DAR File No. 28163

Administrative Services, Facilities Construction and Management

R23-1-60

Construction Contract Clauses

NOTICE OF PROPOSED RULE

DAR File No.: 28163
Filed: 08/18/2005, 01:44
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the amendment is to replace the standard construction contract clauses that are incorporated into the rule.

Summary of the rule or change:

The amendment adopts a new version of standard clauses that are used in construction contracts issued by the Division of Facilities Construction and Management (DFCM). This is done by incorporating by reference a document that is available at DFCM's web site and office due to the volume of this text and the confusion that would result if these clauses were placed in rule format. The more significant changes that were made to the standard clauses that were previously adopted by rule include: 1) a more complete description and requirements for modifying the contract and the costs that may be included in a change order, and 2) inclusion of standard clauses that are unique to Construction Manager/General Contractor and Design/Build agreements.

State statutory or constitutional authorization for this rule:

Section 63-56-601 and Subsections 63-56-208(2) and 63A-5-103(1)(e)

Division of Facilities Construction and Management Required Contract Clauses Dated May 25, 2005

Anticipated cost or savings to:

the state budget:

A limited amount of cost avoidance is anticipated due to the clarifications made regarding costs that may be included in a change order. This primarily involves time extensions under circumstances that do not apply to most projects. As a result, it is not possible to estimate the impact. The clarifications in the contract language may also result in small savings in construction bids resulting from contractors being more comfortable with the requirements they must meet.

local governments:

The rule being amended only applies to construction procured by DFCM and has nothing to do with local government. As a result, there is no impact on local government.

other persons:

The only other persons affected by the amendment are construction contractors. The clarified language will allow them to better understand the requirements of the contract as they prepare their bids. This reduces their risks which may reduce their potential of incurring losses.

Compliance costs for affected persons:

The revised contract language does not change compliance costs except as noted under "Other persons" above.

Comments by the department head on the fiscal impact the rule may have on businesses:

The revised contract language will help construction contractors better understand their obligations when doing construction for the state. This reduces the level of risks they have to consider when preparing their cost proposals and reduces their risk of incurring unexpected costs. D'Arcy Dixon Pignanelli, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Kenneth Nye at the above address, by phone at 801-538-3284, by FAX at 801-538-3267, or by Internet E-mail at knye@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/17/2005

This rule may become effective on:

10/18/2005

Authorized by:

Keith Stepan, Director

RULE TEXT

R23. Administrative Services, Facilities Construction and Management.

R23-1. Procurement of Construction.

R23-1-60. Construction Contract Clauses.

(1) Required Contract Clauses. Pursuant to Section [63-56-40]63-56-601, the document entitled "Required Construction Contract Clauses", [dated January 28, 2002]Dated May 25, 2005, and on file with the Division, is hereby incorporated by reference. Except as provided in Subsections R23-1-30(7) and R23-1-60(2), the Division shall include these clauses in all construction contracts[ for more than $50,000].

(2) Revisions to Contract Clauses. The clauses required by this section may be modified for use in any particular contract when, pursuant to Subsection [63-56-40(5)]63-56-601(5), the Director makes a written determination describing the circumstances justifying the variation or variations. Notice of any material variations from the contract clauses required by this section shall be included in any invitation for bids or request for proposals. Examples of changes that are not material variations include, but are not limited to, the following: grammatical corrections; corrections made that resolve conflicts in favor of the intent of the document as a whole; and changes that reflect State law or rule and applicable court case law.

KEY: contracts, public buildings, procurement

[March 15, ]2005

Notice of Continuation June 6, 2002

63-56-14(2)

63A-5-103 et seq.

63-56-20(7)

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Kenneth Nye at the above address, by phone at 801-538-3284, by FAX at 801-538-3267, or by Internet E-mail at knye@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.