CONSTRUCTION AND INSTALLATION; PAYMENT AND

PERFORMANCE BOND The ESPC will include a Construction and Installation Schedule that will contain the timetables and milestones for project construction and installation. If required by the Government Unit, documentation of required insurance and subcontractor lists may be included in this schedule or broken out into a separate schedule. The construction/installation phase of the project will be treated in compliance with individual Government Unit requirements and the appropriate governing statutes. This may require evidence to demonstrate appropriate levels of competition in the ESCO's procurement for materials and subcontractors for the project. Since construction is just one component of the overall project, a separate construction contract may be desirable and in some cases necessary. The construction contract would then be referred to in the body of the contract and attached as an exhibit, appendix or other type of attachment. Another approach would be to consolidate the appropriate construction language for inclusion in the body of the final contract. This will need to be decided as appropriate on a case-by-case basis. As a condition for granting an ESPC and in order to ensure completion of the Construction and Installation Schedule set forth in the ESPC, the ESCO shall provide a Payment and Performance Bond in favor of the Government Unit and SOEP. The Payment and Performance Bond amount shall equal the total construction and installation costs incurred by the ESCO pursuant to the ESPC. 27 I Page Energy Savings Performance Contract Program Amended Regulation The Payment and Performance Bond must be issued by an insurer duly authorized to do business in the Commonwealth of Puerto Rico by the Puerto Rico Insurance Commissioner with, at least, a financial strength rating of A- and financial size category of V by AM Best.