Section R7-2-1087. Contract Clauses

A.      The school district shall include in solicitations and contracts all contract clauses necessary to ensure the school district’s interests are addressed. The school district may modify clauses for inclusion in any particular school district contract, pro- vided that any variations are supported by a written determina- tion that states the circumstances justifying the variation and provided that notice of any material variation is stated in the solicitation.

B.       All contract clauses shall be consistent with the provisions of Articles 10 and 11.

C.      The school district may permit or require the inclusion of clauses providing for appropriate remedies, adjustments in prices, time of performance or other contract provisions.

D.      A contract for the procurement of construction or construction services shall include a provision for the recovery of damages related to expenses incurred by the contractor for a delay for which the school district is responsible, that is unreasonable under the circumstances and that was not within the contem- plation of the parties to the contract. This subsection shall not be construed to void any provision in the contract that requires notice of delays, provides for arbitration or any other proce- dure for settlement or provides for liquidated damages.

E.       A provision, covenant, clause or understanding in, collateral to or affecting a construction contract that makes the contract subject to the laws of another state or that requires any litiga- tion, arbitration or other dispute resolution proceeding arising from the contract to be conducted in another state is against the public policy of this state and is void and unenforceable.

F.       A covenant, clause or understanding in, collateral to or affect- ing a construction contract or subcontract or a design profes- sional services contract or subcontract that purports to indemnify, to hold harmless or to defend the promisee of, from or against liability for loss or damage resulting from the negli- gence of the promisee or the promisee’s agents, employees or indemnitee is against the public policy of this state and is void.

G.      If a design professional provides work, services, studies, plan- ning, surveys or other preparatory work in connection with a public building or improvement, the school district or property owner may require that the design professional services con- tract or subcontract require the design professional to indem- nify and hold harmless the school district or property owner, and its officers and employees, from liabilities, damages, losses and costs, including reasonable attorney fees and court costs, but only to the extent caused by the negligence, reck- lessness or intentional wrongful conduct of such design pro- fessional or other persons employed or used by such design professional in the performance of the contract or subcontract.

H.      A design professional services subcontract entered into in con- nection with a public building or improvement may also require any design professional to indemnify and hold harm- less the school district or property owner and the indemnified design professional who executed the subcontract, and their respective owners, officers and employees, from liabilities, damages, losses and costs, including reasonable attorney fees and court costs, but only to the extent caused by the negli- gence, recklessness or intentional wrongful conduct of such design professional, or persons employed or used by the indemnifying design professional in connection with the sub- contract.

I.        Nothing in this Section shall prohibit the requirement of insur- ance coverage that complies with this Section, including the designation of the school district or property owner as an addi- tional insured on a general liability insurance policy or as a designated insured on an automobile liability policy provided in connection with a construction contract or subcontract or design professional services contract or subcontract.

J.        Notwithstanding subsection (F), a contractor who is responsi- ble for the performance of a construction contract or subcon- tract may fully indemnify a person, firm, corporation, state or other agency for whose account the construction contract or subcontract is not being performed and that, as an accommo- dation, enters into an agreement with the contractor that per- mits the contractor to enter on or adjacent to its property to perform the construction contract or subcontract for others.

K.      Except as provided in subsections (G), (H) and (I), a design professional services contract or subcontract entered into in connection with a public building or improvement shall not require that a design professional defend, indemnify, insure or hold harmless the school district or property owner or its employees, officers, directors, agents, contractors or subcon- tractors from any liability, damage, loss, claim, action or pro- ceeding, and any contract provision that is not permitted by subsections (G), (H) and (I) is against the public policy of this state and is void.

L.       If any provision or condition contained in this Section con- flicts with any provision of a contract between the school dis- trict and the federal  government, such provision  shall not apply to any construction contract or subcontract, or design professional services contract or subcontract to the extent such conflict exists, but all provisions of this Section with which there is no such conflict, shall apply.

M.     In this Section:

1.        “Construction contract or subcontract” means a written or oral agreement relating to the construction, alteration,

repair, maintenance, relocation, moving, demolition or excavation of a structure, street or roadway, appurte- nance, facility, development, or other improvement to land.

2.        “Design professional services” means architect services, engineer services, land surveying services, geologist ser- vices or landscape architect services or any combination of those services performed by or under the supervision of a design professional or any person employed by the design professional.

3.        “Design professional services contract or subcontract” means a written or oral agreement relating to the plan- ning, design, construction administration, study, evalua- tion, consulting, inspection, surveying, mapping, material sampling, testing or other professional, scientific or tech- nical services furnished in connection with any actual or proposed study, planning, survey, environmental remedi- ation, construction, improvement, alteration, repair, maintenance, relocation, moving, demolition or excava- tion of a structure, street or roadway, appurtenance, facil- ity, development or other improvement to land.

4.        “Other persons employed or used” means a subcontractor to a contractor or design professional in any tier, or any other person or entity who performs work or design pro- fessional services, or provides labor, services, materials or equipment in connection with a construction contract or subcontract or design professional service contract or subcontract subject to this Section.

Historical Note

New Section made by final exempt rulemaking at 21

A.A.R. 1525, effective July 1, 2015 (Supp. 15-3).