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AMENDMENT NO. <br />CONSTRUCTION CONTRACT BETWEEN <br />PENCE/KELLY CONSTRUCTION, INC. AND <br />MARION COUNTY AND SALEM AREA MASS TRANSIT DISTRICT <br />Date: <br />Marion County and Salem Area Mass Transit District (Owner) and Pence/Kelly <br />Construction, Inc. (Contractor) are parties to a contract dated February 17, 1999, for <br />construction of a project known as Courthouse Square. The parties desire to change the terms of <br />the construction contract concerning processing and payment for change orders and retainage. <br />The parties also desire to add terms to the contract concerning value engineering change <br />proposals. - <br />In consideration of the mutual promises of the parties set forth in this Amendment the <br />parties agree to modify the construction contract as follows: <br />I. Chan~e Orders: <br />1. Definitions. For purposes of changes in the work under Article 7, the following <br />definitions of terms shall apply: <br />1. Direct Costs. Unless otherwise provided in the Contract Documents, Direct <br />Costs shall be limited to the following: cost of materials, including sales tax and <br />cost of delivery; cost of labor, including social securiry, old age and unemployment <br />insurance, and fringe benefits required by agreement; workers' compensation <br />insurance; bond premiums; rental value of equipment and machinery; and <br />additional costs of field personnel directly attributable to the change. <br />2. Overhead. The following items shall be included in Contractor's markup <br />(general and administrative expense, overhead and profit) and shall not be charged <br />as direct cost of the Work: Personnel above the level of foreman (i.e., <br />superinter.d~nts a:.d p~ oject managers); ~~1..~'~ <br />; expenses of Contractor's offi s ncluding <br />personnel; and overhead and general and administrative expenses. ~ <br />2. Changed Work Markup. Contractor and Owner agree that the percentage <br />markup to cover all other charges in connection with the Contractor's price for changed work <br />under Paragraph 7.3.7.3 of the General Conditions of the construction contract is hereby amended <br />to be five percent (5%), and to delete ten percent (10%). <br />II. Value En ineerin Chan~e Proposals: <br />1. General. The Contractor is encouraged to develop, prepare, and submit value <br />engineering change proposals (VECP's) voluntarily. The Contractor shall share in any instant <br />