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Tools & Programs: SEP-15

Texas Toll Roads Statewide Open-Road Toll Collection System Project (TX Toll Collection System)

Comprehensive Development Agreement TxDot Statewide Open-Road Toll Collection System

SECTION 13. CHANGES IN THE WORK

This Section 13 sets forth the requirements for obtaining all Change Orders under this Agreement. Developer hereby acknowledges and agrees that each Price constitutes full compensation for performance of all of the Work for the applicable Pilot System and/or Project Segment, subject only to those exceptions specified in this Section 13, and that TxDOT is subject to constraints limiting its ability to increase any Price or extend any Completion Deadlines. Developer unconditionally and irrevocably waives the right to any claim for a time extension or for any monetary compensation in addition to the applicable Price and other compensation specified in this Agreement, except in accordance with this Section 13. To the extent that any other provision of this Agreement expressly provides for a Change Order to be issued, such provision is incorporated into and subject to this Section 13.

13.1 Circumstances Under Which Change Orders May Be Issued

13.1.1 Definition of and Requirements Relating to Change Orders

13.1.1.1 Definition of Change Order

The term "Change Order" shall mean a written amendment to the terms and conditions of the Contract Documents issued in accordance with this Section 13. TxDOT may issue unilateral Change Orders as specified in Section 13.2.2. Change Orders may be requested by Developer only pursuant to Section 13.3. A Change Order shall not be effective for any purpose unless executed by TxDOT. Change Orders may be issued for the following purposes (or combination thereof):

(a) to modify the scope of the Work;

(b) to revise a Completion Deadline;

(c) to revise a Price;

(d) to revise other terms and conditions of the Contract Documents.

Upon TxDOT's approval of the matters set forth in the Change Order form (whether it is initiated by TxDOT or requested by Developer), TxDOT shall sign such Change Order form indicating approval thereof. A Change Order may, at the sole discretion of TxDOT, direct Developer to proceed with the Work with the amount of any adjustment of any Completion Deadline or Price to be determined in the future. All additions, deductions or changes to the Work as directed by Change Orders shall be executed under the conditions of the original Contract Documents.

13.1.1.2 Issuance of Directive Letter

TxDOT may at any time issue a Directive Letter to Developer in the event of any desired change in the Work or in the event of any dispute regarding the scope of the Work. The Directive Letter will state that it is issued under this Section 13.1.1.2, will describe the Work in question and will state the basis for determining compensation, if any. Developer shall proceed immediately as directed in the letter, pending the execution of a formal Change Order (or, if the letter states that the Work is within Developer's original scope of Work, Developer shall proceed with the Work as directed but shall have the right pursuant to Section 13.3 to request that TxDOT issue a Change Order with respect thereto).

13.1.1.3 Directive Letter as Condition Precedent to Claim that TxDOT-Directed Change Has Occurred

13.1.1.3.1 Developer shall not be entitled to additional compensation or time extension for any such work performed prior to receipt of a Directive Letter or Change Order, except to the extent that Section 13.3.2.2 preserves Developer's right to compensation for work performed following delivery of a Request for Partnering. Developer acknowledges that it will be at risk if it elects to proceed with any such work, since TxDOT may later decide not to provide direction with regard to such work. In addition to provision of a PCO Notice and subsequent Change Order request pursuant to Section 13.3.2, receipt of a Directive Letter from TxDOT shall be a condition precedent to Developer's right to make a Claim that a TxDOT-Directed Change has occurred.

13.1.1.3.2 The fact that a Directive Letter was issued by TxDOT shall not be considered evidence that in fact a TxDOT-Directed Change occurred. The determination whether a TxDOT-Directed Change in fact occurred shall be based on an analysis of the original requirements of the Contract Documents and a determination whether the Directive Letter in fact constituted a change in those requirements. The requirements of Section 13.1.1.3.1 shall not imply that a Directive Letter would be required in order for Developer to have the right to receive compensation for Work within its original scope for which additional compensation is specifically allowed under this Section 13.

13.1.2 Right of TxDOT to Issue Change Orders

TxDOT may, at any time and from time to time, without notice to any Surety, authorize and/or require changes in the Work within the general scope of this Agreement pursuant to a Change Order. For the purpose of this Section 13.1.2, any direction to perform work shall be considered within the general scope of this Agreement if it is related to the Project; any direction to delete or modify Work shall be considered within the general scope unless as a result this Agreement would no longer be considered a design-build contract for the Project of the nature described in the RFDP. Developer shall have no obligation to perform any work outside the general scope of this Agreement, except on terms mutually acceptable to TxDOT and Developer.

13.2 TxDOT-Initiated Change Orders

This Section 13.2 concerns (a) Change Orders issued by TxDOT following a Request for Change Proposal and (b) Change Orders unilaterally issued by TxDOT.

13.2.1 Request for Change Proposal

13.2.1.1 If TxDOT desires to issue a TxDOT-Directed Change or to evaluate whether to initiate such a change, then TxDOT may, at its discretion, issue a Request for Change Proposal. A Directive Letter may also constitute a Request for Change Proposal.

13.2.1.2 Within five business days after Developer's receipt of a Request for Change Proposal, or such longer period as may be mutually agreed to by TxDOT and Developer, TxDOT and Developer shall consult to define the proposed scope of the change. Within five business days after the initial consultation, or such longer period as may be mutually agreed to by TxDOT and Developer, TxDOT and Developer shall consult concerning the estimated cost and time impacts.

13.2.1.3 Within five business days after the second consultation and provision of any data described in Section 13.2.1.2, TxDOT shall notify Developer whether TxDOT (a) wishes to issue a Change Order, (b) wishes to request Developer to provide a Cost and Schedule Proposal as discussed at the meeting, (c) wishes to request Developer to prepare a modified work plan for the change and a Cost and Schedule Proposal based on the modified plan, or (d) no longer wishes to issue a Change Order. TxDOT may at any time, in its sole discretion, require Developer to provide two alternative Cost and Schedule Proposals, one of which shall provide for a time extension and any additional costs permitted hereunder, and the other of which shall show all Acceleration Costs associated with meeting the original Completion Deadlines, as well as any additional costs permitted hereunder.

13.2.1.4 If so requested, Developer shall, within ten business days after receipt of the notification described in Section 13.2.1.3, or such longer period as may be mutually agreed to by TxDOT and Developer, prepare and submit to TxDOT for review and approval by TxDOT a Cost and Schedule Proposal (in the format provided by TxDOT) for the requested change, complying with all applicable requirements of Section 13.4, and incorporating and fully reflecting all requests made by TxDOT. Developer shall bear the cost of developing the Cost and Schedule Proposal, including any modifications thereto requested by TxDOT, except that costs of design and engineering work required for preparation of plans or exhibits necessary to the Cost and Schedule Proposal, as pre-authorized by TxDOT, may be included in the Change Order as reimbursable items. If the Change Order is approved, such design and engineering costs will be included within the Change Order, otherwise, they shall be separately reimbursed through a separate Change Order.

13.2.1.5 If Developer and TxDOT agree that a change in the requirements relating to the Work has occurred but disagree as to whether the change justifies additional compensation or time or disagree as to the amount of any change to be made to the applicable Price or Completion Deadline, TxDOT may, in its sole discretion, order Developer to proceed with the performance of the Work in question notwithstanding such disagreement. Such order may, at TxDOT's option, be in the form of: (a) a Time and Materials Change Order as provided in Section 13.7 or (b) a Directive Letter under Section 13.1.1.2.

13.2.1.6 If it is not practicable, due to the nature and/or timing of the event giving rise to a proposed Change Order, for Developer to provide a complete Cost and Schedule Proposal meeting all of the requirements of Section 13.4, Developer shall provide an incomplete proposal which includes all information capable of being ascertained. Said incomplete proposal shall: (a) include a list of those Change Order requirements which are not fulfilled together with an explanation reasonably satisfactory to TxDOT stating why such requirements cannot be met, (b) provide such information regarding projected impact on a critical path as is requested by TxDOT, and (c) in all events include sufficient detail to ascertain the basis for the proposed Change Order and for any price increase associated therewith, to the extent such amount is then ascertainable. Developer shall provide monthly updates to any incomplete Cost and Schedule Proposals in the same manner as updates to incomplete Requests for Change Order under Section 13.3.2.6.2.

13.2.2 Unilateral Change Orders

TxDOT may issue a Change Order at any time, regardless of whether it has issued a Request for Change Proposal. Developer shall be entitled to compensation in accordance with Section 13.7 for additional Work which is required to be performed as the result of any unilateral Change Order, and shall have the right to submit the issue of entitlement to an extension of the Completion Deadlines to dispute resolution in accordance with Section 19. For deductive unilateral Change Orders, the Change Order may contain a price deduction deemed appropriate by TxDOT, and Developer shall have the right to submit the amount of such price deduction to dispute resolution in accordance with Section 19.

13.2.3 TxDOT-Directed Changes Under $5,000

Developer shall not be entitled to an increase in a Price for any TxDOT-Directed Changes involving less than $5,000 in additional direct costs incurred by Developer.

13.3 Developer-Requested Change Orders

13.3.1 Eligible Changes

13.3.1.1 Developer may request a Change Order to extend a Completion Deadline only for delays directly attributable to one or more of the following events or circumstances which change the duration of a Critical Path:

(a) Force Majeure Events;

(b) TxDOT-Caused Delays;

(c) delays relating to Differing Site Conditions, discovery of Hazardous Materials, and/or Changes in Law, to the extent permitted by Section 13.9;

(d) delays relating to Necessary Basic Configuration Changes, to the extent permitted by Section 13.8.

13.3.1.2 Developer may request a Change Order to increase the applicable Price only for increased costs of performance of the Work as follows:

(a) subject to Section 13.2.3, additional costs directly attributable to additional Work resulting from TxDOT-Directed Changes and TxDOT-Caused Delays for which TxDOT has not submitted a Change Order or a Request for Change Proposal;

(b) additional costs directly attributable to Necessary Basic Configuration Changes, to the extent provided in Section 13.8;

(c) additional costs relating to Differing Site Conditions, Hazardous Materials, and Force Majeure Events, to the extent provided in Section 13.9; or

(d) additional costs directly attributable to uncovering, removing and restoring Work, to the extent provided in Section 5.4.3.

13.3.1.3 Developer's entitlement to a Change Order for eligible changes is subject to the restrictions and limitations contained in this Section 13 and furthermore is subject to Developer's compliance with all notification and other requirements identified herein. Developer shall initiate the Change Order process by delivery of a PCO Notice as described in Section 13.3.2, followed by submittal of a Request for Change Order and supporting documentation to TxDOT.

13.3.2 Procedures

The requirements set forth in this Section 13.3.2 constitute conditions precedent to Developer's entitlement to request and receive a Change Order except those involving a Request for Change Proposal. Developer understands that it shall be forever barred from recovering against TxDOT under this Section 13 if it fails to give notice of any act, or failure to act, by TxDOT or any of its representatives or the happening of any event, thing or occurrence pursuant to a proper PCO Notice, and thereafter complies with the remaining requirements of this Section 13.3.

13.3.2.1 Delivery of Requests for Partnering and PCO Notices

Developer acknowledges the importance of providing prompt notification to TxDOT upon occurrence of any event or thing entitling Developer to a Change Order under Section 13.3.1. Among other things, such notification serves the purpose of allowing TxDOT to take action to mitigate adverse impacts. Such notification must be delivered as promptly as possible after the occurrence of such event or situation, through either (a) a PCO Notice as described in Section 13.3.2.3 or (b) if permitted by Section 13.3.2.2, a Request for Partnering followed by a PCO Notice if appropriate.

13.3.2.2 Requests for Partnering

The term "Request for Partnering" shall mean a notice delivered by Developer requesting that TxDOT enter into partnering discussions with Developer with regard to an event or situation that has occurred within the scope of Section 13.3.1.2. The Request for Partnering shall reference this Section 13.3.2.2 and shall describe the event or situation as well as action which Developer would like to take with respect thereto. The parties shall promptly meet and confer for the purpose of determining what action should be taken and also to determine whether the parties are in agreement as to entitlement to a Change Order. Either party may at any time terminate partnering discussions by delivery of written notice to the other, and partnering discussions shall automatically terminate 60 days after delivery of the Request for Partnering unless both parties agree in writing to an extension. Within five Business Days after termination of partnering discussions, if TxDOT has not issued either a Directive Letter or Change Order, Developer must submit a PCO Notice in order to preserve its right to pursue a Change Order. The foregoing process is not available for events or situations involving a delay to the Critical Path. With regard to any such events or situations, Developer must submit a PCO Notice as provided in Section 13.3.2.3.

13.3.2.3 PCO Notices

The term "PCO Notice" shall mean a notice delivered by Developer, meeting the requirements set forth below, stating that an event or situation has occurred within the scope of Section 13.3.1 and stating which subsection thereof is applicable. The first notice shall be labeled "PCO Notice No. 1" and subsequent notices shall be numbered sequentially.

13.3.2.3.1 The PCO Notice shall: (a) state in detail the facts underlying the anticipated Request for Change Order, the reasons why Developer believes additional compensation or time will or may be due and the date of occurrence, (b) state the name, title, and activity of each Project Management Consultant and TxDOT representative knowledgeable of the facts underlying the anticipated Request for Change Order, (c) identify any documents and the substance of any oral communication involved in the facts underlying the anticipated Request for Change Order, (d) state in detail the basis for necessary accelerated schedule performance, if applicable, (e) state in detail the basis that the work is not required by this Agreement, if applicable, (f) identify particular elements of Agreement performance for which additional compensation may be sought under this Section 13.3.2, (g) identify any potential critical path impacts, and (h) provide an estimate of the time within which a response to the notice is required to minimize cost, delay or disruption of performance.

13.3.2.3.2 If the Request for Change Order relates to a decision which this Agreement leaves to the discretion of a Person or as to which this Agreement provides that such Person's decision is final, the PCO Notice shall set out in detail all facts supporting Developer's objection to the decision, including all facts supporting any contention that the decision was capricious or arbitrary or is not supported by substantial evidence.

13.3.2.3.3 Written notification provided in accordance with Section 13.9.1.3 or 13.9.4.1.1 may also serve as a PCO Notice provided it meets the requirements for PCO Notices.

13.3.2.3.4 Any adjustments made to this Agreement shall not include increased costs or time extensions for delay resulting from Developer's failure to timely provide requested additional information under this Section 13.3.2.3.

13.3.2.4 Waiver

13.3.2.4.1 Each PCO Notice shall be delivered as promptly as possible after the occurrence of such event or situation. If any PCO Notice is delivered later than ten days after Developer first discovered (or should have discovered in the exercise of reasonable prudence) the occurrence described therein, Developer shall be deemed to have waived (a) the right to collect any costs incurred prior to the date of delivery of the Request for Partnering (if applicable) or PCO Notice (if no Request for Partnering was submitted or if the PCO Notice was not timely submitted following termination of partnering discussions), and (b) the right to seek an extension of any Completion Deadline with respect to any delay in a critical path which accrued prior to the date of delivery of the written notice. Furthermore, if any PCO Notice concerns any condition or material described in Section 13.9.4.1, Developer shall be deemed to have waived the right to collect any and all costs incurred in connection therewith to the extent that TxDOT is not afforded the opportunity to inspect such material or condition before it is disturbed.

13.3.2.4.2 In addition to the limitations set forth in Section 13.3.2.4.1, Developer's failure to provide a PCO Notice within 60 days after Developer first discovered (or should have discovered in the exercise of reasonable prudence) the occurrence of a given event or situation shall preclude Developer from any relief, unless Developer can show, based on a preponderance of the evidence, that (a) TxDOT was not materially prejudiced by the lack of notice, or (b) TxDOT's designated representative specified in accordance with Section 24.5.1 had actual knowledge, prior to the expiration of the 60-day period, of the event or situation and that Developer believed it was entitled to a Change Order with respect thereto. For situations involving Requests for Partnering, the 60-Day period shall be extended until two Business Days following termination of the partnering period. In other words, if the requirements of clause (a) or clause (b) above are satisfied, Developer shall retain the right to receive a Change Order, but shall be deemed to have waived the right to collect any and all costs incurred prior to the date of delivery of the PCO Notice or Request for Partnering, as applicable, and shall be deemed to have waived the right to seek a time extension with respect to any delay in any Critical Path which accrued prior to the date of delivery of the PCO Notice.

13.3.2.5 Delivery of Request for Change Order

Developer shall deliver all Requests for Change Order under this Section 13.3 to TxDOT within 30 days after delivery of the PCO Notice, or such longer period of time as may be allowed in writing by TxDOT. TxDOT may require design and construction costs to be covered by separate Requests for Change Order. If Developer requests a time extension, then TxDOT, in its sole discretion, may require Developer to provide two alternative Requests for Change Order, one of which shall provide for a time extension and any additional costs permitted hereunder, and the other of which shall show all Acceleration Costs associated with meeting the original Completion Deadlines, as well as any additional costs permitted hereunder. If it is not feasible to recover to the original Completion Deadline or if Developer believes that the costs associated with such a recovery are prohibitive, then Developer shall recommend a date to be shown in the alternative Change Order form. If Developer fails to deliver a complete Request for Change Order or incomplete Request for Change Order meeting all of the requirements of Section 13.3.2.6 within the appropriate time period, Developer shall be required to provide a new PCO Notice before it may submit a Request for Change Order.

13.3.2.6 Incomplete Requests for Change Order

13.3.2.6.1 Each Request for Change Order provided under Section 13.3.2.5 shall meet all requirements set forth in Section 13.4; provided that if any such requirements cannot be met due to the nature and/or timing of the occurrence, Developer shall provide an incomplete Request for Change Order which fills in all information capable of being ascertained. Said incomplete Request shall: (a) include a list of those Change Order requirements which are not fulfilled together with an explanation reasonably satisfactory to TxDOT stating why such requirements cannot be met, (b) provide such information regarding projected impact on a critical path as is requested by TxDOT, and (c) in all events include sufficient detail to ascertain the basis for the proposed Change Order and for any price increase associated therewith, to the extent such amount is then ascertainable.

13.3.2.6.2 Developer shall furnish, when requested by TxDOT or its designee, such further information and details as may be required to determine the facts or contentions involved. Developer agrees that it shall give TxDOT or its designee access to any and all of Developer's books, records and other materials relating to the Work, and shall cause its Subcontractors to do the same, so that TxDOT or its designee can investigate the basis for such proposed Change Order. Developer shall provide TxDOT with a monthly update to all outstanding Requests for Change Order describing the status of all previously unfulfilled requirements and stating any changes in projections previously delivered to TxDOT, expenditures to date and time anticipated for completion of the activities for which the time extension is claimed. TxDOT may reject the Request for Change Order at any point in the process. TxDOT's failure to respond to a complete Request for Change Order within 15 business days of delivery of the request shall not be deemed an acceptance of such request, and the Developer shall have the burden of following up with TxDOT on the status of any such Request for Change Order.

13.3.2.7 Importance of Timely Response

Developer acknowledges and agrees that, due to limitations on funding for the Project, timely delivery of notification of such events and situations and Requests for Change Orders and updates thereto are of vital importance to TxDOT. TxDOT is relying on Developer to evaluate promptly upon the occurrence of any event or situation whether the event or situation will affect the Project Schedule or Price and, if so, whether Developer believes a time extension and/or price increase is required hereunder. If an event or situation occurs which may affect a Price or Completion Deadline, TxDOT will evaluate the situation and determine whether it wishes to make any changes to the definition of the Project so as to bring it within TxDOT's funding and time restraints. The following matters (among others) shall be considered in determining whether TxDOT has been prejudiced by Developer's failure to provide timely notice: (a) the effect of the delay on alternatives available to TxDOT (that is, a comparison of alternatives which are available at the time notice was actually given and alternatives which would have been available had notice been given within ten Days after occurrence of the event or when such occurrence should have been discovered in the exercise of reasonable prudence); and (b) the impact of the delay on TxDOT's ability to obtain and review objective information contemporaneously with the event.

13.3.2.8 Review of Subcontractor Claims

Prior to submission by Developer of any Request for Change Order which is based in whole or in part on a request by a Subcontractor to Developer for a price increase or time extension under its Subcontract, Developer shall have reviewed all claims by the Subcontractor which constitute the basis for the Request for Change Order and determined in good faith that each such claim is justified hereunder and that Developer is justified in requesting an increase in the applicable Price and change in the applicable Completion Deadlines in the amounts specified in the Request for Change Order. Each Request for Change Order involving Subcontractor Work, and each update to an incomplete Change Order request involving such Work shall include a summary of Developer's analysis of all Subcontractor claims components and shall include a certification signed by Developer's Project Manager stating that Developer has investigated the basis for the Subcontractor's claims and has determined that all such claims are justified as to entitlement and amount of money and/or time requested, has reviewed and verified the adequacy of all back-up documentation to be placed in escrow pursuant to Section 21.2, and has no reason to believe and does not believe that the factual basis for the Subcontractor's claim is falsely represented. Any Request for Change Order involving Subcontractor Work which is not accompanied by such analysis and certification shall be considered incomplete.

13.3.3 Performance of Disputed Work

If TxDOT refuses to issue a Change Order based on Developer's request, Developer shall nevertheless perform all work as specified by Directive Letter, and shall have the right to submit the issue to dispute resolution pursuant to Section 19. Developer shall maintain and deliver to TxDOT, upon request, contemporaneous records, meeting the requirements of Section 13.10, for all work performed which Developer believes constitutes extra work (including non-construction work), until all Disputes regarding entitlement or cost of such work are resolved.

13.4 Contents of Change Orders

13.4.1 Form of Change Order

Each Cost and Schedule Proposal and Request for Change Order shall be prepared in form acceptable to TxDOT, and shall meet all applicable requirements of this Section 13.

13.4.2 Scope of Work, Cost Estimate, Delay Analysis and Other Supporting Documentation

Developer shall prepare a scope of work, cost estimate, delay analysis and other information as required by this Section 13.4.2 for each Cost and Schedule Proposal and Request for Change Order.

13.4.2.1 Scope of Work

The scope of work shall describe in detail satisfactory to TxDOT all activities associated with the Change Order, including a description of additions, deletions and modifications to the existing requirements of the Contract Documents.

13.4.2.2 Cost Estimate

The cost estimate shall set out the estimated costs in such a way that a fair evaluation can be made. It shall include a breakdown for labor, materials, equipment and markups for overhead and profit, unless TxDOT agrees otherwise. The estimate shall include costs allowable under Section 13.5.2, if any. If the work is to be performed by Subcontractors and if the work is sufficiently defined to obtain Subcontractor quotes, Developer shall obtain quotes (with breakdowns showing cost of labor, materials, equipment and markups for overhead and profit) on the Subcontractor's stationery and shall include such quotes as back-up for Developer's estimate. No markup shall be allowed in excess of the amounts allowed under Sections 13.5.2 and 13.7. Developer shall identify all conditions with respect to prices or other aspects of the cost estimate, such as pricing contingent on firm orders being made by a certain date or the occurrence or non-occurrence of an event.

13.4.2.3 Delay Analysis

If Developer claims that such event, situation or change affects a Critical Path, it shall provide an impacted delay analysis indicating all activities represented or affected by the change, with activity numbers, durations, predecessor and successor activities, resources and cost, and with a narrative report, in form satisfactory to TxDOT, which compares the proposed new schedule to the current approved Project Schedule.

13.4.2.4 Other Supporting Documentation

Developer shall provide such other supporting documentation as may be required by TxDOT.

13.4.3 Justification

All Requests for Change Orders shall include an attachment containing a detailed narrative justification therefore, describing the circumstances underlying the proposed change, identifying the specific provision(s) of Section 13 which permit a Change Order to be issued, and describing the data and documents (including all data and reports required under Section 13.10) which establish the necessity and amount of such proposed change.

13.4.4 Developer Representation

Each Change Order shall contain a certification under penalty of perjury, in form acceptable to TxDOT, executed by Developer and stating that (a) the amount of time and/or compensation requested is justified as to entitlement and amount, (b) the amount of time and/or compensation requested includes all known and anticipated impacts or amounts, direct, indirect and consequential, which may be incurred as a result of the event or matter giving rise to such proposed change, and (c) the cost and pricing data forming the basis for the Change Order is complete, accurate and current . Each Change Order involving Work by a Subcontractor for which pricing data is required to be provided under Section 21.2 shall include a statement that the Subcontractor pricing data has been provided and shall include a copy of the certification required to be provided by the Subcontractor under Section 21.2.

13.5 Certain Limitations

13.5.1 Limitation on Price Increases

Any increase in a Price allowed hereunder shall exclude: (a) costs caused by the breach of contract or fault or negligence, or act or failure to act by any Developer-Related Entity; (b) costs to the extent that they are unnecessary or could reasonably be avoided by Developer, including by resequencing, reallocating or redeploying its forces to other portions of the Work or to other activities unrelated to the Work; and (c) costs for remediation of any Nonconforming Work. Costs incurred for the purpose of mitigating damages as described in (b) above, and not otherwise disallowed hereunder, would be reimbursable.

13.5.2 Limitation on Delay and Disruption Damages

13.5.2.1 Acceleration Costs; Delay and Disruption Damages

Acceleration Costs shall be compensable hereunder only with respect to Change Orders issued by TxDOT as an alternative to allowing an extension of a Completion Deadline as contemplated by Sections 13.2.1.3 and 13.3.2.5. Other delay and disruption damages shall be compensable hereunder only in the case of delays which qualify as TxDOT-Caused Delays entitling Developer to an extension of a Completion Deadline. Without limiting the generality of the foregoing, costs of rearranging Developer's work plan to accommodate TxDOT-Directed Changes not associated with an extension of a Completion Deadline shall not be compensable hereunder.

13.5.2.2 Other Limitations

Delay and disruption damages shall be limited to direct costs directly attributable to the delays described in Section 13.5.2.1 and markups thereon in accordance with Section 13.7 and any additional field office and jobsite overhead costs incurred by Agreement or directly attributable to such delays. In addition, before Developer may obtain any increase in a Price to compensate for additional or extended overhead, Acceleration Costs or other damages relating to delay, Developer shall have demonstrated to TxDOT's satisfaction that:

(a) its schedule which defines the affected Critical Path in fact set forth a reasonable method for completion of the Work; and

(b) the change in the Work or other event or situation which is the subject of the requested Change Order has caused or will result in an identifiable and measurable disruption of the Work which impacted the Critical Path activity (i.e. consumed all available Float and extended the time required to achieve Substantial Completion or Final Acceptance beyond the applicable Completion Deadline); and

(c) the delay or damage was not due to any breach of contract or fault or negligence, or act or failure to act of any Developer-Related Entity, and could not reasonably have been avoided by Developer, including by resequencing, reallocating or redeploying its forces to other portions of the Work or other activities unrelated to the Work (provided that TxDOT has agreed to reimburse Developer for additional costs reasonably incurred in connection with such reallocation or redeployment); and

(d) the delay for which compensation is sought is not concurrent with any delay for which Developer is responsible hereunder; and

(e) Developer has suffered or will suffer actual costs due to such delay, each of which costs shall be documented in a manner satisfactory to TxDOT.

13.5.3 Limitation on Time Extensions

Any extension of a Completion Deadline allowed hereunder shall exclude any delay to the extent that it (a) did not impact a Critical Path, (b) was due to the fault or negligence, or act or failure to act of any Developer-Related Entity, (c) is concurrent with any other unrelated delay to a Critical Path that is Developer's responsibility hereunder, or (d) could reasonably have been avoided by Developer, including by resequencing, reallocating or redeploying its forces to other portions of the Work (provided that if the request for extension involves a TxDOT-Caused Delay, Developer shall be entitled to a time extension unless TxDOT shall have agreed, if requested to do so, to reimburse Developer for its costs incurred, if any, in resequencing, reallocating or redeploying its forces). Developer shall be required to demonstrate to TxDOT's satisfaction that the change in the Work or other event or situation which is the subject of the Request for Change Order seeking a change in a Completion Deadline has caused or will result in an identifiable and measurable disruption of the Work which has impacted the Critical Path activity (i.e. consumed all available Float and extended the time required to achieve Substantial Completion or Final Acceptance beyond the applicable Completion Deadline).

13.5.4 Work Performed Without Direction

To the extent that Developer undertakes any efforts outside of the scope of the Work, unless Developer has received a Directive Letter or Change Order signed by TxDOT to undertake such efforts, Developer shall be deemed to have undertaken the extra work voluntarily and shall not be entitled to a Change Order in connection therewith. In addition, TxDOT may require Developer to remove or otherwise undo any such work, at Developer's sole cost.

13.6 Change Order Pricing

The price of a Change Order under this Section 13.6 shall be a negotiated lump sum price or unit prices as provided below. Lump sum price or unit prices shall be based on the original allocations of the applicable Price to comparable activities as set forth in Exhibit U, whenever possible. If reference to price allocations is inappropriate and if requested by TxDOT, negotiation for lump sum or unit price Change Orders shall be on an Open Book Basis and may be based on the pricing contained in the EPDs as well as Subcontractors' bid prices.

13.6.1 Detailed Cost Proposal

Developer may be required to submit a detailed cost proposal identifying all categories of costs in accordance with the requirements of Section 13.7: (a) showing all impacts on this Agreement from Work additions, deletions and modifications shown in the Change Order being priced; and (b) setting out the proposed costs in such a way that a fair evaluation can be made. When the Change Order adds Work to Developer's scope, the increase in the applicable Price shall be negotiated based on estimates or actual costs of labor, material and equipment. When the Change Order deletes Work from Developer's scope, the amount of the reduction in the applicable Price shall be based upon an estimate including a bill of material, a breakdown of labor and equipment costs. Markup for profit and overhead consistent with Section 13.7 shall apply for added and deleted Work Change Orders.

13.6.2 Identification of Conditions

Developer shall identify all conditions with respect to prices or other aspects of the proposal, such as pricing contingent on firm orders being made by a certain date or the occurrence or nonoccurrence of an event.

13.6.3 Contents

A negotiated Change Order shall specify costs, scheduling requirements, time extensions and all costs of any nature arising out of the Work covered by the Change Order. Notwithstanding the foregoing, the parties may mutually agree to use a multiple-step process involving issuance of a Change Order which includes an estimated construction and installation cost and which provides for a revised Change Order to be issued after a certain design level has been reached, thus allowing a refinement and further definition of the estimated construction and installation cost.

13.6.4 Added Work

When the Change Order adds Work to Developer's scope, the increase in the applicable Price shall be negotiated based on estimated costs of labor, material and equipment, or shall be based on actual costs in accordance with Section 13.7. For negotiated Change Orders, markups for profit and overhead shall be consistent with Sections 13.5.2 and 13.7.6. Risk associated with the Work described in the Change Order shall be addressed through the assumptions contained therein regarding the scope of such Work.

13.6.5 Deleted Work

When the Change Order deletes Work from Developer's scope, the amount of the reduction in the applicable Price shall be based upon Developer's estimated price for such work included in the Proposal for a Pilot System, or in the relevant Project Segment Supplement for a Project Segment, including a bill of material and a breakdown of labor and equipment costs, plus variable overhead and profit associated with the deleted work. Estimated costs that the Developer applied to develop the original Pilot System Prices and Hypothetical Project Segment Scenario Prices, as well as markup for profit and variable overhead at the rates the Developer applied to develop the original Pilo System Prices and Hypothetical Project Segment Scenario Prices, as reflected in the EPDs, shall apply for determining the amount of the price reduction for deleted Work Change Orders. The amount of risk associated with such Work as of the Contract Date by Developer shall be an additional factor in determining the amount of the price reduction for deleted Work Change Orders. When a deduction is involved, documented cancellation and restocking charges may be included in costs and subtracted from the price deduction. Reimbursement will be made for actual work done and all costs incurred, including mobilization of materials, prior to the date of the Directive Letter or other notification by TxDOT eliminating the work.

13.6.6 Change Order Both Adding and Deleting Work

When the Change Order includes both added and deleted Work, Developer shall prepare a statement of the cost of labor, material and equipment for both added and deleted work. If the cost of labor, material and equipment for the work added and deleted results in a:

(a) Net increase in cost, the change shall be treated as work added and the provisions of Section 13.6.4 shall be used to determine markups for overhead and profit. Markups for overhead and profit will be allowed only for the net increase in cost in order to establish the amount to be added to the applicable Price.

(b) Net decrease in cost, the change shall be treated as work deleted and the provisions of Section 13.6.5 shall be used on the net decrease in cost in order to establish the price deduct to the applicable Price.

(c) Net change of zero, there will be no change in the applicable Price.

13.6.7 Unit Priced Change Orders

Unit prices shall be deemed to include all costs for labor, material, overhead and profit, and shall not be subject to change regardless of any change in the estimated quantities. Unit-priced Change Orders shall initially include an estimated increase in the applicable Price based on estimated quantities. Upon final determination of the quantities, TxDOT will issue a modified Change Order setting forth the final adjustment to the applicable Price.

13.6.8 All-Inclusive Change Orders

All Change Orders submitted by Developer shall be all-inclusive, comprehensive and complete and shall not include any conditions with respect to pricing or schedule.

13.7 Time and Materials Change Orders

TxDOT may at its discretion issue a Time and Materials Change Order whenever TxDOT determines that a Time and Materials Change Order is advisable. The Time and Materials Change Order shall instruct Developer to perform the Work, indicating expressly the intention to treat the items as changes in the Work, and setting forth the kind, character, and limits of the Work as far as they can be ascertained, the terms under which changes to the applicable Price will be determined and the estimated total change in the Price anticipated thereunder. Upon final determination of the allowable costs, TxDOT shall issue a modified Change Order setting forth the final adjustment to the applicable Price.

13.7.1 Labor Costs

The cost of labor for workers used in the actual and direct performance of the Change Order work, whether provided by Developer or a Subcontractor, will equal the sum of the following:

(a) For construction-related labor, (1) the actual cost for direct labor; plus (2) the actual cost of workers' compensation and liability insurance required under this Agreement, health, welfare and pension benefits and Social Security deductions or 55% of the actual direct labor cost, whichever is less; plus (3) 25% of the total of the amounts set forth in clauses (1) and (2) for profit and overhead.

(b) For non-construction-related work (professional services), (1) the actual wages (i.e. the base wage paid to the employee exclusive of any fringe benefits); plus (2) a labor surcharge in the amount of 145%, which shall constitute full compensation for all profit, overhead and all state and federal payroll, unemployment and other taxes, insurance, fringe benefits and all other payments made to, or on behalf of, the workers, in excess of actual wages.

13.7.2 Material Costs

Material costs for Change Order work shall be the actual cost of all materials to be used in the performance of construction work including normal wastage allowance as per industry standards, less salvage value, plus 15% for profit and overhead. The material prices shall be supported by valid quotes and invoices from the suppliers. The cost shall include applicable sales taxes, freight and delivery charges and any allowable discounts.

13.7.3 Equipment

13.7.3.1 Costs for Developer-owned machinery, trucks, power tools or other similar equipment that are required for Change Order work will be allowed based on the following methodology:

(a) The direct cost of fuel, lubricants, repairs, parts, and depreciation will be considered without any additional compensation percentage for overhead and profit being added; and

(b) The equipment rental rates shall be those tabulated in the most recent version of the Rental Rate Blue Book, available at www.equipmentwatch.com). The rental rates to be used shall be the published monthly rate divided by 150 to yield an hourly rate, which hourly rate shall be further adjusted by multiplying it by the Rental Rate Blue Book adjustment rate for the year the equipment was manufactured and by the regional factor contained in the Rental Rate Blue Book estimated hourly operating cost rate.

Developer shall be considered to own such items if an ownership interest therein is held by (w) Developer, (x) any equity participant in Developer, (y) any Subcontractor performing construction work, or (z) any Affiliate of Developer, any equity participant in Developer or any such Subcontractor. If the publication of the Rental Rate Blue Book should be discontinued for any reason, TxDOT may select a different publication from which to make the described calculations.

13.7.3.2 Costs for machinery, trucks, power tools or other similar equipment that are required for Change Order work rented from any commercial enterprises routinely offering equipment and tools for rent or lease to the public will be allowed in an amount equal to the direct rental rate for the equipment plus a 5% markup for overhead and profit.

13.7.3.3 The time to be paid for use of equipment on the Project Site shall be the time the equipment is in operation on the Change Order work being performed. The time shall include the reasonable time required to move the equipment to the location of the Change Order work and return it to the original location or to another location requiring no more time than that required to return it to its original location. Moving time will not be paid for if the equipment is also used at the Project Site other than for Change Order work. Loading and transporting costs will be allowed, in lieu of moving time, when the equipment is moved by means other than its own power. No payment for loading and transporting will be made if the equipment is also used at the Project Site other than for Change Order work. Time will be computed in half and full hours. In computing the time for use of equipment, less than 30 minutes shall be considered one-half hour.

13.7.4 Subcontracted Work

To the extent that any Change Order is intended to compensate Developer for the cost of work performed by Subcontractors, the Change Order shall provide for compensation equal to (1) the actual cost to Developer of such work (which shall be charged by the Subcontractor on a time and materials basis in accordance with this Section 13.7, unless otherwise approved in writing by TxDOT), plus (2) 5% of such cost. The 5% markup for subcontracted work shall not apply to (i) Subcontracts with Affiliates; or ii) Subcontracts with Suppliers.

13.7.5 Other Direct Costs

For any justified change-related direct cost not covered by the categories of costs contained in Sections 13.7.1 through 13.7.5, Developer shall accept as full payment therefore an amount equal to the actual cost to Developer for such direct cost item. Without additional mark-up, back-up documentation supporting each cost item for this category shall be provided by Developer and approved by TxDOT in writing prior to any payment authorization being granted.

13.7.6 Overhead Items

The mark-ups specified herein constitute full and complete compensation for all overhead, tools or equipment having an individual replacement value of $1,000 or less, consumables (items which are consumed in the performance of the Work which are not a part of the finished product) and other indirect costs of the added or changed Work, as well as for profit thereon, including any and all costs and expenses incurred due to any delay in connection with the added or changed Work. Developer's mark-up percentages shall be considered to include:

(a) Supervisory expenses of all types, including salary and expenses of executive officers, supervising officers or supervising employees, excluding only direct supervision of force account work;

(b) Clerical or stenographic employees;

(c) Any and all field, jobsite and general home office overhead and operating expenses whatsoever;

(d) Subsistence and travel expenses for all personnel, other incidental job burdens, and bonuses not otherwise covered;

(e) Quality assurance and quality control; and

(f) Bond and insurance premiums.

With respect to non-construction related labor costs, overhead is covered by the labor surcharge, and includes accessories such as computer assisted drafting and design (CADD) systems, software and computers, facsimile machines, scanners, plotters, etc.

13.7.7 Change Order Data

Developer shall contemporaneously collect, record in writing, segregate and preserve (a) all data necessary to determine the costs described in this Section 13.7 with respect to all Work which is the subject of a Change Order or a requested Change Order (excluding negotiated Change Orders previously executed and delivered), specifically including costs associated with design work as well as Developer's costs for Utility Adjustment Work, and (b) all data necessary to show the actual impact (if any) on the Critical Path, the Project Schedule, and performance deadlines with respect to all Work which is the subject of a Change Order or a proposed Change Order. Such data shall be provided to TxDOT and any authorized representative of TxDOT reviewing any Claim or Dispute regarding compensation for such Work. Developer hereby waives the right to obtain compensation for any work for which cost data is required to be provided hereunder, if Developer fails to maintain and timely provide to TxDOT cost data meeting the requirements of this Agreement.

13.7.7.1 Developer shall maintain its records in such a manner as to provide a clear distinction between (a) the direct cost of Work for which it is entitled (or for which it believes it is entitled) to an increase in the applicable Price and (b) the costs of other operations. Developer shall furnish daily, on forms approved by TxDOT, reports of all costs described in (a) above. The reports shall itemize all costs for labor, materials, and equipment rental and give total of costs through the date of the report. For workers, the reports shall include hours worked, rates of pay, names and classifications. For equipment, the reports shall include size, type, identification number, rental rate and actual working hours of operation. All such records and reports shall be made immediately available to TxDOT upon its request. The cost of furnishing such reports are deemed to be included in Developer's overhead and fee percentages.

13.7.7.2 All reports shall be signed by Developer. TxDOT will compare its records with Developer's reports, make the necessary adjustments and compile the costs of Work completed under a Time and Materials Change Order. When such reports are agreed upon and signed by both Parties, they will become the basis of payment.

13.8 Necessary Basic Configuration Changes

13.8.1 Notwithstanding the fact that this Agreement generally obligates Developer to undertake all work necessary to complete each Pilot System and Project Segment without an increase in the applicable Price, this Section 13.8 provides for an increase in the Price to be made in conjunction with Necessary Basic Configuration Changes, and such changes shall be considered a TxDOT-Directed Change for which TxDOT has not submitted a Change Order or a Request for Change Proposal. If Developer commenced any construction work affected by the change prior to delivery of an appropriate PCO Notice, the Change Order shall allow TxDOT a credit for the cost of any unnecessary work performed and/or shall exclude any additional costs associated with redoing the work already performed.

13.8.2 Developer shall be responsible for any cost increases and/or delays which affect the duration of a Critical Path resulting from changes in requirements and obligations of Developer relating to any Pilot System and/or Project Segment due to Errors in the Schematic Design other than those which require a Necessary Basic Configuration Change. In such event, no change in the Work shall be deemed to have occurred and no Change Order shall be issued for any such cost increases and/or delays.

13.9 Change Orders for Differing Site Conditions, Force Majeure Events, and Hazardous Materials

13.9.1 Differing Site Conditions

13.9.1.1 Subject to the restrictions and limitations set forth in this Section 13, Developer shall be entitled to a Change Order for certain additional costs which are directly attributable to any Differing Site Conditions to the extent permitted in this Section 13.9.1. No time extension shall be available with respect to Differing Site Conditions, and no delay damages shall be recovered. To the extent that additional costs are incurred in connection with a Pilot System or a Project Segment due to changes in Developer's obligations relating to the Work resulting from the existence of Differing Site Conditions and which are not reimbursed by insurance proceeds, TxDOT shall be fully responsible for any additional costs directly attributable to changes in Developer's obligations hereunder resulting from the existence of Differing Site Conditions, and a Change Order shall be issued to compensate Developer for such additional costs.

13.9.1.2 During progress of the Work, if Differing Site Conditions are encountered, Developer shall immediately notify TxDOT thereof telephonically or in person, to be followed immediately by written notification. Developer shall be responsible for determining the appropriate action to be undertaken, subject to concurrence by TxDOT. In the event that any Governmental Approvals specify a procedure to be followed, Developer shall follow the procedure set forth in the Governmental Approvals. If the discovery of Differing Site Conditions necessitates a change in the design of the Project, such change shall be submitted to TxDOT for concurrence in accordance with TP Section _________.

13.9.1.3 Developer hereby acknowledges and agrees that it has assumed all risks with respect to the need to work around locations impacted by Differing Site Conditions. Developer shall bear the burden of proving that a Differing Site Condition exists and that it could not reasonably have worked around the Differing Site Condition so as to avoid additional cost.

13.9.1.4 Each request for a Change Order relating to a Differing Site Condition shall be accompanied by a statement signed by a qualified professional setting forth all relevant assumptions made by Developer with respect to the condition of the applicable Project Site, justifying the basis for such assumptions, explaining exactly how the existing conditions differ from those assumptions, and stating the efforts undertaken by Developer to find alternative design or construction solutions to eliminate or minimize the problem and the associated costs. No time extension or costs will be allowed in connection with any work stoppage in affected areas during the investigation period described above.

13.9.2 Force Majeure Events

Subject to the limitations contained in, and upon Developer's fulfillment of all applicable requirements of, this Section 13, TxDOT shall issue Change Orders (a) to compensate Developer for additional costs incurred arising directly from Force Majeure Events (excluding Acceleration Costs or delay and disruption damages other than for any Force Majeure Events which are included in the definition of TxDOT-Caused Delay), and (b) to extend the applicable Completion Deadlines as the result of any delay in a Critical Path directly caused by a Force Majeure Event, to the extent that it is not possible to work around the problem.

13.9.3 Hazardous Materials Management

If compensation is payable to Developer pursuant to Section 6.3 with respect to Hazardous Materials Management, the amount of the Change Order shall either be a negotiated amount acceptable to the Parties, or 100% of the Reimbursable Hazardous Materials Costs for the work in question, subject to the limitations set forth in this Section 13.9.4. Developer shall not be entitled to a Change Order for additional compensation or extension of time with respect to the Hazardous Materials Management responsibilities set forth in Sections 6.3.4 and 6.3.5.

Entitlement to compensation or a time extension shall be limited to work performed pursuant to Developer's Hazardous Materials Management Plan, Investigative Work Plan and Site Investigation Report for such Hazardous Materials as approved by TxDOT, in writing. No compensation or time extension shall be allowed with respect to (a) immaterial quantities of Hazardous Materials, (b) any Hazardous Materials that could have been avoided by reasonable design modifications or construction techniques, (c) any costs that could have been avoided, or (d) any Hazardous Materials encountered during or in connection with the demolition of buildings, fixtures or other improvements on any parcels within the applicable Project Site.

13.9.3.1 Determination of Reimbursable Amount

13.9.3.1.1 Developer shall be deemed to have waived the right to collect any and all costs incurred in connection with any Hazardous Materials Management and any right to obtain an extension of a Completion Deadline if TxDOT is not provided written notice of the discovery of Hazardous Materials and afforded the opportunity to inspect sites containing Hazardous Materials before any action is taken which would inhibit TxDOT's ability to ascertain, based on a site inspection, the nature and extent of the materials. In the event of an emergency involving Hazardous Materials, Developer may take such limited actions as are required by Law without advance notice to TxDOT, but shall provide such notice immediately thereafter (which in no event shall be more than 2 hours after the incident by phone and 24 hours after the incident by written notice).

13.9.3.1.2 In cases involving reimbursement for Hazardous Materials Management under this Section 13.9.3, allowable costs shall be limited to the incremental costs incurred after completion of the testing process to determine whether Hazardous Materials are present, associated with the Hazardous Materials at issue (deducting any avoided costs such as the cost of disposal that would have been incurred had Hazardous Materials not been present). Investigating and characterizing are included in each Price and Developer shall not be entitled to additional compensation therefore. Developer shall take all reasonable steps to minimize any such costs. Compensation shall be allowed only to the extent that Developer demonstrates to TxDOT's satisfaction that (a) the Hazardous Materials Management could not have been avoided by reasonable design modifications or construction techniques and (b) Developer's plan for the Hazardous Materials Management represents the approach which is most beneficial to the Project and the public. Developer shall provide TxDOT with such information, analyses and certificates as may be requested by TxDOT in order to enable a determination regarding eligibility for payment.

13.9.3.2 Time Extensions

Developer shall not be entitled to an extension of any Completion Deadline with regard to any need to investigate or characterize any Hazardous Materials, regardless of the total quantities. If Developer encounters Hazardous Materials within the Schematic ROW Limits which, due to no fault of Developer, results in delays to a Critical Path, then TxDOT shall bear the risk of such delay (excluding those conditions for which Developer has agreed to be responsible as described in Section 18.1.1(g)).

13.9.3.3 Limitations on Change Orders

Developer shall have no right to receive any compensation for any Hazardous Materials Management resulting from a situation described in Section 18.1.1(g).

13.9.3.4 Insurance Proceeds

If the cost of any Hazardous Materials Management is covered by the insurance described in Section 9, Developer shall be entitled to reimbursement of its costs from proceeds of insurance and self-insurance, up to the limits of the applicable policy, less any deductibles which shall be Developer's responsibility. To the extent that such proceeds are available, Developer shall not be entitled to payment hereunder on any other basis for such Hazardous Materials Management.

13.10 Change Order Records

Developer shall maintain its records in such a manner as to provide a clear distinction between the direct costs of Work for which it is entitled (or for which it believes it is entitled) to an increase in the applicable Price and the costs of other operations. Developer shall contemporaneously collect, record in writing, segregate and preserve (a) separate daily occurrence logs as required under TP Section _________, together with all other data necessary to determine the costs of all Work which is the subject of a Change Order or a requested Change Order, specifically including costs associated with design Work as well as Adjustments, and (b) all data necessary to show the actual impact (if any) of the change on each Critical Path with respect to all Work which is the subject of a Change Order or a proposed Change Order, if the impact on the Project Schedule is in dispute. Such data shall be provided to any dispute resolvers, TxDOT and its authorized representatives as directed by TxDOT, on forms approved by TxDOT. The cost of furnishing such reports is included in Developer's predetermined overhead and profit markups.

13.10.1 Daily Work Reports and Data Collection

Developer shall furnish TxDOT completed daily work reports for each day's Work which is to be paid for on a time and material basis. The daily time and material Work reports shall be detailed as follows:

(a) Name, classification, date, daily hours, total hours, rate, and extension for each worker (including both construction and non-construction personnel) for whom reimbursement is requested.

(b) Designation, dates, daily hours, total hours, rental rate, and extension for each unit of machinery and equipment.

(c) Quantities of materials, prices, and extensions.

(d) Transportation of materials.

The reports shall also state the total costs to date for the Time and Materials Change Order Work.

13.10.2 Supplier's Invoices

Materials charges shall be substantiated by valid copies of Supplier's invoices. Such invoices shall be submitted with the daily time and material Work reports, or if not available, they shall be submitted with subsequent daily time and material Work reports. Should said Supplier's invoices not be submitted within 60 days after the date of delivery of the materials, TxDOT shall have the right to establish the cost of such materials at the lowest current wholesale prices at which such materials are available, in the quantities concerned, delivered to the location of Work, less any discounts available.

13.10.3 Execution of Reports

All Time and Materials Change Order reports shall be signed by Developer's Project Manager.

13.10.4 Adjustment

TxDOT will compare its records with the completed daily time and material Work reports furnished by Developer and make any necessary adjustments. When these daily time and material Work reports are agreed upon and signed by both parties, said reports shall become the basis of payment for the Work performed, but shall not preclude subsequent adjustment based on a later audit. Developer's cost records pertaining to Work paid for on a time and material basis shall be open, during all regular business hours, to inspection or audit by representatives of TxDOT during the life of this Agreement and for a period of not less than five years after the Final Acceptance Date, and Developer shall retain such records for that period. Where payment for materials or labor is based on the cost thereof to any Person other than Developer, Developer shall make every reasonable effort to insure that the cost records of each such other Person will be open to inspection and audit by representatives of TxDOT on the same terms and conditions as the cost records of Developer. Payment for such costs may be deleted if the records of such third parties are not made available to TxDOT's representatives. If an audit is to be commenced more than 60 days after the Final Acceptance Date, Developer will be given a reasonable notice of the time when such audit is to begin.

13.11 Matters Not Eligible for Change Orders and Waiver

Developer acknowledges and agrees that no increase in a Price or extension of a Completion Deadline is available except in circumstances expressly provided for herein, that such price increase and time extension shall be available only as provided in this Section 13 and that Developer shall bear full responsibility for the consequences of all other events and circumstances. Matters which are Developer's exclusive responsibility include the following:

(a) Errors in the Design Documents and Construction Documents (including Errors therein traceable to Errors in the Schematic Design, subject only to the right to a Change Order to the extent permitted by Section 13.8 or 13.9);

(b) any design changes requested by TxDOT as part of the process of approving the Design Documents for consistency with the requirements of the Contract Documents, the Governmental Approvals and/or applicable Laws;

(c) defective or incorrect schedules of Work or changes in the planned sequence of performance of the Work (unless arising from causes which otherwise give rise to a right to a Change Order);

(d) action or inaction of Developer's employees or Subcontractors (unless arising from causes which otherwise give rise to a right to a Change Order);

(e) action or inaction of adjoining property owners or TxDOT's other contractors (unless arising from causes which otherwise give rise to a right to a Change Order);

(f) groundwater levels or subsurface moisture content;

(g) untimely delivery of equipment or material, or unavailability or defectiveness or increases in costs of material, equipment or products specified by the Contract Documents, except to the extent resulting from a Force Majeure Event;

(h) any costs covered by insurance proceeds received by (or on behalf of) Developer;

(i) correction of Nonconforming Work and review and acceptance thereof by TxDOT (including rejected design submittals);

(j) failure by any Developer-Related Entity to comply with the requirements of the Contract Documents, Governmental Approvals or Laws;

(k) delays not on a Critical Path;

(l) any suspensions, terminations, interruptions, denials, non-renewals of, or delays in issuance of a Governmental Approval that is required to be obtained by Developer, any failure to obtain such Governmental Approval, and compliance with the terms and conditions of all Governmental Approvals ;

(m) any situations (other than Force Majeure Events) which, while not within one of the categories delineated above, were or should have been anticipated because such situations are referred to elsewhere in this Agreement or arise out of the nature of the Work;

(n) fluctuations and changes in the price of labor, materials, equipment, Hardware, Software, machinery or any other item required to perform and complete the Work, except to the extent covered by Section 12.1.4; and

(n) all other events beyond the control of TxDOT for which TxDOT has not expressly agreed to assume liability hereunder.

Developer hereby assumes responsibility for all such matters, and acknowledges and agrees that assumption by Developer of responsibility for such risks, and the consequences and costs and delays resulting therefrom, is reasonable under the circumstances of this Agreement and that contingencies included in the Pilot System Prices, Hypothetical Project Segment Scenario Prices, Pilot System Maintenance Prices and Hypothetical Project Segment Scenario Maintenance Prices provided in the Proposal in Developer's sole judgment, constitute sufficient consideration for its acceptance and assumption of said risks and responsibilities.

DEVELOPER HEREBY EXPRESSLY WAIVES ALL RIGHTS TO ASSERT ANY AND ALL CLAIMS BASED ON ANY CHANGE IN THE WORK, DELAY, SUSPENSION OR ACCELERATION (INCLUDING ANY CONSTRUCTIVE CHANGE, DELAY, SUSPENSION OR ACCELERATION) FOR WHICH DEVELOPER FAILED TO PROVIDE PROPER AND TIMELY NOTICE OR FAILED TO PROVIDE A TIMELY REQUEST FOR CHANGE ORDER, AND AGREES THAT IT SHALL BE ENTITLED TO NO COMPENSATION OR DAMAGES WHATSOEVER IN CONNECTION WITH THE WORK EXCEPT TO THE EXTENT THAT THE CONTRACT DOCUMENTS EXPRESSLY SPECIFY THAT DEVELOPER IS ENTITLED TO A CHANGE ORDER OR OTHER COMPENSATION OR DAMAGES.

13.12 Disputes

If TxDOT and Developer agree that a request to increase a Price and/or extend any Completion Deadline by Developer has merit, but are unable to agree as to the amount of such price increase and/or time extension, TxDOT agrees to mark up the Request for Change Order or Cost and Schedule Proposal, as applicable, provided by Developer to reduce the amount of the price increase or time extension as deemed appropriate by TxDOT. In such event, TxDOT will execute and deliver the marked-up Change Order to Developer within a reasonable period after receipt of a request by Developer to do so, and thereafter will make payment and/or grant a time extension based on such marked-up Change Order. The failure of TxDOT and Developer to agree to any Change Order under this Section 13 (including agreement as to the amount of compensation allowed under a Time and Materials Change Order and the disputed amount of the increase in the applicable Price and/or extension of a Completion Deadline in connection with a Change Order as described above) shall be a dispute to be resolved pursuant to Section 19. Except as otherwise specified in the Change Order, execution of a Change Order by both parties shall be deemed accord and satisfaction of all claims by Developer of any nature arising from or relating to the Work covered by the Change Order. Developer's Claim and any award by the dispute resolver shall be limited to the incremental costs incurred by Developer with respect to the disputed matter (crediting TxDOT for any corresponding reduction in Developer's other costs) and shall in no event exceed the amounts allowed by Section 13.7 with respect thereto.

13.13 Changes Not Requiring Change Order

Changes in the Work which have no net cost effect on a Price may be approved in writing by TxDOT as a Deviation, and in such event shall not require a Change Order. Any other change in the requirements of the Contract Documents shall require either a Directive Letter or a Change Order.

13.14 No Release or Waiver

13.14.1 No extension of time granted hereunder shall release Developer's Surety from its obligations. Work shall continue and be carried on in accordance with all the provisions of this Agreement and this Agreement shall be and shall remain in full force and effect during the continuance and until Final Acceptance unless formally suspended or terminated by TxDOT in accordance with the terms hereof. Permitting Developer to finish the Work or any part thereof after a Completion Deadline, or the making of payments to Developer after such date, shall not constitute a waiver on the part of TxDOT of any rights under this Agreement.

13.14.2 Neither the grant of an extension of time beyond the date fixed for the completion of any part of the Work, nor the performance and acceptance of any part of the Work or materials specified by this Agreement after a Completion Deadline, shall be deemed to be a waiver by TxDOT of its right to terminate this Agreement for abandonment or failure to complete within the time specified (as it may have been extended) or to impose and deduct damages as may be provided.

13.14.3 No course of conduct or dealings between the parties nor express or implied acceptance of alterations or additions to the Work, and no claim that TxDOT has been unjustly enriched shall be the basis for any claim, request for additional compensation or extension of a Completion Deadline. Further, Developer shall undertake, at its risk, work included in any request, order or other authorization issued by a person in excess of that person's authority as provided herein, or included in any oral request. Developer shall be deemed to have performed such work as a volunteer and at its sole cost. In addition, TxDOT may require Developer to remove or otherwise undo any such work, at Developer's sole cost.

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