No. 13-15-00174-CV 

In The 

Thirteenth Court of Appeals 

Corpus Christi, Texas 

HALE-MILLS CONSTRUCTION, LTD., HALE-MILLS CONSTRUCTION, 

INC., and HMC CONTRACTING SOUTH TEXAS, LLC 

Appellants, 

v. 

WILLACY COUNTY, 

Appellee. 

On Interlocutory Appeal from the 197th District Court of Willacy County Texas 

(Cause No. 2014-CV-0103-A) 

APPELLEE’S BRIEF 

 Mazin Sbaiti Ramon Garcia 

 State Bar No. 24058096 State Bar No. 07641800 

 Bruce Steckler Emerson E. Arellano 

 State Bar No. 00785039 State Bar No. 24067490 

 Steckler, LLP Law Office of Ramon Garcia, P.C. 

 12720 Hillcrest Road, Ste. 1045 222 West University Drive 

 Dallas, TX 75230 Edinburg, Texas 78539 

 Telephone: (972) 387-4040 Telephone: (956) 383-7441 

 Fax: (972) 387-4041 Facsimile: (956) 381-0825 

 mazin@stecklerlaw.com rgarcia@ramongarcia-law.com 

 bruce@stecklerlaw.com earellano@ramongarcia-law.com 

 Manuel Solis Daniel G. Rios 

 State Bar No. 18826790 State Bar No. 00784844 

 Law Office of Manuel Solis Law Office of Daniel G. Rios, PC 

 6657 Navigation Boulevard 323 W. Nolana Avenue 

 Houston, TX 77011 McAllen, TX 78504 

 Telephone: (713) 844-2700 Telephone: (956) 630-9401 

 Fax: (281) 754-4681 Facsimile: (956) 682-0566 

 msolis1882@yahoo.com dan@danrioslaw.com 

Counsel for Appellee 

ORAL ARGUMENT REQUESTED 

ACCEPTED

13-15-00174-CV

THIRTEENTH COURT OF APPEALS

CORPUS CHRISTI, TEXAS

7/22/2015 8:09:32 PM

CECILE FOY GSANGER

CLERK

 FILED IN 13th COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS 7/22/2015 8:09:32 PM CECILE FOY GSANGER Clerk
i 

IDENTITIES OF PARTIES AND COUNSEL 

 The following is a complete list of all parties to the trial court’s order and the 

names and addresses of all trial and appellate counsel. 

APPELLANTS HALE-MILLS CONSTRUCTION, LTD., HALE-MILLS

CONSTRUCTION, INC., and HMC CONTRACTING SOUTH TEXAS, LLC 

Represented in the trial court and in this appeal by: 

William B. Westcott 

Robert A. Plessala 

Andrews Myers, P.C. 

3900 Essex Lane, Suite 800 

Houston, TX 77027-5109 

APPELLEE WILLACY COUNTY 

Represented in the trial court and in this appeal by: 

Mazin Sbaiti Ramon Garcia 

State Bar No. 24058096 State Bar No. 07641800 

Bruce Steckler Emerson E. Arellano 

State Bar No. 00785039 State Bar No. 24067490 

Steckler, LLP Law Office of Ramon Garcia, P.C. 

12720 Hillcrest Road, Ste. 1045 222 West University Drive 

Dallas, TX 75230 Edinburg, Texas 78539 

Telephone: (972) 387-4040 Telephone: (956) 383-7441 

Fax: (972) 387-4041 Facsimile: (956) 381-0825 

mazin@stecklerlaw.com rgarcia@ramongarcia-law.com 

bruce@stecklerlaw.com earellano@ramongarcia-law.com 

Manuel Solis Daniel G. Rios 

State Bar No. 18826790 State Bar No. 00784844 

Law Office of Manuel Solis Law Office of Daniel G. Rios, PC 

6657 Navigation Boulevard 323 W. Nolana Avenue 

Houston, TX 77011 McAllen, TX 78504 

Telephone: (713) 844-2700 Telephone: (956) 630-9401 

Fax: (281) 754-4681 Facsimile: (956) 682-0566 

msolis1882@yahoo.com dan@danrioslaw.com 
ii 

TABLE OF CONTENTS

REQUEST FOR ORAL ARGUMENT ...................................................... .....cover 

IDENTITIES OF PARTIES AND COUNSEL...................................................i 

TABLE OF CONTENTS.........................................................................ii 

TABLE OF AUTHORITIES........................................................................v 

STATEMENT REGARDING ORAL ARGUMENT .............................................. ix 

RESPONSE ISSUES PRESENTED ........................................................................ x 

SUMMARY OF THE ARGUMENT......................................................xi 

STATEMENT OF FACTS ...................................................................................... 1 

I. Defendants/Appellants Propose to Build Three Facilities Using Taxpayer 

Dollars.....................................................................................1 

II. The Scandal..............................................................................2 

III. The State of the Facilities..............................................................4 

STANDARD OF REVIEW ..................................................................................... 6 

ARGUMENTS AND AUTHORITIES........................................................6 

I. The District Court did not Abuse Its Discretion in Denying Arbitration as to Any 

of the Three Facilities at Issue.........................................................6 

 

 A.Appellant has Waived any Argument Challenging the District Court’s Finding 

that the Contracts were Unconscionable when Made.................................8 

 B.Appellant has Waived any Argument Challenging the District Court’s Finding 

that Compelling Arbitration Would be Substantively Unconscionable...........10 
iii 

 C.Appellants have Waived any Challenge to the District Court’s Finding of 

Insufficient of Evidence to Support the Existence of a Valid Agreement........14 

II. The District Court did not Abuse Its Discretion in Denying Arbitration on the 

Basis of Sovereign Immunity..........................................................15 

 A.The District Court Properly Found that there had been no Waiver of Sovereign 

Immunity.....................................................................15 

 B.Willacy County Has Not Waived Its Sovereign Immunity Because It Has Not 

Signed the Agreements..................................................................16 

 C. Texas Local Government Code Does Not Waive Sovereign Immunity...18 

 1. Local Government Code Section 271 Does Not Waive the 

County’s Sovereign Immunity........................................18 

 2. Appellant’s Contentions Regarding the Local Government 

Corporations’ Agency are Inapt and Irrelevant....................19 

 3. Local Government Code Section 262.007 Also Establishes Why 

the County has Not Waived Sovereign Immunity..................21 

III. Willacy County has Not Filed Suit to Enforce the Agreements, Nor Does It Seek 

a “Direct Benefit” From Them, Therefore It Is Not Bound By the Arbitration 

Clause..................................................................................22 

 A. Texas Supreme Court Precedent and Persuasive Authority Support the 

District Court’s Discretionary Finding..............................................24 

 B. Under KBR, The Court at most Would Reverse as to the Warranty 

Claims............................................................................29 

IV. This Court Should Affirm on Contractual Grounds................................30 

 A. The Sherriff’s Office Agreement Does not Provide for Mandatory 

Arbitration by the County Because it Was Not a Party and the Provision is 

Patently Ambiguous.........................................................31 

 

 B. The County is Expressly Excluded from Mandatory Arbitration Regarding 
iv 

the Marshall’s Office.............................................34 

 C. The Agreements’ Clauses are Limited to Disputes that Arise During 

Construction and Pendency of the Contracts- Not After..................35 

 D. Appellant Has Not Proven that All Pre-Requisites to Compelling 

Arbitration on the Detention Facility Have Been Met.....................38 

CONCLUSION AND PRAYER..............................................................39 

CERTIFICATE OF SERVICE...............................................................41 

CERTIFICATE OF COMPLIANCE.........................................................41 
v 

TABLE OF AUTHORITIES

Aldridge v. Thrift Fin. Mktg., LLC, 

376 S.W.3d 877 (Tex. App.–Fort Worth 2012, no pet.)........................30, 36 

Amir v. Int’l Bank of Commerce, 

419 S.W.3d 687 (Tex. App.–Houston [1st Dist.] 2013, no pet.)...................38

Bankhead v. Maddox, 

135 S.W.3d 162 (Tex. App –Tyler- 2004, no pet.) ..............................8, 15 

Bridas S.A.P.I.C. v. Turkmenistan, 

345 F.3d 347 (5th Cir. 2003)............................................................23 

Britton v. Texas Dep't of Criminal Justice, 

95 S.W.3d 676 (Tex. App. - Houston [1st Dist.] 2002, no pet.).............7, 8, 13 

Carr v. Main Carr Dev., LLC, 

337 S.W.3d 489 (Tex. App. Dallas 2011)........................................25, 27 

Cruikshank v. Consumer Direct Mortgage, Inc., 

138 S.W.3d 497 (Tex. App. - Houston [14th Dist.] 2004, pet. den). 9, 10, 13, 15 

First Option of Chicago, Inc. v. Kaplan, 

514 U.S. 938 (1995).................................................................30, 36 

Fluor Daniel, Inc. v. Travis County, 

2003 U.S. App. LEXIS 8138, *4 (5th Cir. Tex., Apr. 30, 2003)...................17 

Freis v. Canales, 

877 S.W.2d 283 (Tex. 1994) (orig. proceeding)..................................14 

Gonzalez v. Mission Am. Ins. Co., 

795 S.W.2d 734 (Tex. 1990)................................................31, 33, 37 

Green Tree Find. Corp. v. Randolph, 

531 U.S. 79 (2000).......................................................................12 

Hill v. G.E. Power Sys, Inc., 
vi 

282 F.3d 343 (5th Cir. 2002)...........................................................25 

In re Choice Homes, Inc., 

174 S.W.3d 408 (Tex. App.–Houston [14th Dist.] 2005, no pet.)............35, 37 

In re First Merit Bank N.A., 

52 S.W.3d 749 (Tex. 2001).........................................................11 

In re Halliburton Co., 

80 S.W.3d 566 (Tex. 2002).......................................................11, 13 

In re Kellogg Brown & Root, Inc., 

166 S.W.3d 732 (Tex. 2005) (orig. proceeding)...14, 24, 25, 26, 27, 28, 29, 30 

In re Luna, 

175 S.W.3d 315 (Tex. App. Houston 1st Dist. 2004)...............................12 

In re Pisces Foods, L.L.C., 

228 S.W.3d 349 (Tex. App–Austin 2007, orig. proceeding)......................38 

In re Poly-America, L.P., 

262 S.W.3d 337 (Tex. 2008)..........................................9, 10, 11, 12, 13 

In re Serv. Corp. Intern., 

355 S.W.3d 655 (Tex. 2011).......................................................31, 37 

In re Weekley Homes, L.P., 

180 S.W.3d 127 (Tex. 2005).....................................................23, 24 

Intergen N.V. v. Grina, 

344 F.3d 134 (1st Cir. 2003).............................................20, 26, 27, 32 

Int’l Paper Co. v. Schwabedissen Maschinen Anlagen GMBH 

206 F.3d 411 (11th Cir. 2000)..........................................................23 

Jack B. Anglin Co., Inc. v. Tipps, 

842 S.W.2d 266 (Tex. 1992) (orig. proceeding).....................................6

J.M. Davidson Inc. et al. v. Webster, 128 S.W.3d 228 (Tex. 2003) 
vii 

128 S.W.3d at 227........................................................................14 

Landmark Org., L.P. v. Tremco Inc., 

2010 Tex. App. LEXIS 5052, *29 (Tex. App. Austin 2010)......................29 

Morrison v. Circuit City Stores, Inc., 

317 F.3d 646 (6th Cir. 2003)............................................................12 

Okorafor v. Uncle Sam & Assocs., Inc., 

295 S.W.3d 27 (Tex. App.–Houston [1st Dist.] 2009, pet. denied)..............6 

Olshan Found. Repair Co. v. Ayala, 

180 S.W.3d 212 (Tex. App.-San Antonio 2005, pet. denied)......................10 

R.J. Griffin & Co. v. Beach Club II Homeowners Ass’n, 

384 F.3d 157 (4th Cir. 2004).........................................................25 

Schlumberger Technology Corp. v. Baker Hughes Inc., 

355 S.W.3d 791 (Tex. App.–Houston [1st Dist.] 2011)............................6 

Schwartz v. Forest Pharmaceuticals, Inc., 

127 S.W.3d 118 (Tex. App. - Houston [1st Dist.] 2003, pet. den)......9, 10, 13 

Seagull Energy E & P, Inc. v. Eland Energy, Inc., 

207 S.W.3d 342 (Tex.2006).......................................................31, 37 

Town of Highland Park v. Iron Crow Construction Incorporated, 

168 S.W.3d 313 (Tex. App. Dallas 2005)..............................16, 17, 18, 22 

Texas Natural Resource Conservation Commission v. IT-Davy, 

74 S.W.3d 849 (Tex. 2002).......................................................17, 18 

Venture Cotton Coop. v. Freeman 

 395 S.W.3d 272 (Tex. App. Eastland 2013)..........................................13 

Webb County v. Khaledi Props., 

2013 Tex. App. LEXIS 9063, *3 (Tex. App. San Antonio, July 24, 2013)......18 

Wortham v. Otis Elevator Co., 
viii 

 2000 Tex. App. LEXIS 3443, *8 (Tex. App. Dallas May 25, 2000)..............14 

Secondary Authorities

Tex. Civ. Prac. Rem. Code § 171.001......................................................14 

Tex. Loc. Gov. Code § 262.001.............................................................20 

Tex. Loc. Gov. Code § 262.007.........................................................21, 22 

Tex. Loc. Gov. Code § 262.011..............................................................21 

Tex. Loc. Gov. Code § 271.151.........................................................18, 19 

Tex. Loc. Gov. Code § 271.152..............................................................18 

Tex. Loc. Gov. Code § 271.154..............................................................19 

Tex. Loc. Gov. Code § 271.160..............................................................20 

W. Wendall Hall et al., Hall’s Standards of Review in Texas, 

42 St. Mary’s L.J. 1, 78 (2010).........................................................6 
ix 

STATEMENT REGARDING ORAL ARGUMENT 

 Appellee respectfully requests that this Court grant oral argument. Due to the 

novelty of the arguments raised by Appellants, Appellee believes oral argument will be 

of assistance in this matter. 
x 

RESPONSE ISSUES PRESENTED 

1. Texas law states that a party who does not raise evidentiary objections before 

the district court waives them on appeal. Here, Appellants failed to raise any 

evidentiary objections before the district court seeking to strike Willacy County’s 

evidence supporting the district court’s finding of unconscionability. Did Appellants 

waive these objections on appeal?

2. Texas law states that an appellant’s failure to raise points of error in an opening 

brief waives them for the appeal. Texas law also requires proof of a valid agreement 

before ordering arbitration. Here, Appellants’ opening brief fails to challenge the 

district court’s adopted finding that Appellants’ motion was unsupported by 

competent evidence of a valid agreement. Have the Appellants waived any right to 

argue against this finding?

3. Texas law states that a County has sovereign immunity from enforcing an 

arbitration clause, and that only the legislature may waive sovereign immunity. 

Texas statutes have only waived sovereign immunity for a county with regards to 

specific contracts to which the County is a party, and even then immunity is waived 

only to the extent suit is brought in a district court in that county. Here it is 

undisputed that Willacy County is not a signatory to any of the Agreements. Was 

the district court correct in finding that sovereign immunity applied and had not 

been statutorily waived for Willacy County?

4. Texas law states that the doctrine of “direct benefits estoppel” may apply to a 

third party to a contract where that party’s claims seek a direct benefit from 

enforcement of the contract. Texas courts review such determination for abuse of 

discretion. Here, the district court found that the County’s claims for fraud, unjust 

enrichment, warranty and negligence did not seek derive a direct benefit from the 

Agreements. Did the district court abuse its discretion in finding that direct 

benefits estoppel did not apply to one or more of the County’s claims?

5. This court may affirm on any basis in the record. Texas law requires that 

arbitration agreements be construed by their terms. Here, two of the Agreements are 

limited by their terms to the signatories to the contracts, and the others are limited to 

claims arising during the time period during which the work was in progress. Do 

these support the district court’s denial of the motion to compel arbitration on a 

harmless error standard?
xi 

SUMMARY OF THE ARGUMENT 

This appeal arises from the improvident motion by Appellants to compel Willacy 

County to arbitration. The record is clear that Willacy County is not a signatory to any 

of the Agreements. The Agreements are project specific, and therefore, must be 

evaluated on their own terms. 

However, Appellants’ motion to compel arbitration, and this Appeal, suffer from 

four common flaws: 

First, the district court’s adopted finding on unsconscioability was predicated on 

evidence that Appellants never challenged below—therefore, Appellants have waived 

their appeal on this issue which is sufficient to affirm in full. 

Second, the district court’s conclusion is supported by its adopted finding that 

Appellants’ motion was not supported by competent evidence of a valid agreement to 

arbitrate—Appellants fail to address this issue in their opening brief and therefore, have 

waived their appeal on this issue which is sufficient to affirm in full. 

Third, it is well established that only the Texas legislature can waive immunity. 

Here, the district court’s conclusion is supported by the fact that the County is immune 

from suit to compel arbitration, and its immunity has not been waived by the Texas 

legislature for suits brought on contracts to which the county is not a signatory. The 

only statute that remotely speaks to the issue only applies to signatories, and even then 
xii 

only waives immunity from suits brought in district court. 

Fourth, the Texas Supreme Court in KBR said that “direct benefits estoppel” 

only applies to a non-signatory who “seeks, through the claim, to derive a direct benefit 

from the contract.” The Court very clearly excluded any non-contractual claims from 

arbitration. Courts have consistently held that extra-contractual warranty claims are not 

the types of claims that invoke the estoppel doctrine. Here, Appellants have failed to 

demonstrate how the district court abused its discretion in concluding that the county’s 

claims for fraud, unjust enrichment, negligence and implied warranty did not seek to 

derive a direct benefit from the Agreements. Under KBR, even if this Court thinks that 

the warranty claim triggers estoppel, it should only reverse as to the warranty claim and 

affirm on the other claims. 

 The foregoing demonstrate four independent and sufficient reasons to affirm. 

But before this Court must also consider the individual Agreements’ terms. There 

are three facilities and each is governed by its own arbitration provision. However, (i) 

Two of the arbitration clauses by their terms are limited to the parties to the respective 

agreements unless otherwise stated in writing. Binding authority holds that arbitration 

cannot be compelled under those circumstances. (ii) The other arbitration clause is by 

its terms, limited to the pre-dispute resolution provisions, which itself only applies to 

disputes that arise during the pendency of the construction project. It lacks any 

language taking it beyond to any and claims arising under the agreement before or after 
xiii 

the contract terminates. 
1 

STATEMENT OF FACTS 

I. DEFENDANTS/APPELLANTS PROPOSE TO BUILD THREE FACILITIES USING 

TAXPAYER DOLLARS 

Defendants Hale Mills Construction, Ltd., Hale-Mills Construction, Inc., and 

HMC Contracting South Texas, LLC (“Appellants”) approached members of 

Willacy County’s board of commissioners proposing to build a detention center for 

the U.S. Marshall’s Office, a detention center for pre-deportation inmates of the 

Immigration and Customs Enforcement agency (aka “ICE”), and a new jail for the 

Willacy County Sherriff’s office in Raymondville (altogether, the “Facilities”). 

To that end, over the course of years, four principal agreements were entered 

into between one or more of the Defendants/Appellants and one of the County’s 

local government entities (altogether, the “Agreements”)1. 

 For the Marshall’s Office, Willacy County Public Facility Corporation 

contracted with Hale Mills Construction, Ltd., and Hale-Mills Construction, Inc. 

(CR 106 - 130). Attached hereto as Exhibit A (the “Marshall’s Office Agreement”). 

 For the Willacy County Sherriff’s office, Hale-Mills Construction Ltd. 

contracted with the County Jail Public Facility Corporation of Willacy County, 

 

1 Below, Appellee moved to strike any such evidence as not properly for the district court. See 

Exhibit F; CR 90-91). The district court adopted this finding in its Order. Appellee’s citation to the 

agreements in the record is without waiving their contention that such evidence was not properly before 

the district court or the contention that Appellants have waived the challenge on appeal since they did not 

raise it in their opening brief. See Section I(c) supra. 
2 

Texas, on June 29, 2004 (CR 132 - 158). Attached hereto as Exhibit B (the “Jail 

Agreement”). 

 For the Detention Center for ICE, the ICE Facility was constructed 

under an agreement between the Willacy County Local Government Corporation 

and HMC Contracting South Texas, LLC, and was executed on July 19, 2006 (CR 

160-196). Attached hereto as Exhibit C. An addition was constructed pursuant to an 

agreement executed on August 2, 2007 between The Willacy County Local 

Government Corporation and HMC Contracting South Texas, LLC. (CR 198-239). 

Attached hereto as Exhibit D (Exhibits C and D together, the “ICE Facility 

Agreements”). 

There is no dispute that the Facilities were substantially completed by January 

2008, (CR 130, 158, 196, 239) 2 and that the completion of the facilities terminated 

the contractual relationships cited above. 

II. THE SCANDAL

The Agreements were neither negotiated, nor made without substantial 

controversy. (CR 92). They were procured through a system of bribery that 

ultimately saw two Willacy County officials get indicted and plead guilty with a 

third official to criminal charges. (CR 92).3 Jose Jimenez and Israel Tamez were 

 

2 Appellants admit as much in the brief. See Appellant’s Opening Br. at 1). 

3 Citing http://www.myplainview.com/article_439ed742-bbc0-51de-8368-26bf030b4c35.htm (“Two 

former Willacy County commissioners pleaded guilty Tuesday to accepting bribes for their votes on federal 
3 

sentenced to six months in prison each for their roles in voting in favor of the 

Facilities projects. (Id.) 

Yet, these men’s names are all over the Local Government Entities’ 

paperwork that Appellants attach to their opening briefs. For example, in Appellants’ 

Opening Brief, Appendix 2, the Articles of Incorporation of Willacy County Public 

Facility Corporation, Israel Tamez is named on the Board of Directors (pg 2) and 

Jose Jimenez is additional board member (pg 2(A)). In Appellants’ Opening Brief, 

Appendix 3, the Articles of Incorporation of County Jail Public Facility 

Corporation, Israel Tamez is the “Incorporator” (Art. IX) and is named to the Board 

of Directors (Art. VIII). 

What makes the scandal so insidious is that the Facilities were financed 

through public bond issuances that the Taxpayers undertook to bear and repay in 

reliance on the representations that the Facilities would not only perform a function, 

but also on the basis that the Marshall’s Office and the ICE Facility would generate 

revenue and jobs to the County. (CR 92; see also Willacy County Commissioner Bd. 

 

prison contracts. Jose Jimenez, 67, of Sebastian, and Israel Tamez, 58, of Raymondville, waived indictment 

and admitted accepting more than $10,000 each from companies competing for work on the Willacy County 

Adult Correctional Center. The $14.5 million prison was being built to house federal inmates.”); and see 

http://www.myplainview.com/article_92fb86e1-aa11-504a-94cf-49820f746300.html (“The last of three 

county commissioners to plead guilty in a bribery scandal involving a Rio Grande Valley federal detention 

facility has been sentenced...Webb County Commissioner David Cortez, 72, of Laredo was given three 

months in prison Tuesday in federal court for his role in funneling $39,000 in bribes to former Willacy 

County Commissioners Jose Jimenez and Israel Tamez in 2002. The money was given in exchange for 

favorable votes on contracts to design, build or manage a 500-bed facility in Raymondville that opened in 

2003.”). 
4 

Resolutions attached to Appellant’s Brief).4 This is reflected in the various board 

resolutions attached to Appellants’ Opening Brief. See also Appellants’ Br. app’x 3, 

Art. XIII. 

III. THE STATE OF THE FACILITIES

While what was promised by Appellants was state-of-the-art facilities, what 

was delivered was substandard. After only a few years of use, the facilities are in 

complete disrepair, revealing the fraud and slipshod workmanship done by the 

Defendants. (CR 06 et. seq.) 

The Facilities are in no shape to last their useful lives. As revealed in the 

Original Petition (CR 06 et. seq.), poor materials were used in place of proper 

construction materials, thus requiring constant repairs (Id. at ¶ 17). The site 

preparation was irremediably flawed, with building sitting below grade, subjecting 

them to shifting, flooding and improper drainage (Id. at ¶ 18). Whereas the typical 

home houses 3 to 4 people, and has 8 to 12 inches of foundation, the buildings are 

based on less than that (Id. at ¶ 19). Moreover, the quality of the concrete is 

substandard. The concrete throughout reveals flaking, chipping, and spalding—all 

of which should not happen had minimally appropriate concrete and cement been 

used. (Id. at ¶ 21) There are structural defects in load-bearing walls—these are 

 

4 Appellants have attached several appendices to the Opening Brief that are not part of the record. 

These should be stricken to the extent Appellants have not made them a part of the record, but also serve 

as admissions. 
5 

cracking and showing signs of failure. Walls without sufficient internal structure are 

bearing heavy steel beams that cause a danger of failure. (Id. at ¶ 22). There are 

cracks and chipping in all walls and ceilings that continually have to be repaired. 

This is cumulatively worse in quarantine and isolation rooms, since cracks in interior 

walls allow contamination to pass through the walls that are supposed to prevent that 

from happening. (Id. at ¶ 23). There are have been hundreds of roof leaks due to poor 

roofing installation techniques. (Id. at ¶ 24). There is evidence of serious water 

penetration and leakage into the Centers. These are dangerous and cause electrical 

wiring failures, and have caused shorting wiring and otherwise damage conduits and 

electrical appliances and equipment (HVACs, grid ceiling, etc.). (Id. at ¶ 26) The 

sewage and drainage system is demonstrably deficient and exhibits signs of 

improper construction and building techniques. The sewage line is (singular) far too 

small for the Centers and the number of people in them—causing constant grotesque 

backup of sewage and human waste into the dormitories and cafeterias. (Id. at ¶ 27) 

The list is endless. 

The County in filing the instant suit, presciently observed in its Original 

Petition: 

Make no mistake: What is at stake here is the potential loss of 

the contracts and eventually closure of the Centers (all of them) 

because they fail to meet even the most basic requirements of 

suitable construction. Such a cataclysmic event would cost jobs 
6 

in addition to County revenue. (CR 07) 

Thus, it surprised absolutely no one at the County when a riot broke out at the 

ICE Facility in February 2015 precipitating its closure and the dismissal of all but a 

skeleton crew of employees.5 Appellants’ misconduct has contributed to the loss of 

the government contract with the Bureau of Prisons for the ICE Facility, costing over 

400 Willacy County residents their livelihood, and costing the County fiscally as 

well. (Id.) That is just one building; the rest are soon to fall. 

STANDARD OF REVIEW 

This Court reviews the trial court’s denial of a motion to compel arbitration 

for abuse of discretion. See Schlumberger Technology Corp. v. Baker Hughes Inc., 

355 S.W.3d 791, 800 (Tex. App.–Houston [1st Dist.] 2011); Okorafor v. Uncle 

Sam & Assocs., Inc., 295 S.W.3d 27, 38 (Tex. App.–Houston [1st Dist.] 2009, pet. 

denied); see also W. Wendall Hall et al., Hall’s Standards of Review in Texas, 42 

St. Mary’s L.J. 1, 78 (2010) (citing Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 

266, 271–72 (Tex. 1992) (orig. proceeding). 

ARGUMENTS AND AUTHORITIES 

I. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN DENYING 

ARBITRATION AS TO ANY OF THE THREE FACILITIES AT ISSUE 

The District Court denied arbitration on several independent grounds. (CR 

 

5 See http://www.valleymorningstar.com/news/local_news/article_bf112990-cc4a-11e4-ba2fe3c024760e63.html. 
7 

418) (the “Order”). The Order is attached hereto as Exhibit E. The district court ruled 

that the County had sovereign immunity because it was not a signatory to the 

agreements and was not seeking to enforce the Agreements; that Defendants’ had 

failed to properly authenticate their evidence to establish their contractual right to 

arbitrate; and that the arbitration clauses were unconscionable.6 

Appellants expends the entirety of their Appellate briefing on the first of these 

arguments. But they never address the other independent grounds for the denial of 

their motion to compel arbitration. For that reason, Appellants have waived them 

and this Court need not wade into the mire of sovereign immunity. 

An appellant “must attack all independent bases or grounds that fully support 

a complained-of ruling or judgment.” Britton v. Texas Dep't of Criminal Justice, 95 

S.W.3d 676, 681 (Tex. App. - Houston [1st Dist.] 2002, no pet.). If the appellant 

fails to do so, the court of appeals “must affirm the ruling or judgment.” Id. The 

reason is that: 

If an independent ground fully supports the complained-of ruling 

or judgment, but the appellant assigns no error to that 

independent ground, then (1) [the appellate court] must accept 

the validity of that unchallenged independent ground, ... and thus 

(2) any error in the grounds challenged on appeal is harmless 

 

6 The District Court’s Order cited sovereign immunity, and incorporated as independent grounds the 

balance of the issues raised in Willacy County’s Response below (Willacy County’s Plea to the Jurisdiction 

and Response to Plea in Abatement and Opposition to Arbitration Before AAA (CR 84 et seq.) is attached 

hereto as Exhibit F). This Court thus must treat the Willacy County Response below as incorporated by 

reference into the Court’s Order. 
8 

because the unchallenged independent ground fully supports the 

complained-of ruling or judgment. 

Id. at 681-682. It is not enough for the Appellants to try and cure this waiver in their 

reply brief. That would sandbag the Appellee and be patently unfair. The failure to 

address these issues in the opening brief constitutes an irrevocable waiver. See 

Bankhead v. Maddox, 135 S.W.3d 162, 164-65 (Tex. App –Tyler- 2004, no pet.) 

(holding issues not raised in appellant's initial brief are deemed waived on appeal). 

 Accordingly, the waiver of the issues provides ample ground for affirmance. 

A. Appellant Has Waived any Argument Challenging the District Court’s 

Finding that the Contracts Were Unconscionable When Made 

The District Court adopted the argument set forth in Willacy County’s 

opposition to arbitration. (CR 418, 84; see Exhibits E and F). Below, the County 

contended that the Contracts were contracts of adhesion, procured in the midst of a 

criminal bribery scandal during which two of Appellant’s affiliates (former county 

commissioners) were tried, convicted, and sent to prison. (CR 92) The District Court 

adopted this argument in its Order, thus holding that the Agreements were 

unconscionable when made. (CR 418). 

These facts were never controverted nor even addressed by Appellant before 

the district court. They never objected to the evidence, and never obtained a ruling 

on their objections. Appellants have thus failed to preserve the alleged evidentiary 

error for this Appeal. 
9 

In Cruikshank v. Consumer Direct Mortgage, Inc., 138 S.W.3d 497 (Tex. 

App. - Houston [14th Dist.] 2004, pet. denied), appellant argued that the trial court 

had erroneously sustained objections to the appellant's summary judgment affidavit. 

The court of appeals held that the appellant had not preserved error because he had 

not filed a response to the objecting party's motion to strike, he did not object to the 

trial court's ruling, and he did not request the court to reconsider its ruling. Id. at 499. 

Also, the fact that Appellants did not specifically object to the evidence 

anywhere, and failed to obtain a ruling means they have irrevocably preserved the 

error. Accord Schwartz v. Forest Pharmaceuticals, Inc., 127 S.W.3d 118, 120 (Tex. 

App.- Houston [1st Dist.] 2003, pet. den) (holding that failure to specifically raise 

relevance or sufficiency objection before trial court and obtain a ruling failed to 

preserve the objection for appeal even though same evidence had been objected to 

on other grounds). 

The failure to preserve error on appeal deprives the appellate court of any 

jurisdiction to reverse on that basis. Id. That is true even if the Appellate court 

believes it might have otherwise ruled in the appellant’s favor. 

Furthermore, Texas law applies to determine the validity or revocability of the 

arbitration clause. See In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex. 2008). 

There is no presumption favoring arbitration when it comes to determining whether 

there is a valid and enforceable agreement to arbitrate. Id. “Unconscionable 
10 

contracts, however – whether relating to arbitration or not – are unenforceable under 

Texas law.” Id. at 348. 

Here, Appellant neither raised Willacy County’s support of unconscionability 

as a matter of factual or legal error before the district court. Therefore, Appellant 

cannot argue that the District Court abused its discretion or applied the wrong law, 

and has thus waived any contention to that effect in this appeal. Schwartz, 127 

S.W.3d at 120; Cruikshank, 138 S.W.3d at 499. Moreover, this Court would be dutybound to defer to the district court’s findings even without a finding waiver. See 

Olshan Found. Repair Co. v. Ayala, 180 S.W.3d 212, 214 (Tex. App.-San Antonio 

2005, pet. denied) (when reviewing “the trial court's decision concerning the 

unconscionability of an arbitration agreement . . . we defer to the trial court's factual 

determinations”). Appellants’ waiver of their challenges thus conclusively requires 

affirmance. 

Therefore, it is undeniable that Appellant has waived any point of error on the 

District Court’s finding that the agreements are unconscionable. See id. Its waiver 

provides prima facie, independent and uncontroverted grounds for affirming the 

District Court’s Order. 

B. Appellant Has Waived any Argument Challenging the District Court’s 

Finding that Compelling Arbitration Would be Substantively 

Unconscionable 

Below, the County contended that the arbitration clauses were unconscionable 
11 

because they imposed on Willacy County and the county taxpayers an insupportable 

burden and expense in filing and litigating before the Arbitral panel. (CR 92). The 

District Court adopted this position in its Order, thus holding that the Agreements 

were unconscionable when made. (CR at 418). 

Contrary to Appellants’ position that, under In re In re First Merit Bank N.A., 

52 S.W.3d 749 (Tex. 2001), substantive unconscionability lies within the exclusive 

realm of the arbitrator, the Texas Supreme Court overruled that opinion and held 

that a court may find that procedural or substantive unconscionability is sufficient 

to invalidate an arbitration clause. See In re Halliburton Co., 80 S.W.3d 566, 572 

(Tex. 2002) (“We therefore clarify that courts may consider both procedural and 

substantive unconscionability of an arbitration clause in evaluating the validity of an 

arbitration provision.”).

The case law is littered with courts invalidating arbitration clauses for being 

substantively unconscionable. The Texas Supreme Court specifically held that an 

arbitration provision is unconscionable if it imposes on the party raising the claim 

the obligation to pay the costs of arbitration which render access to the forum 

unaffordable. See In re Poly-America, L.P., 262 S.W.3d at 355. There, the Supreme 

Court agreed that: 

[I]n some cases, the potential of incurring large arbitration costs 

and fees will deter potential litigants from seeking to vindicate 

their rights in the arbitral forum . . . . [I]f the fees and costs of the 
12 

arbitral forum deter potential litigants, then that forum is clearly 

not an effective, or even adequate, substitute for the judicial 

forum . . . [T]he burden of demonstrating that incurring such 

costs is likely under a given set of circumstances rests, at least 

initially, with the party opposing arbitration. 

Id. (quoting Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 659-60 (6th Cir. 

2003) (invalidating arbitration provision that imposed excessive fees on litigant)). 

While the Supreme Court held that there was no “per se” rule, it ruled that such a 

determination would be a question of fact. Id. The lower court had found that there 

was sufficient evidence of the litigants inability to afford access to the arbitral forum. 

In re Luna, 175 S.W.3d 315, 322 (Tex. App. Houston 1st Dist. 2004). The Supreme 

Court disagreed, noting that the fee provisions were not unconscionable because the 

arbitrator was permitted to adjust any unconscionable terms including the fee split 

between the parties, and therefore, he had a remedy. In re Poly-America, L.P., 262 

S.W.3d at 355. Here, the District Court implicitly found that the County is required 

to foot the entire cost of filing arbitration which is substantial, and the Agreements 

afford no discretion to the arbitrator to reduce the amount(s). 

Similarly, under Green Tree Find. Corp. v. Randolph, 531 U.S. 79, 90 (2000), 

the U.S. Supreme Court held that prohibitively high arbitration costs that would 

“preclude a litigant...from effectively vindicating [her] rights in the arbitral forum” 

are unsconsionable, and held that it raised a question of evidentiary fact, not law. 

Following these precedent, Texas courts have invalidated arbitration clauses that 
13 

substantively deny a litigant the right of redress. See, e.g., Venture Cotton Coop. v. 

Freeman, 395 S.W.3d 272, 276 (Tex. App. Eastland 2013), 

Applying these precedents, it is clear that Appellant has waived any challenge 

to the district court’s factual finding of unconscionability due to the expense and cost 

to be imposed on the County. 

While Appellants contend that there was insufficient evidence to support this 

finding, Appellants never specifically raised that objection before the district court. 

Appellants thus fail to preserve the factual and legal error for appeal. See 

Cruikshank, 138 S.W.3d at 499 (failure to raise matters before trial court does not 

preserve error on appeal and waives such issues); Schwartz, 127 S.W.3d at 120 

(holding that objection to ruling on one issue—in that case, Rule 401 prejudice, does 

not preserve objections on relevance of evidence). 

Accordingly, Appellants have waived any challenge to the District Court’s 

finding of substantive unconscionability. The finding of unconscionability is 

sufficient in and of itself to vitiate the arbitration clause and its enforcement. See In 

re Poly-America, L.P., 262 S.W.3d 337, 348; In re Halliburton Co., 80 S.W.3d at 

572. This Court need not address the other issues as they are rendered moot. See 

Freeman, 395 S.W.3d at 277 (“Because we have held that the arbitration agreement 

is substantively unconscionable...we need not consider appellants’ remaining 

arguments attacking appellees’ other substantive unconscionability and procedural 
14 

unconscionability defenses.”); Britton, 95 S.W.3d at 681 (failure to attack all 

independent grounds requires affirmance). 

Therefore, the district court’s order may be summarily affirmed. 

C. Appellants Have Waived Any Challenge to the District Court’s Finding of 

Insufficient of Evidence to Support the Existence of a Valid Agreement 

To compel arbitration, a party must show that there is a valid arbitration 

agreement and that the claims raised fall within the agreement's scope. In re Kellogg 

Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding); see also

Tex. Civ. Prac. Rem. Code § 171.001(a). Without an agreement to arbitrate, 

arbitration cannot be compelled. J.M. Davidson, 128 S.W.3d at 227 (citing Freis v. 

Canales, 877 S.W.2d 283, 284 (Tex. 1994) (orig. proceeding)). 

Below, Willacy County attacked the insufficiency of Defendants’ evidence in 

their motion to compel arbitration, and moved to strike the supporting evidence as 

being unsubstantiated, inauthentic, and incomplete. (CR 91-92). This objection was 

sustained by the district court (see Order, CR 418), despite Appellants’ last-ditch 

effort to supplement their motion papers with the agreements. (CR 103 et seq.). 

Appellants never obtained a ruling overruling the objection, meanwhile, the Order 

plainly adopts it as independent grounds to deny arbitration and is correct. See 

Wortham v. Otis Elevator Co., 2000 Tex. App. LEXIS 3443, *8 (Tex. App. Dallas 

May 25, 2000) (sustaining trial court striking of evidence where “documents 
15 

constituted hearsay and were not properly authenticated”). 

However, Appellants also fail to raise the issue in the opening brief before this 

Court. This waives the issue on appeal. In Cruikshank, the court held that raising a 

general point of error only preserves such errors if the errors are expressly and 

specifically addressed in the briefing. 138 S.W.3d at 502. The court of appeals 

concluded that, because the appellant only generally addressed the issue in its brief, 

those issues and the error had been waived. Id. at 503. Furthermore, such waiver 

cannot be cured in an Appellant’s reply brief. See Bankhead, 135 S.W.3d at 164-65 

(holding issues not raised in appellant's initial brief are deemed waived). 

Accordingly, Appellants have likewise waived yet another independent 

grounds for affirming the district court’s Order denying arbitration against Willacy 

County. 

II. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN DENYING 

ARBITRATION ON THE BASIS OF SOVEREIGN IMMUNITY 

A. The District Court Properly Found That There Had Been No Waiver of 

Sovereign Immunity 

The district court, after considering the parties’ motion papers and hosting a 

lengthy hearing, found that the County was protected by sovereign immunity from 

a suit to compel arbitration because it was not a signatory to the Agreements, found 

that the County’s factual allegations at best merely touched upon the Agreements, 

but that the County was not seeking to enforce the Agreements. See Order. 
16 

The fault in this appeal lies in the fact that Appellant side-steps the salient 

argument. Rather than address the district court’s finding head-on, Appellant hangs 

its hat on the premise that the County as a third-party beneficiary of the Agreements 

is attempting to enforce the Agreements, and therefore, is bound by the Arbitration 

clauses. These premises rest on a faulty and simplistic construction of the allegations 

and the law. We address the issues one by one. 

B. Willacy County Has Not Waived Its Sovereign Immunity Because It Has 

 Not Signed the Agreements 

Appellant does not dispute that Willacy County is a sovereign cloaked in 

sovereign immunity from suits to compel arbitration. This was clarified by the 

Supreme Court initially in Town of Highland Park v. Iron Crow Construction 

Incorporated, 168 S.W.3d 313, 319 (Tex. App. Dallas 2005) (“Because its contract 

with Highland Park provided for binding arbitration in the event of a dispute between 

the parties, Iron Crow was seeking to enforce Highland Park's performance under 

that contract. Therefore, sovereign immunity was indeed implicated here.”). 

In Town of Highland Park, the town was a signatory to the contract and the 

Supreme Court refused to allow it to be compelled to arbitration because merely 

signing the agreement did not waive sovereign immunity. 168 S.W.3d at 319. The 

Court held that a motion or action to enforce an Arbitration clause is essentially a 

suit to enforce the terms of a contract, a suit against which the County has sovereign 
17 

immunity. Id. The Court noted that only the legislature can waive immunity which 

it did not do in this case. Id. The court of appeals also held that the Federal 

Arbitration Act did not apply because both the plaintiff and the defendant were Texas 

residents (as is the case here: Willacy and Hale-Mills are Texas residents); and even 

if the FAA did apply, it could not preempt the sovereign rights of the County. Id. at 

317-318. Town of Highland Park thus stands for the proposition that a sovereign is 

generally immune from suit to compel arbitration, even if it is a counterclaim to a 

suit brought by the sovereign. 

In another case analogous to this one, in Texas Natural Resource 

Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex. 2002), the Texas 

Supreme Court rejected the argument that a contractual provision providing that 

disputes could be decided by arbitration could be enforced against a County. Id. at 

857-58. The court held that since only the Legislature could waive sovereign 

immunity, “administrative agents,” even those with authority to enter into contracts 

such as the County Judge, had no authority to bind the County. Id. 

Likewise, in Fluor Daniel, Inc. v. Travis County, 2003 U.S. App. LEXIS 

8138, *4 (5th Cir., Apr. 30, 2003), the Fifth Circuit held that Travis County had not 

waived its rights as a sovereign in a contract with Fluor, despite the fact that the 

County Judge had signed the contract. The Court held that only “the legislative body 

of the county—the commissioner’s court—can waive sovereign immunity.” Id. at 
18 

*5. And moreover, even then it must be “clear and unambiguous.” Id. In that case, 

the Court held that Travis County—even though it arguably invoked the jurisdiction 

of the court by filing counterclaims—had not waived any of its sovereign rights not 

to be brought into court without its express consent. It is also well-established that 

these rights cannot be waived through the conduct of the county. See Webb County 

v. Khaledi Props., 2013 Tex. App. LEXIS 9063, *3 (Tex. App. San Antonio, July 

24, 2013). 

The Texas legislature amended the statutes after Town of Highland Park and 

It-Davy to provide that sovereign immunity could be waived in the limited 

circumstances. See Tex. Loc. Gov. Code § 271.151 et seq. However, outside of these 

amendments, Town of Highland Park is still good law. 

Appellant apparently does not disagree that Willacy County is not a signatory 

to the Agreements. And it cannot show how Section 271 of the Texas Local 

Government Code applies to Willacy County as a non-signatory to the agreements. 

C. Texas Local Government Code Does Not Waive Sovereign Immunity 

1. Local Government Code Section 271 Does Not Waive the County’s 

Sovereign Immunity 

Appellant attempts to expand the reach of the waiver of sovereign immunity 

by invoking Local Government Code section 271. 

However, Local Government Code section 271.152 states that “A local 

governmental entity that is authorized by statute or the constitution to enter into a 
19 

contract and that enters into a contract subject to this subchapter waives sovereign 

immunity to suit for the purpose of adjudicating a claim for breach of the contract, 

subject to the terms and conditions of this subchapter.” 

And Texas Local Government Code 271.154 states that “Adjudication 

procedures, including requirements for ...engaging in alternative dispute resolution 

proceedings before bringing a suit or an arbitration proceeding, that are stated in the 

contract subject to this subchapter or that are established by the local governmental 

entity and expressly incorporated into the contract or incorporated by reference are 

enforceable except to the extent those procedures conflict with the terms of this 

subchapter.” 

The definition of a “contract” includes the fact that the contract “is properly 

executed on behalf of the local governmental entity.” See Tex. Loc. Gov. Code § 

271.151(2)(A). And the definition of “Local Government Entity” excludes a County. 

See id. at § 271.151(3). 

Therefore, even if the local government entities’ execution of the Agreements 

waives sovereign immunity, it does not extend to the County as a non-signatory. 

Nothing in Section 271 extends the waiver of sovereign immunity for signing the 

Agreements to the County. 

2. Appellant’s Contentions Regarding the Local Government 

Corporations’ Agency Are Inapt and Irrelevant 

Appellants take the position that the founding and structure of the various 
20 

local government corporations and their signatory authority creates an agency 

relationship with the County. Appellants ask this Court to conclude that the agency 

relationship binds the County to the Arbitration clause. 

This argument is inapt and irrelevant. 

First, if there is there is no agency, then there can be no binding authority. 

Intergen N.V. v. Grina, 344 F.3d 134, 148 (1st Cir. 2003). Here, the local government 

entities were not serving as agents of the County. If they were, they would have been 

signing the Agreements on behalf of the County as a party. The Agreements 

expressly disclaim such a relationship, relegating the County to anything from 

complete stranger (Exhibit A, at CR 106-130) to assignee (Exhibit B, at CR 132-

158) to third party beneficiary (Exhibits C, at CR 160-196 and D at CR 198-239). 

Second, Texas Local Government Code section 271.160 expressly precludes 

Appellants’ argument. That provision states that “A contract entered into by a local 

government entity is not a joint enterprise [with the county] for liability purposes.” 

In other words, where a local government entity signs an agreement, under Chapter 

271 it would waive immunity. This provision states that it only waives immunity as 

to itself—not as to the local governing body (e.g., here, the County). 

This stands in distinction to Appellants’ invocation of Local Government 

Code section 262.001(b). That states that “A contract or other act of an agent 

appointed under this section that is properly executed on behalf of the county and 
21 

is within the agent's authority binds the county to the contract for all purposes.” 

However, Willacy County did not appoint any of the local government entities as its 

agents—the documents attached to Appellants’ brief clearly show the decision to 

create the local government entities to do the work themselves. Moreover, nothing 

says that creating local government entities is the same as “appointing” an agent 

under section 262 as agents of the County. See Tex. Loc. Gov. Code § 262.011 or 

0115 (purchasing agents). Appellants also never demonstrate how the local 

government entities were appointed as agents under the section. 

Therefore, Willacy County is not liable for any contractual liabilities—

including liability for the contract’s arbitration provision—entered into by one or 

more of the local government entities. 

3. Local Government Code Section 262.007 Also Establishes Why the 

County Has Not Waived Sovereign Immunity 

Section 262.007 only applies to contracts and waives sovereign immunity for 

a County that is a signatory to the contract. See Tex. Loc. Gov. Code § 262.007(a) 

(“A county that is a party to a written contract for engineering, architectural, or 

construction services or for goods related to engineering, architectural, or 

construction services may sue or be sued, plead or be impleaded, or defend or be 

defended on a claim arising under the contract.”) (emphasis added). Therefore, this 

section only applies to contracts where the County is a signatory. 

Consequently, the section specifically requires all suits to be brought in court. 
22 

It provides that even where the county is a signatory to the contract, “a suit on the 

contract brought against a county shall identify the county by name and must be 

brought in a state court in that county.” Id. (emphasis added). No exception is made 

for a contract that contains an arbitration clause. 

It is now well established that only the Texas legislature can waive sovereign 

immunity, or delegate the specific power to do so to subordinate entities, such as the 

County or municipal entity. See Town of Highland Park v. Iron Crow Constr., Inc., 

168 S.W.3d 313, 319 (Tex. App. Dallas 2005). 

The Texas legislature has spoken and stated that where the County is a 

signatory to a contract for specified goods, it may only be sued in the state court of 

that county. See Tex. Loc. Gov. Code § 262.007(a). Nowhere has the Texas 

legislature stated that a County may be compelled to arbitration on a contract, much 

less on a contract to which it is not a signatory. The inclusion of only a means to sue 

a county in state court (e.g., irrespective of an arbitration agreement), necessarily 

implies the exclusion of the right to impose arbitration on a signatory, much less to 

do so on a county that is not even a signatory to an arbitration agreement. 

III. WILLACY COUNTY HAS NOT FILED SUIT TO ENFORCE THE AGREEMENTS,

NOR DOES IT SEEK A “DIRECT BENEFIT” FROM THEM, THEREFORE IT IS 

NOT BOUND BY THE ARBITRATION CLAUSE 

Finding no statutory grounds for the premise that the Texas legislature has 
23 

waived sovereign immunity to compel the County into arbitration, Appellants’ 

primary argument is the equitable contention that the County cannot bring suit to 

enforce the Agreements, but evade the Agreements’ arbitration provisions. They cite 

the “direct benefits estoppel” argument for this position. 

The district court has substantial discretion in deciding whether the equitable 

doctrine applies. See In re Weekley Homes, L.P., 180 S.W.3d 127, 135 (Tex. 2005) 

(“the equitable nature of the [direct benefits estoppel] doctrine may render firm 

standards inappropriate, requiring trial courts to exercise some discretion based on 

the facts of each case.”) (citing Bridas S.A.P.I.C. v. Turkmenistan, 345 F.3d 347, 

360 (5th Cir. 2003) (“The use of equitable estoppel is within a district court's 

discretion.”)). 

Appellants rely exclusively the contention that the district court committed 

legal error. Appellants conveniently gloss over the fact that in its cited cases, the 

sovereign at issue had brought to suit to enforce a contract’s specific provisions, or 

the record had evidence that the plaintiff had specifically adopted the contract as its 

own prior to instituting suit. See Weekley, 180 S.W.3d at 131 (also discussing lnt'l 

Paper Co. v. Schwabedissen Maschinen Anlagen GMBH, 206 F.3d 411 (11th Cir. 

2000) (estopping non-signatory from denying agreement to arbitrate "when he has 

consistently maintained that other provisions of the same contract should be 

enforced to benefit him.”)). 
24 

A. Texas Supreme Court Precedent and Persuasive Authority Support the 

District Court’s Discretionary Finding 

In Weekely, the Supreme Court reiterated that “a nonparty may be compelled 

to arbitrate ‘if it seeks, through the claim, to derive a direct benefit from the contract 

containing the arbitration provisions.’ On the other hand, claims can be brought in 

tort (and in court) if liability arises from general obligations imposed by law.” Id. 

(citing In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 741 (Tex. 2005)). The 

Supreme Court created a two part test: “Claims must be brought on the contract (and 

arbitrated) if liability arises solely from the contract” and if the claims “must be 

determined by reference to [the contract].” Weekley, 180 S.W.3d at 132. 

The narrowness of Weekely’s adoption of the direct benefits estoppel doctrine 

was clarified by the Texas Supreme Court in In re Kellogg Brown & Root, Inc., 166 

S.W.3d 732, 741 (Tex. 2005) (“KBR”). There, the Supreme Court addressed 

whether by alleging damages due to non-payment under color of a claim for unjust 

enrichment or declaratory relief of valid liens, KBR has in effect sought to enforce 

a contract and could be subject to arbitration as a non-litigant. The Supreme Court 

said no. The Supreme Court agreed that KBR was seeking to enforce a right that was 

“based on the fabrication subcontract in the sense that KBRs labor and services were 

linked inextricably to that subcontract.” Id. at 739-740. But it held that it was not 

enough. “[U]nder ‘direct benefits estoppel,’ a non-signatory plaintiff cannot be 

compelled to arbitrate on the sole ground that, but for the contract containing the 
25 

arbitration provision, it would have no basis to sue.” Id. at 740. 

The KBR court further elucidated: “We conclude that, under ‘direct benefits 

estoppel,’ although a non-signatory's claim may relate to a contract containing an 

arbitration provision, that relationship does not, in itself, bind the non-signatory to 

the arbitration provision. Instead, a non-signatory should be compelled to arbitrate a 

claim only if it seeks, through the claim, to derive a direct benefit from the contract 

containing the arbitration provision.” Id. (emphasis added). The Supreme Court held 

that “we conclude that the court of appeals abused its discretion to the extent it 

compelled KBR to arbitrate its quantum meruit claim[.]” Id. at 741. 

As a Texas Court of Appeals likewise explained, “a non-signatory cannot be 

compelled to arbitrate when claims merely ‘touch matters’ covered by a contract or 

‘are dependent upon’ a contract; instead, the claims must rely on the terms of the 

contract.” Carr v. Main Carr Dev., LLC, 337 S.W.3d 489, 498 (Tex. App. Dallas 

2011) (citing Hill v. G.E. Power Sys, Inc., 282 F.3d 343, 348-49 (5th Cir. 2002). 

“Where the obligations arise under general law”—e.g., here, the law of negligence, 

anti-fraud and implied warranty—then a non-signatory to the agreement cannot be 

compelled to arbitrate. Id. 

Furthermore, it is well-established that a warranty and defect claims can be 

brought by third parties to the contract without enforcing any specific terms of the 

contract. Highly instructive is R.J. Griffin & Co. v. Beach Club II Homeowners 
26 

Ass'n, 384 F.3d 157 (4th Cir. 2004), on which the Texas Supreme Court heavily 

relied on in KBR, 166 S.W.3d at 740. There, the Fourth Circuit denied application 

of “direct benefits estoppel” to compel homeowners association who were nonsignatories to a development contract, even though they sued on the basis of breach 

of contract/breach of warranty. Id. at 164. The circuit court recognized that the claim 

did arise from the construction agreement—but they were not seeking to enforce 

particular terms of the agreement; e.g., they were suing “to enforce extra-contractual 

common law rights created by South Carolina to protect homeowners from shoddy 

construction practices.” Id. Moreover, the circuit court noted that the doctrine did 

not apply because “equitable estoppel operates to prevent one party from holding 

another to the terms of an agreement while simultaneously avoiding the same 

agreement's arbitration clause. Here, the Association is not attempting to hold 

[defendant] to any term of” the agreement in question.” Id. at 165. 

Similarly, in Intergen N.V. v. Grina, 344 F.3d 134, 145 (1st Mass. 2003), the 

court of appeals refused to apply the direct benefits estoppel to force a plaintiff to 

arbitration even though the plaintiff alleged breach of contract to which it was not a 

signatory. The plaintiff had alleged that it was the “the successor to all rights of 

predecessor entities related to the actions and omissions alleged.” Id. The court of 

appeals noted that the plaintiff was not seeking to enforce the contract in its breach 

of warranty claims because, inter alia, the “claimed damages are not contract 
27 

damages per se.” Id. The court further noted that the damages were instead a series 

of “extra contractual” acts and representations. Id. at 145-146. Moreover, the court 

held that where a non-signatory has been forced to arbitrate, it is only where the nonsignatory “during the life of the contract, have embraced the contract despite their 

non-signatory status but then, during litigation, attempt to repudiate the arbitration 

clause in the contract.” Id. at 146. The court saw no evidence before it of the plaintiff 

attempting, during the life of the contract, to enforce the terms of the agreement to 

its benefit. Id. 

Here, the district court’s Order is fully consistent with binding precedent. 

Appellants identify no grounds for finding that the district court abused its discretion 

in holding that the claims in the case did not seek to enforce the terms of the 

Agreements. Indeed, Appellants have identified no terms or provisions of the 

Agreements that are being enforced. The Agreements contain no warranty language 

being enforced, nor fraud nor unjust enrichment language. This is all a red herring. 

Willacy County’s claims for breach of implied warranty, negligence, unjust 

enrichment and fraud may “relate” to the Agreements to the extent they relate to the 

Facilities, but they do not actually depend upon them or enforce them. See KBR, 166 

S.W.3d at 740 (“under ‘direct benefits estoppel,’ a non-signatory plaintiff cannot be 

compelled to arbitrate on the sole ground that, but for the contract containing the 

arbitration provision, it would have no basis to sue”); Carr, 337 S.W.3d 489, 498 
28 

(contracts that merely “relate” or “touch upon” an agreement insufficient to impose 

arbitration obligation). Nor do Appellants identify how the County seeks to obtain 

“through the claim, to derive a direct benefit from the [Agreement],” KBR, 166 

S.W.3d a 741. 

There is no evidence in the record of any direct benefit obtained by the County 

from the Agreements. The specific evidence in the Appendices shows that the 

County got no direct benefit because the local government entities were handling the 

work load and raised the funds to build the Facilities. Moreover, those Agreements 

terminated a long, long time ago (CR 130, 158, 196, 239). Therefore, any alleged 

benefit to the County from this lawsuit is incidental. 

For these reasons, Appellants’ continual recitation of the fact that the County 

is a named third-party beneficiary in two of the three Agreements is a non-starter. 

Being named a third party beneficiary does not change the fact that Willacy is a 

stranger to the Agreements. No case has held that a sovereign entity can be bound to 

the breadth of fundamental waivers of sovereign immunity even when it has not 

signed the Agreement. Not a single case has held that. 

To the extent that Appellants admit that in one of the Agreements—the 

Sherriff’s Office Agreement—the County is NOT a third party beneficiary—that 

justifies affirming prima facie. Thus, if as Appellants’ own contorted logic demands, 

being a named third-party beneficiary is outcome determinative, this Court cannot 
29 

reverse the district court as to the Sherriff’s Office Agreement. 

B. Under KBR, The Court At Most Would Reverse as to the Warranty Claims 

Under KBR, the Texas Supreme Court has recognized that a non-signatory 

cannot be compelled to arbitrate claims lying outside of the contract, even if it can 

be compelled to arbitrate claims within the contract. 

The KBR Court recognized the general rule that arbitration clauses can be read 

expansively for signatory parties to include all claims arising between them; the 

same is not true for non-signatories. The Court expalained: 

A party to a contract may, however, seek alternative relief under 

both contract and quasi-contract theories. Pleading in the 

alternative does not defeat the effect of an arbitration clause that 

broadly covers all disputes between signatories that arise out of 

the underlying agreement. But in this case, KBR is not a 

signatory to the fabrication subcontract between MacGregor and 

Unidynamics; therefore, the scope of that subcontract's 

arbitration clause does not answer whether KBR must arbitrate. 

KBR, 166 S.W.3d at 740. Thus, the KBR ultimately reversed as to the quantum 

meruit claim because it was definitely not under the contract, and remanded for 

further determination by the district court of whether the other claims could be 

arbitrated. Id. at 742. 

 Therefore, at best, Appellants’ estoppel theory would place the warranty 

claims in arbitration. Seeking restitution for negligence or unjust enrichment and 

fraud in the inducement does not invoke any terms of the agreement. Landmark Org., 
30 

L.P. v. Tremco Inc., 2010 Tex. App. LEXIS 5052, *29. These arise independent of 

any contract. KBR, 166 S.W.3d at 740. Therefore, the claims for negligence, fraud 

and unjust enrichment must be allowed to remain in district court. 

IV. THIS COURT SHOULD AFFIRM ON CONTRACTUAL GROUNDS

An appellate court may affirm a trial court’s determination on any sufficient 

ground in the record. Here, in the event this Court overrules the district court’s 

sustaining of Willacy County’s objection to the lack of evidence and admits the 

Agreements as evidence, the Agreements themselves provide textual grounds to 

affirm.7 

It is important to note that the three facilities were subject to independent 

contracts, none of which had the same arbitration clause or arbitration language. A 

close reading of these Agreement shows that they do not compel arbitration under 

these circumstances and that the trial court did not abuse her discretion – or said 

differently, any error was ultimately harmless. 

Arbitration agreements are creatures of contract and are construed under the 

same rules of construction as applied to other contracts. See Aldridge v. Thrift Fin. 

Mktg., LLC, 376 S.W.3d 877, 882 (Tex. App.–Fort Worth 2012, no pet.); First 

Option of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). When interpreting a 

 7 Because they were never provided in full, Appellee did not have the opportunity to raise the textual arguments 

herein except where noted. Thus, to the extent this court overrules the district court’s implicit evidentiary ruling, it 

should permit these arguments to be raised and find sufficient grounds to affirm the district court’s order. 
31 

contract, the primary concern is “to ascertain and give effect to the intent of the 

parties as expressed in the contract.” In re Serv. Corp. Intern., 355 S.W.3d 655, 661 

(Tex. 2011). “To discern this intent, we ‘examine and consider the entire writing in 

an effort to harmonize and give effect to all the provisions of the contract so that 

none will be rendered meaningless. No single provision taken alone will be given 

controlling effect; rather, all the provisions must be considered with reference to the 

whole instrument.’” Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 

342, 345 (Tex.2006) (citations omitted). 

Furthermore, all of these agreements were presented and drafted by the 

Defendants. And “[i]t is well-established law that where an ambiguity exists in a 

contract, the contract language will be construed strictly against the party who 

drafted it since the drafter is responsible for the language used.” Gonzalez v. Mission 

Am. Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990). 

A. The Sherriff’s Office Agreement Does not Provide for Mandatory 

Arbitration by the County Because it Was Not a Party and the Provision is 

Patently Ambiguous 

In addition to not naming the County as a third party beneficiary, the Sherriff’s 

Office Agreement does not provide for mandatory arbitration involving the County. 

That agreement only provides for arbitration or mediation of “Claims, disputes, or 

other matters in question between the parties to this Agreement arising out of or 

relating to this Agreement or breach thereof[.]” (see Exhibit B, at CR 132-158) 
32 

(emphasis added). 

As revealed in the Record before this Court, the County is not a Party and is 

not a named third party beneficiary to the Sherriff’s Office Agreement. (see Exhibit 

B, at CR 132-158). In fact, that agreement specifically provides that “Nothing 

contained in this Agreement shall create a contractual relationship between the 

Owner [County Jail Public Facility Corporation] and any person or entity other than 

the Design/Builder [Hale-Mills].” (see Exhibit B at § 1.2.3, at CR 132-158). 

Thus, the express inclusion of the limitation of “parties” as persons bound by 

the arbitration provision to the Agreement cannot be overridden by an equitable 

catch-all. None of the cases cited by the Appellants addressed an arbitration 

provision that was, by its terms, limited to the “parties” of that contract. To the 

contrary, at least one appellate court has held that even a third party beneficiary to a 

contract who brings suit cannot be compelled to arbitrate when the contract 

specifically delineates who must arbitrate, and does not specifically identify the third 

party. See Intergen, 344 F.3d at 146 (“Each purchase order's arbitration clause 

applies to "any and all controversies, disputes or claims between Buyer and Seller." 

The words "Buyer" and "Seller" are explicitly defined.”). 

Additionally, the contract provision is ambiguous. It does not provide that 

arbitration is the exclusive or mandatory means to settling disputes. Indeed, Section 

10.1 specifically states that “Claims, disputes or other matters in question between 
33 

the parties to this Agreement arising out of or relating to this Agreement or breach 

thereof shall be subject to and decided by mediation or arbitration.” (see Exhibit B, 

at CR 132-158). 

Section 10.2 then clarifies that if a party selects arbitration under Section 10.1, 

it must be preceded by a demand for mediation. (See id.). But the opposite is plainly 

not true. A party who elects mediation—as the County did—which then turns out to 

be unsuccessful is nowhere required to then also seek arbitration. The “or” in 

“mediation or arbitration” is disjunctive. Either the mediation, or the arbitration is 

mandatory. Both are not. 

Because neither Section 10.1 nor Section 10.2 states that once a demand for 

mediation is made then a party must then also file for arbitration, arbitration is not 

mandatory under the Sherriff’s Office Agreement. Indeed, Section 10.2, by its own 

terms, only applies to mandatory mediation preceding arbitration. 

This language can be juxtaposed to the ICE Agreements (see Exhibits C, at 

CR 160-196 and D, at CR 198-239) which specifically states that if mediation is 

unsuccessful, then the complaining party must move for arbitration. (See § 10.2 and 

10.3).8 Thus, to the extent that the provision allows the party to select between 

mandatory mediation or arbitration, it is patently ambiguous and must be construed 

 

8 The Arbitration provision in the Ice Agreements do not compel arbitration for other reasons, however, as we spell 

out below. 
34 

against the Appellant. Gonzalez, 795 S.W.2d at 737. 

Because the County is not a named third party beneficiary, is not a party to 

the agreement required to bring an arbitration, and arbitration is not clearly 

mandatory under the provision, this Court must affirm the district court’s denial of 

arbitration as to the Sherriff’s Office Agreement. 

B. The County is Expressly Excluded from Mandatory Arbitration Regarding 

the Marshall’s Office9 

Appellants’ own arbitration clause in the Marshall’s Office Agreement 

expressly excludes arbitration with non-signatories to the Agreement. (See Exhibit 

A, at CR 106-130). Specifically, the agreement provides, for example, that: 

No other arbitration arising out of or relating to this Part 2 

Agreement shall include by consolidation, joinder, or in any 

other manner, an additional person or entity not a party to this 

Part 2 Agreement or not a party to an Agreement with [HaleMills], except by written consent[.] 

See Exhibit B, at CR 132-158. 

Thus, by the plain language in the Marshall’s Office Contract, Willacy County 

cannot be compelled to arbitration over the marshal’s office facility because Willacy 

County is not a signatory to any of the arbitration agreements with Hale-Mills, and 

Willacy County has not otherwise agreed in writing to be bound. 

Thus, the County is expressly excluded from being required to bring 

 

9 This argument was raised and upheld by the district court. 
35 

arbitration under Marshall’s Office Agreement, and could not otherwise join the 

non-signatory defendants. 

C. The Agreements’ Clauses are Limited to Disputes that Arise During 

Construction and Pendency of the Contracts—Not After 

In In re Choice Homes, Inc., 174 S.W.3d 408 (Tex. App.–Houston [14th Dist.] 

2005, no pet.), the appeals court acknowledged that generally, events that occur after 

a contract lapses or has terminated, they are not governed by the contract or its 

arbitration provision unless expressly provided for. That is true even between the 

same parties to the contract. Id. But, because the arbitration provision in that case 

“encompassed claims that arose ‘during or after’” the contract period (there, the 

period of employment), they were “thus subject to arbitration regardless of whether 

the [events occurred] before or after [the contract] was terminated.” Id. at 413-14. 

Under this language, the In re Choice Homes court held that the plaintiff’s 

defamation claim was within the scope of the arbitration provision. Id. 

While the court’s opinion in In re Choice Homes, Inc., turned on the “during 

or after” language contained in the arbitration provision, no such language appears 

in any of the Agreements at issue in this case. Appellants do not deny that the period 

governed by the Agreements ended years ago, but that the latent infirmities and 

cover-ups have only metastasized in recent years. Nonetheless, the disputes at issue 

did not arise during the pendency of the Agreements—those contracts have long 

lapsed, and therefore arguably, so have the Arbitration clauses. There is no dispute 
36 

that the Facilities were substantially completed by January 2008, (CR 130, 158, 196, 

239)10 and that the completion of the facilities terminated the contractual 

relationships. 

This reading is consistent with the language in the Agreements. For example, 

the ICE Agreements’ dispute resolution provisions address the parties relationship 

“throughout the project.” See, e.g., Exhibit D, at CR 198-239 § 10.2 (§ 10.2.1). That 

same provision then provides that “if disputes or disagreements do arise,” e.g., 

“throughout the project,” then the parties “commit to resolving such disputes or 

disagreements in an amicable, professional, and expeditious manner so as to avoid 

unnecessary losses, delays and disruptions to the Work.” Id. The balance of Section 

10.2 describes the procedures for resolution thereof. Id. § 10.3.2-4. 

Section 10.3 governs “Arbitration,” but by its own terms specifically and only 

applies to disputes that arise and cannot be resolved under Section 10.2. See Exhibit 

D, CR at 198-239 at § 10.3 (§§ 10.3.1). In other words, if the dispute arose under 

Section 10.2 and was not resolved, only then would it be subject to Section 10.3. 

Nothing in Section 10.2 suggests that it would apply to disputes that arose after the 

completion of the “Project,” 

It is black letter law that the provisions of contracts, especially those 

containing an arbitration clause must be read to give each term its meaning, and to 

 

10 Appellants admit as much in the brief. See Appellant’s Opening Br. at 1. 
37 

harmonize the terms thereof. See Aldridge, 376 S.W.3d at 882; Kaplan, 514 U.S. at 

944. When interpreting a contract, the primary concern is “to ascertain and give 

effect to the intent of the parties as expressed in the contract.” In re Serv. Corp. 

Intern., 355 S.W.3d at 661. “To discern this intent, we ‘examine and consider the 

entire writing in an effort to harmonize and give effect to all the provisions of the 

contract so that none will be rendered meaningless. No single provision taken alone 

will be given controlling effect; rather, all the provisions must be considered with 

reference to the whole instrument.’” Seagull Energy, 207 S.W.3d at 345. 

 Here, the plain reading of Section 10.3 of the ICE Agreement renders it 

limited in scope to the “disputes or disagreements” that arise under Section 10.2, 

which is limited to disputes and disagreements that arise “throughout the project”—

e.g., while the construction project is still underway. Any other reading would 

expand the scope of Section 10.3 beyond its textual moorings, and would render the 

reference to Section 10.2 meaningless. Id. 

Had the drafters intended for Arbitration to be mandatory regardless of when 

the dispute arose—e.g., before or after, it would have expressly stated as much, and 

it would not have referred to the limited scope of Section 10.2. Accord In re Choice 

Homes, Inc., 174 S.W.3d at 413-14. Moreover, to the extent these provisions are 

ambiguous, the ambiguity should be construed against Appellee as the drafter. 

Gonzalez, 795 S.W.2d 734, 737. 
38 

Because there is no dispute in the record that the construct project is no longer 

“underway,” and there is no risk of “unnecessary losses delays or disruptions to the 

work” that could be avoided by mediation under Section 10.2, the plain language of 

Section 10.3 renders the mandatory arbitration provision therein inapplicable to the 

current litigation. 

D. Appellant Has Not Proven that All Pre-Requisites to Compelling Arbitration 

on the Detention Facility Have Been Met 

The Appellant has not proven that the pre-requisites to invoking arbitration 

have been met. Where there are contractual prerequisites to invoking an arbitration 

agreement, the party seeking an order compelling arbitration is not entitled to relief 

if it cannot demonstrate that those pre-requisites were met. See In re Pisces Foods, 

L.L.C., 228 S.W.3d 349, 353 (Tex. App–Austin 2007, orig. proceeding) (holding 

trial court did not abuse its discretion by refusing to compel arbitration, and noting 

that many courts have held “arbitration could not be compelled when parties who 

were contractually required to mediate or follow other grievance procedures as a 

precondition to arbitration had failed to do so.”); Amir v. Int’l Bank of Commerce, 

419 S.W.3d 687, 692 (Tex. App.–Houston [1st Dist.] 2013, no pet.). (holding that 

where it is clearly established that a strictly procedural requirement has not been met 

and that procedural requirement precludes arbitration, a court can deny a motion to 

compel arbitration). 
39 

Here, the ICE Agreement Section 10.1 requires that the Parties mediate in 

good faith to resolve any dispute that arises during the project. Therefore, if the scope 

of that clause is broadened, then Appellant as the movant bears the burden of proving 

that all pre-requisites were met. The record is barren of any evidence that such a 

prerequisite has been met. 

CONCLUSION AND PRAYER 

Therefore, for the foregoing reasons, any one of which is sufficient, Appellee, 

Willacy County respectfully requests this Court affirm the Order of the Trial Court 

denying Appellant’s motions to compel arbitration. 
40 

 Respectfully submitted, 

 By_____/s/Mazin Sbaiti 

Bruce W. Steckler 

State Bar No. 00785039 

Mazin Sbaiti 

State Bar No. 24058096 

STECKLER, LLP 

12720 Hillcrest Road, Ste. 1045 

Dallas, TX 75230 

Telephone: (972) 387-4040 

Fax: (972) 387-4041 

bruce@stecklerlaw.com 

mazin@stecklerlaw.com 

Ramon Garcia 

 State Bar No. 07641800 

 Emerson E. Arellano 

State Bar No. 00785039 

LAW OFFICE OF RAMON GARCIA, P.C. 

 222 West University Drive 

 Edinburg, TX 78539 

 T: 956-383-7441 

 F: 956-381-0825 

 

Manuel Solis 

 State Bar No. 18826790 

 LAW OFFICE OF MANUEL SOLIS

 6657 Navigation Boulevard 

 Houston, TX 77011 

 T: 713-844-2700 

 F: 281-754-4681 

 msolis1882@yahoo.com 

 Daniel G. Rios 

 State Bar No. 00784844 

LAW OFFICE OF DANIEL G. RIOS, PC 

 323 W. Nolana Avenue 

 McAllen, TX 78504 

 T: 956-630-9401 
41 

 F: 956-682-0566 

 dan@danrioslaw.com

ATTORNEYS FOR APPELLEE 

 

CERTIFICATE OF SERVICE

This is to certify that on July 22, 2015, a true and correct copy of the foregoing 

Appellee’s Brief was served via U.S. Mail, Fax and/or Electronic Service, upon the 

following counsel of record in accordance with the Texas Rules of Appellate 

Procedure: 

William B. Westcott 

Robert A. Plessala 

Andrews Myers, P.C. 

3900 Essex Lane, Suite 800 

Houston, TX 77027-5109 

(713) 850-4211 (facsimile) 

 /s/Mazin Sbaiti 

 Mazin Sbaiti 

CERTIFICATE OF COMPLIANCE

Based on a word count run in Microsoft Word 2010, this Appellant’s Brief

contains 9,415 words, excluding the portions of the document exempt from the word 

count under Texas Rule of Appellate Procedure 9.4(i)(1). 

/s/ Mazin A. Sbaiti 

Mazin Sbaiti 
EXHIBIT A 
JENKENS & GILCHRIST • Fax=214-855-4107 Aug ~ 2003 9:01 P.02 

MA Document A191 

Standard Form of Agreement Between 

Owner and Design/Builder 

THIS DOQ..;)/£NT HAS IMPORTANT LEGAL CONSEQUENCES: CONSULTKl'ION WffH AN 

AITORNEl• JS ENCOURAGED VlffH RESPECI10 ITS USE. CQ"'1PIE1'JON ORlrlODJF/CATION. 

7bis d«umeru a>mprises tUJD Slljlarate~ Jbrt 1 ~ement and lbrl 2 ~- 10 tbe 

e:rumr n/enmced in tbae ~- subordinate pruolblf qrumena to A191 consisl of ALA 

Document ~l. Standard Farm of A8"emtetlts 811tKYnm Deslp,&dldtzr and Conrractor, and A/A 

Do<:umenl B!JOI, Standard Form of~ .8etr.wm Du/gn/Builder and ;.rcbitea.. 

AGR~ENT 

. . 

PART 2 AGREEMENT 

1996EDmON 

made as oft~ Tenth day.of June in che year of two thousand 

two 

BETWEEN rhe Owner. ~_,,atlJnsJ 

Armando Ruba1caba-President 

Willacy c~unty Public Faciiity Corporation 

546 W. Hidalgo Street 

Raymondville, Texas 78580 

Hale-Mills Construction, Ltd. 

Bale-Mills Construction, Inc. 

413Q Bellaire Blvd, Ste 210 

Houston, Texas 77025 

EXHIBIT 

I I\ . 

C:•1flo/111(h1 i'lll~. O'Jl'l'lll 1"ho; Am'-"fll."ilA llll'lilulc 11( Ard11ln1,S, 1-~~ ~~w lork ,w..-11uc. ),"It; lr•ohln11tun. DC .!llUOl>o';l\I.!. llc1tr11(l\A~l\lll Ill 1hc "'"''-"""' h1<ron "' nuh>t11ru"'I 

•1uut.:.U\\Jt\ 1•l 1b I•"""""'"., u.11hoU1 ttu.. .. ""'''-··.., JA'l"ln•Ultlft u( the AJJ\ \"Md.Ill") d11; ''"P'TI~hl b•·a 1.t rhL" 1 ·n11t,:d ~l.:ito ilnd w1U .. uh1~'' lh.,; ,.,,,~11or , .. "-~I pt\NoL"l•utmn. 

- 106 
JENKENS & GILCl-RIST Fax:214-855-4107 ~ug ~ 2003 9:01 P.03 

For the foUo"ing Projet.'t: 

''""'""" l'roj«;t .... ,. •. loctil1on and,..,,,._,,. "-t;rlptlan.1 

See ParagraPi 1 of Apperdix "A". 

T'" 'UChlt.caural services desc:ribcd in Article 3 will be pcovided by the fbllowing peaon or entity who is lawfully licensed 

.Cli<E atehitecture: 

Norroal sa't;JctUral, medwUal and elccabl engineering services will be pn:mded contDClUally through me Archltea 

except llS indicaced below: ,,._ adt/twr,..Jttlilt:Jp/INJ ~IOllA/111....,.1 ('6JtdlatabipldJafp/llulld•I 

107 
JENKENS & GILCHRIST Fax:214-855-4107 Aug ~ 2003 9:01 P.04 

I TERMS AND CONDITIO);"S-PART 2 AGREEMENT J 

ARTICLE 1 

GENERAL PROVISIONS 

1.1 BASIC DEFINJTIONS 

1 .1.1 The Conttaet Documents consiSt of the Patt 1 

Agreement tQ rhe extent nOl modified by chis Pare 2 

Agreement, this Part 2 Agreement, the OeslgntBuiJdec'5 

Proposal and ,..'Iitten 2ddC:nda tO the Proposal idcndticd 

in Anidc: 14. the COnsmiaion Documents apprm'ed bv 

che Owner in aa:oi;dance \\;th Sub~ph -3.2.3 and 

.Modifications issued after Qecudon of this Part 2 

.Agreement.. A-·MOOificadon is a Change Order or :a Mitren amendment t0 chis Pan 2 ..;\greetnent 5igned bv both 

partles, or a Consauaion Change Directive Issued h!' the 

Owner in accordance "'ich Paragcaph 8.3. 

1.1.2 The cerm ''1Kibcku means die consuuction and set"· 

vices plO\llded by the Dcsi8IJ/Buildcr to ful.611 the 

Dcsign/Bllildet's obligations. 

1.2 EXECUTION, CORRELATION AND 'NTENT 

t.1 k is dle inlel\t of the Owner and Dcs.lgrvBuildcr ~t the COntraa Documents indude all items necessarv • .:ic proper execution md completion cf.the Wbdc. ThC 

Conaaa Documents ace complemenrary, and wbar bi 

required by ooe shall be as bindiog as if rcquil'Cd bv all: 

perfonnance by the DesJgivBui.kb- shall ~ r~ircd 

caly to the exrenr consisr.ent with atJd ceasonablv infer· 

able f'rom me Comtaa Docurnems as being neceSsaiy ro 

pn:xiucc the intended a:sults. Words th2t have Wl!IJ.. 

known rechnic:al oc coosuuctiOll ipdwuy meanings ace 

used In die Contact Documents Jn accocdance wtch 

such ttCOgolz.ed meanJnss. 

1.2..2 If the De1ian1Buildcc bdic:va « Is advised bv 1he 

.An:h1u:a or by another des~ pro6:ssional ~ ro 

pi:ovide sttviccs oo rhc Project thac implementation of 

any instruction received from the Ownet would cause a violation of any ~Ucable la-. the Design/Builder shall 

notify dte Owner m writing. Netdler the OesigntBuildec nor the Archltca shall be obl(ga(ed co perform anv ace which either believes wtU Violate any appllablc law..· 

'1 .2..3 Nothtog c:ontained in this Patt l Agreement shall 

CR::3IC II conmu:wal relationship between me.Owner and 

any person or enrity orher than the Daisn/BUUder. 

1.3 OWNERSHIP AND USE OF DOCUMENTS 

1.3.1 Drawings, spcdficatians. and other documents and 

electronic data fumished by ~ .Dc$ign18uUdec :u:e 

tnsttUntems of secvtce. The OesiJ,wBuildcr's A.n:hltect 

lllld other providcn or profe$stonal ~ shaft ~rain 

all common law, $1attllory nnd other resenicd righu, 

;.,dut.l1ng c=opyri8ht In those in.'itrumentli of service fur-

'1cd' by them. Dnlwini;tS, spccifac-Jtions. aru.l other docienr.s and ela-cronic cJ:im are fumi:;hed lbr use sol<.."ly 

wich l'C.!'ipect to this f3.n l J\qreemenc. The O\\ncr i;haU l.>~ p~rmitted ru re~ain cupl~. indodin~ reproducible: 

t:,-Opic:;. of the drawings. ~1>ccif'i<.~dun.'i. and other 

cJocumc:nts and d~ctmnit.· dat:i. rurrti~hed hy chc 

Design1BuiJder for information and reference In c:.:un.nec:· 

cion \\ith tbe Project except as pro .. ided in Subparagnplis 1.3.2 and 1.3.3. 

1 .3.2 Ora\\"lngs. spedfotions, and other documcnlS and 

electronic data Curn1$hed by the Design/Builder shall not 

be used "'. the Owner or others on ocher p.rojeccs, foe 

additions io thJs Project or for completion of thb Project 

by ochers. except bv agreement in ~"tiring and with 

approprta.r.e compcnSalion to the Desigrv'BuiJder. u~ess 

the DesigntBulJdcr is adjudged co be In default under 

this Part 2 .-\greement or under any orher subsequently 

CKCCUced agreement . 

1.3.3 If che Design/Builder d¢aults in the Desagnl 

Builder's obligations ro the Owner. the Arc:hitcct shall 

gtant a license m the Ownec t0 use the dawlngs, specifications. and ochcc documc:ntS and eJecuonic: dat2 furnished bv the Architttt to the .DesignlBuildet for the 

completiOn of the Project, condlr.loned upon the 0wner·s 

exec:udon of an agreii:ment to ewe the Dcsipllluildet's 

defauk io pavment t0 the Architeet for setVk:es previously performed and ro tndemn.lly the M:hima with repni 

to claims arising from such reuse Without lheMcbitca's 

pmkssiooaJ involvement. 

1.3.4 Submission or distribution of the DesignlSuildct's documentS to meet official cqulatory requ~ts or 

for similar putpOSCS in conReaion with me Prajca JS nor 

to br: consuued as publ.icatiOn ln detoJption of the righ&:s 

resem:d In Subparagraph 1.3.lARTICLE2 

OWNER · 

2..1 The O~TICr shall daigllatc a represcnwtve auche>-

riKd t0 ace on the owner·• behalf Wich respect ro du!: 

Profeet. The OWner or such authoclzcd repreR:ruadve 

shall cxo.mine documencs submitted by the Desianl 

8U1Jderand shall tender decisions in a timdy manner and 

In accordance wfth the schedule accepted by the Owner. 

l"he Owner may obtain Independent review of me 

Contraet Documents by a sepaate ;architcet, eQRineer, 

con~r. or cost ~tor under contn.et to OC 

em~ by- the Ownci: Such inde~nt ~shall be underckcn at che 0wncc·s cicpcn11e in a amely m211· 

ner :and 11hall ncl delay the orderly [>f'UKri:ss of ~he Wbc\. 

2.2 The Owner may appoint an on-site project rcpre.o;eniatiYC co ob;erve the Worlc 41nd co ha~ .such ocher 

responsibilities :JS the OwneC" :ind Dc.'fi~uildc:r agree 

in writing. 

2.3 The O\\ncr sh:all ll>t>pc:race With the 0cs1Rnl13ulkkr in 

:;ecurinJt buildina and ocher pennies. 111.-.::nses md ilU~­

tioni;. ·nle O\\"n\."f sh~• not be requil\!d «> pay the li.-e.~ nn: 

such permit.". li1."Cn.'K.-s :ind !mp."t.·dons unk::l.1 the t-'t>.>;l ot 

sud1 ft."c::I is 1:-'Q:ludec.I rrum the: Dcs~liuik.lc:r·, Propc:i.o;:JJ. 

2..4 1"hc C)\m1.T shall fuml.~h l>&.:rvicc..'I of bnd ~urvt.·yor.;. 

~~~------~~~T1Q8 
JENKENS & GILCHRIST Fax:214-S55-4107 Aug ~ 2003 9:02 P.05 

ge:otec:hnical engineei:s. and other consultants for subsoil 

air and \\-ater conditions. in addition ro chose prQ\;ded 

under the Pan l -"'8ret:ment. \\'hen such 5c:rvices are 

deemed nccessat)· ~- the Design Buildcc co properlr carry 

ou( the design sen ices required by d\is hct 2 .<\g(ecmcnt. 

2.5 The 01\"tler shall disclose, co the extent kno\\-n to the 

OwnC(. the results and rcpons of prior cests. inspections 

or invesligations conducted for the Project itl\'oidng: 

suuaui:al or mechanical .svsteans: dlemical. air and \\1lter 

pollution; hazardous mar.Crials: or Other environmental 

and subsurface conditions. The Owner shall disclose all 

information known to rhc Owner regarding the presence 

of pollutants at the Ptojea's site. 

2.S The Owner shall fumi.sh all Jeg:d, accounling and 

insurance counsding senices as .inay be ncccssacy at any 

tlme for the Project. indudins such.aqdl.tjng senices as me Owner may require tO \'lerify tbc Deslgn/BuUdcr's 

Applic:adons for ~mc.ru. 

'-' If the Owner requires the Designl8u1kler to maintain 

any speci31 insurance ~. po1q amendment. or cider, the Owner shall pay the addidonal c:oSt thereof, 

except as otherwise StlpWated ln this hn 2 Aareemcnt. 

2.1 If che Owner observes or ot.hctwJsc becomes aware 

of a fault ot defect in the Work or nonconformity \\'lth 

the Design/Builder's Proposal or che Construcdon 

Documeius. the Owner shall give prompt written nolice 

thaeofm rhe D~ildet: 

2.10 The Owner shall, at the request of the Design/· 

Bulk.lei-, pnor to QC!CUdon of this .P.ut 2 Aareement aod 

prompdy upon request thereafter, furnish to the 

Design/Builder reasonable evidence that financial ~rs h«Ve been made to fulfill i:hc O\\ner·s 

obllgaiions under rhe Conrna. 

2.11 nu: C>wner shall com"1unlcate with persons or 

entities empfoyed or reWllcd by me DcsfgntBullder 

through rhc Oeslgn/Bullder, unless othenvise directed 

by the Design/Bulfder. 

AATICLE3 

DESIGN/BUILDER 

3.1 SERVICES AND ftESPONSIB1unES 

' l'>c:!IJCO scn-lc:coc require:d by thL1 fart .2 :\J!reement 

he 1~cfonncd tw qualified irchlreas and ndu:r uc.~ pmlcs ... iun:il'L The cunrcaawll abl~ttun.; 01' sui::h 

profr:s.'iiona.I per:-ion., or meides are undlm:ila:n :inti per· 

funned In ll'lc int~t n( the Oestgn1Buiklcr. 

3.1.2 "1111: ~·~rcc011..·11c.~ bctwccn lhc Oe'>iJ.{Nl3uikl1.:r :ind 

the persons or entities identified In this hn 2 ~ent, 

and any subsequent mod!ftcations. shall be in wridng. 

These a.gceemencs, including financial arrangements ~ith 

respect to tbis Protea. shall be prompt!~· and fully 

disclosed to the Owner upon request 

3.1.3 The DeslgnlBuilder shall be responsible w lhe 

Owner for aos and ombs.ions sf the Design/Builder's 

employees, subcontraetors and ·their agents and employees. and other persons. lnduding the Archirect and 

other design prok:ssionals, pedocmlng any portion of the 

Design/Builder·s obligations under rhis .Patt Z .~nc. 

3.2 BASIC SERVICES 

3.2.1 The Design/Bulldec's Basic Services ~ described 

below and in An:ide 14. 

3.2.2 The DesigolBuUde.r shall destgoace a re~tacivi(auclioriled· to ace an rhe DesJgntBulldr:r's bChalf with 

respect to the Pmjca. 

3..2.3 The D~ullder shall submit Consuuc:don 

Document! for revtew and approval by the: Owner. 

Construaion Documcncs may IDdude tirn-'ingS. sped&· 

adons, and other docwnenrs and electronk; data setting 

forth In derail the requlrementS for c:onsauclion of the 

WOlk, and shall; 

.1 be consiste.nt with the intent of die Desiga/Builder's Proposal: 

.2 provide infonnation for the use of those in the 

building trades; and 

.3 Include documents c:uscomarity required for 

tcguWory asenc:y appcova.1$. 

3.2.4 The Ocsijp11Buj1der, with the assistance of the 

Owner, shall rue documents required to obtdn nr.cessary approvals of govcramennd authorities having 

jurisdiCtion over the Projec:t. 

3.2.5 Unless orherwiSe proVided . in the COouact 

Docurnents. dlc: De1ign1Buildec .shall pro\lide or cause to 

be pC'Ol'ided and shall paJ" tor desJ.gn services. labor, 

materials. equipment, tooJs, constrUCdon equipment 

md machine~ water, heat. utillde., Uln&pon.adon and 

other &dlides and scrvio:s n~ for proper CCCCU· 

don and compledOn of the Work. whethcC temporary or pennancru and whether or nor incorporaed or to be 

incorporated In rhe Work. 

3.2.6 The OesignJBuilder ithall be responsible Cot all 

and 

C003trucdon 

procedures, 

DlCIOa, 

and i>r 

mcd\oc;ls, 

coordinating 

-=iudqWK.. 

all poniOnS ~ of me ~.de under thi$ P..an: 1 Agreement. 

3.2.7 The De20ign1Builder shall keep the Own« infucmed of the progress and qu~ty of the Work. 

3.2.B The Df:sitn/Builucr shall be: responsible for 

L-orrc:cting Work which <.lo.:J> nm conform ro the Contract 

Documen1:1. 

3.2.1 Tilc! Design/Builder "~"rrants m the Owner that 

1nareriaJs ;md equi1>rmmt fuml."il11..-d under the Conu-a£;t 

will be: uf l(<XtU qUality ;mt! nc:\v W\lcss othcrwksc: required 

nr permitted by lhe Contr.tt.1 Ouc:umcnlS. mac the "11nstrU<..1ion \\ill be fn.-e frunt fuul~ :mcJ dde'cu. and ch.l.c tht: 

c.:nnstruc..·tiun \\itl c:onform \\ith Che: tcqUin:numtS of the 

~~~--~~--~~~~~~~--~109 
JENKENS & GILCHRIST Fax=214-855-4107 Aug 8 2003 9:02 P.06 

Contract Documencs. Construction not conforming ro these rcquiremencs, Including substitutions ncx properly 

approved by the Owner. shaJJ be corrected in accoroancc 

\\ith Article 9. 

3.2.1 o The Design.IBuilder shall pay all saJc:s. consumer. use and similar mes which had been lcgallv enacted at 

chc rime the Or.:s.ign.IBuildcr's Proposal was n.x;i; submitted 

co the ~er. :and shall secure and pay for buildlng and 

~ pcnruts and govemmcnw kc:s, licenses and in.spcct1ons necessary for the proper execution and completk>n 

of the Work l\illch are dt:her customarih• secured after 

c:<ecution of a c:on"3ct Cor consuuaiori or are legally 

required ar che time die Dcsign:Builder's Proposal \\.'25 

fitsc submitred tO die Owner. 

3.2.11 Til.C Deslgn/Buikk{ shall comply "'irh and give 

notices required by laws. ordinances, rules. reguJatiON 

and lawful orders of public authortdes t"elar.ing to t:hc 

Project. • 

3.2.12 The Deslgnl.Buildec shall pay rov:alde!.; and license 

fees foe parented destps, proces5cs 0r products. the 

DesignlBUilder sbalJ ddl:nd $ulCS or claims for lnfrlngement of patent righta and shall hold rhc Ot11."t1Ct hatmk:ss 

Crom loss 011 account rhcrcc( but shall OOl be responsible 

for such ddcnse or loss~ a panicWar design. pr;ocess 

oc pmdua oE a pmlcular manuCu:wter is .cequired bv rhe 

Owner. HOM:ver, if the DesigniBulldct has ttaSOit to 

I •;eve me USI! of &"required design, process Or product 

1 ~enr of a parent, the DesignlBuilder shall be 

• ..... ponslble for such lass unless such infonna'lion is 

pwmpdy furnished to the Owner. 

3.2.13 1'he Design/Builder shall keep me ptem.1$es .and 

surmundina area free from accumul2Ilon of 't\'tite 

materials or rubbish caused br operations uodec this 

Pan 2 Agreement. At the complcdon of lhe Work. rhe 

DesignlBuidec' shall rcmmc Crom lhe ske wasre materials, rubbish, the Designl8uilclec's tool$, construction 

cquipmcnr, m~ and surplus marerlals. 

3.2..14 The Designl&ilder shall nodfy rbe Owner when 

the :DdignlBulldcr bclkm::s chac the Wbrk or an ~ 

upon portion thereof is substandally completed. If the 

Owner concurs, the OealgnJBullder shaH Issue a Cenificate of Sub5lllntial Completion which shall establish the Date of Substmdal Completion. shall swie the 

responsibility m eadl pany ror securitv. mainceoance. 

heat. udlldes, damage to the \Vock and "tnsuranct!. sh:ill 

incluclc a list of lccins to be compleced or c:orrec:ted and 

stwl fix the time within which the DesigntBuildcr shall 

complete items lism:l lheretn. -9isptrllCS between ~-

-'>wRef ~Q11111p1Buil•f-f88&RillRtt ahe CIK-Cifiwe et: 4ubaaRlkal~~ RSQlt...c}Jn ac:GOR.laAQt 

~AJ01ido10 

3.2.15 11-.e Design/Builder shall maintain ac me :ilte for 

the Owner one tce0cd copy of the drawio~. itpt:etfk2-

ric>no;, produce data, samples. shop dr:i\\inRS. Ch.:i~e 

Ordeni :and ocher modificarioos. in gou<l order and rc:g-

~larly updarttl 10_ record the t.-Omplered construction. 

'it: sNll be dcltven:d to the Own~ upon complt:tinn 

.n:strUc."tion :md prior ro Ii~ p:iyn1ait. 

3.3 ADDmONAL SERVICES 

3-3.1 The services described in thi'I 1';1r.i~C"J.ph .3.3 are 

not included in Basic Senices unless so identified In 

.\cticlc 14. and they shall be paid for~ the Ql\·ner as pro-

\.ided in this Pan 2 Agreement. in addition to the com· 

pensatlOn for Basic Services. The services described in 

thi' Paragraph 3.3 shall be provided onJy if aucoorized or 

confitmcd in writing b~· the Owner. 

3.3.2 Making revisions in dtawlngs, spccillcati00$. and 

other documcntS or elecuonic data "·hen such revisions ace required by the enactment or te\islan of codes, l:a\\'5 

or regulations subsequent to the: prepacatlon of such 

documentS or electr0nic data. 

3.13 PC'O\iding consultation concemJng replacement of 

Work dam2ged by fire or Other cause during consrruc- tion, and furnishing services required in connection With 

the replacement of such Work. 

3..3..4 Providfns sccvfces in oonncction "1ith a public 

· hcming, . arbitration proceeding o.r legal p.rcceedJng, 

except v.ilcre dle OesignlBuilder is a party thereto. 

3.3.S Providing coordination of consuuctlon performed 

by me 0wnu·s own forces or separate canuaaar.s 

elf\Plo?ed b}· the Owner. and coordination of .eMccs 

required in connection with canstrUCtion pertbnned 

and equipment supplied b}• the Qwclec. 

3.3.& Prepa.rtng a sec ot i:eproducible record documents 

oc dectrOnlc data ahOtlling significant ddnges in the 

'Wodc m;rde during c.onsrcucrlon. 

~.3.7 Pro'l-idiog assistance In the utili1atlon of equipment or systems such as preparation of opeiadon JOd 

maimenmce manuals. ualnlng peaonnel far opeiation 

and mainienance, and C011$Ultadon during oper.uion. 

ARTICLE4 

TIME 

4.1 Unless Otherwise indicated. the Owner and lhe 

Design/Builder stwl perform the.Ir res~ obligalions as eiq>edldously as Is conslatent with rCasonable s~ and 

catt: and che ocdcdy progress of me Projca. 

4.2 Time limits seated in chc: Conmct Documents arc of 

the essence. TilC Work to be perfonned uC1der mas Pare 

.? Agn:emenc sh:ill commence upon iec:dpt of a nonce to 

proc:_eed unless otherwlile agreed aod, subject to authorized Modlllcadons. Substantial compledon shall be 

achlcVcd on or bc:forc chc: date c;:smb11ahed tn Att1cle 14. 

4.3 Subsw.nd:il Completion L.; che stage in the progre:s.~ 

of the Work when me wt>rk or d~ted portion thereof is :sufficiently complete in acconlance with the 

Conmct Documents so the Owner can occupy or utUize 

the Wbrk for it."i intended use. 

4.4 Bastl<.I on the l>1.."SigrvBullcJc:r·11 Pmpo.. :.il, :i cull!itnl\!· 

tiOR !;cheduic 1th::tll be r>roviuctl l.'UOllistCnt with P:lragraph 4.2 ~bcn-c. 

4.5 If the 11c.si1lr\/Builth:r is c.lela~'t:O at any [lntc in the: 

p~s of ch~ \'1;11rk br 41n nt.'l or n1..1flc.:t..1 of rhc O\mcr. 

0Wncr·i; ltlll[)(C~"C~l'i. \ll" !iC!:r.lf;UC t;Ontr.u:mrs t.'mplu~·t.'tl 

by the O\\'flcr. 111· I~· c:h~~'-"l:i urderttl ln chc '\M1rk. or hy 

110 
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labor di:iputcs. fire, unusual delar In deliveries. aU\'ersc 

weather conditions not fe2sonably anticip:uable. 

unavoidable casualties or other causc:s be\•ond the 

DesignlBuilder's conucl. or by delay authorized by the 

Owner pending arbitRtlon. or~· Ot'her causes "'hich the 

Ownc:c and Design/Builder agree m:iy justi~· dela~·. then 

the Con~ Time shall be reasonablv extended bv 

Change Order. · · 

ARTICLES 

PAYMENTS 

5.1 PROGRESS PAYl!aENTS 

5.1.1 The Deslgn/Bulldcc shall deliver to a:hc Ownec 

.itemized Appli~n& for Payment in such det3il as indicated in .Anlde 14. 

5.1.2 Wirhin ten (10) days of the Owner's receJpt or a 

properly submitted and corrcct Applicadon foe Pa}ment. 

the Own.er shall make payment to the Design/Bu'Jder. 

5.1.3 The Applia.don for Payment shall constitute a 

repEeSeruaμon bv the Design/Builder 1:0 the Owner that 

the deslgn and' c:onsttuctton have progiessed to the 

point indk:med; d1e quality of the ~ ~d b\• the 

•pUcaaoo is in accordance with the coricr.u:t 

icuments: ·and the lksign/Bullder lS entitled to 

t4Jlllcnt in the amount reque&tecl 

~ 

~.1A Upon receipt of payment from the <ft\-ncr, the 

sh:all prompdy pay ~ Architee" other 

desrgn .protessiomll and rach conrracror the amount to 

whic:h each is cndded in accoabnce with the rctms oI 

their respective conmcts. 

5.1.5 The Owner .shall .have no obUgadon under ihis Part 

2 Agreemc:m: to pay O&' to be tt.SpOn5ible in anv \\"a\' for 

payment ~ the .Architect. anocher destgn profesSioniil, oc a contr3CtOi" pedbnnJng pactions of rhe "4:>tk. 

5.1.6 Neithct progress payment nor partial or entire use 

oc occupancy of r:he Project by rhc Owner shaO ccnsdrure an ac:ceplanCl! of 'Mlrk noc in accordance ~id\ me 

Contra.ct Documenrs. 

5.1. 7 The De.sfgo/.Buildc:r wamw.1 rhat Ude IO all con-

~truetion cowm:d by an ~ for Paymcnc will pass 

ro ~ OWncr no Jacec- tbail the dme uf payment. the ~iJ<Er funher-w.amuxs dl:I{ upun .&Ubmitw or an Appilcadon for Paymcnc all oonsuuctl.on fbr 1\lhich pay· 

menr..o; h:lve been received l'rom the Owner shall be fi'ec 

and d<..w of IJC!!ns. claims. secuniy inu:rest:1 or encum· 

branr..'f!S in favor of me t>esignlBuildcr 01" any other pc:n;on 

or r:ntity pcrlbrming c:unstruCtion m the site: or furnishln,g 

marerial.'I or equipment relacing to the <.."OnStJU(..-tiun. 

5.1.8 AL the time of Substanclal Curnplc.-titJD, the Owner 

s!la.11 par tile Ol.-sign/Builder the r< .. '13in:ip;c, if :in~~ less the ..... ~on:ablc cu.,c w wrrecc or cumpk.-u: inc:um:a Clr incom· u: ~irk. Final payment uf !iud1 \\.'ithbdd :turn :ihall be 

.1dc upon co1n..~'don or compleciuo of i;udl 'M>rk. 

5.2 FINAL PAYMENT 

5.2.1 ~r:ilhc.:r tinal p.:t}'l11enc nor arnoums rr.:raiireU. if •lnY. 

sti2ll become due until the Design/Builder submlts to 

the Owner OJ an affldavit that payrolls. bills for materials 

and equipment. and ocher indebtedness connected with 

the Work for "·hich the Owner or Owner's property 

might be responsible or encumbered (less amounts 

tVichhcJd b\• the Owner) have been pald or otherwise 

saclstled: <l) a certiScate evidencing that lnSU12nce 

required by the Coriua.ct Documents to remain In force 

after firial pavment iS cum:nrly l.n dfea and will not be 

canceled or iillowed co expire untU at least 30 day$' prior 

written nodtt has bel.'!'.n given to the Owner; (3) a written 

statement thai; the Design/Builder knows of no suiJstan· 

tial reason that die insuGUJCe will not be renewable 10 

CCM!r lhe perJpd requited bv the Contract Documents: 

(4) consent of surety. JC anv, "to final ~t; and (S) if 

requitt:d b\' the Owner, odict data es'cabUshing payment 

or sausCacilon of oblmatioos, such as rea::ipls, n:1eascs 

and waivers of liens, daJms, security interest.s or encumbrances arising our of the COnma, to the cxr.cnt aod in 

such fotin as may be ·designated by me Otvner. ·If. a 

conuaaor or othet peison or cns:Ity entided to assen a 

lien aaamst the Owner's propeny refuses co lum~ a 

cdcase or "'aiw::r required by the Owner. the Design/ 

Builder may furnish a bond sad&&aozy to die °""1el" to 

indemrufy the Owner sgalnst such lieo. If sudi lien 

remains unsatisfied ~ .~ents arc made, the 

DesignJBuildcr shall Indemnify dJe OWnerforall loss and 

c:ost, including reuanable attorneys' tea incwn:d JS a result of such lien. 

5.2.2 When the ~ h2S been cornJlla::1 and rhe con· tract fully performed, tbe DcsJ,snlB shall submit a 6na.l application for payment to me OWnet, who shall 

make &nal payment within 30 days of receipt. 

5.2.3 The making ot tinal payment shall· con9tilutc a 

waiver of claims by the Owner exa:pt those arisiog &om: 

.1 liens. dalma. sec:urily interests or cncumbnnce6 

arising out of d1e ~and W1$e£ded; 

.2 f.ailucc of the Work to comply with rhe ttquire· 

mems of the Ctinttaa .Doa.a~ents; oc 

.3 t~ of spedaJ wamanties required by the eon- u:ux Document$. 

5.2.4 ~lance of final payment shall constiture a waM:r o( all daims by me ~uilder ~ those 

prcVlous1v made in writing and idcntitlcd by the 

Design/Builder as unsettled at the time or ftml 

Application for P:t.ym~nt. 

5.3 INTEREST PAYMENTS 

5.3.1 Pavmenu due the Desi=LIUder unacr this btt z ~ment which arc nor when due 5haJl bf2r' inrerest Crom the dale d.uc I.It e nue spedfted in Aaidc 13. ur in the ®sente of a spcclftcd rate. at the legal rate 

prevaillng u-lu:re the Project L'! IOOlced. 

ARTICLE& ,, ~ ~ - PROTECTtON OF PERSONS AND PROPERTY 

6.1 The Ocsi!tn1 BuiklL'1' :1h:sll be n:sponsible fur i1lil,i:Uing, m.11nrainini.t and pnwltling !lupervL'liun cif all :s;itcty 

prec..":lutio11:1 :mu pn>Nr.am:i i11 c:nnn~ctlun wich the 

pecfurmanec uf thL'I hrt l ~rt.-emem. 

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6.2 The besign!Builder shall take reasonable prccau· 

tion.s for the safety of. and shall pCOYide reasonable 

protection co pre:vcnr damage:, injucy or loss co: (1) 

empl~es on the Work and other pe(So~ who ma~· be 

affected thereby; (2) rhe Work and materials and equip-. 

mcru to be incorporated therein. whether In scora~e on oc off the sice, under care. custodl( or control or the 

Design/Builder or the Dcsignlt!uilder's contractors: and 

(3) Other property at or adjacent thereto, 5uch as u-ees, 

shrubs, lawns. walks, pavements, roadways, structures 

and utilities not dcslgf1ated for removal, relocation.. or 

replacemeoc in rhe course of constnJCtion. 

6.3 11\e Design/Builder shall give notices and comply 

with ~ laws, ·on:iinances, rule.&, regu)ations and 

lawful Oaleas or public aut:hondes bearing on rhe safety 

of pe.rsons oc pcopercy or their prorecdon from damage. 

injucy CC" loss. . 

6.4 The Design/Builder shall promply remedy damage 

and loss (odlcr than c:Wnage or Joss insured under 

property insua.na: provided or i:equired by the Conaaa 

Documerus) to property at the site caused In whole or 

in pare by the Dcstgn/Builder. a conam:tor of che 

Oesi,gn/Builder ot anyone directly ar indirectly empl~ 

::i:~ of them. oc by myonc for whose aas they may be 

ARTICLE7 

INSURANCE AND BONDS 

T.1 DESIGN/BUILDER'S UABIUTY INSURANCE 

7.1.1 The Design/Builder shall purchase from and 

mainl2in. in a company or~ lawfully aulhor.izcd 

to do buslnea in die furisdicdOn In whk:b die Profect is 

located, sud\ lmuraDce as will protea the DcslglvBullder 

from dalins set Cvnh below which may anse out or or 

1C$Ult from opetation5 under this Pan 2 Agreement by 

the DcsignlBuilder or by a c:oruraaor of the Design( 

BWldet, or by anyone dtrecdy or llldkecdy emplm'l:d bv 

any of mcm, 0( by anyone for whose aas any of them 

may be liable: 

.1 daiiN undet workecs' CIDl1lpeosation, disabillly 

benefit and orher simiJar employee bcne6t laws 

that :are applicable to dte 1ft:Jrk to be performed; 

...Z c:bims for <bmagea because ofbodUy toju.cy. occu- padonal sick.nas or disease, or dctth of rhe 

Design/Builder's ertaploY=S; 

.3 claims for damages because of bodily infury. slclc· 

nc:ss or ~e, or death of pl!Qlo~ o[her than 

me Design/Builder's cmp~es; 

.4 d:aims foe damages col/Cl'Cd by usual pcn;onal injury liabiliry coverage which are sustained c 1 l by a 

person as :i result of an off'cnse din:ctly or indirectly ·related w employmenc of sud1 person by 

the Ocsign1Buildcc or (?) by anocher per.ion: . 

"T claims for d:imagcs, ocher chan to the Whrk itself. 

bc:cau:;c nf lnjUI')' co or destruction. of ranJrible prop<:rt~; induding Luss of use l'dUlting chcn.4from• 

.6 daim.-1 fur tbmaRCS beca~e of h<>dilv lniurv. 

dcach of a pc:r.mn or property c.i:lma~e :ari:;in~ ouc 

of ownershlp, maintenance or use of a motor 

vehicle; and 

.7 claims involvlng comrac;tual liabilir:r insurance 

applicable to the DesigntBuilder·s obligations 

under Paragraph 11.5. 

7.1.2 The insucancc required bv Subparagraph 7.1.l 

shall be \\'rittcn foe not less titan limitS of liabiJlty 

spec:ifkd in this Part l Agreemcii.t or requ1n:d by law, 

whichever coverage i$ greater. Coverages, whether 

"-'fitten on an occur.rence or claims-made basis, shall be 

malnrained "1ilhout interruption frolll dale of com- mencemenc or the Wbrk until date of final paymtnc and 

termination of any covenge required to be mainwned 

after final payment. 

7.1.3 Ccrdftcaces of lnsuta11cc acceptable to the Owner 

shllll be dellvete:d to che Owner immediately after execution of dns Pan 2 Agrmnenc. These_Cerdfic:.:ard an~~. _ ..... inSurance poUck:s required ~· this Pmgraph 7.1 SlllW 

cootaJn a provision that ooveJ38CS afl"orded under rhe 

palidcs wifl not be canceled or allowed to expJre until at 

least 30 davs' pd_51r written notice has beet\ given to the 

Owner. Jf my ol the Co~ lnsurance coverages arc ~ed ro remain in lDrcc after final payment, an Mkli· 

tiOOal cenificacc evidencing contlnll2lion of such cow:ragc shall be submitted with the appllcauon for ftnal payment. lntormadon concerning ccdualon of' CO¥er2F 

.shall be Cumlshai by rhe Desigi1/Builder with reasonable 

prompcncss ln acCocdanc:e wkh the DesJanlBuiJdet's 

information and belie[ 

7.2. OWNER'S UABIUTY INSURANCE 

:::~,::e~~~~::t=:~ ~Owawmaypu,.;._.ud 

~ 

Rlinl1liA od'• 

(ef lelltw~~~~ .......... -.y 

~~..::~:c=r:: llHI R'lliMdAWtg • ., epfie8lll OPIAet's liMilier IAsUllMEe -

'1calc5S sptdlicall.¥ f8'1111RMI i..•• C9"m Oocz·•enti--

7.3 PROPeft'n" INSURANCa 

~At l::Jntess e~1-t:toder ehie- PHI 3 

•8""'ffl!"'1', the GWftef shall purchase and maintain, In a company or co~panic:S authorized to do busineSs in 

· the jurisdiction In which the principal improvell'lCDt5 

are to be located, prl!lpe;ner insUl'lll'\U ttpeft lhe Wem • -~Alhlo ·ae thalof'• a apJaamen• c;oft 

bHls wi~oui ~al d'lduGl'bl•• Such p.epefff insurance shall be matnt2111Cd. unlc::» othettlbc pro'!id· 

cd in rhe Conttact Documents or orhcrwlse agtced In 

wtitinK bv all persons and entitles 9/ho are bene&cr.uics 

OE such irisul'3nce, until final payment has been made or umil no person or entltv ocher than the Owner has an Insurable interest· In the propc:rrv rt.-quired by thl$ 

Paragraph 7.3 to be tnsu.-ed. whichever l:t earlier. This 

lnsur.ance shalt lndudc lmerat.'i of the Owner, the 

DcsignlBuilder, and their respective t:ontradOtS and 

subcontraetors in the Work. 

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JENKENS & GILCHRIST Fax:214-855-4107 Aug ~ 2003 9:04 P.09 

7.3.4 Unless ~e prot'idcd. me Owner shall pW'-

chase and maintain such bollef and machinety Insurance 

requhcd by this Pan 2 ~enc or by law, which shall 

spedfu:aDy CCM:r such insured objeas dutiog insrallark>n 

and until final m:qmancc by the Owner. This iDsuGlnCC ... ~11 include i,nceresrs of lhe O\\ner, the pcsignlBuilder, 

Desl,gniButlder's conuac:S<n :and subConu-aaQJS In 

.. Work. and the Design/Builder's Architect and other 

design proressioo*. nu: OWner and the Design/Builder shall be named insureds. 

7.3,6 Before an exposure w loss mav occur, the Owner 

shall 61e wirh rhe DcsJgn.IBuiJder a Copy of each polJcy 

that includes lnsumu:c coveta&C$ rcJ:IUlred by ibis 

P:lragraph 7..3. P.ach POiiey shall conrain all gcner.illy apmenu 

p.11cabki related CondldoN, 

to this 

clc:&nidone". 

Project. Each 

c:rduBlona 

poltcv shall 

and 

contain 

~ 

a provision that the policy will not be canCeled oc aflowcd co expire until at least 30 m,s· t'rior written nut.ice has 

been given t0 the De&ign/Bullc:Jer. 

7.3.7 If the DcsiKnlBuilder requescs in writing that insur-

<Jllce for risks other than chose d~ here.in or ·roc ~nher specia! h:&?.ards be included in che property ~nsurancc poh ... -y. the: Ownc:r shall. if po:tsible, obetln such 

• .m~. and the om d1ereof shall be charged to rhe 

.:n1Bullder by :ippmpri:ue Change Or4ef. 

7.3.8 The Owner and Dest~ruBullder waive :di ri"hts 

a~ainst t::ich ocher :ind the Architect lnd other dc.-slgn 

professionals. contractors. subconmaaors. agents :and 

employee$. each of the Other. for damages caused by fire or other perils to the extent covered by prope«!f insurance obtained pursuant to this Paragraph : .3 or other 

propcn:y Insurance applicable to the '«'Ork, except such 

rtghts as th~· may haw: ro proceeds of such Insurance 

held by the Owner as trUStee. The 0\\-ner or Design/ 

Bullder. as appropriate, shall require Crom conuacrors 

and subcontraaors by approptiatc agreements, written v.ncrc legall~· required for validlry. similar waivm's each in 

favor of other pantes enumerated in this Paagraph 7.3. 

The policies shall provide such waivers of subrogation by 

endorsement or otherwtsc. A waiver of subropclon shall 

be efleaJve as to a person or entity ever> rhough that ~· 

son ()(' entity would othcrwi.se have a duty or lndemnffi... 

cation, conuaaual or otherwise, did not pay dle Jnsurance premium directly or lndireal~ and whedlcr or not 

the peaon or endcy had an insurable interest in the 

prope(t! damaged. 

7.3.9 11 requfrcd in writing by a pany In inrcrest. the 

Owner as tn.IStee shall, upon oa:urrc:oce of an Insured 

loss, give bond tor fropcr performance of the Owner's 

~ 

duties. 

proceeds 

The eost 

recd\fed 

o required 

as ~ 

bood5 shall 

The Owner 

be ~ 

shall 

deposit in a separate account p~ so received. which 

rhe Owner shall dlsrn'bute In a<XO<dance wJth such agrcemeru as the parties bi interest. may rach, Of In accorda111% with an arblcr.ation award ln which case the proc:cdute shaJI be as provided In Arddc 10. ff a.f'cet such loss 

no odler special asreemeru: is made, replacement of damaeed 'M:Jrkshall be covered byappropriarc ChangeOrda". 

7.3,10 The O\Vner as uuscee shaft have power m adJUSt 

and setde a .loss wirh inswus unlees·one of the panies ln 

1ntetest shall obJec:t 1n wr10ng, Within ave C5l days a&aoccurrence of loss to the 0Wnec'5 exen:lse of dUs power; 

If such obJecdon be made. the panfe5 .shall entcr into 

dlspule .resolution under procedun::s p«Mded in Ankle 

10. II distribudon of insur.ma: proceeds bvarblradon u 

requked. the albklarors 1rilJ direct such distributJon. 

7.3.11 Partial ~pancy or use priot lO Subswldill 

Completion shad noc commcnc:e unril the insw'2nce 

company or companies providing property lnsurance 

have consented to such partial occupancy or use by 

endor.;cmcnt or otherwise. The Owner and the Design/ 

Builder shall take reasonab!e steps to obtain consenc of 

the in$~ company or ~ at\cl shall not, 

\\ithour mutu:al wrtucn consent. cake 2'1Y action •Irh 

rcspea to panial occupancy or use that would cause 

\.ancellation. Jnpsc or tedw:tlon of covttage. 

7.4 LOSS OF USE INSURANCE 

7.4.1 The Owner. at the Owner's option. may purc:ha.'IC: 

:md maintain such Insurance :as will lll.'lun: the Owner 

again!'iit Jc).'IS Of U$C Of the 0Wner's property due 10 fin! or 

mher hai:11tls. however aused. The Owner waives a.II 

ri$d'lts nf actiun again.o;c the Desigo/l\ulkJcr for kJ:i.'i of u.-cc: 

,,(the Owner'ic property. lndudinJ; t:On."l1:4uuntial lc>:f."I<::> 

uue tU tit"U Uf other hazards. however <:aWICU . 

.. --··-·- ........................ ""• ........ ,.,..,,. 113 
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AATICLI; B ---- CHANGES IN THE WORK 

8.1 CHANGES 

8.1.1 Chang~ in the ~Ork ma~· be accomplished after 

O(CCUtlon of this Pact Z -~t, whhout imralidal:lng 

rhis Pact 2 Agreement. bY Change Order, Constn.tc::don 

Cb,anse Dlcective, or order for a minor change in the 

Work. subject co rhe limiwkms stau:d in the Conuacr 

Documcncs. 

8.1.2 A Change Ocdc:r sh'a.11 be based upon a~c:mcnt 

bl!t'\leen du~ Ownec- and rhe DesignlBui,Jdcr; i:a Cori.structiOn Change Direaive may be issued by rhe Owner without rhc agra:m~t of the DcsigrvBuildcf; an order for a minor change ID rhe ~ may be issued b\• rhe 

Design/Builder alone. · 

8.1.3 Changes in lhe ~ shall be performed under 

app~e ~c~ of the Conuaa Documents. and 

the ~slmll ~ ~pdy. unlcs.1 othero. 

wise provided In the Change Order, Consuuctlon 

Change DlcecUVe. or oRier for a mlJlOr change tn the 

Work. 

8.1.4 If.unit pdca are swed In me Conttact Documents or subsequently agreed upon. and Jf quantities originally contemplared aR: so c:binged In a pcopo5ed Cfumge Orde.f o.r consuuc:uon awnge Ditealve mac applicatlOn - r 5uc:b unit priom '° quamldes of Work propo,ed wW 

1e aubs12.0dlal Inequity m che Owner or the Des.lgoJ 

.kier, rhe appJiablc unir prices shall be ~tablv ~usted. ~~- . 

&.Z CtlANGI!! DRDl!RS 

8.2.. 1 A <lwlge Ordcc is a written insuumcnt pr~ 

by me Design/Builder and signed by rhe Owner arid rhe 

De:signt'Builder, swing dlcir agteemMt upon all of the 

following; . 

.1 a change In dle 'Wbrk; 

.2 chc amount of die adlusanent, If an~ In du: Con- ~ Sum; and ' . 

.3 the extent of the adlU5UTienC. if any, in dte Con· ~lime. 

8.2.2 If the Owner regu~cs !. p~ Jbr a char\ge in 

the 'M'Jtk from the.~ and subsequently 

dcas not to proceed "ii.ti die change, a Change Order 

shall ';JC wued to l'Clmburse the Desllln/6.ulkler ror any 

costs incurred for esdmadn,s savice.s. Oesign semces or prepatath>rt of proposed l'CYlslons tO the COncract 

Documenr.s. 

8.3 CONSTRU~N CHANGE DIRECTIVES 

B.a.1 A Consttuetion Change Directive 15 a wtirtcn order 

prepared and signed by lhe Owner. directing a change in 

che Wlbri£ prior (0 agreement on adjustment, if :mv, in che 

ConU2Ct Sum or Conmaa nmc. or both. · 

8.3.2 Except as uthcnYisc agreed by me Owner and the 

Oesi.Mm'Huilder. the adiusrment to the Cuouact Sum 

sh<tfl be dc=rermined on che imi$ of ~-orniblc: c.~i-

. · aruJ savin~s of those performing the 'Mtrk ~tributm lhe change, lnduditlft Che c:xpcndtcures fur 

design services and revisions to che Contract 

Documenrs. In case of an increase in chc COncract Sum. 

the cosc shall indude a ctlSonable allowance for 

overhead and pro.fiL In such case, rhe DcsigniBuilder shall keep and present an itemized accounting cogether 

with appropriate .supporting data for inclusion h1 a Change Order. Unless otherwise provided ln the 

Contraa Documc:na. co;,c:i tor ihcic pwposcs :shsl1 be 

li.mltcd to the following< . 

• 1 costs or 1mor, including sodal security. old age 

and unemployment \Nul;ill1Ce, fringe benefiu requ~ by agreement or cusmm, Nld workets' 

compenso.don lnsur:ancc; 

.2 ~~ of rnau:.rials, $upplies $Ind equipment, including cost of rransponacion, whether mcorpomed of consumed: 

.a cental coacs of m;ac:hinery and equipment exclu-

.. slve. of h2od to0ls, whelh.ec l'CJlted .from the 

Design/Builder or othttS; 

_4 c0$U of premiums foe all boods and lnSUr;3nCC 

permit fees. and &ales. use: or similar c:axcs; 

.& Wdldonml cosrs of r;;up~ llJld field office 

pemmnd directly att.dbutable m r.be diaoge; :znd 

fees paid to the Archlt:ect. engineers aod other 

professionals_ 

8.U Pcm:llng lioa.l dctcrmloadon ol cost to the Owner, amounm not in dispute maybe Included In~ 

b- PlilYmeOt. The sunount Of cn!!dlt w be allowed by the 

DcsWnlBulldcr t0 the Owner for ddedon or change whidi results tn a ner decrease In Ibo Coaaact sum Wtll 

be aaull net cost. When both addidOllS and aa:iltS cov· l!dog related "Wbrk or substitutions are tnvol-.ed in a chsnge, rhe allowance foe ovel'hmd and pro&t shall be ~ on the b2Sis o( the net inae:ISe. if IPY. with 

respect m rhac ctwiaJe. 

8.U When the Owner and the ~ aarec 

upon the adju:scmcars in dlc Conn:act Sum and Conctact 

l1me, such sigreemem shall be e8'ec:dva inimediatelvmd 

shall be recorded. by prepttadoc1 and eteCUtioll of an 

appropriate Change Ontec. · 

8.4 MINOR CHANQl:S IN THli. WORK 

8.4.1 The Desi~ildec 5hall runie auduxitY to make 

minor clian~ m th~ Construction DocumenlS anc1 con· suucaon conslscenc Wldl the tnrem Of du: Conumct 

Documenta when •uch minoc changes do ooc ln\'OlYa 

adjustment in the ContftlCl Sum M extemlon of the 

Conu:aa 'Tlme. nae DacignlDUddcc aball prompdy 

lntonn the Owner, in wrldn& of minor changes in me 

COllSU\lctlon Oocumenu mcl consuuaion. 

I.I CONCUL.m CONDITIONS 

8.5.1 If conditions are encourucred at the sire which ace 

(1) subsurface or othenWic cona:aled physbl condiuons Which differ nuu:Cl'lally ttom those fudiaa:d in chc 

Concraa: Documcnc:t or (2) unknown physical condi.. 

dON of Ill\ unusual nature, which di8'er inslterially from 

those on::lina<lly found tn cxlsl and genc121lv fCC08niZeCl 

:is lnhcre:m In oonsuuctlon ac:tMdes of the chanaaer 

pto\'ldc:cl f()r In the Cuntnu::r Dt>cumems. then nodcc by 

che observing p:iny shllll be gi¥en co the other pacey 

proniptly betOrc conditionS ;ire disturbed and in no 

AIA OOCUllllENT A191, Pllt I o(J"VNEll~ICH.U&:llJ)tll At:llf'.£\IE...:T• "F.C0!'1D mmoN. AL\~. '"9'Jfi 

n1£ A.'\11".llit:AS L'l;smt.7E 01' NlOurectS. 17;\~ l'il!W' ")RK A\11.~Cr., :,"'I( "\FISMINCilCN, nc JO(llto-~J9J. 

WAl'VH!fG: UfMI.,.,,.... ~,... vfDIMH U.S. vapyrtgnc- HD •• llUCll- kl ..... pr-an. 

A191-1HI 

Part 2-P99e 9 

114 
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event later than 21 davs after first observance of the 

conditions. The Concract Sum shall be equitably adjusted for such concealed or unknown conditions by 

Change Oeder upon daim by either patty made within 21 

da~ after the daimanc becomes aware of the conditions. 

8.6 REGULATORY CHANGES 

8.6. 1 The Design/Builder shall be compensated for 

changes in the construction ncCCiSltarcd by the enact· 

mcnr or revisions of codes, laws or reguladons subsequcru t0 chc submission of the Oesign/Builder .. s Prop052.I. 

ARTICLES 

CORRECTION OF WORK 

9.1 1be Desigll/BuUdec shall prtJlJlptly coaea \Vork 

rtjc:ctc:I by rbc Owner or lmown by the DcsignJBuildcc to 

be defcctivc oc f.Wlng co confi>cm to the requirements of 

the Contraet Documents, wh.erher obaerved before or· atitt Sllbswu:bl Cornplerion and whether or not f.abricated, lnsralled occompleced. 1be ~shall bear' 

costS of correcdng such rejected Work, including 

adc:Utkxaal tesdng :and insptttiOns. 

1.2 I( widUn one (l) year after &:he dale of Subscanlial 

C' ·letion oI the \lClbrk oc, aftu the date for oommence- n. of W'llmUldc:s established ln a written agR:emc:nt 

bct\Vttll rhe OWnet and me Dcsign/BUildcr, or by tcrmS 

oI an applk:able special warranty required by the 

Conuaa Dacu.ments. any or me Wbrk is fi::Jund EC be not 

In acCoabnce 'l'llch the requimnc:nu of che ConU3ct 

Oocumems, the Daign/Builder shall con:ect .it pxomptly 

afu:r receipt o! a wrtm:n ncxice from che owner ra do so 

unless lhe Own« has pccviously ~ the Desigpl 

BUfldcr a written aa::epCllDCe of 5uch condldon.. 

9.3 Nodling contained in rhis Anide 9 a;hall be coosuued ro esl2b!lsh a period of IJmiwioo With rcspca i:o 

otbec obli,pdons which the DesiplBuilder mighc haw! 

under the Conrna Documents. Esrabllshmerit ofthe 

dme period of one (1) year• desalJed in Subparagraph 

9.2 relates only to the specific obligadon of d\e 

Desf8n/BUlldCl' ro correct the '\lb'k, and has no relatiOn· 

ship to d\e Wile Within whk:h the obligadon to comply 

with th.e c.onuaa Docwnems may be sought 1:c be 

enforced, nor ro rhe dmc within ~ch e_cocee~ may 

be commenced to escabJJsh me ~uildcr's ffabuky 

W1ch ropc:a to the Dcir1.g111BufJd~t"':i oblfptlons Other 

than spedflally to c:x>rrect the '1.brlt. 

9.• If the Oesign/Bulldcr faiJ.'i ro correct nonconforming 

W'ortl:: a.s n:quired or f.l1ls ro catty ouc \M:>(ic in a«ocdance 

wirh !:fie Conuacr Docwnents, the Owner, t.,• wrtcceo 

order signed personally or by an agou spo:UkaJI~· so 

t!nlpowcred by the Owner in writing, ma.y order rhe 

Desigri/Buildcr to stop the W'ork. or any portion thereof. 

untU che Cl.use for such onler has been ctiminaced: how· 

r:v1 '1c Owner's right to srop rhc Work shall noc give 

ris a duty on the part of the Owner tQ exercise the 

ripu tor benefit or the Oec;1RnJBulldl!r or ocher persons 

or entitie$. 

9.5 If the D~lgnrBuilder def.Jules nr neglect:; to c:irry 

ouc the \~'ork io accordance t-.·irh che Coouact 

Documents and (ails within SCVCl (i) days after receipt 

of written notice from the Owner to ccmmence and continue correction of such default or neglect wich diligence: 

and promptness. the Owner m~ give a second written 

notice to the Design/Builder and. SC\-'Cn r.) da~'S fo~ow:· 

ing receipt bv the Design/Builder of chat second wnuen notice and ~ithout prejudice to orhcr remedies che 

Owner mav ha"C, correct such ddldencies. tn such asl!! 

an appropriate Change Order shall be issued deductJng 

from paymencs then or thereafter due the Design/ 

Builder cosu of correcting such delidencics. U che pay- mcnrs then or thereafter due rhe DesJgntBullder are nor suffidenr re cover the amount ol the deduction, the 

Design/Builder .shall pay the difference to the Owntt. 

Such actlon by the Owner shall be subject to d15pote 

resolution procedul'C$ as pt'OYided In .Artide 10. 

ARTICLE 10 

DISPUTE RESOLUTION- MED~TION AND ARBITRATION 

10.1 Claims. '"5putcS ·or other mauers in question between the patties to thlS Pan 2 Agreement a.riSin& our 

of tX relating to this Part 2 Agrttmcnc or bn:ach thereof 

sh;dl be subject to and decided by mediation ot abimtlon. Such mediatioo or ubiuation s.ball be conducted in 

accordance 'Mch the Consuuc:tion lndusuy Media~ or Atbitration Rules of the AuieriC2'1 Arbkr.ation Association 

cummtly in eftCa. 

10,2 ln additton to and prior w adJJtration, the parties 

shall endeavoc m settle disputcS by medladon. Demand 

fur mediation shall be lilc:d in writing with the orher 

pany to this fut 2 Agl'eemcnt and with the Amaic:an 

Arbiindon Association. Adeuaand tor medlation shall be 

made within a reasonable time al\er the claim, dispute. 

01: ocher matter In questlon has arisen.· Jn no ~t shall 

the demand for mediation be made aftc:t the dare when 

lnftltudon of legal or equh:lble proceedinas bslsed on 

such clahn, dispure oc other mauer In quesdon would be 

barred by the appllcable stature of repose or limbadons. 

10.8 Demand For arbitl2don shall l:!F filed In writing with 

· the other party to this Part 2 Agreement and Wir.h me 

Amcdcan Nblttation AssodarJon. A demand for acbitra--

tion shall be made wlthiil a reasonable dme afra' the 

claim, dJspure or Other matter in ~uesrion has amen. In 

no cvenc snau enc ctc:mand a wlt;ral:icn be mtadc after 

the date when lnstkudon of lc;pl or equir.abJe proceedings based on $Uch claim, c.Jisputc or oc:her mattct' In 

quesdon would be barred by the applicable srarures of 

repose or limitations. 

10.4 An arbimuJ.oo pursunnc to thili Para~ph may be: 

joined with :m arbitration involving common ls.slid or 

law or fac.'t bctMCrt the ~ign/Builtlt!r :i.ntl any person 

or entity \\.ith whom me Dcst.gnJBuUcler N.-c a concra<.."tual obligation tu .arbitr:ate disputes. No othtt a.rbiu;itiun 

arising uuc o( or n:latinR lO this Part l ~nt sh2JI 

include. by c;unsolid:uion. julndcr or in any other man- ner, :in addidon:d per.1on or endry noc a p:i.rty co thl<I l'"Jrt 

1 Agreement or not a pltrtY ro :in agreement With chc 

DeslgrvBuildcr. excepc by written c."Onscnt c:onUUolnR 11 

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·* The indemni£ication of thits Article 11 • 5 shall be limited to the extent oi: t:ne 

insurance provided by Des 1/'Builder pursuant to Article 7 ?re of aro the payment 

and perrorniance bonds required therein. 

Specific ccterence to thiS Part 1.-\gr~ent signed b\· the 

C?wnet, the Oesign.IBuJJder and any ocher person or ·cnti· 

ties sought to be joined. Consent t0 arbicratlon in,"Olving 

an addition.al pason or enti~· shall nor constltuce con· sent CD arbitrulon of any claim. dispute or other matter 

in question not described in the written consent or with 

a person or cndcy n0t named Or described cherein. The 

foregoing ~menc to arbitrate: and other agrcemct1rs ro ad>jtratc with an addltlonal person ur eodcy duly con· :sentcd to by the putia to thb Part 2 Agreement sf\all be . 'peci&co.fl~ enforceable in accordance -.ith applii;ablc 

law itl any coun havlns ;urisdiction cheteot 

1 o.s The award rendered bv the arbitrator or arbitratots 

slWl be final, and iudgmeni may be entered upon it in 

accordance wtdi applicable l2w In tny courc haVing 

jutisdiaioo thcn:of. 

ARTICLE 11 

MISCELLANEOUS PROVISIONS 

11.1 Unles$ odtccwisc provided. this Part z Agtttmeoc 

shall be g~cd by the law of che place where the 

Projea is located. · · 

11.Z SU8CONTRACTS 

11.2.1 The Dc:sig.yBullder. as soon as praccicab~ a!ra ~ution or miS Pan 2 Agreement, shall furnish co the 

nee in wrtdng die names of rhe persons or entitia ••• e DeeignlBuilder 1'11ijJ cngasc a:s COntraaor.5 for- the 

Prof ea. 

11.J WORK BY OWNER OR 

OWNER'S CONTRACTORS 

11.3.1 The Owner rescrw:s the right m pedorm c:onstruetlon ot opcr:adons related to lbe Project \\1th the 

Owner's own fon:a, and IO a'l\'acd separate conuaas Jn 

conm:alon With other porttons of the Protect or other 

consuuaion or opc:radons on the~ under condidons 

of imur.ancc and waiver of subcopdon idenc.tcal to the 

pl'DYisJoos of this Part 2 A.lircemenL lf the OeslenrBuikkr 

Claims dw delay or addldonal cosc is In~ 6ecause of 

:such aaion by the Ownes:, the OesignlBudder shall a$Sert 

lJUdl daims·as pawfded in SUbparagraph 11.4. 

11.3.2 The Des.ign/BuUdcc shall afford the O~"ner'.s 

5c:par,.te mntt:aet0a reasonable oppomanh:y foe inuoduafon :and $10(3Be of didr m:uerillls and equipm•t ~d pcrfOnnancc ofthck aa1vn1es and shall connect :md 

cooo:lin2ce the Dc:signlBuilder·s L'Onstruccion and operations with theit5 35 required ~· the Coner-act Docvmems. 

11,3.3 CusL'i t:1u.o;ed by <Ida~ or by improperlr tim~ 

n.::rtritia or ddcctlYc consm.1ct1on shall be bc;>rne bv the 

parry n."5ponslblc rhcr:cfor. · 

11.4 CLAIMS FOR DAMAGES 

11.4.1 If either party to rhls P.Jtt 1. ·"-t:erecmen( sutlers 

injur~· or tbm::t~ co per.ion or pmpcny bet."au.'ic: of :in act Of ontl"siun nftho other p:irt~ (Jf :1.ny <tfd1e od-.ei:- p:trcy·:i 

c·-.,lo}'Ce:i or uszc:nL'i. or uf mhc..-rs for whc>lic: :&cti; o;uch 

iii lc.~allv lrJblc. wrtncn flntice ur such lnfury or .~~. \\~cchcr ur not insured. shall bi: ~!Ven cu the 

ocner parry within a reasonable time nor exceeding 21 

days after first observance. The nO(ice shall provide 

:iufficicm dccall to enable lhc ocher party ro investigate 

tnc matter. If a claim of additional cost or time rdarcd ro this claim is co be assened, it shall be flied in writing. 

11.5 lNDEMNIFICAnON 

11.6.1 To the fullC$t extent pc.nnitccd by law, the 

De5JgrvBuilder &hall indemnify and hoJd harmless the 

Owner. OWnet''s consulcuus, :and ~cs snd employees 

of anv of thcim from and ~insc claims. damascs. Jo5SCS 

and expenses, inducting bur not limited to atmmeys' 

fets. arising out of or resulting from performance of the 

Wt>rlc. provldcd thac such daJm, a.image, Joss or 

expense is amibutable co bodily inlu.cy, sickness, dJse:asc or- dn.ch. or co injucy ~ or: daottuction of caagiblc: propetty (od>er cMn the We.it: lcs:e1f) indudtns roo of use 

resul~a thci;efrom. bur onty to che ~c caused in 

whole or in pan by negligcot aas or omwlons of the 

Oesign/BuUder. anvone dJi:ectly or indlrecdy employed 

by the Design/Builder oc anyone for whose aas the 

Ocsign/Bulldc:r may be liable. n:prdla5 of wllcctlu or 

not :iuch claim, damage, loss OC' apense is caused in 

p2Ct by- a p:any indemnified hel'eundec Such obligation 

shall not h! consrnied to ~ abfidae. or reduce 

other righu or obliptions of indemnity wh1ch Wl)Uld omerwise cxisc as to a pany or person described lo this 

Pacagraph 11. 5. 

11.5.2 In claims apfnst :any peison °"entity indemnified 

under this Pa.rasraPh 11.5 by an emp&oyee of the 

DcsilWIBuU".'a·-~ direcr:ly or indkecdy employed by dle DCSlgnll:SUlldCr or anyone tor whoise acrs die 

Oes.ign/Builder may be liable, die Ulde.mnificaEion oblig· 

adon under r1d3 Patagraph 11., ahall not be: JUPkc:d by a llmlcadon an amount or type of daanagl:s, eompensation 

or benefits ~ by °' foe the Desien/Builder uru:le: 

wodccrs' compensadon acts, diubilir:y bene&t acts or 

other employee benefit aas. 

11.8 SUC&:eSSORS AND ASSIGNs 

11.e.1 The OtMer and ~c:r, ac:s~ bind 

rhemsel'l<-es, their parmers., successocs, 8SSignS aod legal 

repl'Clic:matlVes 10 the ocher pany to dlf.5 Part 2 

Agreement and to the panncis.. :n.accic::soon and~ of 

such othel' P='"Y With respea co 1111 c:ovenams ol dds Part 

2 Aarecmc:m.. Neither the Owne.r noc the De.siaol.Builder 

shall :WiS!\ this Part 2 Agreement wilhout the written 

consent Of the orher. The a.met may .assJgn this Part 2 .~em co :my insritudonal lender~ eon· 

:strucdoa financing. and rhc .DcslgnlB • l18la:3 to 

eecutc all cunsents ceasonablY required ao f:acilicace 

5uch an :assignment. II either patty mab:s such an assignment, th2t P.3ftY s112ll nevertheless remain leg:ally respon- i1ible for all oblig:ati0"5 under this Pan 2 .Agrcemem. 

unless oc.herw;se agreed by- the other p:arty. 

11.7 TEFIMINATION 01" 

PROFESSIONAL DESIGN SliRVICE8 

i1.1.1 PB t89tc~Mm/~mt .services or the Archircc';;~ any nther dc.':iign pmfessiunal desianatc:d in 

rhi.s Pnt't .? -~'t'C~mc::nt. the:: Oc."lign/Bulkler ishali kJi.:ndtr 

m me O\,.m,.r in wrltinK lllloth<r .:atchitcet or other" 

design profwu.:lon:il wish rcs~'t t0 whon\ the Owft«!r hllS 

nt> l'C'.JSUnahlc ohjCL11Un, who WIO f)fU\•ide the ~C!C\'in:.'i 

AJA DOCUMINT A 111. P•" 2 • 1111'!111'.ll·l>lil'k:i< bl :11.J)Kll .ACl<~IV.'T • i:tiCOND F'.Dl1'10l'r • All\ .e. • ., I 'I'"• 

111£ AMl!lll~~'> l:o\:l'l1Tl:TF. Of • .\llCHITF.~. 1-i; !(f, ... YOHK A\'FSl:F.. ;>."\II( •"'-~1 ll:St.TOlol. l'IC·!lllllte,.o\~\ll • 

WARNING: Unrlcemrord pit _ _,....,....,., u.s. copyrlgllt i.... ena 19 eaei-& It> legal ,'°'9cvllon. 

A191-1996 

Part 2-Page 11 

116 
JENKENS & GILC~IST Fax=214-855-4107 Aug 8 2003 9:06 P.13 

originally to have been provided by the: Arehirea or 

other design professional whose services are being 

cccmlnated. 

11.8 EXTENT OF AGREEMENT 

11.s.1 This P:u:t 2 Agreement represents che entire 

agreement bccwec::n the Owner and the Design/Builder 

and supersedes poor negotiations, repn:scni:ations or 

agreementS, either written or oral. This Part 2 .wccment 

may be amended only by written Instrument and signed 

by both the Owner and die Deslgn/8uUder. 

ARTICLE 12 

TERMINATION OF THE AGREEMENT 

.. . 12.1 TERMINATION BYTKE OWNER 

12.1.1 nm Pan 2 .c\glttrncnt may be terminated hr chc 

Owner upon 14 days' wrinen n~ to the DesignrBuiJdec 

in the evait that the Projea ls abandoned. If such reaninar.ton oa:urs. the owner shall pay the Destgn/8uilder tor 

'M>tk c:ompleu:d and Cot proven toss sustained upon 

materials, equipment. wols, and co.nsuuctioo equipment 

and~ ioduding reasoo.ible p<ofic and applicable 

damages. 

2 If the· DeslgnlBuUder detaulis or persist£Ddr falls 

01 aegleas co cmy out the Work in ac:cocdanc:e with the 

Conrract Pocumcni:s or fall5 co peJ'fomi the provisions of 

this Pan· 2 Agreement. the OWncr may gtve wntam 

notice that the owner intends to lerminatc this Part Z 

.o\gfccment. lf the Design/BuJlder £ails to cocrcct the 

defaults. failure or neslect within seven (/J days after 

being given notice. the Oomer may then give a second 

\\'Otten notice and, after an additional seven (';) days. the 

Qwner may without prejudice to any O(bei: remedy tCC'· 

minate the employment of the Design/Builder and cal<!!: 

possession of the stte and of all. materials. equipment. 

tools and constrUcdon equlpmcnc and machinery th_cre· on owned bv the Oesign/Bulldet and finish the Work by 

"-'hatever mCmod lhe Owner may deem expedient. 1f 

the unpaid balance of the Conraa Sum exceeds the 

expense of finishln8 che Work and all damages il\cucred 

bv 1he Owner, such c:xcess shall be paid to the 

Design/Builder. If the ~nse ot completing the Work 

and all damages incucted by the Owner exceeds the 

unpaid bal2nc:c. chc Dcslgnl8uildcr shall pay me differ· 

ence co the awner. This obligation for payment shall sue· 

dvc termination of thiS Part 2 Agreemenc. 

12.2 TERMINATION BY THE DESIGNIBULDl!R 

12..2.1 J!the Owner fails to make payment 1lltu!n due. me 

Design/Builder may give wd~ notice of rhe Des~ 

Builder's intention to teiminare chis Part 2 Agieemeru. If 

the Dcsign/Bullder fails.to receive payment within seven (7) days after cecdpt of such noclce by the Owner, the 

Oesi.gnJBuiJder may gtve a second wrinen notice and 

seven (7) days after m:eipt of such second wrlttcJJ .notice 

by the Owner, mav cermJnace thJs Pan :Z ~t and 

recover from the Owner payment for Work executed and 

fot proven losses su5tained upon maredals, equipmcm. 

tools, and consuuctioo cquip111ent and .macblncry, 

indudlng rasonabJe profit and applicable damages. 

ARTICLE 13 

BASIS OF COMPENSATION 

The Owner shall compensa1e the Design/Builder in accordance with Article 5, Payments, and che other provisions of 

diJs Pact Z ~t as dac.dbed below. 

13..1 COMPl!NSATION 

Uh4a1 Pet' WI 9~dl!I''& paAaAllranQt.Qf..Jbe IGwk; ll!I ~ ift-~~~AIJ aRJ' QGl:a9F-

-au wins l:isred ·bl ~ 44'11!!11Nlff"el IJasje &erl'H!~haD-pay the ~crildcr tn=cocteftl FHIMls dile 

-COt1U:acrSum'251bllow. 

~ti.on p:oviai.ons are set :fort:h .in ~· 111" _ 

Total contract amount is $ 14,279 000 ( Fourteen million two hJlmdred 

seventy nine thousand dollars). ' · 

See Appendix B "the Schedule of Values.:" 

117 
JENKENS & GILC~IST Fax:214-855-4107 Aug 8 2003 9:07 P.14 

1t1-..2-:fil::JrAdrttt1ona1 SetV1res;~irr~!'l"'3Tmd1nctottms~~eli'is Additional So +ices, wmpt:11S2tion shall be -asiollo111s. 

1&.:2 REIMBURS \BL£ Etl'f'l!te9ES 

acQ•al 

~~=-ddidon-te-che cxpeadicur.s. ~AviWeHAd-dte e918feRstste11i D~s fer BMie 

employc~-at'lfl~ 8flEl..i'daitielUH-Servitm; irirthe -~ intetcst ot tbe PuJJt;a; zs tbllutto: · 

.:a&.a:2 FeR nBMBUB5ABL£ BEl'EN6ES, wmpcosadoli shall be a auatrip!e: of t-- ) limes the antodlil$ apoidu:I:. 

13.3 INTEREST PAYMENTS 

13.3.1 'Il1C cue oflnterc$t for past due paymems shall be 25 follows: Lesser of 1-1/2% per llDlth or 

by 

the 

law. 

highest interest ~ 

(Usury 1-11 llntl ,.,__..,, ,...._lh IWodl Jtw6 In ilendlngita, sfmifar-OJttl l.ocat aJIUUfJll!r'O#it law and-.,.,..._,., llM ""1Mr'IMll D#i8rf/ 

BUi/tW'I~ JJ/.tUm a/"""'-, Ill llM ~ oflH /'rOj«l t6llll.......,, ~ 4'fll lh lltllltilt,y ¢/tlJis pnwbltM. .ljpc#fc: ilflM tldrlir.1 lbtJultl i. obltdrwd 

ll"1irb ..-.p.:t ID.,,.,,,,,,_ modficWoit arOIW Nqllln-.ci; ad .a lflrlaen ~-or---.) 118 
JEN<ENS & GILD-RIST Fax:214-855-4107 Aug 8 2003 9:07 P.15 

ARTICLE 14 

OTHER CONDITIONS AND SERVICES 

following 

14.1 TheBasicServicescobepedormedshallbecommencedon the date 5 days after all of the 

and, subject co authorized adjustments and to delays not caused by the Design/Builder, SubScantlal Completion shall be 

achieved in the Com12cc Time of three hundred ninet:t 3 9 9 ) calendar days. 

nine 14.2--~~~tbo5C-dcs.cRbn:Li11Al:cidc~-e.E&a5~-

14 .• 2 

Defined as: 

1. Receipt of building permit 

2. Receipt of confirmation of financial funding and first 

payment. 

3. Receipt of approval to begin construction from ~he Texas 

Commission of Jail Standards. 

4. Approval of design documents by county representative and 

operator. 

The owners Representative will be James Parkey-corplan Corrections 

The Representative for Hale-Mills Construction will be 

Kendall Phinney 

14.4 The DesJgn/&_μilder shall submit an Application for Payment-00-tRlil- by the 

( 5th ) day of each month. · 

... ~ ...... -.. ....... -.. -------··---·- .. 
JENKENS & GILCHRIST Fax:214-855-4107 Aug ~.2003 9:07 

) 

14.6 The Design/Bu.Ude.r's Proposal includes the following documents: 

(1.($t tbs~ /ly JP«IJlc lllte anti~ lnduM "'9' f'flllll/l'ld ~ fl"'1 paytrtftll flcmdrJ 

ntle Date 

.. Appendix A 

.. 

Th1s Agrce.m.cm enccred into as of the day :and year lh!t written above. 

OWNER 

P.16 

u ahauld sign an orJUinal AIA dOcument which Ila thl• cautian printed In red. 

sures that changes wtU not be ob•oured aa may acclir when dacumenta are reproduced. 

:>WN!a-Pl!SIGM~l AGUEM8'IT ~ 199& IElmON • /dAe • Ol996 ~ 

ITSCl'S, 1735 tf8'I' YORK AYllflJB. h.W, Y~GTON, D.C. 10006·~ • A191-1fJ!I 
JENKENS & GILC~IST Fax:214-855-4107 Aug 8 2003 9:07 P.17 

APPENDIX "A" 

1. A minimum and medi\lJJl security coaecti.onal facility to house 500 inmates, to be 

located on the real property described in Exhibit "A" attached hereto, located in 

the Town of Raymondville, Willacy County, Texas, design to be. approved by the 

Texas Commission on Jail Standards. 

2. Design/Build.er acknowledges the funds for the construction of the Project are to 

be provided through the issuance of Lease Certificates of Participation by Willacy 

County (the "County,,), the disbursement of which will be governed by a certain 

Trust Indenture between Municipal Capital Mafkets Coxporation (''Owner'') and 

U.S. Bank National Association C'Trustee''). Design/Builder had reviewed the 

Trust Indenture and hereby agrees to be bound by the terms thereof. Further, 

Design/Builder acknowledges and.understands the Owner, immediately upon 

cxerution hereof, will assign to the County this agreement and Design/Builder 

agrees that Owner should have no penonal liability whatsoever for any payments 

due to Design/Builder heremider and that Design/Builder shall look solely to the 

Construction Fund established pursuant to the Trust Indenture by the Tru.stcc for 

any and all payments due to Design/Builder hereunder. Notwithstanding the 

foregoing, Owner shall be liable to Design/Builder for any act or omissions of 

Owner which are negligent, grossly negligent or willful and which are directly 

related to the obligations of Owner hereunder. 

3. This agreement is make and intended for the benefit of Owner and Design/Builder 

only, and is not made or intended for the benefit of any third party, except the 

County and the Trustee. Design/Builder makes no representations 11!1 to the 

com.merciality or profitability of the Project, and does not guarantee or. wanant 

any representations or statemeiits made by any other party in connection with the 

Project. 

4. If the Desiga/Builder is delayed in the progress of the Project by acts of neglect of 

Ownec, Owner's employees, sepataie con.1ractorS employed by the Own.er, 

changes ordered in the Work except as provided in Paragraph 7 below, labor 

disputes, fire not caused by Design/Builder, wiusual delay in transportation, 

unavoidablo oMUnltic~, or another cause which the Owner and Design/Builder 

agree is justifiable, the contract time shall be reasonably extended by Change 

Order. 

5. Should Design/Builder fail to substantially complete the Project within 1hirteen 

(13) months from the date of :funding, subject to any extensions pursuant to this 

Agreement ("Time of Completion of Work"). the Design/Builder agrees to pay 

the OWner as liquidated damages for each and evezy day of delay beyon~ the 

Time of Completion of Work the sum of $6,4 75 per day, which sum is hereby, in 

view of the difficulty of estimating such dam.ages, agrc:ed upon, :fixed, and 

Page 1 of3 121 
JENKENS & GILCHRIST Fax:214-855-4107 Aug 8 2003 9:08 P.18 

per day, which sum is hereby, in view of the difficulty of estimating such 

damages. agreed upon, fixed, and detennined by the parties hereto, as the 

liquidated damages that the Owner will suffer by such default and not by way of . 

penalty, and shall be deducted as such from the "Balance Due Design/Builder." 

The facility will be considered substantially complete upon inspection and 

approval by tbB Texas Jail Standards Commission. : 

6. Design/Builder's liability for damage or loss shall be limited to the amount of 

insurance coverage and payment and pmonnance bonds required by the teims of 

this Agreement. In no event shall Design/Builder by liable for any damages or 

losses, no matter how described, for amounts in excess of that cove.red by the 

insl11'81ice required hcrebv. 

7. DesigliJBuilder shall receive a total of thirteen million eight hundred tbcusand and 

.n0/100 dollars ($ 14,279,000) as coinpensation for services provided under this 

Agreement, subject to the time and provisions he.reof. The parties hereto agree 

tb;lt the Project, as coDStructed in accordance with th.is Contlact, will not be . 

subject to state 8Jld local sales taxes. Owner will provide Des.igo/Builder an 

exemption certificate fur exemption from payment of state and local sales and use 

taxes in order to oomply with applicable sales tax lBWS of the State of Texas, this 

Agtcemcnt shall be separated contract, with the amount fOr, materials and 

services specified separat.ely: 

Ma1a:iaJ.s - S 7,.350,000 Services - S 6,979,000 

Application for payment will be for 100% of work completed, less I 0% retainage, 

which retainage shall be paid upon completion of the Project. The rctainage is not 

applicable to development insurance and bond costs. The price is subject to 

change only pursuant to the provisions contained in this Agreement . 

8. Design/Builder and Owner agree that Design/Build.a need not present a complete 

set of docum.ent.s for Owner to approve prior to the begjnniDg of construction. 

Design/Builder will present for approval such documents as are reasonably 

avail.able at the time Design/Builder is xeady to commmwe construction of the 

Project and Dcisignmuildct shall be entitled. to commence construction based on 

partial documents. Notwithstanding the foregoin& Design/Builder repxesents and 

waxrants that the Project will be designed and conatrlletecl to house 500 im;wrtca, 

to be located on the real property described in Exhibit '"A" attached hereto, and to 

be approved by the Texas Commission 011 Jail Stand~, 

122 
JENKENS & GILCHRIST Fax=214-855-4107 Aug 8 2003 9:08 P.19 

9. W eathettrime Extensions 

The time quoted in this contract includes -0- days for weather related 4elays on the project and the 

contractor has made no allowance for time or cost above this number for delays caused by weather. Any 

delay or work stoppage due to a.o.y weather above the stated allowance will necessitate a change order to 

address this change to the contract The time quoted in the contract is in calendar days and the schedule 

of the project recognizes a S day work week, therefore, the loss of part or all of a day will need to be 

converted to calendar days. 

10. Warranty 

Hale-Mills Construction, Inc. wmants our finished product to be the project as defined on the plans aod 

specifications. Conttactor warrants all work. for one year after substantial completion. Contractor ~es 

to provide the OWncr with all wananties as required by the specifications. Some systems and/or 

products have been selected by the Design Professionals on this project for tbW value to the project and 

an extended warranty by the vendor is required by the couttaot documents. For any extended warranties 

.required in any conttact doCUIJBUts, the Contractor will provide and the Owner will rely Solely on the 

Product or ManuDcttirer or Subconfractor providing the syst.em, for 1be extended warranty. 

11. Design Liability 

Hale-Mills Construction, Inc. bas no licend professional design or engineering personnel nor do we 

engage in professional design work. Hale-Mills Construction. Inc. docs not represent that we have tht 

capability or expertise to evaluate such services or product The Architect is the design profcssiouaJ on 

this proj~ and is qualified to mab these ~uations and judgments. bl the event design or engineering 

work is required llllder the conftact, Hale-Milla Construction, blc. will provide and pay for the 

'professiooal &sign work required but, Hale-Mills Construction, Inc. and the Qlmer are relying on the 

Architect and his project design professionals in evaluati:og and approving this design work. Hale-Mills 

C~struction, Inc. will assist the Owner 111d Architect in any 'Way, necessary and will, if request.eel, assign 

any rights Hale-Milla Construction, Inc. might have, to the Owner :regarding this professional design and 

engineering work and the entity or pe:rson providing the professional design or engineering services 

wider this contract. 

12. Change Order Cost 

Any increased cost to the project will increase the cost of the insurance and if applicable the cost of any 

bonds. The cost on 8ny chan&e order will cmy a added burden of 1.97% for insurance cost a.o.d 1.15% 

for bonds wh«e applicable. 

Page3 of3 

123 
.. 

JENKENS & GILCHRIST Fax:214-855-4107 i:\J.g 8 2003 9:08 

Willacy 500 Bed Detention Center 

08/05/2002 

Cash Flow anal}'Sis of a 500 bed Detention center 

Based on a total east of: $14,279,000 

Many things effect the timing of draws and detemine 

progresss on a particular project. Sorre of these are: 

rain, approvals/inspection&, changes, deli\ery, schedules, 

etc. This is only a projection of work on the project 

and does not con\ey or guarantee the resorces needed 

for any particular month. · 

:·,,~:-, ,;-~ : ~ • =~ r~~ --:;. ~~-' ' : ~; ~· :' ~ 5_;~ '. r ~~~~w~~fi-~':t,:~ .. :l .~•~\}(~':I~:·:~:~~-~·~,_;·~·~ 7}-_-,~~:~·.~~ 

3,656,352 26% 1 At Closing 

1,285,110 9% 2 September 

1.142,320 8% 3 October 

999,530 7% 4 November 

999,530 7% 5 December 

1,142,320 8% 6 January 

999,530 7% 7 February 

713.950 5% 8 March 

713,950 5% 9 April 

579,460 4% 10 May 

571,160 4% 11 June 

428,370 3% 12 July 

1,047,418 7% 13 August 

14,279,000 100% 

P.20 

124 
....... 

N 

0..: 

_..APPLICATION AND CERTIFICATE FOR PAYMENT 

ro (OWl!Cr): WiUac.y Couty Public racillty Corp. l'!lOJ'BCTl 

5'16 West Hidalgo Sll'eel Willaey Coua(1 

Raymondville, Tcx111 785 80 Deteatloa Ceater 

FROM {G'C): HaleeMllls Comlnldiou, Inc. 

4130 Bellaire Blvd. #210 

VIA AB.CHmlC'l'~ 

Apll"re, lnc. • .•. 

HoUll:On, Texas no25 

Atteatioa: 

r.2100 Park ~ill>rive #~_.sos 

Dallas, Texas ·1~251 

l1m11 P•rkey 

CONTRACTOR'S APPLICATION FOR PAYMENT 

Apphclltlon 13 maac tor l'Byment, as st\<lWn t>etow, 1n connecti.on w1Ul. tnc t;onua.c-.t. 

Coarillatillll Siied Ill 11t1.W. 

1. ORIGINAL CONTRACT SUM. • • • • • • • • • • • • • . • • _s ___ l.._4,:.<;;2:;..;.7=-9,,_000~.0-'0'--

2.. Nd tha1.1ebyChange ont':"s. • • • • . • • • • . • • • . • • _s _______ o_.o_o_ 

3. CONTRACT SUM TO DATE. ••••.••••.••••••• s 14,279,000.00 

4. TOTAL COMPLETED a: STORED TODATR ••.••••••.• _s ___ --'3,._9_.Q4_.,_l_IO_.o_o_ 

(Colmna G on Cllnli.DUlll(cm Sbeel) 

5. R:ETAlNAGE .••••.• ____ _;..lO....:'J-1_. • • • • • • • • • . • _s _____ 2_47_,,'-7S_8_.o_o_ 

{CollJl:IJDl OD ColllinualioaShecl) 

6. TOTAL EARNED LESS RETAINAGE •••••••••.••••• ...;;s ___ _..::.!3,t.::.6::..S6::.!,3;;;.;S::..;;;2:.:..o;;..;o;_ 

7. LESS PREVIOUS CERTIFICATES FOR PAYMENT •.••••• _s _______ o_.oo_ 

8. CURRENT PAYMENT DUE •••••••••••••• '-'' s ___ 3_,_,6_56 ..... ~_5_l._Oo_,I 

9. BALANCE TO FINISH (INCLUDING UTAINAGE 

(Lino l lcas Liae 6) 

CHANGE OlU>Ell SUMMARY ADDl1tONS 

Change Orders approved 

in nrc.vious mnnths bv Owner 

Tolal 8tlnroved this Month 

TOTALS 0.00 

Net changed bv Ch.a!ll!'e Orders 

s 10,62.l,648.00 

DEDUCJ'JONS 

0.00 

0.00 

Al'PUCA.TlON NO: 1 DiSlcflulim (A); 

~-- Start ARCHlTBC'r 

CX»mlACTOR 

INSPliCTOR 

PBRJODTO: 

PIOJECrMO: 09-016 

The umfenripd. C'bmnr.tor =tifn duic ID the best of .bis knowledge. ~oa I.ad belld the WorJt CDftteci by thG APJ:'L.ltATLUN .t<UR 

PA'YMBNr has heed completed iii aa:ord.amz wab die Choma Documents, that al 8lllOWlll law 1-i. paid by .bim for Work for which 

pievicus CER11FIC.ATES fat Payar:at-wee iauad and ptymMtS ieceived 

Eram the Olme.r , and chat Cumor. pt.)lllent sh.awn hen is now due. 

CONIMCTOR.: N~UCTION, INC. 

It) 

N 

'I"" 

DATE; 08/06/2002 

In accordanr.e With the 0:>11tna: Docune.or.a, hued on on-sim obse.rfttiou 

wi the d.ata coiqirising die above applialioc, the AGENT caci6es 10 die 

Oilmr dllt .die work lW progressed 10 the point indicad; chat to the ben 

of hil lmowhdge, .infutnlllticn aod belef, the quaaityof th.e "WO.tk~ i:i 

acccndw:ie with the Cmctact documro.tt; and tLat the <:oanctOl' is elllidorl 

to pa')lllellt of the AMOUNT CEKIFIED. 

AMOUNT CER.111<'.IED ••••• , • 

COR-PI;AN OORREC1lONS 

BY: DA"re: 

Thts c:ma tiu.lo ii not 111aati1ble. Th• AMOlNI' CEllTmBD is pt,yable obly 1o <be 

ConttlA::lw 111med bercio.. liluanae, paymc:l\I 11111 &eteJ>ll&Acc of 11•J1M11l are witbo11t 

prajlld.ice ID 111Yrialill of <h6 Owo11r '111 COlllrc.lar-...c!Gl'lbll Conln~I. 
.. co•JTINUATION SHEET 

APPLICATION AND CERTIFICATE FOR PAYMENT, containing 

Contractor's aigned Certification Is attached. 

In tabulations below, amounts ani slated to the nearest dollar. 

ITEM DESCRIPTION OF WORK 

NO. 

102 SITE PREPARATION 

109 SANITARY SEWER · · 

110 MISCELLANEOUS SITE WORK 

111 WATER MAINS 

116 SITE LIGHTING 

121 ASPHALT PAVING 

124 PARKING MARKERS/STRIPING 

128 FENCING 

201 l:AY-Olff ENGINE NG 

219 TURN-KEY CONCRETE FOUNDATI 

220 TURN-KEY CONCRETE PAVING 

221 TURN-KEY CONCRETE FLAlWK 

222 TURN-KEY CONCRETE WALLS 

223 TURN-KEY CONCRETE SITE-WK 

234 WATERPROOFING 

235 TESTING ALLOWANCE 

301 U TURAL El 

302 STRUCTURAL ERECTION 

303 MISCEUANEOUS STEEL 

304 ROOFING 

305 MASONRY 

309 BUILDING MISCELLANEOUS 

AU.800 SERIES TOTALS 

5C>1 INSULA N 

5Q2 HOLLOW-CORE METAL DOORS 

507 GLASS ANO GLAZING 

~09 CARPENTRY 

510 HARDWARE 

614 DRYWALL 

515 CEILINGS 

51~ OAINTING 

518,743 

180,805 

131,932 

115,620 

95,912 

301,065 

2,476 

464,145 

f,810,698 

11,570 

2.96,308 

76,415 

684,315 

238,201 

6B, 117 

33,717 

17,449 

1.426,092 

316,270 

69,418 

74,643 

362.345 

1,090,052 

25,727 

1,938,455 

52,3'19 

51, 103 

24,701 

48,795 

37,6D1 

150,917 

12,408 

288,257 

FROM PREVIOUS THIS PERIOD 

APPLICATION 

(D-tE) 

440,932 

153,684 

39,058 

49,765 

D 

D 

0 

0 

0 683,439 

0 

0 

11,570 

103,708 

0 

218,981 

71,687 

0 

0 

10,385 

416,33 

56,467 

3,443 

0 

0 

0 

0 

59,910 

0 

10, 138 

0 

0 

0 

0 

0 

0 

APPLICATION NO: 1 

APPLICATION DATE: Funding 

PERIOD TO: August 14, 2002 

Wll•cy Cowity o.t.ntlon Centar 

PROJECT NUMBER: 09-018 

co 

N 

'I"" 

:rERW.S.. TOTAi. ··RE't:·At·NA·GE· PRESENlLY COMPLETED TO FINISH 10t 

STORED AND STORED (C-G) 

(NOT IN TO DATE 

DOR F) 

0 

0 

0 

440,93'2 

153,884 

39,058 

49,785 

0 

0 

0 

D 

883,439 

Bfi% 

85% 

30% 

43% 

38% 

11,570 100% 

103,708 35% 

0 

218,981 32.% 

71,687 30% 

D 

D 

10,385 60% 

<416,33 29% 

56,487 18% 

3,443 5% 

0 

0 

0 

0 

59,910 3% 

0 

10,13& 20% 

0 

0 

0 

0 

0 

0 

77,811 

27, 121 

92,874 

85,855 

95,912 

301,065 

2,476 

4&4,145 

1,127,259 

0 

192,600 

76,415 

465,334 

166,514 

68,117 

33,717 

7,064 

1,0,09,761 

259,803 

66,975 

74,643 

362,345 

1,090,052 

.25,727 

1,878,545 

52,349 

40,965 

24,701 

48,795 

37,601 

150,917 

12,40R 

288, 

#,09: 

15,361 

3,90C 

4,97'. 

( 

( 

( 

( 

68,3+ 

1, 15: 

10,37' 

( 

21,891 

7,161 

I 

I 

1,03! 

41,63: 

5,99' 

1,011 

( 

( 

( 

( 

( 

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- CO~TINUATION SHEET APPLICATION NO: 1 

APPLICATION AND CERTIFICATE FOR ~AYMENT, containing APPLICATION DATE: Funding 

Contractor's signed Certification Is atfached. PERIOD TO: August14,2002 .... In tabulatioml beeow, amounts are staead to the nearest dolar. WUlacy Count, Detention Cent9r N 

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PROJECT NUMBER: 09-016 

RIALS TOTAL t<') 

C'i PRESENTI..Y COMPt.E.TEO {G+C) TO FINISH 

a.. STORED AND STORED (C-G) 

(NOTIN TO DATE 

DOR +E+F 

0 519 TILE AND MARBLE 28,610 0 a 26,610 .-1 

.. 52.1 RESILIENT FLOORING 45,321 0 0 45,321 Q) 

522. SPECIAL FLOORS 37,037 0 0 37,037 

t<') 523 IVETAL PARTITIONS 5,901 0 0 5,901 ( 

8 525 PL:UMBING 1,101,421 399,620 399,820 36% 701,601 39,98: 

C'i 529 EQUIP~NT 496,000 a 0 496,000 r 

00 530 HVAC 988,315 4'1,418 41\,418 5% 91Q,899 4.84: 

en 535 ELECTRICAL 1,122.,135 112,2.14 112.214 10% 1,00Q,921 11.22' 

~ 540 FIRE SPRINKLER SYSTEM 174,352 8,718 8,71B 5% 165,634 87~ 

545 MISCELLANEOUS SPECIALTIES 31,819 0 0 31,519 ( 

566 SECURITY MISCEUANEOUS .. 1,916,784 57,5°'4 57,504 3% 1,859,280 5,75! 

ALl.500 SERIES TO ALS 6,591,826 0 636,8 0 0 636,810 10% 5,955,0 6 63,68· 

401 PROJECT SUPERVI ION 326,000 74,980 74,980 23% 251,02.0 7,49l 

r-- 402 JOB MOBILIZATION 43,176 1:7,270 17,270 40% 25,906 1,72i 

0 403 GENERAL CONDITIONS 60,225 13,852 13,852 23% "48,373 1,38! .-1 

"" 404 PROJECT UTILITIES 12,000 1,800 1,800 15% 10,200 18( I 

If') 

405 PLANS & PERMITS 10,0_00 10,000 f0,000 100% 0 1,00( 

~ 406 CLEAN-UP 30,000 0 0 30,000 ( 

'<:t 

....... 407 TRAVELJPER DIEM EXPENSE 53,000 12,190 12.191> 23% 40,810 f,21E 

C'i 409 DEVELOPMENT/DESIGN COST 1,102,000 1,102,00Q 1,1Q2,00D 1 otw. 0 55,10( 

x 410 PRECONSTRUCTION EXPENSE 460,000 460,000 460,000 100% 0 c L:! 420 INSURANCE 2.47,308 247,308 247,30& 100% 0 ( 

421 PMT/PERF. BOND 168,220 188,220 168,220 0 ( 

I- ALL400 SERIES TOTAL 2,511,92.9 0 2,10. 0 0 404,309 68,10E (fJ 

....... ALL TOTAL NTRACTCOST 14. 79 DOD 0 3,904110 0 to 37<1,seo 24775E ~ u 

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08/06/02 

PROOUaER THIS CER11FICATE 18 lllUED MA. MATIER OF INFORMATION 

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CERTIFICATE HOLDER Y AODl110NAL INSURED; INSU!Ulft. L.Ef'fllR: 

11.S. B;;a:ak R•ilona.l: Assaci•tion 

As Trustee 

Attn: Linda Johnson 

950 17th Sheet, Si;ait. 650 

Denver, CO 80202 

,l\CORJ> isi-S (7197) 

lJSBADDf 

CANCELLATION 

afOUU>N« 01- TIIEABOW oectUll., l"OUCll!S IE~ EICl'ORETIIRll!lll'IRA 

DATii ~. 11& ISSUING INSURER WILL l!NDirAllOK TO -L _l_Q_ OAYS Wlt1Tr8" 

NOTICI! TO ?NI! CERTIFIOATI! H~ NAMm TOlHI! LEFT, llUJ FAll.llftl! TO DO 50 SHALL 

IMl'OSI! ND OBUCATIOH OR LlA8IUTY Of Al4Y KINO ""°"THE INIURl!ll. rrs AOIUfTS OR 

OACORD CORPORATION 1888 

128 
JENKENS & GILCHRIST 

ACORD. 

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11111 w~lcreat Green 1106 

Houston TX 770t2-4739 

Phorie:713-7BS-6785 rax:713-715-B785 

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an Additional. ~ as :i::espect:a General IJ.ahi1ity. Waiver of subrogaUon 

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8909 (ExeC'1tive Offi~ISJ on1y. 

cERTIFICATE HOLDER 

Willacy County Puh1io Facil.ity 

Cozporati.on 

SU 11'. lli.cSaJ.go st.-t ~ymopctvi.11.• 1 TX '78500 

ACOFW 21.S (7197) 

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NOTICli TO THW. Cl!ll1ll'ICATI!! HDLDllR NAMED TO THI! U9"T, l!IUT FAILUR!E TO DO ao .SHALL 

OACORD CORPORATION 1988 

129 
CERTIFICATE OF 

SUBSTANTJAL 

COMPLETION 

AJA DOCUMENT G704 

NER 0 11 ..-_(HITECT 0 

CONTRACTOR 0 

FIELD 0 

OTHER 0 

PROJECT: 

(name address) 

Willacy County Detention 

Facility 

ARCHITECT: Aguir·re Corporation 

1601 Buffalo Drive 

Raymondville, Texas 78580 

ARCHITECT'S PROJECT NUMBER: 

TO (Owner): 

f'Willacy County Public --i 

Facility Corporation 

546 W. Hidalgo Street 

Raymondville, Texas 78580 

CONTRACTOR: Hale-Mills Construction, Lt 

CONTRACT FOR: Willacy County Detention 

Facility 

L _J CONTRACT DATE: June 1 0, 2002 

DATE OF ISSUANCE: October 6, 2003 

PROJECT OR DESIGNATED PORTION SHALL INCLUDE: 

The Work performed under this·Contract has been reviewed and found to be substantially complete. The Date of Substantial 

Completion of the Project or portion thereof designated above is hereby established as July 2 9, 2 o o 3 

which is also the date of commencement of applicable warranties required by the Contract Documents, except as stated below. 

DEFINITION OF DATE OF SUBSTANTIAL·COMPLETION 

The Date of Substantial Completion of the Work or designated portion thereof is the Date certified by the Architect when 

construction is sufficiently complete, in accordance with the Contract Documents, so the Owner can occupy or utilize the 

Work or designated portion thereof for the use for which it is intended, as expressed in the Contract Documents. 

A list of items to be completed or corrected, prepared by the Contractor and verified and amended by the Architect, is 

attached hereto. The failure to include any items on such list does not alter the responsibility of the Contractor to complete all 

Work· in accordance with the Contract Documents. The date of commencement of warranties for items on the attached list will 

be the da.te of final payment u~less otherwise agreed t~o;n w~~ 

Aguirre Corporation ~ /"t::J~~~ ARCHITECT BY . [)AjE 

The Contractor will complete or correct the Work on the Ii 

from the above Date of Substantial Completion. 

Hale-Mills Construction, Ltd. 

CONTRACTOR 

days 

1u

~ 

11} ) 

The Owner accepts the Work or designated portion thereof as substantially complete d will assume full possession thereof 

at (time) on 

Willacy County Public Facility 

OWNER corpora ti on BY 

The responsibilities of the Owner and the Contractor for security, maintena 

and insurance shall be as follows: 

1 {date). 

, 

II 0/o1 

DA1E 

(Note-Owner's and Contractor's legal and insurance counsel should determine and review insurance requirements and coverage; Contractor 

shall secure consent of surety company. if any.) 

Nner assumes all responsibility for security, maintenance, utilites and insurance. 

AIA DOCUMENT G704 • CERTIFICATE OF SUBSTANTIAL COMPLETION • APRIL 1976 EDITION • AIA8 

© 1978 •THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C 20006 

130 

(;704-1978 
EXHIBIT B 
AGREEMENT 

Made as of the twenty-ninth day of June in the year of 2004. 

BETWEEN the owner: 

County Jail Public Facility Corporation of Willacy County, Texas 

546 West Hidalgo Street 

Raymondville, Texas 78580 

and the Design/Builder: 

Hale-Mills Construction, Ltd. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77025 

For the following Project: 

~and constructionof the will consist of a one story, 96 bed, secure adult 

detention facility, expandable by 96 beds, with an area of approximately 26,000 square 

feet. The facility will be designed to meet the requirements of the Texas Commission on 

Jail Standards and will comply with applicable local, state and national codes. The 

facility will be monitored through closed circuit television and operable remotely through 

the use of a central control panel located in the central Control Room. 

The Sheriffs administrative offices will contain all functional spaces necessary to 

support the sheriffs office and his stafl: including a sheriff's lobby with public 

restrooms, clerical office, multi-agency office, chiefs offices, Sheriffs office, dispatch 

room, 911 room, communications sergeants office, investigators offices, civil process 

office, deputies office, patrol sergeants office evidence storage, arsenal and keIUlel for the 

drug dogs. On the opposite side of the sheriff's lobby will be a squad room/conference 

room, break room and multi-purpose room. A separate Department of Public Safety 

("DPS'') room will be located in the administrative area and will have a private entranc.e. 

The jail lobby will have a separate entrance for the public, adjacent to the DPS. The 

ceiling in these areas will be acoustical ceiling tile. The floors in these areas will be 

carpet or vinyl composition tile. The walls will be metal studs with gypsum wall board 

or concrete masonry unit. 

The Intake Area will contain an intake/booking counter, female holding, male 

holding, violent cell, shakedown, female detox, male detox, inmate property storage, and 

inmate clothing issue. The ceiling in the Intake Area will be composed of hollow core 

concrete planks. The floors will be sealed concrete and the walls will be grouted, 

reinforced concrete masonry units. 

a e 1 of26 

EXHIBIT 

cQ 132 
The Secure Area (inmate housing area) will contain (12) separation cells, (10) 8-

person multi-occupancy cells, and (1) 4-person multi-occupancy cell. Inmate Visitation 

and Public/Attorney Visitation rooms will be located near the Jail Lobby. The Line-Up 

room will be located across from the Viewing/Statement room. The Medical Room will 

be located adjacent to the Kitchen and the Laundry will be adjacent to Intake. There is a 

Multi-purpose Room, Commissary, ample Storage and Janitor's Closets. The inmate 

outdoor recreation area will be configured as an interior courtyard and will be visible 

from Central Control. The Jail Administrator's office will be located next to Central 

Control. All passage from the secure area to non-secure area will be through security 

vestibules with interlocking doors. The ceiling in the Secure Area will be composed of 

hollow core concrete planks. The floors will be sealed concrete and the walls will be 

grouted, reinforced concrete masonry units. All inmate plumbing fixtures will be 

security-type stainless steel fixtures. The doors in the secure area will be security hollow 

metal and the door hardware will be detention hardware. 

The kitchen will be designed to accommodate food preparation for 100-200 

inmates. It wiH be fully equipped with the appropriate kitchen equipment and food 

storage areas. The ceiling in the kitchen will be security gypsum board and /or hollow 

core concrete planks. The floors will be sealed, non-porous concrete and the walls will 

be reinforced concrete masonry units. 

The vehicular sallyport will be fully secured and will accommodate a full size 

inter-city bus. 

The facility will be constructed of tilt-up concrete panel exterior walls. The 

building structure will be steel framed with a metal roof. 

The architectural services described in Article 3 will be provided by: 

F. C. Cuny Corporation 

4222 Rosehill Rd., Suite 7 

Garland, Texas 75043 

who is lawfully licensed to practice architecture in the State of Texas. 

ARTICLE 1 

GENERAL PROVISIONS 

1.1 BASIC DEFINITIONS 

1.1.1 The Contract Documents consist of this Agreement; the Design/Builder's Proposal 

and written addenda to the Proposal identified in Article 14, the Construction Documents 

approved by the Owner in accordance with Subparagraph 3.2.3 and Modifications issued 

after execution of this Agreement. A Modification is a Change Order or a written 

amendment to this Agreement signed by both parties, or a Construction Change Directive 

issued by the Owner in accordance with Paragraph 8 .3. 

Page 2 of26 

133 
1.1.2 The tenn ''Work" means the planning, design., construction, fmancing, operation 

and management services provided (or caused to be provided) by the Design/Builder to 

fulfill the Design/Builder's obligations. 

1.2 EXECUTION, CORRELATION AND INTENT 

1.2.1 It is the intent of the Owner and the Design/Builder that the Contract Documents 

include all items necessary for proper execution and completion of the Work. The 

Contract Documents are complementary, and what is required by one shall be as binding 

as if required by all; performance by the Design/Builder shall be required only to the 

extent consistent with and reasonably inferable from the Contract Documents as being 

necessary to produce the intended results. Words that have well known technical or 

construction industry meanings are used in the Contract Documents in accordance with 

such recognized meanings. 

1.2.2 If the Design/Builder believes or is advised by the Architect or by another design 

professional retained to provide services on the Project that implementation of any 

instruction received from the Owner would cause a violation of any applicable law, the 

Design/Builder shall notify the Owner in writing. Neither the Design/Builder nor the 

Architect shall be obligated to perform any act which either believes will violate any 

applicable law. 

1.2.3 Nothing contained in this Agreement shall create a contractual relationship 

between the Owner and any person or entity other than the Design/Builder. 

1.3 OWNERSHIP AND USE OF DOCUMENTS 

1.3.1 Drawings, specifications, and other documents and electronic data furnished by 

the Design/Builder are instruments of service. The Design/Builder's Architect and other 

providers of professional services shall retain all common law, statutory and other 

reserved rights, including copyright in those instruments of service furnished by them. 

Drawings, specifications, and other documents and electronic data are furnished for use 

solely with respect to this Agreement. The Owner shall be permitted to retain copies, 

including reproducible copies, of the drawings, specifications, and other documents and 

electronic data furnished by the 

Design/Builder for information and reference in connection with the Project except as 

provided in Subparagraphs 1.3.2 and 1.3.3. 

1.3.2 Drawings, specifications, and other documents and electronic data furnished by 

the Design/Builder shall not be used by the Owner or others on other projects, for 

additions to this Project or for completion of this Project by others, except by agreement 

in writing and with appropriate compensation to the Design/Builder, unless the 

Design/Builder is adjudged to be in default under this Agreement or under any other 

subsequently executed agreement. 

1.3.3 If the Design/Builder defaults in the Design/ Builder's obligations to the Owner, 

the Architect shall grant a license to the Owner to use the drawings, specifications, and 

other documents and electronic data furnished by the Architect to the Design/Builder for 

Page 3 of26 

134 
the completion of the Project, conditioned upon the Owner's execution of an agreement to 

cure the Design/Builder's default in payment to the Architect for services previously 

performed and to indemnify the Architect with regard to claims arising from such reuse 

without the Architect's professional involvement. 

1.3.4 Submission or distribution of the Design/Builder's documents to meet official 

regulatory requirements or for similar purposes in connection with the Project is not to be 

construed as publication in derogation of the rights reserved in Subparagraph 1.3.1. 

ARTICLE2 

OWNER 

2.1 The Owner shall designate a representative authorized to act on the Owner's 

behalf with respect to the Project. The Owner or such authorized representative shall 

examine documents submitted by the Design/Builder and shall render decisions in a 

timely manner and in accordance with the schedule accepted by the Owner. The Owner 

may obtain independent review of the Contract Documents by a separate architect, 

engineer, contractor or cost estimator under contract to or employed by the Owner. Such 

independent review shall be undertaken at the Owner's expense in a timely manner and 

shall not delay the orderly progress of the Work. 

2.2 The Owner may appoint an on-site project representative to observe the Work and 

to have such other responsibilities as the Owner and the Design/Builder agree in writing. 

2.3 The Owner shall cooperate with the Design/Builder in securing building and other 

permits, licenses and inspections. The Design/Builder shall be required to pay the fees 

for such pennits, licenses and inspections. 

2.4 The Owner shall disclose, to the extent known to the Owner, the results and 

reports of prior tests, inspections or investigations conducted for the Project involving: 

structural or mechanical systems; chemical, air and water pollution; hazardous materials; 

or other environmental and subsurface conditions. The Owner shall disclose all 

information known to the Owner regarding the presence of pollutants at the Project's site. 

2.5 The Owner shall furnish all legal, accounting and insurance counseling services as 

may be necessary at any time for the Project, including such auditing services as the 

Owner may require to verify the Design/Builder's Applications for Payment. 

2.6 Those services, infonnation, surveys and reports required by Paragraphs 2.4 

through 2.6 which are within the Owner's control shall be furnished at the Owner's 

expense, and the Design/Builder shall be entitled to rely upon the accuracy and 

completeness thereof, except to the extent the Owner advises the Design/Builder to the 

contrary in writing. 

2.7 If the Owner requires the Design/Builder to maintain any special insurance 

coverage, policy, amendment, or rider, the Owner shall pay the additional cost thereof, 

except as otheiwise stipulated in this Agreement. 

Page 4 of26 

135 
2.8 If the Owner has actual knowledge of a fault or defect in the Work or 

nonconformity with the Design/Builder's Proposal or the Construction Documents, the 

Owner shall give prompt written notice thereof to the Design/Builder. 

2.9 The Owner shall, at the request of the Design/Builder, prior to execution of this 

Agreement and promptly upon request thereafter, furnish to the Design/Builder 

reasonable evidence that financial arrangements have been made to fulfill the Owner's 

obligations under the Contract. 

2.10 The Owner shall communicate with persons or entities employed or retained by 

the Design/Builder through the Design/Builder, unless otherwise directed by the 

Design/Builder. However, breach of contract by the Design/Builder shall allow direct 

communication with persons or entities employed or retained by the Design/Builder. 

ARTICLE3 

DESIGN/BIDLDER 

3.1 SERVICES AND RESPONSIBILITIES 

3 .1.1 Design services required by this Agreement shall be performed by quaJified 

architects and other design professionals. The contractual obligations of such 

professional persons or entities are undertaken and perfonned in the interest of the 

Design/Builder. 

3 .1.2 The agreements between the Design/Builder and the persons or entities identified 

in this Agreement, and any subsequent modifications, shall be in writing. These 

agreements, including financial arrangements with respect to this Project, shall be 

promptly and fully disclosed to the Owner upon request. 

3.1.3 The Design/Builder shalJ be responsible to the Owner for acts and omissions of 

the Design/Builder's employees, subcontractors and their agents and employees, and 

other persons, including the Architect and other design professionals, performing any 

portion of the Design/Builder's obligations under this Agreement. 

3.2 BASIC SERVICES 

3.2. t The Design/Builder's Basic Services are described below and in Article 14. 

3.2.2 The Design/Builder shall designate a representative authorized to act on the 

Design/Builder's behalf with respect to the Project. 

3 .2.3 The Design/Builder shall submit Construction Documents for review and 

approval by the Owner. Construction Documents may include drawings, specifications, 

and other documents and electronic data setting forth in detail the requirements for 

construction of the Work, and shall: 

.1 be consistent with the intent of the Design/Builder's Proposal; 

Page 5 of26 

136 
.2 provide information for the use of those in the building trades; and 

.3 include documents customarily required for regulatory agency approvals. 

3 .2.4 The Design/Builder, at the expense of the Design/Builder, with the assistance of 

the Owner, shall file documents required to obtain necessary approvals of governmental 

authorities having jurisdiction over the Project. 

3.2.5 Unless otherwise provided in the Contract Documents, the Design/Builder shall 

provide or cause to be provided and shall pay for design services, labor, materials, 

equipment, tools, construction equipment and machinery, water, heat, utilities, 

transportation and other facilities and services necessary for proper execution and 

completion of the Work, whether temporary or pennanent and whether or not 

incorporated or to be inco1porated in the Work. 

3.2.6 The Design/Builder shall be responsible for all construction means, methods, 

techniques, sequences and procedures, and for coordinating all portions of the Work 

under this Agreement. 

3.2.7 The Design/Builder shall keep the Owner and Trustee informed of the progress 

and quality of the Work on a monthly basis. 

3.2.8 The Design/Builder shall be responsible for correcting Work which does not 

confonn to the Contract Documents. 

3.2.9 The Design/Builder warrants to the Owner that materials and equipment furnished 

under the Contract will be of good quality and new unless otherwise required or 

permitted by the Contract Documents, that the construction will be free from faults and 

defects, and that the construction will conform with the requirements of the Contract 

Documents. Construction not conforming to these requirements, including substitutions 

not properly approved by the Owner, shall be corrected in accordance with Article 9. 

3.2.10 The Design/Builder shall pay all sales, consumer, use and similar taxes which had 

been legally enacted at the time the Design/Builder's Proposal was first submitted to the 

Owner, and shall secure and pay for building and other permits and governmental fees, 

licenses and inspections necessary for the proper execution and completion of the Work 

which are either customarily secured after execution of a contract for construction or are 

legally required at the time the Design/Builder's Proposal was first submitted to the 

Owner. It being clearly understood that this is a Separated Contract and the Owner shall 

cause to be provided to the Design/Builder, by the County Jail Public Facility 

Corporation of Willacy County, Texas, a Tax Exemption Certificate, which will allow the 

material and equipment purchased for this project to be purchased without any State 

Taxes being owed or paid. In order to comply with the sales tax law of the State of 

Texas, this Agreement shall be considered a separated contract with the costs of Materials 

and Equipment to be $2,741,364.00 and the costs of Services to be $2,335,236.00, when 

combined the total contract amount is $5,076,600.00. 

Page 6 of26 

137 
3.2.11 The Design/Builder shall comply with and give notices required by laws, 

ordinances, rules, regulations and lawful orders of public authorities relating to the 

Project. 

3.2.12 The Design/Builder shall pay royalties and license fees for patented designs, 

processes or products. The Design/Builder shall defend suits or claims for infiingement 

of patent rights and shall hold the Owner harmless from loss on account thereof, but shall 

not be responsible for such defense or loss when a particular design, process or product of 

a particular manufacturer is required by the Owner. However, if the Design/Builder has 

reason to believe the use of a required design, process or product is an infringement of a 

patent, the Design/Builder shall be responsible for such loss unless such information is 

promptly furnished to the Owner. 

3.2.13 The Design/Builder shall keep the premises and surrounding area free from 

accumulation of waste materials or rubbish caused by operations under this Agreement. 

At the completion of the Work, the Design/Builder shall remove from the site waste 

materials, rubbish, the Design/Builder's tools, construction equipment, machinery, and 

surplus materials. 

3.2.14 The Design/Builder shall notify the Owner when the Design/Builder believes that 

the Work or an agreed upon portion thereof is substantially completed. If the Owner 

concurs, the Design/Builder shall issue a Certificate of Substantial Completion which 

shall establish the Date of Substantial Completion, shall state the responsibility of each 

party for security, maintenance, heat, utilities, damage to the Work and insurance, shall 

include a list of items to be completed or corrected and shall fix the time within which the 

Design/Builder shall complete items listed therein. Disputes between the Owner and 

Design/Builder regarding the Certificate of Substantial Completion shall be resolved in 

accordance with provisions of Article 10. 

3.2.15 The Design/Builder shall maintain at the site for the Owner one record copy of the 

drawings, specifications, product data, samples, shop drawings, Change Orders and other 

modifications, in good order and regularly updated to record the completed construction. 

These shall be delivered to the Owner upon completion of construction and prior to final 

payment. 

3 .2.16 The Design/Builder shall facilitate, at the Owner's request the acquisition of the 

land and furnish services of land surveyors, geotechnical engineers and other consultants 

for subsoil, air and water conditions when such services are deemed necessary by the 

Design/Builder to properly carry out the design services required by this Agreement. 

3 .2.17 The Design/Builder shall use his best efforts to develop subcontractor interest in 

the Project and shall furnish to the Owner and Architect for their information a list of 

possible subcontractors, including suppliers who are to furnish materials or equipment 

fabricated to a special design, from whom proposals will be requested for each principal 

portion of the Work. The Architect will promptly reply in writing to the Design/Builder 

if the Architect or Owner knows of any objection to such subcontractor or supplier. The 

receipt of such list shall not require the Owner or Architect to investigate the 

qualifications of proposed subcontractors or suppliers, nor shall it waive the right of the 

Owner or Architect later to object to or reject any proposed subcontractor or supplier. 

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The Design/Builder shall seek to solicit bids from these qualified subcontractors and 

suppliers to furnish services for all construction aspects of the Project covered by this 

Agreement. 

3.3 ADDITIONAL SERVICES 

3.3.1 The services described in this Paragraph 3.3 are not included in Basic Services 

unless so identified in Article 14, and they shall be paid for by the Owner as provided in 

this Agreement, in addition to the compensation for Basic Services. The services 

described in this Paragraph 3.3 shall be provided only if authorized or confirmed in 

writing by the Owner. 

3.3.2 Making revisions in drawings, specifications, and other docwnents or electronic 

data when such revisions are required by the enactment or revision of codes, laws or 

regulations subsequent to the preparation of such documents or electronic data. 

3.3.3 Providing consultation concerning replacement of Work damaged by fire or other 

cause during construction, and furnishing services required in connection with the 

replacement of such Work. However, replacement of Work damaged by acts of the 

Design/Builder or his sub-contractors shall not be considered additional services. 

3.3.4 Providing services in connection with a public hearing, arbitration proceeding or 

legal proceeding, except where the Design/Builder is a party thereto. 

3.3.5 Providing coordination of construction performed by the Owner's own forces or 

separate contractors employed by the Owner, and coordination of services required in 

connection with construction performed and equipment supplied by the Owner. 

3.3.6 Preparing a set of reproducible record documents or electronic data showing 

significant changes in the Work made during construction shall not be an additional 

charge. 

3.3.7 Providing assistance in the utilization of equipment or systems such as 

preparation of operation and maintenance manuals, training personnel for operation and 

maintenance, and consultation during operation. 

ARTICLE4 

TIME 

4.1 Unless otherwise indicated, the Owner and the Design/Builder shall perform their 

respective obligations as expeditiously as is consistent with reasonable skill and care and 

the orderly progress of the Project. 

4.2 Time limits stated in the Contract Documents are of the essence. The Work to be 

performed under this Agreement shall commence upon receipt of a notice to proceed 

unless otherwise agreed and, subject to authorized Modifications, Substantial Completion 

shall be achieved on or before the date established in Article 14. 

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4.3 Substantial Completion is the stage in the progress of the Work when the Work or 

designated portion thereof is sufficiently complete in accordance with the Contract 

Documents so the Owner can occupy or utilize the Work for its intended use. 

4.4 Based on the Design/Builder's Proposal, a construction schedule shall be provided 

consistent with Paragraph 4.2 above. 

4.5 If the Design/Builder is delayed at any time in the progress of the Work by an act 

or neglect of the Owner, Owner's employees, or separate contractors employed by the 

Owner, or by material changes ordered in the Work, or by labor disputes, fire, unusual 

delay in deliveries, adverse weather conditions not reasonably anticipatable, unavoidable 

casualties or other causes beyond the Design/Builder's control, or by delay authorized by 

the Owner pending arbitration, or by other causes which the Owner and Design/Builder 

agree may justify delay, then the Contract Time shall be reasonably extended by Change 

Order. 

ARTICLES 

PAYMENTS 

5.1 PROGRESS PAYMENTS 

.1 S .1.1 The Design/Builder shall deliver to the Owner itemized 

Applications for Payment in such detail as indicated in Article 14. 

5 .1.2 Within ten (10) days of the Owner's receipt of a properly submitted and correct 

Application for Payment, the Owner shall make payment to the Design/Builder less 

retainage of 5% of the amount otherwise payable. 

5.1.3 The Application for Payment shall constitute a representation by the 

Design/Builder to the Owner that the design and construction have progressed to the 

point indicated, the quality of the Work covered by the application is in accordance with 

the Contract Documents, and the Design/Builder is entitled to payment in the amount 

requested. 

5.1.4 Upon receipt of payment from the Owner, the Design/Builder shall promptly pay 

the Architect, other design professionals and each contractor the amount to which each is 

entitled in accordance with the tenns of their respective contracts. 

5.1.5 The Owner shall have no obligation under this Agreement to pay or to be 

responsible in any way for payment to the Architect, another design professional or a 

contractor performing portions of the Work. 

5.1.6 Neither progress payment nor partial or entire use or occupancy of the Project by 

the Owner shall constitute an acceptance of Work not in accordance with the Contract 

Documents. 

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140 
5.1.7 The Design/Builder warrants that title to all construction covered by an 

Application for Payment will pass to the Owner no later than the time of payment. The 

Design/Builder further warrants that upon submittal of an Application for Payment all 

construction for which payments have been received from the Owner shall be free and 

clear of liens, claims, security interests or encumbrances in favor of the Design/Builder or 

any other person or entity performing construction at the site or furnishing materials or 

equipment relating to the construction. 

5.1.8 At the time of Substantial Completion, the Owner shall pay the Design/Builder 

the retainage less the reasonable cost to correct or complete incorrect or incomplete 

Work. Final payment of such withheld sum shaJI be made upon correction or completion 

of such Work. 

S.2 FINAL PAYMENT 

5.2.1 Neither final payment nor amounts retained, if any, shall become due until the 

Design/Builder submits to the Owner: (1) final application for payment; (2) an affidavit 

that payrolls, bills for materials and equipment, and other indebtedness connected with 

the Work for which the Owner or Owner's property might be responsible or encumbered 

(less amounts withheld by the Owner) have been paid or otherwise satisfied; (3) a 

certificate evidencing that insurance required by the Contract Documents to remain in 

force after final payment is currently in effect and will not be canceled or allowed to 

expire until at least 30 days' prior written notice has been given to the Owner; (4) a 

written statement that the Design/Builder knows of no substantial reason that the 

insurance will not be renewable to cover the period required by the Contract Documents; 

( 4) consent of surety, if any, to final payment. If a contractor or other person or entity 

entitled to assert a lien against the Owner's property refuses to furnish a release or waiver 

required by the Owner, the Design/Builder may furnish a bond satisfactory to the Owner 

to indemnify the Owner against such lien. If such lien remains unsatisfied after payments 

are made, the Design/Builder shall indemnify the Owner for all loss and cost, including 

reasonable attorneys' fees incurred as a result of such lien. 

5.2.2 When the Work has been completed and the contract fully perfonned, the 

Design/Builder shall submit a final application for payment to the Owner, who shall 

make final payment within 3 0 days of receipt. 

5.2.3 The making of final payment shall constitute a waiver of claims by the Owner 

except those arising from: 

.1 liens, claims, security interests or encumbrances arising out of the 

Contract and unsettled; 

.2 failure of the Work to comply with the requirements of the Contract 

Documents; or 

.3 terms of special warranties required by the Contract Documents. 

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141 
5.2.4 Acceptance of final payment shall constitute a waiver of all claims by the 

Design/Builder except those previously made in writing and identified by the 

Design/Builder as unsettled at the time of final Application for Payment. 

5.3 INTEREST PAYMENTS 

5.3.1 Payments due the Design/Builder under this Agreement which are not paid when 

due shall bear interest from the date due at the rate specified in Article 13, or in 

the absence of a specified rate, at the legal rate prevailing where the Project is 

located. 

5.3.2 Payments due the Owner under this Agreement which are not paid when due shall 

bear interest from the date due at the rate specified in Article 13, or in the absence 

of a specified rate, at the legal rate prevailing where the Project is located. 

ARTICLE6 

PROTECTION OF PERSONS AND PROPERTY 

6.1 The Design/Builder shall be responsible for initiating, maintaining and providing 

supervision of all safety precautions and programs in connection with the performance of 

this Agreement. 

6.2 The Design/Builder shall take reasonable precautions for the safety of, and shall 

provide reasonable protection to prevent damage, injury or loss to: (1) employees on the 

Work and other persons who may be affected. thereby; (2) the Work and materials and 

equipment to be incorporated therein, whether in storage on or off the site, under care, 

custody, or control of the Design/Builder or the Design/Builder's contractors; and (3) 

other property at or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, 

roadways, structures and utilities not designated for removal, relocation or replacement in 

the course of construction. 

6.3 The Design/Builder shall give notices and comply with applicable laws, 

ordinances, rules, regulations and lawful orders of public authorities bearing on the safety 

of persons or property or their protection from damage, injury or loss. 

6.4 The Design/Builder shall promptly remedy damage and loss {other than damage 

or loss insured under property insurance provided or required by the Contract 

Documents) to property at the site caused in whole or in part by the Design/Builder, a 

contractor of the Design/Builder or anyone directly or indirectly employed by any of 

them, or by anyone for whose acts they may be liable. 

ARTICLE? 

INSURANCE AND BONDS 

7.1 DESIGN/BUILDER'S LIABILITY INSURANCE 

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7.1.1 The Design/Builder shalJ purchase from and maintain, in a company or companies 

lawfully authorized to do business in the jurisdiction in which the Project is located and 

approved by Owner, such insurance as will protect the Design/Builder from claims set 

forth below which may arise out of or result from operations under this Agreement by the 

Design/Builder or by a contractor of the Design/Builder, or by anyone directly or 

indirectly employed by any of them, or by anyone for whose acts any of them may be 

liable: 

.1 claims under workers' compensation, disability benefit and other similar 

employee benefit laws that are applicable to the Work to be performed; 

.2 claims for damages because of bodily injury, sickness or disease, or death; 

.3 claims for damages because of bodily injury, sickness or disease, or death 

of persons other than the Design/Builder's employees; 

.4 claims for damages for personal injury liability coverage which are 

sustained (1) by a person as a result of an offense directly or indirectly related to 

employment of such person by the Design/Builder or (2) by another person; 

.5 claims for damages, other than to the Work itself, because of injury to or 

destruction of tangible property, including loss of use resulting therefrom; 

.6 claims for damages because of bodily injury, death of a person or property 

damage arising out of ownership, maintenance or use of a motor vehicle; and 

. 7 claims involving contractual liability insurance applicable to the 

Design/Builder's obligations under Paragraph 11.5. 

7.1.2 The insurance required by Subparagraph 7.1.1 shall be written for not less than 

limits of liability specified in this Agreement or required by law, whichever coverage is 

greater. Coverages, whether written on an occurrence or claims-made basis, shall be 

maintained without interruption from date of commencement of the Work until date of 

final payment and termination of any coverage required to be maintained after final 

payment. Schedule of coverage is attached herewith as Exhibit I. 

7.1.3 Certificates of insurance acceptable to the Owner shall be delivered to the Owner 

immediately after execution of this Agreement. These certificates and the insurance 

policies required by this Paragraph 7.1 shall contain a provision that coverages afforded 

under the policies will not be canceled or allowed to expire until at least 30 days' prior 

written notice has been given to the Owner. If any of the foregoing insurance coverages 

are required to remain in force after final payment, an additional certificate evidencing 

continuation of such coverage shall be submitted with the application for final payment. 

7.2 OWNER'S LIABILITY INSURANCE 

7 .2.1 The Design/Builder shall be responsible to provide "Additionally Insured" 

coverage for the Owner to satisfy the usual liability exposures of the Owner for work 

performed by the Design/Builder. Optionally, the Owner may purchase and maintain 

Page 12 of26 

143 
other insurance for self-protection against claims which may arise from operations under 

this Agreement. The Design/Builder shall not be responsible for purchasing and 

maintaining this optional Owner's liability insurance unless specifically required by the 

Contract Documents. 

7.3 PROPERTY INSURANCE 

7.3.1 Unless otherwise provided under this Agreement, the Design/Builder shall 

purchase and maintain, in a company or companies authorized to do business in the 

jurisdiction, and acceptable to the Owner, in which the principal improvements are to be 

located, property insurance upon the Work to the full insurable value thereof on a 

replacement cost basis without optional deductibles. Such property insurance shall be 

maintained, unless otherwise provided in the Contract Documents or otherwise agreed in 

writing by all persons and entities who are beneficiaries of such insurance, until 

substantial completion. This insurance shall include interests of the Owner, the 

Design/Builder, and their respective contractors and subcontractors in the Work. 

7.3.2 Property insurance shall be on an all-risk policy fonn and shall insW"e against the 

perils of fire and extended coverage and physical loss or damage including, without 

duplication of coverage, theft, vandalism, malicious mischief, collapse, falsework, 

temporary buildings and debris removal including demolition occasioned by enforcement 

of any applicable legal requirements, and shall cover reasonable compensation for the 

services and expenses of the Design/Builder's Architect and other professionals required 

as a result of such insured loss. Coverage for other perils shall not be required unless 

otherwise provided in the Contract Documents. 

7.3.3 Reserved. 

7.3.4 Unless otherwise provided, the Design/Builder shall purchase and maintain such 

boiler and machinery insurance required by this Agreement or by law, which shall 

specifically cover such insured objects during installation and until final acceptance by 

the Owner. This insurance shall include interests of the Owner, the Design/Builder, the 

Design/Builder's contractors and subcontractors in the Work, and the Design/Builder's 

Architect and other design professionals. The Owner and the Design/Builder shall be 

named insureds. 

7 .3 .5 A loss insured under the property insurance purchased by the Design/Builder 

described above in 7.3.2 shall be adjusted by the Owner and made payable to the Owner 

for the insureds, as their interests may appear, subject to requirements of any applicable 

mortgagee clause and of Subparagraph 7 .3 .10. The Design/Builder shall pay contractors 

their shares of insurance proceeds received by the Design/Builder, and by appropriate 

agreement, written where legally required for validity, shall require contractors to make 

payments to their subcontractors in similar manner. 

7.3.6 If the Design/Builder requests in writing that insurance for risks other than those 

described herein or for other special hazards be included in the property insurance policy, 

the Owner shall, if possible, obtain such insurance, and the cost thereof shall be charged 

to the Design/Builder by appropriate Change Order. 

Page 13 of26 

144 
7.3.7 Before an exposure to loss may occur, the Owner shall file with the 

Design/Builder a copy of each policy that includes insurance coverages required by this 

Paragraph 7.3 .Each policy shall contain all generally applicable conditions, definitions, 

exclusions and endorsements related to this Project. Each policy shall contain a provision 

that the policy will not be canceled or allowed to expire until at least 30 days' prior 

written notice has been given to the Design/Builder. 

7.3.8 The Owner and the Design/Builder waive all rights against each other and the 

Architect and other design professionals, contractors, subcontractors, agents and 

employees, each of the other, for damages caused by fire or other perils to the extent 

covered by property insurance obtained pursuant to this Paragraph 7.3 or other property 

insurance applicable to the Work, except such rights as they may have to proceeds of 

such insurance held by the Owner. The Owner or Design/Builder, as appropriate, shall 

require from contractors and subcontractors by appropriate agreements, written where 

legally required for validity, similar waivers each in favor of other parties enumerated in 

this Paragraph 7.3. The policies shall provide such waivers of subrogation by 

endorsement or otherwise. A waiver of subrogation shall be effective as to a person or 

entity even though that person or entity would otherwise have a duty of indemnification, 

contractual or otherwise, did not pay the insurance premium directly or indirectly, and 

whether or not the person or entity had an insurable interest in the property damaged. 

7.3.9 If required in writing by a party in interest, the Owner shall, upon occurrence of 

an insured loss, give bond for proper performance of the Owner's duties. The cost of 

required bonds shall be charged against proceeds received. The Owner shall deposit in a 

separate account proceeds so received, which the Owner shall distribute in accordance 

with such agreement as the parties in interest may reach, or in accordance with an 

arbitration award in which case the procedure shall be as provided in Article 10. If after 

such loss no other special agreement is made, replacement of damaged Work shall be 

covered by appropriate Change Order. 

7.3.10 The Owner shall have power to adjust and settle a loss with insurers unless one of 

the parties in interest shall object in writing, within five (5) days after occurrence of loss 

to the Owner's exercise of this power, if such objection be made, the parties shall enter 

into dispute resolution under procedures provided in Article 10. If distribution of 

insurance proceeds by arbitration is required, the arbitrators will direct such distribution. 

7.3.11 Partial occupancy or use prior to Substantial Completion shall not commence 

until the insurance company or companies providing property insurance have consented 

to such partial occupancy or use by endorsement or otherwise. The Owner and the 

Design/Builder shall take reasonable steps to obtain consent of the insurance company or 

companies and shall not. without mutual written consent, take any action with respect to 

partial occupancy or use that would cause cancellation, lapse or reduction of coverage. 

7.4 PERFORMANCE AND PAYMENT BOND 

7.4.l The Design/Builder shall furnish bonds covering faithful performance of the 

Agreement and payment obligations arising thereunder. Bonds may be obtained through 

the Design/Builder's usual source, with Owner's approval, and the cost thereof shall be 

Page 14 of26 

145 
included in the Guaranteed Maximum Price stipulated in Section 13.1.1. The amount of 

each bond shall be equal to one hundred percent (100%) of the GMP. 

7.5 LOSS OF USE INSURANCE 

7.5.1 The Design/Builder will add coverage to their Builders Risk policy and maintain 

such insurance as will insure the Owner against loss of use of the Owner's property, for a 

period not-to-exceed 12-months, due to fire or other hazards, however caused. Such 

coverage is limited to an insurable loss, as defined in the property insurance provisions, 

and an amount of $ 1,977.00 per day. 

ARTICLES 

CHANGES IN THE WORK 

8.1 CHANGES 

8.1.1 Changes in the Work may be accomplished after execution of this Agreement, 

without invalidating this Agreement, by Change Order, Construction Change Directive, 

or order for a minor change in the Work. 

8.1.2 A Change Order shall be based upon agreement between the Owner and the 

Design/Builder; a Construction Change Directive may be issued by the Owner without 

the agreement of the Design/Builder, an order for a minor change in the Work may be 

issued by the Design/Builder alone. 

8.1.3 Changes in the Work shall be performed under applicable provisions of the 

Contract Documents, and the Design/Builder shall proceed promptly, unless otherwise 

provided in the Change Order, Construction Change Directive, or order for a minor 

change in the Work. 

8.1.4 If unit prices are stated in the Contract Documents or subsequently agreed upon, 

and if quantities originally contemplated are so changed in a proposed Change Order or 

Construction Change Directive that application of such unit prices to quantities of Work 

proposed will cause substantial inequity to the Owner or the Design/Builder, the 

applicable unit prices shall be equitably adjusted. 

8.2 CHANGE ORDERS 

8.2.1 A Change Order is a written instrument prepared by the Design/Builder and 

signed by the Owner and the Design/Builder, stating their agreement upon all of the 

following: 

.1 a change in the Work; 

.2 the amount of the adjustment, if any, in the Contract Sum; and 

.3 the extent of the adjustment, if any, in the Contract Time. 

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146 
8.2.2 If the Owner requests a proposal for a change in the Work from the 

Design/Builder and subsequently elects not to proceed with the change, a Change Order 

shall be issued to reimburse the Design/Builder for any costs incurred for estimating 

services, design services or preparation of proposed revisions to the Contract Documents. 

8.3 CONSTRUCTION CHANGE DIRECTIVES 

8.3.1 A Construction Change Directive is a written order prepared and signed by the 

Owner, directing a change in the Work prior to agreement on adjustment, if any, in the 

Contract Sum or Contract Time, or both. Both parties to this Agreement agree to make 

every effort to not issue or use any Construction Change Directives in this work. 

8.3.2 Except as otherwise agreed by the Owner and the Design/Builder, the adjustment 

to the Contract Sum shall be determined on the basis of reasonable expenditures and 

savings of those performing the Work attributable to the change, including the 

expenditures for design services and revisions to the Contract Documents. In case of an 

increase in the Contract Sum, the cost shall include a reasonable allowance for overhead 

and profit. In such case, the Design/Builder shall keep and present an itemized 

accounting together with appropriate supporting data for inclusion in a Construction 

Change Directive. Unless otherwise provided in the Contract Documents, costs for these 

puzposes shall be limited to the following: 

.1 costs of labor, including social security, old age and wiemployment 

insurance, fringe benefits required by agreement or custom, and workers' 

compensation insurance; 

.2 costs of materials, supplies and equipment, including cost of 

transportation, whether incorporated or consumed; 

.3 rental costs of machinery and equipment exclusive of hand tools, whether 

rented from the Design/Builder or others; 

.4 costs of premiums for all bonds and insurance permit fees, and sales, use 

or similar taxes; 

.5 additional costs of supervls1on and field office personnel directly 

attributable to the change; and fees paid to the Architect, engineers and other 

professionals. 

8.3.3 Pending final determination of cost to the Owner, amounts not in dispute may be 

included in Applications for Payment. The amount of credit to be allowed by the 

Design/Builder to the Owner for deletion or change which results in a net decrease in the 

Contract Sum will be actual net cost. When both additions and credits covering related 

Work or substitutions are involved in a change, the allowance for overhead and profit 

shall be figured on the basis of the net increase, if any, with respect to that change. 

8.3.4 When the Owner and the Design/Builder agree upon the adjustments in the 

Contract Sum and Contract Time, such agreement shall be effective immediately and 

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147 
shall be recorded by preparation and execution of an appropriate Construction Change 

Directive. 

8.4 MINOR CHANGES IN THE WORK 

8.4.1 The Design/Builder shall have authority to make minor changes in the 

Construction Documents and construction consistent with the intent of the Contract 

Documents when such minor changes do not involve adjustment in the Contract Sum or 

extension of the Contract Time. The Design/Builder shall promptly inform the Owner, in 

writing, of minor changes in the Construction Documents and construction. 

8.5 CONCEALED CONDITIONS 

8.5.1 If conditions are encountered at the site which are (1) subsurface or otherwise 

concealed physical conditions which differ materially from those indicated in the 

Contract Documents, or (2) unknown physical conditions of an unusual nature which 

differ materially from those ordinarily found to exist and generally recognized as inherent 

in construction activities of the character provided for in the Contract Documents, then 

notice by the observing party shall be given to the other party promptly before conditions 

are disturbed and in no event later than 21 days after first observance of the conditions. 

The Contract Sum shall be equitably adjusted for such concealed or unknown conditions 

by Change Order upon claim by either party made within 21 days after the claimant 

becomes aware of the conditions. 

8.6 REGULATORY CHANGES 

8.6.1 The Design/Builder shall be compensated for changes in the construction 

necessitated by the enactment or revision of codes, laws or regulations subsequent to the 

submission of the Design/Builder's Proposal. 

ARTICLE9 

CORRECTION OF WORK 

9.1 The Design/Builder shall promptly correct Work rejected by the Owner, or his 

designee, or known by the Design/Builder to be defective or failing to conform to the 

requirements of the Contract Documents, whether observed before or after Substantial 

Completion and whether or not fabricated, installed or completed. The Design/Builder 

shall bear costs of correcting such rejected Work, including additional testing and 

inspections. 

9.2 If, within one (1) year after the date of Substantial Completion of the Work or, 

after the date for commencement of warranties established in a written agreement 

between the Owner and the Design/Builder, or by terms of an applicable special warranty 

required by the Contract Docwnents, any of the Work is found to be not in accordance 

with the requirements of the Contract Documents, the Design/Builder shall correct it 

promptly after receipt of a written notice from the Owner to do so unless the Owner has 

previously given the Design/Builder a written acceptance of such condition. 

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148 
9.3 Nothing contained in this Article 9 shall be construed to establish a period of 

limitation with respect to other obligations which the Design/Builder might have under 

the Contract Documents. Establishment of the time period of one (1) year as described in 

Subparagraph 9.2 relates only to the specific obligation of the Design/Builder to correct 

the Work, and has no relationship to the time within which the obligation to comply with 

the Contract Documents may be sought to be enforced, nor to the time within which 

proceedings may be commenced to establish the Design/Builder's liability with respect to 

the Design/Builder's obligations other than specifically to correct the Work. 

9.4 If the Design/Builder fails to correct nonconforming Work as required or fails to 

carry out Work in accordance with the Contract Documents, the Owner, by written order 

signed personally or by an agent specifically so empowered by the Owner in writing, may 

order the Design/Builder to stop the Work, or any portion thereof, until the cause for such 

order has been eliminated; however, the Owner's right to stop the Work shall not give rise 

to a duty on the part of the Owner to exercise the right for benefit of the Design/Builder 

or other persons or entities. 

9.5 If the Design/Builder defaults or neglects to carryout the Work in accordance with 

the Contract Docmnents and fails within seven (7) days after receipt of written notice 

from the Owner to commence and continue correction of such default or neglect with 

diligence and promptness, the Owner may give a second written notice to the 

Design/Builder and, seven (7) days following receipt by the Design/Builder of that 

second written notice and without prejudice to other remedies the Owner may have, 

correct such deficiencies. In such case an appropriate Change Order shall be issued 

deducting from payments then or thereafter due the Design/Builder, the costs of 

correcting such deficiencies including Owner costs and expenses related thereto. If the 

payments then or thereafter due the Design/Builder are not sufficient to cover the amount 

of the deduction, the Design/Builder shall pay the difference to the Owner. Such action 

by the Owner shall be subject to dispute resolution procedures as provided in Article I 0. 

ARTICLE 10 

DISPUTE RESOLUTION, MEDIATION AND ARBITRATION 

10.1 Claims, disputes or other matters in question between the parties to this 

Agreement arising out of or relating to this Agreement or breach thereof shall be subject 

to and decided by mediation or arbitration. Such mediation or arbitration shall be 

conducted in accordance with the Construction Industry Mediation or Arbitration Rules 

of the American Arbitration Association currently in effect. 

10.2 In addition to and prior to arbitration, the parties shall endeavor to settle disputes 

by mediation. Demand for mediation shall be filed in writing with the other party to this 

Agreement and with the American Arbitration Association. A demand for mediation 

shall be made within a reasonable time after the claim, dispute or other matter in question 

has arisen. In no event shall the demand for mediation be made after the date when 

institution of legal or equitable proceedings based on such claim, dispute or other matter 

in question would be barred by the applicable statutes ofrepose or limitations. 

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149 
10.3 Demand for arbitration shall be filed in writing with the other party to this 

Agreement and with the American Arbitration Association. A demand for arbitration 

shall be made within a reasonable time after the claim, dispute or other matter in question 

has arisen. In no event shall the demand for arbitration be made after the date when 

institution of legal or equitable proceedings based on such claim, dispute or other matter 

in question would be barred by the applicable statutes of repose or limitations. 

10.4 An arbitration pursuant to this Article may be joined with an arbitration involving 

common issues of law or fact between the Design/Builder and any person or entity with 

whom the Design/Builder has a contractual obligation to arbitrate disputes. No other 

arbitration arising out of or relating to this Agreement shall include, by consolidation. 

joiner or in any other manner, an additional person or entity not a party to this Agreement 

or not a party to an agreement with the Design/Builder, except by written consent 

containing a specific reference to this Agreement signed by the Owner, the 

Design/Builder and any other person or entities sought to be joined. Consent to 

arbitration involving an additional person or entity shall not constitute consent to 

arbitration of any claim, dispute or other matter in question not described in the written 

consent or with a person or entity not named or described therein. The foregoing 

agreement to arbitrate and other agreements to arbitrate with an additional person or 

entity duly consented to by the parties to this Agreement shall be specifically enforceable 

in accordance with applicable law in any court having jurisdiction thereof. 

10.S The award rendered by the arbitrator or arbitrators shall be final, and judgment 

may be entered upon it in accordance with applicable law in any court having jurisdiction 

thereof. 

ARTICLE11 

MISCELLANEOUS PROVISIONS 

11.1 Unless otherwise provided, this Agreement shall be governed by the law of the 

place where the Project is located. 

11.2 SUBCONTRACTS 

11.2.1 The Design/Builder, as soon as practicable after execution of this Agreement, 

shall furnish to the Owner in writing the names, address, telephone numbers, fax numbers 

and representatives names of the persons or entities the Design/Builder will engage as 

contractors for the Project. 

11.3 WORK BY OWNER OR OWNER'S CONTRACTORS 

11.3 .1 The Owner reserves the right to perfonn construction or operations related to the 

Project with the Owner's own forces, and to award separate contracts in connection with 

other portions of the Project or other construction or operations on the site under 

conditions of insurance and waiver of subrogation identical to the provisions of this 

Agreement. If the Design/Builder claims that delay or additional cost is involved because 

of such action by the Owner, the Design/Builder shall assert such claims as provided in 

Subparagraph 11.4. 

Page 19 of26 

150 
11.3.2 The Design/Builder shall afford the Owner's separate contractors reasonable 

opportwiity for introduction and storage of their materials and equipment and 

perfonnance of their activities and shall connect and coordinate the Design/Builder's 

construction and operations with theirs as required by the Contract Documents. 

11.3.3 Costs caused by delays or by improperly timed activities or defective construction 

shall be borne by the party responsible therefor. 

11.4 CLAIMS FOR DAMAGES 

11.4.1 If either party to this Agreement suffers injury or damage to person or property 

because of an act or omission of the other party, of any of the other party's employees or 

agents, or of others for whose acts such party is legally liable, written notice of such 

injury or damage, whether or not insured, shall be given to the other party within a 

reasonable time not exceeding 21 days after first observance. The notice shall provide 

sufficient detail to enable the other party to investigate the matter. If a claim of 

additional cost or time related to this claim is to be asserted, it shall be filed in writing. 

11.S INDEMNIFICATION 

11.5.l To the fullest extent permitted by law, the Design/Builder shall indemnify and 

hold hannless the Owner, Owner's consultants, and agents and employees of any of them 

from and against claims, damages, losses and expenses, including but not limited to 

attorneys' fees, arising out of or resulting from performance of the Work, provided that 

such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or 

death, or to injury to or destruction of tangible property (other than the Work itself) 

including loss of use resulting therefrom, but only to the extent caused in whole or in part 

by negligent acts or omissions of the Design/Builder, anyone directly or indirectly 

employed by the Design/Builder or anyone for whose acts the Design/Builder may be 

liable, regardless of whether or not such claim, damage, loss or expense is caused in part 

by a party indemnified hereunder. Such obligation shall not be construed to negate, 

abridge, or reduce other rights or obligations of indemnity which would otherwise exist 

as to a party or person described in this Paragraph 11.5. 

11.5.2 In claims against any person or entity indemnified under this Paragraph 11.5 by 

an employee of the Design/Builder, anyone directly or indirectly employed by the 

Design/Builder or anyone for whose acts the Design/Builder may be liable, the 

indemnification obligation under this Paragraph 11.5 shall not be limited by a limitation 

on amount or type of damages, compensation or benefits payable by or for the 

Design/Builder under workers' compensation acts, disability benefit acts or other 

employee benefit acts. 

11.6 SUCCESSORS AND ASSIGNS 

11.6.1 The Owner and Design/Builder, respectively, bind themselves, their partners, 

successors, assigns and legal representatives to the other party to this Agreement and to 

the partners, successors and assigns of such other party with respect to all covenants of 

this Agreement. Neither the Owner nor the Design/Builder shall assign this Agreement 

Page 20 of26 

151 
without the written consent of the other. The Owner may assign this Agreement to any 

institutional lender providing construction financing, and the Design/Builder agrees to 

execute all consents reasonably required to facilitate such an assigrunent. If either party 

makes such an assigrunent, that party shall nevertheless remain legally responsible for all 

obligations under this Agreement, unless otherwise agreed by the other party. 

11. 7 TERMINATION OF PROFESSIONAL DESIGN SERVICES 

11.7.1 Prior to termination of the services of the Architect or any other design 

professional designated in this Agreement, the Design/Builder shalJ identify to the Owner 

in writing another architect or other design professional with respect to whom the Owner 

has no reasonable objection, who will provide the services 

originally to have been provided by the Architect or other design professional whose 

services are being terminated. 

11.8 EXTENT OF AGREEMENT 

11.8.1 This Agreement represents the entire agreement between the Owner and the 

Design/Builder and supersedes prior negotiations, representations or agreements, either 

written or oral. This Agreement may be amended only by written instrument and signed 

by both the Owner and the Design/Builder. 

ARTICLE12 

TERMINATION OF mE AGREEMENT 

12.1 TERMINATION BY mE OWNER 

12.1.1 This Agreement may be terminated by the Owner upon 14 days' written notice to 

the Design/Builder in the event that the Project is abandoned. If such termination occurs, 

the Owner shall pay the Design/Builder for Work completed and for proven loss 

sustained upon materials, equipment, tools, and construction equipment and machinery, 

including reasonable profit and applicable damages. 

12.1.2 If the Design/Builder defaults or persistently fails or neglects to carry out the 

Work in accordance with the Contract Documents or fails to perform the provisions of 

this Agreement, the Owner may give written notice that the Owner intends to terminate 

this Agreement. If the Design/Builder fails to correct the defaults, failure or neglect 

within seven (7) days after being given notice, the Owner may then give a second written 

notice and, after an additional seven (7) days, the Owner may without prejudice to any 

other remedy terminate the employment of the Design/Builder and take possession of the 

site and of all materials, equipment, tools and construction equipment and machinery 

thereon owned by the Design/Builder and finish the Work by whatever method the 

Owner may deem expedient. If the unpaid balance of the Contract Sum exceeds the 

expense of finishing the Work and all damages incurred by the Owner, such excess shall 

be paid to the Design/Builder. If the expense of completing the Work and all damages 

incurred by the Owner exceeds the unpaid balance, the Design/Builder shall pay the 

difference to the Owner. This obligation for payment shall survive termination of this 

Agreement. 

Page 21 of26 

152 
12.2 TERMINATION BY THE DESIGN/BUILDER 

12.2.l If the Owner fails to make payment when due, or the work is stopped for 30 days 

by causes outside of the control of the Design/Builder, the Design/Builder may give 

written notice of the Design/Builder's intention to terminate this Agreement or seek 

adjustment in price and time. If the Design/Builder fails to receive payment within seven 

(7) days after receipt of such notice by the Owner, the Design/Builder may give a second 

written notice and, seven (7) days after receipt of such second written notice by the 

Owner, may terminate this Agreement, or the Design/Builder will receive an adjustment 

for price and time, and recover from the Owner payment for Work executed and for 

proven losses sustained or increases anticipated upon materials, equipment, tools, and 

construction equipment and machinery, including reasonable profit and applicable 

damages. 

The owner shall compensate the Design/Builder in accordance with Article 5, Payments, 

and the other provisions of this Agreement as described below. 

ARTICLE13 

BASIS OF COMPENSATION 

13.1 COMPENSATION 

+3-:t:+-F61'--t:he..D.efil&!i!Rnilctr.r'i:: nerfonnance of the Work, as described in Paragraph 3.2 

and including any other services IiSfedin-J\rticle-14.as.p!'rt nflhci;r. ~P.TVir.P.~ thP. OwnP.r 

shall pay the Design/Builder in current funds the Contract Sum as follows: 

The sum of the cost of the Work, including the Design/Builder's fee are guaranteed by the 

Design/Builder as a Stipulated Sum, subject to additions and deductions by changes in 

Work as provided in the Agreement, the Stipulated Sum of Five Million, Seventy-Six 

Thousand, Six Hundred and No cents ($5,076,600.00). In order to comply with the sales 

tax law of the State of Texas, this Agreement shall be considered a separated contract, 

with the Cost of Materials and Equipment to be $2,741.364.00 and the Cost of Services to 

be $2,335.236.00, when combined, the total contract amount is $5,076,600.00. The 

Stipulated Sum includes $100,00.00 for furniture, fixtures and equipment. 

13:T:2-Notwithstanding-afty-provis1en-herei.n.1Q.11)e_~ontrary, any obligations or liabilities 

of any kind of Owner or any of its officers, employees, agents or representatives under 

this Agreement shall be payable solely from the proceeds of the County Jail Public 

Facility Corporation of Willacy County, Texas Project Revenue Bonds, Series 2004, and 

the Construction Account established pursuant to a Trnst Indenture, dated as of the 1st 

day of July, 2003 (the "Indenture''), by and between Owner and U.S. Bank, National 

Association, (the "Trustee"). This Agreement is not intended to create nor does it create 

any liability on the part of the persons or entity referenced in the previous sentenance 

except to the extent such liabilities are paid and can be paid from funds in the above 

referenced constust account. 

Page 22 of26 

153 
ARTICLE 14 

OTHER CONDITIONS AND SERVICES 

14.1 The Basic Services to be performed shall be commenced on June 29, 2004 and, 

subject to authorized adjustments and to delays not caused by the Design/Builder, 

Substantial Completion shall be achieved in the contract time of three hundred and 

sixty-five (365) calendar days (Contract Time). 

Should the Design/Builder fail to substantially complete the Project within the Contract 

Time, subject to extensions pursuant to this Agreement, the Design/Builder agrees to 

pay the Owner as liquidated damages for each and everyday of delay beyond the 

Contract Time the sum of One Thousand Nine Hundred Seventy Seven Dollars and No 

Cents ($1,977.00) per day, which sum is hereby, in view of the difficulty of estimating 

such damages, agreed upon, fixed, and determined by the parties hereto, as the 

liquidated damages that the Owner will suffer by such default and not by way of 

penalty, and shall be deducted as such from the "Balance Due Design Builder." 

14.2 The Basic Services beyond those described in Article 3 are as follows: 

NONE 

14.3 Additional Services beyond those described in Article 3 are as follows: 

NONE 

14.4 The Design/Builder shall submit an Application for Payment on the First (1st) 

day of each month. 

14.5 The Design/Builder shall provide monthly progress reports with current photographic 

documentation with each pay request. 

NONE 

14.6 The Design/Builder shall provide documentation of acceptable roofing 

preparation and installation from roofing manufacturer prior to substantial 

completion, and during installation, inspection of roofing continuously to insure 

compliance. 

14.7 The Design/Builder will provide updated graphic monthly schedule. 

14.8 To the extent that any Owner covenants contained in this Agreement or the 

performance thereof conflict with the provisions(or performance thereof) of the 

Indenture Agreement, dated as of , by and between the 

Owner and Hudspeth County, Texas, the provisions of the Indenture Agreement 

shall control. 

Page 23of26 

154 
This Agreement entered into as of the day and year first written above. 

OWNER 

County Jail Public Facility Corporation of 

Willacy County, Texas 

DESIGN/BUILDER 

!(~~ 1- { . -I 

!Kendall P~nney, President of KGP' 

Management, LLC .' 

Hale-Mills Construction, Ltd. I 

Page24of26 

155 
EXHIBIT 1 

ACORD. CERTIFICATE OF LIABILITY INSURANCE ftt!Oal"' °"IUllODIW'Y1 

3- '1 06/24/04 

!Ibo 'fr;m•p~tioa. aro11p, Lt<l. 

11111 Wl.lcr••t OrlK"n, tl25 

Hoaaton TX 71042 

l'lloot:713-785-G7a5 Fax:713-185-8785 

..... ,,."° 

A BC.!10006745 

lC 

x 

TllllCERTIFIC4TlllllSUEDASAllATTUOFltl..._TIDN 

ONLY AllD COltPl!llS llOtUOHT$ UJllOlt Tiii! Cl!llT1f1CATI! lfOlilEll. THl!I cEJtnflCAT'! DOU NOl' AMEND, !XTlllO 011 

AL TeR THE COVERAGl!AFfO!IOl!D ·~ Tiie l'OllCll!S BElOW. 

INSllRl!M AFFOROING CCVl!RAGE 

llcottadale Ina. Co.• 

C' ... Ud •••l~l.Of:J !Alli C'int. 

Col01111al County Mlltual 

Texas wutua1 In•. co. 

09/'J0/03 : 011/30/04 

I 

.. , ........... ~--

.. '• 

11,000.000 • 

t 1?0. •. 000 

15,1100. 

. 11,000,000. 

ra.ooo,~4!~· 

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CAG00123't!i ... Ot/30/03 , 011/30/04 11,000.~!i. 

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15,000,000. 

1s,ooo,.Oil_. 

I 

B ~ taUl.022504 

:• 'I J Jr t--.~,W<J-A-•1'll-.-.~---U'n<m--lol-O ~-··----·-------·-------'l-----"'-Jt-.-.-,.--1--,,..-.-------I 

o ,~;· .. ••L~~.~ , sB110001onou 10121/oJ 1

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:: "·:.'.'" . : : i .,,;· .,~ :!:::::::: 

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DS5H414A : 01/lO/OI I OJ/20/05 i 015,000,000 

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aecexenoe·-count:r Jul., <'....,rtL~1cate Kolder 1• Ulc:111d*' aa 111t Mdi.t.101utl 

1Aa1u::o4 iaa HIPft't• Geaezal Lnb:l.11tl( ucl IOivei: oE S11bz09atlou app1i••· 

Hor._•• c-.peuati- ?al.icy pi:ovidoa -v-ge :fo'1 claaa ~ HOt -

k1JG1&t;ivo Oteic"•. 

Cl!'R'JlflCATI! llOLllEll 

wi11~ay Co!Ulty ?llb1ic ro:aci1ity C:ocporaUon 

546 Mht IU.d.fl190 Street 1'4~DdVil1e 'l:lC 71580 

C:IUICEl.LATIOll 

~AO AHf ~ 1., .\I~ CSJCMIO•OVC1f.lal' C/.JrilcaLIO Mf'OPill l'WliJAA:TIQH 

°"1'! n-M:;, i'MH18..ltb r41UM.JI ..... tNmA¥Gll 10 iMM. 3~ DA'f1 WRtm'lt 

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lilPOll 1.0 oaUO.AllC.fi CR IJAALITY Cl ..,, KltlO lPzJN M NJUMA, fTI IGINTS :::ia 

........ .,...,.,,.. 

Page25 of26 

156 
ACORD. CERTIFICATE OF LIABILITY INSURANCE 

!l'bc '1'.t:."lllSpoZ't~tJ.OD CJ.t:oup, X.td. 

11111 w11crest Gre<C"n, IJ25 

Kou•toD 2'X 77042 

Phone:713-785-678S rax:11a-1es-11as 

........ o 

._ _________ -----··" ------·-· COllERAOt!S 

.. . ~ 

TI411CER11FICATE • ISIUEOA8A llAT11!R Of'ntl'ORMA1ION 

ONLY AHO COIWPl,_S HO RlGltTll Ul'Olt THI! Cl!ft.Tlf!CATI!: 

HOLCE1!. TNll C:!Anl'JCAff OOIES NOT AlllEND. U.TENO 011 

Al. TEii THE COVERAGE Aff'Olt::JIOD BY fHll l'Ot.K:ll!ll BUOW. 

INSVRl!IUI UFORCllMG C:OVIHIAt.E 

Scottsdale XII•. co.• 

C'1p1ld s,u;•_~t.r !N Hep_. 

~lon1al Couuty Mutual 

Texas Mutual I~•· Co, . - -- - ,.,.., .... ,., •• ,,;. ce• ~.,. ...... _________ _, 

---'-'-''-~~-~---·~~a•-""'~.,.~f'~·~~"'-"~'?'•'----·-----'-M"-•-----~-­

A. x llCJ000&"145 09/30/03 i 09/30/04 

. x 

, .. , . ...,..,.._.....,_ 

. 

.. 

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18,000 • 

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12,000,000 . 

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- ---"-----·------~-- .,,.... ....... 1 ...... rrt -- ---·-------'-------------------· -----·· 

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~SCOM'ttdAT-.::M ANO 

D e: ....... O'"'E'ltlt L.!MM..:v I 

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I 

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j 

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a , auildK• • at.re Ol/JOID•' OJ/J0/05. ·- Oac:r. t1s,ooo,ooo 

, ___ .,_,.,. ~--"eo.T•tt.1:•~ ·'A>~·:a ··~·,u.;;ai~.,.-Oil;:li-"'. =-------------------1 

Rof'.1tr•11ee--Cou11ty Jail. Cert1t1eau Koldltt' 1• inaluc!H aa a;n Additiooal 

:i:aauHd u reapects eeuerlll Liabtl1ty ud wa1-ver ~ lllbr09ation applie•. 

Koskera• CClapU&Atlon !OJ.icy prOVidea CIOVeft§O ;for ClU.f .::O!N '8011 -

~'llt.1..,. otticexa. 

CEllTIFICATlr lfOLDFR 

U.5. llllnJc Rational. Aaaociation 

l&D 11th at.ra.t, Suite ftSO 

M<t.t.l Stop DN-CO-'N 

t>wuuax c:o 80242 

tHo,.l\b AW cw,,.~ CA:tc1n•10 PQ.H;lit: .. C:&H!Jl.LIO ll'ON nc U.PJt.A110ff 

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"'"""""''~) 

Page 26 of26 

157 
I AJA Document G704'" - 2000 

Certificate of Substantial Completion 

PROJECT: 

(Name and addres.v); 

Willacy County Sheriffs Office 

1371 Industrial Park Drive 

Raymondville, Texas 78580 

TO OWNER: 

(Name and address): 

County Jail Public Facility Corporation 

of Willacy County, Texas 

546 West Hildalgo 

Raymondville, Teicas 78580 

PROJECT NUMBER: /04-01 

CONTRACT FOR: General Construction 

CONTRACT DATE: June 29, 2004 

TO CONTRACTOR: 

(Name and address): 

Hale-Mills Construction, Ltd. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77025 

PROJECT OR PORTION OF THE PROJECT DESIGNATED FOR PARTIAL OCCUPANCY OR USE SHALL INCLUDE: 

Entire Project 

Hale-Mills 

APR l 3 70W1 

Construction, Ltd 

OWNER: 181 

ARCHITECT: 181 

CONTRACTOR: 181 

FIELD: 181 

OTHER:O 

The Work perfonned under this Contract has been reviewed and found, to the Architect's best knowledge, information and belief, 

to be substantially complete. Substantial Completion is the stage in the progress of the Work when the Work or designated 

portion 1s sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for 

its intended use. The date of Substantial Completion of the Project or portion designated above is the date of issuance established 

by this Certificate, which is also the date of commencement of applicable warranties required by the Contract Documents, except 

as stated below: 

Warranty 

March 30, 2005 

Date of Commencement 

March 30, 2005 

FCCunyCorporation ~_-ri~__.. ~/5 /05 

-AR-CH---'ITE--CT____,______ ~ .....,.D-AT=e-1-6F,,.....,J5s~s-=uA:;....,.biC~e--:;_.,;:=---

A list of items to be completed or corrected is auached hereto. The failure to include any items on such list docs not alter the 

responsibility of the Contractor to complete all Work in accordance with the Contract Documents. Unless otherwise agreed lo in 

writing, the date of commencement of warranties for items on the allached list will be the date of issuance of the final Certificate 

of Payment or the date of final payment. 

Cost estimate of Work that is Incomplete or defective: s o.oo 

The Contractor will complete or correct the ork on e ist of items attached hereto within 111irty ( 30) days from the above 

date of Substantial Completion. . J ) 

Hale-Mills Construction, Ltd. ' • ~ f {; ~ CONTRACTOR DA E/ I ... The Owner accepts the Work or designated portion as substantially co cte and will assume full possession at 10:00 a.m. (time) 

on March 30, 2005 (date). 

County Jail Public Facility 

Corporation of Willacy County, 

Teicas 

OWNER 

AIA Document G704TI• -2000. Copyright C) 1963, 1978, 1992 and 2000 by The American lnstltule ol Architects. All rights res&rved. WA!'NING: This 

AIA9 Document Is protected by U.S. Cop~lght Law and 1n1ernetlonal Trealles. Unauthorized reproduction or distribution of this AIA Document, or 1 

any portion of It, may result In &evete clvll and crlmJnal penalties, and will be prosecuted to the maximum extent possible under the law. This 

document was produced by AIA software at 13:51 :19 on 04/01/2005 under Order No.1000120966_ 1 which expires on 5/28/2005, and Is not for resale. 

uaer Notea: (885531343) 

158 
EXHIBIT C 
Standard Form of Agreement Between 

Owner and Design-Builder - Lump Sum 

This document has been amended and revised from its standard form. 

This AGREEMENT is made as of the /'lJ.c.,day of 1 L in the year of 2006, by and 

between the following parties, for services in conne~ with the Project identified 

below. 

OWNER: 

The Willacy County Loca] Government Corporation 

190 North 3rc1 Street 

Courthouse Annex 

Raymondville, Texas 78580 

DESIGN-BUILDER: 

HMC Contracting South Texas, L.L.C. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77025-1044 

PROJECT: 

Willacy County 2000 Bed ICE Facility 

WiUacy County, Texas 

In consideration of the mutual covenants and obJigations contained herein, Owner and 

Design-Builder agree as set forth herein. 

Article l 

Scope of Work 

1.1 Design-Builder shall perform all design and construction services, and provide all 

material, equipment, tools and labor, necessary to complete the Work described in 

and reasonably inferable from the Contract Documents. 

154912 2068.1 EXHIBIT 

160 
1.2 A description of the Project is attached as part of Exhibit A. This description is for 

general purposes only - the Project may have different technical attributes not 

described in this Exhibit or described differently in this Exhibit. 

Article 2 

Contract Documents 

2.1 The Contract Documents are comprised of the following: 

.1 All written modifications, amendments and change m:dei:s. to this 

Agreement issued in accordance with DBIA Document J'ln '\~'\ Standard 

Form of General Conditions of Contract Between Owner-and DesignBuilder (1998 Edition) as amended ("General Conditions of Contract"); 

.2 This Agreement, including all exhibits and attachments1 executed by 

Owner and Design-Builder; 

.3 The General Conditions of Contract; 

.4 Construction Documents prepared in accordance with Section 2.4 of the 

General Conditions of Contract along with a description of the Project, 

attached as Exhibit A; 

.5 Attached as Exhibit B, Design-Builder's Applications for Payment. 

.6 Attached Exhibit C, Design-Builder's Certificate of Insurance . 

. 7 Attached Exhibit D, Payment and Performance Bonds . 

. 8 Attached as Exhibit E, the list of drawings as of the effective date of this 

Agreemen~ which may be modified. 

Article 3 

Interpretation and Intent 

3.1 The Contract Documents are intended to permit the parties to complete the Work and 

all obligations required by the Contract Documents within the Contract Time(s) for the 

Contract Price. The Contract Documents are intended to be complementary and 

interpreted in harmony so as to avoid conflict, with words and phrases interpreted in a 

manner consistent with construction and design industry standards. In the event of any 

inconsistency, conflict, or ambiguity between or among the Contract Documents, the 

Contract Documents shall take precedence in the order in which they are listed in Section 

2.1 hereof. 

3.2 Terms, words and phrases used in the Contract Documents, including this Agreement, 

shall have the meanings given them in the General Conditions of Contract. 

154912 2066.1 2 

161 
3.3 The Contract Documents form the entire agreement between Owner and DesignBuilder and by incorporation herein are as fully binding on the parties as if repeated 

herein. No oral representations or other agreements regarding the Work have been made 

by the parties except as specifically stated in the Contract Documents. 

Article 4 

Ownership of Work Product 

4.1 Work Product. All drawings, specifications and other documents and electronic data 

furnished by Design-Builder to Owner under this Agreement ("Work Product") are 

deemed to be instruments of service and Design-Builder shall retain the ownership and 

property interests therein, including the copyrights thereto. 

4.2 Upon Owner's payment in full for all Work perfonned under the Contract 

Documents, the drawings, specifications, models, renderings, work product, instruments 

of service and other documents shall become the property of the Owner. Owner may 

utilize such drawings, specifications, models, renderings, work product, instruments of 

service and other documents only for the repair, maintenance, modification, expansion or 

renovation of the Project. Nevertheless, it is understood by Owner that all such 

Drawings, Specifications, models, renderings, work product, instruments of service and 

other documents may be inappropriate for use in the construction of any other project. 

Therefore, Design-Builder shall not be responsible for the use or workability of such 

drawings, specifications, models, renderings, work product, instruments of service and 

other documents in connection with any project other than the Project for which they 

were specifically prepared. OWNER SHALL INDEMNIFY, DEFEND AND HOLD 

DESIGN-BUILDER HARMLESS OF AND FROM ANY AND ALL CLAIMS, 

DEMANDS AND CAUSES OF ACTION, INCLUDING ATIORNEY'S FEES AND 

LITIGATION COSTS, ARISING OUT OR RELATING TO OWNER'S USE OF 

DRAWINGS, SPECIFICATIONS, MODELS, RENDERINGS, WORK PRODUCT, 

INSTRUMENTS OF SERVICE AND OTHER DOCUMENT FOR THIS PROJECT ON 

ANY OTHER PROJECT. 

Article 5 

Contract Time 

5 .1 Date of Commencement. The Date of Commencement shall be June 21, 2006 ("Date 

of Commencement"). 

5.2 Substantial Completion and Final Completion 

5.2.1 The Project will be completed in two phases. The First Phase ("Phase l ")shall be 

the substantial completion of facilities (excluding the support building) to be able house 

500 inmates and shall be substantially completed within 40 days of the Date of 

Commencement. The Second Phase ("Phase 2") will be the substantial completion of 

faci1ities to be able to house an additional 1500 imnates (for a total of 2000 inmates), as 

well as substantial completion of the support building, within 90 days of the Date of 

154912 2068.1 3 

162 
Commencement. The substantial completion of Phase 2 shall be referred to in the 

Contract Documents as the "Scheduled Substantial Completion Date." 

5.2.2 Intentionally left blank. 

5.2.3 Final Completion of the Work, including the support building, shall be achieved 

120 days after the Date of Commencement. 

5.2.4 AU of the dates set forth in this Article 5 ("Contract Time(s)") shall be subject to 

adjustment in accordance with the General Conditions of Contract. The Contract Time 

shall be extended if ICE grants time extensions to Owner and/or Willacy County, Texas, 

for the same amount of time granted by ICE, unless agreed otherwise. 

5.3 Time is of the Essence. Owner and Design-Builder mutually agree that time is of the 

essence with respect to the dates and times set forth in the Contract Documents. 

5.4 Liquidated Damages. Design-Builder understands that if Substantial Completion is 

not attained by the Scheduled Substantial Completion Date, Owner will suffer damages 

which are difficult to determine and accurately specify. Design-Builder agrees that if 

Substantial Completion is not attained by thirty (30) days after the Scheduled Substantial 

Completion Date (the "LO Date"), Designer-Builder shall pay Owner Twenty Five 

Thousand Dollars ($25,000) as liquidated damages for each day that Substantial 

Completion extends beyond the LD Date. The liquidated damages provided herein shall 

be in lieu of all liability for any and all extra costs, losses, expenses, claims, penalties and 

any other damages, whether special or consequential, and of whatsoever nature incurred 

by Owner which are occasioned by any delay in achieving Substantial Completion. 

Article 6 

Contract Price 

6.1 Contract Price. Owner shall direct the Trustee to pay Design-Builder's Applications 

for Payment attached to this Agreement in the total sum of Fifty Million Dollars 

($50,000,000) ("Contract Price"), subject to adjustments made in accordance with the 

General Conditions of Contract. 

6.2 Materials incorporated into this project are exempt from State Sales tax according to 

provisions of the Texas Tax Code, Chapter 151, Subsection H. The Owner shall provide 

to Design-Builder a limited sales, excise and use tax permit or exemption certificate 

which shall enable Design-Builder to buy the materials to be incorporated into the Work 

without paying tax due at time of purchase. This is a separated contract as that term is 

used the Texas Tax Code and applicable Texas law and the Owner agrees and 

acknowledges that it is purchasing the material for the Work separately from the labor for 

the Work. Material for the Work totals $19,997,000 and labor for the Work totals 

$30,003,000. This paragraph is meant to meet the separated contract definition under the 

Texas Tax Code and the laws of Texas. 

154912 2068.1 4 

163 
6.3. Upon Substantial Completion of the Project, Design Builder will provide Owner a 

certification that the Project has been substantially completed. Design-Builder will also 

provide a final release for all payments made by Owner and a consent of surety. Upon 

Final Completion, Design-Builder shall supply a list of all subcontractors utilized by 

Design-Builder and all applicable warranties. 

6.4 Design-Builder guarantees to complete the Project for the Contract Price, which 

cannot be modified by either party except by a Change Order signed by both parties 

pursuant to Article 9 of the General Conditions. 

7 .1 Progress Payments 

Article 7 

Procedure for Payment 

7.1.l Design-Builder's Applications for Payment are attached to this Agreement as 

Exhibit B. By the execution of this Agreement, Owner hereby approves the Applications 

for Payment and agrees to take all actions necessary to fund such Applications for 

Payment. 

7.1.2 Owner agrees that the Trustee can pay the Applications for Payment upon 

submission by Design-Builder of the Applications for Payment to the Trustee. 

7 .2 Source of Funds. Design-Builder and Owner acknowledge and agree that the funding 

for payments due under this Agreement shall come from the Construction Fund 

established pursuant to the Trust Indenture by the Trustee, U.S. Banlc, N.A. (the 

"Trustee"). 

7.3 (Intentionally Left Blank) 

7 .4 Record Keeping and Finance Controls. In light of the fact that this is a stipulated swn 

contract, Design-Builder shall have no obligation to keep records, books, correspondence, 

receipts, subcontracts, purchase orders, vouchers, memoranda or other data relating to the 

Work and no records shall be open for inspection by any party. Design-Builder agrees to 

cooperate with Owner in coajunction with any reporting required of Owner by ICE or the 

Federal Government in connection with the Project. 

154912 2068.1 

Article 8 

(Intentionally Left Blank) 

Article 9 

Representatives of the Parties 

5 

164 
9 .1 Owner's Representatives 

9 .1.1 Owner designates the individuals listed below as its Senior Representatives 

("Owner's Senior Representatives"), which such individuals have the authority and 

responsibility for avoiding and resolving disputes under Section 10.2.3 of the General 

Conditions of Contract: 

Emilio Vera, President 

Abiel Cantu, Vice-President 

Aurelio Guerra, Secretarytrreasurer 

Noe Loya 

Simon Salinas 

9.1.2 Owner designates the individual listed below as its Owner's Representative, which 

individual has the authority and responsibility set forth in Section 3.4 of the General 

Conditions of Contract: (Identify individual's name, title, address and telephone numbers) 

Mr. Emilio Vera, President 

The Willacy County Local Government Corporation 

190 North 3rd Street 

Courthouse Annex 

Raymondville, Texas 78580 

9 .1.3. Owner may designate another representatfVe by providing written notice to DesignBuilder (the "Assigned Representative"). Design-Builder shall reimburse Owner for 

Assigned Representative's costs, not to exceed $30,000. 

9 .2 Design-Builder's Representatives 

9.2.1 Design-Builder designates the individual listed below as its Senior Representative 

("Design-Builder's Senior Representative"), which individual has the authority and 

responsibility for avoiding and resolving disputes under Section 10.2.3 of the General 

Conditions of Contract: 

Mr. Philip K. Packer 

President ofHMC Contracting South Texas, L.L.C. 

4130 Bellaire Blvd., Suite 210 

Houston, Texas 77025-1044 

(713) 665-1100 

9.2.2 Design-Builder designates the individual listed below as its Design-Builder's 

Representative, which individual has the authority and responsibility set forth in Section 

2.1. l of the General Conditions of Contract: 

Mr. Philip K. Packer 

President of HMC Contracting South Texas, L.L.C. 

4130 Bellaire Blvd., Suite 210 

154912 2068.1 6 

165 
Houston, Texas 77025-1044 

(713) 665-1100 

Article 10 

Bonds and Insurance 

10.1 Insurance. Design-Builder shall procure in accordance with Article 5 of the General 

Conditions of Contract the insurance coverages set forth iri Exhibit C. 

10.2 Bonds and Other Perfonnance Security. Design-Builder shall provide the folJowing 

performance bond and labor and material payment bond or other performance security: 

See Exhibit D. 

Article 11 

Other Provisions 

11.1 Other provisions, if any, are as follows: (Insert any additional provisions) 

11.1.1 Willacy County, Texas shall be a direct, third party beneficiary of 

this Agreement and shall be bound by the dispute resolution 

procedures contained in Article 10 of the General Conditions of the 

Contract. 

In executing this Agreement, Owner and Design-Builder each individually represents that 

it has the necessary financial resources to fulfill its obligations under this Agreement, and 

each has the necessary corporate approvals to execute this Agreement, and perform the 

services described herein. 

OWNER: 

THE WILLACY COUNTY LOCAL 

GOVERNMENT CORPORATION 

154912 2068.1 7 

DESIGN-BUILDER: 

HMC CONTRACTING 

SOUTI-1 TEXAS, L.L.C. 

166 
7-- . . ~· ~/ C .. ~&' ~,- President 

.) _./ 

154912 2068.1 8 

167 
Sheet 

Cl of B 

C2of8 

C3of B 

C4of8 

CS of B 

C6 of B 

C7of 8 

CB ofB 

A0.1 

A1.0 

Al.1 

A2.1 

A2.1A-B 

A2.2 

A2.3 

A2.4 

A3.1 

A8.1 

51.0 

52.0 

52.1 

52.2 

P06126.0 

P06126.1 

P06126.2 

S-1 

S-2 

5-3 

EXHIBIT "An 

LIST OF DRAWINGS 

Willacy 2000 Bed Federal Temporary Detention Facility 

1800 Industrial Drive 

Raymondville, Texas 78580 

Title Date 

Sheet Title 06/14 '06 

Gradina Plan 06/14 06 

Dimension Control Plan 06J '14 06 

SWPPP 06 14 106 

Water and Sanltarv Sewer Plan 06, 14 06 

S.H. 186 R.O. Water and Sanltarv Sewer Aerial 06/14, 06 

Off-Site Water and Sanitarv Sewer Plan 06/14, '06 

Sanitary Sewer Forced Main from S.H. 186 06/14 06 

General Information 06/14/06 

Phasina Site Plan 06/14/06 

Site Plans and Details 06/14/06 

Overall Admin Floor Plan 06/14 06 

Admln Aoor Plan Areas "A" and "B" 06/14/06 

Housina Floor Plan 06/14/06 

Overall Admin Reflected CellinQ Plan 06/14/06 

Admin Reflected Celling Plan Areas "A" and "B" 06/14/06 

Admln Exterior Efevations 06/14/06 

Wall tvoes/Miflwork elevatlons/Millwork details 06/14/06 

General Notes 06/14/06 

Foundation Plan and Sections 06/14/06 

Foundation Plan 06/14/06 

Foundation Sections 06/14/06 

70.0' x 205.0' Corrections Facllitv 06/13/06 

Column Base Lavout 06/13/06 

70.0' x 205.0' Concrete Details 06/13/06 

70.0' Structures Section and Base Details 06/14/06 

70.0' Structure Purlln and Solice Details 06/14/06 

70.0' Hemispherical End Details 06/14/06 

Addendum 

168 
HMC Contracting South Texas, L.L.C. 

SOLD TO: The Willacy County Local Government Corporation 

546 W. Hidalgo 

Raymondville, Texas 78580 

Project Willacy County 2000 Bed ICE Facility 

Pay Application No. 1 

Invoice Date: June 22, 2006 

Description 

Trustee to fund@ Financial Closing 

WIRING INSTRUCTIONS 

FROST NATIONAL BANK 

HOUSTON,TEXAS77040 

ROUTINGNO.: 114000093 

HMC CONTRACTING SOUTH TEXAS, L.L.C. 

ACCOUNTNO.: 5099-46349 

Amount 

$25,000,000.00 

SUB-TOTAL $25,000,000.00 

TOTAL $25,000,000.00 

Submitted to the Trustee pursuant to Article 7.1.2, for the payment due from the Trustee. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77027 

Telephone 713.665.1100 Facsimile 713.665.4944 

169 
HMC Contracting South Texas, L.L.C. 

SOLD TO: The Willacy County Local Government Corporation 

546 W. Hidalgo 

Raymondville, Texas 78580 

Project Willacy County 2000 Bed ICE Facility 

Pay Application No. 2 

Invoice Date: June 22, 2006 

Description 

Trustee to fund 30 days after payment of Pay Application No. 1 

WIRING INSTRUCTIONS 

FROST NATIONAL BANK 

HOUSTON, TEXAS 77040 

ROUTING No.: 114000093 

HMC CONTRACTING SOUTH TEXAS, L.L.C. 

ACCOUNTNO.: 5099-46349 

SUB-TOTAL 

TOTAL 

Amount 

$12,500,000.00 

$12,500,000.00 

$12,500,000.00 

Submitted to the Trustee pursuant to Article 7.1.2, for the payment due from the Trustee. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77027 

Telephone 713.665.1100 Facsimile 713.665.4944 

170 
HMC Contracting South Texas, L.L.C. 

SOLD TO: The Willacy County Local Government Corporation 

546 W. Hidalgo 

Raymondville, Texas 78580 

Project: Willacy County 2000 Bed ICE Facility 

Pay Application No. 3 

Invoice Date: June '12, 2006 

Description 

Trustee to fund 30 days after payment of Pay Application No. 2 

WIRING INSTRUCTIONS 

FROSTNATJONAL BANK 

HOUSTON,TEXAS77040 

ROUTING No.: 114000093 

HMC CONTRACTING SOUTH TEXAS, L.L.C. 

ACCOUNT No.: 5099-46349 

SUB-TOTAL 

TOTAL 

Amount 

$12,500,000.00 

$12,500,000.00 

$12,500,000.00 

Submitted to the Trustee pursuant to Article 7.1.2, for the payment due from the Trustee. 

4130 Bellaire Boulevard, Suite 210 

Houston, Texas 77027 

Telephone 713.665.1100 Facsimile 713.665.4944 

171 
ACORD. CERTIFICATE OF LIABILITY INSURANCE CSR JN I OAT& (MMIDOIYYYYJ 

3-HALJ:M 07/07/06 I l'IWOUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION 

ONLY AND CONFERS NO RIGHTS UPON THE C!RT1FICATE 

le ~ransportation Group, Ltd. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 

illll Wilcrest Green, 1325 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 

Houston TX 77042 

Phone:713-785-6785 rax:713-7&5-B7&5 INSURERS AFFORDING COVERAGE NAIC# 

IN~ INSURER"'- ll•t-t .. .l'uqlUo JdnH z .... 

INSURERS: 

HMC Contractin9 South nxas. INSURERC: LLC 30 Bellaire l~vd. 1210 -·-- Houston TX 770 INSURERO: 

INSURERE 

COVERAGES 

THE POLICIES Of INSUR!'J>ICE LISTED BEi.OW HAVE BEEN ISSUED TO THE INSURED NAMED /ISOVE FOR THE POI.ICY PERIOD INDICATED NOTWITI ~ST)ljl/()ING 

/>NY REOUIRE~NT. TERM OR CONDITION OF /'HI CONTRACT OR OTHER OOCLMENT WITii RESPECT TO WICH THIS CERTIFICATE MAY BE ISSUED OR 

MAY PERTAIN, THE INSURAJ>iCE AFFORCEO BY TH: POLICIES DESCRIBED HEREIN IS SUB..ECT TO ALL THE TERMS. EXCLLSIONS AND CONDfTIONS Of SUCH 

POLICIES AGGREGATE LIMITS SliO'l\"N MAY HAVE BffN REDUCED DY PAID CLAIMS 

i.m ~ 'l'll'E OF -..RANCE POLICY NUMBER Dll11i .~ ... 11AT1i IMllllWm') LIMITS 

GENERAL UA81UTY EACH OCCURRENCE 

- COMMERCIAL GENERAL LIABILITY ~(&oCN.nc.1 ' s - :J CLAIMS MADE D OCCl.R ~D EXP (Any one person) $ 

- >---· 

PERSON.al. & ADV 1"4.AJRY 

- • ·- GENERAL AGGREGATE $ 

-

GENt AGGREGAlE LIMIT l'PPllES PER PROOUCTS • CO"IPIOP AGG s 

-1POLICYn~ nLOC -----

AUTOMOBILE LIABILITY ,_.. Cot.elNED SINGLE LIMIT (Ee accident) $ ANY ALITO 

- ALL OWNED ALITOS BOOIL Y INJURY - ' SCHEDULED ALITOS {Pe< person) 

- HIRED AUTOS ,.._ EIODIL Y INJl.RV $ 

NON-OWNt;ll !WTOS (Per 1cc1dertl ,.._ 

,.._ PROPERTY DA'llAGE ' (Per eccidort) 

llARAGEUABLllY AUTO ONL V • EAACCIDENT Fl ' ANY AUTO OTHER JtWi EAACC 

AUTOONLV: AGG ' $ 

liXCE5&1UMBRELLA LIASILl'IY EACH OCCURRENCE 

:Joccun D CLAIMS r.wJE ' -·· 

AGGREGATE ' =i ' DEOUCTIBLE $ -·~' 

RETENflON $ I 

WORKERS COMPENSATION NID lrciRV'Lw I IVEit Efil'LOYERS' LIABILITY E L EACH ACCIDENT $ ANY PROPRIETOflA"AATNER/EXECUTIVE OfflCERIMEhEER EXO.UDEO? E L. DISEASE • EA EMPLOYEE 

If VU•. doscr1be tnder ' SPECIAL PROVISIONS b- EL. DISEASE· POLICY LIMIT I 

OTHl!R 

A suilders Risk IMC 120667643 001 07/07/06 11/07/06 Per occ. $50,000,000 

Wind oco. $10,000,000 , w~-· "" ,,_,OF QPERA,.....,.. f LOC:A11yow r ._.es f Y• 

,......,_ ae: Willacy County 2000 Bed ICB !'acility. 

Deductible•: $50,000 per occurrence; $250,000 or Sl of the Total Value• 

Installed Of the project(s) suffering loss at the time of loss whichever i• 

greAter. 

CERTIFICATE HOLDER 

Willacy County Public Facility 

Corporation 

546 w. Hir:Salgo street 

Raymondville, TX 78580 

ACORD 2512001/Dll} 

WILCllY 

CANCELLATION 

SHOUl.11 Nff Of THE ABOVE DESCRIBED POLICES BE CANCELLED BEFORll TI-E EXPIRATION 

DATE THEREOF. TIE ISSUING IN8URM WILL ENDEAVOR TO MAIL 30 DAYS wmTEN 

NOTICE TO THE CERTIFICATE HOl.DER NAMED TO THE l.&FT, BL.IT FAILURE TO DO SO SHALL 

IMPOIE NO OBUOATION OR LIABILl'IY OF Ntf KlND UPON TME INSURER, ITS AGEHTS OR 

RE!PRESEHTATIVE8. 

@ACORD CORPORATION 1988 

172 
AC080. CERTIFICATE OF LIABILITY INSURANCE CSR .JN I DAlli fMMIDDNYYYI 

3-IUU.DS 07/07/06 

IPROOUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION 

ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE 

~e Transportation Group, Ltd. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXT!ND OR 

11111 Wilcrest Green, 1325 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 

Houston '1'X 77042 

Phone:713-785-6785 rax:713-7B5-B785 INSURERS AFFORDING COVERAOE NAIC# ·--~ INSURED INSURER A: W•1tchMte1: Sut:plus Lin•• lnJ.. 

INSURERS 

HMC contracting south INSURERC; Texas. LLC 4130 Bellai~e Blvd. #210 INSURERD: Houston TX 7025 INSURER E' 

COVElllAGES 

n£ POLICIES Of INSl.RANCE LISTED BElOW HAVE BEEN ISSUED TO THE INS!JlED NAMED /'BOVE FOR Tl-IE POLICY PERIOD INDICATED NOTWITHSTANDING 

ANY REQUIREMENT. TERM OR COfl[)JnON Of N>IV CONTRACT OR 01lER DOCUMENT WITrl RESPECT TO WHICH Tl-115 CERTIFICATE lllAY BE ISSUED OR 

MAY PERTAIN. THE INSU1ANCE Af'FORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SIJCH 

POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS 

"LiR NSRi TIPE OF INSURANCE POl.ICf NUMBER i>Aii~~ .... UATE•-u~ L!Mln 

GENERAL LIABIUTY EACH OCCURRENCE $ 

- COMMER<: 1AL GENERAL l IABILllY PR£MISES~"::;~., $ 

- :=J CLAIMS MADE D OCCUR 

·- MEO EXP (Any one person) $ ._ PERSONAL & NJV INJLA1Y $ 

- GENERAi. AOORFGAlE $ 

-GENt. AGGREGATE LIMIT APPLIES PER PRODUCTS • COWP/OP AGG 

n POLICY r111& nlOC ' AVTOMOBILE LIAlllLITY COMBll'ED SING! E LIMIT - [Ee SCCldOnl) $ Nl'INJTO 

- H.l D'MED AIJfOS BOOIL Y IN..URY - (Per pmon) $ !iOElll.lEO AUfOS -- ···---- HIREDMJTO& BOOIL Y INJURY - {Per acclaert) ' NCll+O't'IM!O AIJl'OS --

- PROPERTY DAA'ACE {Per ecctderi) • GARAGE UABUTY AUTO OM. Y • EA ACCIDENT $ 

RANYl'JJTO 

----- 011-<ER THN>I EAACC 

AUTO ONLY· N3G ' • EXCESSIUlllllREUA LIABllllY EACH OCCURRENCE 

:J OCCUR D CLAIMS M'IDE AGGREGATE $ ' 

$ =i DEDUCTIBLE 

RElENTION $ ' • WORKER8 COMPENSATION AND lrciiW i:iMiiS I 1-Eii EMPLOYER8' UABll.rrY EL EACH ACCIDENT $ /WY PROPRIETOR/PllITTNER/EXECUTlVE OFFICERMB<f!ER EXCIUOED? El DISEASE· EA EMPLOYEE s ~·-Lnllf CIM. PAOYISION$ below EL DISEASE· POI.ICY LIMIT 

'"""" ' 

A Builders aisk IMC 120667643 001 07/07/06 11/07/06 Per Occ. $50,000,000 

Kind Occ. $10,000,000 DESCl<ll"'TION w ~ '' L.....,.,......, "'"'"'ES • ,... .. Lv....,... ADDEu D I !W&Cw. ffiOVISlONS 

Re: Willacy county 2000 Bed ICE racility. 

Deductil:>les: $50,000 per occurrence; $250,000 o.r 5% of the Total values 

Installed Cf the projec::t(s) suffering loss at the time Of loss whichever is 

greater. 

CERTlflCATE HOLDER 

u.s. Bank National ASsociation 

As 'l'rustee 

950 17th Street, Suite 650 

Mail stop CNDT 0665 

Denver, CO 80202 

ACORD 25 12001/08) 

USBADl!!N 

CANCELLATION 

SHOULD Nfi OF THE ABOVE DESCRIBED l'OLICIE9 BE ClololCELLED BEFORE TIE E~PIRATION 

DATE THEREOF, THE 188UING INSURER WLL ENDEAVOR TO MAL 30 DAYS Wllll"TEN 

NOTICE TO THE CER11~1CATE MOLDER NAMED TO THE LEFT, BUT FAl.URE TO DO SO SHAU. 

IMPOSE NO OBLIGATION OR LIMIL11Y Of~ KIND UPON THE INSURER, ITS AGENTS OR 

REPRESliNTAllVES, 

Ii ACORD CORPORATION 1988 

173 
The Willacy County Local Government Corporation PAYMENT 

BOND 

Bond #61BCSEB5978 

STATE OF TEXAS § 

§ 

COUNTY OF WILLACY § 

PAYMENT BOND 

KNOWN ALL MEN BY THESE PRESENTS: That HMC Contracting South Texas, L.L.C., as 

principal, and Hartford Fire Insurance Company authorized under the laws of the State of Texas 

to act as surety on bonds for principals, are held and finnly bound unto The Willacy County 

Local Government Corporation as Obligee (Owner), in the penal sum of Fifty Million DoJJars 

($50,000,000.00) for the payment whereof, the said Principal and Surety bind themselves, and 

their heirs, administrators, executors, successors arid assigns, jointly and severally, by these 

presents: 

WHEREAS, the Principal has entered into a certain written contract with the Owner, effective as 

of the 29th day of June, 2006, (the "Contract"} to commence and complete the construction of 

certain improvements described as follows: 

Willacy County 2000 Bed ICE Facility 

Willacy County, Texas 

which Contract, including the Contract Documents as defined therein, is hereby referred to and 

made a part hereof as fulJy and to the same extent as if copied at length herein. 

NOW THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the said 

Principal shall pay all claimants supplying labor or material to it or a subcontractor in the 

prosecution of the Work provided for in said Contract, then, this obligation shall be void; 

otherwise to remain in full force and effect; 

PROVIDED, HOWEVER, that this bond is executed pursuant to the provisions of Chapter 2253 

of the Texas Govenunent Code as amended and all liabilities on this bond shall be determined in 

accordance with the provisions of said Statute to the same extent as if it were copied at length 

herein. 

Surety, for value received, stipulates and agrees that no change, extension of time, alteration or 

addition to the terms of the Contract, or to the Work performed thereunder, or the plans, 

specifications, or drawings accompanying the same, shall in any way affect its obligation on this 

bond, and it does hereby waive notice of any such change, extension of time, alteration or 

addition to the tenns of the Contract, or to the Work to be perfonned thereunder. 

154173 1562.0 

174 
The Willacy County Local Government Corporation PAYMENT 

BOND 

IN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument 

this 281

h day of June, 2006. 

NOTICE: THE ADDRESS OF THE SURETY COMPANY TO WHICH ANY NOTICE 

OF CLAIM SHOULD BE SENT MAY BE OBTAINED FROM THE TEXAS 

DEPARTMENT OF INSURANCE BY CALLING ITS TOLL-FREE TELEPHONE 

NUMBER: 1-800-252-3439. 

154173 1562.0 

175 
The WiUacy County Local Goverrunent Corporation PERFORMANCE 

BOND 

Bond #61BCSEB5978 

STATE OF TEXAS § 

§ 

COUNTY OF WILLACY § 

PERFORMANCE BOND 

KNOWN ALL MEN BY THESE PRESENTS: That HMC Contracting South Texas, L.L.C., as 

principal, and Hartford Fire Insurance Company authorized under the laws of the State of Texas 

to act as surety on bonds for principals, are held and firmly bound unto The Willacy County 

Local Government Corporation as Obligee (Owner), in the penal sum of Fifty MiJJion Dollars 

($50,000,000) for the payment whereof, the said Principal and Surety bind themselves, and their 

heirs, administrators, executors, successors and assigns, jointly and severaUy, by these presents: 

WHEREAS, the Principal has entered into a certain written contract with the Owner, effective as 

of the 291h day of June 2006, (the "Contract") to commence and complete the construction of 

certain improvements described as follows: 

WilJacy County 2000 Bed ICE Facility 

Willacy County, Texas 

which Contract, induding the Contract Documents as defined therein, is hereby referred to and 

made a part hereof as fully and to the same extent as if copied at length herein. 

NOW THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the said 

Principal shall faithfully perform said Contract Work, then this obligation shall be void; 

otherwise to remain in full force and effect; 

Whenever, Contractor shalJ be, and be declared by Owner in a written notice to Surety, to be in 

default under the Contract, the Owner having performed Owner's obligations thereunder, the 

Surety may promptly remedy the default, or shall promptly: 

I. Complete the Contract in accordance with its tenns and conditions, or 

2. Obtain a bid or bids for completing the Contract in accordance with its terms and 

conditions, and upon determination by Surety of the lowest responsible bidder, or, if the Owner 

elects, upon determination by the Owner and the Surety jointly of the lowest responsible bidder, 

arrange for a contract between such bidder and Owner, and make available as Work progresses 

(even though there should be a default or succession of defaults under the contract or contracts of 

completion arranged under this paragraph) sufficient funds to pay the cost of completion less the 

balance of the Contract Price; but not exceeding, including other costs and damages for which 

154172 1562.0 

176 
The WiJlacy County Local Government Corporation PERFORMANCE 

BOND 

the Surety may be liable hereunder, the amount set forth in this first paragraph hereof. The term 

.. balance of the Contract Price," as used in this paragraph, shall mean the total amount payable 

by Owner to Contractor under the Contract and any amendments thereto, less the amount 

properly paid by Owner to Contractor. 

Surety shalJ have no further or other obligations other than those set forth above. 

As a condition precedent to coverage under this Bond, Owner must give Surety its 

written notice of Contractor's default no later than ninety one (91) days from the earliest to occur 

of the following: (i) the date of any abandonment or tennination of the Contract; (ii) the date 

final payment is made to the Contractor under the Contract; or (iii) the date Contractor last 

performed Work under the Contract, excluding any warranty work. Any default declared by 

Owner or demand made against the Surety by Owner outside of this time frame is not covered by 

this Bond and Surety shall have no liability therefore. 

Any suit under this bond must be instituted before the expiration of twenty-five (25) 

months from the date on which the right of action accrues, but if this provision is prohibited by 

law or if any Jaw provides for a lesser period of time then it shall be deemed to be amended as so 

to be equal to the minimum period of limitation allowed by such Jaw. 

No right of action shall accrue on this Bond to or for the use of any person or entity other 

than the Owner and its successors or assigns. The terms and conditions of this Bond shall be 

binding upon Contractor, Surety, Owner and their respective successors or assigns. 

Surety, for value received, stipulates and agrees that no change, extension of time, 

alteration or addition to the terms of the Contract, or to the Work performed thereunder, or the 

plans, specifications, or drawings accompanying the same, shall in any way affect its obligation 

on this Bond, and it does hereby waive notice of any such change, extension of time, alteration or 

addition to the terms of the Contract, or to the Work to be perfonned thereunder. 

IN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument 

this 28th day of June 2006. 

154172 1562.0 

177 
The Willacy County Local Government Corporation 

Principal, H1'1C Contracting South Texas, L.L.C. 

By: (~L­ Title:zf;l:~iAddrlsS: 41:".- i..Jli.1 , 1 ~ :J 1L 1k 11i- 1 /,, _, 

Telephone: (713) 665-1100 ' 

Fax: (713) 665-4944 

154172 1562,0 

PERFORl\tlANCE 

BOND 

178 
HARTFORD FIRE INSURANCE COMPANY 

Hartford, Connectlcut 

POWER OF ATTORNEY 

Know all man by these Presents, That HARTFORD FIRE INSURANCE COMPANY, a corporation duly organized 

under the laws of ltla State of Connecticut, and having its principal office in the Cily of Hartford, County of Hartford, Slate of Connecticut, 

does hereby make, constitute and appoint 

JIM HOWSE and/or JODI N.EAL 

of HOUS1'0N, TEXAS 

Its true and lawful Attorney(s)-ln-Facl, with lull power and aulhority to each ol said Allomey(s)-in-Fac;t. In the.Ir separate capacity if more 

than one is named above, lo sign, execute and ac:lcnowladga any and •ff bonds and Ul1dertakings and other wrl"ngs obligatory in the 

natute lhetaof on behalf of Iha Company In ils business of guaranteeing the fldellty of pefSOOS holding places of public or privare trust: 

guaranteeing the per!om\ance of contn;icts other lhan insurance polcies; guaranteeing the perlormarn;e of insurance contracts where 

surety bonds are accaptecl by stales and municipalities. end executing or guarenlUing bonds and undel1akif1!1S required or permllled in 

all actions 01 ptoeffdings 0t by law aHowed, and to bind HARTFORD FIRE INSURANCE COMPANY thereby as ftilly and to lhe same 

exlenl as if such bGnds and under1akings afld other writings obllgatory in Iha nature thereof were signed by an Executive Offieer of 

HARTFORD FIRE INSURANCE COMPANY and sealed and etteslecl by one olher of such Officers. and hereby ratifies and confirms an 

thar lls said Attorney(s)-ln-Facl may do In pursuance hereof. 

This Power of AUomey is granted under and by aulhorfty of the By-Laws of HARTFORD FIRE INSURANCE COMPANY, ("the Company") 

as amended by the Board of Directors at a meeting duly called and held on July 9, 1997. as follows: 

ARTICLE IV 

SECTION 7. The President or any Vice President or Ass!Slant Vlca-Pruldllftl, acting with any Secimiy or Assistant Seaelafy shal have power 

and llUlllOlllY lo 9ign and necuta ind attach the seal of the company to bond& and -attaklngs, l1ICllftglVUnee. contracts of Indemnity and other 

wtllift911 obllgaloiy in the llelure thereof, and suC11 lns11ument• so llgnlld and .-tell. with or without the - SHI, shaM be valld and binding upon 

llleCompall)I 

SECT!QN I. Tiie P!Hidllftl or •'"I Vk:e-PretilMRI or ~ Asliltlnl Va PnttldM! llCtinO wilh any Secretary or Aaslstant SeCl9tl•)'. aliaW have 

power and ..,ll!Orily lo appcrinr, lot p.uposes Ont>/ of •xecutlng and aa.slln!I bonClr. Hd ~ and other writings obfi9alory in rhe nature theJeOf. 

one or mot• residllnl Vice Presidents. AISldlftl Assislllnl SllCtei.rles llftd AtlCrnlryll-ln-Fact and It any time to"'"'°"" any cUCll residellt Voce-Presklenr. 

resident Aui«Canl Seet.wty, OI AllOM•)"/n.FllCI, and revolCe Ille -r Md aulllclrily giWll IO him. 

llosolved, lhol UHr .,._...of_,,~ - the - ol fie~ ...,. ~ ... _ID ... ~ - ol -- or lo any c.llllclla ~ lheJelO by 

lacslmlle, and any sudl power ol-..., rw-.. artna •udl r.-..1e slgnalunts or taCllimle Hal Shal be - - -,. - fie ~nY - .,, such - ro oucuted ond eatliled by,....,........, __ ......,. IUl lhdbe walicl-bindlng UP"" NC-Ill .. M.,._mpoclllo llljl bon6 orV--.. lowlllcll Kil 

- In Wttnea Whereof, HARTFORD FIRE INSURANCE COMPANY hlS caused Chase presents to be signed by Jes Asaistanl I/lee 

President, and its c;orporate seal to be hereto affiqd, duly attested by q Secnllary, this 15111 day of September, 1997. 

Attest: HARTFORD FIRE INSURANCE COMPANY 

~L.a.--- cY- ~ ~ 

Richard A. Hermanson. Secretary John F. Burke, Asaislant Vice President 

STATE OF CONNECTICUT} 

SS. 

COUHlY OF HARTFORD 

On this 15th day of September, A.O. 1997, before me penionally came John F. Burke, to me known, who being by me duly sworn. did 

depose and say: that he resides in the County of Haltfon:I. State of Connecticut. that he is the Assistant Vice-President of HARTFORD 

FIRE tNSURANCE COMPANY. the c:orporallon described in end which llll8Qlled the above instrument that he knows the seat of lhe 

aeld corporation: that the seal effilled IO the saJd lnelrument is such corporate seal; that it was 10 affixed by order of the Board of 

Oltedora of said cotporalion and that he signed his name thereto by like oofer. 

STATE OF CONNECTICUT} 

SS. 

COUNlY OF HARTFORD Cl:RTIFICATE 

@~~~ M:rCommisri1111 hpiao1 M. 30, 199!1 

I, the undersigned. Secrelary of HARTFORD FIRE INSURANCE COMPANY. I Connedk:ut Corpotallol\, 00 HEREBY CERTIFY 

that lhe foregoing and attached POWER OF ATTORNEY remains In fua force and has not been revoked; and fuf1hermant, lhat Mic:lo IV. 

Sections 7 and 8 of Iha By-I.awl of HARTFORD FIRE INSURANCE COMPANY, set lofth Ill the Power of Attorney, are hO'N In force. 

Signed amhealed at the City of Haftfonl. Dated Iha 28th day or June 1 2006 

Robert L. Post, Secretary 

Form $JS07·9 (Hll) Printed in U.S.A. 

179 
DI I A 

DlSIGN·IUflD 

INSTITUTE OF AMERICA 

STANDARD FORM OF GENERAL 

CONDITIONS OF CONTRACT 

BETWEEN OWNER AND 

DESIGN-BUILDER 

180 
DI I A 

Dr5161·1UflD 

INSTllUTE Of AMERICA 

Standard Form of General Conditions 

of Contract Between Owner and Design-Builder 

This document has been amended and revised from its standard form. 

Table of Contents 

Article 1: General ...................................................................................................................................... 3 

Article 2: Design-Builder's Services and Responsibilities ......................................................................... 3 

Article 3: Owner's Services and Responsibilities ...................................................................................... 6 

Article 4: Hazardous Conditions and Differing Site Conditions ................................................................. 7 

Article 5: Insurance and Bonds ................................................................................................................. 7 

Article 6: Payment ..................................................................................................................................... 8 

Article 7: lndemnification ......................................................................................................................... 10 

Article 8: Time ......................................................................................................................................... 11 

Article 9: Changes to the Contract Price and Time ................................................................................. 11 

Article 10: Contract Adjustments and Oisputes ......................................................................................... 12 

Article 11: Stop Work and Termination for Cause .................................................................................... 13 

Article 12: Miscellaneous .......................................................................................................................... 15 

181 
Article 1 

General 

1.l Mutual Obligations 

1.1.l Owner and Design-Builder commit at all times 

to cooperate fully with each other, and proceed on the 

basis of trust and good faith, to pennit each party to 

realize the benefits afforded under the Contract 

Documents. 

1.2 Basic Definitions 

1.2.J Agreement refers to the executed contract 

between Owner and Design-Builder ,DBIA Document 

No. 525, Standard Form of Agreement Between Owner 

and Design-Builder c Lump Sum (1998 Edition) as 

amended by the parties. 

1.2.2 Day or Days shall mean calendar days unless 

otherwise specifically noted in the Contract Documents. 

1.2.3 Design Consultant is a qualified, licensed design 

professional who is not an employee of Design-Builder, 

but is retained by Design-Builder, or employed or 

retained by anyone under contract with Design-Builder or 

Subcontractor, to furnish design services required under 

the Contract Documents. 

1.2.4 Hazardous Conditions are any materials, wastes, 

substances and chemicals deemed to be hazardous under 

applicable Legal Requirements, or the handling, storage, 

remediation, or disposal of which are regulated by 

applicable Legal Requirements. 

1.2.5 General Conditions of Contract refer to this 

DBIA Document No. 535, Standard Form of Gene1·a/ 

Conditions of Contract Between Owner and DesignBuilder ( 1998 Edition) as amended by the parties. 

1.2.6 Legal Requirements arc all applicable federal, 

state and local Jaws, codes, ordinances, rules, reguJations, 

orders and decrees of any government or quasigovemment entity having jurisdiction over the Project or 

Site, the practices involved in the Project or Site, or any 

Work. 

l.2.7 (lntentionaJJy Left Blank) 

1.2.8 Site is the land or premises on which the Project 

is located. 

1.2.9 Subcontractor is any person or entity retained by 

Design-Builder as an independent contractor to perfonn a 

portion of the Work and shalJ include materialmen and 

suppliers. 

1.2.10 Sub-Subcontractor is any person or entity 

retained by a Subcontractor as an independent contractor 

to perform any portion of a Subcontractor's Work and 

shall include materialmen and suppliers. 

1.2.J 1 Substantial Completion is the date on which the 

Work, or an agreed upon portion of the Work, is 

sufficiently complete so that Owner can occupy and use 

the Project. 

1.2.12 Work is comprised of all Design-Builder's 

design, construction and other services required by the 

Contract Documents, including procuring and furnishing 

all materials, equipment, services and labor reasonably 

inferable from the Contract Documents. 

Article 2 

Design-Builder's Services and 

Responsibilities 

2.1 General Services 

2.1.1 Design-Builder's Representative shall be 

reasonably available to Owner and shall have the 

necessary expertise and experience required to supervise 

the Work. Design-Builder's Representative shall 

communicate regularly with Owner and shall be vested 

with the authority to act on behalf of Design-Builder. 

Design-Builder's Representative may be replaced only 

with the mutual agreement of Owner and Design-Builder. 

2.1.2 Design-Builder shall provide Owner with a 

monthly status report detailing the progress of the Work. 

2.2 Design Professional Services 

2.2.l Design-Builder shall, consistent with applicable 

state licensing laws, provide through qualified, licensed 

design professionals employed by Design-Builder, 

procured from qualified, independent licensed Design 

Consultants or from subcontractors/vendors fabricating 

materials and/or equipment for the Project, the necessary 

design services, including architectural, engineering and 

other design professional services, for the preparation of 

the required drawings, specifications and other design 

Page 3 

182 
submittals to permit Design-Builder to complete the 

Work consi~1ent with the Contract Docwnents. Nothing 

in the Contract Documents is intended or deemed to 

create any legal or contractual relationship between 

Owner and any Design Consultant. 

2.3 Standard of Care for Design Professional 

Services 

2.3.1 The standard of care for all design professional 

services performed to execute the Work shall be the care 

and skill ordinarily used by members of the design 

profession practicing under similar conditions at the same 

time and locality of the Project. 

2.4 Design Development Services 

2.4.1 Design-Builder has provided Owner 

design/conccptua1 submissions that have been approved 

by Owner and are attached as Exhibit A to the 

Agreement. 

2.4.2 Design-Builder may submit to Owner 

Construction Documents setting forth in greater detail 

drawings and specifications describing the requirements 

for construction of the Work. The Construction 

Documents shall be consistent with the intent defined in 

the previously approved design submissions identified in 

the Agreement. Owner acknowledges that the Project 

will not be designed to meet or comply with any type of 

State, Federal or voluntary jail or prison design standards 

that may or may not be applicab]e to the Project. DesignBuilder shall proceed with construction in accordance 

with the Construction Documents, if any are created. 

2.S Legal Requirements 

2.5.1 Design-Builder shall perform the Work in 

accordance with atJ Legal Requirements and shall provide 

all notices applicable to the Work as required by the 

Legal Requirements. 

2.5.2 The Contract Priceand/orContractTime(s) shall 

be adjusted to compensate Design-Builder for the effects 

of any changes in the Legal Requirements enacted after 

the date of the Agreement affecting the performance of 

the Work. Such effects may include, without limitation, 

revisions Design-Builder is required to make to the 

Construction Documents because of changes in Legal 

Requirements. 

2.6 Government Approvals and Permits 

2.6.1 Except as identified in an Owner's Permit List 

which may be attached as an exhibit to the Agreement, 

Design-Builder shall obtain and pay for all necessary 

permits, approvals, licenses, government charges and 

inspection fees required for the prosecution of the Work 

by any government or quasi-government entity having 

jurisdiction over the Project. 

2.6.2 Owner shall provide reasonable assistance to 

Design-Builder in obtaining those pennits, approvals and 

licenses that are necessary for the design and construction 

of the Project. 

2.7 Design-Builder's Construction Phase 

Services 

2.7.1 Design-Builder shall provide through itself or 

Subcontractors the necessary supervision, labor, 

inspection, testing, start-up, material, equipment, 

machinery, temporary utilities and other tempordry 

facilities to permit Design-Builder to complete 

construction of the Project consistent with the Contract 

Documents. 

2.7.2 Design-Builder shall perform all construction 

activities efficiently and with the requisite expertise, skill 

and competence to satisfy the requirements of the 

Contract Docwnents. Design-Builder shall at all times 

exercise complete and exclusive control over the means, 

methods, sequences and techniques of construction. 

2.7.3 Design-Builder shaJl employ only 

Subcontractors who are duly licensed and qualified to 

perfonn the Work consistent with the Contract 

Documents. 

2. 7.4 Design-Builder assumes responsibility to Owner 

for the proper performance of the Work of Subcontractors 

and any acts and omissions in connection with such 

performance. Nothing in the Contract Documents is 

intended or deemed to create any legal or contractual 

relationship between Owner and any Subcontractor or 

Sub-Subcontractor, including but not limited to anythirdparty beneficiary rights. 

2.7 .S Design-Builder shall coordinate the activities of 

all Subcontractors. If Owner performs other work on the 

Project or at the Site with separate contractors under 

Owner's control, Design-Builder agrees to reasonably 

cooperate and coordinate its activities with those of such 

separate contractors so that the Project can be completed 

in an orderly and coordinated manner without 

unreasonable disruption. 

Pagc4 

183 
2.7.6 Design-Builder shall keep the Site reasonably 

free from debris, trash and construction wastes to pennit 

Design-Builder to perfonn its construction services 

efficiently, safely and without interfering with the use of 

adjacent land areas. Upon Substantial Completion of the 

Work, or a portion of the Work, Design-Builder shall 

remove all debris, trash, construction wastes, materials, 

equipment, machinery and tools arising from the Work or 

applicable portions thereof to pennit Owner to occupy the 

Project or a portion of the Project for its intended use. 

2.8 Design-Builder's Responsibility for Project 

Safety 

2.8.1 Design-Builder recognizes the importance of 

perfomling the Work in a safe manner so as to prevent 

damage, injury or loss to (i) all individuals at the Site, 

whether working or visiting, (ii) the Work, including 

materials and equipment incorporated into the Work or 

stored on-Site or off-Site, and (iii) all other property at 

the Site or adjacent thereto. Design-Builder assumes 

responsibility for implementing and monitoring all safety 

precautions and programs related to the performance of 

the Work. 

2.8.2 Design-Builder and Subcontractors shall comply 

with all Legal Requirements relating to safety, as well as 

any Owner-specific safety requirements set forth in the 

Contract Documents, provided that such Owner-specific 

requirements do not violate any applicable Legal 

Requirement. Design-Builder will immediately report in 

writing any safety-related injury, loss, damage or accident 

arising from the Work to Owner's Representative and, to 

the extent mandated by Legat Requirements, to all 

government or quasi-government authorities having 

jurisdiction over safety-related matters involving the 

Project or the Work. 

2.8.3 Design-Builder's responsibility for safety under 

this Section 2.8 is not intended in any way to relieve 

Subcontractors and Sub-Subcontractors of their own 

contractual and legal obligations and responsibility for (i) 

complying with all Legal Requirements, including those 

related to health and safety matters, and {ii) taking all 

necessary measures to implement and monitor all safety 

precautions and programs to guard against injury, losses, 

damages or accidents resulting from their performance of 

the Work. 

2.9 Design-Builder's Warranty 

2.9.1 Design-Builder warrants to Owner that the 

construction, including all materials and equipment 

furnished as part of the construction, shall be new unless 

otherwise specified in the Contract Documents, of good 

quality, in conformance with the Contract Documents and 

free of defects in materials and workmanship. DesignBuilder's warranty obligation excludes defects caused by 

abuse, alterations, or failure to maintain the Work by 

persons other than Design-Builder or anyone for whose 

acts Design-Builder may be liable. Nothing in this 

warranty is intended to limit any manufacturer's warranty 

which provides Owner with greater warranty rights than 

set forth in this Section 2.9 or the Contract Documents. 

Design-Builder will provide Owner with all 

manufacturers• warranties upon either Substantial or Final 

Completion. Where a manufacturer's or third party 

warranty has been provided to Owner, Owner agrees that 

Design-Bui Ider will have oo further liability with respect 

to the subject of the manufacturer's or third party 

warranty and Owner agrees to look solely to such 

manufacturer or third party for any warranty claim with 

respect to such items and hereby ·specifically releases 

Design-Builder of and from any such claims. 

2.10 Correction of Defective Work 

2.10.1 Design-Builder agrees to correct any Work that 

is found to not be in confonnance with the Contract 

Documents, including that part of the Work subject to 

Section 2.9 hereof, within a period of one year from the 

date of Substantial Completion of the Work or any 

portion of the Work, or within such longer period to the 

extent required by the Contract Documents, provided 

such work is not the subject of a manufacturers warranty 

as described in Article 2.9.1 above. 

2.10.2 Design-Builder shaH, within seven (7) days of 

receipt of written notice from Owner that the Work is not 

in conformance with the Contract Documents, take steps 

to commence correction of such nonconforming Work, 

including the correction, removal or replacement of the 

nonconforming Work and any damage caused to other 

parts of the Work affected by the no~conforming Work, 

provided such work is not the subject of a manufacturer's 

or third party warranty as described in Article 2.9.1 

above. If Design-Builder fails to commence the 

necessary steps within such seven (7) day period, Owner, 

in addition to any other remedies provided under the 

Contract Documents, may provide Design-Builder with 

written notice that Owner will commence correction of 

such nonconforming Work with its own forces. If Owner 

does perfonn such corrective Work, Design-Builder shall 

be responsible for all reasonable costs incurred by Owner 

Page5 

184 
in performing such correction. If the nonconforming 

Work creates an emergency requiring an immediate 

response, the seven (7) day periods identified herein shall 

be deemed inapplicable. 

2.10.3 The one year period referenced in Section 2.10.1 

above applies only to Design-Builder's obligation to 

correct nonconforming Work not the subject of a 

manufacturer's or third party warranty and is not intended 

to constitute a period oflimitations for any other rights or 

remedies Owner may have regarding Design-Builder's 

other obligations under the Contract Documents. 

Article 3 

Owner's Services and Responsibilities 

3.1 Duty to Cooperate 

3.1.1 Owner shall, throughout the performance of the 

Work, cooperate with Design-Builder and perfonn its 

responsibilities, obligations and services in a timely 

manner to facilitate Design-Builder's timely and efficient 

performance of the Work and so as not to delay or 

interfere with Design-Builder's performance of its 

obligations under the Contract Documents. 

3.1.2 If required by this Agreement, Owner shall 

provide timely reviews and approvals of submissions 

consistent with the tumarowtd times set forth in DesignBuilder' s schedule. 

3.2 Furnishing of Services and Information 

3.2.1 Owner is responsible for securing and executing 

all necessary agreements with adj accnt land or property 

owners and any easements that are necessary to enable 

Design-Builder to perfonn the Work. Owner is further 

responsible for all costs, including attorneys' fees, 

incurred in securing these necessary agreements. 

3.3 Financial Information 

3.3.1 Design-Builder shall cooperate with the 

reasonable requirements of Owner's lenders or other 

financial sources. Notwithstanding the preceding 

sentence, after execution of the Agreement, DesignBuilder shall have no obligation to execute for Owner or 

Owner's lenders or other financial sources any documents 

or agreements that require Design-Builder to assume 

obligations or responsibilities greater than those existing 

obligations Design-Builder that may exist under the 

Contract Documents. 

3.4 Owner,s Representative 

3.4. 1 Owner's Representative shall be responsible for 

providing Owner-supplied information and in a timely 

manner to pennit Design-Builder to fulfill its obligations 

under the Contract Documents. Owner's Representative 

shall also provide Design-Builder with prompt notice ifit 

observes any failure on the part of Design-Builder to 

fulfill its contractual obligations, including any errors, 

omissions or defects in the performance of the Work. 

Failure to provide such notice to Design-Builder shall 

constitute a complete waiver of any claims by Owner 

relating to such matters. 

3.5 Government Approvals and Permits 

3.5.1 Owner shall provide reasonable assistance to 

Design-Builder in obtaining those permits, approvals and 

licenses that are Design-Builder's responsibility. 

3.6 Owner,s Separate Contractors 

3.6.1 Owner is responsible for all work performed on 

the Project or at the Site by separate contractors wider 

Owner's control. Owner shall contractually require its 

separate contractors to cooperate with, and coordinate 

their activities so as not to interfere with, Design-Builder 

in order to enable Design-Builder to timely complete the 

Work consistent with the Contract Documents. 

3.7 Owner,s Responsibility for Maintenance 

3.7.1 Owner shall be responsible for maintaining the 

Work after Final Completion by Design-Builder. Owner 

warrants and represents to Design-Builder that it will 

provide all necessary maintenance and upkeep of the 

structure, systems, equipment and appurtenances 

furnished and installed by Design-Builder hereunder. 

Page6 

185 
Article 4 

Hazardous Conditions and Differing 

Site Conditions 

4.l Hazardous Conditions 

4.1.1 Unless otherwise expressly provided in the 

Contract Documents to be part of the Work, DesignBuilder is not responsible for any Hazardous Conditions 

encountered at the Site. Upon encountering any 

Hazardous Conditions, Design-Builder will stop Work 

immediately in the affected area and duly notify Owner 

and, if required by Legal Requirements, all government 

or quasi-government entities with jurisdiction over the 

Project or Site. 

4.1.2 Upon receiving notice of the presence of 

suspected Hazardous Conditions, Owner shall take the 

necessary measures required to ensure that the Hazardous 

Conditions are remediated or rendered harmless. Such 

necessary measures shal1 include Owner retaining 

qualified independent experts to (i) ascertain whether 

Hazardous Conditions have actually been encountered, 

and, if they have been encountered, (ii) prescribe the 

remedial measures that Owner must take either to remove 

the Hazardous Conditions or render the Hazardous 

Conditions harmless. 

4.J.3 Design-Builder shalJ be obligated to resume 

Work at the affected area of the Project only after 

Owner's expert provides it with written certification that 

(i) the Hazardous Conditions have been removed or 

rendered harmless and (ii) all necessary approvals have 

been obtained from all government and quasi-government 

entities having jurisdiction over the Project or Site. 

4.1.4 Design-Builder will be entitled, in accordance 

with these General Condltions of Contract, to an 

adju&1ment in its Contract Price and/or Contract Time(s) 

to the extent Design-Builder's cost and/or time of 

performance have been adversely impacted by the 

presence of Hazardous Conditions. 

4.1.5 TO THE FULLEST EXTENT PERMITTED 

BY LAW, OWNER SHALL INDEMNIFY, DEFEND 

AND HOLD HARMLESS DESIGN-BUILDER, 

DESIGN CONSULTANTS, SUBCONTRACTORS, 

ANYONE EMPLOYED DfRECTL Y OR INDIRECTLY 

FOR ANY OF THEM, AND THEIR OFFICERS, 

DIRECTORS, EMPLOYEES AND AGENTS, FROM 

AND AGAINST ANY AND ALL CLAIMS, LOSSES, 

DAMAGES, LIABILITIES AND EXPENSES, 

INCLUDING ATTORNEYS' FEES AND EXPENSES, 

ARISING OUT OF OR RESULTING FROM THE 

PRESENCE, REMOVAL OR REMEDIATION OF 

HAZARDOUS CONDITIONS AT THE SITE. 

4.1.6 Notwithstanding the preceding provisions of this 

Section 4.1, Owner is not responsible for Hazardous 

Conditions introduced to the Site by Design-Builder, 

Subcontractors or anyone for whose acts they may be 

liable. DESIGN-BUILDER SHALL INDEMNIFY, 

DEFEND AND HOLD HARMLESS OWNER AND 

OWNER'S OFFICERS, DIRECTORS, EMPLOYEES 

AND AGENTS FROM AND AGAINST ALL CLAIMS, 

WSSES, DAMAGES, LIABILITIES AND EXPENSES, 

INCLUDING A ITORNEYS' FEES AND EXPENSES, 

ARISING OUT OF OR RESULTING FROM THOSE 

HAZARDOUS CONDITIONS INTRODUCED TO THE 

SITE BY DESIGN-BUILDER, SUBCONTRACTORS 

OR ANYONE FOR WHOSE ACTS THEY MAY BE 

LIABLE. 

4.l Differing Site Conditions 

4.l.l Concealed or latent physical conditions or 

subsurface conditions at the Site that (i) materially differ 

from the conditions indicated in the Contract Documents 

or (ii) are of an unusual nature, differing materially from 

the conditions ordinarily encountered and generaJiy 

recognized as inherent in the Work are collectively 

referred to herein as "Differing Site Conditions." If 

Design-Builder encounters a Differing Site Condition, 

Design-Builder will be entitled to an adjustment in the 

Contract Price and/or Contract Time(s) to the extent 

Design-Builder's cost and/or time of performance are 

adversely impacted by the Differing Site Condition. 

4.2.2 Upon encountering a Differing Site Condition, 

Design-Builder shall provide prompt written notice to 

Owner of such condition, which notice shall not be later 

than fourteen (14) days after such condition has been 

encountered. Design-Builder shall, to the extent 

reasonably possible, provide such notice before the 

Differing Site Condition has been substantially disturbed 

or altered. 

Article 5 

Insurance and Bonds 

5.1 Design-Builder's Insurance Requirements 

5.1.1 Design-Builder is responsible for procuring and 

maintaining from insurance companies authorized to do 

Page 7 

186 
business in the state in which the Project is located, the 

insurance coverages set forth in the attached Exhibit C. 

5.1.2 Design-Builder's liability insurance set forth in 

Exhibit C shall specifically delete any design-build or 

similar exclusions that could compromise coverages 

because of the design-build delivery of the Project. 

5.J .4 To the extent Owner requires Design-Builder or 

any Design Consultant to provide professional liability 

insurance for claims arising from the negligent 

performance of design services by Design-Builder or the 

Design Consultant, the coverage limits, duration and 

other specifics of such insurance shall be as set forth in 

the Agreement. Any professional liability policy shall 

specifically delete any design-build or similar exclusions 

that could compromise coverages because of the designbuild delivery of the Project. Such policies shall be 

provided prior to the commencement of any design 

services hereunder. 

S.1.S Prior to commencing any construction services 

hereunder, Design-Builder shall provide Owner with 

certificates evidencing that (i) all insurance obligations 

required by the Contract Docwnents are in fuJl force and 

in effect and will remain in effect for the duration 

required by the Contract Documents and (ii) no insurance 

coverage will be canceled, renewal refused, or materially 

changed unless at least thirty (30) days prior written 

notice is given to Owner. 

5.2 Owner's Liability Insurance 

5.2.1 Owner shall procure and maintain from 

insurance companies authorized to do business in the 

state in which the Project is located such liability 

insurance to protect Owner from claims which may arise 

from the performance of Owner's obligations under the 

Contract Documents or Owner's conduct during the 

course of the Project. 

S.3 Property Insurance 

5.3.J Unless otherwise provided in the Contract 

Documents, Design-Builder shall procure and maintain 

from insurance companies authorized to do business in 

the state in which the Project is located property 

insurance upon the entire Project to the full insurable 

value of the Project, including professional fees, overtime 

premiums and all other expenses incurred to replace or 

repair the insured property. The property insurance 

obtained by Design-Builder shall include as additional 

insureds the interests of Owner, Design Consultants, 

Subcontractors and Sub-Subcontractors, and shall insure 

against the perils of fire and extended coverage, theft, 

vandalism, malicious mischief, collapse, flood, 

earthquake, debris removal and other perils or causes of 

loss as called for in the Contract Documents. The 

property insurance shall include physical loss or damage 

to the Work, including materials and equipment in transit, 

at the Site or at another location as may be indicated in 

Design-Builder's Application for Payment and approved 

by Owner. 

5.3.2 Owner and Design-Builder waive against each 

other and Owner's separate contractors, Design 

Consultants, Subcontractors, agents and employees of 

each and all of them, all damages covered by property 

insurance provided herein, except such rights as they may 

have to the proceeds of such insurance. Design-Builder 

and Owner shall, where appropriate, require similar 

waivers of subrogation from Owner's separate 

contractors, Design Consultants and Subcontractors and 

shall require each of them to include similar waivers in 

their contracts. 

5.4 Bonds and Other Performance Security 

5.4.1 Copies of the performance and payment bonds 

for the Project are attached as Exhibit D to the Standard 

Fonn of Agreement Between Owner and Design-Builder 

- Lump Sum. The owner acknowledges that the surety on 

such bonds (and the Design-Builder) shall not be liable or 

responsible in any way for the items, or the 

reimbursement of items, set forth in the Initial 

Application for Payment as described in Article 6.2.4 

below. 

Article 6 

Payment 

6.1 Applications for Payment 

6.1.1 The proposed Application for Payments are 

attached to the Agreement. Design-Builder shall submit 

for Owner's review its Application for Payment. The 

Applications shall be paid in accordance with the terms of 

the Agreement. 

6.2 Initial Application for Payment 

6.2.1 Design-Builder's Initial Application for Payment 

will include funds for disbursements to third parties for 

land acquisition, all pre-construction development costs 

and fees, insurance, bond fees, travel and legal expense 

Page 8 

187 
reimbursement, design consultant and pre-development 

fees. Design-Builder is performing this function at the 

request of Owner and has not participated in the 

negotiation or creation of these obligations and, therefore, 

does not assume, and express disclaims, any liability or 

warranty obligations with respect to such activities. This 

Initial Application for Payment will be paid at the 

financial dosing of the transaction for the Project 

6.3 Disputes over Payments 

6.3.1 On or before the date established in the 

Agreement, Owner shall pay Design-Builder all amounts 

properly due. If Owner determines that Design-Builder is 

not entitled to all or part ofan Application for Payment, it 

will notify Design-Builder in writing at least five (5) days 

prior to the date payment is due. The notice shall indicate 

the specific amounts Owner disputes, the reasons and 

contractual basis for such disputes, and the specific 

measures Design-Builder may take to rectify Owner's 

concerns. Design-Builder and Owner will attempt to 

resolve Owner's concerns prior to the date payment is 

due. If the parties cannot resolve such concerns, Owner 

must pay Design-Builder and Owner may pursue its rights 

under the Contract Documents, including those under 

Article 10 hereof. 

6.4 Right to Stop Work and Interest 

6.4.1 If Owner fails to pay Design-Bw1deranyamount 

that becomes due, Design-Builder, in addition to all other 

remedies provided in the Contract Documents, may stop 

Work pursuant to Section 11.3 hereof. All payments due 

and unpaid shall bear interest at the rate set forth in the 

Agreement. 

6.5 Design-Builder's Payment Obligations 

6.5.1 Design-Builder wilJ pay Design Consultants and 

Subcontractors in accordance with its contractual 

obligations to such parties. Design-Builder will impose 

similar requirements on Design Consultants and 

Subcontractors to pay those parties with whom they have 

contracted. Design-Builder will indemnify and defend 

Owner against any claims for payment and mechanic's 

liens as set forth in Section 7.3 hereof. 

6.6 Substantial Completion 

6.6.J Design-Builder shall notify Owner when it 

believes the Work, or to the extent pennitted in the 

Contract Documents, a portion of the Work, is 

substantially complete. Within five (5) days of Owner's 

receipt of Design-Builder's notice, Owner and DesignBuilder will jointly review such Work. Design-Builder 

shall prepare and issue a Certificate of Substantial 

Completion that will set forth (i) the date of Substantial 

Completion of the Work or portion thereof, (ii) the 

remaining items of Work that have to be completed 

before final payment, (iii) provisions (to the extent not 

already provided in the Contract Documents) establishing 

Owner's and Design-Builder's responsibility for the 

Project's security, maintenance, utilities and insurance 

pending final payment and (iv) an acknowledgment that 

warranties commence to run on the date of Substantial 

Completion, except as may otherwise be noted in the 

Certificate of Substantial Completion. 

6.6.2 Owner, at its option, may U.'le a portion of the 

Work which has been determined to be substantially 

complete, provided, however, that (i) a Certificate of 

Substantial Completion has been issued for the portion of 

Work addressing the items set forth in Section 6.6.1 

above, (ii) Design-Builder and Owner have obtained the 

consent of their sureties and insurers, and to the extent 

applicable, the appropriate government authorities having 

jurisdiction over the Project, and (iii) Owner and DesignBuilder agree that Owner's use or occupancy will not 

interfere with Design-Builder's completion of the 

remaining Work. 

6.7 Final Payment 

6.7.l After receipt ofa Final Application for Payment 

from Design-Builder, Owner shall make final payment by 

the time required in the Agreement, provided that DesignBuilder has completed all of the Work in conformance 

with the Contract Documents. 

6.7.2 At the time of submission of its Final 

Application for Payment, Design-Builder shall provide 

the following infonnation: 

.1 (intentionally left blank); 

.2 a general release executed by DesignBuilder waiving, upon receipt of final 

payment by Design-Builder, a11 claims, 

except those claims previously made in 

Page9 

188 
writing to Owner and remaining unsettled 

at the time of final payment; 

.3 consent ofDesign-Builder's surety, if any, 

to finaJ payment; 

.4 all operating manuals, warranties and other 

deliverables required by the Contract 

Documents; and 

.5 certificates of insurance confirming that 

required coverages will remain in effect 

consistent with the requirements of the 

Contract Documents. 

6.7.3 Upon making final payment, Owner waives all 

claims against Design-Builder except claims relating to 

(i) Design-Builder's failure to satisfy its payment 

obligations, if such failure affects Owner's interests, (ii) 

Design-Builder's failure to complete the Work consistent 

with the Contract Documents, including defects appearing 

after Substantial Completion and (iii) the terms of any 

special warranties required by the Contract Documents, 

specifically excluding manufacturers' warranties. 

Article 7 

Indemnification 

7.1 Patent and Copyright Infringement 

7.1.l Design-Builder shall defend any action or 

proceeding brought against Owner based on any claim 

that the Work, or any part thereof, or the operation or use 

of the Work or any part thereof, constitutes infringement 

of any United States patent or copyright, now or hereafter 

issued. Owner shall give prompt written notice to 

Design-Builder of any such action or proceeding and will 

reasonably provide authority, information and assistance 

in the defense of same. Design-Builder shall indemnify 

and hold hann.less Owner from and against all damages 

and costs, including but not limited to attorneys' fees and 

expenses awarded against Owner or Design-Builder in 

any such action or proceeding. Design-Builder agrees to 

keep Owner informed of all developments in the defense 

of such actions. 

7.1.2 If Owner is enjoined from the operation or use 

of the Work, or any part thereof, as the result of any 

patent or copyright suit, claim, or proceeding, DesignBuilder shall at its sole expense take reasonable steps to 

procure the right to operate or use the Work. If DesignBuilder cannot so procure such right within a reasonable 

time, Design-Builder shall promptly, at Design-Builder's 

option and at Design-Builder's expense, (i) modify the 

Work so as to avoid infringement of any such patent or 

copyright or (ii) replace said Work with Work that does 

not infringe or violate any such patent or copyright. 

7.1.3 Sections 7.1.1 and 7.1.2 above shall not be 

applicable to any suit, claim or proceeding based on 

infringement or violation of a patent or copyright (i) 

relating solely to a particular process or product of a 

particular manufacturer specified by Owner and not 

offered or recommended by Design-Builder to Owner or 

(ii) arising from modifications to the Work by Owner or 

its agents after acceptance of the Work. If the suit, claim 

or proceeding is based upon events set forth in the 

preceding sentence, Owner shall defend, indemnify and 

hold harmless Design-Builder to the same extent DesignBuilder is obligated to defend, indemnify and hold 

hamlless Owner in Section 7 .1.1 above. 

7.1.4 The obligations set forth in this Section 7.1 shalt 

constitute the sole agreement between the parties reJating 

to Ii ability for infringement of violation of any patent or 

copyright. 

7.2 Tu Claim Indemnification 

7.2.1 If, in accordance with Owner's direction, an 

exemption for all or part of the Work is claimed for taxes, 

Owner shall indemnify, defend and hold harmless DesignBuilder from and against any liability, penalty, interest, 

fine, tax assessment, attorneys' fees or other expenses or 

costs incurred by Design-Builder as a result of any action 

taken by Design-Builder in accordance with Owner's 

directive. 

7.3 Payment Claim lndemnitlcation 

7.3.1 Providing that Owner is not in breach of its 

contractual obligation to make payments to DesignBuilder for the Work, Design-Builder shall indemnify, 

defend and hold hannless Owner from any claims or 

mechanic's liens brought against Owner or against the 

Project as a result of the failure of Design-Builder, or 

those for whose acts it is responsible, to pay for any 

services, materials, labor, equipment, taxes or other items 

or obligations furnished or incurred for or in connection 

with the Work. Within three (3) days ofreceiving written 

notice from Owner that such a claim or mechanic's lien 

has been filed, Design-Builder shall commence to take 

the steps necessary to discharge said claim or lien, 

including, if necessary, the furnishing of a mechanic's 

Hen bond. 

Page 10 

189 
7.4 Design-Builder's General Indemnification 

7.4. l Design-BuiJder, to the fullest extent pennitted by 

law, shall indemnify, hold hannless and defend Owner, its 

officers, directors, employees and agents from and againi.t 

claims, losses, damages, liabilities, including attorneys' 

fees and expenses, for bodily injury, sickness or death, 

and property damage or destruction (other than to the 

Work itself) to the extent resulting from the negligent acts 

or omissions of Design-Builder, Design Consultants, 

Subcontractors, anyone employed directly or indirectly by 

any of them or anyone for whose acts any of them may be 

liable. 

7.4.2 lf an employee of Design-Builder, Design 

Consultants, Subcontractors, anyone employed directly or 

indirectly by any of them or anyone for whose acts any of 

them may be liable has a claim against owner, its 

officers, directors, employees, or agents, DcsignBuilder's indemnity obligation set forth in Section 7.4.1 

above shall not be limited by any limitation on the 

amount of damages, compensation or benefits payable by 

or for Design-Builder, Design Consultants, 

Subcontractors, or other entity under any employee 

benefit acts, including workers' compensation or 

disability acts. 

7.S Owner's General Indemnification 

7.5.1 Owner, to the fullest extent permitted by law, 

shall indemnify, hold harmless and defend DesignBuilder and any of Design-Builder's officers, directors, 

employees, or agents from and against claims, losses, 

damages, liabilities, including attorneys' fees and 

expenses, for bodily injury, sickness or death, and 

property damage or destruction (other than to the Work 

itself) to the extent resulting from the negligent acts or 

omissions of Owner, Owner's separate contractors or 

anyone for whose acts any of them may be liable. 

Article 8 

Time 

8.1 Obligation to Achieve the Contract Times 

8.1. l Design-Builder agrees that it will commence 

performance of the Work and achieve the Contract 

Time(s) in accordance with Article 5 of the Agreement. 

8.2 Delays to the Work 

8.2.1 If Design-Builder is delayed in the performance 

of the Work due to acts, omissions, conditions, events, or 

circumstances beyond its control and due to no fault of its 

own or those for whom Design-Builder is responsible, the 

Contract Time(s) for performance shall be reasonably 

extended by Change Order. By way of example, events 

that will entitle Design-Builder to an extension of the 

Contract Time(s) include acts or omissions of Owner or 

anyone under Owner's control (including separate 

contractors), changes in the Work, unavailability of 

materials/equipment at the price contemplated by DesignBuilder when establishing the Contract Price, Differing 

Site Conditions, Hazardous Conditions, wars, floods, 

labor disputes, unusual delay in transportation, epidemics 

abroad, earthquakes, adverse weather conditions not 

reasonably anticipated, and other acts of God. 

8.2.2 In addition to Design-Builder's right to a time 

extension for those events set forth in Section 8.2.1 

above, Design-Builder shall also be entitled to an 

appropriate adjustment of the Contract Price. 

Article 9 

Changes to the Contract Price and 

Time 

9.1 Change Orders 

9.1.1 A Change Order is a written instrument issued 

after execution of the Agreement signed by Owner and 

Design-Builder, stating their agreement upon an of the 

following: 

.I The scope of the change in the Work; 

.2 The amount of the adjustment to the 

Contract Price; and 

.3 The extent of the adjustment to the 

Contract Time(s). 

9.1.2 All changes in the Work authorized by 

applicable Change Order shall be performed under the 

applicable conditions of the Contract Documents, 

provided that Owner covenants to Design-Builder that it 

has sufficient funds to pay for any changes in the Worlc. 

Owner and Design-Builder shall negotiate in good faith 

and as expeditiously as possible the appropriate 

adjustments for such changes. 

9 .1.3 If Owner requests a proposal for a change in the 

Work from Design-Builder and subsequently elects not to 

Page 11 

190 
proceed with the change, a Change Order shall be issued 

to reimburse Design-Builder for reasonable costs incurred 

for estimating services, design services and services 

involved in the preparation of proposed revisions to the 

Contract Documents. 

9.2 (intentionally left blank) 

9.3 Minor Changes in the Work 

9.3.l Minor changes in the Work do not involve an 

adjustment in the Contract Price and/or Contract Time(s) 

and do not materially and adversely affect the Work, 

including the design, quality, perfonnance and 

workmanship required by the Contract Documents. 

Design-Builder may make minor changes in the Work 

coni.istent with the intent of the Contract Documents, 

provided, however that Design-Builder shall record such 

changes on the documents maintained by Design-Builder. 

9.4 Contract Price Adjustments 

9.4.1 The increase or decrease in Contract Price 

resulting from a change in the Work shall be determined 

by the agreement between Owner and Design-Builder. 

9.5 Emergencies 

9.5.l In any emergency affecting the safety of persons 

and/or property, Design-Builder shall act, at its 

discretion, to prevent threatened damage, iajury or loss. 

Any change in the Contract Price and/or Contract Time(s) 

on account of emergency work shall be determined as 

provided in this Article 9. 

Article 10 

Contract Adjustments and Disputes 

10.1 Requests for Contract Adjustments and 

Relief 

10.1.1 If either Design-Builder or Owner believes that 

it is entitled to relief against the other for any event 

arising out of or related to the Work or Project, such 

party shall provide written notice to the other party ofthe 

basis for its claim for relief. Such notice shall, if 

possible, be made prior to incurring any cost or expense 

and in accordance with any specific notice requirements 

contained in applicable sections of these General 

Conditions of Contract. In the absence of any specific 

notice requirement, written notice shall be given within a 

reasonable time, not to exceed twenty-one (2 I) days, after 

the occurrence giving rise to the claim for relief or after 

the claiming party reasonably should have recognized the 

event or condition giving rise to the request, whichever is 

later. Such notice shall include sufficient information to 

advise the other party of the circumstances giving rise to 

the claim for relief, the specific contractual adjustment or 

relief requested and the basis of such request. 

10.2 Dispute Avoidance and Resolution 

10.2.1 The parties are fully committed to working with 

each other throughout the Project and agree to 

communicate regularly with each other at all times so as 

to avoid or minimize disputes or disagreements. If 

disputes or disagreements do arise, Design-Builder and 

Owner each commit to resolving such disputes or 

disagreements in an amicable, professional and 

expeditious manner so as to avoid unnecessary losses, 

delays and disruptions to the Work. 

10.2.2 Design-Builder and Owner will first attempt to 

resolve disputes or disagreements at the field level 

through discussions between Design-Builder's 

Representative and Owner's Representative. 

10.2.3 Jf a dispute or disagreement cannot be resolved 

through Design-Builder's Representative and Owner's 

Representative, Design-Builder's Senior Representative 

and Owner's Senior Representative, upon the request of 

either party, shall meet as soon as conveniently possible, 

but in no case later than thirty (30) days after such a 

request is made, to attempt to resolve such dispute or 

disagreement. Prior to any meetings between the Senior 

Representatives, the parties will exchange relevant 

information that will assist the parties in resolving their 

dispute or disagreement. 

10.2.4 If after meeting the Senior Representatives 

determine that the dispute or disagreement cannot be 

resolved on terms satisfactory to both parties, the parties 

shall submit the dispute or disagreement to non-binding 

mediation. The mediation shall be conducted by a 

mutually agreeable impartial mediator, or if the parties 

cannot so agree, a mediator designated by the American 

Arbitration Association ("AAA") pursuant to its 

Construction Industry Mediation Rules. The mediation 

will be governed by and conducted pursuant to a 

mediation agreement negotiated by the parties or, if the 

parties cannot so agree, by procedures established by the 

mediator. The local of the mediation shall be conducted 

in Houston, Texas. 

Page 12 

191 
l 0.3 Arbitration 

10.3.l Any claims, disputes or controversies between 

the parties arising out of or relating to the Agreement, or 

the breach thereof, the Project or any transaction or 

occurrence arising out of or relating to the Project which 

have not been resolved in accordance with the procedures 

set forth in Section 10.2 above shall be decided by 

arbitration in accordance with the Construction Industry 

Arbitration Rules of the AAA then in effect, unless the 

parties mutually agree otherwise.. The hearing locale 

shall be in Houston, Texas. 

10.3.Z The award of the arbitrator(s) shall be final and 

binding upon the parties without the right of appeal to the 

courts. Judgment may be entered upon it in accordance 

with applicable law by any court having jurisdiction 

thereof. 

10.3.3 Design-Builder and Owner expressly agree that 

any arbitration pursuant to this Section 10.3 may be 

joined or consolidated with any arbitration involving any 

other person or entity (i) necessary to resolve the claim, 

dispute or controversy, or (ii) substantially involved in or 

affected by such claim, dispute or controversy. Both 

Design-Builder and Owner will include appropriate 

provisions in all contracts they execute with other parties 

in connection with the Project to require suchjoinder or 

consolidation. 

10.3.4 The prevailing party in any arbitration, or any 

other final, binding dispute proceeding upon which the 

parties may agree, shall be entitled to recover from the 

other party reasonable attorneys' fees and expenses 

incurred by the prevailing party. 

10.4 Duty to Continue Performance 

10.4.t Unless provided to the contrary in the Contract 

Documents, Design-Builder shall continue to perform the 

Wark and Owner shall continue to satisfy its payment 

obligations to Design-Builder, pending the final 

resolution of any dispute or disagreement between 

Design-Builder and Owner. 

10.S CONSEQUENTIAL DAMAGES 

10.5.l NOTWITHSTANDING ANYTHING HEREIN 

TO THE CONTRARY (EXCEPT AS SET FORTH IN 

SECTION 10.5.2 BELOW), NEITHER DESIGNBUILDER NOR OWNER SHALL BE LIABLE TO THE 

OTHER FOR ANY CONSEQUENTIAL LOSSES OR 

DAMAGES, WHETHER ARISING IN CONTRACT, 

WARRANTY, TORT (INCLUDING NEGLIGENCE), 

STRICT LIABILITY OR OTHERWISE, INCLUDING 

BUT NOT LIMITED TO LOSSES OF USE, PROFITS, 

BUSINESS, REPUTATION OR FINANCING. 

10.S.Z The consequential damages limitation set forth 

in Section 10.5.I above is not intended to affect the 

payment ofliquidated damages, if any, set forth in Article 

5 of the Agreement, which both parties recognize has 

been established, in part, to reimburse Owner for some 

damages that might otherwise be deemed to be 

consequential. 

Article 11 

Stop Work and Termination for Cause 

11.1 Owner's Right to Stop Work 

ll.1.J Owner may, without cause and for its 

convenience, order Design-Builder in writing to stop and 

suspend the Work. Such suspension shall not exceed 

sixty ( 60) consecutive days or aggregate more than ninety 

(90) days during the duration of the Project. 

11.1.1 Design-Builder is entitled to seek an adjustment 

of the Contract Price and/or Contract Time( s) if its cost or 

time to perform the Work has been adversely impacted by 

any suspension of stoppage of work by Owner. 

11.2 Owner's Right to Perform and Terminate for 

Cause 

11.2.1 If Design-Builder persistently fails to (i) provide 

a sufficient number of skilled workers, (ii) supply the 

materials required by the Contract Oocumcnt'I, (iii) 

comply with applicable Legal Requirements, (iv) timely 

pay, without cause, Design Consultants or 

Subcontractors, (v) prosecute the Work with promptness 

and diligence to ensure that the Work is completed by the 

Contract Time(s), as such times may be adjusted, or (vi) 

perform material obligations under the Contract 

Documents during the perfonnance of the Work, then 

Owner, in addition to any other rights and remedies 

provided in the Contract Documents, shall have the rights 

set forth in Sections 11.2.2 and 11.2.3 below. 

1 t.Z.Z Upon the occurrence of an event set forth in 

Section 11.2.1 above, Owner may provide written notice 

to Design-Builder that it intends to tenninate the 

Agreement unless the problem cited is cured, or 

commenced to be cured, within seven (7) days ofDesignBuilder's receipt of such notice. If Design-Builder fails 

Page 13 

192 
to cure, or reasonably commence to cure, such problem, 

then Owner may give a second written notice to DesignBuilder of its intent to terminate within an additional 

seven (7) day period. If Design-Builder, within such 

second seven (7) day period, fails to cure, or reasonably 

commence to cure, such problem, then Owner may 

declare the Agreement terminated for default by 

providing written notice to Design-Builder of such 

declaration and after obtaining written approval from the 

Trustee of the same, which shall be an express condition 

precedent to tenninating this agreement for default. 

1 1.2.3 Upon declaring the Agreement terminated 

pursuant to Section 11.2.2 above, Owner may enter upon 

the premises and take possession, for the purpose of 

completing the Work, of all materials, equipment, 

scaffolds, tools, appliances and other items thereon, 

which have been purchased or provided for the 

performance of the Work and paid for by Owner, all of 

which Design-Builder hereby transfers, assigns and sets 

over to Owner for such purpose, and to employ any 

person or persons to complete the Work and provide all 

of the required labor, services, materials, equipment and 

other items. In the event of such termination, DesignBuilder shall not be entitled to receive any further 

payments under the Contract Documents until the Work 

shall be finally completed in accordance with the 

Contract Documents. At such time, if the unpaid balance 

of the Contract Price exceeds the cost and expense 

incurred by Owner in completing the Work, such excess 

shall be paid by Owner to Design-Builder. If Owner's 

cost and expense of completing the Work exceeds the 

unpaid balance of the Contract Price, then Design-Builder 

shall be obligated to pay the difference to Owner. Such 

costs and expense shall include not only the cost of 

completing the Work, but also losses, damages, costs and 

expense, including attorneys' fees and expenses, incurred 

by Owner in connection with the reprocurement and 

defense of claims arising from Design-Builder's default, 

subject to the waiver of consequential damages set forth 

in Section 10.5 hereo[ 

11.3 Design-Builder's Right to Stop Work 

11.3.1 Design-Builder may, in addition to any other 

rights afforded under the Contract Documents or at law, 

stop work for the following reasons: 

,l Owner's failure to provide financial 

assurances as required under Section 3.3 

hereof; or 

.2 Owner's failure to pay amounts properly 

due under Design-Builder's Application 

for Payment. 

11.3.2 Should any of the events set forth in Section 

11.3.1 above occur, Design-Builder has the right to 

provide Owner with written notice that Design-Builder 

will stop work unless said event is cured within seven (7) 

days from Owner's receipt of Design-Builder's notice. If 

Owner does not cure the problem within such seven (7) 

day period, Design-Builder may stop work. In such case, 

Design-Builder shall be entitled to make a claim for 

adjustment to the Contract Price and Contract Time(s) to 

the extent it has been adversely impacted by such 

stoppage. 

11.4 Design-Builder's Right to Terminate for 

Cause 

11.4.1 Design-Builder, in addition to any other rights 

and remedies provided in the Contract Documents or by 

law, may terminate the Agreement for cause for the 

following reasons: 

.1 The Work has been stopped for sixty ( 60) 

consecutive days, or more than ninety (90) 

days during the duration of the Project, 

because of court order, any government 

authority having jurisdiction over the 

Work, or orders by Owner under Section 

I 1.1.1 hereof, provided that such 

stoppages are not due to the acts or 

omissions of Design-Builder or anyone for 

whose acts Design-Builder may be 

responsible. 

.2 Owner's failure to provide Design-Builder 

with any infonnation, pennits or approvals 

that are Owner's responsibility under the 

Contract Documents which result in the 

Work being stopped for sixty (60) 

consecutive days, or more than ninety (90) 

days during the duration of the Project, 

even though Owner has not ordered 

Design-Builder in writing to stop and 

suspend the Work pursuant to Section 

11.1.I hereof. 

.3 Owner's failure to cure the problems set 

forth in Section l I .3. 1 above after DesignBuilder has stopped the Work. 

Page 14 

193 
11.4.2 Upon the occurrence of an event set forth in 

Section 11.4.1 above, Design-Builder may provide 

written notice to Owner that it intends to terminate the 

Agreement unless the problem cited is cured, or 

commenced to be cured, within seven (7) days of 

Owner's receipt of such notice. If Owner fails to cure, or 

reasonably commence to cure, such problem, then 

Design-Builder may give a second written notice to 

Owner of its intent to terminate within an additional seven 

(7) day period. If Owner, within such second seven (7) 

day period, fails to cure, or reasonably commence to cure, 

such problem, then Design-Builder may declare the 

Agreement tenninated for default by providing written 

notice to Owner of such declaration. In such case, 

Design-Builder shall be entitled to recover in the same 

manner as if Owner had tenninated the Agreement for its 

convenience under Article 8 of the Agreement. 

11.5 Bankruptcy of Owner or Design-Builder 

11.S.1 If either Owner or Design-Builder institutes or 

has instituted against it a case wider the United States 

Bankruptcy Code (such party being referred to as the 

"Bankrupt Party"), such event may impair or frustrate the 

Bankrupt Party's ability to perfonn its obligations under 

the Contract Documents. Accordingly, should such event 

occur: 

.1 The Bankrupt Party, its trustee or other 

successor, shall furnish, upon request of 

the non-Bankrupt Party, adequate 

assurance of the ability of the Bankrupt 

Party to perform all future material 

obligations under the Contract Documents, 

which assurances shall be provided within 

ten (10) days after receiving notice of the 

request; and 

.2 The Bankrupt Party shall file an 

appropriate action within the bankruptcy 

court to seek assumption or rejection of the 

Agreement within sixty (60) days of the 

institution of the bankruptcy filing and 

shall diligently prosecute such action. 

If the Bankrupt Party fails to comply with its foregoing 

obligations, the non-Bankrupt Party shall be entitled to 

request the bankruptcy court to reject the Agreement, 

declare the Agreement terminated and pursue any other 

recourse available to the non-Bankrupt Party under this 

Article 11. 

11.5.2 The rights and remedies under Section I l .5.1 

above shall not be deemed to limit the ability of the nonBankrupt Party to seek any other rights and remedies 

provided by the Contract Documents or by law, including 

its ability to seek relief from any automatic stays under 

the United States Bankruptcy Code or the right ofDesignBuilder to stop Work under any applicable provision of 

these General Conditions of Contract. 

Article 12 

Miscellaneous 

12.1 Assignment 

12.1.1 Neither Design-Builder nor Owner shall, without 

the written consent of the other assign, transfer or sublet 

any portion or part of the Work or the obligations 

required by the Contract Documents. 

12.2 Successorship 

12.2.1 Design-Builder and Owner intend tllat the 

provisions of the Contract Documents are binding upon 

the parties, their employees, agents, heirs, successors and 

assigns. 

12.3 Governing Law 

12.3.1 The Agreement and all Contract Documents 

shall be governed by the laws of the place of the Project, 

without giving effect to its conflict oflaw principles. 

12.4 Severability 

12.4.1 If any provision or any part of a provision of the 

Contract Documents shall be finally detennined to be 

superseded, invalid, illegal, or otherwise unenforceable 

pursuant to any applicable Legal Requirements, such 

determination shall not impair or otherwise affect the 

validity, legality, or enforceability of the remaining 

provision or parts of the provision of the Contract 

Documents, which shall remain in full force and effect as 

if the unenforceable provision or part were deleted. 

12.5 No Waiver 

12.5.1 The failure of either Design-Builder or Owner to 

insist, in any one or more instances, on the performance 

of any of the obligations required by the other under the 

Contract Documents shall not be construed as a waiver or 

relinquishment of such obligation or right with respect to 

future performance. 

Page 15 

194 
12.6 Headings 

12.6.1 The headings used in these General Conditions 

of Contract, or any other Contract Document, are for ease 

of reference only and shall not in any way be construed to 

limit or alter the meaning of any provision. 

12.7 Notice 

12.7.1 Whenever the Contract Documents require that 

notice be provided to the other party, notice will be 

deemed to have been validly given (i) if delivered in 

person to the individual intended to receive such notice, 

(ii) four ( 4) days after being sent by registered or certified 

mail, postage prepaid to the address indicated in the 

Agreement or (iii) if transmitted by facsimile, by the time 

stated in a machine generated confirmation that notice 

was received at the facsimile number of the intended 

recipient. 

12.8 Amendments 

12.8.1 The Contract Documents may not be changed, 

altered, or amended in any way except in writing signed 

by a duly authorized representative of each party. 

Page 16 

195 
106 16:44 

1008 D4:38pm 

9404540798 

Fralll"HALE I CONSTRUCTION 

-AJA Document G704" - 2000 

Celtificate of Substantial Completion 

r .. 549 

PAGE 01/01 

P.002/002 F-914 

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to be subsbtlllllllY D)lllplttl!. Sllbsunllal Complcdon Sit lltc •blp In die Pftlllftlll DC die Work whi=n the Work or dcaignaied 

ponion Is sufflclcndy complcre In ue11ntani:i: with 1hc ConlrBCt Documents sa diat I.ho Ownllf c1n oceisp1 or udtl:rc me Wark rar 

Its Intended u.ce. Tbr- dare oM11b1ttu11laJ Complctjon of die PR)jec1 or portion desigaatcd above is r.ila de of l.uu:11tca mrablbhed 

by Cl1is Ccrtl~, ~'hid! it also 1hc dace ot COfnGICllCC"911iat of Op,pJicable wunndet requited by chc Ccmcnct D~menn. i:xccpt ., s~tcd below: 

A list oflrcms 1a be o:amplcted or corrected is machi:d lll!nKo. The tillun: ro include any ilems on svdl llsr docs nor :alter the 

re!lflD~iliL)J ol lhc Cannc:t111r to compl&Ua all Work in =il!Cort!:mG15 wllh the CQ11trac' DOCllllllUlll. Unlc:l1 odle.rwlae llfil'lllld (O in 

wrldnf. the date ar O.lmmtl\l:Cl1Vlftt Of Wllmlnlies fot hc:nu On lhc: lltl.acihcd list wlJl be tho dPla of lniJlftlCC Of TJle fin I( Cc:nfru:au: 

of Payment ar Illa date at final paymmr. 

Cost estimate otWarkihat ls·incomplAto ord~fcctiYl!: 

The Contractor will aalnfJalC Ot COrt9Ct chc Wart Oil 

date ar SubstmtiDI Campktioa. 

HMC contrac.ti ng Sou!bh Texas~ LLC~.--+-...w:..,~~---­ coNTRACTDR BY 

11\e 09.'ne:t acceprs d~ Wort "'° doalsna,itd po an :lace). 

Management Tra1n~ng Corppratio.,."--------- Opel"itor 

a,m.{1imi::) 

DATE 

f 1t maintenance, utilities and insurance. 

owner assume:; a11 responsibi11t.Y or secur :y, 
EXHIBIT D 
Standard Form of Agreement Between 

Owner and Design-Builder ... Lump Sum 

1 'his document has been amended and revised from its standard form. 

This AGREEMENT is made as of the . ?O~ day of ~n the year of 2007, by and 

between the following parties, for services in connection with the Project identified below. 

OWNER: 

The Willacy County Local Government Corporation 190 North 3rd Street 

Courthouse Annex 

Raymondville, Texas 78580 

DESIGN-BUfLDER: 

HMC Contracting South Texas. L.L.C. 

2900 Wesleyan, Suite J75 

Houston, Tex.as 77027 

PROJECT: 

I 000 Bed Addition to the Willacy County fCE Detention Facility Willacy County, Texa~ 

In consideration of the mutual covenants and obligations contained herein, Owner and 

Design-Builder agree as set forth herein. 

Artide 1 

Scope of Work 

I. I Design-Builder shall perform all design and constmction services, and provide all 

material, equipment, tools and labor, necessary to complete the Work described in 

and reasonably inferable from the Contract Documents. 

EXHIBIT 

q 198 
1.2 A description of the Project is attached as part of Exhihit A. This description is for 

general purposes only - the Project may have different technical attributes not 

described in this Exhibit or described differently in this Exhibit. 

Article 2 

Contract Documents 

2.1 The Contract Documents nrc comprised of the following: 

.I All written modifications, amendments and change orders to this 

Agreement issued in accordance with DBIA Document No. 535, Standard 

Form of General Conditions of Contract Between Owner and DesignBuilder (1998 Edition) as amended ("General Conditions of Contract"); 

.2 This Agreement, including all exhibits and attachments, executed by 

Owner and Design-Builder; 

.3 The General Conditions of Contract; 

.4 Construction Documents prepared in accordance with Section 2.4 of the 

General Conditions of Contract along wilh a description of the Project, 

attached as Exhibit A; 

.5 Attached as Exhibit 8, Design-Builder's Ap1>lications for Payment and 

Requisitions for Payment to Trustee . 

. 6 Attached Exhibit C, Design-Builder's Certificate ofinsurance . 

. 7 Attached Exhibit D, Payment and Performance Bonds . 

. 8 Attached as Exhibit E, the list of drawings as of the effective date of this 

Agreement, which may be modified. 

Article 3 

Interpretation and Intent 

3.1 The Contract Documents are intended to permit the parties to complete the Work and 

all obligations required by the Contract Documents within the Contract Time(s) tbr the 

Contract Price. The Contract Documents are intended to be complementary and 

interpreted in hannony so as to avoid conflict, with words and phrases interpreted in a 

manner consistent with construction and design industry standards. fn the event of any 

inconsistency, conflict, or ambiguity between or among the Contract Documents, the 

Contract Documents shall take precedence in the order in which they are listed in Section 

2.1 hereof. 

171620 2066 1 2 

199 
3.2 Terms, words and phrases used in the Contract Documents, including this Agreement, 

shall have the meanings given them in the General Conditions of Contract. 

3.3 The Contract Documents fonn the entire agreement between Owner and DesignBuilder and by incorporation herein are as fully binding on the parties as if repeated 

herein. No oral representations or other agreements regarding the Work have been made 

by the parties except as specifically :;laled in the Contract Documents. 

Article 4 

Ownership of Work Product 

4. I Work Product. All drawings, specifications and other documents nnd electronic data 

furnished by Design-Builder to Owner under this Agreement (''Work Product") are 

deemed to be instruments of service and Design-Builder shall retain the ownership and 

property interests therein, including the copyrights thereto. 

4.2 Upon Owner's payment in full for all Work perfonned under the Contract 

Documents, the drawings, specifications, models, renderings, work product, instruments 

of service and other documents shall become the property of the Owner. Owner may 

utilize such drawings, specifications, models, renderings, work product. instruments of 

service and other documents onJy for the repair, maintenance, modification, expansion or 

renovation of the Project. Nevertheless, it is understood by Owner that all such 

Drawings, Specifications, models. renderings, work product, instruments of service and 

other documents may be inappropriate for use= in the construction of any other project. 

Therefore. Design-Builder shall not be responsible for the use or workability of suc;:h 

drawings, spt..oeiflcations, models, rendering.~ work product, instruments of service and 

other documents in connection with any project other than the Pr~ect for which they 

were specifically prepnrcd. OWNER SHALL INDEMNIFY, DEFEND AND HOLD 

DESIGN-BUILDER HARMLESS OF AND FROM ANY AND ALL CLAIMS, 

DEMANDS AND CAUSES OF ACTION, INCLUDING AITORNEY'S FEES AND 

LITrGATION COSTS, ARISING OUT OR RELATING TO OWNER'S L'SE OF 

DRA WTNGS, SPECIFICATIONS, MODELS, RENDERINGS, WORK PR.ODlXT, 

lNSTRUMENTS Of SERVICE AND OTHER DOCUMENT FOR THIS PROJECT Ol'i 

ANY OTHER PROJECT. 

Article 5 

Contract Time 

5. I Date of Commencement. The Work shall commence within five (5) days of 

Contractor's receipt of I) Owner's Notice to Proceed 2) the execution of this Agreement 

by both parties and the receipt of some by Contractor, and 3) payment of Contractor's 

initial Application for Payment payable at the financial closing of the transaction for the 

Project ( .. Date of Commencement") ~111less the parties mutually agree otherwise in 

writing. 

5.2 Substantial Completion and Final Completion 

171620 2068.1 3 

200 
5.2.l Substantial Completion of the entire Work shall be achieved no later than 180 

calendar days after the Date of Commencement ("Scheduled Substantial Completion 

Date"). 

5.2.2 Intentionally left blank. 

5.2.3 Final Completion of the Work, including the support building, shall be achieved 

120 days after the Date of Commencement. 

5.2.'1 All of che dates set forth in this Article 5 ("Contract Time(s)") shall be subject to 

adjustment in accordance with the General Conditions of Contract. The Contract Time 

shall be extended if ICE grants time extensions to Owner and/or Willacy County, Texas, 

for the same amount of time granted by ICE, unless agreed otherwise. 

5.3 Time is of the Essence. Owner and Design-Builder mutually agree that time is of the 

essence with respect to the dates and times set forth in the Contract Documents. 

5.4 Liquidated Damages. Design-Builder understands that if Substantial Completion is 

not attained b) the Scheduled Substantial Completion Date, Owner will suffer damages 

which are difficult to determine and accurately specify. Design-BuilJer agrees lhat if 

Substantial Completion is not attained by thirty (30) days after the Scheduled Substantial 

Completion Date (the "LO Date"), Designer-Builder shall pay Owner Thirteen Thousand 

Seven Hundred Twenty Five Dollars ($13,725.00} as liquidated damages for each day 

that Substantial Completion extends beyond the LO Date. The liquidated damages 

provided herein shall be in lieu of all liability for any and all extra costs. losses. expenses. 

claims, penaltieli and any other damages, whether special or consequential, and of 

whatsoever nature incurred by Owner which are occasioned by any 1.hday in achieving 

Substantial Completion. 

Article 6 

Contract Price 

6. I Contract Price. Owner shall direct the Trustee to pay Design-Builder's Applications 

for Payment attached to this Agreement in the total sum of Forty-three Million One 

Hundred Seventy-two Thousand Three Hundred Twenty Seven Dollars ($43, 172,327) 

("Contract Price"), subject to adjustments made in accordance with lh1: General 

Conditions of Contract. 

6.2 Materials incorporated into this project are exempt from State Sales tax according to 

provisions of the Texas Tax Code, Chapter 151, Sub!lection H. The Owner shall provide 

to Design-Builder a limited sales, excise and use tax permit or exemption certificate 

which shall enable Design-Builder to buy the materials to be incorporated into the Work 

without paying tax due at time of purchase. This is a separated contract as that term is 

used the Texas Tax Code and applicable Texas law and the Owner agrees and 

acknowledges that it is purchasing th~ material for the Work separately from the lahor for 

the Work. Material for the Work totals $24,176,503 and labor for the Work totals 

171620 2068 1 4 

201 
; 

$18,995,824. This paragraph is meant to meet the separated contract definition under the 

Texas Tax Code and the laws of Texas. 

6.3. Upon Substantial Completion of Lhe Project, Design Builder will provide Owner a 

certification that the Project has been substantially completed. Design-Builder will also 

provide a final release for all payments made by Owner and a consent of surety. Upon 

Final Completion, Design-Builder shall supply a list of all subcontractors utilized by 

Design-Builder and all applicable warranties. 

6.4 Design-Builder guarantees to complete the Project for the Contract Price, which 

cannot be modified by either party except by a Change Order signed by both parties 

pursuant to Article 9 of the General Conditions. 

7.1 Progress Paymenlc; 

Article 7 

Procedure for Payment 

7.1. l Design-Builder's Applications for Payment are attached to this Agreement as 

Exhibit B. By the execution of this Agreement, Owner hereby approves the Applications 

for Payment and agrees to take all actions necessary to fund such Applications for 

Payment, including the execution of the Requisitions attached as Exhibit B at closing. 

7.1.2 Owner agrees that the Trustee can pay the Applications for Payment upon 

submission by Design-Builder of the executed Requisitions for Payment to the Trustee, 

without the need for any additional information or consent from the Owner. 

7.2 Source of Funds. Design-Builder and Owner acknowledge and agree that the fonding 

for payments due under this Agreement shall come from the Construction Fund 

established pursuant to the Trust Indenture by the Trustee, U.S. Bank, N .A. (the 

"Trustee"). 

7.3 (Intentionally Left Blank) 

7.4 Record Keeping and Finance Controls. In light of the fact that this is a stipulated sum 

contract, Design-Builder shall have no obligation to kl.-ep records, books, correspondence, 

receipts, subcontracts, purchase orders, vouchers, memoranda or other data relating to the 

Work and no records shall be open for inspection by any part). Design·Builder agrees to 

cooperate with Owner in conjunction with any reporting required of Owner by !CE or the 

Federal Government in connection >Aith the Project. 

171620 2068.1 

Article 8 

(Intentionally Left Blank) 

s 

202 
9.1 Owner's Representatives 

Article9 

Representatives of the Parties 

9.1. I Owner designates the individuals listed below as its Senior Representatives 

("Owner's Senior Representatives"), which such individuals have the authority and 

responsibility for avoiding and resolving disputes under Section 10.2.3 of the General 

Conditions of Contract: 

9.1.2 Owner designates the individual listed below as its Owner's Representative, which 

individual has the authority and responsibility set forth in Section 3.4 of the General 

Conditions of Contract; (Identify individual's namc.1idc. add~s ind telephone numbmJ 

The Willacy County Local Government Corporation 

190 North 3r:1 Street 

Courthouse Annex 

Raymondville, Texas 78580 

9.2 Design-Ruilder's Representatives 

9.2.J Design-Builder designates the individual listed below as its Senior Representative 

("Design-Builder's Senior Representative"), which individual has the authority and 

responsibility for avoiding and reo;olving disputes under Section I 0.2.3 of the General 

Conditions of Contract: 

Mr. Philip K. Packer 

President ofHMC Contracting South Texas. L.L.C. 

2900 Weslayan, Suite 375 

Houston, Texas 77027 

(713) 665-1100 

9.2.2 Design-Builder designates the individual listed below as its Design-Builder's 

Representative, which individual has the authority and responsibility set forth in Section 

2.1.l of the General Conditions of Contract: 

Mr. Philip K. Packer 

President of HMC Contracting South Texas, L.L.C. 

2900 Wesleyan, Suite 375 

Houston, Texas 77027 

(713) 665-1100 

171620 206&.1 6 

203 
Article 10 

Bonds and Insurance 

l 0.1 Insurance. IJesign-Builder shall procure in accordance with Article 5 of the General 

Conditions of Contract the insurance coverages set forth in Exhibit C. 

10.2 Bonds and Other Performance Security. Design-Builder shall provide the following 

perfonnance bond and labor and material payment bond or other performance security: 

See Exhibit D. 

Article 11 

Other Provisions 

11.1 Other provisions, if any, are as follows: (lnsen 11ny addftlon•I ~\lsions) 

11.1.l Willacy County, Texas shnll be a direct, third party beneficiary of 

this Agreement and shall he bound by the dispute resolution 

procedures contained in Article I 0 of the General Conditions of the 

Contract. 

In executing this Agreement, Owner and Design-Builder each individually represents that 

it has the necessary financial resources to fulfill its obligations under this Agreement, and 

each has the necessary corporate approvals to execute this Agreement, antl perfonn the 

services descrihed herein. 

OWNER: 

THE WILLACY COUNTY LOCAL 

GOVERNMEl'T CORPORATION . _,.-; 

c~~ President 

DESlGN-BUILDER: 

HMC CONTRACTING 

SOffel~/ 

yfusi ent 

-----------------------------------·-·-·--·--

204 
DB I A 

DESIGH•IUllD 

INSTJTllTE 

~ OF AMUICA 

STANDARD FORM OF GENERAL 

CONDITIONS OF CONTRACT 

BETWEEN OWNER AND 

DESIGN-BUILDER 

205 
DB I A 

DHIGN·JOILD 

IHSTll 

~ U If OF AMEllC4 

Standard Form of General Conditions 

of Contract Between Owner and Design-Builder 

This documr.nt Jra.y heen amemkd and revised/ram it.s stando.rdform. 

Table of Contents 

Article 1: General ...................................................................................................................................... 3 

Article 2: Design-Bullder·e Services and ResponslblllUes ......................................................................... 3 

Article 3: Owner's Services and Responaibilities ...................................................................................... 6 

Article 4: Hazardou5 Conditions and Differing Site Conditions .............................................................. 7 

Article 5: Insurance and Bonds ................................................................................................................... 7 

Article 6: Payment. .................................................................................................................................... 8 

Article 7: lndemniflcation .......................................................................................................................... 10 

Article 8: Tlme .......................................................................................................................................... 11 

Article 9: Changes to the Contract Price and Time ................................................................................. 11 

Article 10: Contract.Adjustments and Disputes ......................................... ., ........................................ 12 

Article 11: Stop Work and Termination for Cause ................................................................................... 13 

Article 12: Miscellaneous ......................................................................................................................... 15 

206 
Article 1 

General 

1.1 Mutual Obligations 

1.1.l Owner and Design-Builder commit at all times 

to cooperate fully with each other, and proceed on the 

basis of trust and good faith, to permit each party to 

realize the benefits afforded under the Contract 

Documents. 

1.2 Buie DefloHiolls 

l,2.1 Agreement refenc to the txi:cuted contract 

between Owner llJ1d Design-Builder ,DBIA Document 

No. 525, Standard Form of Agreement Betw~en Owner 

and Design-Builder - Lump Sum (1998 Edition) as 

amended by the parties. 

1.2.l Day or Days shall mean calendar days unless 

otherwise specifically noted in the Contract Documents. 

1.2.3 DeJign Consultant is e qualified, licensed design 

professional who Is noc an employee of Design-Builder, 

but Is retained by Design-Builder, or employed or 

retained by anyone under contract with Design-Builder or 

Subcuntractor, to furnish design services required under 

the Contract Documents. 

l.l.4 Hazardous Conditions are any materials, wastes, 

substances and chemicals deemed to be hazardous under 

applicable Lesa I Rcquiremenl1, or the h1111dling, storage, 

remediation, or disposal of which are regulated by 

applicable Legal Requirements. 

1.2.5 GenemJ Conditions of Contract refer to lhi5 

DBIA Document No. 53S, Stamlard Form of Genaral 

CondJ1ionJ of Contracs Berween Owne1· and Destl{l'lBul/der (1998 Edition) as amended by the parties. 

1.2.6 ugal Requirements are all 11pplicable federal, 

state ll!ld local laws, codes, ordillllllces, rules, regulations, 

orders and decrees of 1111y government or quasi· 

government entity havingjurudiction over the Project or 

Site, the practices involved In the Project or Site, or any 

Work. 

1.2. 7 (Intentionally Left Bl Mk) 

1.2.8 Site is the land or premises on which the Project 

ls located. 

1.2.9 Subcontractor ls any person or entity retained by 

Design-Builder as an independent contractor to perfonn a 

po11lon of the Work and shall include materialmen and 

suppliers. 

1.2.10 Sub-Subcontractor is any person or entity 

retained by a Subcontractor as an independent contractor 

to perfonn any portion of a Subcontractor's Work and 

shall include materialmen and suppliers. 

1.2.11 Substantial Completion is the date on which the 

Work, or an agreed upon portion of the Work, is 

~ufficiently complete so that Owner and/or Operator 

would be able to use the Project for training andtor 

operations. 

1.2.12 Work is comprised of all Design-Builder's 

design, construction and other services requited by the 

Contract Documents, including procuring and furnishing 

all materials, equipment. servicu and labor reasonably 

inferable from the Contract DoCUlJ'lents. 

Article 2 

Deslgn-Bullder's Services and 

ResponslbllltJes 

2.1 General Services 

1..1.1 Design·Bullder's Representative shall be 

reasonably available to Owner end shall have the 

necessary expertise and experience required to supervise 

the Work. Design·Bullder's Representative shall 

communicate regulady with Ownel' a11d shall be vested 

w'ith the authority tc act on behalf of Design-Builder. 

Design-Builder's Representative may be replaced only 

with lhe mutual agreement of Owner and DesigTI-Builder. 

2.1.2 Design-Builder shall provide Owner with a 

monthly status report detailing the progress oi !he W urk. 

l.2 DesI:n Professional Services 

l.2.1 Design-Builder shall, consistent with appliC11.ble 

state licensing laws, provide through qualified, licensed 

design professionals employed by Design-Builder, 

procured from qualified, independent licensed Design 

Consultants or from subcontr8Ctors/vendors fabricating 

materials and/or equ\ pment for the Project, the necessary 

design services, including architecturul, engineering and 

other design professional services, for the preparation of 

Page3 

207 
lhe required drawings, specifications and other design 

submitto.ls to pennlt Design-Builder to complete the 

Work consistent with the Contracl. Documents. Nothini: 

Jn the Contract Documents Is intended or deemed to 

create any legal or conll"actual relationship between 

Owner and any Design Consultant. 

l.3 Standard of Cart for Design Profes1lon11l 

Services 

2.3.1 The standard of care for all desi~ professional 

seivices perfonned to ~ecute the Work shall be the care 

and skill ordinarily used by members of the design 

profession practicing under similar conditions at the same 

time and locality of the Project. 

l.4 Design Development Services 

l.4.1 Design-Builder has provided Owner 

design/conceptual submissions that have been approved 

by Owner 11ml llTC isllached as Exhibit A to the 

Agreement. 

2.4.2 Desii!l·Builder may submit to Owner 

Construction Documents setting forth in greater detail 

drawings and specifications dc:lcrlblng the requirements 

for construction of the Work. The construction 

Documents shall be consistent with the intent defined In 

the previously approved design submissions identified in 

the Agreement. Owner acknowledges that the Projecl 

will not be designed to meet or comply with any type uf 

State, Federal or voluntary jail or prison design standards 

that may or may not be applicable to the Project. Design· 

Builder shall proceed with construction In accordance 

with the Construction Documents, if any are created. 

l.S ~Ill Requlresnenu 

1.5.1 Design-Builder shall perfonn the Work in 

accordance with all Legal Requirements and shall provide 

o.11 notices applicable to the Work as required by I.he 

Legal Requirements. 

2.5.2 The Contract Price and/or Contract Time(s) shall 

be adjusted to compensate Design-Builder for the effects 

of' any changes in the Legal Requirements enacted after 

the date of the Agreement affecting the pcrfonnance of 

the Work. Such effectS may include, without limitation, 

revisions Design-Builder is required to make to the 

Construction Documents because of changes in Leglll 

Requirements. 

2.6 Government Approvals and Permits 

2.6.1 Except as identified in an Owner's Pennit List 

which may be attached as an exhibit to the Agreement, 

Design-Builder shall obtain a11d pay for all necessary 

permits, approvals, licenses, government charges and 

inspection fees required for the prosecution of the Work 

by any government or quasi-government entity having 

jurisdiction over the Project. 

2.6.2 Owner shall provide reasonable assistance to 

Design-Bullder in obtaining those pennits, approvals and 

licenses that arc ne~sary for the design and construction 

of the ProjecL 

2.7 Deslgn-Bul1d•r's Construction PhQe 

Servic~s 

2.7.1 Desl~n-Builder sh.all provide through itself or 

Subcontractors the necessary supervision, labor, 

inspection, testing, start-up, material, equipment, 

mechh1eiy, temporary utilities and other temporary 

facilities to permit Design-Builder to CQmpiete 

construction of the Project consistent with the Contract 

Documenls. 

2.7.2 Design-Builder shall perfonn all construction 

activities efficiently and with the requisite expertise, skill 

and competence to satisfy the requirements of the 

Contract Documents. Design-Builder shall at all times 

exercise complete and exclusive control over the means, 

methods, sequences and techniques ot' construction. 

2.7.3 Design-Builder shall employ only 

Subcontractors who ore duly licensed and qualified to 

perform the Work consistent with the Contract 

Documents. 

2.7.4 Design-Builder assumes responsibility to Owner 

for the proper performance of the Worl< ofSubcon1ractors 

1111d any acts and omissions In connection with such 

performtlnce. Nothing in the Contract Documents is 

intended or deemed to create any legal or contractual 

relationship between Owner and any Subcontractor or 

Sub-Subcontractor, including but not limited to any third· 

party beneficiary rights. 

l. 7.5 Design-Builder shall coordinate the activities of 

all Subcontractors. lfOwner performs other work on the 

Project or at the Site with separate contractors under 

Owner's control, Design-Builder agrees to reasonably 

cooperate and coordinate its activities wilh those of such 

separate contractors so that the Project can be completed 

208 
in an orderly ond coordinated manner without 

unreasonable disruption. 

2.7.6 Design-Builder shall keep the Site reusonably 

free from debris, trash and construction wastes to pennit 

Design-Builder to perform Its construction services 

efficiently, safely and without interfering with the use of 

adjacent land areas. lipon Substantial Completion of the 

Work, or a portion of the Worlc, Desien-Builder shall 

remove all debris, trash, construction wastes, materials. 

equipment, machinery and tools arising from the Work or 

applicable portions thereof to pennit Owner to occupy the 

Project or a portion of the Project for its intended use. 

2.8 Design-Builder's ResponslbUity fur Project 

Safefy 

2.8.1 Design-Builder recognizes the Importance of 

performing the Work in a safe manner so as to prevent 

damage, iajury or loss to (i) all individuals at the Site, 

whether working or visitfog, (ii) the Work, including 

materials and equipment incorporated into the Work or 

stored on-Site or off-Site, 1111d (iii) all other property at 

lhe Site or adjacent thereto. Design-Builder assumes 

responsibility for implementing and monitoring all safety 

precautions and programs related to the perfonnance of 

the Work. 

2.8.2 Design-Builder and :Subcontractors shall comply 

with all Legal Requirements relatlng to safety, as well as 

any Owner-specific safety requirements set forth In the 

Contract Documents, provid1;:d that such Owner-specific 

requirements do not violate any applicable Legal 

Rcquircmenl Design-Builder will Immediately report In 

writing any safety-related injury, loss, damage or accident 

arising from the Work to Owner's Representative and, to 

the extent mandated by Legal Requirements, to all 

government or quasi-government authorities having 

jurisdicLion over safety-related matters involving the 

Project or the Work. 

2.8.3 lJesign-Builder's responsibility for safety under 

this Section 2.8 is not Intended in any way to relieve 

Subcontractors and Sub-Subcontractors of their own 

contr11Ctual and legal obligations and responsibility for (i) 

complyin& with all Legal Requirements, including those 

related to health and safety maners, and (ii) taking ell 

necessary measures lo implement and monitor all safety 

precautions 11nd programs to guard against injury, losses, 

damage.~ or accidents resulting from their performance of 

the Work. 

2.9 De.sign-Builder's W11rranty 

2.9.l o~sign-BLlilder warrants to Owner that the 

construction, including all materials and equipment 

furnished as part of the construction, shall be new unless 

otherwise specified In the Contract Documents, of good 

quality, in conformance with the Contract Documents and 

free of defects in materials and workmanship. Design. 

Builder's warranty obligation excludes defects caused by 

abuse. elterations. or failure to maintain the Worlc by 

persons other than Design-Builder or anyone for whose 

acts Design-BuUder may be liable. Nothing in this 

warranty is intended to limit any manufacturer's warranty 

which provides Owner with greater warranty rights than 

set forth in this Section 2.9 or the Contract Documents. 

Design-Builder will provide Owner with all 

manufacturers' warranties upon either Substantial or 

Final Complet[on. Where a manufacturer's or third party 

warranty has been provided to Owner, Owner agrees that 

Design-Builder will have no further liability with respect 

to the subject of the manufacturer's or third party 

warranty and owner agrees to look solely to such 

manufacturer or third party f1Jr >111y warranty claim with 

respect to such items and hereby specifically releases 

Design-Builder of end from any such claims. 

2.10 Correction of Defective Work 

2.10.1 Design-Builder agrec.1 to correct iUIY Work \hat 

is found to not be in conformance with the Contract 

Documents, including that part of the Work subject to 

Section 2.9 hereof, within a period of one year from tbe 

date of Substantial Completion of the Work or any 

portion of the Work, or within such longer period to the 

extent required by the Contract Documents, provided 

~w:h work ls not the subject of a manufacturers warranty 

as described in Article 2.9. l above. 

Z.10.l Design-Builder shafl, within seven (7) days of 

receipt of written notice from Owner that the Work is not 

in conformance with the Contract Documents, take steps 

to commence correction of such nonconfonning Work, 

Including the correction, removal or replacement 1,1f th" 

nonconforming Work and any dam1111e caused to other 

parts of the Work ftffected by the nonconforming Work, 

provided such work is not the subject of a manufacrurer' s or third party warranty as described in Article 2.9. I 

above. If Design-Builder fails to commence the 

necessary steps within such seven (7) day period, Owner, 

in addition to any other remedie.~ provided under the 

Conlract Documents, may provide Design-Builder with 

written notice tbal Owner will commence correction of 

such nonconfonning Work with its own forces. If Owner 

does perform such corrective Work, Design-Builder shall 

age 

209 
be responsible for all reasonable costs incurred by Owner 

in performing such correction. If the nonconforming 

Work creates an emergency requiring an immediate 

response, the seven (7) day periods identified herein shall 

be deemed inapplicable. 

2.10.3 The one year period referenced in Section 2.10.1 

above applies only to Dt:Sigr1-Builder's obligation to 

correct nonconfonning Work not the subject of a 

manufacturer'~ or third party warranty and Is not Intended 

to constitute a period oflimltations for any other rights or 

remedies Owner may have regarding Design-Builder's 

other obligations under the Contract Documents. 

Article 3 

owner's Services and Responsibilities 

3.1 Duty to Cooperate 

3.1.1 Owner 5hall, throughout the performance of the 

Work, cooperate with Design-Builder and perform lts 

responsibilities, obligations 11nd services in a timely 

manner to facilitate Design-Builder's timely and efficient 

performance of the Work and so as not to delay or 

interfere with Design-Builder's performance of Its 

obli,&ations under the Contract Documents. 

3.1.2 If required by this Agreement, Owner shall 

provide timely reviews and approvals of submissions 

consistent with the turnaround times set forth in Design· 

Builder's schedule. 

3.2 Furnbhin& of Servien and IJaformatlon 

3.2.1 Owner is responsible for securing and executing 

all necessary agreements with adjacent land or property 

owners and any easements that are necessary to enable 

Design-Builder to perform the Work. Owner is further 

respo1111ible for all costs, including attorneys' fees, 

incurred in securing these necessary e.greemcnts. 

3.3 Finanetal Information 

3.3.1 Design-Builder shall cooperate with the 

rellllOnable requirements of Owner's lenders or other 

financial sources. Nohvithstanding the preceding 

sentence, after execution of the Agreement, DesignBuildcr shall have no obligation to execute for Owner ur 

Owner's lendor& or other financial sources any documents 

or agreements that require Design-Builder to assume 

obligations or re.'lponsibilitiCll greater than those existing 

obligations Design-Builder that may exist under the 

Contract Documents. 

3.4 Owner's Representative 

3.4.l Owner's Representative shall be responsible for 

providing Owner-supplied infonnation and in a timely 

manner to permit IJesign-Builder to fulfill its obligations 

under the Contract Documents. Owner's Representative 

shalt also provide Design-Builder with prompt notice if it 

observes any failure on the part of Design-Builder to 

fulfill its contractual obligations, including any errors, 

omissions or defects in the performance of the Work. 

Fllilure to provide such notice to Design-Builder shall 

constitute a complete waiver of any daims by OWner 

relating to such matters. 

3.5 Government Approvall and Permits 

3.5.1 Owner shall provide reasonable assistance to 

Deslgn-Huilder in obtaining those pennits, approvals and 

licenses thal are Design-Builder's responsibility. 

3.6 Owner's Separate Coatractors 

3.6.1 Owner is responsible for all work perfonned on 

the Pruj~cl or at the Site by separate contractors under 

Owner's control. Owner shall contractually require its 

separate contr11Ctors to cooperate with, and coordinate 

their activities so as not to inteTfere with, Design-Builder 

in order lo enable D1;11ign-Buildcr to timely complete the 

Work consistent with the Contract Documents. 

3.7 Owner's Rerponslbllity ror Maintenance 

3.7.I Owner shall be n::spon8ible for maintaining the 

Work after Final Completion by Design-Builder. Owner 

warrants and represents to Design-Builder that it will 

provide all necessary maintenance and upkeep of the 

llinJcture, systems, equipment and appurtenances 

furnished and installed by Design-Auilder hereunder. 

Page6 

210 
Article 4 

Hazardous Conditions and Differing 

Site Conditions 

4,1 Ha:r.ardons Conditionx 

4, t.1 Unless otherwise expressly provided in the 

Contract Documents to be part of the Work, Design· 

Builder is not re.sponsible for any Hazardous C'.tmdition~ 

encountered at the Site. Upon encountering any 

Hazardous Conditions, Design-Builder will stop Work 

Immediately in the affected area and duly notify Owner 

and, if required by Legal Requirements, all government 

or quasi-government entities with jurisdiction over the 

Project or Site. 

4.1.2 L:pon receiving notice of the presence of 

suspected Hazardous Conditions, Owner shall take the 

necessary measures required to ensure that the Hazardous 

Conditions are remediated or renderc::d h!ITlllless. Such 

necessary measures shall include Owner retaining 

qualified independent experts to (i) ascertain whcthe1· 

Hazardous Conditions have actually been encountered, 

and, if they have been enco1.1ntered, (ii) prescribe the 

remedial measures that Owner must take either to remove 

the Hazardous Conditions or render the Hazardous 

Conditions harmless. 

4.1.3 Design-Bullder shall be obligated to resume 

Work llt the affected area of the Project only after 

Owner's expert provides it with written certification that 

(i) the Hazardous Conditions have been removed or 

rendered h11rmle:1s aod (ii) all necessary approvals have 

been obtained from all government and quasi-government 

entities having jurisdiction over the Project or Site. 

4.1.4 Design-Builder will be entitled, in w:ordance 

with these General Conditions of Confract, to an 

adjustment in its Contrnct Price and/or Contract Tlrnc(s) 

to the extent Design-Builder's cost and/or time of 

performance have been adversely impacted by the 

pl'esence ofHazardo\tS Conditions. 

4.1.5 TO THE FULLEST EXTENT PER'v[JITED 

BY LAW, OWNER SHALL INDEMNIFY, DEFEND 

AND HOLD HARMLESS DESIGN-BUILDER, 

DESIUN CONSULTANTS, SUBCONTRACTORS, 

ANYONE EMPLOYED DIRECTLY OR INDIRECTI.. Y 

FOR ANY OF THEM, AND THEIR OFFICERS, 

DIRECTORS, EMPLOYEES AND AGENTS, FROM 

AND AGAINST ANY Af'.r'D ALL CLAIMS, LOSSES, 

DAMAGES, Lll\SJLITIES AND EXPENSES, 

INCLUDINO ATIORNEYS' FEES AND EXPENSES, 

ARISING OUT OF OR RESULTING FROM THE 

PRESENCE, REMOVAL OR REMEDIATION OF 

HAZARDOUS CONDITIONS AT THE SITE. 

4.1.6 Notwithstanding the preceding provisions of this 

Section 4.1, Owner is not responsible for Hazardou3 

Conditions introduced to the Site by Design-Builder, 

Subcontractors or anyone for whose acts they may be 

liable. DESION-BUILDER SHALL INDEM?\TFY, 

DEFEND AND HOLD HARMLESS OWNER AND 

OWNER'S OFFICERS, DIRECTORS, EMPLOYEES 

AND AGENTS FROM AND AGAINST ALL CLAIMS, 

LOSSES, DAMAGES, LIABILI'nES AND EXPENSES, 

IJ;;CLUDING A lTORNEYS' FEES AND ID<Pl3NSES, 

ARISING OUT Of OR RESUL TINO FROM THOSE 

HAZARDOt;S CONDITIONS INTRODUCED TO THE 

SITE BY DESIGN-BUILDER, SUBCONTRACTORS 

OR ANYONE FOR WHOSE ACTS THEY MAY BE 

LIABLE. 

4.2 Differing Site Conditions 

4.2.1 Concealed or latent phyaical conditions or 

subsurface conditions at the Site that (I) materially differ 

from the conditions indicated in the Contract Documents 

or (ii) are of 11n Unl1$ual nature, differing materially from 

the conditions ordinarily encountered and generally 

recognized as inherent in the Work are collectively 

referred to herein as "Differing Site Conditions." If 

Design-Builder encounters a Differing Site Condition, 

Design-Builder will be entitled to an adjustment in the 

Co11tract Price and/or Contract Tlme{s) to 1he extent 

Design-Builder's cost and/or time of performance are 

adversely impacled by the Differing Site Condition. 

4.2.2 Upon encountering a Differing Site Condition, 

Design-Builder shall provide prompt written notice to 

Owner of such condition, which notice shall not be later 

than fourteen (14) days after ~uch condition has been 

encountered. Design-Builder shall, to the extent 

rcMonably possible, provide such notice before the 

Differing Site Coridition has been substantially disturbed 

or altered. 

Article 5 

Insurance and Bonds 

5.1 Design-Builder's Insurance Requirements 

5.1.1 Design-Builder is responsible for procuring and 

maintaining trom insurance companies authorized to do 

211 
business In the state In which the Project is located, the 

l11surancc cover11acs set forth In the 11ttaohcd Exhibit C. 

!1.1.2 Design-Builder's liability insurllllcc set forth in 

Exhibit C shall specifically delete any d~isn-bulld or 

similar exclusions that could compromise coverages 

because of the design-build delivery of the Project. 

5.1.4 To the extent Owner requires Design-Builder or 

any Design Consultant tu provide professional liability 

insurance for claims arising Crom the negligent 

perfonnance of design services by Design.Builder or the 

OeBign Consultant, the coverage limits, duration and 

other specifics of such insurance shall be as set forth in 

the Agreement. Any professional liability policy ~hall 

specifically delete any design-build or similar exclusions 

that could compromise coverages because ofthc de&ignbuild delivery of the Project. Such policies shall be 

provided prior to th~ commencement of any design 

services hereunder. 

5.1.5 Prior to commencing any constroctlon services 

hereunder, Design-Builder shall provide Owner with 

certificates evidencing that (i) all insurance obligations 

required by the Contract Documents are in full force and 

in effect and will remain in effect for the duration 

required by tile Contract Documents and (ii) no insurance 

coverage will be canceled, renewal refused, or materially 

ch1111ged unless at least thirty (30) days prior written 

notice is given to Owner. 

S.l Owner's Liability Insurance 

5.2.1 Owner shntl procure nnd maintain from 

insurance companies authorized to do business in the 

state in which the Pro.iect is located such liability 

insurance to protect Owner from claims which may 11ri:ie 

from the performance of Owner' a obligations under the 

Contract Documents or Owner's aonduct during the 

course of the Project. 

5.3 Property lnsarauce 

5.3.1 Unless otherwlRe provided in the Contract 

Documents, Design-Builder shall procure lllld maintain 

from insurance companies authorized to do business in 

the state in which the Proje~ Is localed property 

Insurance upon the entire Pruj1:cl lo the full Insurable 

value of the: Project, including professional tees, overtime 

premiums and all other expenses incurred to replace or 

rcpni r tile insured property. The property insurance 

obtained by Design-Builder shall include: as additional 

insureds the interests of Owner, De,ign C'.onsultants, 

Subcontractors and Sub-Subcontractors, and shall insure 

againet tho pcrilu of fiftl ond 111d.ended coverage, theft, 

vandalism, malicious mischief, collapse, flood, 

earthquake, debris rcmovlll and other perils or causes of 

loss as called for in the Contract Documents. The 

property insurance shall include physical loss or damage 

to the Work, includin& materials and equipment in transit, 

at the Site or at another location ns may be indicated in 

Design-Builder's Application for Payment and approved 

by Owner. 

5.3.2 Owner and Design-Builder waive against each 

other and Owner's separate contractors, Design 

Consultants, Subcontractors, agents and employees of 

each lllld all of them, all damage$ covered by property 

insurllllce provided herein, except such rights as they may 

have to the proceeds of such Insurance. Design· Builder 

and Owner shall, where appropriate, require similar 

waivers of subrogation from Owner's separate 

contractol'll, De.~ign Consultants and Subcontractors and 

shall require each or them to include similar waivers In 

their contracts. 

5.4 Bonds and Other Performance Security 

5.4.t Copies of the performance and payment bonds 

for the Project are attached as Exhibit D to the Standard 

Form of Agreement Between Owner and Design-Builder 

- Lump Sum. The owner acknowlcd&es that the surety 

on puch bonds (and the Design-Builder) shall not be 

liable or responsible in any way for the items, or the 

reimbursement of items, set forth in the Initial 

Application for Payment 11S described in Article 6.2. I 

below. 

Artjcle 6 

Payment 

6. t Applicati11ns for Payment 

6.1.1 The proposed Application fur P1tymcnts are 

attached to the Agreement. Dcaign·Builder shall submit 

for Owner'R review it~ Application for Payment. The 

Applications sball be paid In aocordance wlth thetenns of 

the Agreement. 

6.1 Initial Application for Payment 

6.1.1 Design-Builder's Initial Application for Payment 

will Include funds for disbursements to third plll'tiea for 

land acquisition, all pre-construction development costs 

and fees, insurance, bond fees, travel and legal expense 

Page 

212 
reimbursement, design consultant and pre-development 

fees. Design-Builder is performing this function at the 

request of Owner and has not participated in the 

negotiation or creation or these obllgations and, therefore, 

does not assume, and express disclaims, any liability or 

warranty obligations with respect to such activities. This 

fnitlal Application for Payment will be paid at the 

financial closing of the l.ransaction for the Project. 

6.3 Disputu over Payment.I 

6.J.l On or before the date established in the 

Agreemenl, Owner :;hall pay Design-'Ruilder all amount.~ 

properly due. If Owner determines that Design-Builder is 

nol entitled to all or part of an Application for Payment, it 

will notify Design-Builder in writing at least five (S) days 

prior to the date payment is due. The notice shall indicate 

the specific amounts Owner disputes, the reasons and 

contractual basis for such dispute11, and the !!pccific 

measures Design-Builder may take to rectify Owner's 

concerns. Design-Builder and Owner will attempt to 

resolve Owner's concerns prior to the date payment is 

due. If the parties cannot resolve such concerns, Owner 

must pay Design-Builder and Owner may pursue its 

rights under the Contra.;;! DocWtlents, including those 

under Article 10 hereof. 

6.4 Right to Stop Work 110.d Interest 

6.4.1 If Owner fails to pay Design-Builder any 

amount that becomes due, Design-Builder, in addition to 

all other remedies provide.d in the Contract Documents, 

may atoμ Work pursuant to Section 11.3 hereof. All 

payments due and unpaid shall bear Interest at the rate set 

forth in the Agreement. 

6,5 Design-Builder's Payment Obligations 

6.5.J Oe~iwi-Builder will pay Design Consultants and 

SubcontraetDrs in accordance willi its contractual 

obligations to such parties. Design-Builder will impose 

similar requirements on Design Consultants and 

SubcontrllCtors to pay those parties with whom they have 

contracted. Design-Builder will indemnify ttnd defend 

Owner against any claims for payment and mechanic's 

liens as set forth in Section 7 .3 hereof. 

6.6 Substantial Completion 

6.6.1 Design-Builder shall notify Owner when it 

believes the Work, or to the extent permitted in the 

Contract Documents, a portion of the Work, is 

substantially complete. Within ftve (S) days of Owner's 

receipt of Design-Builder's notice, Design-Builder shall 

prepare and issue a Ce1tifica.te of Substantial Completion 

that will set forth (i) the date of Substantial Completion 

of the Work or portion !hereof, (li) provlsions (to 1he 

extent not already provided in the Contract Documents) 

establishing Owner's and De.~ign-Builder's responsibllity 

fur the Project's security, maintenance, utilities and 

insurance pending final payment and (iii) an 

acknowledgment that warranties commence to run on the 

date of Substantial Completion, except as may otherwise 

be noted in the Certificlll.e of Substantial Completion. 

6.6.2 Owner, at its option, may use a portion of the 

Work which has been detennined to be substantially 

complete, provided, however, that (i) a Certificate of 

Substantial Completion hflS been issued forthe portion of 

Work addressing the Items set forth In Section 6.6.l 

above, (ii) Design-Builder and Owner have obtained the 

consent of thelr sureties and insurers, and to the extent 

applicable, the appropriate government authorities having 

jurisdiction over the Project, and (iii) Owner and DesignBuilder 11gro:e Lhal Owner's use or occupancy will not 

interfere with Design-Builder's completion of the 

remaining Work. 

6.7 Final Payment 

6.7.1 At the time of submission of its Final 

Application for Payment, Design-Builder shall provide 

the following information: 

.1 (intentionally left blank); 

,2 a general release executed by DesignBullder waiving, upon receipt of final 

payment by Design-Builder, all claims, 

except those claims previously made in 

writing to Owner and remaining unsettled 

at the time of final payment; 

.3 consMt ofDeslgn-Builder's surety, ifany, 

to fin a I payment; 

,4 al I operating manual~, warr11t1lies and other 

delivel'llbles required by the Contract 

Documents; and 

oge 

213 
.5 ce1tificates of insurance confirming that 

required coverages will remain in effect 

consistent with the requiremenls of the 

Contract Documents. 

6.7.2 Upon making final payn1ent, Owner waives all 

claims against Design-Builder except claims relating to 

(i) Design-Builder's failure to satisfy i1.s paymenl 

obligations, if such failure affects Owner's interesL,, (ii) 

Design-Ruilder's failure to complete the Wol'kconsistent 

with the Contract Documents, including defects 

appearing after Substantial Complc:tion and (iii) the terms 

of any special warranties required by the Contr11et 

Documents, specifically excluding manufocturcrs' 

wmanties. 

Article 7 

Indemnification 

7.1 Patent aa.d Copyright lnfrincement 

7.1.1 Design-Builder shall defend any action or 

proceeding brought against Owner based on any claim 

that the Worlc, or any part thereof, or the operation or use 

of the Work or aJty part thereof, constitutes infringement 

of any United States patent or copyright, now or hereafter 

issued. Owner shall give prompt wrilten notice to 

Design-Builder of any such action or proceeding and will 

reasonably provide authority, information and assistance 

in the defense of same. Desl&n-Builder shal! indemnify 

and hold harmless Owner from and against all damages 

and costs, including but not limited to attorneys' fees and 

expenses awarded against Owner 01· Design-Builder in 

any such action or proceeding. Design-Builder agrees to 

keep Owner informed ofaU developments in the defense 

uf such actions. 

7.1.2 If Owner is eflioined from the operation or use 

of the Work, or any part thereof, as the result of any 

pillc:nl or copyright suit, claim, or proceeding, Design· 

Builder shllll at its sole expense take reooonable steps to 

procure tne tight to operate or use the Work. IfDesignBullder cannot so procure such right within a reasonable 

time, Design-Builder shall promptly, at Design-Builder's 

option and at nesign-Builder's expense, (i) modify the 

Work so 11S to nvoid infringement of any such patent or 

copyright or (ii) replace said Worlc with Work that does 

not infringe or violate any l;Uch patent or copyright. 

7.1.3 Sections 7.1.1 and 7.1.2 above shall not be 

applicable to any suit, olaim or proceeding based on 

Infringement or violation of a patent or copyright (i) 

relating solely to a particular process or product of a 

particular manufacturer specified by Owner and not 

offered or recommended by Design-Builder to Owner or 

(ii) arising from modifications to the Work: by Owner or 

its agents after acceptance of the Work. If the suit, claim 

or proceeding is based upon events set forth in the 

preceding sentence, Owner shall defend, indemnify and 

hold harmless Design-Builder to the same extent DeslgnBuildcr is obligated tn defend, indemnify and hold 

harmless Owner in Section 7.1.l above. 

7.1.4 The obligalions set forth in this Section 7.1 shall 

constitute the sole agreement between the plll1ies relating 

to liability for infringement of violation of any patent or 

copyright. 

7.2 TllX Oaim Indemnification 

7.2.1 If, in accordance with Owner's direction, an 

exemption for all or part of the Work is claimed for taxes, 

Owner sl\all indemnify, defend and hold harmless 

Uesign-Builder from and against any liability, penalty, 

interest, fine, tax assessment, attorneys' fees or other 

expenses or costs incurred by Design-Builder as a result 

of any action W:en by Design-Builder in 11ec0rdance with 

owner's direclive. 

7.3 P•yment Clsiim lodemnif'icatlon 

7.3.l Providing that Owner is not in breach of its 

contractual obligation to make payments 10 OCSlitlBuilder for the Work, Design-Builder shall indemnify, 

defend and hold hannless Owner from any claims or 

mechanic's liens brought against Owner or 11go.inst the 

Project as 11 result of the failure of Design-Builder, or 

those for whose acts it is responsible, to pay for any 

services, materials, labor, equipment, taxes or other items 

or obligations furnished 01· incurred for or in connection 

wltb the Work. Within three (3) days of receiving written 

notice from Owner that such a claim or mecl\anic's lien 

hlllf b~n filed, Design-Builder shall commence to take 

the steps necessary to discharge said claim or lien, 

including, if necessary, the furnishing of a mechanic's 

lien bond. 

7.4 Duign-B111lder'1 General Indemnlfkatton 

7.4.1 Design-Builder, to the fullest extenl permill.tfil 

by law, 1hall indemnify, hold harmless and defend 

Owner, its officeni, director~. employees and 1111.ents from 

and against claims, losses, damt1&es, liabilities, including 

attorneys' fees and expenses, for bodily iaj11zy, sickness 

or death, and property damage or destruction (other than 

Page 10 

214 
to the Work ltself) to the extent resulting from the 

negligent acts or omissions of Design-Builder, Design 

Consultants, Subconlractors, anyone employed directly or 

Indirectly by any of them or anyone for whose acts any of 

them may be liable. 

7.4.2 If an employee of Design-Builder, Design 

Consultants, Subcontractors, anyone employed directly or 

indirectly by any of them or anyone for whose acts 1111y of 

them may be liahlc has 11 claim againat Owner, its 

officers, directors, employees, or agents, DesignBullder's indemnity obligation set forth in Section 7.4.I 

above shall llOt be limited by any limitation on the 

amount of damages, compensation or benefits payable by 

or for Design-Builder, Design Consultants, 

Subcontractors, or other entity under any employee 

benefit acts, including workers' compensation or 

di3ablllty acts. 

7.5 Owner's Genual lndemnlftcatlon 

7.5.l Owner, to the fullest extent permitted by law, 

shall indemnify, hold harmless and defend Design. 

Builder and any of Design-Builder's officers, directors, 

employees, or agents from and against claims, losses, 

damages, liabilitie.,, including attorneys' fees 81ld 

CXpcn3CS, for bodily injury, sickness or death, and 

property damage or destruction (other th1111 w the Work 

itself) to the extent resulting from the ne&ligent acts or 

omissions of Owner, Owner's separate contractors or 

anyone for whose~ any of them may be liable. 

Article 8 

Time 

8.1 Obligation to Achieve the Contract 11mes 

8.1.1 Design-Builder agrees that it will 1.'Ummtmee 

performance of the Work and achieve the Contract 

Time(s) in accordance with Article S of the Agreement 

8.2 Delays to the Work 

8.2.1 If Design-Builder is delayed in the performance 

of the Work due to acts, omissions, conditions, events, or 

circumstances beyond its control and due to no mutt ofits 

own or those for whom Design-Builder is responsible, the 

Contract Thne(s) for perfonnance shall be reasonably 

extended by Change Order. By way of example, events 

that will entiUe Design-Builder to an extension of the 

Contract Tlme(s) include acts or omissions of Owner or 

anyone under Owner's control (including separate 

contractors), changes In the Work, unavailability of 

materials/equipment at the prict: contemplated by DesignBuilder when establishing the Contract Price, Differing 

Sit.e Conditions, Hazardous Conditions, wars, floods, 

labor disputes, unusual delay in transponation, epidemics 

abroad, earthquakes, adverse weather conditions not 

reBSOnably anticipated, and other acts of God. 

8.2.2 ln addition to Design-Builder's right to a time 

extension for those events set forth in Section 8.2.1 

above, Design-Builder shall also be entitled lo an 

appropriate adjustment oftbe Contract Price. 

Article 9 

Changes to the Contract Price and 

Time 

9.1 Change Orders 

9.1.1 A Change Order is a wrltten instrument issued 

after execution ot' the Agl'eement signed by Owner and 

Design-Builder, stating their agreement upon all of the 

following: 

.I The 11eope of the change in the Work; 

.2 The amount of the adjustment to the 

Contract Price; and 

.3 The extent of the adjustment to the 

Contract Time(s ). 

9.1.2 All changes in the Work authorized by 

applicable Change Order shall be performed under the 

applicable conditions of the Contract Documents, 

provided that Owner covenants to Design-Builder that it 

has sufficient funds to pay for an)' changes in the Work. 

Owner and Design-Builder shall negotiate in good faith 

and as expeditiously as possible the appropriate 

adjustments for such changes. 

9.1.3 ff Owner requests a proposal for a change in the 

Work from Design-Builder and subsequendy elects not to 

proceed with the change, a Change Order shall be issued 

to reimburse Design-Builder fof teasonable costs incurred 

for estimating services, design services and services 

involved in the preparation of proposed r~islons to the 

Contract Documents. 

9.2 (Intentionally left blank) 

Pn&c ll 

215 
9.3 Minor Changes b1 the Work 

9.3.t Minor changes In the Work do not involve an 

adjustment in the Con1ract Price and/or Contract Time(s) 

and do not materially and adversely affect the Work, 

including the design, quality, performance and 

workmanship required by the Contract Documents. 

Design-Builder may make minor changes in the Work 

consistent with the intent of the Contract Documents, 

provided, however that Design-Builder shall record such 

changca on the documents maintained by Design-Builder. 

9.4 Contract Price Adjumaeots 

9.4.1 The increase or dec1·ea.se in Contract Price 

resulling from a change In the Work shall be detennined 

by the agreement between Owner and Design-Builder. 

9.5 Emergencies 

9.S.l In any emergency 11ffecling the safely urpersons 

and/or property, Dcsign-BuildCT shall 11et, at its 

discretion, Lll prevent threatened damage, injury or loss. 

Any change In the Contract Price and/or Contract Tlme(s) 

on ac1:ount of emergency work shill be detennined as 

provided in this Article 9. 

Article 10 

Contract Adjustments and Disputes 

10.1 Requests for Contract Adjustments and 

Relief 

10.1.t If either Design-Builder or Owner believes that 

it is entitled to relief against the other for any event 

arising oui of or related to the Work or Project, such party 

shall provide written notice to the other party of the basis 

for its claim for relief. Such notice shat~ if possible, be 

made prior to Incurring any cost or expense and in 

accordance with any speciflc notice requirements 

contained in applicable sections of these General 

Condition~ of Contract. In the absence of any specific 

notice requirement, written notice shall be given within a 

reasonable time, not to exceed twenty-one (21) days, after 

the occurrence giving rise to the claim for relil!f or after 

the claiming party reasonably should have recognized the 

event or condition giving rise to the request, whichever is 

later. Such notice shall include sufficient information to 

advise the other party of the circumstances giving rise to 

the claim for relief, the specific contractual adjustment or 

relief requested and the basis ofsuch request. 

10.2 Dispute Avoidance and Resolution 

10.2.1 The parties are fully con1mined to working with 

each other throughout the Project and agree to 

communicate regularly with each other at all times so as 

tn avoid or minimize disputes or disagreements. If 

disputes or disagreements do arise, Design-Builder and 

Owner each commit to resolving such disputes or 

disagreements in an amicable, professional and 

CJ<peditiou.s manner llO a.~ to avoid unnecessary losses, 

delays and disruptions to the W orlc. 

10.2.2 Design-Builder and Owner will first attempt to 

resolve dispute., or disagreements at the field level 

through discussions between Design-Builder's 

Representative and Owner's Representative. 

10.2.3 If a dispute or disa&reement cannot be resolved 

through Design-Builder's Representative and Owner's 

Representative, Design-Builder's Senior Representative 

and Owner's Senior Representative, upon the request of 

either party, shall meet a.• soon as conveniently possible, 

but in no case lat.er than thirty (30) days after such a 

request ls made, to attempt to resolve such disput.e or 

disagreemenL Prior to any meetings between the Senior 

Representatives, the partle.<1 will exch11nge relevant 

information that will assist the parties in resolving their 

dispute or disagreement. 

10.2.4 1f after meeting the Senior Representatives 

determine that the dispute or disagreement cannot be 

resolved on terms satisfactory to both plll1ie.s, the parties 

shall submit the dispute or disagreement to non-binding 

mediation. The mediation shall be conducted by a 

mutually agroeable impartial mediator, or If the parties 

cannot so agree, a mediator designated by the American 

Arbitration Association ("AAA") pursuant to ils 

Construction Industry Mediation Rules. The mediation 

will be governed by end conducted pursuant to a 

mediation agreement negotiated by the parlies or, if !he 

pllrties c1111nol ~u 11grt:t:, by procedures established by tbe 

mediator. The local of the mediation shall be conducted 

In Houston, Texas. 

10.3 Arbitration 

10.3. l Any claims, disputes or controversies between 

the parties arising out of or relating to the Agreement, or 

the breach thereof, the Project or any transaction or 

occurrence arising out of or relating to the Agreement 

and/or the Project which have not been resolved in 

accordt111ce with the procedures set forth In Section I 0.2 

above shall be decided by arbitration in accordance with 

Pa~~ 12 

216 
the Construction Industry Arbitration Rules of the AAA 

then in effect, unless the parties mutually agree 

otherwise.. The hearing locale shall be in Houston, 

Texas. 

10.3.2 The award of the arbitrator(s) shall be final and 

binding upon the parties without the right of appeal to the 

couns. Judgment may be entered upon it in 11ccortlance 

with applicable law by any oourt hflVing jurisdict.ion 

thcreor. The rarties ~tipulate and agree that the Project 

involves interstate commerce and this Agreement shall be 

governed by the Federal Arbitration Acl. 

10.3.J Design-Builder and Owner expressly agree that 

any arbitration pursuant to this Section 10.J may be 

joined or consolidated with any arbitration involving ~Y 

other person or entity (i) necessary to resolve the claim, 

dispute or controversy, or (ii) substantially involved in or 

affected by such claim, dispute or controversy. Both 

Design-Builder and Owner will include appropr~te 

pn.ivi~ions in all contracts they ex.ecut~ with o~e~ parties 

in connection with the Project to require such JOmder or 

consolidation. 

10.3.4 The prevailing rnrty In any arbitration, or any 

other final, binding dispute proceeding upon which Che 

parties may llgl'ee, shall be entitled to recover from the 

other party reasonable attorneys' fees and ex.pl::llS~ 

incurred by the prevailing party. 

L0.4 Duty to Continue Performance 

10.4.1 Unless provided to the contrary in the Contract 

Documents, Design-Builder shall continue to perfom1 the 

work and Owner shall continue to satisfy its pllyment 

obligations to Design-Builder, pending the final 

resolution of any dispute or disagreement between 

Design.Builder and Owner. 

10.5 CONSEQUENTIAL DAMAGES 

10.5.l NOTWilliSTANDl'NG ANYTillNG HEREIN 

TO THE CONTRARY (EXCEPT AS SET FORTH IN 

SECTION 10.5.2 BELOW}, NEITHER DESJGNBUILDERNOR.OWNERSHALLBEUAF.ILETOnrE 

OTHER FOR ANY CONSEQUENTIAL LOSSES OR 

DAMAOUS, WHETHER ARISING IN CONTRACT, 

WARRANTY, TORT (fNCLUDING NEGLIGENCE), 

STRICT LIABILITY OR OTHERWISE, INCLUDING 

BUT NOT LIMITED TO LOSSES OF USE, PROFITS, 

BUSINESS, REPUT A no-r-; OR FINANCING. 

10.5.2 The consequential dllll\nges limitation set forth 

in Section l O.S.1 above Is not intended to affect the 

payment ofliquldated damages, if any, set forth in Article 

5 of the Agreement, which both parties recognize has 

been established, in part, to reimburse Owner for some 

damages that might olherwise be deemed to be 

consequenlial. 

Article 11 

Stop Work and Termination for Cause 

11.1 Own11r's Right to Stop Work 

11.1.1 Owner m11y, without cause and for it~ 

convenience, order Design· Builder in writing to stop ood 

suspend the Work. Such suspension shall not exceed 

sixty (60) consecutive days or aggregate more than ninety 

(90) days during the duration of the Project. 

11.l.2 Design-Builder ls entltled to seek an adjustment 

of the Contract Price and/or Con1r11ct Tlme(s) if its cost or 

time to perform the Work has been adversely impacted by 

any suspension of stoppage of work by Owner. 

11.l Owner's Rlcht tu Perform a11d Termiuate for 

Cause 

J 1.2.1 IfDe:iign-Bullder persistently fails to (I) provide 

a sufficient number of skllled workel'll, (ii) supply the 

material& required by the Contract Documents, (iii) 

comply with applicable Legal Requirements, {iv) timely 

pay, without cause, Design Consultants or 

Subcontractors, (v)prosecute the Worlc with promptness 

and diligence to ensure that the Work is completed by the 

Contract Time(s), as such times may be adjusted, or (vi) 

perform material obligations under the Contract 

Documents during the performance of the Work, then 

Owner, in addition to any other rights and rem~dies 

provided In the Contract Documents, shall have the r1gh1S 

set forth in Sections 11.2.2 and 11.2.3 below. 

11.l.1 Upon Lhe occurrence of an event set forth In 

Section 11.2.1 above, Owner may provide written notice 

to Design-Builder that IL intends Lo terminate lhe 

Agreement unless th1: probl~m cited is cured, or 

commenced to be cured, within seven (7) days of Design. 

Builder's receirt of such notice. If Design-Builder fails 

to cure, or reasonably commence 10 cure, such problem, 

then Owner may give a second written nolice to De.~lgn· 

Builder of its intent to terminate within an additional 

seven (7) day reriod. If Dcsign·Builder, within such 

second seven (7) day period, falls to cure, or reasonably 

Ill• I 

217 
commence to cure, such problem, then Owner mtiy 

declare the Agreement tc::rminated for default by 

providing written notice to De~ign·Buildcr of such 

declaration and after obtain in, written approval from the 

Trustee of the same, which shall be an express condition 

precedent to tenninatlng this agreement for default. 

11.2.3 Upon declaring the Agreement tenninated 

pursuant to Section 112.2 above, Owner may enter upon 

the premises and take possession, for the purpose of 

completing the Work, of all materials, equipment, 

scaffolds, tool$, appliances and other items thereon, 

which have been purchased or provided for the 

perfomumce of lht: Work and paid for by Owner, all of 

which Design-Builder hereby transfers, assigns and sets 

over to Owner for such purpose, and to emplQy any 

person or persoM to complete the Work and provide all 

of the required labor, services, materials, equipment and 

other items. In the event ~·f such tennination, De.,ignnuilder shall not be entitled to receive ony further 

payments under the Contract Documents until the Work 

shall be finally completed in accordance wilh the 

Contract Documents. At such time, if the unpaid balance 

of the Contract Price exceeds the cost and expense 

incurred by Owner In completing the Worlc, such excess 

shall be paid by Owner to Design-Builder. If Owner's 

cost and expense of completing the Work exceeds the 

unpaid balance of the Contract Price, then Design-Builder 

shall be obligated to pay the difference to Owner. Such 

costs and expense shall include not only the cost of 

completing the Work, but also losses, damages, costs and 

ex.pcnsc, including attorneys' fees and expenses, incurred 

by Owner in connection with the reprocuremont and 

defense of claims arising from Design·BullJ1:r'~ defaull, 

subject to the waive.r of consequential damages set forth 

in Section 10.S hereof: 

11.3 Des!in-Bullder's Rleht to Stop 

Workfl'erminatt 

11.3.1 Uesi&n-Builder may, in addition to any other 

rights afforded under the Contract Documents or at 1!1w, 

stop work for the following reasons: 

.1 Owner's fallure to provide financial 

aS911rances as required under Section 3.3 

hereof; ur 

.2 Failure to pay Design-Builder's 

Application(e) for Payment. 

11.3.2 Should any of the events set forth in Section 

11.3. I above occur, Design-Builder has the right to 

provide Ow1\er witl1 written notice that Design-Duilder 

will stop work and terminate the Agreemenl unless said 

event is cured within seven (7) days from Owner's receipt 

of Design-Builder's notice. Jf Owner does not cure the 

problem within such seven (7) day period, Design· 

Builder may mop work and/or terminate the Agreemenl 

for cause pursuant to 11.4 below. lf Design-Builder only 

stops work, Design-Builder shall be 1:ntille<l ltJ make a 

claim for adjustment to the Contract Price and Contract 

Time(s) lo the eitlent it ha.~ been adversely impacted by 

such stopp11ie. 

11.4 DeJign-Builder's Riaht to Terminate for 

Cause 

11.4.1 Design-Builder, in addition to any other rights 

and remedies provided in the Contract Documents or by 

law, may terminate the Agreement for cause for the 

followin& reasons: 

.1 The W urk has be~n slopped for sixty (60) 

consecutive days, or more than ninety (90) 

days during the duration of the Project, 

because of court order, any government 

a1.1thority having jurisdiction over the 

Work, or orders by Owner under Section 

11.1.1 hm:of, provided that such 

stoppages are not due to the acts or 

omissions ofDesign-B1,1ilder or anyone for 

whose acts Design-Builder may he 

responsible. 

.2 Owner's failure to provide Design-Builder 

with any information, permits or approvals 

that arc Owner's responsibility under the 

Contract DocumenlS which result in the 

Wotk being stopped for si:<ty (60) 

conscculi vc days, or more than ninety (90) 

dny~ during the duration of the Project, 

even though Owner has not ordered 

Design-Builder \n writing 10 slop imd 

suspend the Work pursuant to Section 

11.1.1 hereof. 

.3 Owner's failure to cure the problems act 

forth in Section 11.3.1 aboveafu:r J1c~ignDuilder has stopped the Work. 

11.4.2 Upon the occurrence of an event set forth In 

Section 11.4.1 above, Design-Builder may provide 

w1·itten notice to Owner that it intends to terminate lhc 

Agreement unless the problem cited is cured, or 

commenced to be cured, within seven (?) days of 

Page 14 

218 
Owner' 5 receipt of such notice, or notice hll.S elrea<ly been 

provld~d to Owner under Article 11.3. ff Owner fllil~ tu 

cure, or reasonably commence to cure, such problem, 

then Design-Builder may declare the Agreement 

tennlnated ror default by providing writtw notice to 

Owner of such declaration. In such case, Design-Builder 

shall be entitled to recover 1111 damages arising out of or 

resulting from such termination. 

11.5 Bankruptcy of Ownu or Design-Builder 

11.5.1 If either Owner or DtlSign-Bullder institutes or 

has instituted against it a case under the United States 

Bankruptcy Code (such party being referred to as the 

"Bankrupt Party"), such event may impair or :frustrate the 

Bankrupt Party's ability to perform its obligations under 

the Contract Documents. Accordingly, should such event 

occur: 

.J The Bankrupt Party, its trustee or other 

successor, shall furnish, upon request of 

the non-Bankrupt Party, adequate 

assurWJce of the ability of the Rankrupt 

Porty to pcrfonn all furure material 

obligations under the Contract Docummts, 

which assurances shllll be provided within 

ten (l 0) days after receiving notice of the 

request; and 

.l The Bankrupl Pariy shall file an 

appropriate action within the bankruptcy 

court to seek assumption or rejection of the 

Agreement within sixty (60) days of the 

imrtitutlon of the b1mkruplcy liling and 

shall diligently prosecute such action. 

If the B11nkrupt Party fails to comply with its foregoing 

obligations, the non-Bankrupt Party shall be entitled to 

request the bankruptcy court to reject the Agreement, 

declare the Agreement terminated and puT11Ue MY other 

recourse available to the non-Bankrupt Party under this 

Article 11. 

11.5.2 The rights and remedies under Section 11.S. I 

above shall not be deemed to limit the ability of the nonBankrupt Party lo seek any other rights and remedies 

providec.I by Lhe Contract Documents or by law, Including 

its ability to seek relief from any automatic stays under 

the United States Bankruptcy Code or the right of 

Design-Builder to stop Work under any applicable 

provision of these General Co11ditions ufConlracl. 

Article 12 

Miscellaneous 

12.1 Assignment 

12.1.1 Neither Design-Builder nor Owner shall, 

without the written consenL of the other assign, transfer or 

sublet any portion or pllrt of the Work or the obligations 

required by the Contract Documents. 

12,2 Successorship 

12.2.t Design-Builder 11nd Owner Intend that the 

provisions oflhe Contract Documents arc binding upon 

the parties, their employees, agents, hei~. successors 1111d 

assigns. 

12.J Governing Law 

12.3.1 °The Agreement and all Contract Documents 

shall be governed by the laws of the place of the Project, 

without giving effect to its conflict of law principles. 

11.4 Severability 

12.4.1 Ifnny provision or any part ofaprovision of the 

Contract Documents shall be finally det.erm ined to be 

superseded, invalid, illegal, or otherwise unenforceable 

pursu1111t to any applicable 1.egal Requirements, such 

detennination shall not impair or otherwise affect the 

validity, legality, or enforceability of the remaining 

provision or parts of the provision of lhc Contract 

Documents, which shal I remain in full force nnd effect o.s 

if the unenforceable provision or part were deleted. 

12.S ~o Waiver 

1l.S.1 The failure of either Design-Builder or Owner to 

Insist, In any one or more instances, on the performance 

of any of the obligations required by the other under the 

Contract Documents shall not be construed as a waiver or 

relinquishment of such obligation or right with respect to 

future performance. 

ll.6 H eadi"1'5 

12.6.1 The headings used in these General Conditions 

of Contract, or any other Contract Document, arc for ease 

ofreference only and shall not in any way be con~trued to 

limit or alter the meaning of any provision. 

12.7 Notice 

Page 

219 
)l.7.1 Whenever the Contract Documents require that 

Mtlce be provided to the other party, notice will be 

deemed to have been validly given (I) If delivered in 

person to the individual lnten®d to receive such notice, 

(ii) four ( 4) days after being sent by registered or certified 

mai I, postage prepaid to the address indicated in the 

Agreement or (ill) If transmitted by facsimile, by the time 

stated in a machine generated con1lnnation that notice 

was received at the facsimile number of the Intended 

recipient. 

11.8 Amendments 

U.8.1 The Contract Documents may not be changed, 

altered, or amended in any way except In writing signed 

by u duly Uui.horized represeittatlve of each party. 

ngo 

220 
EXHIBIT A 

PROJECT DESCRIPTION 

The original 2006 Project consists of a 2000-bed, low security adult detention facility, 

constructed in two phases, including ten housing structures and a support building. The work 

under this Agreement consists of an addition to and remodel of the existing Administration 

Building, a new 1,086 Detainee Housing Building, a new Administration/Maintenance Building 

and a new enclosed Recreation Building. The expansion of the existing facility is located on the 

original 54 acres. The entire facility is surrounded by a double security fence and perimeter 

patrol road. Additional vehicle parking has been provided to accommodate the additional staff. 

The facility is designed to comply with applicable local, state and national codes. Public utilities 

are available and of the appropriate capacities to accommodate the detainees and facility staff. 

The existing Administration Building is approximately 41,000 square feet and will be 

expanded by 21,286 square feet. The Facility Operator's offices will be relocated from the 

existing Administration Building to the new Administration/Maintenance Building. This 

building will be extensively remodeled to accommodate expanded general office space needs 

that will initially be utilized by the ICE Office of Detention and Removal (DRO), the Office of 

Principle Legal Advisor (OPLA), the Executive Office for Immigration Review (EOIR), which is 

the judicial portion of the facility, and Public Health Services (PHS), which is the health care 

portion of the facility. Each of these areas contains offices, office cubicles, storage, support 

spaces, conference rooms, multi-purpose rooms, courtrooms, restrooms, etc. Detainee intake and 

processing, detainee visitation and the vehicular sally port are part of the original Administration 

Building. The ceiling in the Administration Building is acoustical ceiling tile or gypsum board; 

the partitions are either gypsum board or concrete masonry units. The floors in the 

Administration Building are carpet, vinyl composition tile or sealed concrete. Plumbing fixtures, 

hardware, doors, windows and finishes are commercial grade. The Administration Building is an 

engineered steel structure with a pre-engineered metal roof. 

The new Detainee Housing Building is approximately 130,960 square feet and contains 

(43) 2-bed separation cells, and (20) 50-person donnitories. The kitchen and laundry are also 

located in this building. The kitchen and laundry are fully equipped with the appropriate 

equipment and food storage areas to accommodate food preparation and laundry processing for 

3 ,300 detainees/staff. Inmate dining, law library, urgent care, tele-health, tele-medicine, exam 

room, ICE offices, operator offices, multipurpose rooms, staff restrooms, mechanical, electrical, 

unit storage and exterior inmate recreation are all included in the Detainee Housing Building. 

The control room located in this building controls all the electro/mechanical security hardware, 

CCTV and monitors in this building. The ceilings in the separation cells are concrete, the 

Dormitories are exposed to structure and the corridors and support areas are acoustical ceiling 

tile. The floors are either vinyl composition tile or sealed concrete. The walls in the detainee 

areas are structurally grouted, reinforced concrete masonry units with gypsum wall board from 

12' AFF to underside of structure or concrete panels. The plumbing fixtures in the separation 

cells arc security stainless steel fixtures. The plumbing :fixtures in the donnitories and support 

areas are vitreous china. The doors in the secure area are security hollow metal and the door 

hardware is detention grade hardware. The doors in the support areas are commercial hollow 

171620 2068.1 

221 
metal with commercial hardware. The Detainee Housing Building exterior walls are concrete tilt 

up panels and the roof is standing seam metal. 

The new Administration/Maintenance Building is approximately 27,350 square feet. The 

Administration portion contains the necessary offices, office cubicles, storage, support spaces, 

conference rooms, multi-purpose rooms, workout room, property storage, locker rooms, 

restrooms, etc. for the Facility Operator. The ceiling in the Administration portion is acoustical 

ceiling tile, gypsum board or exposed to structure, the partitions are either gypsum board or 

concrete masonry units. The floors in the Administration portion are carpet, vinyl composition 

tile or sealed concrete. Plumbing fixtures, hardware, doors, windows and finishes are 

commercial grade. 

The Maintenance portion of the Administration/Maintenance Building contains an office, 

tool storage, property storage, restrooms, and armories. The ceiling in the Maintenance portion 

is either exposed to structure, acoustical ceiling tile or security gypsum board, the partitions are 

either gypsum wall board or concrete masonry units. The floors are carpet, vinyl composition tile 

or sealed concrete. Plumbing fixtures, hardware and finishes are typical commercial grade in the 

office areas and security type in the armories. The Administration/Maintenance Building is an 

engineered steel structure with a pre-engineered metal roof. 

The new enclosed Recreation Building is approximately 18,750 square feet. It contains 

(2) recreation areas, restrooms, library, offices and supply storage. The ceiling is exposed to 

structure in the recreation area and acoustical ceiling tile in the other areas. The partitions are 

either metal panel or gypsum board. The floors are either vinyl composition tile or sealed 

concrete. The enclosed Recreation Building is an engineered steel structure with pre-engineered 

metal roof. 

171620 2068.1 

222 
EXHIBIT B 

PAY APPLICATIONS AND REQUISITIONS 

1716202068.1 

223 
EXHIBITC 

CERTIFICATES OF LIABILITY INSURANCE 

171620 2068.1 

224 
--------------------------------------------------------------

CERTIFJCATE OF LIABILITY INSURANCE /-'~lw j ~Ar~~';;:;;; ._P_,,~-OC-IJC!!__,_n________ THIS C!RTIFICATE IS ISSUl!D AS A MATTER OF INFORMATION 

The !ll%ansportation ~roup, Ltd. 

11111 WilcreBt Groen, #325 

HouGton 'IX 77042 

Phone:713-785-6785 rax:713-?BS-8785 

HMC contracting South 

Tcxa.s, L.~.c. Attn: rh~l racke~ 

2900 Weslayan6 Suite 375 

HOUlil ton -rx- 77 2? 

COVERAGES 

I 

ONLY AtlD CONFERS NO RIGHTS UPON THE Cl!RTll'ICATE 

HOLDER. THIS CERTIFICATE DOES NOT AMENO, EXTEND OR 

Al TER THE COVERAGE AFFOROl!O BY THE POLIC1£.S BELOW 

. I ! INSURl!RS AFFORDING COVERAGE I NAIC# ' ·- - - ------·-·-----------· ··-···-·-1 _: _.,._. _,~_,,,_. __ ...;;..!o.terstate E'ire L~alty ___ --·- I 

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u:·~· (;"'R1'MEM3CR" E ~.:-. l 1:'S(;·? 

1 SCI0023!107731 06/01/07 

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certificate Hol.der is inc.l.uded as an Additional rnsured as .x·espects aeueral 

Liability and Waiver 0£ Subrogation appl.ies as required by contxact. 

Certificate Holder is included as Mortqaqee on tbe Buil.ders Risk Pol.icy as 

re•peats Willacy County ~ocal Government Corporation. 

CERTIFICATE! HOLDER 

us. Bank Nationa1 Association 

As Truatee 

950 17th Streot, Suite 650 

Mail. Stop CNDT 0665 

DGDV<!:t', CO 80202 

J\CORD 25 (7001/08) 

--· -·------ CANC:1!;LLATION 

~ou1 n ANY or TH! ~o~ oP.scP-seo Pouc.es ei::: Cl'N:::t:LLEo ~vr.:ccF. w1: EX?'P.t.-r.c•j J 

DATE nr.;REOF, "-HE. IS~U.!te 1'-lSlJR€R. w·._l (\o:J~.P.-'('~. TO t,IA·_ 30 ;).-'..OS 't\111irnJ. 

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l'l<Pruose•l:A1WES 

@ ,O.CORD CORPORATION 1988 

225 
IMPORTANT 

If lhe certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed A statement 

on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s) 

If SUBROGAT!ON IS WAIVED, subject to the terms and conditions of the policy, certain policies ma;' 

require an endorsement. A statement on this certificate does not confer rights to the certificate 

holder In lieu of such endorsement(s). 

DISCLAIMER 

The Certificate of Insurance on the reverse side of this form does not constitute a contract between 

the issuing insurer(s), authorized representative or producer, and the certifi:;ate holder, nor does it 

affirmatively or negatively amend, extend or alter the coverage alforded by the policies listed thereon. 

226 
CERTIFICATE OF LIABIUTY INSURANCE OP ID CH I O~rE (rdhl/ODM'VVi 

3-KALEM 08/24/07 PRCZ~CER THIS CERTIJllCATE IS ISSUED AS A MATTER OF INFORMATION 

ONLY AND CONFERS NO RIGHTS UPON THE C&RTIFlCAT! 

HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 

ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 

The ~ranaportation Group, Ltd. 

11111 Wilcrest Green, #325 

Kouston 'l'X 77042 

Phone:713-785-6785 rax:713-7BS-8785 t-:~= .. ,.,,nir.,,.,---------------

HMC Contractinq south 

!l'exaa, L.:{.1c. 

Attn: Ph1 Packer 

2900 Weslayan0 Suite 375 Houston '.rlr77 27 

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COVERAGES 

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, EMPLCJ'l'ERS' llAe!UTf 

, P.Nf P~\:"'PRIF.iCIR!PNTit'-P~~1E>-E...:U~;'"'.: 

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"-~~·~~ii_··- .J.'25,000,000_ 

08/01/08 •.CC~EC.<Tt'. -- ~25,000,00~-

. ----- -.. I· . -·- ---- - 08/01/0'7 I 

f 

03/30/07 03/30/0B Per occr. $50,000,000 

I 

as respects General 

,_C_E_R_T-ll'l_C_A_T_E_H_O_l_D_E_R_ .. ----·------------C~AHC--""E_L_LA_Tl_O_N ____ _ 

Willac~ County Local 

GoverlllDSnt corporation 

546 w, Hidalqo street 

Ra'llUIOndville, TX 78580 

\CORD 25 (2001/08) 

ffYLC:RAY SHOU'.D ANY OF TI1~ QIO\IE OESCRISEO POLICl~S ~E CM:~ELLEO 8Ef0Rf TM" E>Pl'IAT'ON 

OATE THEREOF. THE 133~i:io l/ISURER "c.L ENOEAY<JR re IW!. 3 0 CAYS WMTf.1, 

NOTICliTO THE CER11FiCATE J-!OLOEll 111''':0 TO l>1E LEFT, ~1;HNl~f TO oc •O 3HAl.L 

11.tPOSI! ~O OSl.IOA110M OR LIABILITY OF AHY KltlO llP0'1 l>1S INSUP.<P., ITS AQSl'ITS OR 

REPAESENT~'llYE' 

0 ACORD CORPORATION 1988 

..... ----------------------------------------------~~~~~~~~~~-~--

227 
IMPORTANT 

If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement 

on this certificate does not confer nghts to the certificate holder in lieu of such endorsement(s) 

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may 

require an endorsement A statement on this certificate does not confer rights to the certificate 

holder In lieu or such endorsement(s) 

OISCL.AIMER 

The Certificate of Insurance on the reverse side of this rorrn does not constitute a oontract between 

the issuing tnsurer(s), authorized representative or producer, and the certificate holder, nor does it 

alfirrnatlvety or negatively amend, extend or alter the coverage afforded by the pollcles listed thereon. 

ACORD 25 (2001Jllt) 

228 
EXHIBITD 

PAYMENT AND PERFORMANCE BONDS 

1716202068.1 
TEXAS STATUTORY PAYMENT BOND 

ST ATE OF TEXAS § 

§ 

COUNTY OF WILLACY § 

KNOW ALL MEN BY THESE PRESENTS that HMC Contracting South Texas, L.L.C. 

(hereinafter caJled the .. Principal") as Principal, and Hartford Fire Insurance Company 

(hereinafter called the "Surety") as Surety, are held and firmly bound unto the Willacy County 

Local Government Corporation, the Owner of the subject property (hereinafter called the 

"Obligee") in the amount of Forty-three Million One Hundred Seventy-two Thousand Tbree 

Hundred Twenty Seven Dollars ($43, 172,327), said amount being a sum at least equal to the 

total of the original contract amount, for the payment whereof the said Prine ipal and Surety bind 

themselves and their respective heirs, administrators, executors, successors and assigns, jointly 

and severally, firmly by these presents. 

WHEREAS, the Principal has entered into a certain written contract with the Obligee on the 

1911! day of July, 2006, (the "Contract") for the construction of a I 000 bed addition to the ICE 

Detention Facility located in Willacy County, Texas, which Contract is hereby referred to and 

made a part hereof as fully and to the same extent as if copied at length herein. 

NOW, THEREFORE. THE CONDITION OF THIS OBLIGATION IS SUCH. that if the 

Principal shall promptly pay Claimants for all labor, subcontracts, materials, equipment and 

specially fabricated materials performed or furnished under or by virtue of said Contract and 

duly authorized normal and usual extras thereto not exceeding fifteen p~rcenl ( 15%) of the 

contract price, then this obligation shall be void, otherwise to remain in full force and eftect. 

"Labor, subcontracts, materials, equipment and specially fabricated materials" shall he construed 

in accordance with Chapter 53 of the Texas Property Code and Chapter 2253 of the Texas 

Government Code. 

This Bond has been furnished to comply with Subchapter I of Chapter 53 of the TeKas Property 

Code and Subchapter B of the Texas Government Code. Any provisions in this Bond conflicting 

with Subchapter I of Chapter 53 of the Texas Property Code or Subchapter B of the Texas 

Government Code shall be disregarded, and provisions conforming to such statutory or legal 

requirements of Subchapter I of Chapter 53 of the Texas Property Code or Subchapter B of the 

Texas Government Code shall be deemed incorporated herein. The intent is that this Bond shall 

be construed as a Statutory Bond in compliance with both Subchapter I of the Texas Property 

Code and Subchapter B of the Texas Government Code. 

The address of Surety to which any notice of claim should be sent may be obtained from 

the Texas Department of Insurance by calling its toll·free number: 

1-800-252-3439 (Consumer Information) or 1-800-578-4677 {1\'Iain). 

171620 2068.1 

230 
IN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument 

this_ day of , 2007. 

Principal, HMC Contracting South Texas, L.L.C. 

By: ______ _ 

Title:----------- Address: _________ _ 

Telephone: (713) 665-1100 

Fax: (713) 665-4944 

THE FOREGOING BOND JS HEREBY APPROVED BY OWNER: 

Willacy County Local Government Corporation 

By:-----------~ Its: ____________ _ 

Address: ___ --------

Date:. _____________ _ 

171620 2068.1 

Surety, Hartford Fire Insurance 

Company 

By: _______ _ 

Title: 

Address: 

Telephone: ( ) ______ _ 

Fax: ( ) ________ _ 

231 
STA TE OF TEXAS § 

§ 

COUNTY OF WILLACY § 

PERFORMANCE BOND 

KNOWN ALL MEN BY THESE PRESENTS: That HMC Contracting South Texas, L.L.C., as 

principal, and Hartford Fire lnsurance Company authorized under the laws of the State of Tex.as 

to act as surety on bonds for principals, are held and finnly bound unto The Willacy County 

Local Government Corporation as Obligee (Owner), in the penal sum ofForty·three Million One 

Hundred Seventy-two Thousand Three Hundred Twenty Seven Dollars {$43, l 72,327) for the 

payment whereof, the said Principal and Surety bind themselves, and their heirs, administrators, 

executors, successors and assigns., jointly and severally, by these presents: 

WHEREAS, the Principal has entered into a certain written contract with the Owner, effective as 

of the __ day of 2007, (the ''Contract") to commence and complete the construction 

of certain improvements described as follows; 

A 1000 bed expansion of ICE Facility 

Willacy County, Texas 

which Contract, including the Contract Documents as defined therein, is hereby referred to and 

made a part hereof as fully and to the same extent as if copied at length herein. 

NOW THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the said 

Principal shall faithfully perform said Conrract Work, then this obligation shall be void; 

otherwise to remain in full force and effect; 

Whenever, Contractor shall be, and be declared by Owner in a written notice to Surety, to be in 

default under the Contract, the Owner having performed Owner's obligations thereunder, the 

Surety may promptly remedy the default, or shall promptly: 

1. Complete the Contract in accordance with its terms and conditions, or 

2. Obtain a bid or bids for completing the Contract in accordance with its teTITJs and 

conditions, and upon detennination by Surety of the lowest responsible bidder, or. if the Owner 

elects, upon determinatiO!l by the Owner and the Surety jointly of the lowest responsible bidder, 

arrange for a contract between such bidder and Owner, and make available as Work progresses 

(even though there should be a default or succession of defaults under the contract or contracts of 

completion arranged under this paragraph) sufficient funds to pay the cost of completion less the 

balance of the Contract Price; but not exceeding, including other costs and damages for which 

the Surety may be liable hereunder, the amount set forth in this first paragraph hereof. The term 

"balance of the Contract Price," as used in this paragraph, shall mean the total amount payable 

by Owner to Contractor under the Contract and any amendments thereto, Jess the amount 

properly paid by Owner to Contractor. 

171620 2068.1 

232 
Surety shalJ have no further or other obligations other than those set forth above. 

As a condition precedent to coverage under this Bond, Owner must give Surety its 

written notice of Contractor's default no later than ninety one (91) days from the earliest to occur 

of the following: (i) the date of any abandonment or termination of the Contract; (ii) the date 

final payment is made lo the Contractor under the Contract; or (iii) the date Contractor last 

performed Work under the Contract, excluding any warranty work. Any default declared by 

Owner or demand made against the Surety by Owner outside of this time frame is not covered by 

this Bond and Surety shall have no liability therefore. 

Any suit under this bond must be instituted before the expiration of twenty-five (25) 

months from the date on which the right of action accrues, but if this provision is prohibited by 

law or if any law provides for a lesser period of time then it shall be deemed to be amended as so 

to be equal to the minimum period oflimitation allowed by such law. 

No right of action shall accrue on this Bond to or for the use of any person or entity other 

than the Owner and its successors or assigns. The terms and conditions of this Bond shall be 

binding upon Contractor, Surety, Owner and their respective successors or assigns. 

Surety, for value received, stipulates and agrees that no change, extension of time, 

alteration or addition to the terms of the Contract, or to the Work performed thereunder. or the 

plans, specifications, or drawings accompanying the same, shall in any way affect its obligation 

on this Bond, and it does hereby waive notice of any such change, extension of time, alteration or 

addition to the terms of the Contract, or to the Work to be perfonned thereunder. 

fN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument 

this __ day of __ . __ ,2007. 

Principal, HMC Contracting South Texas, L.L.C. 

By: __ ~-·--------- Title:------------

Address;----------

Telephone: (713) 665-1100 

Fax: (713) 665-4944 

171620 2068 1 

Surety, Hartford Fire Insurance Company 

By: _________ _ 

Title:------------

Address:------

Telephone: ( ) -------- Fax: ( ) ________ _ 

233 
171620 2068.1 

EXHIBITE 

LIST OF ORA WINGS 
EXHIBn"E" 

UST OF DRAWINGS 

WHlar;y County Processing Facility Expansion 

Revl 

Cl -~~ --~ l'lan a ·io 01 

(2 -n ·-----f--'!?;.;B1"!0':'0!!7>-+--·--~ 

CS Wa.._ ii. -~Sewer Plan 8 10 07 

Sl.J '"""" a 10 07 .1 .,._., ""' ""'•ndation Plan .I 10 U7 

.4 _.....,. •• nn ""' "'"" Plan 8 10 01 

Sl.11. ,.. • -~ -·n • la DJ' 

~SJ::':!,1'-----IH"""~~;,i, ~~~i::::.:··~~~·~n'---------+-··~·~u~u•--ir-~ 53.2 .... ... Piii' • 10 07 - SJ.] • •n n7 

... ~.4 "'" "" Bu!Jdm .., rv """" a ''-D 07 

58.1 Panel ~~ -· v.... I "' 07 I 

.2 p...,Jaint -- I 1• 07 ••. »» > ..j.-_1,:::1...,.!'---1------.i .3 p....., 814107 

.4 - --· 8:iD07 .'i P11111I - """ a 10 n7 Ll: ~- -~ 8 •u 07 

AZ.1A nnr """'-Area A ··-------1--!!'~'-~'0':'u~·-+------1 A2.IB """Plan···-• a 19 07 

ll". Housina Roar"""' • ""'a C • 10 'D>' 8 S4 07 

.20 --~Fluor Plan •Ania D 8 • 0 '"7 8 ri4 07 

AB.J ..,.,..,_ .- J__.._.. ~-- I l 

M•"t "Hedlanll:ll Plan 8 tftJ07 

M-4 ° Ml!Clutnlral PIE a ID/17 

M·S -., _ _,Plan l/1GJ07 

M-6 aon•-- Madll....,,, Plan a/1M07 

1+7 I-Mmln llldn --Plan 8/10107 

OE3. I Olierd - ..,,_, ""'" 8/10107 t'Ofl...,..~.1.A ___ ,_ ....,.0 .._Area A 8fln1 n7 

OE3.•B ....__,.__PlanAn>•8 8/10107 --~ 

u."'"'1.,,,__2 __ -1'Sle-'-'Tl.5lc.f'l-""bl!!LI!&. _P_,,,,, Conduit Run< 111n1n7 

235 
EXHIBIT"E" 

UST OF DRAWINGS 

Wiiiacy county Proc:esstng Facility Exp!lnSion 

236 
Slleet 

Cl 

C2 

0 

Of 

C5 

51.1 

s2.1 

52.2 

52.3 

52.4 

52.5 

52.6 

52.7 

52.8 

53.1 

53.2 

53.3 

53.4 

54.l 

"4,2 

54.3 

54.4 

55.1 

SS.2 

55.3 

561 

56.2 

57.l 

57.2 

58.t 

58.2 

58.3 

58.4 

58.5 

58.6 

SS.7 

AJ.1 

A7.0 

A2.t 

A2.1A 

A2.1B 

A2.2 

A2.2A 

A2.2B 

A2.2C 

A2.20 

.~.3 

A2.4 ,.,,5 

A3.1 

A3.2 

AB.t 

A8.2 

m-5.00 

0F5.01 

DEl>.00 

M-1 

M-2 

M-3 

M-4 

M-5 

~ 

M-7 

M-8 

M-9 

M-10 

M·ll 

DE2.1 

DE2.1A 

OEZ.18 

DE3.1 

DE3.1A 

DE3.18 

El.2 

EXHIBIT•e• 

UST OF DRAWINGS 

Wiiiacy County ProcMSing Facility Expansion 

Title Date 

Olmension Control Plan • 10 07 '~dlna/Pavtnn Plan • 10 07 

Draln:ine Area Man • 10 07 

[)r.ljnanePlan • 10 07 

Water&. Sarur- Sawer Plan • 10 07 , ........ Notes 8 10 07 

""""""'Bu ~ -·ndation Plan • 10 07 HQuclnn Bui ""Fo1

""""""' Plan • 10 07 Houann .... IVI nundatlon Plan • 10 07 

Houslnn -· ~ -·~•non Plan 10 07 

Admln ~ T~ ~ ""•ndatlon Plan 10 07 

Admln ~ """"' "" "'"'nation Plan • 10 07 Mlll~nn•n~ - -·~·t1on Plan 10 07 ... , 111111"'.., Foundatlon Plan 10 07 ....... ............. ~ rv Plan 10 07 HnUl! nnBu-- ~·~ ~Plan 10 07 :Mn<M ................ ..,., .. "'Plan 10 07 MnllC ..,, Bulldlna ""'url ill Plan 10 07 ........ ..., "'"''"nn rtvV Framina Plan 10 07 

Houslna BulcRna Rad Framfnn Plan 10 07 

Houslnn Bulldlnn Roof Framlna Plan 10 07 

Houslnn BuHdlna Root l'rlmlna Plan 10 07 

Main ""'""IN founnannn Sections '1.0 07 

Main Facilllv Founmmon """""""' 10 07 

Malnt Buldlnn Foundation Plan - "10 07 

~Sections • '10 07 

se'""""" • 10 07 

Details 8 •n 07 

Panel atlans Mid Details • '10 07 

Panel Joint Elewltlons • 10 07 

- lalnl EleYatlolls • 10 07 

Panel Joint Elev"°""" • 10 07 

Panel Joint Elev- • 10 07 

p-lnln< Elevations • 10 07 

Panel Joint EleYallons • 10 07 

Pana1 Joint a- • 11 07 

--Plan • 10 07 

Floor Plans I JO 07 namo Plan•~ Plan • lill 117 

~•nnr Plln-Atu A . .... U7 

Floor Plan-Area B • 10 U7 

Hnuclnn Ffaor Plan • 10 07 

HOU51na Hnnr Plan • """" A 810 07 

HOUSIM Flonr Plan • Area 8 • '10 17 

HaU"'"" Flnnr Plan - Al'N C • '10 07 

Hou...,........,..Plan • .....,.D 810 07 

MTC Admln Flaor Plan • '1.0 07 

Admln ReflectlVI Cdlna - 8'10 01 

Houslnn Relledlve Celllno l'tiNI • 10 07 

&tl!rlor FIMIJUll\ftC • 10 07 

Exterior ElevlltlOns I 10 07 

PartltlOn T""""nntertor E-~ • 10 '11'7 

Ml""""" EleYatlons •'1.0 07 

"JVt>r.Oll innr ..,..,....,ule • 10 07 

Overall ~r~ute 8 10 07 

Daor""' · ............, f"""" Elevatlons • 10 07 

""'' - _,n Mechanical Plan • 10 07 lnri oor ,_ ~~nlcal Plan • 10 07 

Bu ....., _,.,,anlcal Plan 8 10 07 .... '""'Kkhen """' Mechanical Plan R 1n , .... Bunks/Kltdlen Sirin Mechanical Plan l/10/fr1 

Bunksl!Clkhen Blda Mechanical Plan 1/10/07 

Exlstlnll Ad!nln Blda Mechanical Plan a11n11r7 

fxlsttna Admln 8111<1 Medlantcal Plan 1110/07 

Eldsti110 Admln Rlrln Mechanlcal Plan 8110/07 

Exlstin" Admln Blda Mechanlcal Plan 8110/07 

Mechan1r111 ~ulgs 1/10107 

Overall LJnh~nn ........,, Plan 8110107 

Uohtlna Demo Plan Area A 1/10107 

UnhUnn De~ Plan Area 8 1110/07 

Overall Pnwer Demo Plan 1110107 

Power Demo Plan Area A l/1ft/ft7 

Power Demo Plan Area B 1110/07 

Sit!! Tel Data &. Prtmarv Conduit R•""' 1110/07 

ltev1 

• 14 ,., • 14 07 

114 07 

I 14 07 • 14 07 

237 
Sheet 

E2.1 

E2.1A 

E2.1B 

E2.2 

E2.2A 

IF7.JA 

E2.2r 

E2.20 

E2.3 

E2.4 

E3.1 

E3.1A 

IF1.18 

EJ.2 

E3.2A 

E3.2B 

E3.2C 

E3.2D 

El.3 

E3.4 

E4.1 

E4.1A 

E4.1B 

E4.2 

E4.2A 

E4.2B 

E4.2C 

BUD 

E4.3 

ES.1 

ES.2 

P.1.1 

IP.2.1 

P.2.2 

P.2.3 

P.2.4 

P.2.5 

P.3.1 

P.3.2 

P.3.1 

P.3.4 

P.4.1 

P.4.2 

p_ .. , 

p ~.1 

1c:..n.oo 

Sel.00 

le..~ nn 

Se2.01 

5e2.02 

Se3.00 

5e4.00 

Se 4.01 

<:..4.02 

S..4.03 

Se4.04 

Se5.00 

199-FS01 

199-FS02 

199-F503 

199.fS04 

EXHIBIT"E" 

UST OF DRAWINGS 

Wiiiacy County Processing F•dllty Expansion 

Tiiie o.m 

Overall Lklhtlna Plan 1/10/07 

Uahtfna Plan Area A 1/11)/07 

Llahttna Plan Area B 1/10107 

l~n Housirui Uahtlna Plan 1/10/07 

Housinn I ltlhttno Plan Area A 1/10/07 

Ho11<:1n11 L111htrno Plan A"'a B 1/10/07 

Houslno llllhtlno Plan Area c 1111)/07 

HoUSlno L"'hH"" Plan Area D 1110/07 

New A.rtmln Uohttno Plan 1/10/tn 

Indoor Recreation Uohllna Plan 1110/07 

Overall Power Plan 1110/87 

Power Plan Area A 1/1fllfl7 

Power Plan Area B 1/10/07 

Overall Housfna Power Plan 1110/07 

Houslnn Power Plan Area A 1110/07 

Housino Power Plan Area B 1110/07 

Houslno - Plan Area C 1110/07 

Houslna Power Plan Area D 1/10107 

New Admln Power Plan 1/10107 

Indoor R"'"""1Hnn HV AC • Power Plan 1110101 

Overall HVAC Power Plan 1110/07 

HVAC Power Plan Area A 1110/07 

HVAC Power Plan Area B l/IO/D7 

Overall HOUSlno HVAC Power Plan 8/10107 

IMnusfno HVAC Power Plan"""' A 1/10/07 

Houslno HVAC Power Plan Area B l/10107 

Houslna HVAC Power Plan Area C 8110/07 

1"""'"'nn HVAC Pow..,. Plan•- D 1/10107 

New Admln HVAC Power Plan 8110/17 

Schedules Ill RISer 1/10/07 

Schedules lit Dt ... r <flltn 

Demo!,.._ Plan Sewer """"nslon Plan 8/10/D7 

Houston Sewer Plan Area A 1/10/07 

Houslna Sewer Plan .t.noa B 1/11187 

Houslna Sewer Plan Area C 1111107 

Houslnn 5ewer Plan Area D 1/10/07 

Recreation Bulldlno Plumbina Plan 8110/97 

Houslno Water Plan Area A l/10/07 

HoUSIM Water Plan Area B 1/10107 

Houslnn WatPr Plan Area C 8/10/07 

Houslno Water Plan Area D 1110/07 

PlumblNl Kitch..., """I 1110/07 

Sewer Plan Allmln llulldlna 8/10107 

Water Plan Admin Bulldinn 8/10/07 

ISO Riser n..tlllls 1/10/"7 

General - and svmoo11 """"d 1/10/07 

Securlv Electronics Ovenill Site Plan l/U/07 

5ea.1r1v Electronlc:s overall Floor Plan 1/10/07 

Securtv Electronics Partial Floor Plan 1110/07 

Securllv Electronics Partial Floor Plan 8/10/07 

,c-. ....... Elearonlc:s Partial Floor Plan l/10/07 

Securllv Electronics Overall Floor Plan 1/10/07 

Secu""' Electronlc:s Partial Aaar Plan 1/10/07 

'"-''""" F1o..+nv>1C5 Partlal Floor Plan 8/18/07 

Seal""' Electronics Partial Floor Plan 8/10/07 

I""'°',....,, Ela .. mnJcs Partial Floor Plan 8110/07 

1 .............. Efectronlcs Overall Floor Plan 1110/07 

IOtch""'l.aunci-v Plan View l/1fllfl7 

ICltdlen/Laundrv Plan View 8/10107 

Kitchen/Laundrv Plan lllAw l/10/07 

IEaulament Schedule 8/10/07 

"9¥1 

238 
DI I A 

DESIGN·IUllD 

INSTJTUT£ 

~ OF AMEllCA 

Certificate of Substantial Completion 

Date of Substantial 

Comoletion: 

January 31, 2008 

Project: 1,086 Bed Addition to the Willacy County ICE 

Detention Facility 

Desian-Builder's Proiect No: 07-06 

Willacy County, Texas Date Of Agreement August 30, 2007 

Owner: The Willacy County Local Government Corporation 

190 North 3

111 Street 

Courthouse Annex 

Design-Builder: HMC Contracting South Texas, LLC 

2900 Weslayan, Suite 375 

Houston, Texas n021 

Raymondville, Texas 78580 

This Certificate of Substantial Completion applies to all Work as defined in DBIA Contract Dated August 30, 2007, 

General Conditions of Contract, or to the following portion of the Work only; 

itantial Completion for: 1,086 Bed Housing Building Expansion, Administratton Expansion and Remodel, 

kiw .. reation Building, and MTC Administration Building. 

Owner and Design-Builder have jointly inspected the Work and have verified that the Work identified above was 

substantially complete in accordance with the requirements of the Contract Documents on the above-stated Date of 

Substantial Completion. The following items of Work remain to be completed prior to final payment (if necessary, attach 

list): 

Attached Punch List 

Except as noted below, warranties related to the Work identified above to which this Certificate of Substantial Completion 

applies, commence to run on the date of Substantial ComP,I · · 

DESIGN-BUILDER: 

By: 

Printed Name and Tltle: Emilio Vera, Commissioner Printed Name and TiOe: Kenda I Phin President 

Date: Date: 

OPERATOR: 

~~ 

DESIGNER: 

By: By: 

p 1 Name and Title: ;5/Jz.pk'I\ l'.'>OIMS - Qtt<tio~ -m Printed Name and Title: 

Date: ( ~ 31 - 200 8 Date: 

DBIA Documents No. 525.4 and 530.4 - Certificate of Substantial Completion 

© 2001 Design-Build Institute of America 

,.. 
EXHIBIT E 
CAUSE NO. 2014-CV-0103A 

WILLACY COUNTY, 

Plaintiff 

vs. 

HALE-MILLS CONSTRUCTION, LTD.; 

HALE-MILLS CONSTRUCTION, INC.; 

HMC CONTRACTING SOUTH TEXAS, LLC; 

and MANAGEMENT & TRAINING 

CORPORATION d/b/a MTC/GSA-TEXAS, 

Defendants 

§ IN THE TEXAS DISTRICT COURT 

§ 

§ 

§ 

§ 

§ 197rn JUDICIAL DISTRICT 

§ 

§ 

§ 

§ 

§ WILLACY COUNTY, TEXAS 

ORDER 

THE COURT, after reviewing Defendants' Motion to Abate and Compel Arbitration, and 

Plaintiffs Response, and after hearing held on January 21, 2015, finds that Defendant's Motion 

should be DENIED. 

Plaintiff, Willacy County, retains sovereign immunity against any attempt to enforce the 

contractual terms-including those allowing for arbitration. See Highland Park v. Iron Crow 

Constr., Inc., 168 S.W.3d 313, 319 (Tex. App. Dallas 2005). Moreover, Willacy County was not 

even a signatory to the agreements, and as such, has not consented to arbitration. The fact that the 

parties to the Agreements designated Willacy as a third party beneficiary does not rise to the level 

of making it a signatory or giving its assent to waive its right to a judicial forum. None of the cases 

cited by the Defendants hold otherwise. The Court further agrees with the reasons set forth in 

Plaintiffs' Response to Defendants' Motion as to why arbitration cannot be compelled under these 

circumstances. 

IT IS SO ORDERED. 

418 
EXHIBIT F 
CAUSE NO.: 2014-CV-0103A 

WILLACY COUNTY, 

Plaintiff 

§ IN THE TEXAS DISTRICT COURT 

§ 

vs. 

HALE-MILLS CONSTRUCTION, LTD.; 

HALE-MILLS CONSTRUCTION, INC.; 

HMC CONTRACTING SOUTH TEXAS, 

LLC; 

and MANAGEMENT & TRAINING 

CORPORATION d/b/a MTC/GSA-TEXAS, 

Defendants 

§ 

§ 

§ 

§ 197TH JUDICIAL DISTRICT 

§ 

§ 

§ 

§ 

§ 

§ WILLACY COUNTY, TEXAS 

WILLACY COUNTY'S PLEA TO THE JURISDICTION AND RESPONSE TO PLEA IN 

ABATEMENT AND OPPOSITION TO ARBITRATION BEFORE AAA 

TO THE HONORABLE JUDGE OF THIS COURT: 

COME NOW, the Plaintiff County of Willacy, Texas, by and through their respective 

attorneys of record, and files this its Response To Plea In Abatement And Opposition To 

Arbitration Before AAA, and as grounds therefore would show unto the Court as follows: 

I. 

INTRODUCTION 

Plaintiff County of Willacy, Texas, respectfully submits this Response to Defendants' 

Plea in Abatement and Motion to Compel Arbitration, set for hearing in this Court on January 

21, 2015, and by undersigned counsel would respectfully show the Court: 

Defendants make much hay out of the fact that they claim to have four different 

agreements, with four different arbitration clauses, covering (at least) four different transactions 

that are alleged by Defendants to be implicated in this case. But Defendants' miss the point and 

cannot prevail because: 

irBlb~© g·31--p ·K· 

'JAN 2 0 2015 

GllbArt Lozano Dist CleJk, Willacy Co. 

By ~Rt.:;j st"' Deputy 

84 
• Under the case Town of Highland Park, Defendant's Motion to Compel is 

tantamount to an action to enforce the contract against Willacy County, an action 

against which Willacy County has unwaivable sovereign immunity-this Court 

thus lacks jurisdiction to enforce such a contractual right against the County; 

• Willacy County is not a party to the Arbitration agreements, and cannot be made a 

party by implication or supposition; 

• Defendants have not attached the alleged contracts, nor authenticated themtherefore, there is no evidence for this Court to conduct a "trial" as is required 

under the statute; 

• Even if sovereign rights had not been waived, Willacy County's claims are 

incident to the contract and Willacy is not attempting to enforce the contracttherefore, there is no basis to enforce the agreement on estoppel grounds; and 

• The arbitration clauses are unconscionable and therefore, unenforceable under the 

Texas Arbitration Act. 

Any of one of these reasons is sufficient to deny the motion. Together, they are a bulwark 

against Defendants' impotent attempt to enforce an unenforceable and unconscionable agreement 

that the County never signed and never agreed to be bound by. 

Accordingly, this Court should deny the Plea in Abatement and Motion to Compel 

Arbitration. 

II. 

ARGUMENTS AND AUTHORITIES 

A. WILLACY COUNTY'S PLEA TO THE JURISDICTION: The Agreement to Arbitrate 

is Invalid and Unenforceable Against Willacy County Because there Was Lack of 

Capacity to Bind Willacy County to an Arbitration Agreement 

None of the agreements purports to bind Willacy County. Nor do any of the Signatories 

have the authority to bind Willacy County to waive its sovereign rights. It is well-established 

now that forcing a County into arbitration implicates the county's sovereign rights. See Town of 

Highland Park v. Iron Crow Constr., Inc., 168 S.W.3d 313, 319 (Tex. App. Dallas 2005) 

("Because its contract with Highland Park provided for binding arbitration in the event of a 

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dispute between the parties, Iron Crow was seeking to enforce Highland Park's performance 

under that contract. Therefore, sovereign immunity was indeed implicated here."). 

In Town of Highland Park, the town was a signatory to the contract and the Court still 

refused to allow it to compel arbitration. 168 S.W.3d at 319. The Court held that a motion or 

action to enforce an Arbitration clause is essentially a suit to enforce the terms of a contract, a 

suit against which the County has sovereign immunity. Id. The Court noted that only the 

legislature can waive immunity which it did not in this case. Id. The court of appeals also held 

that the Federal Arbitration Act did not apply because both the plaintiff and the defendant were 

Texas residents (as is the case here: Willacy and Hale-Mills are Texas residents); and even if the 

FAA did apply, it could not preempt the sovereign rights of the County. Id. at 317-318. 

Therefore, this Court lacks jurisdiction to enforce the Arbitration Agreement against Willacy 

County. 

The Agreements' arbitration clauses are completely unenforceable against Willacy 

County absent an express and unambiguous agreement by Willacy County to waive its right to be 

a party in a court of law. In another case analogous to this one, in Texas Natural Resource 

Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex. 2002), the Texas Supreme Court 

rejected the argument that a contractual provision providing that disputes could be decided by 

arbitration could be enforced against the County. Id. at 857-58. The court held that since only the 

Legislature could waive sovereign immunity, "administrative agents," even those with authority 

to enter into contracts such as the County Judge, had no authority to bind the County. Id. 

Likewise, in Fluor Daniel, Inc. v. Travis County, 2003 U.S. App. LEXIS 8138, *4 (5th 

Cir. Tex. Apr. 30, 2003), the Fifth Circuit held that Travis County had not waived its rights as a 

sovereign in a contract with Fluor, despite the fact that the County Judge had signed the contract. 

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The Court held that only "the legislative body of the county-the commissioner's court--can 

waive sovereign immunity." Id at *5. And moreover, even then it must be "clear and 

unambiguous." Id In that case, the Court held that Travis County-even though it arguably 

invoked the jurisdiction of the court by filing counterclaims-had not waived any of its 

sovereign rights not to be brought into court without its express consent. It is also wellestablished that these rights cannot be waived through the conduct of the county. See Webb 

County v. Khaledi Props., 2013 Tex. App. LEXIS 9063, 3 (Tex. App. San Antonio July 24, 

2013). 

Here, the contractual provision hailing Willacy County into arbitration is a violation of 

the above case law and rules. The various corporate entities lacked capacity to bind the County 

to those agreements in any way, fashion or form. And Defendants cannot prove otherwise. 

Therefore, the Motion must fail. 

B. There is No Valid Agreement to Arbitrate Between Defendants and Willacy CountyIn Fact the Agreements Preclude Arbitration in this Instance 

To compel arbitration, a party must show that there is a valid arbitration agreement and 

that the claims raised fall within the agreement's scope. In re Kellogg Brown & Root, Inc., 166 

S.W.3d 732, 737 (Tex. 2005) (orig. proceeding); see also Tex. Civ. Prac. Rem. Code § 

171.00l(a). Without an agreement to arbitrate, arbitration cannot be compelled. J.M Davidson, 

128 S.W.3d at 227 (citing Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994) (orig. 

proceeding)). 

A court determines the validity of an arbitration agreement by applying state contract law 

principles. See J.M Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003). Any 

presumption in favor of arbitration only arises after a valid agreement to arbitrate is established 

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to exist-the presumption does not apply to construing the existence of the agreement itself. See 

In re Kellogg Brown & Root, Inc., 166 S.W.3d at 737. 

1. The Arbitration Agreements Are Not With the County of Willacy And 

Therefore Cannot be Enforced Against the County 

The four putative arbitration agreements are between Hale Mills et al. and Willacy 

County Public Facility Corporation (Exhibit A), between Hale-Mills Construction Ltd. and 

County Jail Public Facility Corporation of Willacy County (Exhibit B), HMC Contracting South 

Texas LLC and the Willacy County Local Government Corporation (Exhibit C), and HMC 

Contracting South Texas LLC and Willacy County Local Government Corporation (Exhibit D). 

Willacy County is not a signatory to any of the agreements. Moreover, none of the aboveidentified corporate signatories is a plaintiff in this lawsuit. Therefore, there is no contractual 

basis to enforce the agreements against Willacy County. 

Willacy County's claims for breach of implied warranty, negligence/unjust enrichment 

and for fraud in the inducement "relate" to the contracts, but do not actually depend upon them. 

As one Court of Appeals explained, "a non-signatory cannot be compelled to arbitrate when 

claims merely 'touch matters' covered by a contract or 'are dependent upon' a contract; instead, 

the claims must rely on the terms of the contract." Carr v. Main Carr Dev., LLC, 337 S.W.3d 

489, 498 (Tex. App. Dallas 2011) (citing Hill v. G.E. Power Sys., Inc., 282 F.3d 343, 348-49 (5th 

Cir. 2002). "Where the obligations arise under general law"-e.g., here, the law of negligence, 

anti-fraud and implied warranty-then a non-signatory to the agreement cannot be compelled to 

arbitrate. Id. As the Weekley court observed, "claims must be brought on the contract (and 

arbitrated) if liability arises solely from the contract or must be determined by reference to it." 

Weekley, 180 S.W.3d at 132 (emphasis added). Conversely, " ... claims can be brought in tort 

(and in court) if liability arises from obligations imposed by law." Id. 

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Here, Defendants' motion is completely silent as to what of the contractual language 

themselves Willacy's claims would rely upon. Willacy's claim for breach of contract/warranty, is 

not an attempt to enforce any of the specific terms of the agreements. It is well-established that a 

warranty and defect claims can be brought by third parties to the contract without enforcing any 

specific terms of the contract. See Landmark Org., L.P. v. Tremco Inc., 2010 Tex. App. LEXIS 

5052, *29 (Tex. App. Austin 2010). Likewise, seeking restitution for negligence or unjust 

enrichment and fraud in the inducement does not invoke any terms of the agreement. 

Defendant cite the case In re NEXT Fin. Group Inc., 271 S.W.3d 263, 267 (Tex. 2008) 

for the proposition that "[a] third-party beneficiary to a contract can be compelled to arbitrate 

under an arbitration provision in the contract." But this is not what the court in In re NEXT held 

at all. There, the Court held that a non-signatory third-party beneficiary could enforce an 

arbitration clause against one of the signatories. The case here is the opposite-a signatory (Hale 

Mills or HMC) is trying to force a non-signatory (Willacy County) into arbitration. Defendant 

cites no other case or statute that specifically allows for arbitration clauses to be enforced against 

a non-signatory, even if that non-signatory is a putative third-party beneficiary. 

Furthermore, Defendants admit that Willacy County is not a party to any of the 

agreements, and is only designated as a third-party beneficiary in three of the four agreements. 

Thus, that agreement and its claims fall outside of Hale-Mills' own contractual argument that a 

third-party beneficiary may be compelled to arbitration under all the agreements. 

However, because Willacy is named as a Third-Party beneficiary is not enough to compel 

it to arbitration if it is not invoking the contract specifically-its claims are merely incident to the 

contract. 

2. Defendants Cannot Establish That the Non-Parties Can be Bound to the 

Arbitration Clause 

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Defendants are attempting to bring parties to the arbitration table that cannot be seated 

there under Defendants' own arbitration clauses. For instance, the Arbitration agreements 

expressly exclude arbitration with non-signatories to the Agreement. Specifically, the agreements 

provide, for example, that: 

No other arbitration arising out of or relating to this Part 2 Agreement 

shall include by consolidation, joinder, or in any other manner, an 

additional person or entity not a party to this Part 2 Agreement or not a 

party to an Agreement with [Hale-Mills], except by written consent[.] 1 

Thus, by the plain language, Willacy County cannot be compelled to arbitration under this 

provision since Willacy County is not a signatory to any of the arbitration agreements either, nor 

are four two of the three co-defendant entities. Thus, this lawsuit brought by Willacy as against 

the non-signatory defendants must continue. 

3. Defendants Cannot Established That a Valid Arbitration Agreement Exists, 

Therefore, This Court Need Not Try the Matter 

The Texas Civil Practice & Remedies Code states that "If there is a substantial bona fide 

dispute as to whether an agreement to arbitrate exists, the court shall try the issue promptly and 

summarily."). See Tex. Civ. Prac. Rem. Code § 171.023(b) (emphasis added). Here, there is a 

substantial dispute as to whether an agreement to arbitrate exists between the County and the 

Defendants. Thus, this Court is to try the issue summarily-but how can the Court try this issue 

when there is not proper evidence before the Court? It cannot. 

Defendants only attach snippets of what they claim to be agreements to arbitrate. 

However, it is prima facie accepted law that to be valid, an arbitration clause must be part of an 

otherwise enforceable written agreement. See Bennett v. Leas, 2008 Tex. App. LEXIS 4817, *8-

9 (Tex. App. Corpus Christi June 26, 2008); Tex. Civ. Prac. Rem. Code§ 171.021(b). 

1 See Exhibit A to Amended Motion. 

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Defendants ask this court to assume without evidence-not even an affidavit-that their 

snippets are part of enforceable contracts. Yet, the contracts have not been presented in full to the 

Court with signatures, dates or other matters governing the scope of the claims or issues covered 

by the Agreements. They have not been properly authenticated or otherwise presented properly 

to the Court as certified copies or genuine facsimiles. This is grounds for striking the evidence 

and not considering it-it constitutes hearsay. Wortham v. Otis Elevator Co., 2000 Tex. App. 

LEXIS 3443, *8 (Tex. App. Dallas May 25, 2000) (sustaining trial court striking of summary 

evidence where "documents constituted hearsay and were not properly authenticated"). 

Therefore, before this court is no evidence of an enforceable agreement containing an 

enforceable arbitration clause. Defendants' say-so is not enough. Defendants mere attachment of 

pieces of paper constitute hearsay and is plenary grounds for striking the evidence. Wortham, 

2000 Tex. App. LEXIS 3443, *8. Because there is no evidence in favor of the Defendants, there 

need be no summary trial. And for that reason alone, the Motion fails on its face. 

C. The Claims Do Not Fall Within the Scope of Any of the Submitted Agreements 

Defendants have not presented the agreements, and therefore, there is no basis for this 

Court to say that the claims fall within the scope of the agreements or their arbitration clauses. It 

is fundamental law that a court cannot compel arbitration of claims that are not covered by the 

arbitration clause. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) 

(orig. proceeding); see also Tex. Civ. Prac. Rem. Code§ 171.00l(a). 

Therefore, because Defendants have not made even the most fundamental showing of 

how the allegations or the claims actually arise under the Agreements bearing the arbitration 

clauses, they cannot hope to establish that arbitration is necessary. 

D. The Purported Arbitration Agreements are Unconscionable 

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Section 171.022 of the Texas Civil Practices and Remedies Code states that "[a] court 

may not enforce an agreement to arbitrate if the court finds the agreement was unconscionable at 

the time the agreement was made." "An unconscionable contract provision is defined as one that 

'is grossly unreasonable or unconscionable in light of the mores and business practices of the 

time and place as to be unenforceable according to its literal terms.'" BDO Seidman, LLP v. JA. 

Green Dev. Corp., 327 S.W.3d 852, 859 (Tex. App. Dallas 2010) (quoting Gillman v. Chase 

Manhattan Bank, N.A., 73 N.Y.2d 1 (N.Y. 1988)). Unconscionability has a procedural dimension 

as well as a substantive one. Id 

Here, the Agreements were procedurally unconscionable. They were standard form 

agreements that were compelled on the County. Moreover, they were procedure through a 

process that included two officials who accepted bribes and ultimately pled guilty to criminal 

charges of bribery.2 The agreements are substantively unconscionable because they select the 

American Arbitration Association, which requires high up-front fees and arbitrator costs-all of 

which the Willacy County taxpayers would have to bare. The taxpayers should not be the victims 

of a bribery scandal and shoddy workmanship on a prison that is at the root of this issue. 

For these reasons, the arbitration clause should not be enforced. 

III. 

CONCLUSION 

For the foregoing reason, this Court should deny Defendants' Plea in Abatement and 

Motion to Compel Arbitration, and set this matter for trial on the merits. 

2 See www.myplainview.com/article 439ed742-bbc0-5lde-8368-26btu30b4c35.html (last visited January 20, 

2015). 

92 
Respectfully submitted, 

LAW OFFICE OF RAMON GARCIA, P.C. 

222 West University Drive 

Edinburg, Texas 78539 

(956) 383-7441I(956)381-0825-Facsimile 

e-mail address(s): EArellano@ramongarcia-law.com 

or rsalinas@ramongarcia-law.com 

By: ~ 

& 

& 

& 

HON. RAMON GARCIA 

State Bar No.: 07641800 

HON. EMERSON E. ARELLANO 

State Bar No.: 24067490 

Hon. BRUCE STECKLER 

State Bar No.: 00785039 

THE STECKLER LAW GROUP, LLP 

12720 Hillcrest Road, Suite 1045 

Dallas, Texas 75230 

(972) 387-4040 

(972) 387-4041 

HON. MANUEL SOLIS 

State Bar No.: 18826790 

6657 Navigation 

Houston. TX 77011 

(713) 844-2700 

(281) 754-4681 

HON. DAN RIOS 

State Bar No.: 00784844 

323 Nolana Loop 

McAllen, TX 78504 

(956) 630-9401 

(956) 682-0566 

Counselor(s) for Willacy County 

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CERTIFICATE OF SERVICE 

I, EMERSON E. ARELLANO, do hereby certify that on the 20th day of January, 2015, a 

true and correct copy of the foregoing WILLACY COUNTY'S PLEA TO THE 

JURISDICTION AND RESPONSE TO PLEA IN ABATEMENT AND OPPOSITION TO 

ARBITRATION BEFORE AAA filed and a true and a correct copy of the foregoing was issued 

via e-mail addresses and facsimile transmission to: 

William B. Westcott 

Kristi Belt 

ANDREWS MYERS, P .C. 

3900 Essex Lane, suite #800 

Houston, TX 77027 

(713) 850-4200 I (713)850-4211 - Facsimile 

e-mail address(s): Ben.ewestcott@μndrewsmyers.com or kblet@1indrewsmyers.com 

Counsel/or Defendants Hale-Mills Construction, LTD, Hale-Mills Construction, Inc. 

and HMC Contracting South Texas, LLC 

EMERSON E. ARELLANO 

94 
LA w OFFICE OF 

RAMON GARCIA 

A PROFESSIONAL CORPORATION 

-----•!• ----- 222 W. UNIVERSITY DRIVE 

EDINBURG, TEXAS 78539 

rgarcia@ramongarcia-law.com 

RAMON GARCIA TELEPHONE: (956) 383-7441 

FACSIMILE: (956) 381-0825 

January 20, 2015 

Hon. Gilbert Lozano 

WILLACY COUNTY DISTRICT CLERK 

Willacy County Courthouse 

546 West Hidalgo A venue 

Raymondville, Texas 78580 

ISSUED VIA: Hand-Delivery (only) 

Re: Cause No. 2014-cv-0103-A; Willacy County vs. Hale-Mills Construction, Ltd.; Hale-Mills 

Construction, Inc.; HMC Contracting South Texas, LLC; and Management & Training 

Corporation d/h/a MTC/GSA-TEXAS; situated before the 19'J'h Judicial District Court, the 

Honorable Judge Migdalia Lopez, presiding. 

Dear Mr. Lozano: 

Regarding the above referenced cause and style, please for filing an original & five copies of the 

following: 

1) Willacy County's Plea To The Jurisdiction And Response To Plea 

In Abatement And Opposition To Arbitration Before AAA; 

Please stamp file our copy and return said stamped copy for our files in the enclosed metered 

envelope. 

Should you have any questions, please do not hesitate to contact me, Rosie Salinas at (956) 383-

7441. Lastly, thank you for your assistance and cooperation in this matter. 

Respectfully submitted, 

E OF RAMON GARCIA, P.C. 

...__-'-""osie 

//L/~·~~ Salinas, 

Assistant to Judge Ramon Garcia & Attorney Emerson E. Arellano 

95