whether payment for such

work has been made.

5.12 Removal of Non-Conforming and Unauthorized Work: Performance

of Corrective or Remedial Work. All work that does not conform to the

requirements of the contract shall be remedied or removed and replaced by the

Contractor at no increase in contract price, contract time, or both. No payment

will be made for non-conforming work.

Any work done beyond the work limits shown on the drawings and

specifications or established by the Engineer or any additional work done without

written authority will be considered unauthorized work. No payment will be made

for unauthorized work. Unauthorized work may be ordered removed at no

increase in contract price, contract time, or both.

The Engineer may require that the Contractor submit a schedule

acceptable to the Engineer for the performance of corrective or remedial work.

Should the Contractor fail to submit an acceptable schedule or fail to comply with

the accepted schedule for performance of corrective or remedial work, or

otherwise fail to comply with any order of the Engineer regarding remedial,

corrective, removal, and replacement work, the Engineer shall have the authority,

in addition to all other remedies provided by contract or law, to cause non-

conforming work to be remedied or removed and replaced and unauthorized

work removed by someone other than the Contractor. The Engineer may charge

the Contractor the cost of such work, deduct the costs from any monies due or to

become due the Contractor, or a combination thereof.

5.13 Maintenance. The Contractor shall assume all risk of loss or damage to

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the work and shall maintain the work, including the removal of all graffiti and

defacement, until final acceptance of the project or incremental acceptance of

that portion of the work. If the Contractor fails to remedy unsatisfactory

maintenance after receipt of a written directive from the Engineer, the Engineer

shall have the authority, in addition to other remedies by law, to have such

maintenance performed by someone other than the Contractor, to charge the

Contractor for such maintenance, or deduct the cost of such maintenance from

monies due or become due to the Contractor.

During the performance of the work and upon termination or completion

thereof and at the end of each working day, the Contractor shall remove or

control all debris and waste resulting from his operations and keep and leave the

site of work in satisfactory condition.

5.14 Storage and Handling of Materials and Equipment.

(a) State’s Responsibility. The Engineer will supply a reasonable

area for the storage of materials and equipment in or near the project site.

(b) Contractor’s Responsibility. Materials shall be stored and

handled to preserve their quality and fitness for the work. The Contractor

shall locate stored materials so as to facilitate their prompt inspection by

the Engineer. No State land outside the project limits may be used

without authority granted by the State agency having jurisdiction over the

site. Prior to final inspection, the Contractor, at no increase in contract

price or contract time, shall restore all storage sites provided by the State

to their pre-existing or to a different condition as required by the contract

documents or pursuant to an agreement between the Contractor and

Engineer.



damage to the materials and equipment stored within the State project site

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or any other storage site provided by the Engineer pursuant to Subsection

5.14(a). Storage of materials and equipment in connection with the

project is an element of the Contractor’s “performance” as referred to in

Section 7.15 Responsibility For Damage Claims; Indemnity.

(d) Excavated or Removed Material. All materials excavated or

removed as part of the work shall be properly disposed of by the

Contractor as part of the contract price, unless otherwise directed by the

Engineer or the contract documents. Unsuitable excavated or

removed material shall not be maintained in or around the work site for

an unreasonable length of time as determined by the Engineer.

When stockpiling of suitable excavated or removed materials is

necessary, the material shall be hauled and stored in an area designated

by the Engineer. No excavated material shall be stockpiled at any time in

a manner that may endanger traffic or that may in any other way be

detrimental to the completed work, health, or the operation of the airport.

5.15 Value Engineering Incentive Proposal. On any contract in an amount

greater than $100,000, the Contractor shall be entitled to an equitable adjustment

to share in cost savings resulting from the value engineering proposal, subject to

the following conditions:

(1) A value engineering proposal must result in a minimum

savings of $4,000 to the State by providing less costly items than

those specified in the contract without impairing any of their

essential functions and characteristics such as service life,

durability, reliability, substitutability, economy of operations and

maintenance, ease of maintenance, and necessary standardized

features.

(2) A value engineering proposal shall not be deemed accepted

until a change order has been issued establishing the proposal as

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part of the work.

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(3) A value

engineering

proposal

must be submitted

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conformity with, and is subject to, the terms and conditions of

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Section 3-132, H.A.R., and the procedures established by the

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Department.

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(4) The Contractor shall bear the cost of the VECP submittal

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process.

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5.16 Subcontracts.

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(a) Subcontract Requirements. Nothing contained in the contract

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documents shall create a contractual relationship between the State and

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any subcontractor.

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Subject to the provisions of Chapter 103D-302, H.R.S., the

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Contractor may subcontract a portion of the work, but the Contractor shall

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remain responsible for the work so subcontracted. When requested by

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the Engineer, the Contractor shall provide a copy of any subcontract to the

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Engineer within 7 calendar days.

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The Contractor shall not sublet, sell, transfer, assign, or otherwise

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dispose of any duty the Contractor may have pursuant to the contract

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without the written consent of the State.

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The Contractor shall perform with his/her own organization work

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amounting to not less than 30 percent of the total contract cost, except for

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any items designated by the State in the contract as “specialty items”.

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Where an entire item is subcontracted, the value of work subcontracted

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will be based on the contract item bid price. When a portion of an item is

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subcontracted, the value of work subcontracted will be estimated by the

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Engineer and be based on the cost of such portion of the contract items.

No subcontract shall release the Contractor of any liability under

the contract and bonds.

(b) Obligations of Subcontract of $50,000 or more as to the

Employment of State of Hawaii Residents. The requirements of

Section 7.2 Employment of State of Hawaii Residents, shall apply to any

subcontract valued at $50,000 or more and such subcontractors awarded

such subcontracts must ensure that State of Hawaii residents comprise

not less than 80% of the subcontractor’s workforce used to perform the

subcontract as calculated by Subsection 7.2(a).

H.R.S., the Contractor is required to list the names of persons or firms to

be engaged by the Contractor as a subcontractor or joint contractor in the

performance of the contract. Contractors may enter into subcontracts only

with subcontractors listed in the proposal. However, for work not covered

by a listed subcontractor, after the Notice to Proceed, the Contractor may

enter into subcontracts with a nonlisted subcontractor but only for such

work. Substitutions will be allowed only if the subcontractor:

(1) Fails, refuses or is unable to enter into a subcontract;

(2) Agrees in writing, together with the Contractor, to be

released from the subcontract;

(3) Becomes insolvent;

(4) Has its Contractor’s license suspended or revoked;

(5) Has allegedly defaulted or has otherwise breached the

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subcontract in connection with the subcontracted work; or

(6) Is unable or refuses to comply with other requirements of law

applicable to Contractors, subcontractors, and public works

projects.

Requests to substitute a subcontractor shall be allowed only upon

the written approval of the Engineer. The Contractor agrees to hold the

State harmless, defend, and indemnify the State for all claims, liabilities, or

damages whatsoever, including attorney’s fees, arising out of or related to

the approval or disapproval of the substitution.

(d) Contractor’s Responsibility for Subcontractors. The

Contractor is responsible for the operations and the work of its

subcontractors as well as the conduct of the subcontractors’ employees.

5.17 Dimensions, Performance Standards, and Other Values Required by

the Contract. When work required by the contract is subject to contractually

established tolerances, the Contractor’s means and methods shall nevertheless

be designed to meet the precise dimensions, performance standards, and other

values required by the contract. Contractor shall not intentionally attempt to

provide work that does not strictly meet the precise dimensions, performance

standards, and other values required by the contract.

END OF ARTICLE V

ARTICLE VI – CONTROL OF MATERIAL 1

6.1 Source of Supply and Quality Requirements. The Contractor shall

furnish, pay for, and install all materials required to complete the work, except

materials that are designated in the contract documents to be furnished by the

State. Materials shall be in new condition, subject to normal wear, at the time of

final acceptance.

All materials proposed to be used may be inspected and tested at any

time and place including, but not limited to, the source of supply and locations of

manufacture and fabrication. When requested by the Engineer, the Contractor

shall notify the Engineer of the Contractor’s proposed sources of materials prior

to delivery. At the request of the Engineer, the Contractor shall provide

reasonable and adequate testing facilities and equipment for the Engineer at the

inspection site at no increase in contract price or contract time.

6.2 Material Sources. Unless otherwise provided in the contract

documents, (1) Contractor may use any suitable materials (such as stone, sand,

gravel) found within the project limits in order to do the work, and (2) Contractor

shall not remove any material (such as stone, sand, gravel) from the project limits

without the written permission of the Engineer. Such permission will not be

considered a change and may be revoked at any time for any reason by the

Engineer at no increase in contract price or contract time.

The contract documents or Engineer may make available to the

Contractor the option to use material from sources made available by the State.

Designation of a source for material is not a representation by the Engineer of

the quantity or quality of material obtainable or the method, equipment, or work

required to obtain material from the source. The Contractor is not obligated to

use material from such sources. The Contractor bears all costs of using such

material and assumes the risk that such material does not conform to contract

requirements.

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6.3 Unauthorized Excavation. Unless otherwise expressly directed or

authorized by the contract documents, Contractor shall not excavate beyond the

excavation limits for the purpose of obtaining materials. The site disturbed by

unauthorized excavation shall be returned to the condition existing before such

unauthorized excavation at no increase in contract price or contract time. Any

unauthorized excavation shall be filled, at the direction of the Engineer, with

either the material taken out or a substitute material selected by the Engineer.

6.4 Material Sample and Testing. Submission of material samples and

equipment data required by the contract documents or by the Engineer are

exclusively for the benefit of the State’s quality control monitoring of the project.

Any statement or representation by the Engineer that any submitted sample or

equipment data is “ACCEPTED”, “APPROVED”, or other words to similar effect,

shall not be deemed conclusive that the material and equipment data for which a

sample was submitted will conform to the contract requirements when

incorporated into the work. The ‘ACCEPTANCE” or “APPROVAL” of any sample

by the Engineer does not change or modify any contract requirements.

Unless otherwise specified, all testing of materials, whether or not

incorporated into the work, shall be at the Contractor’s expense as part of the

contract price. The Engineer may conduct tests of or take samples of any

materials at any time to verify conformance with the requirements of the contract

documents. The Contractor shall collect and forward samples and provide other

assistance when requested by the Engineer. In all cases, the Contractor shall

furnish the required samples at no increase in contract price or contract time.

The Contractor shall not be entitled to payment for work that incorporates

materials required to be tested or inspected until the Engineer completes the

tests or inspections. Where samples are required from the completed work, the

Contractor shall cut and furnish samples from the completed work at the sites

and quantities designated by the Engineer. The work where such sample has

been removed shall be restored with new material conforming to the contract

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requirements or other material acceptable to the Engineer at no increase in

contract price or contract time.

Tests of the material samples will be made in accordance with the contract

specifications, or in the absence thereof, the latest standards of HDOT Hawaii

Test Methods, AASHTO, ASTM, or other recognized material organizations.

References to HDOT Hawaii Test Method means “Hawaii Test Methods”,

published by the State of Hawaii, Department of Transportation, Highways

Division, Materials Testing and Research Branch. The Engineer shall decide:

(1) The tests to be conducted and standards to be applied;

(2) Whether a submitted material sample passes the tests and

meets the standards; and

(3) Whether a submitted material sample shall be retested.

Each sample submitted shall have a label indicating project title and

number, date sampled, the material represented, its place of origin, the names of

the producers and suppliers, the Contractor, and the portion of the work for which

the material is intended. Samples shall be marked to indicate where the

materials represented are required by the contract documents.

A letter in duplicate shall accompany each delivery of samples and shall

contain a list of the samples and the same information required on the labels

accompanying each sample.

6.5 Sample Submittals.

(a) Contractor’s Duty. When sample submittals are required by the

contract documents, the Contractor shall review, approve, indicate its

approval, and submit to the Engineer samples of the materials to be used

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in the work. It is the responsibility of the Contractor to submit required

material and color samples for review at the earliest possible date after the

date of award. Delays caused by the failure of the Contractor to submit

material and color samples will not be considered as justifiable reasons for

contract time extension or additional compensation.

(b) Deviations. The Contractor shall include, with the submittal of

samples, written notification of and shall clearly identify all deviations from

the contract documents. Failure to so notify the Engineer of and identify

such deviations shall be grounds for the subsequent rejection of the

related work or materials, notwithstanding that the sample upon its

submittal was accepted by the Engineer. If the deviations are not

acceptable to the Engineer, the Contractor shall be required to furnish the

samples as specified or indicated on the contract documents at no

increase in contract price or time.

communicate the results of the inspection or test within 30 days of receipt,

unless otherwise agreed between the Contractor and the Engineer, or as

stated in the contract documents. Should the Engineer partially or totally

reject the test samples, the Contractor shall modify the sample, as

required by the Engineer, and resubmit the item within 15 days. At this

time, the review and acceptance cycle described above shall begin again

and repeat each time a test sample is returned to the Contractor for

modification. If the volumes of samples submitted at any time for review is

unusually large, the Contractor may inform the Engineer of its preferred

order for review, and the Engineer will use reasonable efforts to

accommodate the Contractor’s priorities.

If the Engineer notifies the Contractor that a sample does not

conform to the contract documents, the Contractor shall promptly submit a

sample conforming to the requirements of the contract documents,

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indicating in writing on the transmittal and the subject sample what

portions of the resubmittal have been altered.

No mark or notation made by the Engineer on or accompanying the

return of any sample to the Contractor shall be considered a request or

order for a change or extra work. If the Contractor believes any such mark

or notation constitutes a request for a change or extra work for which it is

entitled to an adjustment in contract price, contract time, or both, the

Contractor must follow the procedures established in Subsection 4.2(b)

Orders and Directives or else lose its right to claim for an adjustment.

(d) Conformance of Material to Submittal. After a material

submittal has been accepted by the Engineer, the Contractor shall provide

materials for the work that conform to such submittal. Materials that do

not conform to such submittal are non-conforming material in accordance

with Section 6.8 Non-Conforming Materials, even if they otherwise meet

the contract requirements. If the Contractor intends to substitute a

material in place of a material for which a submittal has been accepted,

the Contractor shall submit the substitute material in accordance with the

sampling and testing procedures described herein. The Contractor shall

not use the substitute material until the Engineer accepts it.

6.6 Notice of Change. If, during the course of the work, the Contractor

intends to change the source of supply of any previously submitted material or

the location of any manufacturing or fabrication plant, the Contractor shall

provide the Engineer written notice of such intended change not less than ten

days before the change is made. The Engineer may require that the Contractor

repeat the submittal process, in accordance with this Article VI – Control of

Material, for any such material.

6.7 Certificate of Compliance. In addition to or instead of the submission

of material samples for inspection or testing, the Engineer or the contract

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documents may require the Contractor to submit to the Engineer a Certificate of

Compliance from the manufacturer, supplier, or both.

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A Certificate of Compliance shall be an English language document

containing:

(1) A description of the material supplied;

(2) Means of material identification, including, but not limited to,

label, lot number, heat number, batches, or marking including the

respective quantities of each material supplied for the work;

(3) A statement that the material complies in all respects with

the requirements of the cited specifications within the contract

documents;

(4) When required by the Engineer, test results confirming that

the material complies in all respect with the requirements of the

contract documents; and

(5) The name, title, and signature of the authorized person

acting on behalf of the manufacturer or the supplier of the material,

the date of the signature, and the name and address of the

manufacturer or supplier of the material.

6.8 Non-Conforming Materials. All materials not conforming to the

contract requirements, whether in place or not, shall be promptly

removed from

the site of the work when directed by the Engineer in writing. If the Contractor

fails to comply forthwith with any order of the Engineer made under the

provisions of this subsection, the Engineer shall have the authority to remove and

replace non-conforming materials and charge the removal and replacement to

the Contractor.

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6.9 State-Furnished Material. The Contractor shall furnish all materials

required to complete the work, except those specified to be furnished by the

State. The contract documents or the Engineer will establish the time and means

of delivery or the turning over of State-furnished materials. Unless otherwise

specified, the cost of pick up and transport to the work site of such materials is

included in the contract price.

Unless otherwise stated in the contract documents, it shall be conclusively

presumed that State-furnished materials conform to the contract documents as of

the time of delivery to the Contractor.

Upon receipt, the Contractor shall inventory, store, inspect, protect,

distribute, and install State-furnished material at its risk and cost.

6.10 Payment for Deleted Materials.

(a) Canceled Orders. If acceptable material was ordered by the

Contractor for any item deleted by an ordered change in the work prior to

the date of notification of such deletion by the Engineer, the Contractor

shall use its best efforts in a timely manner to cancel the order. The State

will pay reasonable cancellation charges required by the supplier. The

Contractor will be paid a 10 percent markup on all reasonable cancellation

charges for compensation for overhead and profit.

(b) Returned Materials. If acceptable deleted material is in the

possession of the Contractor or is ultimately received by the Contractor, if

such material is returnable to the supplier and the Engineer so directs, the

material shall be returned. After the Contractor returns acceptable

material to the supplier, the State will pay for the reasonable charges

made by the supplier or other source for the return of the material. The

Contractor shall be paid a 10 percent markup on the reasonable charges

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made by the supplier or other source for returning the material for

compensation for overhead and profit. The cost to the Contractor for

handling the returned material will be paid as provided in Section 4.6

Methods of Price Adjustment.

deleted cannot be canceled at a reasonable cost or returned, it will be paid

for at the actual cost charged by the material supplier to the Contractor

including a markup for overhead and profit of 10 percent. In such cases

the material paid for shall become the property of the State and the cost of

further storage and handling will be paid as provided in Section 4.6

Methods of Price Adjustment.

All charges the Contractor proposes for the acceptable material that

was deleted shall be properly itemized and supported by sufficient

substantiating legible data to permit evaluation. The Engineer will

determine whether the proposal is acceptable.

6.11 (Reserved).

6.12 Assignment Of Antitrust Claims For Overcharges For Goods and

Materials Purchased

Contractor and owner recognize that, in actual economic practice,

overcharges resulting from antitrust violations are in fact usually borne by the

owner. Therefore, Contractor hereby assigns to owner any and all claims for

such overcharges as to goods and materials purchased in connection with this

order or contract, except as to overcharges which result from antitrust violations

commencing after the price is established under this order or contract and any

contract change order. In addition, Contractor warrants and represents that each

of its first tier suppliers and subcontractors shall assign any and all such claims to

owner, subject to the aforementioned exception.

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6.13 Substitution Of Materials and Equipment After Bid Opening.

Substitution of material or equipment will not be allowed after the bid opening

date except under the following circumstances:

(1) A specified or pre-qualified item is delayed by an

unforeseeable event beyond the control of the Contractor which

would impact the timely completion of the project.

(2) A specified or pre-qualified item is no longer being

manufactured or is no longer reasonably commercially available.

(3) A specified or pre-qualified item is found to be unsuitable for

reasons beyond the control of the Contractor.

(4) When a manufacturer or supplier of a pre-qualified or

specified item makes available a suitable item determined by the

Engineer to be equal to or better than the item prequalified or

specified.

(5) Under such other terms and conditions acceptable to the

Engineer.

Every substitution request shall be fully explained in writing by the

Contractor and shall include the justification, the quantities and unit prices

involved, quotations, and such other documents as are deemed necessary to

support the request. Any savings in cost will accrue to the State.

The burden of proof as to the comparative quality and suitability of

alternate equipment, articles, or materials shall be upon the Contractor. The

Contractor shall furnish, at no increase in contract price or contract time, all

information required by the Engineer.

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The Engineer reserves the right to deny any request the Engineer deems

irregular or not in the best interest of the State and shall be the sole judge of the

comparative quality and suitability of alternate equipment, articles, or materials.

END OF ARTICLE VI

ARTICLE VII – LEGAL RELATIONS AND RESPONSIBILITY TO PUBLIC 1

7.1 Insurance Requirements.

(a) Obligation of Contractor. Contractor shall not commence any

work until it obtains, at its own expense, all required insurance described

herein. Such insurance shall be provided by an insurance company

authorized by the laws of the State to issue such insurance in the State of

Hawaii. Coverage by a “Non-Admitted” carrier is permissible provided the

carrier has a Best’s Rating of “A-VII” or better. The Contractor shall

maintain and ensure all insurance policies are current for the full period of

the contract until final acceptance of the work by the State.

The Certificate of Insurance shall contain: a clause that it is agreed

that any insurance maintained by the State of Hawaii will apply in excess

of, and not contribute with, insurance provided by this policy; and shall be

accompanied by endorsement form CG2010 or equivalent naming the

State as an additional insured to the policy which status shall be

maintained for the full period of the contract until final acceptance of the

work by State.

The Contractor shall obtain all required insurance as part of the

contract price. Where there is a requirement for the State of Hawaii and

its officers and employees to be named as additional insureds under any

Contractor’s insurance policy, before the State of Hawaii issues the Notice

to Proceed, the Contractor shall obtain and submit to the Engineer a

Certificate of Insurance and a written policy endorsement that confirms the

State of Hawaii and its officers and employees are additional insureds for

the specific State project number and project title under such insurance

policies. The written policy endorsement must be issued by the insurance

company insuring the Contractor for the specified policy type or by an

agent of such insurance company who is vested with the authority to issue

a written policy endorsement. The insurer’s agent shall also submit

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written confirmation of such authority to bind the insurer. Any delays in

the issuance of the Notice to Proceed attributed to the failure to obtain the

proof of the State of Hawaii and its officers and employees’ additional

insured status shall be charged to the Contractor.

A mere Certificate of Insurance issued by a broker who represents

the Contractor (but not the Contractor’s insurer), or by any other party who

is not authorized to contractually name the State as an additional insured

under the Contractor’s insurance policy, is not sufficient to meet the

Contractor’s insurance obligations.

Certificates shall contain a provision that coverages being certified

will not be cancelled or materially changed without giving the Engineer at

least thirty (30) days prior written notice. Contractor will immediately

provide written notice to the Director should any of the insurance policies

evidenced on its Certificate of Insurance form be cancelled, reduced in

scope or coverage, or not renewed upon expiration. Should any policy be

canceled before final acceptance of the work by the State, and the

Contractor fails to immediately procure replacement insurance as

specified, the State, in addition to all other remedies it may have for such

breach, reserves the right to procure such insurance and deduct the cost

thereof from any money due or to become due to the contractor.

Nothing contained in these insurance requirements is to be

construed as limiting the extent of Contractor’s responsibility for payment

of damages resulting from its operations under this contract, including the

Contractor’s obligation to pay liquidated damages, nor shall it affect the

Contractor’s separate and independent duty to defend, indemnify, and

hold the State harmless pursuant to other provisions of this contract. In no

instance will the State’s exercise of an option to occupy and use

completed portions of the work relieve the Contractor of its obligation to

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maintain the required insurance until the date of final acceptance of the

work.

All insurance described herein shall be primary and cover the

insured for all work to be performed under the contract, all work performed

incidental thereto or directly or indirectly connected therewith, including,

but not limited to traffic detour work, barricades, warnings, diversions, lane

closures, and other work performed outside the work area and all change

order work.

The Contractor shall, from time to time, furnish the Engineer, when

requested, satisfactory proof of coverage of each type of insurance

required covering the work. Failure to comply with the Engineer’s request

may result in suspension of the work and shall be sufficient grounds to

withhold future payments due the Contractor and to terminate the contract

for Contractor’s default.

(b) Types of Insurance. Contractor shall purchase and maintain

insurance described below which shall provide coverage against claims

arising out of the Contractor’s operations under the contract, whether such

operations be by the Contractor itself or by a subcontractor or by anyone

directly or indirectly employed by any of them or by anyone for whose acts

any of them may be liable.

(1) Worker’s Compensation. The Contractor shall obtain

worker’s compensation insurance for all persons whom they

employ in carrying out the work under this contract. This insurance

shall be in strict conformity with the requirements of the most

current and applicable State of Hawaii Worker’s Compensation

Insurance laws in effect on the date of the execution of this contract

and as modified during the duration of the contract.

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(2) Auto Liability. The Contractor shall obtain Auto Liability

Insurance covering all owned, non-owned, and hired autos with a

combined single limit of not less than $1,000,000 per occurrence

for bodily injury and property damage with the State of Hawaii

named as additional insured. Refer to SPECIAL CONDITIONS for

any additional requirements.

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(3) General Liability. The Contractor shall obtain General

Liability insurance with a limit of not less than $2,000,000 per

occurrence and in the Aggregates for each of the following:

(A) Products – Completed/Operations Aggregate,

(B) Personal & Advertising Injury, and

The General Liability insurance shall include the State as an

additional insured. The required limit of insurance may be provided

by a single policy or with a combination of primary and excess

policies. Refer to SPECIAL CONDITIONS for any additional

requirements.

(4) Builder’s Risk For All Work. The Contractor shall take

out a policy of builder’s risk insurance for the full replacement value

of the project work, from a company licensed or otherwise

authorized to do business in the State of Hawaii; naming the State

as an additional insured under each policy; and covering all work,

labor, and materials furnished by such Contractor and all its

subcontractors against loss by fire, windstorm, tsunamis,

earthquakes, lightning, explosion, other perils covered by the

standard Extended Coverage Endorsement, vandalism, and

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malicious mischief. Refer to SPECIAL CONDITIONS for any

additional requirements.

Contractor or its insurer wrongfully fails to defend or indemnify the State of

Hawaii, its officers, and employees against any claims, the State may

debar or suspend the Contractor from bidding or working on construction

projects and may refuse to permit the insurer to provide insurance on

construction projects.

The State may exercise these remedies in addition to other legal or

equitable remedies it may have against the Contractor, insurer, or both.

(d) Subcontractor Insurance. The Contractor shall either:

(1) Require its subcontractors to procure and to maintain, during

the life of its subcontract, subcontractor’s comprehensive general

liability, automobile liability, and property damage liability insurance

of the type and in the same amounts specified herein and further

require that such coverage be required by its subcontractors from

all lower tier subcontractors. On all such insurance coverages, the

State of Hawaii, its officers, and employees, shall be named as

additional insureds; or

(2) Insure the activities of its subcontractors and their lower tier

subcontractors in its own policy.

In the absence of language in the certificate excluding coverage for

subcontractors, it will be understood that the Contractor’s insurance

covers all aspects of the work whether performed by the Contractor or any

of its subcontractors.

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(e) Self-Insured Retention. The Contractor shall be permitted, in

cooperation with its insurers, to maintain a self-insured retention for up to

25 percent of the per occurrence combined single limits of the commercial

general liability and the automobile liability policies required by the

contract documents.

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7.2 Employment of State of Hawaii Residents.

(a) Obligations of Contractor. Pursuant to 103B-3(a), H.R.S., a

Contractor awarded a contract shall ensure that State of Hawaii residents

comprise not less than 80% of the workforce employed to perform the

contract. The 80% requirement shall be determined by dividing the total

number of hours worked on the contract and all subcontracts by State of

Hawaii residents, by the total number of hours worked on the contract by

all employees of the Contractor and all subcontractors in the performance

of the contract. The hours worked by employees within shortage trades,

as determined by the Department of Labor and Industrial Relations

(DLIR), shall not be included in the calculation for this section.

(1) Notarized certificates of compliance with Section 103B-3(a),

H.R.S. shall be made by an officer of the Contractor and applicable

subcontractors and submitted as part of Subsection 8.19(a) Final

Settlement of Contract Closing Requirements.

(2) The Contractor and any applicable subcontractors shall

maintain records such as certified payrolls for laborers and

mechanics who perform work at the site and timesheets for all other

employees who performed work on the project. These records

shall include the names, addresses and number of hours worked

on the project by all employees of the Contractor and applicable

subcontractors who performed work on the project to validate

compliance with this section. The Contractor and applicable

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subcontractors shall maintain, retain, and provide the Engineer

access to these records at all times during the work as well as in

accordance with Section 9.12 Records, Accounts, and Documents.

(3) The Contractor has an affirmative duty, throughout the

course of the project, to ensure that all subcontractors remain in

compliance with this Section.

(b) Failure to Comply. Failure to comply with Subsection 7.2(a) shall

be deemed a breach of contract by the Contractor and the State may

exercise all applicable remedies available including, but not limited to:

(1) With respect to the Contractor, withholding of final payment

on the contract until the Contractor complies with Subsection

7.2(a); or

(2) Proceedings for debarment or suspension of the contractor

or subcontractor under Section 103D-702, H.R.S.

7.3 Permits and Licenses. As part of the contract price, the Contractor

shall obtain all permits and licenses required by law to perform the work and pay

charges, fees, and taxes incidental to obtaining such permits and licenses. The

Contractor assumes exclusive responsibility for identifying and acquiring all

permits and licenses necessary to perform the work, except for those permits

and licenses identified in the contract documents as being the responsibility of

the State.

The terms and conditions of any permit or license required for

performance of the work, whether or not issued in the name of the Contractor,

are incorporated into the contract. Compliance with such terms and conditions

are duties owed by the Contractor to the State under the contract.

Notwithstanding the enforcement authority of the permitting or licensing agency,

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whether or not a State agency, non-compliance by the Contractor with any term

or condition of such license or permit shall be deemed non-compliance with the

contract and may constitute grounds for default.

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The Engineer may grant a time adjustment, cost adjustment, or both, to

the extent the Engineer determines that the Contractor was not a contributing

factor for any delay in obtaining necessary permits or licenses.

107.02

7.4 Working Hours; Night Work. Normal working hours shall be from 7:00

a.m. to 3:30 p.m., Monday through Friday, excluding holidays. Work performed

between 3:30 p.m. and 7:00 a.m. of the following day is “night work”.

7.5 Overtime and Night Work. Overtime work shall be considered as work

performed in excess of eight hours in any one day or work performed on

Saturday, Sunday, or legal holidays of the State. Overtime and night work are

permissible when approved by the Engineer in writing or as called for elsewhere

within the contract documents. The Contractor shall inform the Engineer in

writing at least three working days in advance of its intent to work overtime and

10 working days in advance of any night work. In addition, the Contractor shall

inform the Engineer of what specific work is to be done during any overtime and

night work period.

The Engineer may, at any time, direct overtime and/or night work be

performed in addition to or in lieu of work during normal working hours at such

additional costs to the State as the Engineer determines to be reasonable.

The Engineer may cancel any overtime or night work previously approved

or directed when the Engineer finds that work during these periods is detrimental

to public welfare, safety, or the interest of the State.

7.6 Overtime and Night Payment for State Inspection Service.

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(a) State’s Responsibility for State’s Cost. The State shall be

responsible for overtime or night work payment for State’s staff and

inspection personnel, including consultants, when the contract requires

overtime or night work to be performed or directs the Contractor to work

additional shifts or overtime for the State’s convenience.

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(b) Contractor’s Responsibility for State’s Cost. The Contractor

shall be responsible for overtime or night work payment for the State’s

staff and inspection personnel, including consultants, when the Contractor

does any other overtime or night work.

The Contractor shall pay the following costs incurred by the State:

(1) The payroll costs for the State’s staff and inspection

personnel assigned in connection with such work, including, but not

limited to, salaries, the State’s share of contributions to the

employee’s retirement, medical plan, social security, vacation, sick

leave, worker’s compensation funds, per diem, and other applicable

fringe benefits and overhead expenses incurred on account of such

work.

(2) The transportation costs incurred by the State’s staff and

inspection personnel, which are based on established rental rates

or mileage allowance in use by the State for the particular

equipment or vehicle.

(3) Fees and other costs billed the State by consultants

engaged on the project for overtime and night work.

costs described herein shall be deducted from the monies due or to

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become due the Contractor. The Contractor shall not pay the State’s

employees and consultants directly.

7.7 Contractor Duty Regarding Public Convenience. The Contractor

shall, at all times, conduct the work in such manner and in such sequence as will

insure the least practicable interference with pedestrian, bicycle, and motor

passageways.

7.8 Assignment or Change of Name.

(a) General. The Contractor shall not sell, transfer, assign, or

otherwise dispose of this contract or any part hereof or any right, title, or

interest herein without the written consent of the Engineer.

The Contractor may assign money due or to become due under the

contract and such assignment will be recognized by the State, if given

written notice thereof, to the extent permitted by law. Any assignment of

monies shall be subject to all set-offs in favor of the State and to all

deductions provided for in the contract, including, but not limited to,

liquidated or actual damages for delay and money retained by the State

for the completion of the work in the event that the Contractor should be in

default.

(b) Recognition of a Successor in Interest; Assignment. When in

the best interest of the State, a successor in interest may be recognized in

an assignment agreement in which the Contractor and the transferee and

the State shall agree that:

(1) The transferee assumes all of the Contractor’s obligation.

(2) The Contractor remains liable for all obligations under the

contract but waives all rights under the contract against the State.

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(3) The Contractor shall continue to furnish, and the transferee

shall also furnish, all required bonds.

name in which it holds a contract with the State, the Engineer shall, upon

receipt of a document indicating such change of name (for example: an

amendment to the articles of incorporation of the corporation), enter into

an agreement with the requesting Contractor to effect such a change of

name. The agreement changing the name shall specifically indicate that

no other terms and conditions of the contract are thereby changed.

107.07

7.9 Laws to be Observed; Indemnity. At all times, the Contractor shall

observe and comply with all Federal, State, and local laws, ordinances, rules,

regulations, and permit and license requirements, which in any manner affect

those engaged or employed in the work, the materials used in the work, and the

conduct of the work. The Contractor shall comply with all orders and decrees of

government bodies or officials having any jurisdiction or authority over the work

whether such orders or decrees are directed to the Contractor, its

subcontractors, vendors and suppliers, or to the State.

No instruction in the contract documents or contained within any directive

from the Engineer to the Contractor to observe and comply with any specific law,

ordinance, rule, regulation, or permit or license requirement shall limit the duty of

the Contractor to observe and comply with all other laws, ordinances, rules,

regulations, or permit or license requirements that relate to the work.

The Contractor shall immediately notify the Engineer in writing of any

orders, directives, notices, decrees, or warnings issued by any governmental

agency to the Contractor, its subcontractors, vendors, and suppliers that a

violation of law, rule, regulation, or permit or license requirement is alleged to

have occurred or is occurring in connection with the work.

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The Contractor shall defend, protect, hold harmless, compensate, and

indemnify the State, its officers, and employees against any claim or liability

arising from or based on the violation of any laws, ordinances, rules and

regulations, orders or decrees, or the terms and conditions of any permits and

licenses, whether such orders or decrees are directed to the Contractor, its

subcontractors, vendors and suppliers, or to the State.

7.10 Patented Devices, Materials, And Processes. If the Contractor

desires or is required to use any designs, devices, materials, or processes

covered by letters of patent or copyright, the right for such use shall be procured

by the Contractor from the patentee or owner. The Contractor shall defend,

protect, indemnify and hold harmless, compensate, and where appropriate,

insure, the State from any and all claims, demands, liabilities, actions, and

judgments for infringement by reason of the use of any such patented designs,

devices, materials, or processes or any trademark or copyright in connection with

the work to be performed under the contract.

7.11 Furnishing Right-Of-Way. Except as noted in the contract documents,

the State will be responsible for securing necessary rights-of-way.

7.12 Safety: Accident Prevention.

(a) The Contractor shall provide all safeguards, safety devices, and

protective equipment and take any other needed actions as it determines,

or as the Engineer may determine, to be reasonably necessary to protect

the life and health of employees and other persons on and around the

worksite and the safety of the public and to protect property in connection

with the performance of the work covered by the contract.

(b) The Contractor and any subcontractor shall not permit any

employee, in performance of the contract, to work in surroundings or

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under conditions which are unsanitary or hazardous or dangerous to

his/her health or safety, as determined under construction safety and

health standards promulgated by the Federal, State, and local authorities.

will be to monitor the Contractor’s safety practices and procedures and to

ensure a safe working environment.

The Engineer as well as authorized Federal, State, and local

officials shall have right of entry to any site of contract performance to

inspect, investigate, and enforce the matter of compliance with the

construction safety and health standards referred to herein; however, it is

not the responsibility of the State to review the adequacy of the

Contractor’s onsite safety measures or to check on the performance of the

Contractor’s safety officer.

(d) The Contractor shall immediately comply with all safety and

security directives issued by authorized Federal, State, and local officials.

If the Contractor anticipates that any such directive may result in a claim

for an increase in contract price or time, it shall notify the Engineer in

writing not later than 24 hours after receiving such directive.

107.11

7.13 Protection of Persons and Property.

(a)

Contractor’s Responsibility for Damage to Property. All

damage, injury, or loss to any property caused during the course of or

arising out of the work, whether or not caused by negligent acts or

omissions, shall be the responsibility of the Contractor and shall be

remedied promptly by the Contractor. This provision shall not affect the

Contractor’s legal rights of subrogation, contribution, and indemnity to

recover the costs of remedial measures and other damages to which it

may be entitled.

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(b) Safety Precautions and Programs. The Contractor shall notify

owners of adjacent properties and of underground (or overhead) utilities

when performing work which may affect the owners and shall cooperate

with the owners in the protection, removal, and replacement of their

property.

The Contractor shall not permit any load to be placed on the work,

any structure, roadway, or any other location that may endanger the safety

of any persons or cause damage to any property. The Contractor shall

not injure or destroy trees or shrubs that are identified in the contract

documents for preservation nor remove or cut them without permission of

the Engineer. The Contractor shall protect all land monuments and

property marks until an authorized agent has witnessed or otherwise

referenced their location and shall not remove them until directed.

In the event the Contractor encounters, on the site, material

reasonably believed to be asbestos or other hazardous material that has

not been rendered harmless, the Contractor shall stop work in the area

and notify the Engineer promptly. The work in the affected area shall be

resumed in the absence of hazardous materials or when the hazard has

been rendered harmless.

Engineer verbally as soon as conditions permit and in writing not later than

noon of the following working day whenever:

(1) Police, fire, or other public safety officers are called to the

work site for any reason or are present at the work site for any

public safety related reason.

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(2) Any person is treated or evacuated from the work site for

medical reasons.

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(3) Any member of the public claims to have been injured at the

work site.

(4) The Contractor witnesses a member of the public being

involved in an accident at the worksite or on account of conditions

related to the work, whether or not visible injuries occur.

(5) Any representative of a Federal, State, or County regulatory

or enforcement agency is present at the work site including but not

limited to any representative of Department of Health, EPA, OSHA,

and public works.

107.12

7.14 Pollution Control and Protection Of Archeological, Historical, and

Burial Sites.

(a) Erosion, Siltation, and Pollution Control. The Contractor shall

exercise precaution to prevent silting and pollution of oceans, rivers,

streams, lakes, reservoirs, and other bodies and conveyances of water,

including sewer systems and storm drains.

The Contractor shall provide for pollution, dust, and erosion control

during the work, including periods of suspension of contract performance.

If material begins to erode, the Contractor shall act immediately to bring

the siltation, erosion, and pollution under control.

The Contractor shall follow:

(1) Guidelines in the City and County of Honolulu’s “Best

Management Practices Manual for Construction Sites in Honolulu”,

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in developing, installing, and maintaining BMPs for all projects;

(2) City and County of Honolulu’s “Rules for Soil Erosion

Standards and Guidelines” for all projects on Oahu;

(3) Appropriate Soil Erosion Guidelines for Maui, Kauai,

Molokai, Lanai, and Hawaii projects; and

(4) HNL SWMPP (Storm Water Management Program Plan)

http://hawaii.gov/dot/airports/doing-

business/environmental/construction-site-runoff-control-program.

(b) Archaeological, Historical, and Burial Sites. Whenever the

Contractor encounters sites of potentially historic or archaeological

significance such as walls, platforms, pavements, and mounds or remains

such as artifacts, burials, concentration of charcoal, or shells, work shall

cease in the immediate vicinity of the site, and the site shall be protected

from damage. The Contractor shall suspend any work that may affect the

site and inform the Engineer immediately. Upon direction by the Engineer,

the Contractor shall provide and install temporary fencing to protect such

sites. The Contractor shall not resume the work suspended without the

prior written direction of and subject to the conditions set by the Engineer.

7.15 Responsibility For Damage Claims; Indemnity. The Contractor shall

compensate and make whole the State for all loss or damage to the State’s

property and facilities arising out of any act or omission in the performance of the

work by the Contractor, any subcontractor, or their employees and agents.

The Contractor shall defend, hold harmless, compensate, and indemnify

the State, its employees, and officers against any loss, demand, claim, liability,

suit, action, cause of action, judgment, cost, and expenses, including attorney’s

fees, based upon personal injury, death, or property damage which arise out of

7-16

the Contractor’s performance under the contract, including the operations and

performance of one or more subcontractors, whether or not a lawsuit is filed

against the State and whether or not the Contractor is named as a party to any

such lawsuit, unless and until a court of competent jurisdiction makes a final non-

reviewable determination that the personal injury, death, or property damage was

caused solely by the negligence of the State.

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The State may participate in the defense of any claim or suit brought

against its officers or employees, without relieving the Contractor of any

obligation hereunder. The purchase of liability insurance shall not relieve the

Contractor of the obligations described herein. If the Contractor and its insurer

fail to undertake the defense of the State, its employees, and officers, after a

tender of defense has been duly made, the State may retain and withhold money

to cover the Contractor’s obligation, whether or not the Contractor is terminated

for cause.

The Contractor shall pay all just claims for materials, supplies, tools, labor,

and other just claims against the Contractor or any subcontractor in connection

with this contract, and the payment bond or security will not be released by final

acceptance and payment by the State unless all such claims are paid or

released. The State may, but is not obligated to, withhold or retain as much of

the monies due or to become due the Contractor under this contract considered

necessary by the Engineer to cover such just claims until satisfactory proof of

payment or the establishment of an acceptable payment plan.

7.16 Disputes and Claims.

(a)

Written Notice A Condition Precedent to Claim. As a

condition precedent to any claim for damages, or any matter dealing with

contract price or contract time, the Contractor must give all notices of a

potential claim as required by the contract documents including, but not

limited to, the following Subsections of these General Provisions:

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(1) 4.2 Changes

(2) 4.3 Field Orders

(3) 4.4 Duty of Contractor to Provide Change Proposals

(4) 4.5 Contract Change Orders

(5) 4.8 Differing Site Conditions

(6) 5.4 Review and Acceptance Process

(7) 6.5 Sample Submittals

(8) 8.5 Contract Time

(b) Contractor’s Duty to Maintain Accurate and Contemporaneous

Records. Upon delivering written notice of a potential claim as

described in Subsection 7.16(a) Written Notice A Condition Precedent to

Claim, the Contractor has the duty to support and substantiate all claims

by maintaining accurate, contemporaneous records of the subject work

and the time and costs thereof. The Engineer may direct the manner and

the format in which such records must be prepared, maintained, and

verified. The Contractor shall comply with such directives at no increase

in contract price or contract time. Any directive from the Engineer

regarding the manner and format for the keeping of records associated

with the potential claim shall not in any way be deemed an agreement by

the State regarding the validity of any element of the claim.

times continue with performance of the contract in full compliance with the

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directions of the Engineer. Continued performance by the Contractor shall

not prejudice any claim for damages or any matter dealing with contract

price or contract time provided that the notice of a potential claim is given

in writing by the Contractor in the manner and within the time set forth in

the contract documents.

(d) Making of a Claim. All Contractors’ claims for damages or any

matter dealing with contract price or contract time shall be submitted in

writing to the Engineer. The written submission (“The Claim”) shall be

clearly identified and labeled as a claim. The Contractor shall sequentially

number its claims in the chronological order submitted to the Engineer.

No claim shall be valid if it is delivered to the Engineer after the date of

final acceptance or later than 180 days after Contractor’s delivery of its

notice of potential claim, whichever comes first.

The claim shall, at a minimum, contain the following:

(1) A detailed description of the facts and circumstances that

justify every element of the claim. The detailed description shall

include, but is not limited to, providing all necessary dates,

locations, and items of work affected by the claim.

(2) The specific provisions of the contract or laws which support

the claim and a statement of the reasons why such provisions

support the claim.

(3) A copy of the related written notice of potential claim

required by Subsection 7.16(a) Written Notice A Condition

Precedent to Claim.

(4) Any other documents that support the claim.

7-19

(5) If an adjustment of time for the performance of the contract

is sought:

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(A) The specific days and dates for which it is sought.

(B) The specific reasons the Contractor believes a time

adjustment should be granted.

additional time is sought.

(D) The Contractor’s detailed analysis of its previously

submitted time scaled logic diagram (TSLD) schedule and

impact on the critical path.

(6) If additional monetary compensation is sought, the claim

cannot be in an amount greater than the Contractor would be

entitled to under the terms, conditions, and limitations set forth in

Section 9.6 Force Account Provisions and Compensation; however,

the Engineer may determine the Contractor’s entitlement, if any, in

accordance with any payment method described in Section 4.6

Methods of Price Adjustment. The exact amount sought and a

breakdown of that amount into the following categories shall be

provided to the Engineer:

(a) Labor. Categories such as listing of individuals,

description and location of work performed, classification,

hours worked, wage rate, fringe benefits, and employee

number if available.

(b) Materials. Categories such as invoices, purchase

orders, evidence of payment, descriptions, and quantities.

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description (make, model, year, attachments, and serial

number), hours of use, and dates of use.

(d) Contractor’s Margin for Profit and Overhead.

(e) Other categories as specified by the Contractor or the

State.

(7) The claim shall be certified on behalf of the Contractor by an

authorized representative, as follows:

Under penalty of law for submission of false claims, false

statements, and misrepresentation, the undersigned,

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(Name)

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(Title)

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(Company)

hereby certifies that the claim is made in good faith; that the

supporting data are accurate and complete to the best of my

knowledge and belief; that the amount requested accurately reflects

the contract adjustment for which the Contractor believes the State

of Hawaii is liable; and that I am duly authorized to certify the claim

on behalf of the Contractor.

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Signature Date

7-21

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(e) Subcontractor’s Claim. When the Subcontractor submits a

claim to the Contractor and the Contractor, upon its review and

investigation of said claim, concludes that the State is ultimately liable for

payment of any part of said claim and the Contractor chooses to seek

recovery against the State for all or any part of the Subcontractor’s claim,

the Contractor shall:

(1) Independently verify the basis for and amount of said claim.

(2) Limit said claim to only those portions for which the State

may be liable.

(3) Submit said claim as a Contractor’s claim, in accordance

with this section.

(f) Engineer’s Review and Decision. The Engineer shall review

the claim and may request additional information, documentation, and

other evidence, which the Contractor shall provide. The Engineer may

conduct interviews with Contractor’s employees and other persons having

knowledge related to the claim.

The Engineer shall render a written decision on the claim after the

claim is complete and fully documented, as follows:

(1) Within 60 days for claims equal to or less than $50,000.

(2) Within 90 days on claims exceeding $50,000.

If the Engineer does not issue a written decision within the time

period described herein, then the Contractor may proceed as if the claim

has been denied in its entirety. If the claim submittal is found to be

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incomplete, the Contractor shall be notified to provide the additional

information that is required. When this occurs, the Engineer’s review time

will be adjusted as deemed appropriate and the Contractor will be notified.

The decision will be sent to the Contractor by Certified Mail, Return

Receipt Requested.

(g) Appeal of the Engineer’s Decision.

(1) Any Contractor aggrieved by an adverse decision by the

Engineer on a claim may appeal the decision to the Director, as

head of the purchasing agency, as specified in the Hawaii

Administrative Rules for Procurement Disputes.

(2) Appeals of the Engineer’s decision must be filed in writing

not later than 30 days after delivery of the Engineer’s decision on

the claim to the Contractor, or if no written decision is delivered,

within 30 days after the deadline for the Engineer’s decision. A

copy of the notice of appeal of the Engineer’s decision shall be

delivered to the Engineer.

(3) The record on appeal by the Contractor to the Director shall

be limited to the Claim as submitted by the Contractor described in

Subsection 7.16(d) Making of a Claim, the Engineer’s response to

the claim, the project file, and any other material or evidence the

Director, in the Director’s discretion, believes may be useful in

deciding the merits of the appeal.

(4) In its notice of appeal of the Engineer’s decision, the

Contractor shall provide specific citations to the Engineer’s decision

and explanations as to why the Contractor believes the Engineer’s

decision was incorrect.

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(5) All controversies and claims which are appealed to the

Director shall be decided by the Director within 90 days after the

filing of the appeal by the Contractor; provided that:

(A) If the Director does not issue a written decision within

90 calendar days after written request for a final decision, or

within such longer period as may be agreed upon by the

parties, then the Contractor may proceed as if the appeal

was denied.

(B) The Director immediately furnishes a copy of the

decision to the Contractor, by certified mail, return receipt

requested or by any other method that provides evidence of

receipt.

unless fraudulent or unless the Contractor brings an action

seeking judicial review of the decision in a Hawaii circuit

court within the six months from the date of receipt of the

decision.

(h) Contractor’s Duty to Continue Work. During the claim review

and appeal process including any litigation in relation to the claim, the

Contractor shall proceed diligently with performance of this contract,

except where:

(1) The State has suspended the work or has terminated the

contract for default of the Contractor or for the convenience of the

State.

7-24

(2) There has been an alleged material breach of contract by

the State excusing further performance by the Contractor; provided

that in such event the Contractor shall proceed diligently with the

performance of the contract where the Director has made a written

determination that continuation of work under the contract is

essential to the public health and safety.

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7.17 Contaminated or Hazardous Items and Material; Regulated Items and

Material; Waste.

(a) Known or Suspected Contaminated or Hazardous Items and

Material. If the contract documents have noted an area of known or

suspected contaminated or hazardous items or material within the project

limits, in the absence of specific orders from the Engineer or directions in

the contract documents, the Contractor shall report the discovery of such

items or material to the appropriate governmental agencies, cooperate

with all investigations and either remediate or remove and dispose of such

items or material as part of the contract price unless otherwise noted in

the contract documents. Upon encountering any such items or material

the Contractor shall immediately notify the Engineer.

(b) Unknown Contaminated or Hazardous Items and Material. If

the Contractor encounters or exposes any items, material, or other

conditions within the worksite not previously known or suspected to be

contaminated or hazardous but which exhibits properties which may

indicate the presence of such items or material, the Contractor shall

immediately notify the Engineer. Claims by the Contractor for additional

money or time arising from work involving such items, material, or other

conditions, including the cost and time associated with notifying and

providing written reports to government agencies listed below, shall be

subject to the terms and conditions of Section 4.8 Differing Site

Conditions.

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encounters or exposes any hazardous or contaminated items, material, or

conditions at the worksite, whether the existence of which was previously

known, suspected, or unknown, the Contractor shall notify the State

Department of Health/HEER office, the Federal Environmental Protection

Agency, the U.S. Coast Guard, the National Response Center, and other

appropriate government agencies, and comply with any directives or

instructions provided by them.

(d) Material and Waste Brought to the Worksite. The Contractor

shall assume sole responsibility for

(1) The management of all regulated materials and items

brought to the worksite.

(2) The management of all waste generated by or incidental to

the Contractor’s operations, including, but not limited to, lubricants,

antifreeze, engine fluids, paints, and solvents.

Management of such materials and items includes, but is not

limited to, their transport, storage, handling, and disposal.

(e) Reimbursement of State Expenses. In addition to all other

remedies provided by law or contract, the State may withhold from or

recover from the Contractor any money it is required to expend to

remediate, remove, or dispose of any such items and material, as well as

the cost of any fines or impositions made by appropriate enforcement

agencies arising from the management of such items and material,

whether or not the Contractor exercised due care.

107.16

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7.18 Right to Audit Records, Records Maintenance, Retention, and

Access. Pursuant to Chapter 103D-317, H.R.S., the State, at reasonable

times and places, may audit the books and records of a Contractor, prospective

contractor, subcontractor, and prospective subcontractor relating to the

Contractor’s or subcontractor’s cost or pricing data. Any such audits may be

conducted by Federal and State employees or by consultants working on behalf

of the State. The Contractor and subcontractor(s) shall maintain the books and

records for a period of three years from the date of final payment under the

contract.

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The Contractor and its subcontractors shall, in accordance with generally

acceptable accounting practices, maintain fiscal records and supporting

documents and related files, papers, and reports that adequately reflect all direct

and indirect expenditures and management and fiscal practices related to the

Contractor and subcontractor’s performance of work under this contract.

The representatives of the State (and Federal government representatives

when federal funds are utilized) have the right to inspect and copy any book,

document, paper, file, or other record that is related to the performance of the

work of the Contractor and any subcontractor.

The Contractor shall provide full cooperation during any audit or inspection

and shall insure that its subcontractors comply with this requirement. The

Contractor shall bear all costs (including attorney’s fees) of enforcement in the

event of its or its subcontractor’s failure or refusal to fully cooperate.

This right of inspection and audit shall not be limited to the required

retention period but shall last as long as records are retained. The Contractor

and subcontractor shall retain all records related to the Contractor and

subcontractor’s performance of work under this Agreement for three years from

the date of final payment, except that if any litigation, claim, negotiation,

investigation, audit, or other action involving the records has been started before

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the expiration of the three year period, the Contractor and subcontractors shall

retain the records until final resolution of all issues that arise from it or until the

end of the three year retention period, whichever occurs later.

7.19 Conflicts of Interest. In all State or Federal-aid projects, no official or

employee of the State or any other governmental instrumentality who is

authorized in his official capacity to negotiate, make, accept, or approve or to

take part in negotiating, making, accepting, or approving any contract or

subcontract in connection with such project shall have, directly or indirectly, any

financial or other personal interest in any such contract or subcontract. No

engineer, attorney, appraiser, inspector, or other person performing services for

the State or any governmental instrumentality in connection with the project shall

have, directly or indirectly, a financial or other personal interest, other than his

employment or retention by the State or other governmental instrumentality, in

any contract or subcontract in connection with such project.

A violation of the provisions of this Section shall void the contract or

agreement in respect of which such violation occurs, and no claim for loss or

damage shall be made by the Contractor against the State or the Federal

government.

7.20 Sanitation Provisions. The Contractor shall provide sanitation

(lavatory) facilities at the work site sufficient to meet the needs of all workers and

other persons anticipated to be on the work site during the progress of

construction. Such facilities shall be maintained in a neat, sanitary condition at

all times.

END OF ARTICLE VII

ARTICLE VIII – PROSECUTION AND PROGRESS 1

8.1 Notice to Proceed (NTP). A notice to proceed will be issued to the

Contractor. It shall establish the date the Contractor is expected to start work

and from which contract time will commence.

The Engineer will consult with the Contractor in an effort to set a mutually

agreeable notice to proceed date. When the notice to proceed date is set by

mutual agreement, Contractor shall have no claim for delay impact costs

resulting from the issuance of the notice to proceed for such date.

In the absence of an agreed notice to proceed date, the Engineer will

issue a notice to proceed to the Contractor for a date convenient to the State. In

the event that the Engineer establishes a starting date that is more than 90 days

after the effective date of the contract, the Contractor may not terminate the

contract for a default by the State but may submit a claim in accordance with

Section 7.16 Disputes and Claims for increased labor and material costs which

are directly attributable to the delay beyond the first 90 days. The Engineer may

suspend the contract before issuing the notice to proceed, in which case the

Contractor’s remedies are exclusively those set forth in Section 8.10 Suspension

of Work.

The Contractor shall begin work no later than 10 working days from the

date in the notice to proceed and shall diligently prosecute the same to

completion within the contract time. In the event that the Contractor fails to start

the work, the Engineer may terminate the contract in accordance with Section

8.11 Termination of Contract for Cause. The Contractor shall notify the Engineer

at least three working days before beginning work.

The Contractor shall notify the Engineer at least 24 hours before restarting

work after a suspension of work pursuant to Section 8.10 Suspension of Work.

8-1

The Contractor shall not begin work before the date in the notice to

proceed. Any work done prior to the notice to proceed date will be considered

unauthorized work. If the Engineer does not direct that the unauthorized work be

removed, it shall be paid for after the notice to proceed date and only if it is

acceptable.

When construction is started, the Contractor shall work expeditiously and

pursue the work diligently until it is complete. If a portion of the work is to be

done in stages, the Contractor shall leave the area safe and usable for the user

agency at the end of each stage.

8.2 Prosecution of Work. Unless otherwise permitted by the Engineer in

writing, the Contractor shall not commence with physical construction unless

sufficient materials and equipment are available for either continuous

construction or completion of a specified portion of the work.

8.3 Preconstruction Data Submittal. The awardee shall submit to the

Engineer, for information and review, the preconstruction data within 30 days

after the execution of the contract. Until the items listed below are received and

found acceptable by the Engineer, the Contractor shall not commence work

unless otherwise authorized to do so in writing and subject to such conditions set

by the Engineer. No progress payment will be made to the Contractor until the

Engineer acknowledges, in writing, receipt of the following preconstruction data

submittals acceptable to the Engineer:

(1) List of the Superintendent and other Supervisory Personnel.

(2) Name of person(s) authorized to sign for the Contractor.

(3) Work Schedule.

8-2

(4) Initial Progress Schedule (See Section 8.6 Progress

Schedules).

(5) Water Pollution and Siltation Control Submittals.

(6) Solid Waste Disposal form.

(7) Tax Rates.

(8) Insurance Rates.

(9) Certificate of Insurance, satisfactory to the Engineer,

indicating that the Contractor has in place all insurance coverage

required by the contract documents.

(10) Schedule of Values.

(11) List of suppliers.

(12) Shop drawings and material data sheets.

(13) Other submittals as directed by the Engineer.

8.4 Character and Proficiency of Workers. The Contractor shall at all

times provide adequate supervision and sufficient labor and equipment for

prosecuting the work to full completion in the manner and within the time required

by the contract. The superintendent and all other representatives of the

Contractor shall act in a civil and honest manner in all dealings with the Engineer,

all other State officials and representatives, and the public in connection with the

work.

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All workers shall possess the proper license, certification, job

classification, skill, training, and experience necessary to properly perform the

work assigned to them.

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The Engineer may direct the removal of any worker(s) who does not carry

out the assigned work in a proper and skillful manner or who is disrespectful,

intemperate, violent, or disorderly. The worker shall be removed forthwith by the

Contractor and will not work again without the written permission of the Engineer.

8.5 Contract Time.

(a) Calculation of Contract Time. When the contract time is on a

working day basis, the total contract time allowed for the performance of

the work will be the number of working days shown in the contract plus

any additional working days authorized in writing as provided hereinafter.

The count of elapsed working days to be charged against contract time,

will begin from the date of notice to proceed and will continue

consecutively to the date of substantial completion. When multiple shifts

are used to perform the work, the State will not consider the hours worked

over the normal eight working hours per day or night as an additional

working day.

Whenever the Engineer provides the Contractor with a written

statement of elapsed working days, the Contractor may file a written

protest with the Engineer setting forth, in detail, the basis of the protest,

not later then seven days after receiving the statement. Failure of the

Contractor to file such a protest shall be deemed an acceptance by the

Contractor of the correctness of the statement.

When the contract is on a calendar day basis, the total contract time

allowed for the performance of the work will be the number of days shown

in the contract plus any additional days authorized in writing as provided

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hereinafter. The count of elapsed days to be charged against contract

time will begin from the date of notice to proceed and will continue

consecutively to the date of substantial completion. The Engineer will

exclude days elapsing between the orders of the Engineer to suspend

work and resume work for suspensions not the fault of the Contractor.

(b) Modifications of Contract Time. Whenever the Contractor

believes that an extension of contract time is justified, the Contractor shall

serve written notice on the Engineer not more than five working days after

the occurrence of the event that causes a delay or justifies a contract time

extension. The Engineer may grant an extension of contract time for any

discrete part of the work affected by the delay(s) while, at the same time,

keeping the existing completion date in place or modifying it separately for

the remainder of the work not affected by the delay. Contract time may be

adjusted for the following reasons or events but only if and to the extent

the critical path has been affected:

(1) Changes in the Work, Additional Work, and Delays

Caused by the State. If the Contractor believes that an

extension of time is justified on account of any act or omission by

the State, and is not adequately provided for in a field order or

change order, it must request the additional time as provided

above. At the request of the Engineer, the Contractor must show

how the critical path will be affected and must also support the time

extension request with schedules as well as statements from its

subcontractors, suppliers, or manufacturers, as necessary. Claims

for compensation for any altered or additional work will be

determined pursuant to Section 4.2 Changes.

Additional time to perform the extra work, to the extent such

work affects the critical path, will be added to the time allowed in

the contract for the completion of the project, or the Engineer may

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limit the extension to only the portion of the project work affected by

the delay, without regard to the date the change directive was

issued, even if the contract completion date has passed. A change

requiring additional time issued after contract time has expired will

not constitute an excusal or waiver of pre-existing Contractor delay.

(2) Delay for Permits. For delays in the routine application

and processing time required to obtain necessary permits, including

permits to be obtained from State agencies, on the condition that

the delay is not caused by the Contractor and, provided that, as

soon as the delay occurs, the Contractor notifies the Engineer in

writing that the permits are not available. Time extensions will be

the exclusive relief granted and no additional compensation will be

paid the Contractor on account of such delays.

(3) Delays Beyond Contractor’s Control. For delays

caused by acts of God, a public enemy, fire, inclement weather

days or adverse conditions resulting therefrom, earthquakes,

floods, epidemics, quarantine restrictions, labor disputes impacting

the Contractor or the State, freight embargoes, and other reasons

beyond the Contractor’s control, the Contractor may be granted an

extension of time provided that:

(A) In the written notice of delay to the Engineer, the

Contractor describes possible effects on the completion date

of the contract. The description of delays shall:

(i) State specifically the reason or reasons for the

delay and fully explain in a detailed chronology how

the delay affects the critical path.

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(ii) Include copies of pertinent documentation to

support the time extension request.

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(iii) Cite the anticipated period of delay and the time

extension requested.

(iv) State either that the above circumstances have

been cleared and normal working conditions restored

as of a certain day or that the above circumstances

will continue to prevent completion of the project.

(B) The Contractor shall notify the Engineer in writing

when the delay ends. Time extensions will be the exclusive

relief granted and no additional compensation will be paid

the Contractor for such delays.

(4) Delays in Delivery of Materials or Equipment. For

delays in delivery of materials or equipment, which occur as a result

of unforeseeable causes beyond the control and without fault of the

Contractor, its subcontractor(s), or supplier(s), time extensions shall

be the exclusive relief granted and no additional compensation will

be paid the Contractor on account of such delay. The delay shall

not exceed the difference between the originally scheduled delivery

date and the actual delivery date. The Contractor may be granted

an extension of time provided that it complies with the following

procedures:

(A) The Contractor’s written notice to the Engineer must

describe the delays and state the effect such delays may

have on the critical path.

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(B) The Contractor, if requested, must submit to the

Engineer, within five days after a firm delivery date for the

material and equipment is established, a written statement

regarding the delay. The Contractor must justify the delay

as follows:

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(i) State specifically all reasons for the delay.

Explain in a detailed chronology the effect of the delay

on the critical path.

(ii) Submit copies of purchase order(s), factory

invoice(s), bill(s) of lading, shipping manifest(s),

delivery tag(s), and any other documents to support

the time extension request.

(iii) Cite the start and end date of the delay and the

time extension requested.

(5) Delays for Suspension of Work. When the performance

of the work is totally suspended for one or more days (calendar or

working days, as appropriate) by order of the Engineer in

accordance with Subsections 8.10(a)(1), 8.10(a)(2), 8.10(a)(3) or

8.10(a)(5), the number of days from the effective date of the

Engineer’s order to suspend operations to the effective date of the

Engineer’s order to resume operations shall not be counted as

contract time, and the contract completion date will be adjusted.

During periods of partial suspensions of the work, the Contractor

will be granted a time extension only if the partial suspension

affects the critical path. If the Contractor believes that an extension

of time is justified for a partial suspension of work, it must request

the extension in writing at least five working days before the partial

suspension will affect the critical path operation(s) in progress. The

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Contractor must show how the critical path was affected based on

the status of the work and must also support its claim, if requested,

with statements from its subcontractors. A suspension of work will

not constitute a waiver of pre-existing Contractor delay.

(6) Contractor Caused Delays. No time extension will be

granted under the following circumstances:

(A) Delays within the Contractor’s control in performing

the work caused by the Contractor, subcontractor, supplier,

or any combination thereof.

(B) Delays within the Contractor’s control in arrival of

materials and equipment caused by the Contractor,

subcontractor, supplier, or any combination thereof, in

ordering, fabricating, and delivery.

critical path.

(D) Delays caused by the failure of the Contractor to

make submittals in a timely manner for review and

acceptance by the Engineer, such as, but not limited to,

shop drawings, descriptive sheets, material samples, and

color samples except as covered in Subsection 8.5(b)(3) and

8.5(b)(4).

(E) Delays caused by the failure to submit sufficient

information and data in a timely manner in the proper form in

order to obtain necessary permits related to the work.

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(F) Failure to follow the procedure within the time allowed

by contract to request a time extension.

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(G) Failure of the Contractor to provide evidence sufficient

to support the time extension request.

(7) Reduction in Time. If the State deletes or modifies any

portion of the work, an appropriate reduction of contract time may

be made in accordance with Section 4.2 Changes.

108.05

8.6 Progress Schedules.

(a) Forms of Schedule. All schedules shall be submitted using the

specific computer program designated in the bid documents or as directed

by the Engineer.

Schedule submittals shall be as follows:

(1) For Contracts $2,000,000 or Less or For Contract Time

100 Working Days or 140 Calendar Days or less. For

contracts of $2,000,000 or less or for contract time of 100 working

days or 140 calendar days or less, the progress schedule will be a

Time Scaled Logic Diagram (TSLD). The Contractor shall submit a

TSLD submittal package and it shall meet the following

requirements and have these essential and distinctive elements:

(A) The major features of work shown in the chronological

order in which the Contractor proposes to work that feature

of work and its location on the project. The schedule shall

account for normal inclement weather, unusual soil, or other

conditions that may influence the progress of the work,

schedules, and coordination required by any utility, off or on

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site fabrications, and other pertinent factors that relate to

progress.

(B) All features listed or not listed in the contract

documents that the Contractor considers a controlling factor

for the timely completion of the contract work.

events for each feature, and its interrelationship and

interdependencies in time and logic to other features in order

to complete the project.

(D) The total anticipated time necessary to complete work

required by the contract.

(E) Identification of the critical path i.e. a chronological

listing of critical intermediate dates or time periods for

features or milestones or phases that can affect timely

completion of the project.

(F) Major activities related to the location on the project.

(G) Non-construction activities, such as submittal and

acceptance periods for shop drawings and material,

procurement, testing, fabrication, mobilization, and

demobilization or order dates of long lead material.

(H) Set schedule logic for out of sequence activities to

retain logic. In addition, open ends shall be non-critical.

(I) Show target bars for all activities.

8-11

(J) Vertical and horizontal sight lines both major and

minor shall be used as well as a separator line between

groups. The Engineer will determine frequency and style.

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(K) The file name, print date, revision number, data, and

project title and number shall be included in the title block.

(L) Have columns with the appropriate data in them for

activity ID, description, original duration, remaining duration,

early start, early finish, total float, percent complete, and

resources. The resource column shall list who is responsible

for the work to be done in the activity. These columns shall

be to the left of the bar chart.

(2) For Contracts More Than $2,000,000 or For Contract

Time of More Than 100 Working Days or 140 Calendar Days.

For contracts which have a contract amount more than $2,000,000

or contract time of more than 100 working days or 140 calendar

days, the Contractor shall submit a Timed-Scaled Logic Diagram

(TSLD) and it shall meet the following requirements and have these

essential and distinctive elements:

(A) The information and requirements listed in (1) above.

(B) Additional reports and graphics available from the

software as requested by the Engineer.

the Contractor and subcontractor's operations.

(D) The time scaled schematic shall be on a calendar or

working days basis. What will be used shall be determined

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by how the contract keeps track of time. It will be the same.

Plot the critical calendar dates anticipated.

(E) Breakdown of activity, such as forming, placing

reinforcing steel, concrete pouring and curing, and stripping

in concrete construction. Indicate location of work to be

done in such detail that it would be easily determined where

work would be occurring within approximately 200 feet.

(F) Latest start and finish dates for critical path activities.

(G) Identify responsible subcontractor, supplier, and

others for their respective activity.

(H) No individual activity shall have duration of more than

20 calendar days unless requested and approved by the

Engineer.

(I) All activities shall have work breakdown structure

codes and activity codes. The activity codes shall have

coding that incorporates information for phase, location, who

is responsible for doing work, type of operation, and activity

description.

(J) Incorporate all physical access and availability

restraints.

(b) Inspection and Testing. All schedules shall provide reasonable

time and opportunity for the Engineer to inspect and test each work

activity.

8-13

of and the Engineer’s receipt of any progress schedule shall not be

deemed an agreement to modify any terms or conditions of the contract.

Any modifications to the contract terms and conditions that appear in or

may be inferred from an acceptable schedule will not be valid or

enforceable unless and until the Engineer exercises discretion to issue an

appropriate change order. Nor shall any submittal or receipt imply the

Engineer’s approval of the schedule’s breakdown, its individual elements,

or any critical path that may be shown; nor shall it obligate the State to

make its personnel available outside normal working hours or the working

hours established by the Contract in order to accommodate such

schedule. The Contractor has the risk of all elements (whether or not

shown) of the schedule and its execution. No claim for additional

compensation, time, or both, shall be made by the Contractor or

recognized by the Engineer for delays during any period for which an

acceptable progress schedule or an updated progress schedule, as

required by Subsection 8.6(e) Contractor’s Continuing Schedule Submittal

Requirements, had not been submitted. Any acceptance or approval of

the schedule shall be for general format only and shall not be deemed an

agreement by the State that the construction means, methods, and

resources shown on the schedule will result in work that conforms to the

contract requirements or that the sequences or durations indicated are

feasible.

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(d) Initial Progress Schedule. The Contractor shall submit an initial

progress schedule. The initial progress schedule shall consist of the

following:

(1) Four sets of the TSLD schedule.

(2) All the software files and data to re-create the TSLD in a

computerized software format as specified by the Engineer.

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(3) A listing of equipment that is anticipated to be used on the

project, including the type, size, make, year of manufacture, and all

information necessary to identify the equipment in the Rental Rate

Blue Book for Construction Equipment.

(4) An anticipated manpower requirement graph plotting

contract time and total manpower requirement. This may be

superimposed over the payment graph.

(5) A Method Statement that is a detailed narrative describing

the work to be done and the method by which the work shall be

accomplished for each major activity.

(A) A major activity is an activity that meets any of the

following criteria:

(i) Has a duration longer than five days;

(ii) Is a milestone activity;

(iii) Is a contract item that exceeds $10,000 on the

Proposal Schedule;

(iv) Is a critical path activity; or

(v) Is an activity designated as such by the

Engineer.

(B) Each Method Statement shall include the following

items needed to fulfill the schedule:

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(i) Quantity, type, make, and model of equipment; 475

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(ii) The manpower to do the work, specifying

worker classification; and

(iii) The production rate per eight hour day, or the

working hours established by the contract documents

needed to meet the time indicated on the schedule. If

the production rate is not for eight hours, the number

of working hours shall be indicated.

(6) Two sets of color time-scaled project evaluation and review

technique charts (“PERT”) using the activity box template of Logic –

Early Start or such other template designated by the Engineer.

If the contract documents establish a sequence or order for the

work, the initial progress schedule shall conform to such sequence or

order.

(e) Contractor’s Continuing Schedule Submittal Requirements.

After the acceptance of the initial TSLD and when construction starts, the

Contractor shall submit four plotted progress schedules, two PERT charts,

and reports on all construction activities every two weeks (bi-weekly).

This scheduled bi-weekly submittal shall also include an updated version

of the project schedule in a computerized software format as specified by

the Engineer. The submittal shall have all the information needed to re-

create that time period’s TSLD plot and reports. The bi-weekly submittal

shall include, but is not limited to, an update of activities based on actual

durations, all new activities, and any changes in duration or start or finish

dates of any activity.

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The Contractor shall submit with every update, in report form

acceptable to the Engineer, a list of changes to the progress schedule

since the previous schedule submittal. The Engineer may change the

frequency of the submittal requirements but may not require a submittal of

the schedule to be more than once a week. The Engineer may decrease

the frequency of the submittal of the bi-weekly schedule.

The Contractor shall submit updates of the anticipated work

completion graph, equipment listing, manpower requirement graph, or

method statement when requested by the Engineer. The Contractor shall

submit such updates within 4 calendar days from the date of the request

by the Engineer.

The Engineer may withhold progress payments until the Contractor

is in compliance with all schedule update requirements.

(f) Float. All float appearing on a schedule is a shared commodity.

Float does not belong to or exist for the exclusive use or benefit of either

the State or the Contractor. The State or the Contractor has the

opportunity to use available float until it is depleted. Float has no

monetary value.

(g) Scheduled Meetings. The Contractor shall meet with the

Engineer to review the progress schedule on a periodic basis as

determined by the Engineer. The Contractor shall have someone

attending the meeting that can answer all questions on the TSLD and

other schedule related submittals.

(h) Accelerated Schedule; Early Completion. If the Contractor

submits an accelerated schedule (shorter than the contract time), the

Engineer’s review and acceptance of an accelerated schedule does not

constitute an agreement or obligation by the State to modify the contract

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time or completion date. The Contractor is solely responsible for and shall

accept all risks and any delays, other than those that can be directly and

solely attributable to the State, that may occur during the work until the

contract completion date. The contract time or completion date is

established for the benefit of the State and cannot be changed without an

appropriate change order or final acceptance by the State. The State may

accept the work before the completion date set by the contract but is not

obligated to do so.

If the TSLD indicates an early completion of the project, the

Contractor shall, upon submittal of the schedule, cooperate with the

Engineer in explaining how it will be achieved. In addition, the Contractor

shall submit the above explanation in writing which shall include the

State’s part, if any, in achieving the early completion date. Early

completion of the project shall not rely on changes to the Contract

Documents unless approved by the Engineer.

(i) Contractor Responsibilities. The Contractor shall promptly

respond to any inquiries from the Engineer regarding any schedule

submission. The Contractor shall adjust the schedule to address

directives from the Engineer and shall resubmit the TSLD package to the

Engineer until the Engineer finds it acceptable.

The Contractor shall perform the work in accordance with the

submitted TSLD. The Engineer may require the Contractor to provide

additional work forces and equipment to bring the progress of the work

into conformance with the TSLD at no increase in contract price or

contract time whenever the Engineer determines that the progress of the

work does not insure completion within the specified contract time.

108.06

8.7 Weekly Meeting. In addition to the bi-weekly schedule meetings, the

Contractor shall be av

ailable to meet once a week with the Engineer, at the time

8-18

and place as determined by the Engineer, to discuss the work and its progress

including, but not limited to, the progress of the project, potential problems,

coordination of work, submittals, erosion control reports, etc. The Contractor’s

personnel attending shall have the authority to make decisions and answer

questions.

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The Contractor shall bring to weekly meetings a detailed work schedule

showing the next three weeks’ work. The number of copies of the detailed work

schedule to be submitted will be determined by the Engineer. The three-week

schedule is in addition to the TSLD and shall in no way be considered as a

substitute for the TSLD or vice versa. The three-week schedule shall show:

(a) All construction events, traffic control, and BMP related activities in

such detail that the Engineer will be able to determine at what location and

type of work will be done for any day for the next three weeks. This is for

the State to use to plan its manpower requirements for that time period.

(b) The duration of all events and delays.

makes it clearly distinguishable from other paths and is acceptable to the

Engineer.

(d) Critical submittals and requests for information (RFI’s).

(e) The project title, project number, date created, period the schedule

covers, Contractor’s name, and creator of the schedule on each page.

Two days prior to each weekly meeting, the Contractor shall submit a list

of outstanding submittals, RFIs, and issues that require discussion.

8-19

8.8 Liquidated Damages for Failure to Complete the Work or Portions of

the Work on Time. The actual amount of damages resulting from the

Contractor’s failure to complete the contract in a timely manner is difficult to

accurately determine. Therefore, the amount of such damages shall be

liquidated damages as set forth herein and in the Special Provisions, Invitation

for Bid, or Request for Proposal. The State may, at its discretion, deduct the

amount from monies due or that may become due under the contract.

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When the Contractor fails to reach substantial completion of the work for

which liquidated damages are specified, within the time or times fixed in the

contract or any extension thereof, in addition to all other remedies for breach that

may be available to the State, the Contractor shall pay liquidated damages to the

State, in the amount specified in the contract documents.

If a contract time extension is granted for part but not all of the project, the

Engineer may make a reasonable apportionment of the liquidated damages

amount among the different completion dates.

(a) Liquidated Damages Upon Termination. If the State

terminates on account of Contractor’s default, liquidated damages may be

charged against the defaulting Contractor and its surety until substantial

completion of work.

(b) Liquidated Damages for Failure to Complete the Punchlist.

The Contractor shall complete the work on any punchlist created after

substantial completion within the contract time or any extension thereof.

When the Contractor fails to complete the work on such punchlist

within the contract time or any extension thereof, the Contractor shall pay

liquidated damages to the State of 20 percent of the amount of liquidated

damages established for failure to substantially complete the work within

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the contract time. Liquidated damages shall not be assessed for the

period between:

(1) Substantial completion of the work and the time the punchlist

is delivered to the Contractor,

(2) The date of the completion of punchlist as determined by the

Engineer and the date of the successful final inspection, and

(3) The date of the inspection that results in final acceptance

and the receipt by the Contractor of the written notice of the final

acceptance.

Unenforceable. In the event a court of competent jurisdiction holds that

any liquidated damages assessed pursuant to this contract are

unenforceable, the State will be entitled to recover its actual damages for

Contractor’s failure to complete the work or any designated portion of the

work within the time set by the contract.

108.08

8.9 Fines and Other Penalties. In addition to any compensatory remedies

available to the State arising out of the Contractor’s failure to complete the

work by the contract completion date including, but not limited to,

liquidated damages, the Contractor shall reimburse the State for any fines,

penalties, citations, or fees levied by a third party against the State arising

from the late completion of the work.

8.10 Suspen

sion of Work.

(a) Suspension of Work. The Engineer may, by written order,

suspend the performance of the work, either in whole or in part, for such

periods as the Engineer may deem necessary. Unless instructed

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otherwise by the Engineer, the Contractor shall be responsible for the

maintenance and protection of the work during the period of suspension.

Suspension may be ordered for any cause, including, but not limited to:

(1) Unanticipated weather or soil conditions considered

unsuitable for prosecution of the work.

(2) Whenever a redesign that may affect the work is deemed

necessary by the Engineer.

(3) Unacceptable noise or dust arising from the construction,

even if it does not violate any law, regulation, or permit.

(4) Failure on the part of the Contractor to:

(A) Correct conditions unsafe for the general public or for

the workers.

(B) Carry out orders given by the Engineer.

provisions of the contract.

(D) Provide adequate supervision on the jobsite.

(5) The convenience of the State.

(b) Partial and Total Suspension. Suspension of work on some but

not all items of work shall be considered a “partial suspension”.

Suspension of work on all items shall be considered “total suspension”.

The period of suspension shall be computed from the date set out in the

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written order for work to cease until the date of the order for work to

resume.

is ordered by the Engineer, in writing as provided herein, to suspend work

under the contract for the reasons specified in Subsections 8.10(a)(1),

8.10(a)(2), 8.10(a)(3) or 8.10(a)(5) of the “Suspension of Work” paragraph,

the Contractor may be reimbursed for actual direct costs incurred on work

at the jobsite, as authorized in writing by the Engineer, including costs

expended for the maintenance and protection of the work. An allowance

of 5 percent for indirect categories of delay costs will be paid on any

reimbursed direct costs, including extended branch and home-office

overhead and delay impact costs. No allowance will be made for

anticipated profits. Payment for equipment which is ordered to standby

during such suspension of work shall be made as described in Subsection

9.6(h) Idle and Standby Equipment.

(d) Cost Adjustment. If the performance of all or part of the work is

suspended for reasons beyond the control of the Contractor, an

adjustment shall be made for any increase in cost of performance of this

contract (excluding profit) necessarily caused by such suspension, and the

contract modified in writing accordingly.

However, no adjustment to the contract price shall be made for any

suspension, delay, or interruption:

(1) For weather related conditions;

(2) To the extent that performance would have been so

suspended, delayed, or interrupted by any other cause, including

the fault or negligence of the Contractor; or

8-23

(3) For which an adjustment is provided for or excluded under

any other provision of this Contract.

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(e) Claims for Adjustment. Any adjustment in contract price made

shall be determined in accordance with Sections 4.2 Changes and 4.6

Methods of Price Adjustment.

Any claims for such compensation shall be filed in writing with the

Engineer within 30 days after the date of the order to resume work or the

claim will not be considered. The claim shall conform to the requirements

of Subsection 7.16(d) Making of a Claim. The Engineer will take the claim

under consideration, may make such investigations as are deemed

necessary, and will be the sole judge as to the equitability of the claim.

The Engineer’s decision will be final.

(f) No Adjustment. No provision of this clause shall entitle the

Contractor to any adjustments for delays due to failure of its surety, the

cancellation or expiration of any insurance coverage required by the

contract documents, for suspensions made at the request of the

Contractor, for any delay required under the contract, or for suspensions,

either partial or whole, made by the Engineer under Subsection 8.10(a)(4)

of the “Suspension of Work” paragraph.

108.10

8.11 Termination of Contract for Cause.

(a) Default. If the Contractor refuses or fails to perform the work, or

any separable part thereof, with such diligence as will assure its

completion within the time specified in this contract, or any extension

thereof, or commits any other material breach of this contract, and further

fails within seven days after receipt of written notice from the Engineer to

commence and continue correction of the refusal or failure with diligence

and promptness, the Engineer may, by written notice to the Contractor,

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declare the Contractor in breach and terminate the Contractor’s right to

proceed with the work or the part of the work as to which there has been

delay or other breach of contract. In such event, the State may take over

the work, perform the same to completion, by contract or otherwise, and

may take possession of, and utilize in completing the work, the materials,

appliances, and plants as may be on the site of the work and necessary

therefore. Whether or not the Contractor’s right to proceed with the work

is terminated, the Contractor and the Contractor’s sureties shall be liable

for any damage to the State resulting from the Contractor’s refusal or

failure to complete the work within the specified time.

(b) Additional Rights and Remedies. The rights and remedies of

the State provided in this contract are in addition to any other rights and

remedies provided by law.

State, together with the cost of completing the work under contract, will be

deducted from any monies due or which would or might have become due

to the Contractor had it been allowed to complete the work under the

contract. If such expense exceeds the sum which would have been

payable under the contract, then the Contractor and the surety shall be

liable and shall pay the State the amount of the excess.

In case of termination, the Engineer will limit any payment to the

Contractor to the part of the contract satisfactorily completed at the time of

termination. Payment will not be made until the work has satisfactorily

been completed and all required documents, including the tax clearance

required by Section 9.11 Final Payment, are submitted by the Contractor.

Termination shall not relieve the Contractor or Surety from liability for

liquidated damages.

8-25

(d) Erroneous Termination for Cause. If, after notice of termination

of the Contractor’s right to proceed under this section, it is determined for

any reason that good cause did not exist to allow the State to terminate as

provided herein, the rights and obligations of the parties shall be the same

as and the relief afforded the Contractor shall be limited to the provisions

contained in Section 8.12 Termination for Convenience.

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8.12 Termination For Convenience.

(a) Terminations. The Director may, when the interests of the State

so require, terminate this contract in whole or in part, for the convenience

of the State. The Director will give written notice of the termination to the

Contractor specifying the part of the contract terminated and when

termination becomes effective.

(b) Contractor's Obligations. The Contractor shall incur no further

obligations in connection with the terminated work, and on the date set in

the notice of termination, the Contractor shall stop work to the extent

specified. The Contractor shall also terminate outstanding orders and

subcontracts as they relate to the terminated work. The Contractor shall

settle the liabilities and claims arising out of the termination of

subcontracts and orders connected with the terminated work subject to the

State’s approval. The Engineer may direct the Contractor to assign the

Contractor's right, title, and interest under terminated orders or

subcontracts to the State. The Contractor must still complete the work not

terminated by the notice of termination and may incur obligations as

necessary to do so.

the Contractor to transfer title and to deliver to the State in the manner and

to the extent directed by the Engineer, the following:

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(1) Any completed work. 822

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(2) Any partially completed construction, goods, materials, parts,

tools, dies, jigs, fixtures, drawings, information, and contract rights

(hereinafter called "construction material") that the Contractor has

specifically produced or specially acquired for the performance of

the terminated part of this contract.

(3) The Contractor shall protect and preserve all property in the

possession of the Contractor in which the State has an interest. If

the Engineer does not elect to retain any such property, the

Contractor shall use its best efforts to sell such property and

construction materials for the State’s account in accordance with

the standards of Chapter 490:2-706, H.R.S.

(d) Compensation.

(1) The Contractor shall submit a termination claim specifying

the amounts due because of the termination for convenience

together with cost or pricing data, submitted to the extent required

by Subchapter 15, Chapter 3-122, H.A.R. If the Contractor fails to

file a termination claim within one year from the effective date of

termination, the Engineer may pay the Contractor, if at all, an

amount set in accordance with Subsection 8.12(d)(3).

(2) The Engineer and the Contractor may agree to a settlement

provided the Contractor has filed a termination claim supported by

cost or pricing data submitted as required and that the settlement

does not exceed the total contract price plus settlement costs

reduced by payments previously made by the State; the proceeds

of any sales of construction, supplies, and construction materials

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under Subsection 8.12(c)(3); and the proportionate contract price of

the work not terminated.

(3) Absent complete agreement, the Engineer will pay the

Contractor the following amounts less any payments previously

made under the contract:

(A) The cost of all contract work performed prior to the

effective date of the notice of termination plus a 5 percent

markup on the actual direct costs, including amounts paid to

subcontractor, less amounts paid or to be paid for completed

portions of such work. However, if it appears that the

Contractor would have sustained a loss if the entire contract

would have been completed, no markup shall be allowed or

included, and the amount of compensation shall be reduced

to reflect the anticipated rate of loss. No anticipated profit or

consequential damage will be due or paid.

(B) Subcontractors shall be paid a markup of 10 percent

on their direct job costs incurred to the date of termination.

No anticipated profit or consequential damage will be due or

paid to any subcontractor. These costs must not include

payments made to the Contractor for subcontract work

during the contract period.

exceed the total contract price reduced by the amount of any

sales of construction supplies and construction materials.

(4) Cost claimed, agreed to, or established by the State shall be

in accordance with Chapter 3-123, H.A.R.

8-28

8.13 Pre-Final and Final Inspections. 885

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The procedures described herein shall apply for the entire project if there

is a single completion date or to each part of the project for which there is a

separate completion date. When there are two or more separate completion

dates, “project” as used herein shall refer to each part of the work for which there

is a separate completion date. Inspection and acceptance procedures shall be

applied as described herein for each part of the project for which there is a

separate completion date.

(a) Inspection Requirements. Before the Engineer undertakes a

final inspection of any work, a pre-final inspection must first be conducted.

The Contractor shall notify the Engineer that the work has reached

substantial completion and is ready for pre-final inspection.

(b) Pre-Final Inspection. Before notifying the Engineer that the

work has reached substantial completion, the Contractor shall inspect the

project and test all installed items with all of its subcontractors as

appropriate. The Contractor shall also submit the following documents as

applicable to the work:

(1) All written guarantees required by the contract.

(2) Complete weekly certified payroll records for the Contractor

and Subcontractors.

(3) Certificate of Plumbing and Electrical Inspection.

(4) Certificate of Building Occupancy.

(5) Certificate of Soil and Wood Treatments.

8-29

(6) Certificate of Water System Chlorination. 917

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(7) Certificate of Elevator Inspection and Boiler and Pressure

Pipe Inspection.

(8) Maintenance Service Contract and two copies of a list of all

equipment installed.

(9) Any other final items and submittals required by the contract

documents.

the Contractor shall notify the Engineer in writing that the project has

reached substantial completion and is ready for pre-final inspection.

The Engineer will then make a preliminary determination as to

whether or not the project is substantially complete and ready for pre-final

inspection. The Engineer may, in writing, postpone until after the pre-final

inspection the Contractor’s submittal of any of the items listed in

Subsection 8.13(b) Pre-Final Inspection, herein, if in the Engineer’s

discretion it is in the interest of the State to do so.

If, in the opinion of the Engineer, the project is not substantially

complete, the Engineer will provide the Contractor a punchlist of specific

deficiencies in writing which must be corrected or finished before the work

will be ready for a pre-final inspection. The Engineer may add to or

otherwise modify this punchlist from time to time. The Contractor shall

take immediate action to correct the deficiencies and must repeat all steps

described above, including written notification that the work is ready for

pre-final inspection.

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After the Engineer is satisfied that the project appears substantially

complete, a final inspection shall be scheduled within ten working days

after receipt of the Contractor’s latest letter of notification that the project is

ready for final inspection.

If, as a result of the pre-final inspection, the Engineer determines

the work is not substantially complete, the Engineer will inform the

Contractor in writing as to specific deficiencies which must be corrected

before the work will be ready for another pre-final inspection. If the

Engineer finds the work is substantially complete but finds deficiencies

that must be corrected before the work is ready for final inspection, the

Engineer will prepare, in writing, and deliver to the Contractor a punchlist

describing such deficiencies.

At any time before final acceptance, the Engineer may revoke the

determination of substantial completion if the Engineer finds that it was not

warranted and will notify the Contractor in writing the reasons therefore

together with a description of the deficiencies negating the declaration.

When the date of substantial completion has been determined by

the State, liquidated damages for the failure to complete the punchlist, if

due to the State, will be assessed pursuant to Subsection 8.8(b)

Liquidated Damages for Failure to Complete the Punchlist.

(d) Punchlist; Clean Up and Final Inspection. Upon receiving a

punchlist after substantial completion, the Contractor shall promptly

devote all required time, labor, equipment, materials, and incidentals to

correct and remedy all punchlist deficiencies. The Engineer may add to or

otherwise modify this punchlist until final acceptance of the project.

Before final inspection of the work, the Contractor shall clean all

ground, occupied by the Contractor in connection with the work, of all

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rubbish, excess materials, temporary structures, and equipment; shall

remove all graffiti and defacement of the work; and shall restore all

property and facilities that may have been damaged or affected during the

course of the work to the original condition, unless otherwise directed by

the Engineer. The worksite shall be left in a neat and presentable

condition to the satisfaction of the Engineer.

Final inspection will occur within ten working days after the

Contractor notifies the Engineer in writing that all punchlist deficiencies

remaining after the pre-final inspection have been completed and the

Engineer concurs. If the Engineer determines that deficiencies still remain

at the final inspection, the work will not be accepted, and the Engineer will

notify the Contractor, in writing, of the deficiencies which shall be

corrected and the steps above repeated.

If the Contractor fails to correct the deficiencies and complete the

work by the established or agreed date, the State may correct the

deficiencies by whatever method it deems appropriate and deduct the cost

from any payments due the Contractor.

8.14 Final Acceptance.

The procedures described herein shall apply for the entire project if there

is a single completion date or to each part of the project for which there is a

separate completion date. When there are two or more separate completion

dates, “project” as used herein shall refer to each part of the work for which there

is a separate completion date. Inspection and acceptance procedures shall be

applied as described herein for each part of the project for which there is a

separate completion date.

When the Engineer finds that the project has been satisfactorily completed

in compliance with the contract, the Engineer will notify the Contractor in writing

8-32

of the project’s completion and acceptance. The final acceptance date shall

determine end of contract time, liquidated damages for failure to complete the

punchlist, and commencement of all guaranty periods subject to Section 8.16

Contractor’s Responsibility for Work; Risk of Loss or Damage.

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8.15 Use of Structure or Improvement. The State has the right to use the

structure, equipment, improvement, or any part thereof, at any time after it is

considered by the Engineer as available, whether or not substantial completion

has been reached. In the event that the structure, equipment, or any part thereof

is used by the State before final acceptance, the Contractor is not relieved of its

responsibility to protect and preserve all the work until final acceptance.

108.15

8.16 Contractor’s Responsibility for Work; Risk of Loss or Damage.

Until the written notice of final acceptance has been received, the Contractor

shall take every precaution against loss or damage to any part of the work from

any cause whatsoever, whether arising from the performance or from the non-

performance of the work. The Contractor shall rebuild, repair, restore, and make

good all loss or damage to any portion of the work resulting from any cause

before its receipt of the written notice of final acceptance and shall bear the risk

and expense thereof.

The risk of loss or damage to the work from any hazard or occurrence that

may or may not be covered by a builder’s risk policy is that of the Contractor and

Surety, unless such risk of loss is placed elsewhere by express language in the

contract documents.

8.17 Guarantee of Work.

(1) Regardless of, and in addition to, any manufacturers’ warranties, all

work and equipment shall be guaranteed by the Contractor against

defects in materials, equipment, or workmanship for one year from the

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date of final acceptance or as otherwise specified in the contract

documents.

(2) When the Engineer determines that repairs or replacements of any

guaranteed work and equipment is necessary due to materials,

equipment, or workmanship which are inferior, defective, or not in

accordance with the terms of the contract, the Contractor shall, at no

increase in contract price or contract time, and within five working days of

receipt of written notice from the State, commence to do all of the

following:

(A) Correct all noted defects and make replacements, as

directed by the Engineer, in the equipment and work.

(B) Repair or replace to new or pre-existing condition any

damages resulting from such defective materials and equipment or

installation thereof.

(3) The State will be entitled to the benefit of all manufacturers’ and

installers’ warranties that extend beyond the terms of the Contractor’s

guaranty regardless of whether or not such extended warranty is required

by the contract documents. The Contractor shall prepare and submit all

documents required by the providers of such warranties to make them

effective and submit copies of such documents to the Engineer. If an

available extended warranty cannot be transferred or assigned to the

State as the ultimate user, the Contractor shall notify the Engineer who

may direct that the warranted items be acquired in the name of the State

as purchaser.

(4) If a defect is discovered during a guarantee period, all repairs and

corrections to the defective items when corrected shall be guaranteed for

a new duration equal to the original full guarantee period. The running of

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the guarantee period shall be suspended for all other work affected by any

defect. The guarantee period for all other work affected by any such

defect shall restart for its remaining duration upon confirmation by the

Engineer that the deficiencies have been repaired or remedied.

(5) Nothing in this section is intended to limit or affect the State’s rights

and remedies arising from the discovery of latent defects in the work after

the expiration of any guarantee period.

8.18 No Waiver of Contract Obligations. None of the provisions of this

contract shall be considered waived by the State unless such waiver is given in

writing by the State. No such waiver shall be a waiver of any past or future

default, breach or modification of any of the terms, provisions, conditions, or

covenants of the contract unless expressly stipulated in such waiver.

The following will not operate or be considered as a waiver of any portion

of the contract, or any power herein reserved, or any right to damages provided

herein or by law:

(1) Any payment for, or acceptance of, the whole or any part of the

work.

(2) Any extension of time.

(3) Any possession taken by the Engineer.

A waiver of any notice requirement or of any noncompliance with the

contract will not be held to be a waiver of any other notice requirement or any

other noncompliance with the contract.

8.19 Final Settlement of Contract.

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(a) Closing Requirements. The contract will be considered settled

after the project acceptance date or, after the last acceptance date if there

is more than one acceptance date for different portions of the project, and

when the following items have been satisfactorily submitted, where

applicable:

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(1) Two accepted final as-built drawings as specified in

Subsection 5.8(a) Drawings and Special Provisions.

(2) All written guarantees required by the contract.

(3) Complete and certified weekly payrolls for the Contractor

and its subcontractors.

(4) Certificate of plumbing and electrical inspection.

(5) Certificate of building occupancy.

(6) Certificate for soil treatment and wood treatment.

(7) Certificate of water system chlorination.

(8) Certificate of elevator inspection and boiler and pressure

pipe installation.

(9) Certificates of Compliance for employment of State of Hawaii

residents by Contractor and applicable subcontractors per Section

7.2 Employment of State of Hawaii Residents.

(10) Tax clearance.

(11) All other documents required by the Contract or by law.

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(b) Failure to Meet Closing Requirements. The Contractor shall

meet the applicable closing requirements within 60 days from the date of

Project Acceptance or the agreed to Punchlist complete date. Should the

Contractor fail to comply with these requirements, the Engineer may

terminate the contract for cause.

END OF ARTICLE VIII

ARTICLE IX - MEASUREMENT AND PAYMENT 1

9.1 Schedule of Values. After the award of contract, the Contractor shall

submit a schedule of prices (Schedule of Values) for each of the various items of

work paid for by a lump sum price. For projects involving more than a single

building, structure, or facility, the breakdown cost shall reflect a separate

schedule of prices for the various items of work for each building, structure, and

facility. The sum of the prices submitted for the various items must equal the

lump sum bid in the bidder’s proposal. This schedule of values will be subject to

acceptance by the Engineer who may require the bidder to submit another or

several other schedules if, in the Engineer’s opinion, the prices are unbalanced

or not sufficiently detailed. The Engineer is not bound by any cost proposal

schedule in the bid documents in determining if the schedule of values is

sufficiently detailed or balanced; the accepted schedule of values shall

supersede any bid proposal schedule. This schedule of values (1) shall be used

for the purpose of determining the value of monthly payments due the Contractor

for work installed complete in place and (2) may be used as the basis for

determining cost and credit of added or deleted items of work, respectively.

As a condition of payment, the Contractor shall estimate, at the close of

each month, the percentage of work completed under each of the various

construction items during such month and submit the estimate to the Engineer for

review and approval. The Contractor shall be paid the percentage of the price,

as approved by the Engineer, established for each item less any permissible

retention.

9.2 Payment is not Acceptance. No payment made to the Contractor prior

to final acc

eptance is an acceptance by the State of the work or the portion of the

work related to the payment; nor does a progress payment affect the State’s

rights to inspect, test, or reject the work. A progress payment does not relieve

the Contractor of the risk of loss or damage to the work for which payment is

made. The Contractor still maintains the responsibility and duty with respect to

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the work for which payment is made, to protect against loss or damage, to insure

the work, to insure and indemnify the State against claims, to maintain the

required surety bonds, and to protect the work and the public.

9.3 Measurement of Quantities.

(a) Measurements; Disputes. The work will be measured in

accordance with United States standard measure or as otherwise stated in

this contract. Final measurement shall be verified or determined by the

Engineer. If the Contractor has a dispute about the measurement of the

work, the Contractor must demonstrate the existence of an error by actual

physical measurement before the work has progressed in a manner that

would make a proper verification of the contested measurements

impractical. If the Contractor’s claim cannot be physically verified, the

Engineer’s measurements will be deemed as correct.

(b) Methodology. Longitudinal measurements for area

computations of the various surfaces will be made in the horizontal

projection of the actual surface. Transverse measurements for area

computations will be the neat dimensions shown in the contract

documents or the horizontal projection of the actual surface or as ordered

in writing by the Engineer. No deductions in measurement for unit price

payment purposes will be made for fixtures or structures in place having a

combined area of nine square feet or less.

Work will be measured to the pay limits shown in the contract documents.

Measurement of items that are measured by the linear foot will be

made parallel to the base or foundation.

Every vehicle hauling material specified for measurement and

payment by “loose measurement” or “measurement by vehicle” shall be

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made available to the Engineer for verification of its load volume or

capacity. A vehicle’s full load shall be its water level capacity. The

Engineer may direct that any load in a vehicle be leveled for purposes of

measurement or payment.

The Contractor shall notify the Engineer 24 hours before hauling

material payment for which is based upon weight. Unless otherwise

directed by the Engineer, the truck used to haul material paid by weight

shall be weighed with no load on a properly certified scale before each

load is added.

The following items will not be paid for and such quantities will be

deducted from the final total measured quantities:

(1) Quantities of material wasted or disposed of in a manner not

called for under the contract;

(2) Rejected material, including material rejected after it has

been placed by reason of the failure to conform to the provisions of

the contract;

(3) Material not unloaded from the transporting vehicle;

(4) Material placed outside of the lines indicated on the plans or

given by the Engineer; or

(5) Material remaining on hand after completion of the work.

No compensation will be allowed for hauling any above-described

material to or from the site.

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manufactured items by gage, unit weight, or section dimensions, such

identification will be nominal weights or dimensions. Standard

manufactured items shall be such items as fence, wire, plates, rolled

shapes, and pipe conduit. Unless specific allowable tolerances are set by

the contract documents, tolerances generally accepted or established by

the industries involved in the manufacture of the product are acceptable.

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A station, when used as a definition or term of measurement, is 100

linear feet.

The term "gage" refers to the U. S. steel wire gage or U.S standard

gage for uncoated hot and cold rolled sheets.

The term "ton" will mean the short ton of 2,000 pounds avoirdupois

weight. The Contractor shall weigh materials measured or proportioned

by weight on properly certified scales.

9.4 Full Compensation; Changes. The contract price is full compensation

for the work.

Change order work as described in Section 4.5 Contract Change Orders,

shall be paid for in the manner established by the related change order.

The total price adjustment as specified in the field order or the change

order shall be considered full compensation for all materials, labor, insurance,

bonds, fees, taxes, equipment use or rental, profit and all overhead, and any

delay impact costs.

9.5 Allowances for Overhead and Profit. In determining the cost or credit

to the State resulting from a change, the allowances for all overhead, including

extended overhead resulting from adjustments to contract time (including home

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office, branch office, and field overhead and related delay impact costs) and

profit combined, shall not exceed the percentages set forth below:

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(1) 20 percent of the direct cost for any work performed by the

Contractor’s own labor force.

(2) 20 percent of the direct cost for any work performed by each

subcontractor’s own labor force.

(3) For the Contractor or any subcontractor for work performed

by their respective subcontractor or tier subcontractor, 10 percent

of the amount due to the performing subcontractor or tier

subcontractor.

(a) Allowance Percentages. The allowance percentages will be

applied to all credits and to the net increase of direct costs where work is

added and deleted by the changes.

(b) Allowed Markup. Not more than three markup allowance line

item additions not exceeding the maximum percentage noted in

Subsections 9.5(1), 9.5(2), and 9.5(3) are allowed for profit and overhead,

regardless of the number of tier subcontractors.

9.6 Force Account Provisions and Compensation. The contract

documents may provide that certain work be compensated by force account

method, or the Contractor may be directed to provide changes compensable

under the price adjustment provision Subsection 4.6(a)(5). When performing

force account work, the Contractor and its subcontractor(s) shall comply with the

provisions of this section. Compensation by force account will not alter any

rights, duties, and obligations under the contract. The Contractor shall follow

these procedures:

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(a) The Contractor’s Duties; Engineer’s Authority. The

Contractor has the duty to perform the work payable under this provision

efficiently and economically. When the Engineer determines the

Contractor is working inefficiently or uneconomically, the Engineer may

direct the Contractor to stop, modify its means and methods, or the

Engineer may specifically direct means and methods of doing the force

account work. The Engineer will not pay for work that is unacceptable or

for the cost of correcting work that fails to conform to contract

requirements.

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(b) Records. The Contractor shall maintain accurate daily records of

all allowable costs. The records, as well as all work and costs, are subject

to review, audit, and approval by the Engineer.

The Contractor shall use the State’s Force Account Form and

obtain the Inspector’s signature thereon each day the Contractor performs

force account work. As the condition of payment of the force account

work, the Contractor shall submit an original and two copies of the force

account records, together with invoices, receipts, and other backup data to

the Engineer.

machinery, trucks, insurance, taxes and bonds, overhead, profit, and

reimbursable expenses all as described herein. Other costs or items not

covered under this section are subject to the Engineer’s written approval.

(d) Labor. Allowable costs include Contractor and subcontractor(s)

costs for hourly worker wages, and fringe benefits required by

employment contracts, plus overhead and profit markup. The Contractor

shall provide the information on the force account form regarding each

worker and supervisor.

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Overtime compensation, per diem costs, and other reimbursable

costs are not allowed unless approved in writing by the Engineer prior to

incurring the expense. Overhead and profit markup will not be allowed for

such costs. Costs and time for employees to travel to and from the project

site are not allowed unless approved in writing by the Engineer prior to

performing the work.

(e) Materials. Contractor and subcontractor(s) are allowed the

actual cost of materials (excluding financing costs) delivered and

incorporated into the work plus overhead and markup. The Contractor

shall provide descriptions and quantities of materials, prices, and

extensions and costs to transport materials if not included in the prices of

the materials. The Contractor shall provide legible receipts and invoices

for all materials used and transportation charges. The Contractor shall

promptly inform the Engineer of any early payment discounts that are

available, as well as scheduled or anticipated price increases.

If materials used are not specifically purchased for the force

account work but are taken from the Contractor’s stock, then in lieu of the

invoices, the Contractor shall certify that the materials were taken from

stock and that the amount claimed represents the actual cost to the

Contractor.

(f) Equipment and Machinery. For equipment and machinery

necessary and actually used (other than small tools defined under

Subsection 9.6(i) Small Tools) that are owned or leased or rented, the

Contractor is allowed costs for use of equipment or machinery at a per

hour rate.

Hourly rates shall include costs for fuel, oil, lubricants, supplies,

necessary attachments, repairs, maintenance, tire wear, depreciation,

storage, and other incidentals. The allowable hourly rates shall be the

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Contractor’s actual customary charges, e.g., shop rates, yard rates, or

rental cost as verified by Contractor’s records or invoices, provided that

the maximum rate shall not exceed the current rates published in the Blue

Book, effective at the time of equipment use. Blue Book hourly rates are

calculated based upon the following formula:

Hourly Rates = [(Blue Book Monthly Rate ÷ 176) X (Regional

Adjustment Factor) X (Rate Adjustment Table Factor)] + Hourly

Operating Cost

Equipment and machinery costs are not subject to any additional

overhead and profit markup.

Equipment and machinery shall be in good condition and suitable

for the purpose for which the equipment and machinery are to be used.

For equipment and machinery that is not listed in the Blue Book,

the Contractor shall obtain the Engineer’s written approval of the monthly

and hourly rates prior to using the equipment or machinery. If there is no

agreement on the rates, the Engineer will set the rate. Engineer may,

prior to the use of rental equipment, approve in writing rates that are

higher than the published rates, if justified by special circumstance.

(g) Equipment Charges. The rental period for equipment and

machinery brought to the work site, specifically for the force account work,

begins when the equipment or machinery reaches the work site, continues

each day the equipment or machinery is at the site, and terminates at the

end of the day when the equipment or machinery is no longer needed for

the force account work or when the equipment or machinery leaves the

project site, whichever comes first.

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Rental times for all other equipment and machinery used for force

account are paid for the time actually used. Prior to the performance of

work, the Engineer must approve any hours of operation in excess of 8

hours in any one day. No additional premium beyond the normal rates

used will be paid for equipment or machinery over 8 hours per day or 40

hours per week.

The total of all force account rental charges minus the operating

cost accrued over the duration of the contract for a specific item of

equipment or machinery (same make, model, or kind of equipment or

machinery doing the same kind of force account work) shall not exceed

the replacement cost of that equipment. The Contractor shall provide the

cost of replacement to the Engineer prior to using the equipment or

machinery. If the Engineer does not agree with the replacement cost

provided by the Contractor or if the Contractor does not provide the

replacement cost, the Engineer shall set the replacement cost. The

Contractor may contest the replacement cost set by the Engineer in

accordance with Section 7.16 Disputes and Claims. The Engineer will pay

only the hourly operating cost should the replacement cost be reached.

This provision shall not apply to the accrued rental charges for barricades

and other traffic control devices.

Rental times are not allowed or credited for any time during which

equipment or machinery is inoperative due to its breakdown.

(h) Idle and Standby Equipment. In the event the equipment or

machinery must standby due to work being delayed or halted by reasons

beyond the Contractor’s control, the rental rate shall be: Standby/Idle

Hourly Rental Rates = [(Blue Book Monthly Rate ÷ 176) X (Regional

Adjustment Factor) X (Rate Adjustment Table Factor)] X 0.50 or the

Contractor’s shop rates or yard rates, whichever is lower. The Engineer

may order the demobilization of standby/idle equipment or may direct that

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equipment that was located at the jobsite at the start of the force account

work cease to be used for force account work.

Payment will be made only when:

(1) The Contractor has notified the Engineer in writing at the

beginning of the standby/idle period that compensation is expected

for the individual piece of equipment or machinery.

(2) The Contractor submits to the Engineer on each Monday a

list of the equipment or machinery that was idle the past week.

This list shall have all information necessary to determine the

hourly rental rate and the date and time it became idle and the

reason for the equipment or machinery being idle. The list shall

also have the date and time when any maintenance was performed

on the equipment or machinery during the period the equipment

was idle.

With the written approval of the Engineer, the Contractor may store

the idle equipment or machinery on the project site for its own

convenience at no increase in contract price or contract time.

(i) Small Tools. Contractor and subcontractor(s) are not allowed

costs for depreciation or use of small tools, even if the small tools are

consumed by use. Small tools are individual pieces of equipment, tools,

or other items having a purchase price for that new item or equivalent

replacement value of $500.

(j) Trucks and Utility Items. The Contractor’s cost for utility

vehicles and other items such as pickup trucks, vans, flatbed trucks,

storage trailers, containers, etc. that are already in use or planned for use

on the entire project will not be allowed except for the time that, in the

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opinion of the Engineer, they: (1) are directly and necessarily used for the

performance of the force account work; and (2) the use of such items has

not been included within the Contractor’s total project overhead costs.

Allowable rental rates for trucks not owned or leased by the

Contractor shall not exceed the listed rates in the Blue Book or those

established under the Hawaii State Public Utilities Commission, whichever

is less.

The Contractor shall provide points of origin, destinations, mileage,

and hourly rates for each travel segment.

Payment for use of trucks shall be in accordance with the

provisions of Subsection 9.6(f) Equipment and Machinery.

(k) Transportation, Mobilization, and Demobilization. The

Contractor shall obtain the Engineer’s approval of the location from which

the equipment or machinery will be moved or transported.

Where the equipment or machinery must be transported to the work

site, the Contractor will be paid the reasonable costs to mobilize and

demobilize, load and unload, and transport the equipment or machinery to

and from its original location to the work site or, upon completion of the

work, to another location, whichever cost is less.

The cost to transport the equipment or machinery shall not exceed

the rates established by the Hawaii State Public Utilities Commission. If

the rates are nonexistent, then the rates will be determined by the

Engineer based upon the prevailing rates charged by established haulers

within the locale.

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If the Contractor uses the equipment or machinery for other than

force account work, the costs to mobilize and transport may be disallowed

or prorated depending on the non-force account work.

(l) Subcontractors. Subcontractor’s costs are allowed plus a

markup limited under Section 9.5 Allowances for Overhead and Profit and

applicable State excise tax. Costs for insurance and taxes shall comply

with the provisions of Subsections 9.6(m) Insurance and Taxes.

(m) Insurance and Taxes. Contractor and subcontractor(s) are

allowed actual additional costs attributable exclusively to the force account

work for insurance premiums for property damage, liability and workers

compensation insurance, State unemployment contributions, Federal

unemployment taxes, Social Security and Medicare taxes, plus an

allowable markup of 6 percent.

(n) Other Costs. Any other costs or items not covered under this

Section 9.6 Force Account Provisions and Compensation are subject to

the Engineer’s written approval and conditions.

(o) Reimbursable Expenses. All costs are subject to Section 3-123,

H.A.R., Cost Principles. Reimbursable expenses are subject to the

Engineer’s written approval and conditions. Overhead and profit markups

are not permitted on reimbursable expenses.

Costs incurred by the Contractor for air transportation and

associated ground transportation and per diem or subsistence allowance

costs (lodging and meals) are allowed as reimbursable expenses when

the project conditions require special skilled workers not readily available

on the island of the project site. Air transportation shall not exceed the

actual cost of coach class airfare. Whenever possible, Contractor shall

take advantage of advance purchase discount air fares. Ground

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transportation shall not exceed the actual cost of renting a compact-sized

vehicle. Rental vehicles shall be shared among Contractor’s employees

to the greatest extent possible. Insurance coverage is not a reimbursable

expense.

Per diem or subsistence costs (lodging and meals) shall not exceed

the applicable daily authorized rates for inter-island or out-of-state travel

for State government employees. No per diem is allowed for leaving and

returning the same day. The Contractor shall obtain prior written approval

from the Engineer for other conditions.

(p) State Excise Tax and Bond. The Contractor will be reimbursed

for State excise taxes paid or payable on the allowable force account

work. The State shall pay increased premiums only on the bonds the

Contract requires the Contractor to maintain for the work. No additional

premium costs shall be paid for bonds not required by the Contract or for

bonds acquired or maintained by any subcontractor.

The actual bond premium, not to exceed 1 percent is allowed on

items covered by Subsections 9.6(d) Labor, 9.6(e) Materials, 9.6(f)

Equipment and Machinery, 9.6(j) Trucks and Utility Items, 9.6(l)

Subcontractors, 9.6(m) Insurance and Taxes, 9.6(n) Other Costs, and

9.6(o) Reimbursable Expenses when applicable. When the original

contract price includes a bond premium for an allowance item to be paid

by force account, no additional bond premium for such allowance items

will be paid until the allowance amount is exhausted.

9.7 Assignment of Payments. The Contractor may not assign its right to

receive monies due under the contract without the written consent of the State

and the surety.

9.8 Progress Payments.

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(a) Monthly Payment. The Contractor shall be paid progress

payments monthly upon approval of a monthly payment estimate by the

Engineer. The monthly payment estimate shall be based upon the value

of the items of work that appear to be satisfactorily completed, including

the value of materials incorporated in the work. Materials not yet

incorporated in the work will be paid in accordance with Subsection 9.8(b)

Payment for Material On Hand. Monthly payments will be approximate

only and shall be subject to correction before or in the final payment.

Monthly shall mean the period between the first day of the month to the

last day of the month. The Engineer and the Contractor may agree on a

different monthly period.

The Engineer may withhold all or any part of a monthly payment

due to the Contractor, without interest accruing on account of:

(1) The failure of the Contractor to meet a requirement of law or

the contract that is a condition precedent of payment.

(2) The exercise of any right granted the Engineer to withhold

money due the Contractor established by law or the contract.

No monthly payment will be made if the total value of the work done

since the last estimate is less than $2,000.

(b) Payment for Material On Hand. The Contractor will be paid the

manufacturer’s, supplier’s, distributor’s, or fabricator’s invoice cost of

materials not yet incorporated into the work on the following conditions:

(1) If acceptance of submittals of such materials are required by

the contract documents, the submittal processes have been

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completed and the materials for which payment is requested

conform to the accepted submittal.

(2) The materials shall be stored and handled in accordance

with Section 5.14 Storage and Handling of Materials and

Equipment.

(3) Payments shall be made only if:

(A) All materials are acceptable to the Engineer.

(B) Contractor provides legible documentary evidence

that all materials for which payment is requested have been

paid in full.

value to the benefit of the State against theft, fire, damages

incurred in transportation to the site, and other hazards.

(D) In case of materials stored off the project site, the

materials are clearly marked and identified for the project

and are not commingled with other materials not to be

incorporated into the project.

The payment authorized in this subsection will not exceed the

contract price of that item. Payment for the material under this subsection

is not final acceptance of the material nor shall any such payment shift the

risk of loss or damage from the Contractor to the State.

Payment for the material does not relieve the Contractor of its

obligations to furnish material acceptable to the Engineer and to properly

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incorporate the material into the project in accordance with the contract

documents.

The State will not make material payment on living or perishable

plant material or any material that may deteriorate or is not insurable.

9.9 Prompt Payment.

(a) Contractor’s Duty.

(1) When any subcontractor has met all the terms and

conditions of the subcontract, and there are no bona fide disputes,

the Contractor, upon receiving payment from the State for the work,

shall make full payment to the subcontractor of all monies due

within 10 days from the receipt of an invoice from the

subcontractor. Upon final payment to the Contractor, full payment

to the subcontractor shall include all retainage amounts due. This

payment obligation applies to payments made to and payable to all

tiers of subcontractors.

(2) Bona Fide Disputes. The existence of a bona fide

dispute with a subcontractor or material supplier shall not release

the Contractor of its prompt payment obligations as to all sums due

that are not directly affected by such disputes.

The following are examples of ‘bona fide disputes’:

(A) When work done by a subcontractor is paid for and

later found to be non-conforming or unacceptable and the

amount previously paid by the State is deducted from the

Contractor’s subsequent payment request.

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(B) When the Contractor and subcontractor disagree as

to whether the subcontractor has failed to promptly correct

any deficiencies or non-conforming work.

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to whether the subcontractor has failed to fulfill any material

term, condition, or requirement of its subcontract.

(b) Filing Of Non-Payment Complaint And Verification Of Its

Validity. Subcontractors and material suppliers may file, in writing, a

complaint with the Engineer regarding non-payment by the Contractor.

Such a complaint must state:

(1) The amount past due for work performed and already paid

for by the State;

(2) The date the work was completed;

(3) The date payment was due from the Contractor;

(4) That all the terms, conditions, or requirements of its

subcontract have been met; and

(5) That no bona fide dispute over its performance exists.

The Engineer will investigate, hear and receive evidence, and

determine the validity of the complaint, and the Engineer's decision on the

matter shall be final. It is not the Engineer’s responsibility to determine

how a bona fide dispute should be resolved.

Contractor failed to make prompt payment required under the subcontract

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or these contract documents to a subcontractor or material supplier with

whom the Contractor has no bona fide dispute within the time period

specified above, the Engineer shall inform the Contractor of the findings

and direct the Contractor to make payment accordingly.

If the Contractor does not act promptly, the Engineer may do any or

all of the following including:

(1) Withholding from future progress payment amounts to cover

any sums paid to the Contractor for work performed by a

subcontractor if the State finds that the subcontractor’s complaint

regarding non-payment by the Contractor has merit.

(2) Refer the matter to the Contractor Licensing Board for

appropriate action.

(3) Initiate a petition for debarment.

(d) Penalty. The Contractor will be subject to a penalty of one and

one-half percent per month upon outstanding amounts due that were not

timely paid by the Contractor under the following conditions.

Where a subcontractor has provided evidence to the Contractor of

satisfactorily completing all work under their subcontract and has provided

a properly documented final payment request, and:

(1) Has provided to the contractor an acceptable

performance and payment bond for the project executed by a surety

company authorized to do business in the State; or

(2) The following has occurred:

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(A) A period of ninety days after the day on which

the last of the labor was done or performed and the

last of the material was furnished or supplied has

elapsed without written notice of a claim given to

contractor and the surety, as provided for in section

103D-324; and

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(B) The subcontractor has provided to the

Contractor an acceptable release of retainage bond,

executed by a surety company authorized to do

business in the State, in an amount of not more than

two times the amount being retained or withheld by

the Contractor; any other bond acceptable to the

Contractor; or any other form of mutually acceptable

collateral,

then, all sums retained or withheld from a subcontractor and otherwise

due to the subcontractor for satisfactory performance under the

subcontract shall be paid by the Engineer to the Contractor and

subsequently, upon receipt from the Engineer by the Contractor, to the

subcontractor within ten days after receipt of payment from the Engineer.

The penalty may be withheld from future payment due to the

Contractor if the Contractor was the responsible party. If a Contractor has

a violation three or more times within two years of the first violation, the

Contractor shall be referred by the Engineer to the Contractors License

Board for action under Section 444-17(14), HRS.

(e) Documented Subcontractor Final Payment Request. A

properly documented final payment request from a subcontractor shall

include:

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(1) Substantiation of the amounts requested; 604

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(2) A certification by the subcontractor, to the best of the

subcontractor’s knowledge and belief, that:

(A) The amounts requested are only for performance in

accordance with the specifications, terms, and conditions of

the subcontract;

(B) The subcontractor has made payments due to its

subcontractors and suppliers from previous payments

received under the subcontract and will make timely

payments from the proceeds of the payment covered by the

certification, in accordance with their subcontract

agreements and the requirements of this section; and

that the subcontractor intends to withhold or retain from a

subcontractor or supplier in accordance with the terms and

conditions of their subcontract.

(3) The submission of documentation confirming that all other

terms and conditions required under the subcontract agreement

have been fully satisfied.

The Engineer shall return any defective final payment request,

along with a statement identifying the defect, to the Contractor within

seven days after receipt.

(f) Additional Subcontract Terms and Conditions.

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This section shall not be construed to impair the right of a

contractor or a subcontractor, at any tier, to negotiate and to include in

their respective subcontracts provisions that provide for additional terms

and conditions that are requested to be met before the subcontractor shall

be entitled to receive final payment, provided that any such payments

withheld shall be withheld by the Engineer.

9.10 Retainage; Withholding of Payment for Unsatisfactory Progress.

(a) Retainage. If the Engineer finds that satisfactory progress is

being made, an amount equivalent to 5 percent of the first 50 percent of

the whole will be deducted from the total of the amounts ascertained as

payable and will be retained by the Department until after completion of

the entire contract in an acceptable manner. After 50 percent of the work

has been completed, the Department shall make any of the remaining

progress payments in full provided progress is satisfactory.

(b) Withholding of Payment for Unsatisfactory Progress. If the

Contractor is progressing or performing the work unsatisfactorily, the

Engineer, upon written notice to the Contractor, may withhold sums not

exceeding 5 percent of the total contract price from subsequent progress

payments.

The Engineer may deduct, from any amounts due to the Contractor,

sums assessed as liquidated damages as well as any other charges

against the Contractor allowed by law or the contract documents.

If the Contractor refuses or fails to comply with the laws and

regulations dealing with equal employment opportunity, affirmative action,

non-discrimination, labor compliance, implementing and maintaining the

BMP and NPDES standards, and disadvantaged business enterprise

requirements, the Engineer, at its sole discretion and upon written notice

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to the Contractor, may withhold any or all of the monthly progress

payments that are due or to become due.

With the approval of the State, the Contractor may withdraw, from

time to time, the whole or any portion of the sum withheld after endorsing

over to the State and depositing with the State any general obligation

bond of the State or its political subdivisions suitable to the State. But in

no case will the bond have a face value less than the value of the amount

to be withdrawn. The State may sell the bond and use monies directly

withheld from progress payments or the final payment.

9.11 Final Payment. The Engineer will prepare the final estimate when the

State accepts the project in accordance with Section 8.14 Final Acceptance.

Prior progress estimates and payments shall be subject to correction in the final

estimate and payment.

Upon final settlement, the State will pay the entire sum due, less all

previous payments and less any sums that may have been or may be deducted

in accordance with the provisions of the contract, upon receipt of the following

documents in a format acceptable to the Engineer:

(1) Consent of the surety to payment of the final estimate and

certificate of release from the surety.

(2) Evidence by affidavit that the Contractor fully paid the debts

resulting from the contract.

(3) A current “Certificate of Vendor Compliance” issued by the Hawaii

Compliance Express (HCE). The Certificate of Vendor Compliance is used

to certify the Contractor’s compliance with (a) Section 103D-328, HRS (for

all contracts $25,000 or more) which requires a current tax clearance

certificate issued by the Hawaii State Department of Taxation and the

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Internal Revenue Service; (b) Chapters 383, 386, 392, and 393, HRS; and

that compliance is current prior to the issuance of final payment.

Contractors are advised that non-compliance status will result in the

rejection of the submission and the final payment being withheld until

compliance is attained.

Sums necessary to meet the claims of any governmental agencies may be

withheld from the sums due the Contractor until said claims have been fully and

completely discharged or otherwise satisfied.

9.12 Records, Accounts, And Documents. The Contractor shall retain and

preserve its bid documents and estimates, contract records, accounts, data, and

documents of the Contractor and its subcontractors, including all records

regarding the employment of State of Hawaii residents , for not less than three

years from the date of final payment. If any lawsuit or claim relating to the work

is pending before the expiration of the three year period, the Contractor shall

retain the documents until it is resolved. The Contractor shall provide written

notice to the Engineer not less than 30 days of its intent to dispose of the

contract records. The Engineer may direct, in writing, the Contractor to retain

such records for an additional period of time at no cost to the State. The

documents shall be available for inspection and auditing by the State and other

government agencies at the offices of the Contractor and its subcontractors upon

24 hours notice to the Contractor. The Contractor shall cooperate during such

inspection and auditing of the documents at no cost to the State.

END OF ARTICLE IX.