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Advice for Construction Contracts

Do Don't
Consult with your attorney early in the process, and include a proposed contract with your RFP documents. Accept a low bid if you believe that it is irresponsible or non-responsive.
Consider consulting a professional regarding project risks, including property and personal injury insurance, and additional protection, as well as indemnity provisions, to protect the District's interests. Acquire a site before investigating surface, subsurface, and environmental conditions and reviewing Department of Education and Department of Environmental Services requirements.
Consider utilizing contractual devices to limit the District's risk, including "no damages for delay" provisions, "liquidated damages" provisions, and site investigation provisions, in case the project is delayed for reasons beyond the District's control. Allow the contractor to substitute the subcontractors' payment and performance bonds for its own payment and performance bonds. It's much easier for the District to make a claim on the contractor's surety than to pursue several subcontractors.
Define your architect's site visit responsibilities. How many times will they visit? What are they expected to do? How and when will they report to the District? Assume that the architect and contractor will have adequate types and amounts of insurance to cover your project.
Either develop your own payment and performance bonds or require the contractor to submit bonds in the penal amount of the contract and a form acceptable to the District as a condition to signing the contract. Attempt to shorten the construction or commissioning schedules once they have been established in the contract. You may become liable for the contractor's extra cost of accelerating its work, and you may sacrifice quality in the process.
Exercise care and diligence in deciding which architect and contractor to hire. Check references thoroughly and carefully. Don't be afraid to hire professionals to help you evaluate bids. Authorize the architect or contractor to begin work before contract terms are finalized and signed by all necessary parties.
Make sure that you understand the terms and conditions of the payment and performance bonds, including provisions relating to notice, limits on recovery, and the impact of change orders. Delay in giving the contractor access to the site after they have been authorized to proceed.
Request the architect and contractor to submit proof of insurance in amounts acceptable to the District, and to maintain that insurance for the duration of the project. Eliminate contingency in an attempt to save money. Changes are inevitable and the District will be better served if they can be evaluated and made early in the construction process. Corrections made after the project is complete are nearly always more expensive.
Require that all change orders be in writing on a District-specified form with appropriate backup documentation and all costs and schedule impacts. The change order form should include language precluding any subsequent claim by the contractor regarding the indirect impact of the change. Make sure that your clerk of the works or construction manager strictly observes these requirements. Interfere with the contractor's work after construction commences. Keep site visits by curious members of the public to a minimum, or agree on their number and timing of visits ahead of time with the contractor.
Require the architect, contractor, clerk of the works/construction manager to maintain all documents relating to the project for at least three years after final completion. Release performance bonds until the architect certifies in writing that the project meets all specifications and the contractor has delivered as-built drawings.
Require the contractor to submit the professional qualifications of key construction management personnel (project manager, site construction manager, commissioning manager, project controls manager, etc.) for the District's review, and reserve the right to request the removal of any person deemed to be unqualified. Require a meeting with the contractor's key management personnel responsible for the project before you sign the contract. Take too long to make decisions on proposed change orders. Make sure you have good decision-making processes in place, and make sure those processes are followed.
Understand how the architect and contractor's price is determined and how the cost of change orders will be determined. Utilize standard form contracts without reviewing them with your attorney.
Understand the District's contractual responsibilities, and be prepared to perform them. Waive contractual notice and documentation requirements for change orders or other items.

Advice About School Construction Contracts
Provided by Christopher D. Hawkins, Esq., Newmarket, NH

New Hampshire Department of Education
101 Pleasant Street | Concord, NH | 03301-3494
Telephone: (603) 271-3494 | TDD Access: Relay NH 711