Contractor default

Completion risks are primarily related to commissioning delays, contractor default and cost overruns. Typical outcomes of such events would be the loss of revenue, difficulties in servicing debts, the calling-in of bonds, the need to refinance or seek new loans. Prudent strategies would involve the use of reputable contractors, early triggers of performance bonds, etc. 

Eliminates contractor A performance bond is a guarantee by a surety to the owner that the contractor will complete the work in accordance with the plans and specifications. If the contractor defaults under the terms of the contract, the surety becomes responsible for the contractor s obligations and must complete the work in accordance with the terms of the contract. 

If a contractor defaulted that was under contract to a CM at Risk, the CM would become responsible to complete the work. If the contractor was bonded, the CM may take action against the bond to try and force the bonding company to step in and complete the work of the defaulted contractor for the CM. A Construction Manager - at Risk holds contracts. A Construction Manager - Advisor does not hold any contracts. All contracts are prime with the Owner. 

When the rerun is required due to matrix effects interferences or other problems encountered, the Government will pay the Contractor for the reruns. Such reruns shall be billable and accountable under the specified contract allotment of automatic reruns. When the rerun is required due to Contractor materials, equipment or instrumentation problems or lack of Contractor adherence to specified contract procedures, the rerun shall not be billable nor accountable under the terms of this contract. The Contractor s failure to perform any of the sample reruns specified herein, either billable or nonbillable shall be construed as Contractor nonperformance and may result in the termination of the contract for default. Specific requirements for reextraction and reanalysis are given in Section 17. 

If the contractor fails or refuses to provide sufficient resources to perform the work, the Owner has the right to terminate the contract for default after giving the contractor prior written notice and has then the right to do whatever is required, including taking over the contractor s resources, to complete the work. 

Contractors - lenders interests extend beyond just the identity of the principal contractors. They will consider their reputation and financial strength in assessing whether there is any risk of default in relation to any function which is material to the project s success ... 

NOTE Surplus chemicals not selected for donation are offeredfor sale to the public by competitive offerings such as sealed bid sales, spot bid sales or auctions. DOE or DOE contractor may conduct the sale if the GSA is made aware of DOE s intent at the time the excess is reported or the GSA will conduct the sale, by default.]... 

Under the AHERA ERP no penalties are assessed against LEAs for first time violations if they are relatively low level violations. Instead, Notices of Noncompliance, which do not carry penalties, are issued for these first time violations. Civil complaints can be issued if the LEA does not comply with a Notice of Noncompliance. For example, in In the Matter of Rose 6- Alex Pilibos, the EPA Region issued a default order penalizing the ovmers of a private school building because they had allegedly not submitted a management plan in accordance with the Notice of Noncomphance issued to them, and they did not respond to the EPA s complaint. Civil complaints may also be issued for subsequent violations and more serious first violations. The 1998 AHERA ERP amendments authorize penalties for first time violations if the LEA fails to inspect or reinspect using accredited contractors. 

The Basis for Capital Costs includes specifications for process controls, plant location, currency, wage rates, units of measure, and contractor profiles. Default values are provided for all entries, most of which need not be adjusted. 

In case of the contractor s default due to the missed deadline end of test run , for which the contractor is responsible, liquidated damages will be charged. The liquidated damages amount to 0.5% of the contract price per full calendar week (alternatively per commenced calendar week) of the missed deadline, however maximum 5% of the contract price. 

Whether the owner is reserving the right to default the contractor if the contractor s accident and MSHA compliance rate is unacceptable and, if so, an objective standard to apply in determining whether a contractor can be so defaulted... 

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