SECTION 108: PROSECUTION AND PROGRESS
108.1 Subcontracting
Any individual, partnership, firm, corporation, or joint ventur e performing Work on the Project that is not an employee of the Contractor is a Subcontr actor unless otherwise stated in the Contract. A Supplier or Fabricator is not a Subcontractor unless Work is being performed within the Project limits. The Contractor shall perform with its own organization at least 40.0% of the Work based on the Total Bid Amount. The phrase, “its own organization” in cludes only workers employed and paid directly, inclusive of employees who are employed by a lease agreement Acceptable to the Department and Equipment owned or rented or without oper ators and does not include employees or Equipment of the Subcontractor, assignee or agent of the Subcontractor. The Contractor is solely responsible and liable for the performance of all Work or any act by its Subcontractors, Truckers, and Supp liers on the Project. Liabil ity of the Contractor and the Contractor’s Surety under the Contract and the Contract Bonds s hall not be waived or diminished by subcontracting or any other assignment of interes t. The Contractor shall submit to the Project Manager a request to Subcontract on the current Department approved form. The form must be concurred t o by the Department before the subcontracted Work begins. Unless otherwise approved by th e Project Manager, the request to Subcontract shall be submitted no later than two (2) Working Days before the Subcontract Work is scheduled to begin. The Contractor shall n ot circumvent this requirement by placing a Subcontractor’s employees on its payroll. If the Contractor does not perform at least 40.0% of the Work with its own organization requests for Subcontractor approval will be rejected. The Department will treat a person or group generall y operating as an independent Contractor, as independent Contractors for the purposes of this Section. An independent Contractor is a person who is paid for Work by the Contractor w ho is not the Contractor’s employee and is not performing Work within the Project limits s uch as the Contractor’s attorney or accountant. The Contractor is responsible for ensuring that its Subcontract ors are prequalified by the Department and are also duly licensed for the Work to be perfor med on the Project, are registered with all of the state agencies as is required to do business in New Mexico and to perform Work on Public Works Proj ects including the New Mexico Taxation and Revenue Department and the New Mexico Department of Workforce Solutions or successor agencies, and are in compliance with all applicable state and federal law s and regulations including the New Mexico Public Works Minimum Wage Act. The Contractor shall comply with the New Mexico Subcontractor Fair Practices Act to the extent it is app licable to the Project. The Contractor shall update its list of Subcontractors and Supplier s submitted at the Pre- Construction Conference as the Work progresses. A Trucker is not a Subcontractor unless the Contractor is using the Trucker to meet the DBE goal associated with the Project. A Trucker is an individu al, partnership, firm, corporation, or joint venture that transports Materials to and from the Project and does not perform Work within the Project Limits. Transportation of Mate rials within the Project Limits is Work performed by the Contractor or a Subcontractor. Transport ation of Materials on or off the Project site does not require a Subcontract. The Contractor shall not construe the Department’s concurrence as an endorsement of the subcontract, the Subcontractor, or the Subcontractor’s ability to complete the Work in a satisfactory manner. Subcontracting creates no Contract betwee n the Department and the Section 108: Prosecution and Progress Page 69 Subcontractor. The Subcontractor gains no rights, and the Depa rtment Accepts no responsibilities by reason of the Subcontractor’s Contract with the Contractor.
108.1.1 Prompt Payment
The Contractor shall promptly pay its Subcontractors and Suppli ers for satisfactory performance of their Contracts no later than thirty (30) Days a fter receipt of Progress Payment for the Subcontractor’s Work or Supplier’s Materials by the Dep artment. For purpose of this section, a Subcontractor’s and Supplier’s p ortion of the Work is satisfactorily completed when the Department processes a Progre ss Payment per Section 109.8, “Progress Payment.” In no event shall the Contractor an d its Subcontractors fail to promptly pay their Subcontractors and Suppliers the amounts due for undisputed Accepted Work within thirty (30) Days of the Contractor receiving a Prog ress Payment from the Department. The payment by the Department to the Contractor is not a condition precedent for payment by the Contractor to any Subcontractor or Supplier. A zero dollar ($0.00) Progress Payment by the Department does not relieve the Contrac tor from paying the Subcontractor or Supplier for Accepted Work. The Contractor’s failure to make timely or prompt Subcontractor or Supplier payment may result in the Department rejecting the Contractor’s future Bids in accordance with Section 102.5, “Rejection of Bids.” The Contractor’s repeated failure to make timely Subcontractor payment may also lead to Suspension or Debarment in accordance with Section 102.3, “Suspension and Debarment.”
108.2 Notice To Proceed and Pre-Construction Conference
108.2.1 Notice to Proceed
The Department may issue the Notice to Proceed within 30 Days a fter the Department’s Contract execution, unless otherwise agreed to by the parties. The Notice to Proceed will identify the timeframe the Contractor shall begin Work and when Contract Time shall begin. The Contractor’s shall not commence Work without a Notice to Pr oceed.
108.2.2 Pre-Construction Conference
After the issuance of the Notice to Proceed, the Project Manage r will provide written notice to the Contractor of the date, time and location of the Pre-Construction Conference. The Pre-Construction Conference will occur during the timeframe in the Notice to Proceed. If the Contract has ramp up time, the Pre-Construction Conference shall occur before the ramp up time commences. The Contractor shall ensure the Project Superintendent or the i ndividual who executed the Contract attends the Pre-Construction Conference. The Cont ractor’s shall not commence Work without a Pre-Construction Conference and the items above are Accepted by the Department. Commencing Work without a Pre-Construction Confere nce may result in a Non- Conformance. Contract Time shall commence as indicated in the Notice to Proceed and no additional Contract Time will be granted. The Contractor shall provide the following at a minimum of ten (10) Days before Pre- Construction Conference. The Pr e-Construction will not be held until the required items are provided to the Department: 1. Letters of assignment (offi cial capacity) for Project; a. Project Superintendent; b. Company and Project Safety Officer; Section 108: Prosecution and Progress Page 70 c. Traffic Control Supervisor (i nclude current certifications a nd copy of wallet card) 2. A list with samples of autho rized signatures and assignments for Supplemental Agreements (Change Orders), Progress Payments, payrolls and rel ated items; 3. Baseline Schedule; 4. Additions, revisions deletions to the Traffic Control Plan; a. Proposed changes to the Project; b. Potential problems with the construction of the Project; 5. List of Subcontractors and Material suppliers; 6. Lump Sum breakdowns; 7. Weighmasters / Deputy Weighmas ter certifications (must be ma intained throughout the duration of the Project); 8. Progress Payment cutoff date; 9. Company EEO policy statement; 10. Recruitments letters (attachments E-K of the EEO package); 11. Superintendent’s indoctrination letter (attachment D of EEO package); 12. If applicable the on-the-job training letter (Attachment R of the EEO package); a. The trainee classification letter must include the number of trainees to be trained, the training program to be used, the classification of each trainee and the approximate start date; 13. The completed Civil Rights / EEO Pre-Construction Report. Complete and sign the portions that are applicable D epartment Project personnel; 14. Pre-Construction safety questionnaire; 15. VECP form; and, 16. Other items and any other documents required by the Contrac t or as directed in the Project Manager’s notice of Pre Construction.
108.3 Schedule
108.3.1 Baseline Schedule
The Project shall utilize a CPM format as the Baseline Schedule unless otherwise specified in the Contract. The Project Manager will notify the Contractor in writing with in ten (10) Days of the submittal of a Baseline Schedul e if the schedule is “Accepted,” “Accepted as noted,” or is “rejected.” For Baseline Schedules that are “rejected,” the Pr oject Manager shall communicate, in writing, to the Contractor all portions of the schedule that are not in compliance with the Contract requirements. The Contractor shal l, within seven (7) Days of receipt of the reasons for rej ection of the schedule, provide a new Baseline Schedule and all additional information necessary f or the Project Manager to “Ac cept” the Baseline Schedule. The Project Manager will notify the Contractor in writing withi n seven (7) Days of the submittal of the corrected Baseline Schedule if the schedule is “Accepted ,” “Accepted as noted”, or is “rejected.” The Contractor’s failure to provide a timely and A cceptable new Baseline Schedule in response to a rejected schedule waives any Claim the basis o f which would have been documented by an Acceptable Baseline Schedule. Unless otherwise specified in the Contract, the Contractor is w holly and solely responsible for construction m eans, methods or techniques, ther efore the Project Manager’s Section 108: Prosecution and Progress Page 71 review of the Baseline Schedule will be for compliance with the Specifications and Contract requirements. Acceptance by the Project Manager shall not reli eve the Contractor of any of its responsibilities for the accuracy or feasibility of the schedul e. Any Baseline Schedule which exceeds the as let Contract Time may be “Accepted as noted” an d does not revise the Contract Documents, including Contract Time, unless accompanied by a related Change Order. The Department’s Accept ance of a Baseline Schedule that exceeds as let Contract Time shall not operate as a waiver of the Department’s right to assess liquidated damages. A Baseline Schedule that reflects a completion date before the ex piration of Contract Time does not revise the as let Contract Time and will be considered floa t for the exclusive use and benefit of the Department. The Contractor shall not commence W ork until the Project Manager Accepts a Baseline Schedule. The Department will use the Baseline Schedule to measure Projec t performance and for evaluation of changes to the Contract. Failure by the Contract or to include any element of Work required for performance of the Contract shall not excuse the Contractor from completing all Work within the required time.
108.3.1 1 CPM Baseline Schedule
Unless otherwise specified in the Contract the Contractor shall provide a CPM Baseline Schedule which clearly describes the following: 1. Created in the most current version of the scheduling softwa re identified in the Contract; 2. Identifies the Project’s Critical Path; 3. Includes all activities requir ed to complete the Work, inclu ding but not limited to, engineering, surveying, permitting, submittals, approvals, proc urement, fabrication, deliveries, crushing, utility Work and third party Work; 4. Includes milestones, interim Completion Dates, Substantial C ompletion Date, physical Completion Date, and ot her key dates specified in the Contract; 5. Describe activities such that the Work is readily and identi fiable. The activities shall provide the station or location of the Work; 6. Identifies the scheduled early and late start and finish dat es for each activity; 7. Limits activity relationships to finish to start, start to f inish, and finish to finish relationships. Use of leads and lags must be explained in the narrative; 8. Use only contractual date constraints, unless otherwise appr oved by the Project Manager; 9. Defines the Work cal endar for each activity; 10. Narrative at a minimum incl uding the Plan for sequencing th e Project; 11. Defines the duration of each activity; 12. Total float and free fl oat for each activity; 13. Workdays each week; 14. Contractor designated Holidays; 15. Number of shifts and Work hours per Day; 16. Anticipated weather events, based on historical data from t he last seven (7) years; 17. Resource loading that sho ws production rates; and, 18. Cost loading that shall include the projected Project compl etion, measured in dollars and time, on a monthly basis or at each Progress Payment cut-of f date.
108.3.2 Schedule Format
108.3.2 1 CPM Schedule Format
The Project shall utilize a CPM format as the Baseline Schedule unless otherwise specified in the Contract. The Contractor shall prepare and submit one (1) electronic copy and two (2) time-scaled color prints of the CPM Baseline Schedule, updated monthly sche dule, and revised schedules using a Project scheduling software as directed by the Departme nt that includes the following features: 1. Ability to display the schedule as a Gantt chart; 2. Ability to clearly display the Critical Path of scheduled ac tivities apart from the non- critical scheduled activities; 3. Ability to calculate and display total float and free float for each activity; 4. Ability to clearly display the early start, late start, earl y finish and late finish dates for each activity; and, 5. Ability to easily store and transfer the schedule as a file (or files) from one computer to another.
108.3.2 2 Bar Graph Baseline Schedule
If required by the Contract the Contractor shall submit the Bas eline Schedule in bar graph form. The Baseline Schedule shall list Contract features or Wo rk activities in sufficient detail to show a reasonable and workable p lan to complete the Project within the Contract Time. The Contractor shall show the following on the bar graph Baseli ne Schedule: 1. Each Work activity as a bar; 2. Each activity’s planned st art and Completion Dates; 3. Each activity’s estimated co st and percent of Total Bid Amou nt; 4. The overall Project cost; 5. The planned Project Completion Date; 6. The monthly projected percent complete in time and dollars; 7. A plot of the monthly projected percent complete (in dollars ) superimposed on the bar chart; and, 8. Any approved Project sus pensions and time extensions.
108.3.3 Monthly and Revised Schedules
For this Section “schedule” refers to CPM or Bar Graph as requi red by the Contract. The Department considers an updated monthly schedule as an update t o the Accepted Baseline Schedule when no changes in activiti es have occurred except for the progression of planned Work. The Department consider s a revised schedule as a schedul e that modifies the Accepted Baseline Schedule. If A ccepted the revised schedule b ecomes the current Baseline Schedule. Each activity in a monthly or r evised schedule s hall contain th e same information required for the Baseline Schedule. Any updated or revised sch edule that exceeds the as let Contract Time may be Accepted as Noted and does not revise the Contract Documents, including Contract Time, unless accompanied by a related Change Order. The Department’s Acceptance of an updated or revi sed schedule does not operate a s a waiver of the Department’s right to assess liquidated damages. The Contractor shall submit a n updated or revised schedule in a ccordance with
108.3.3 1, “Monthly Schedule Update.” If the Contractor fails to submit an Acceptable
schedule, the Department may take action in accordance with Sec tion 109.8.2, ”Non- Conformance.” The Contractor’s repeated failure to provide Acc eptable monthly or revised schedules may lead to Suspension or Debarment in accordance wit h Section 102.3, “Suspension and Debarment.” Failure to timely provide a monthl y or revised schedule waives any Claim the basis of which would have been documented by an A cceptable monthly or revised schedule. Float generated on Critical Path activities due to the accelera tion of the Contractor’s performance, at the written direction of the Project Manager, s hall be for the exclusive use of the Department; and, float genera ted on Critical Path activitie s due to modification, reduction or elimination of items shall be for the exclusive use of the D epartment. The float generated by a VECP may be split equally for the mutual use of the Depart ment and the Contractor. The Department may grant time extensions only to the extent tha t the activities on the Critical Path of the CPM Base line Schedule in effect at the tim e of the Delay are impacted.
108.3.3 1 Monthly Schedule Update
The Contractor shall submit an updated schedule monthly by the Progress Payment cut- off date.
108.3.3 2 Contractor’s Independent Duty to Provide Schedule Rev isions
If it becomes apparent, or should have become apparent to the C ontractor that the Contractor cannot complete the Work within the Contract Time, t he Contractor shall provide a revised schedule and recovery Plan to the Project Manager withi n five (5) Days. When the Critical Path changes, and when applicable, the Contractor shal l provide a revised schedule and recovery Plan to the Project Manager within five (5) Days. If the Work falls behind schedule, the Contractor shall take su c h s t e p s a s m a y b e necessary to mitigate damages and improve its progress includin g development of a recovery Plan. For an Excusable Delay, Non-compensable Delay, Concurren t Delay, as those terms are identified in Section 109.11, “Compensation for Claims,” th e Contractor shall take all reasonable steps to minimize the impact of the Delay once a Del ay causing event is identified. Failure to do so may result in the rejection of all or part of the Delay Claim. If the Delay cannot be mitigated, the Contractor shall promptly submit either a written request for an extension of the Contract Time pursuant to Secti on 105.19, “Notice of Intent Claim,” and Section 105.20, “Administrative Remedy,” or request approval of a late completion schedule and shall be liable for liquidated damages. For an Inexcusable Delay or a Non-excusable Delay, as those ter ms are identified in Section 109.11, “Compensation for Claims,” the Contractor shall consider as a minimum the following potential schedule mitigat ion techniques: increase t he number of shifts, begin overtime operations, Work extra Days including weekends and Hol idays, or supplement its construction plant and submit, as provided in this Section, a r evised schedule with a proposed recovery Plan, as may be deemed necessary to demonstrate the ma nner in which the agreed rate of progress shall be regained, all at no cost to the Depar tment. The revised schedule shall show Contract Time, Project completi on date and all additional information necessary f or the Project Manager to “Ac cept” the revised schedule. The Contractor’s failure to provide a timely and Acceptable rev ised schedule waives any Claim Section 108: Prosecution and Progress Page 74 the basis of which would have been documented by an Acceptable revised schedule. The Project Manager will provide the C ontractor with a decision in writing within five (5) Days of receiving the revised schedule. The revised schedule shall bec ome the current Accepted Baseline Schedule.
108.3.3 3 Schedule Revisions at Request of Department
If it becomes apparent to the Department that the Contractor ca nnot meet the schedule, the Project Manager may request a schedule revision and recover y plan from the Contractor. The Contractor shall, within five (5) Days of receipt of the re quest, provide a revised schedule. The Project Manager will provide the Contractor with a decision in writing within five (5) Days of receiving the revised schedul e. The revised schedule shall become the current Accepted Baseline Schedule. The Contractor’s failure to provide a timel y and Acceptable response waives any Claim the basis of which would have been documented by an Acceptable revised schedule.
108.3.3 4 Schedule Update and Revision Information
The Contractor’s updated monthly and revised schedules shall co nform to the requirements of Section 108.3.1, “Baseline Schedule” and shall show: 1. Actual start and finish dates of each activity; 2. Remaining duration of activities started but not yet complet ed; 3. Delays and changes resulting from the addition, deletion or revisions to activities due to the issuance of a Change Order, change to an activity du ration, changes to relationship between activiti es or changes to the planned seque nce of Work or the method and manner of its performance; and, 4. Narrative report describing; a. Processes during the month; b. Shifts in the critical activit ies from the previous update; c. Sources of Delay; d. Weather Days; e. Traffic switches; f. Allocations of crews; g. Work completed the previous month; h. Potential problem areas; i. Work planned for the next update period; and, j. Changes made to the schedule. k. The Superintendent shall sign the narrative and provide cert ification statement stating that the progress shown on the schedule update accurate ly represents Work completed through the date indicated.
108.4 Unsatisfactory Progress of Work
The Project Manager will issue a notice of unsatisfactory perfo rmance to the Contractor. The notice shall be sent by certified mail and identify the uns atisfactory performance. The progress of the Work is deemed unsatisfactory when: 1. The dollars earned by the Contractor on the Project are 15% less than the estimated dollars earned, as shown on the current Accepted baseline progr ess schedule; Section 108: Prosecution and Progress Page 75 2. When the start of an activity on the Critical Path, as shown on the current Accepted progress schedule, has exceeded its late start date by seven (7 ) Days; 3. When an activity on the Critical Path, as shown on the curre nt Accepted progress schedule, has exceeded its original duration by ten (10) or mor e Days; or, 4. When the Project Manager determines that the progress of Wor k is unsatisfactory. When the progress of the Work is deemed unsatisfactory the Proj ect Manager and the Contractor shall meet to address the schedule within five (5) D ays. The Contractor shall provide a revised schedule with a narrative addressing Project progress compliance or anticipated liquidated damages. T he Department’s approval of a late completion schedule will not operate as a waiver of the Department’s right to assess liq uidated damages. Failure by the Contractor to address the unsatisfactory progress within fi ve (5) Days after the meeting, will result in the Project Manager issuing a Notice of Apparent Default to the Contractor per
108.5 Character of Workers, Methods, and Equipment
108.5.1 Character of Workers
The Contractor shall provide the resources necessary to complet e the Work as specified. The Contractor shall ensure workers have the experience and ski lls to perform assigned Work. The Contractor shall remove employee(s) who perform the Work in an unskilled manner, is in eligible to perform the Work, or who is intemperate or di sorderly. The Contractor shall allow these employees to return to the Project only with the Pr oject Manager’s written permission. If the Contractor or its employee(s) fail to comply with these requirements the Project Manager may suspend the Work at no cost to The Department.
108.5.2 Methods and Equipment
The Contractor shall use methods and Equipment capable of perfo rming the Work specified in the Contract. The Contractor shall ensure that th e Equipment does not damage the Roadway, adjacent property or other Highways, Streets, or R oads. The Contractor shall request permission of the Project Manager in writing to use methods or Equipment other than those specified in the Contract. The C ontractor shall describe the proposed methods and Equipment to be used and the reasons for t he change. The Contractor shall perform Work in accordance with the original B asis of Payment and Contract Time. The Contractor shall discontinue use of alternate method s or Equipment when Work does not meet Contract requirements. The Contractor shall remo ve and replace unacceptable Work or repair deficient Work at no cost to The Department.
108.6 Determination and Extension of Contract Time
The Department will provide the Contract Time in the Advertisem ent, in Working Days, Days, or Mandatory Completion date. For Working Day Projects, the Project Manager will provide the Contractor with a weekly statement showing the Contract Time, the number of Working Days used, the accumulated Working Days charged, and the number of Working Days remaining to complete the Work. The Contractor shall have three (3) Days after receipt of the w eekly statement to object in writing to the weekly statement, setting forth the specific dat es and justifications for the Section 108: Prosecution and Progress Page 76 objection. If the Project Manager finds that the Contractor’s objection is valid, or if there is an error, then the Project Manager will issue corrected weekly sta tement(s). If the Project Manager determines that the objecti on is not valid the Project Manager will notify the Contractor in writing. If the Contractor continues to object t o the weekly statement then the Contractor may file a Notice of Intent to Claim. If the Contra ctor fails to timely object, the weekly statement is deemed Accepted by the Contractor. The Contractor is not entitled to a Partial Suspension, at its own request, when any of the conditions below apply: 1. Projects with a Bar Graph Schedule; 2. Projects with a Mandatory Completion Date; 3. Projects that are Calendar Day; 4. When performing Work on the Critical Path; 5. When the Contractor has not provided proper justification an d the Project Manager has not approved the request; 6. The Work obstructs the Traveled Way; or, 7. For issues for which the Contractor is responsible. Partial Suspension shall be lifted if the Contractor Works on Critical Path activities and the Project Manager shall commence the Contract Time count. If completion of the Contract requires Extra Work that impacts the Critical Path, the Contractor shall provide the Department an updated progress sch edule and narrative requesting additional Contract Time associated with the Extra W ork. Upon adequate justification by the Contractor the Department will determine i f any adjustment in Contract Time is warranted. Any request for additional Contract Time shall be made in writi ng to the Project Manager. If the Project Manager rejects a time extension request, the Co ntractor may proceed pursuant to Section 105.19, “Notice of Intent to Claim.”
108.7 Reserved
108.8 Liquidated Damages
The Department is entitled to assess liquidated damages for fai lure of the Contractor to complete the Work within the Contract Time. A daily charge wil l be made against the Contractor not as a penalty, but as liquidated damages, for eac h Day for any Work that remains uncompleted after the lapse of Contract Time. In suits involving the assessment or recovery of liquidated dam ages, the reasonableness of daily charges will be presumed and the amount assessed will be in addition to every other remedy enforceable at law, in equity, by statute, or under the Contract. The Department does not waive its rights to assess liquidated d amages under the Contract by allowing the Contractor to finish the Work after th e expiration of Contract Time. The Contractor shall complete the Work within the Contract Time . The Department’s Contract administrative costs, including engineering, inspectio n, and supervision, will be increased as the time to compl ete the Work increases. The Contractor agrees that the following schedule of liquidated damages, unless Section 108: Prosecution and Progress Page 77 otherwise specified in the Contract, represents an amount suffi cient to cover estimated average daily Departmental costs if the Contractor does not com plete the Project within the Contract Time and does not operate as a penalty to the Contract or: Table 108.8:1 Schedule of Liquidated Damages Total Original Contract Amount ($) Charge ($) per Day ≤100,000 500 >100,000–500,00 1,000 >500,000–1,000,000 1,500 >1,000,000–2,000,000 2,000 >2,000,000–4,000,000 2,500 >4,000,000–7,000,000 3,000 >7,000,000–10,000,000 4,000 >10,000,000 5,000 The Department will deduct liquidated damages from the next Pr ogress Payment due to the Contractor after Contract Time expires and will continue to assess liquidated damages each Progress Payment until the determination of Substantial Co mpletion. If the Department directs Extra Work after Substantial Completion, the Department will rescind the determination of Substantial Completion and then assess Contract Time in acco rdance with Section 104.2, “Extra Work.” If the amount of liquidated damages exceeds the monies due to the Contractor for that Progress Payment then the Department will seek reimbur sement for any liquidated damages exceeding the dollar amount withheld from the Contracto r. If the Contractor has been granted Substantial Completion, but has not satisfied the requirements of Section 109.10, “Pr oject Closure” the Departmen t reserves the right to continue to assess liquidated damages until Physical Completion . Upon the completion of steps I through VII of Project Closure the ADE-Construction sha ll provide a written determination of Physical Completion to the Contractor which st ops further assessment of liquidated damages.
108.9 Default of Contract
The Department may declare the Contractor in default of the Con tract if the Contractor: 1. Fails to perform the Work with sufficient resources (supervi sion, workers, Equipment, or Materials) to assure the completion of the Work; 2. Performs the Work unsuitably, or neglects or refuses to remo ve Materials or to correct rejected Work; 3. Fails to begin the Work within the time specified in the Not ice to Proceed; 4. Discontinues the Work; 5. Fails to resume discontinued Work after the Department issue s a request to resume Work; 6. Becomes insolvent or is dec lared bankrupt, or files for reor ganization under the bankruptcy code, or commits any act of bankruptcy or insolvency , either voluntarily or involuntarily; 7. Allows a final judgment, in a suit filed in connection with this Contract, to stand unsatisfied for 30 Days; Section 108: Prosecution and Progress Page 78 8. Makes an assignment, in connection with the Contract, for th e benefit of its creditors; 9. Fails to carry on the Work i n an Acceptable manner in accord ance with the Contract; 10. Fails to comply with Contract requirements or willfully vio lates any term or condition of the Contract; 11. Fails to perform the Work or maintain the Project in compli ance with Federal and New Mexico Occupational Health and Safety laws and regulations; 12. Fails to observe or comply with Federal and New Mexico laws and regulations, local laws and ordinances, 13. Is debarred or suspended in accordance with the Section 102 .3, “Suspension and Debarment”, or is suspended or debarred by any federal agency; 14. Communicates that the Contractor may not perform under the Contract; 15. Fails to promptly pay a Subcontractor or Supplier for undis puted Accepted Work in accordance with Section 108.1 “Subcontracting”; or, The complete default process is sequential and consists of the following steps: 1. Notice of Apparent Default; 2. Declaration of Default and Demand for Surety to Complete the Work; and, 3. Department Completion of the Work.
108.9.1 Notice of Apparent Default
The Project Manager will provide written notice to the Contract or and the Contractor’s Surety specifying the condition(s) in Section 108.9, “Default o f Contract” that the Contractor violated and the corrective measures to be taken by the Contrac tor. If the Contractor or Surety does not proceed with the corrective measures within ten (10) Days of the date written notice, the Department, has full power and authority, without v iolating the Contract, to declare the Contractor in default.
108.9.2 Declaration of Default and Demand for Surety to Complet e the Work
The written declaration of default is separate from the notice of apparent default and will be addressed to both the Contractor and the Surety. The declar ation of default is issued after time for the Contract to take corrective measures expires in Se ction 108.9.1, “Notice of Apparent Default.” The declaration of default removes the corr ective measures from the Contractor, and will demand compliance by the Surety of the ter ms, conditions, and obligations contained in the Performance Bond. If the Department determines that the Contractor is in default the Surety shall complete the Work at its own expense pursuant to the Contract and receiv e the balance of any funds owed to the Contractor.
108.9.3 Department Completion of the Work
If the Surety fails to complete the Work, the Department will c omplete the Work. The Department will deduct costs and charges that the Department in curs as a result of the default and the cost of completing the Work from Contract funds due to or which may become due to the defaulting Contractor or Surety. If the total costs for co mpleting the Work exceeds the amount that would have been payable under the Contract, the def aulting Contractor and the Surety shall be jointly and seve rally liable for the excess cos ts. If a default of the Contractor is later determined to be withou t cause, the default of the Section 108: Prosecution and Progress Page 79 Contractor will revert to a Section 108.10, “Termination of Con tract; No Fault of Contractor,” and the Contractor is not entitled to recover damages other tha n those allowed by that section.
108.10 Termination of Contract; No Fault of Contractor
The Department may terminate, by written notice and order, all or part of the Contract, after determining the following: 1. That the Contractor is prevented from proceeding with or com pleting the Work as originally contracted for reasons beyond the control of the Con tractor; or, 2. That termination would be in the public interest. Reasons for termination may include, but are not limited to, t he following: 1. Executive orders of the President of the United States; 2. Executive orders of the Governor of the State of New Mexico; 3. An emergency that creates a serious shortage of Materials, a s deemed by the Secretary; 4. Orders from duly constituted authorities relating to energy conservation; 5. Restraining orders or injunc tions obtained by third party ci tizen actions resulting from national or local environmental protection laws or where t he issuance of the order or injunction is primarily caused by acts or omissions of persons or agencies other than the Contractor; or, 6. To correct any Material errors or omissions or to correct an y discrepancy or contradictions within the Contra ct discovered after execution o f the Contract by both parties, the failure of which to correct is likely to lead to C ontractor Delay, a Claim for additional time, or a Claim fo r compensation which may exce ed the costs recoverable under this Section.
108.10.1 Submittals and Procedures
When the Department issues a notice and order for a Contract t ermination effective on a certain date the Department will pay: 1. For the actual number of units or items of Work completed at the Bid Item Unit Price; 2. For items of Work started but not completed as negotiated an d mutually agreed. Negotiated amount shall not exceed the Bid Item Unit Price; and , 3. For invoices to restock or for invoices for Material on hand for Work not yet started. Invoices shall be provided by the Contractor documenting both c osts and Department will make a determination on how to proceed, includi ng delivery of the Material if needed. For the purposes of this section, Material s on hand are Materials that are ordered and have been manufactured before the date not ice and order of termination is issued. After the Contractor receives the termination notice and order from the Department, and no agreement or only a partial agreement is reached about the t ermination costs, then Contractor shall submit any Claim for damages or costs within 3 0 Days of the date of the notice and order of termination or shall waive such Claim. The Contractor shall submit the Claim in accordance with Sections 105.19, “Notice of Intent to Claim” and 105.20, “Administrative Remedy.” The Claim shall be limited to the fol lowing cost items: 1. Actual and direct bidding and Project investigative costs wh ich are separate and excluded from home office overhead costs; 2. Actual and direct mobilization costs, mobilization paid by t he Department exceeding Section 108: Prosecution and Progress Page 80 actual and direct mobilization co sts may be subject to reimburs ement by the Contractor; 3. If Work is stopped in advance of the termination date, idle Equipment time using standby-time rental rates at 50% of the Blue Book Equipment ren tal rate, without the cost of operating personnel; 4. If Work is stopped in advance of the termination date, idle labor costs; 5. Unpaid Supplier costs; 6. Accounting charges involv ed in Claim preparation; 7. Written and executed agreements for private land usage; and, 8. An additional ten percent (10%) of the total of the above it ems 2, 3, 4, and 5 to cover home office overhead and salaried labor expenses. The Contractor shall provide those records required by Section 105.20.1, “District Level,” to the Department to determine the validity and amount of each Claim item. The Contractor shall not be entitled to recover anticipated loss of profits or any category of damages excluded pursuant to Section 109.11, “Compensation for Claims.” Full or partial Contract termination does not relieve the Contr actor of its contractual responsibilities for the completed Work, nor will it relieve th e Surety of its obligation for Claims arising out of the completed Work. Section 109: Measurement and Payment Page 81