Construction Contract - District of Columbia

CONSTRUCTION SERVICES AGREEMENT

(District of Columbia – Private Project)

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
    A. Scope of Work
    B. Contract Price & Payment Terms
    C. Schedule & Milestones
    D. Change Orders
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

THIS CONSTRUCTION SERVICES AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [OWNER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Owner”); and
2. [CONTRACTOR LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Contractor”).

Owner and Contractor are sometimes referred to in this Agreement individually as a “Party” and collectively as the “Parties.”

RECITALS
A. Owner is the fee simple owner or authorized agent of the real property located at [PROJECT ADDRESS] in the District of Columbia (the “Site”).
B. Owner desires to engage Contractor to furnish labor, materials, equipment, and services necessary to construct the improvements described herein (the “Project”).
C. Contractor is duly licensed and qualified to perform the Work (as defined below) in the District of Columbia.
D. In consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

II. DEFINITIONS

For ease of reference, capitalized terms have the meanings set forth below. Terms defined in the body of the Agreement shall have the same meaning throughout unless expressly stated otherwise.

“Change Order” means a written amendment executed by both Parties modifying the Scope of Work, Contract Price, Milestones, or any other term of this Agreement.

“Completion” means Substantial Completion and Final Completion, collectively.

“Contract Documents” means (a) this Agreement, (b) the Scope of Work attached as Exhibit A, (c) the Project Schedule attached as Exhibit B, (d) all Change Orders, and (e) any other documents expressly incorporated herein.

“Contract Price” has the meaning set forth in Section III.B.

“DC Lien Law” means the District of Columbia mechanics’ lien statute codified at D.C. Code §§ 40-301.01 et seq.

“Final Completion” means the stage at which the Work is fully completed in compliance with the Contract Documents, all punch-list items are satisfied, and all required close-out documents are delivered.

“Milestones” means the interim and final dates for completion of defined portions of the Work set forth in Exhibit B.

“Notice of Intent to Lien” has the meaning assigned in Section VII.D.1.

“Retainage” has the meaning assigned in Section III.B.4.

“Scope of Work” means the labor, materials, equipment, and services described in Exhibit A, as modified by Change Orders.

“Substantial Completion” means the stage at which the Work is sufficiently complete, in accordance with the Contract Documents, so that Owner can occupy or utilize the Project for its intended purpose, subject only to minor punch-list items.

“Work” means all obligations of Contractor under the Contract Documents.

III. OPERATIVE PROVISIONS

A. Scope of Work

1. Contractor shall furnish and perform the Work strictly in accordance with the Contract Documents and all applicable laws, codes, ordinances, and regulations of the District of Columbia, including without limitation building, safety, environmental, and lien laws.
2. Contractor shall provide competent supervision and shall be solely responsible for construction means, methods, techniques, sequences, and procedures.
3. No deviation from the Scope of Work is permitted without a prior written Change Order.

B. Contract Price & Payment Terms

1. Contract Price. Owner shall pay Contractor the lump-sum amount of $[AMOUNT] (the “Contract Price”), subject to additions and deductions by Change Order.
2. Schedule of Values. Within five (5) days after the Effective Date, Contractor shall submit a schedule of values allocating the Contract Price among the various portions of the Work, subject to Owner’s approval.

3. Progress Payments.
   a. Application for Payment. On or before the [DAY] of each month, Contractor shall submit to Owner an itemized Application for Payment covering Work performed during the preceding month and supported by (i) conditional lien waivers for the payment requested from Contractor and applicable subcontractors and suppliers, (ii) updated schedule of values, and (iii) such other documentation reasonably required by Owner.
   b. Payment Due Date. Owner shall pay undisputed amounts within [NUMBER] days after receipt of a complete and correct Application for Payment, less Retainage properly withheld under this Agreement and applicable law. D.C. Code § 27A-102(c) also requires payment of undisputed amounts no later than seven days after a payment date specified in the contract.

4. Retainage. Owner shall withhold ten percent (10 %) of each progress payment (the “Retainage”) until fifty percent (50 %) of the Work is satisfactorily completed, after which Retainage shall be reduced to five percent (5 %) of each subsequent progress payment. Owner may withhold additional amounts as permitted under Section VI.

5. Final Payment. Final payment, including all released Retainage, shall be conditioned upon (i) Final Completion; (ii) delivery of conditional final lien waivers for the payment requested from Contractor and applicable subcontractors and suppliers, followed by unconditional waivers after that payment clears; (iii) delivery of warranties, as-built drawings, operation manuals, and all close-out documents; and (iv) Contractor’s certification identifying any laborers, subcontractors, or suppliers still to be paid from the final payment.

6. Statutory Late-Payment Interest. An undisputed amount unpaid when required by D.C. Code § 27A-102 accrues interest at 1.5% per month or any part of a month under D.C. Code § 27A-103. The statutory costs and reasonable attorneys’ fees remedy for a contractor who prevails in an action to collect that interest also applies.

C. Schedule & Milestones

1. Contractor shall commence the Work on [START DATE] and achieve Substantial Completion on or before [SUBSTANTIAL COMPLETION DATE] and Final Completion on or before [FINAL COMPLETION DATE].
2. Time is of the essence with respect to Contractor’s obligations.
3. Liquidated Damages. If Contractor fails to achieve Substantial Completion by the scheduled date (as extended by Change Order), Contractor shall pay Owner liquidated damages of $[AMOUNT] per calendar day, not as a penalty but as a reasonable pre-estimate of Owner’s damages.

D. Change Orders

No alteration or addition to the Work, Contract Price, or Milestones shall be effective unless memorialized in a written Change Order signed by both Parties.

IV. REPRESENTATIONS & WARRANTIES

1. Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.

2. Contractor Representations. Contractor further represents and warrants that:
   a. Licensing. Contractor and all subcontractors are properly licensed, bonded, and qualified to perform the Work in the District of Columbia.
   b. Standard of Care. The Work will be performed in a workmanlike manner, free from defects, and in accordance with industry best practices.
   c. Compliance. The Work will comply with all applicable codes, laws, regulations, and the Contract Documents.
   d. Materials. All materials furnished will be new (unless otherwise specified), of good quality, and suitable for their intended purpose.

3. Survival. The representations and warranties in this Section IV shall survive Final Completion for a period of [ONE (1) YEAR], unless a longer period is required by statute or the manufacturer’s warranty.

V. COVENANTS & RESTRICTIONS

1. Safety & Clean-Up. Contractor shall maintain the Site in a safe, clean, and orderly condition, remove debris daily, and comply with all OSHA and D.C. safety requirements.
2. Permits & Inspections. Contractor shall obtain and pay for all permits, inspections, and approvals required for the Work.
3. Notice of Defects. Contractor shall promptly notify Owner in writing of any apparent errors, omissions, or inconsistencies in the Contract Documents.
4. Anti-Kickback / Anti-Corruption. Contractor shall comply with all federal, state, and local anti-kickback and anti-corruption laws and regulations.
5. Notice of Potential Liens. Contractor shall immediately notify Owner upon receiving written notice from any subcontractor or supplier of non-payment, potential liens, or bond claims.

VI. DEFAULT & REMEDIES

1. Contractor Events of Default. Each of the following constitutes a Contractor default:
   a. Failure to perform the Work in accordance with the Contract Documents;
   b. Failure to pay subcontractors or suppliers when due;
   c. Abandonment of the Work;
   d. Insolvency, bankruptcy, or assignment for the benefit of creditors;
   e. Material breach of any representation, warranty, or covenant.

2. Notice & Cure. Owner shall give Contractor written notice of default specifying the nature of the default. Contractor shall have seven (7) days to commence and diligently pursue a cure (or such shorter period as may be reasonable in the event of an emergency or safety issue).

3. Owner Remedies. If Contractor fails to cure within the applicable period, Owner may, without prejudice to any other right or remedy:
   a. Suspend all or any portion of the Work;
   b. Take over the Work and complete it by whatever method Owner deems expedient, deducting the cost from the Contract Price;
   c. Terminate this Agreement for cause;
   d. Seek recovery of all damages, costs, and expenses, including reasonable attorneys’ fees.

4. Owner Default. Owner shall be in default if it fails to make undisputed payments when due and does not cure such failure within ten (10) days after written notice from Contractor.

5. Contractor Remedies. For Owner default, Contractor may suspend Work or terminate this Agreement and recover amounts due for Work satisfactorily performed and verified direct costs incurred as a result of the suspension or termination. This section does not displace statutory interest, costs, or reasonable attorneys’ fees under D.C. Code § 27A-103, or any mechanic’s lien remedy available under D.C. law.

VII. RISK ALLOCATION

A. Insurance

1. Contractor Insurance. Contractor shall maintain, at a minimum, (i) commercial general liability insurance with limits of not less than $[1,000,000] per occurrence / $[2,000,000] aggregate, (ii) workers’ compensation insurance as required by D.C. law, (iii) automobile liability insurance, and (iv) builder’s risk insurance if not provided by Owner.
2. Additional Insured. Owner (and its lenders, if any) shall be named as additional insureds on Contractor’s liability policies.
3. Certificates. Certificates of insurance and endorsements shall be furnished to Owner prior to commencing the Work.

B. Indemnification

To the fullest extent permitted by law, Contractor shall indemnify, defend, and hold harmless Owner and its officers, directors, members, managers, employees, agents, successors, and assigns (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, fines, penalties, judgments, and expenses (including reasonable attorneys’ fees) arising out of or resulting from: (i) the negligent or intentional acts or omissions of Contractor or its subcontractors, suppliers, or anyone for whom Contractor is responsible; (ii) breach of this Agreement; or (iii) violation of any law or regulation; provided that such indemnity shall not apply to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.

C. Limitation of Liability

Except for Contractor’s indemnity obligations, willful misconduct, or gross negligence, Contractor’s aggregate liability to Owner arising out of or related to this Agreement shall not exceed the Contract Price.

D. Lien Rights & Waivers

1. Notice of Intent to Lien. If Contractor seeks to enforce a mechanic’s lien, Contractor shall record a notice of intent during construction or within ninety (90) days after the earlier of project completion or termination. The notice must meet the content and attachment requirements of D.C. Code § 40-301.02(b). Contractor shall send Owner a copy of the recorded notice by certified mail within five (5) business days after recordation. If that mail is returned unclaimed or undelivered, Contractor shall post the recorded notice at the affected property as D.C. Code § 40-301.02(a)(2) requires.
2. Lien Waivers. As a condition of each progress and final payment, Contractor shall furnish conditional waivers for the payment requested from Contractor and applicable subcontractors and suppliers. After payment clears, Contractor shall furnish corresponding unconditional waivers for amounts actually paid.
3. Discharge of Liens. Contractor shall promptly (and in any event within ten (10) days) discharge, by bond or otherwise, any lien or claim of lien filed by Contractor or any subcontractor or supplier to the extent Owner has made the corresponding payment.
4. Bond to Release Lien. If Contractor fails to discharge any lien as required, Owner may, at its option, bond off or otherwise discharge the lien and deduct all costs and expenses (including attorneys’ fees and premiums) from any amounts due or to become due to Contractor.

E. Payment Bond (Private Project)

[OPTIONAL] Contractor shall, within [10] days after the Effective Date, furnish a payment and performance bond issued by a surety licensed in the District of Columbia and rated A- or better by A.M. Best, in an amount equal to [100 %] of the Contract Price, naming Owner as obligee.

F. Force Majeure

Neither Party shall be liable for delays or failure to perform caused by acts of God, terrorism, war, civil unrest, epidemic, governmental action, or other events beyond its reasonable control, provided the affected Party gives written notice within three (3) days of the event and resumes performance promptly thereafter.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the District of Columbia, without regard to conflict-of-laws principles.
2. Forum Selection. Any action arising out of or relating to this Agreement shall be brought exclusively in the Superior Court of the District of Columbia or, if jurisdiction is proper, the United States District Court for the District of Columbia.
3. Injunctive Relief. Notwithstanding any other provision, either Party may seek injunctive or other equitable relief to protect its confidential information or intellectual property, or to preserve the status quo, without first pursuing mediation or arbitration.

4. Arbitration.
   [OPTION A – Include Arbitration]
   “Any dispute not resolved by negotiation within thirty (30) days shall be finally resolved by binding arbitration administered by the American Arbitration Association (“AAA”) in accordance with its Construction Industry Arbitration Rules, conducted in Washington, D.C. Judgment on the award may be entered in any court of competent jurisdiction.”
   [OPTION B – Omit Arbitration]

5. Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

6. Attorneys’ Fees. The prevailing Party in any dispute shall be entitled to recover its reasonable attorneys’ fees, costs, and expenses.

IX. GENERAL PROVISIONS

1. Amendments & Waivers. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.
2. Assignment. Neither Party may assign or delegate its rights or obligations without the prior written consent of the other Party, except that Owner may freely assign its rights to any lender providing financing for the Project.
3. Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
4. Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to achieve, as nearly as possible, the intent of the Parties.
5. Integration. This Agreement, together with the Contract Documents, constitutes the entire agreement between the Parties and supersedes all prior negotiations, representations, or agreements, whether written or oral, with respect to the subject matter hereof.
6. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., via PDF or a recognized e-signature platform) shall be deemed originals for all purposes.
7. Notices. All notices shall be in writing and delivered by (i) personal delivery, (ii) nationally recognized overnight courier, or (iii) certified mail, return receipt requested, to the addresses set forth above (or such other address as a Party may designate by notice). Notice is effective upon receipt or refusal of delivery.
8. Independent Contractor. Contractor is an independent contractor and not an employee, partner, or joint venturer of Owner.
9. No Third-Party Beneficiaries. Except as expressly provided for the benefit of the Indemnified Parties or surety under a bond, nothing in this Agreement is intended to confer any rights or remedies upon any person other than the Parties.
10. Headings. Section headings are for convenience only and shall not affect interpretation.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Construction Services Agreement as of the Effective Date.

[NOTARY ACKNOWLEDGMENT (if required under local practice)]

EXHIBITS

Exhibit A – Scope of Work
Exhibit B – Project Schedule & Milestones
Exhibit C – Schedule of Values
Exhibit D – Insurance Certificates
Exhibit E – Form of Conditional / Unconditional Waiver & Release