Opinion ID: 1649985
Heading Depth: 1
Heading Rank: 16

Heading: Has the Commission executed an agreement for the construction of the stadium for a certified price and provided for performance bonds in accordance with 473.581, Subd. 3?

Text: The Statute reads (g): The commission has executed agreements which will provide for the construction of its sports facility for a certified construction price and completion date and which include performance bonds in an amount at least equal to 100 percent of the certified price to cover any costs which may be incurred over and above the certified price, including but not limited to costs incurred by the commission or loss of revenues resulting from incomplete construction on the completion date. The Council made a determination by Resolution No. 79-63, conditioned upon the execution of the agreement and addendums and the execution of a bond. Section 2.1.1 of the Construction Management Agreement requires that the construction manager provide a certified maximum price and a certified completion date by way of the execution and delivery of Addendum A to the contract. Addendum A has been executed by the construction manager and provides for a certified maximum price of $52,400,000 and a certified completion of April 1, 1982. Although, Addendum A has not been executed by the Commission, upon execution, the requirements of a certified maximum price and a certified completion date will have been fulfilled. The Construction Management Agreement also provides for bonds as required by the statute. Section 7.1 of the Agreement specifically states: It is the express intention that the bond furnished hereunder comply with each and all of the requirements of the Act, including but not limited to the Construction Manager's guarantee to the Commission and the trustee that the Construction Manager (i) will perform his work under this contract, (ii) will make payment to the Commission in respect of the certified maximum price according to the terms of this contract, (iii) will insure proper payment for all who furnish labor, materials, supplies and equipment used in the prosecution of the work under this contract, and (iv) will cover any costs which may be incurred by the Commission for loss of revenues by the Commission resulting from incomplete construction on the certified completion date. Section 10.1 of the Agreement provides for payments to the Commission when the guaranteed maximum price is exceeded and payments for lost revenue if the facility is incomplete on the construction date, as required by the statute. The contract does provide, particularly in Article V for changes in the Certified Construction Price, and Certified Completion Date under the circumstances stated therein. Such a provision is not prohibited by the statute. When interpreting this contract it is important to keep in mind that we are dealing with a massive construction project. A mere recitation of the statutory language would be insufficient to contract for the construction of a project of these proportions and of course was not so intended by the legislature. Section 11.2 of the Agreement specifically states: 11.2 Governing Law : This contract shall be governed by laws of the State of Minnesota and shall be construed in such a manner as to comply with the laws of the State of Minnesota which apply to the project, including specifically M.S. 473.551 to 473.595, as amended. The court is satisfied that the Construction Management Contract addendum and performance bond when executed by the Council and Commission complied with 473.556, Subd. 7 and 473.581, Subd. 3.