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§ 7.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Subcontractors, or suppliers,
<br />provided that such damaged or nonconforming Work was not caused by the negligence of, or failure to fulfill a specific
<br />responsibility by, the Construction Manager, and only to the extent that the cost of repair or correction is not recovered
<br />by the Construction Manager from insurance, sureties, Subcontractors, suppliers, or others.
<br />§ 7.7.4 The costs described in Sections 7.1 through 7.7 shall be included in the Cost of the Work, notwithstanding any
<br />provision of AIA Document A201-2017 or other Conditions of the Contract which may require the Construction
<br />Manager to pay such costs, unless such costs are excluded by the provisions of Section 7.9.
<br />§ 7.8 Related Party Transactions
<br />§ 7.8.1 For purposes of this Section 7.8, the term "related parry" shall mean (1) a parent, subsidiary, affiliate, or other
<br />entity having common ownership of, or sharing common management with, the Construction Manager; (2) any entity in
<br />which any stockholder in, or management employee of, the Construction Manager holds an equity interest in excess of
<br />ten percent in the aggregate; (3) any entity which has the right to control the business or affairs of the Construction
<br />Manager; or (4) any person, or any member of the immediate family of any person, who has the right to control the
<br />business or affairs of the Construction Manager.
<br />§ 7.8.2 If any of the costs to be reimbursed arise from a transaction between the Construction Manager and a related
<br />parry, the Construction Manager shall notify the Owner of the specific nature of the contemplated transaction, including
<br />the identity of the related parry and the anticipated cost to be incurred, before any such transaction is consummated or
<br />cost incurred. If the Owner, after such notification, authorizes the proposed transaction in writing, then the cost incurred
<br />shall be included as a cost to be reimbursed, and the Construction Manager shall assist Owner in procuring the Work,
<br />equipment, goods, or service, from the related party, as a Subcontractor, according to the terms of Article 9. If the
<br />Owner fails to authorize the transaction in writing, the Work, equipment, goods, or service shall be procured from some
<br />person or entity other than a related party according to the terms of Article 9.
<br />§ 7.9 Costs Not To Be Reimbursed
<br />§ 7.9.1 The Cost of the Work shall not include the items listed below:
<br />.1 Salaries and other compensation of the Construction Manager's personnel stationed at the Construction
<br />Manager's principal office or offices other than the site office, except as specifically provided in Section
<br />7.2, or as may be provided in Article 14;
<br />.2 Bonuses, profit sharing, incentive compensation, and any other discretionary payments, paid to anyone
<br />hired by the Construction Manager or paid to any Subcontractor or vendor, unless the Owner has
<br />provided prior approval;
<br />.3 Expenses of the Construction Manager's principal office and offices other than the site office;
<br />.4 Overhead and general expenses, except as may be expressly included in Sections 7.1 to 7.7;
<br />.5 The Construction Manager's capital expenses, including interest on the Construction Manager's capital
<br />employed for the Work;
<br />.6 Except as provided in Section 7.7.3 of this Agreement, costs due to the negligence of, or failure to fulfill
<br />a specific responsibility of the Contract by, the Construction Manager, Subcontractors, and suppliers, or
<br />anyone directly or indirectly employed by any of them or for whose acts any of them may be liable;
<br />.7 Any cost not specifically and expressly described in Sections 7.1 to 7.7;
<br />.8 Costs, other than costs included in Change Orders approved by the Owner, that would cause the
<br />Guaranteed Maximum Price to be exceeded; and
<br />.9 Costs for services incurred during the Preconstruction Phase.
<br />ARTICLE 8 DISCOUNTS, REBATES, AND REFUNDS
<br />§ 8.1 Cash discounts obtained on payments made by the Construction Manager shall accrue to the Owner if (1) before
<br />making the payment, the Construction Manager included the amount to be paid, less such discount, in an Application
<br />for Payment and received payment from the Owner, or (2) the Owner has deposited funds with the Construction
<br />Manager with which to make payments; otherwise, cash discounts shall accrue to the Construction Manager. Trade
<br />discounts, rebates, refunds, and amounts received from sales of surplus materials and equipment shall accrue to the
<br />Owner, and the Construction Manager shall make provisions so that they can be obtained.
<br />§ 8.2 Amounts that accrue to the Owner in accordance with the provisions of Section 8.1 shall be credited to the Owner
<br />as a deduction from the Cost of the Work.
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