Regl. 7998, art. 15 dup2
SUSPENSION OF WORK AND TERMINATION
Length: 2,373 wordsOfficial source
Cite as Reglamento Núm. 7998, Art. 15 dup2
15.1 Suspension of Work
15.1.1. At any time and without cause, Owner may, with a minimum of seven (7) calendar days written notice,
suspend the Work or any portion thereof for a period of not more than ninety (90) consecutive days by notice in
writing to Contractor and Architect/Engineer. Said notice will fix the date on which Work will be resumed.
Contractor shall resume the Work on the date so fixed. Contractor shall be allowed an adjustment in the Contract
Price or an extension of the Contract Time, or both, directly attributable to any such suspension if Contractor makes
a timely Claim therefore as provided in Article 11.5. Said adjustment shall be computed based on the following
factors:
15.1.1.1. Fixed Project expenses (after all reasonable reduction and mitigation of expenses) for the period of the
Work stoppage, such as: (i) the Contractor's and subcontractor's supervisory, administrative, and operations
personnel salaries, together with their corresponding fringe benefits and insurance costs if this personnel has
been kept in the Contractor's payroll and are not gainfully utilized by Contractor or someone else elsewhere, (ii)
utilities, (iii) Project's fixed equipment, and (iv) miscellaneous expenses such as safety, and vigilance.
15.1.1.1.1. At any time during the suspension, the Owner may order the Contractor to demobilize, paying the
Contractor the de-mobilization costs and any future mobilization costs to re-start the Project.
15.1.1.1.2. Cancellation costs and cost increases for materials already ordered which had to be canceled and
reordered, provided that such costs are not in excess of reasonable market prices.
15.1.1.1.3. Differential increases in labor costs, and its corresponding fringe and insurance benefits, in the
Project for the period that the work is stopped.
15.1.1.1.4. Construction equipment use costs for the stoppage period if said equipment remains stationed at
the site (idle equipment rates), or transportation costs if the Owner orders in writing that it be removed from the
site. If the equipment is owned by the Contractor, he will be paid the cost (depreciation) of said equipment.
15.1.1.1.5. Insurance costs whose rates are based on the time such insurance is in effect, such as Builder's
Risk Insurance, for the period that the work is stopped.
15.1.1.1.6. Contractor's overhead and profit in the amount equivalent to fifteen percent (15%) of all expenses
detailed above.
15.1.1.1.7. An amount of the Contractor's main office overhead costs (exclusively in this instance and solely
related to suspension) reached by mutual accord between the parties or if no mutual accord can be reached, the
cost for main office overhead shall be computed using the Eichleay formula using as base the previous two (2)
years of Contractor's main office overhead cost taken from the previous two (2) years financial statements which
have been externally audited by a recognized CPA. If the Contractor does not have financial statements
prepared externally by a recognized CPA, he must prepare them in order to be able to present a claim for this
purpose.
15.1.1.1.8. Contractor shall exert his best effort to mitigate the costs included in this Article 15.1.1.
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15.1.2. At any time, the Owner's Representative may, with a minimum of seven (7) calendar days written
notice, for the following causes suspend the Work or part of the Work due to:
15.1.2.1. the repeated and persistence failure of the Contractor to perform his contractual obligations;
15.1.2.2. the repeated and persistent failure of the Contractor to have sufficient labor and the trades necessary to
maintain the quality and progress required in the Contract Documents;
15.1.2.3. the repeated and persistent failure of the Contractor to have sufficient material necessary to
maintain the quality and progress required in the Contract Documents;
15.1.2.4. the repeated and persistent failure of the Contractor to have sufficient equipment and type of
equipment necessary to maintain the quality and progress required in the Contract Documents.
15.1.3. The Contractor will be responsible for all of his costs due the suspension of the Work indicated in Article
15.1.2 and there will be no increase in Contract Price or extension to the Contract Time as a result of such
suspension for cause.
15.1.3.1. The suspension for cause under Article 15.1.2 will last until the Contractor remedies the situation or until
termination.
15.1.3.2. The Contractor shall also be responsible for the inspection costs made necessary by overtime work
to restore the project to its intended schedule due to delays caused by the actions mentioned in Article 15.1.2.
Said costs will consist of the actual cost paid therefore by and to the inspector, if his presence is required or
necessary.
15.1.4. At any time, the Owner's Representative or the Contractor may suspend the work or part of the work
without advanced notice due to any danger or potential danger that may exist to life, limb or property or any
emergency whether on the Site or off the Site.
15.1.4.1. The Contractor will be responsible for all of his costs due the suspension and there will be no time
extension to the Contract Time if the suspension is due to the failure of the Contractor to perform his contractual
obligations.
15.1.4.2. The Owner will compensate the reasonable costs incurred by Contractor if the suspension is due to
causes other than the failure of the Contractor to perform his contractual obligations and such causes are
attributable to Owner.
15.1.5. In case of suspension of Work for any cause whatsoever, the Contractor shall be responsible for the Work
under the Contract and shall take such precautions as may be necessary to prevent damage to the Project,
provide suitable drainage and erect necessary temporary structures, signs or other facilities.
15.1.5.1. During such period of suspension, the Contractor shall properly and continuously maintain in acceptable
growing conditions all living material in newly established plantings, seeding, and sodding furnished under his
contract, and shall take adequate precautions to protect new tree growth and other important vegetative growth
against injury.
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15.1.5.2. When Work is suspended by the Contractor without authorization from the Owner, or is suspended by
the Owner due to the causes specified in Article 15.1.2, the costs of providing the protective measures
specified in Article 15.1.5. and 15.1.5.1, during the period of suspension shall be borne by the Contractor.
15.1.5.3. The Contractor will be responsible for all of its costs due to the suspension and there will be no time
extension to the Contract Time if the suspension is due to the failure of the Contractor to perform its contractual
obligations, or other causes attributable to Contractor.
15.1.5.4 The Owner will compensate the reasonable costs incurred by Contractor if the suspension is due to causes
other than the failure of the Contractor to perform his contractual obligations and such causes are attributable to
Owner.
15.2 Owner May Terminate for Cause
15.2.1. The occurrence of any one or more of the following events will justify termination for cause:
15.2.1.1. Contractor's persistent or repeated failure to perform the Work in accordance with the Contract
Documents (including, but not limited to, failure to supply sufficient skilled workers or suitable materials or equipment
or failure to adhere to the progress schedule established under the Contract, as adjusted from time to time); or
15.2.1.2. Contractor's egregious disregard of Laws or Regulations of any public body having jurisdiction; or
15.2.1.3. Contractor's persistent or repeated disregard of the authority of Architect/Engineer, Owner or Owner's
Representative; or
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15.2.1.4. Contractor's persistent and repeated violation of any substantial provisions of the Contract Documents;
and does not start curing and without interruption continues to cure same prior to termination.
15.2.1.5. Contractor is adjudged bankrupt, or is a party to a fraud; or
15.2.1.6. Contractor should make a general assignment for the benefit of his creditors; or
15.2.1.7. A receiver be appointed on account of the Contractor's insolvency; or
15.2.1.8. An attachment is made upon a substantial amount the Contractor's properties utilized to perform the
Work, and it is not lifted, or the claim otherwise secured, within five (5) working days thereafter; or
15.2.1.9. Contractor persistently fails to make prompt payment to subcontractors, as per Article 6.21.2, or for
materials, services, or labor already paid to Contractor by the Owner; or
15.2.1.10. Contractor abandons or discontinues the prosecution of the Work without Owner's written authorization.
15.2.1.10.1 Nevertheless, Contractor may discontinue the prosecution of the Work during: (i) Holy Thursday; (ii) the Friday
after Thanksgiving; and (iii) the time period commencing on the Saturday before Christmas Day (December 25) and ending
on the Sunday after Three Kings' Day (January 6) without incurring in an event of default due to discontinuance of the Work.
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15.2.2. If one or more of the events identified in Article 15.2.1 occur, Owner may, after giving Contractor (and the
surety, if any) seven (7) days written notice to cure such default, terminate the services of Contractor, exclude
Contractor from the Site, and take possession of the Work and of all Contractor's tools and appliances at the Site,
and use the same to the full extent they could be used by Contractor (without liability to Contractor for trespass or
conversion), incorporate in the Work all materials and equipment stored at the Site or for which Owner has paid
Contractor but which are stored elsewhere, and finish the Work as Owner may deem expedient. In such case,
Contractor shall not be entitled to receive any further payment until the Work is finished.
15.2.3. In Lump Sum contracts, if the unpaid balance of the Contract Price exceeds all claims, costs, losses,
and damages (including but not limited to all fees and charges of engineers, architects, attorneys, and other
professionals and all court or arbitration or other dispute resolution costs) sustained by Owner arising out of or
relating to completing the Work, such excess will be paid to Contractor.
15.2.4. If such claims, costs, losses, and damages exceed such unpaid balance, Contractor shall pay the
difference to Owner. Such claims, costs, losses, and damages incurred by Owner will be reviewed by Owner's
Representative as to their reasonableness and, when SO approved by Owner's Representative, incorporated in a
Change Order or Extra Work Order. When exercising any rights or remedies under this paragraph Owner shall not
be required to obtain the lowest price for the Work performed, but shall assume all reasonable means to
complete the work at a reasonable cost.
15.2.5. When Contractor's services have been SO terminated by Owner, the termination will not affect any rights
or remedies of Owner against Contractor then existing or which may thereafter accrue. Any retention or payment of
moneys due Contractor by Owner will not release Contractor from liability.
15.2.5.1. Termination of the Contract, as stated above, will not release the Contractor of his responsibilities for
the Work completed, nor shall said termination release surety from its obligations.
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15.3 Owner May Terminate the Contract For Convenience
15.3.1. Upon seven (7) days written notice to Contractor and Architect/Engineer, Owner may, without cause and
without prejudice to any other right or remedy of Owner, elect to terminate the Contract for convenience.
15.3.2. After receipt of notice of termination for convenience from the Owner, the Contractor shall submit, within
sixty (60) calendar days of the effective termination date, a Claim for compensation damages and/or costs. In
such Claim, if presented, Contractor shall be paid, without duplication of any items, the following:
15.3.2.1. In lump sum contracts, the work performed and accepted by the Owner shall be paid in accordance
with the schedule of values approved by the Owner.
15.3.2.2. The actual cost of all acceptable materials for which orders have been placed by the Contractor for
use under this Contract, provided that, if required by the Owner, the Contractor shall make every reasonable
effort to cancel such orders. If said orders can be canceled, the Owner shall pay for all restocking, or other
charges, associated with said cancellation.
15.3.2.3. The actual cost of acceptable raw material ordered or purchased for fabrication, or materials already
fabricated, whether those materials are located in the shop, the project, or in transit.
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15.3.2.4. The actual amounts paid by the Contractor for construction equipment rentals up to the time of
termination, plus any amounts accrued, or payable, under written contracts for the rental of such equipment.
Contractor shall make every possible effort to cancel any such contracts. In the event that the rental contracts
can be canceled by the Contractor, the Owner shall pay for all reasonable costs incurred directly caused by
the rental cancellation. If the equipment is owned by the Contractor, he will be paid the cost (depreciation) of
said equipment.
15.3.2.5. The actual costs disbursed by to the Contractor of bonds, insurance, taxes, and deposits required
under the Contract, unless previously paid by Owner.
15.3.2.6. Contractor's overhead and profit in the amount equivalent to fifteen percent (15%) of all payments
made under Articles 15.3.2.2 to 15.3.2.5.
15.3.2.7. Contractor shall exert his best effort to mitigate the costs mentioned in Articles 15.3.2.2 to 15.3.2.5.
15.3.2.7.1. From the total sum of all the costs indicated in Articles 15.3.2.2 to 15.3.2.6. there shall be
deducted all payments therefore previously made and all proper charges to the Contractor in relation
therewith.
15.3.3. In the event that the Work is suspended under Article 15.1, thereby stopped for a period of time, and
after said suspension is cancelled, the amounts due to the Contractor under the Contract will be first
calculated for the suspension period as per Article 15.1 hereunder and then calculated for the cancellation
afterwards as per Article 15.3, hereunder. The total amount due the Contractor will be the sum of both.
15.3.4. If the Contract is terminated for convenience, the Owner shall assume all security, and insurance of
the project on the effective date of the termination, or cancellation.
15.3.5. Termination of the Contract for convenience, as stated above, will not release Contractor from his
responsibilities for the Work completed, nor shall it release his surety of its obligations.
15.3.6. Contractor shall not be entitled to payment on account of loss of anticipated or expected profits or
revenues or other economic loss arising out of or resulting from such termination for convenience under this