CONSTRUCTION CONTRACT
This Construction Contract (“Contract”), made ______________, 2018 is between Noll Power
Company, a West Virginia corporation whose headquarters is located at 1 Hamish Road,
Charleston, West Virginia (“Noll Power”), and Malin Construction Company, a privately held
construction company whose main office is located at 321 Macher Drive, Juliaburg, Ohio
(“Malin Construction”).
Background:
A. Noll Power owns and operates a number of electric generating facilities (power plants) in
West Virginia and the surrounding states.
B. Noll Power sells electricity generated at these facilities to various public utility
companies, who in turn, distribute the power to consumers.
C. Noll Power recently entered into a contract with West Virginia Power and Light
Company (“WVP&L”) to supply electricity to WVP&L beginning on April 1, 2021.
D. Noll Power plans to build a new power plant on property that Noll Power owns along the
Chazzerai River to generate the electricity required to fill the contract with WVP&L.
E. The power produced by the new Noll Power plant will be routed through an interconnect
facility, which will be constructed and owned by WVP&L.
F. Noll Power wishes Malin Construction to design and construct the new Chazzerai River
power plant and Malin Construction wishes to do the same.
The parties agree:
Section 1. Definitions.
a. “Add-On Pollution Control Equipment” means any additional pollution control
equipment that may be required by either the State of West Virginia or the federal
government that is beyond the Base Pollution Control required by this Contract.
b. “Appropriate Change” means any change to the proposed design of the facility that
would improve the Plant’s security, expandability, appearance, noise control, lighting,
and worker comfortability, at a good-faith estimated cost of less than 1% of the initial
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price listed in Section 9 of this Contract.
c. “Base Pollution Control” means equipment which meets all current industry safety and
performance standards and is of the same design as the pollution control equipment
which is installed in the GT Power Company of Georgia facility.
d. “Interconnection Test” means the test or series of tests conducted by Malin Construction
and WVP&L to verify the connection and interoperability between the Plant and the new
WVP&L interconnect facility.
e. “Final Completion” means that the Plant meets all of the requirements for Substantial
Completion and that all of the items on the Punch List have been completed.
f. “Final Completion Date” means the date after which Malin Construction will be
penalized for failure to reach Final Completion. The Substantial Completion Date is
tentatively set for April 1, 2021, but can me modified per the terms of this Contract.
g. “Plant” means the new electric generating facility to be built on the Noll Power property
along the Chazzerai River.
h. “Plant Specifications” means all technical specifications and operational requirements
provided by Noll Power to Malin Construction regarding the construction of the Plant,
including, but not limited to the Specifications and Requirements List attached to this
Contract as Exhibit A.
i. “Punch List” means a document listing minor items that need to be completed in order
for the Plant to meet all specifications after the plant has been Substantially Completed
and turned over to Noll Power.
j. “Substantial Completion” means that the Plant has been constructed in substantial
conformance with the plans and specifications, has successfully completed the required
tests listed in Appendix A, has passed the Interconnection Test, and can operate
sustainably at 420 megawatts thermal (420 MWt).
k. “Substantial Completion Date” means the date after which Malin Construction will be
penalized for failure to reach Substantial Completion. The Substantial Completion Date
is tentatively set for December 31, 2020, but can me modified per the terms of this
Contract.
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l. “WVP&L Contract” means the contract between Noll Power and WVP&L in which Noll
Power agreed to supply electricity to WVP&L over a twenty-year period beginning April
1, 2021.
m. “Work” means all design, construction, testing, and other tasks performed by Malin
Construction or its subcontractors in relation to the Plant and this Contract.
Section 2. Effect. Effective January 15, 2019, Noll Power retains Malin Construction to design,
construct, and test the Plant and Malin Construction chooses to be retained, according to the
provisions of this Contract.
Section 3. Design.
a. Malin Construction is fully responsible for the design of the Plant.
b. Malin Construction will ensure that all Plant designs conform to industry engineering and
safety standards, applicable statutes and regulations, Plant Specifications, and design
changes required by Noll Power per this Contract.
c. Noll Power has the right to review and comment on all Plant designs before such designs
are implemented.
i.
Malin Construction will, at a minimum of thirty days prior to beginning any phase
of construction on the Plant, provide to Noll Power a copy of all design
specifications and drawings to be used in that phase of construction.
ii.
Noll Power may provide comment and request design changes to be considered
by Malin Construction on any part of the Plant during any phase of the Plant’s
construction.
iii.
Noll Power may require that the Plant design be changed if such changes are
required to meet obligations of Noll Power under the WVP&L Contract.
iv.
Noll Power may require that the Plant design be changed if Noll Power deems
that such changes would increase the operational efficiency of the Plant.
v.
Noll Power may require any Appropriate Changes.
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vi.
No changes to the Plant design required or requested by Noll Power relieve Malin
Construction of its obligation to provide proper design and construction of the
Plant.
Section 4. Construction.
a. Malin Construction is fully responsible for the proper construction of the plant.
b. Malin Construction will ensure that Plant is constructed in a manner that conforms to:
i.
all industry, construction, engineering, and safety standards;
ii.
all applicable statutes and regulations;
iii.
all Plant Specifications;
iv.
either the unchanged design specifications and drawings provided to Noll Power
prior to each phase of construction, or the changed designs suggested by Noll
Power under Section 3 of this Contract; and
v.
all design changes required by Noll Power per this Contract.
c. Malin Construction shall furnish all labor, materials, tools, services, etc. necessary to
construct the Plant.
Section 5. Pollution Mitigation and Control.
a. Malin Construction shall, at a minimum, install Base Pollution Control at the Plant.
b. Noll Power is responsible determining if Add-On Pollution Control Equipment is
required by West Virginia or Federal law.
c. Noll Power shall notify Malin Construction as to whether or not Add-On Pollution
Control Equipment is required, and the exact requirements of any required Add-On
Pollution Control Equipment prior to the installation of Base Pollution Control.
d. Malin Construction shall install any required Add-On Pollution Control Equipment upon
receiving notification from Noll Power.
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e. Noll Power shall be responsible the cost of any Add-On Pollution Control Equipment
installed by Malin Construction prior to Malin Construction’s notification of pollution
control equipment requirements by Noll Power.
Section 6. Testing.
a. Malin Construction shall be responsible for conducting all tests required to ensure Plant
operability and Substantial Completion, including, but not limited to the tests described in
in Appendix A of this Contract.
b. If the any of the tests described in Appendix A of this Contract are unsuccessful, Malin
Construction may repeat the tests as needed subject to the following provisions.
c. If the any of the tests described in Appendix A of this Contract are unsuccessful, Noll
Power may:
i.
accept the Plant, make any changes or corrections as necessary to enable the Plant
to successfully pass the tests, and deduct the costs of such changes or corrections
from the price of this Contract as listed in Section 9 of this Contract.
ii.
require Malin Construction to make any changes or corrections as necessary to
enable the Plant to successfully pass the tests and not accept delivery of the plant
until the tests are successful.
d. Under this section, Noll Power shall retain the right to elect option (c)(i) at any time, even
if Noll Power initially elects option (c)(ii). If Noll Power elects option (c)(ii) Malin
Construction shall be liable for any cost incurred by Noll Power from the failure of the
tests, including, but not limited to any costs incurred from having to purchase power from
another source in order to meet obligations under the WVP&L Contract.
e. Malin Construction is responsible for the performance of the Interconnection Test subject
to force majeure.
i.
If, however, the failure of WVP&L to complete construction the interconnection
facility causes the Interconnection Test not to successfully occur by December 31,
2020, Noll Power shall extend the dates for Substantial Completion and Final
Completion accordingly.
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ii.
Noll Power shall be liable to Malin Construction for any additional costs Malin
Construction may incur resulting from the delay in completion of the
interconnection facility.
Section 7. Delivery.
a. Noll Power shall take possession of the Plant once Malin Construction has reached
Substantial Completion of the plant.
b. Malin Construction shall have the plant meet Substantial Completion no later than the
Substantial Completion Date.
i.
If Malin Construction has met Substantial Completion of the Plant before the
Substantial Completion Date, Noll Power shall pay an increase in price to Malin
Construction as provided in Section 9 of this Contract.
ii.
If Malin Construction has not met Substantial Completion of the Plant on or
before the Substantial Completion Date, Malin Construction shall be liable for the
adjustment in price to Noll Power as provided in Section 9 of this Contract.
c. Malin Construction shall have the Plant to Final Completion within sixty days after
reaching Substantial Completion.
Section 8. Subcontractors.
a. Malin Construction may subcontract portions of the Work to subcontractors.
b. Malin Construction will submit the names and contact information for all subcontractors
that Malin Construction intends to use on the Work to Noll Power no less than fifteen
days prior to allowing any subcontractor to do any portion of the Work.
c. Malin Construction must obtain approval from Noll Power before allowing any
subcontractor to do any portion of the Work.
d. Noll Power will not, without good reason, disapprove any subcontractor Malin
Construction wishes to hire for any portion of the Work.
e. Malin Construction will require all subcontractors to maintain liability and other
insurance as listed in the Subcontractor Insurance Requirements Sheet attached to this
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Contract as Exhibit B.
f. No contractual relationship will exist between Noll Power and any subcontractor.
g. Malin Construction shall hold harmless and indemnify Noll Power against any claims or
causes of action arising from Malin Construction’s use of subcontractors on any part of
the Work.
h. Noll Power shall not direct subcontractors to do any Work directly except as provided in
writing by Malin Construction.
Section 9. Price. Noll Power shall pay Malin Construction a price of $542,850,000.00, for the
construction of the Plant, subject to the adjustments listed in this section.
a. $9,7000,000.00 from the price of $542,850,000.00 is allocated for installation of Add-On
Pollution Control Equipment if the equipment is installed.
i.
If the cost of procurement and installation of required Add-On Pollution Control
Equipment is greater than $9,7000,000.00, Noll Power shall increase the price
paid to Malin Construction by the actual cost of the Add-On Pollution Control up
to a maximum increase of $2,000,000.00. This would bring the total paid for AddOn Pollution Control to $11,700,000.00.
ii.
If the cost of procurement and installation of required Add-On Pollution Control
Equipment is greater than $11,700,000.00, Noll Power and Malin Construction
shall equally share the cost of the procurement and installation up to a maximum
increase of $2,500,000.00, above $11,700,000.00 for a total of $14,200,000.00.
iii.
Noll Power shall pay all costs of procurement and installation of required Add-On
Pollution Control Equipment to the extent that such costs exceed $14,200,000.00,
subject to the limitations listed in the previous paragraphs.
iv.
Noll Power shall reduce the price paid to Malin Construction by $9,700,000.00, if
the Add-on Pollution Control Equipment is not installed unless Malin
Construction has incurred costs for the procurement and installation of the Addon Pollution Control Equipment prior to receiving notice from Noll Power that the
Add-on Pollution Control Equipment is not required, in which case, Noll Power
shall be responsible for the costs incurred by Malin Construction.
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b. Noll Power shall increase the price paid to Malin Construction under this Contract
$50,000.00 per day, up to a total of $4,500,000.00, for each day before the Substantial
Completion Date that Malin Construction reaches Substantial Completion of the Plant.
c. Noll Power shall decrease the price paid to Malin Construction under this Contract
$50,000.00 per day for each day after the Substantial Completion Date, up to and
including March 31, 2021, which Malin Construction has not reached Substantial
Completion of the Plant.
d. If the Plant has not reached Final Completion by the Final Completion Date, Noll Power
shall decrease the price paid to Malin Construction under this Contract by $2,000,000.00
in addition to the per day penalty listed in the previous paragraph.
e. Noll Power shall decrease the price paid to Malin Construction under this Contract
$75,000.00 per day for each day after the Final Completion Date which Malin
Construction has not reached Final Completion of the Plant.
f. Malin Construction shall be liable for all costs, and penalties Noll Power should accrue
for failure to deliver power to WVP&L pursuant to the WVP&L Contract, which result
from Malin Construction failing to reach Substantial Completion on the delivery date as
outlined in Section 7 of this Contract. Noll Power shall deduct these costs from the price
of this Contract.
Section 10. Payments.
a. Noll Power shall pay Malin Construction an advance payment of $12,500,00.00 at the
signing of this Contract.
b. Malin Construction shall submit a monthly invoice to Noll Power by the 10th day of each
month for all Work completed, and for all equipment and material purchased and stored
on site, as of the end of the previous month.
c. Malin Construction shall submit a sworn statement with each of the monthly invoices,
stating all subcontractors, laborers, and material suppliers have been paid in full for any
amounts invoiced.
d. Noll Power shall, within ten days of the date Noll Power receives the invoice, approve all
invoices that Noll Power and its consulting engineer, believe in good faith to be true and
accurate.
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e.
Noll Power shall pall Malin Construction for all approved invoices within twenty days
after the date Noll Power receives the invoice.
f. Noll Power shall pay Malin Construction progress payments owed for completed Work
according to Appendix B of this Contract when Noll Power pays Malin Construction for
approved monthly invoices.
g. All payments made to will be made by electronic fund transfer to the Malin Construction
opeartions account at the Buckey Bank headquartered in Juliaburg, Ohio.
Section 11. Dispute of Payment.
a. If Noll Power does not approve the amount shown on an invoice from Malin
Construction, Noll Power shall notify Malin Construction of the disagreement no more
than fifteen business days after Noll Power receives the invoice.
b. Noll Power and Malin Construction shall meet within ten days after Noll Power notifies
Malin Construction of the disagreement to reach a resolution for the disagreement.
c. If no resolution is reached within twenty days after the date Noll Power notifies Malin
Construction of the disagreement, both parties are to be settled by binding arbitration in
the State of West Virginia or another jurisdiction mutually agreeable to the parties. The
arbitration shall be conducted pursuant to the Rules of the American Arbitration
Association. Any decision or award as a result of any such arbitration proceeding will be
in writing and will be binding on the parties.
d. Payment of any invoice is not evidence of Noll Power’s acceptance of the Work
performed or proper performance by Malin Construction under this Contract.
Section 12. Retainage.
a. Noll Power shall retain Ten percent of the amount which otherwise is to be paid to Malin
Construction for each invoice.
b. Any monies retained by Noll Power shall gain interest at the rate of prime plus one
percent.
c. Noll Power shall pay Malin Construction one-half of the retainage within thirty days of
the tests listed in Appendix A being successful and Substantial Completion.
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d. Noll Power shall pay Malin Construction the remainder of the retainage upon Final
Completion.
Section 13. Termination.
a. Noll Power shall have the right to terminate this Contract for its own convenience.
b. If Noll Power terminates this Contract for convenience:
i.
Noll Power shall have the right to perform any Work itself, or contract with
another company to perform the Work.
ii.
Noll Power shall pay Malin Construction for all of the Work performed and all
materials that have been procured or purchased by Malin Construction for Work
on the Plant which have not yet been used minus the advance payment listed in
Section 10 of this Contract.
iii.
Noll Power shall return any retainage to Malin Construction within thirty days of
termination minus the advance payment listed in Section 10 of this Contract.
iv.
Malin Construction shall return any part of the advance payment listed in Section
10 of this Contract which has not been invoiced and is not accounted for in
paragraphs (ii) and (iii) of this section.
c. If Noll Power terminates this Contract “for cause”, subsections (b)(i-iv) of this section are
not enforceable.
Section 14. Force Majeure.
a. If the performance of this Contract is prevented, restricted or interfered with by reason of
earthquake, fire, flood or other casualty or due to strikes, riot, storms, explosions, acts of
God, war, terrorism, or a similar occurrence beyond the reasonable control of the either
party, the party so affected shall give prompt notice to the other Party.
b. Upon giving such notice the non-performing party will be excused from such
performance during the prevention, restriction or interference, and any resulting failure or
delay will not be considered a breach of this Contract.
c. Upon any event that triggers this clause, the parties will make appropriate adjustments to
the Substantial Completion Date and Final Completion Date without penalty to the nonperforming party.
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Section 15. Applicable Law. This Contract will be governed by and construed in accordance
with the law of the State of West Virginia without regard to conflict of law principles.
Section 16. Severability. If any part of this Contract is held invalid, void, or unenforceable the
remainder of this Contract will not be affected.
Section 17. Amendments. The parties may not amend this Contract except by a written
document signed by each of the parties.
Section 18. Assignment. No party may assign this Contract without the prior written consent of
the other parties. Any purported assignments are void.
Section 19. Captions. The headings of sections within this Contract are for convenience only
and do not affect the construction or interpretation of this Contract.
Section 20. Counting of Days. In counting the number of days for any purpose under this
Contract, Saturdays, Sundays, and holidays are not counted.
Section 21. Notice. Any party giving or making any notice, request, demand, or other
communication (each, a “Notice”) pursuant to this Contract shall give the Notice to all Partners
in writing and use one of the following methods of delivery: registered, certified, or express mail
(postage prepaid and return receipt requested), nationally recognized overnight courier (all fees
prepaid), or email. Notice given by any other means is effective upon receipt.
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Notice will be sent to the following parties:
Noll Power Company
Attn: Pamela Maven
Address: 1 Hamish Road, Charleston, West Virginia, WV 25301
Phone:_______________________
Fax:_________________________
Email:_______________________
Malin Construction Company
Attn: Keith Goldfarb
Address: 321 Macher Drive, Juliaburg, Ohio, 98765
Phone:_______________________
Fax:_________________________
Email:_______________________
The parties sign:
Noll Power Company
______________________________________
Pamela Maven
Date:______________________________20/_______
Malin Construction Company
______________________________________
Keith Goldfarb
Date:______________________________20/_______
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