Common use of Project Allowances Clause in Contracts

Project Allowances. The parties acknowledge that the Fixed Design-Build Price contains an allowance in the aggregate amount of $410,000 (the “Project Allowance”) for certain portions of the Design-Build Work identified in Appendix 12 (Allowances) (the “Project Allowance Items”). To the extent practicable, prior to the Construction Date the parties shall agree to guaranteed fixed prices for each Project Allowance Item. The individual allowances related to each Project Allowance Item represent the maximum amount which the Owner anticipates will be paid for such Project Allowance Item; provided, however, the Owner may agree to a price for an individual item in excess of the corresponding allowance without a Change Order as long as the aggregate payments for the Project Allowance Items do not exceed the Project Allowance. On the Construction Date, the Fixed Design-Build Price will be adjusted accordingly as set forth in Section 5.2 (Payment Procedure and Amount). In the event that a guaranteed fixed price for any Project Allowance Item has not been set prior to the Construction Date, the balance of the Project Allowance shall be deducted from the Fixed Design-Build Price and the Owner shall have the option of either (i) agreeing with the Design-Builder to another methodology for fixing the payment for such Project Allowance Item (e.g. cost-plus guaranteed maximum price, or future guaranteed fixed price) or (ii) bidding such work out to a third party in which even such work will no longer constitute Design-Build Work for which the Design- Builder is responsible. In either event, the parties shall memorialize their agreement on how to proceed through the execution of a Contract Administration Memorandum as set forth in subsection 11.4(B) (Contract Administration Memorandum).