Section 1 - Contract Requirements

7.1 Introduction. For a construction project to be a success the multi-functional team (contractor, contracting officer and engineer, etc) must work together toward their common goal of a quality end product conforming to the contract requirements. Contracting officers are responsible for assuring the contractor complies with the contract documents and produces the required end product. The contractor is responsible for Quality Control. It is their responsibility to manage, control, and document work to ensure compliance with the contract plans and specifications. As stated in FAR Part 36 and other regulations, contract management of construction contracts is accomplished in accordance with FAR Part 42. However, construction contracts also have unique processes that differ from other types of contracts. This chapter focuses on managing those unique areas:

7.2. Performance and Payment Bonds. The Miller Act (40 U.S.C. Section 3132, requires that construction contracts greater than $30,000, but not greater than $100,000 include payment protections. FAR 28.102-1(b)(1) identifies the types of protection necessary. The Miller Act (40 U.S.C. Section 3131 et seq.) requires performance and payment bonds for construction contracts exceeding $100,000. The conditions under which this requirement can be waived can be found at FAR 28.102-1(a). A bond is a written instrument executed by a bidder or contractor and a second party to assure fulfillment of the principal's obligations to a third party (AF). If the principal's obligations are not met, the bond assures fulfillment of the principal's obligation, to the extent stipulated, to the third party. The applicable clauses are located at FAR 28.103. When using Performance and Payment Bonds consider:

7.2.1. The due date(s) of the payment and performance bonds is identified in the contract (SF 1442). In accordance with FAR 28.102-1(c) the appropriately executed performance and payment bonds are required before starting work.

7.2.2. Upon contract award the SABER and MACC awardees should be required to submit bonds for the "Original Contract Price." In accordance with FAR 28.102-2(a), "Original Contract Price" means the price payable for the estimated total quantity for requirements contracts, and the price payable for the specified minimum quantity for indefinite-quantity contracts. In accordance with FAR 28.102-2(b) & (d) if the contract price increases, the performance and payment bonds must equal 100% of the increase, therefore, bonding for delivery orders against SABER and MACCs must be:

7.2.2.1. payment and performance bonds obtained for individual orders, or

7.2.2.2. incrementally increased to ensure coverage of all task orders.

7.2.3. FAR 28.106-5 requires that when a contract is modified, a Consent of Surety should be obtained when an additional bond is obtained from other than the original surety. A surety is also required when the modification is for new work beyond the scope of the original contract; or the modification does not change the contract scope but increases or decreases the contract price by more than 25 percent or $50,000. A Consent of Surety is required for a novation agreement.

7.2.4. A Contract Bonds Checklist is available in IG5336.90.

7.3. Insurance When Work is Being Performed on A Government Installation. Certificates of insurance for the prime contractor performing work, or Notification of Compliance with Contract Insurance Requirements should be received prior to the commencement of any work on the Government installation. The prime contractor is responsible for maintaining a copy of all subcontractors' proofs of insurance, and shall make them available to the Contracting Officer upon request. The insurance certificate must include an endorsement that cancellation is effective as prescribed by the laws of the state; or 30 days after the insurer or the Contractor gives written notice to the Contracting Officer, whichever period is longer.

7.4. Pre-Construction Conference. Although in accordance with FAR 52.236-26 the contracting officer decides if a preconstruction conference is necessary, the contracting officer must give careful consideration to the benefits of the conference prior to determining a conference is not necessary. If the Contracting Officer decides a pre-construction conference is necessary, they must notify the contractor in advance of the conference, and the contractor is required to attend. The notification includes the date, time, location, any need for the attendance of subcontractors, and an agenda. Other interested stakeholders should also be invited to attend. The conference typically includes representatives from safety, fire, security, COR(s), affected building managers, and others that may be impacted by the construction. If a decision is made not to hold a conference, at a minimum, written documentation explaining the items below should be sent to the contractor prior to the commencement of work. The Pre-Performance Conference Checklist Template in IG5336.90 may be used for planning the pre-performance conference. The conference includes:

7.4.1. Review of significant matters of interest in the contract, such as labor standards, payment and performance bonds, insurance, progress payments, authorities related to contractual, administrative and construction responsibilities, and unique contract requirements and/or clauses, e.g. AF Voluntary Protection Program certified sites have additional construction site requirements, http://www.osha.gov/dcsp/vpp/index.html and requirements to use green products.

7.4.2. Review of requirements for the contractor to post information such as the wage determinations, and the poster from US Department of Labor Poster, Form WH-1321, Notice to Employees Working on Federal and Federally Financed Construction Projects in an area easily accessible by employees.

7.4.3. Review of requirements for the contractor to submit information to the contracting officer, e.g. Accident Prevention Plans (52.236-13), Schedules for Construction Contracts (52.236-15), a Voluntary Protection Program Safety and Health Management Plan, Hazardous Materials Reporting, etc.

7.4.4. It is recommended that all bonds or alternative payment protection, including any necessary reinsurance agreements, be received prior to the CO issuing a notice to proceed with the work or the contractor being allowed to start work.

7.5. Materials and Workmanship. FAR 52.236-5 identifies the quality of equipment, material, and articles used for a project, and the quality of workmanship required during performance. Submittal requirements originate from the specifications. It is the responsibility of the contractor to convey submittal requirements to the sub-contractors, suppliers, and vendors. Quality Assurance personnel recommend approval of the submittals, and the Contracting Officer is responsible for approval the submittal. The AF IMT 3000, Material Approval Submittal may be used to meet construction and article approval requirements.

7.5.1 The specifications should

7.5.1.1. identify the items to be transmitted, e.g. shop drawings, product data, manufacturer's certificates, design data and calculations, manufacturer's instructions, manufacturer's field service reports, sample, and operation and maintenance manuals (timing, quantity, content and form).

7.5.1.2. identify who is authorized to approve submittals.

7.5.1.3. establish and specify the review time for submittals.

7.5.1.4. require separate submittal for each specification section requiring submittals. Where multiple sections relate to the same system or element and are being provided from the same source, a single combined submittal is acceptable.

7.5.1.5. require the contractor to identify variations from requirements of contract documents. State product and system limitations which may adversely affect the work.

7.5.1.6. require the marking or showing dimensions and values in the same units as specified.

7.5.2. The submittal register is an internal listing of required submittals for the project and is used by the Air Force as a reference document. The contractor is responsible for providing all submittals required by the specifications and/or drawings. The contractor and Project Engineer should review the register to ensure all submittals are identified. The contract will identify the submittals and the due dates they must be submitted to the CO. The Project Engineer updates the submittal receipt, and recommends approval. The CO updates the submittal register to reflect the status of the submittals, approved, disapproved, resubmitted, and annotates the date the register was returned to the contractor, etc.

7.5.3. The AF IMT 3000 Approval process. Upon review, the contracting officer returns the AF IMT 3000 and submittals to the contractor. The IMT indicates the action taken:

7.5.3.1. Approved. The part of the work covered by the submittal may proceed provided it complies with the requirements of the contract documents. Final acceptance will depend upon that compliance. The term "Approved" shall only indicate that there is no exception taken to the submittals.

7.5.3.2. Disapproved. Do not proceed with the part of the work covered by the submittal including purchasing, fabricating, and delivering. The contracting officer should identify the number of days the contractor has to resubmit on the AF IMT 3000.

7.6. Labor Compliance Requirements. Chapter 6 of this Guide addresses labor compliance requirements.

7.7. Warranties. In accordance with the FAR 52.246-21, Warranty of Construction, the contractor is required to warrant that all work performed conforms to the contract requirements and is free from any defect in equipment, material, or design furnished, or workmanship performed by the contractor or any subcontractor or any supplier at any tier. If possession of any part of the work occurs, prior to final acceptance, the warranty continues one year from the date of possession. FAR 52.246-21 requires the Contracting Officer to notify the contractor, in writing, within a reasonable time after the discovery of any failure, defect, or damage. If the contractor fails to remedy any failure, defect, or damage within a reasonable time after receipt of the notice, the Government has the right to replace, repair, or otherwise remedy the failure, defect or damage at the contractor's expense. The contractor is required to supply all standard commercial warranties, and enforce the warranties for the benefit of the government, if requested.