Notice to Proceed: CA shall issue the Notice to Proceed (NTP) to the contractor and copy the project team within 15 days of University Counsel signing the construction agreement. When completing the NTP, the CA shall exercise caution when inserting the start or completion date, as these dates shall not fall on a Saturday, Sunday, or a holiday. The NTP provides the contractor with the official start and end dates, duration of project, liquidated damages, and the DIR Project Identification Number.
The preconstruction meeting is to be scheduled prior to the construction start date identified in the Notice To Proceed. The Construction Administrator will send notification of the preconstruction meeting to the Contractor, Architect and other attendees (refer sample letter).
The Preconstruction Packages include: Preconstruction Meeting Agenda, the Contractor’s Payment Request form 702.12, the meeting Sign-In Sheet. Four contract set labels should also be prepared for attachment to two sets of contract drawings and specifications, including all addenda. The Contractor and the Construction Administrator shall sign these labels and affix them to the drawings and specifications, thereby making those signed sets the official contract documents. Half-sized plans may be used for the signature set.
The Construction Administrator is to conduct the preconstruction meeting following the standard preconstruction meeting agenda. The Construction Administrator should take as much time as appropriate to achieve common understanding of all topics: the roles of the parties; document workflow; site access; safety; submittals; change orders; payment; prevailing wage requirements; certified payroll records; and all other relevant information and processes. The form number CSU.LC-00A: Checklist of Labor Law Requirements for use on projects for which the DIR monitors labor compliance contains a certification which all contractors at the preconstruction meeting must sign, and campus must retain in files. The Construction Administrator shall maintain a positive tone and encourage the principles of partnering by all parties for the mutual success of the project.
To ensure performance under a contract, the Trustees shall retain no less than five (5%) percent of the contract price, including change orders, until final completion and acceptance of the project by the Trustees (Public Contract Code, Section 10851).
The Trustees shall process the Contractor’s partial payment requests, retaining not less than five (5%) percent of each partial payment request, and hold the retention funds in the contract account. After the project is 100% complete, and if there are no stop notices, labor commissioner withholds or claims against the Contractor or the project, the Trustees may process the final retention payment request to the Contractor.
Escrow Agreement Overview:
The Trustees may allow the Contractor to establish an escrow account. When there is an escrow agreement, the Trustees will process all partial payment requests, and process retention payments to the Contractor, but only after confirming that the Contractor has deposited sufficient securities with the State Treasurer’s Office (STO). Rarely, the Trustees may opt not to authorize an escrow agreement if specific reasons exist related to a contractor’s performance or if there are unique circumstances with a project. Reasons such as staff workload are not valid reasons to disallow a contractor to utilize an escrow agreement. The Trustees may combine the use of holding funds and an escrow account. This may occur near the completion of a project when the Trustees may establish a cut-off point when the Contractor is not required to deposit additional securities with the STO. Instead, the Trustees will process the remaining partial payment requests to the Contractor, and hold the retention funds from those partial payment requests in the contract account. Thus, the Trustees have retention in the form of securities deposited at the STO up to the cut-off point, and also hold five (5%) percent retention in the contract account for retention on all payments processed thereafter. Both accounts shall equal no less than five (5%) percent of the entire contract.
Parties in the Escrow Agreement Process: A three-party agreement is drawn up between the Trustees of the California State University as the Trustee, the Contractor, and the STO as the Escrow Agent. All parties must hold a fully executed agreement which includes an escrow agreement, surety, power of attorney and all-purpose acknowledgement.