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Resolution No. 8388
0 I■ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 8388 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT BY AND BETWEEN THE CITY OF VERNON AND THOMASON MECHANICAL CORPORATION FOR VALVE INSPECTION AND MAINTENANCE FOR THE GAS DISTRIBUTION SYSTEM WHEREAS, the City of Vernon ("City") is constructing a 134 MW Combined Cycle Power Plant, the Malburg Generating Station (the "Malburg Project"), for the purpose of installing additional generating capacity that will yield an efficient, cost-effective, and reliable source of electric generation to the City's inhabitants; and WHEREAS, on July 16, 2003, the City Council of the City of Vernon adopted Resolution No. 8252 with the intention of expediting the purchase of supplies and services for the Malburg Project; and WHEREAS, the City has determined that it needs the services of a vendor to inspect and maintain the gate and ball valves throughouti the City's approximately 50 miles of pipe comprising the gas distribution system prior to the Malburg Project's first fire (hereinafter referred to as the Valve Inspection and Maintenance"); and WHEREAS, Thomason Mechanical Corporation ("Thomason") submitted a proposal dated January 12, 2004, to provide the Valve Inspection and Maintenance; and WHEREAS, Thomason has provided services to Vernon in the past relating to the diesel and gas turbine units and currently provides mechanical preventative maintenance and emergency services on the diesel units at the City's Power Plant; and WHEREAS, as a result of Thomason's past services to Vernon, it should be able to provide the Valve Inspection and Maintenance 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 services now required by the City in a more efficient and effective manner; and WHEREAS, the City has determined that Thomason possesses the technical knowledge and expertise to furnish the Valve Inspection and Maintenance to facilitate the Malburg Project; and WHEREAS, on February 18, 2004, the Finance Committee considered the recommendation of Bruce V. Malkenhorst, Director of Finance, dated February 11, 2004, that the services of Thomason Mechanical Corporation be retained and an agreement prepared to facilitate the operation of the Malburg Project; and WHEREAS, the City Council of the City of Vernon has determined that, pursuant to the provisions of subsection (a) of Section 2.27 of the Vernon City Code, it is in the public interest and necessity to enter into an agreement with Thomason. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Inspection and Maintenance Services Contract with Thomason Mechanical Corporation, a copy of which is attached hereto as Exhibit "A" and made a part hereof. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor and the City Clerk to execute said Contract for, and on behalf of, the City of Vernon. - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 4: The City Council of the City of Vernon hereby directs the City Clerk, or his designee, to send one fully executed Contract to: Thomason Mechanical Corporation Attn. Ed Davis, Manager 2150 E. 37th Street Vernon, CA 90058 SECTION 5: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 24th day of March, 2004. ATTEST: BRUCE V. MALKENHORST, City Clerk EONIS C. MAL URG, Mayor - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8388, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Wednesday, March 24, 2004, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, City Clerk - 4 - EXHIBIT VA& 2 3 4 5 6 7 8 a 10 lll' 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INSPECTION AND MAINTENANCE SERVICES CONTRACT THIS CONTRACT is made, entered into and executed in duplicate originals, either copy of which may be considered and used as the original hereof for all purposes, as of this 24th day of March, 2004, in the City of Vernon, County of Los Angeles, California BY AND BETWEEN AND RECITALS THE CITY OF VERNON (hereinafter referred to as %%City") 4305 Santa Fe Avenue Vernon, CA 90058 THOMASON MECHANICAL CORPORATION (hereinafter referred to as "Thomason") 2150 E. 37th Street Vernon, CA 90058 WHEREAS, City is constructing the Malburg Generating Station Combined Cycle Power Plant at 2715 E. 50th Street in the City of Vernon (the "Malburg Project") for purposes of installing additional generating capacity that is capable of yielding cost effective, efficient and reliable electricity to meet its goals, while meeting Federal, State and local environmental and siting requirements; and WHEREAS, the Malburg Project team has determined that it needs the services of a vendor to inspect and maintain the gate and ball valves throughout the City's gas distribution system prior to the Malburg Project's first fire (hereinafter referred to as the "Valve Inspection and Maintenance"); and WHEREAS, Thomason prepared a Proposal dated January 12, 2004, to provide Valve Inspection and Maintenance (hereinafter I referred to as the "Proposal"), a copy of which is attached hereto as 2 Exhibit "A" and made a part hereof; and 3 WHEREAS, Thomason represents that it is qualified, properly 4 licensed and capable of furnishing the Valve Inspection and 5 Maintenance services that the City requires as set forth in the 6 Proposal and is willing to do so on the terms and conditions set forth 7 below; and 8 WHEREAS, the City desires to enter into an agreement with 9 Thomason to provide for the labor and materials necessary for the 10 Valve Inspection and Maintenance. 11 NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET 12 FORTH HEREIN: 13 1. Scope of Services. 14 Thomason agrees to provide the necessary material and 15 services for the Valve Inspection and Maintenance as set forth and 16 described in detail in the attached Exhibit "A". Thomason shall 17 provide said services at the time, place and in the manner specified 18 in the Proposal, subject to the direction of the City, through its 19 staff, as may be provided from time to time. Such services shall 20 include the following identified tasks: (1) remove valve casing lid, 21 (2) remove debris from casing if required (vacuum out), (3) verify if 22 valve is open or closed, (4) operate valve, (5) drill 5/32" hole in 23 pvc casing, (6) install 5/32" brass rod; (7) install 24" brass chain 24 and tag, (8) try locating pipe on both sides of valve, and (9) 25 document each completed task. The City will be responsible for 26 obtaining and paying for any permits necessary to perform the tasks 27 identified in herein, including any traffic control permits. It is 28 understood and agreed that in the event of a conflict between the - 2 - I Proposal and this Contract, the terms of this Contract shall prevail. 2 2. Time of Performance. 3 Thomason' performance, as identified herein, shall commence 4 upon the full execution of this Contract. Performance of the 5 Inspection and Maintenance services is to be completed no later than 6 September 6, 2004. If the Valve Inspection and Maintenance services 7 are not completed within this time period, the City shall have the 8 option of canceling this Contract in order to proceed with another 9 vendor, if one can be located, or extending the completion date. The 10 completion date may be extended by the City at its sole discretion for 11 an additional thirty (30) days, or such other time as the parties may 12 agree. 13 3. Price. 14 The City shall pay Thomason for the actual time expended on 15 a time and material basis. The total amount to be paid to Thomason 16 for the Valve Inspection and Maintenance, as described in the 17 Proposal, shall not exceed the sum of Two Hundred Thirty -Eight 18 Thousand Eight Hundred Eighty Dollars and No Cents .($238,880.00). 19 4. Payment Terms. 20 Thomason shall submit within thirty (30) days after the last 21 day of any month in which services have been performed or costs 22 incurred hereunder an invoice to the City. Invoices shall contain an 23 itemization of services rendered, the names, labor classifications, 24 the hours worked for each workers on a specific job, the equipment 25 used and the number of hours the equipment was used, other directly 26 related job expenses and subcontract charges incurred by Thomason and 27 for which compensation is due. Thomason shall be responsible for 28 paying any subcontractors used in the performance of this Agreement. - 3 - I Subcontractors shall not bill the City directly. 2 Payment of the invoice shall be made after acceptance and 3 approval by the City within thirty (30) days of receipt. The City's 4 approval of the invoice shall not be unreasonably withheld. 5 5. Change and Extra Services. City reserves the right to 6 request changes in the equipment design, delivery dates, or additions 7 to or deletions from the Valve Inspection and Maintenance purchased 8 from Thomason. All such changes shall be incorporated in written 9 change orders executed by City and Thomason and shall specify the 10 changes ordered and the adjustment of prices, delivery schedules and 11 warranties. Any equipment or services added under this section shall 12 be executed under all applicable conditions of this Contract. No 13 claim for additional compensation or extension of time shall be 14 recognized unless contained in a duly executed change order. 15 6. Termination. This Contract may be terminated by the 16 City without cause on ten (10) days written notice to Thomason. In 17 the event of such termination by the City, Thomason shall be entitled 18 to only the compensation earned by it prior to the date the 19 termination notice, plus compensation for necessary work performed 20 during the ten (10) day notice period and authorized in the 21 termination notice. 22 7. Cancellation/Default. In the event that Thomason 23 commits a breach of a material condition of this Contract, City shall 24 notify Thomason in writing of said breach and if Thomason has not 25 cured or begun reasonable efforts to cure after fifteen (15) days of 26 receipt of said notice, and fails to diligently pursue corrective 27 action, City shall have the right to cancel this Contract for cause 28 based on Thomason' default. Thomason shall be responsible for any - 4 - I direct costs due to City's re -procurement of the equivalent of the 2 equipment or services cancelled from Thomason. 3 8. Confidential Information. 4 A. Access to Confidential Information. City may 5 provide Thomason and/or its subcontractor with, or allow Thomason 6 access to, certain information not available to the public concerning 7 City, or businesses located in City. The information may include 8 company information, taxes, sales, value of assets, or other such 9 information. All such information shall be known as "Confidential 10 Information" and may not be used to circumvent the responsibility of 11 either party to this Contract. 12 B. No Disclosure. Except as expressly permitted, 13 Thomason and/or its subcontractor shall not disclose, permit the 14 disclosure of, release, disseminate, or transfer, whether orally or by 15 any other means, any part of such Confidential Information to any 16 other person or entity, whether corporate, governmental, or 17 individual, without the express prior written consent of an authorized 18 representative of City. Thomason and/or its subcontractor shall return 19 any written Confidential Information and all copies made of such items 20 to City upon City's written request, but in any event not later than 21 the date that Thomason has performed all services to be performed 22 pursuant to this Contract. Thomason hereby agrees that such 23 Confidential Information and any documents provided may be used by 24 Thomason and/or its subcontractor only as authorized by the City. 25 Thomason shall include a contract provision in its contract with 26 subcontractors that binds the subcontractors to this non -disclosure 27 requirement. Thomason shall take reasonable measures to avoid any 28 disclosure of any such Confidential Information to any unauthorized - 5 - I person. 2 C. Court Ordered Disclosure. Thomason shall 3 immediately notify City of any court order or subpoena requiring 4 disclosure of Confidential Information, and shall cooperate with 5 City's legal counsel in responding to any such order or subpoena. 6 Thomason may only disclose Confidential Information required to be 7 disclosed pursuant to court order or subpoena after legal counsel has 8 exhausted any lawful and timely appeal or challenge. 9 D. Remedies. In addition to any other remedies that 10 it may have at law or in equity, City shall be entitled to a temporary 11 and permanent injunction by a court of competent jurisdiction against 12 any breach or threatened breach of the Confidential Information 13 provisions of this Agreement. Thomason acknowledges that in case of 14 such breach or threatened breach of said provisions, City would have 15 no adequate remedy at law. 16 9• Warranties. Thomason shall provide a one (1) year labor 17 and material warranty to begin upon City's acceptance of the Valve 18 Inspection and Maintenance. In addition, all manufacturers' 19 warranties, and any other warranties made applicable by law, shall 20 apply to City's purchase of the materials and labor provided by 21 Thomason. 22 10. Compliance with Laws. Thomason shall strictly observe" 23 and comply with all applicable federal, state, and local laws, 24 ordinances and regulations governing this sale, including but not 25 limited to any permit or license requirements of the United States 26 Department of Commerce, as well as any laws of the United States of 27 America. 28 11. Governing Law. The validity, interpretation and - 6 - I performance of this Contract shall be controlled and construed under 2 the laws of the State of California. 3 12. Forum Selection. Any action brought relating to this 4 Contract shall be brought and held exclusively in a State Court in the 5 County of Los Angeles, California. 6 13. Notices. Notices to the parties, unless otherwise 7 requested in writing, shall be sent to: 8 City: THE CITY OF VERNON ATTN: BRUCE V. MALKENHORST 9 CITY ADMINISTRATOR 4305 SANTA FE AVENUE 10 VERNON, CA 90058-0805 11 Thomason: THOMASON MECHANICAL CORPORATION ATTN: ED DAVIS, MANAGER 12 2150 E. 37TH ST. VERNON, CA 90058 13 14 14. General Provisions. 15 A. Independent Contractor. At all times during the 16 term of this Contract, Thomason shall be an independent contractor and 17 shall not be an employee of the City. The City shall have the right 18 to control Thomason only insofar as the results of Thomason' services 19 rendered pursuant to this Contract; however, the City shall not have 20 the right to control the means by which Thomason accomplishes services 211 rendered pursuant to the Contract except to the extent that such 22 services involve the use of City property or Confidential Information. 23 B. Thomason Not Agent. Except as the City may 24 specify in writing, Thomason shall have no authority, express or 25 implied, to act on behalf of the City in any capacity whatsoever as an 26 agent. Thomason shall have no authority, expressed or implied, 27 pursuant to this Contract to bind the City to any obligation 28 whatsoever. - 7 - I C. Indemnification. Thomason shall indemnify, 2 defend, protect and hold the City and its officers, agents and 3 employees, free and harmless from and against any and all claims, 4 demands, losses, damages, liabilities, fines, charges, penalties, 5 orders, judgments and all costs and expenses incurred in connection 6 therewith, including reasonable attorney's fees and costs of defense 7 arising out of or attributable to the negligent or wrongful acts of 8 Thomason or its subcontractors, employees or agents in the performance 9 of services under this Contract, except to the extent arising from or 10 caused by the negligence or willful misconduct of the City, its 11 officers, agents or employees. 12 D. Insurance. Thomason agrees to provide insurance 1.3 in the amounts and forms specified in Exhibit "B," which is attached 14 hereto and made a part hereof by reference. Comparable coverage shall 15 be provided for each subcontractor used in the performance of this 16 Contract. Thomason shall submit to the City documentation indicating 17 compliance with these minimum requirements no less than one (1) day 18 prior to the beginning of performance under this Contract. Thomason 19 shall not commence performance of its services under this Contract 20 until the above insurance has been obtained and proof of insurance has 21 been filed with and approved by the City. 22 Limitation on Contractor's Liability. Neither 23 party shall have any liability for consequential damages of any nature 24 whatsoever, however arising. In addition, the dollar amount of 25 Thomason's total liability under this Contract, shall not exceed the 26 amounts that may be recovered under the limits of the insurance 27 required to be maintained by Thomason hereunder, plus Thomason's 28 warranty. The limitation of the parties' liability shall apply - 8 - I regardless of whether liability is asserted to arise in contract, 2 negligence or under any other theory of law. 3 E. Assignment and Subcontracting Prohibited. No 4 party to this Contract may assign or subcontract any right or 5 obligation pursuant to this Contract except as especially and 6 specifically provided for in the Proposal or with the express written 7 consent of the other party. Any other attempted or purported 8 assignment of any right or obligation pursuant to this Contract shall 9 be void and of no effect. 10 F. Entire Agreement. This Contract constitutes the 11 complete and final expression of the agreement of the parties and is 12 intended as a complete and exclusive statement of the terms of their 13 agreement and supersedes all prior and contemporaneous offers, 14 promises, representations, negotiations, discussions, communications 15 and agreements which may have been made in connection with the subject 16 matter hereof. All exhibits are incorporated by reference. Thomason 17 represents that in entering into this Contract it has not relied on 18 any previous representations or understandings of any kind or nature. 19 G. Partial Invalidity. Wherever possible, each 20 provision hereof will be interpreted in such manner as to be effective 21 and valid under applicable law, but in case any one or more of the 22 provisions contained herein will, for any reason, be held to be 23 invalid, illegal or unenforceable in any respect, such provision will 24 be ineffective to the extent, but only to the extent of such 25 invalidity, illegality or unenforceability without invalidating the 26 remainder of such provision or provisions or any other provision 27 hereof, unless such a construction would be unreasonable or contrary 28 to the parties' intent as expressed in this Contract. - 9 - H. Benefit of Agreement. This Contract shall bind and benefit the parties hereto and their heirs, successors, and permitted assigns. I. Waiver. Any waiver at any time by either party of its rights with respect to a default under this Contract, or with respect to any other matters arising in connection with this Contract, shall not be deemed a waiver with respect to subsequent default or other matter. J. Amendment. All changes or modifications to this Contract shall be in writing stating that it is an amendment to this Contract and shall be signed by both parties or their duly authorized agents. This Contract shall not be modified through course of dealing, usage or trade. K. Force Maieure. Neither Party shall be considered to be in default in any of its obligations under this Contract when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force" shall mean any cause beyond the control of the party affected, including, but not restricted to, flood, earthquake, storm, fire, lightening, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor material shortage, sabotage, federal, state, or municipal action, statute, ordinance, or regulation, embargoes of the United States Government or any other government, which by exercise of due diligence such party could not reasonably have been expected to avoid and by exercise of due diligence has been unable to overcome. Either party rendered unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force, shall give written notice within five (5) business days of such fact to the other party and shall exercise due - 10 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 diligence to remove such inability with all reasonable dispatch. IN WITNESS WHEREOF, the parties have caused this Contract to be executed by and through their authorized officers on the date, month and year first written above. ATTEST: BRUCE V. MALKENHORST, City Clerk APPROVED AS TO FORM: Z 7- - �7a ERIC T. FRESCH, tity Attorney CITY OF VERNON By: LEONIS C. MALBURG, Mayor THOMASON MECHANICAL CORPORATION By,�-� -,c, EXHIBIT 2150 E 37" ST_ VemonCa.90058 R w Tel: (310) 6393523 F— (310) 639.8217 NO. Qahtornia Ottice: 4595 Pacheco Blyd. Martinet, CA 94553 Tel: (925) 372-4844 Fax (925) 372-4845 Texas office: 3444 E. Pasadena Frwy. Pasadena. TX 77503 Tel: (713) 47234" Fax (713) 472-8428 Coletel Office: 6261 Prescott Court. Chino, CA 91710 Tel: (909) 5904500 Fax (909) 590.4M Thomason Mechanical Corp. 1/12104 Mr. Manny Garcia City of Vernon www.thomasoomech.com Subject: Quote for the inspection of gas shut Off valves in City of Vernon system Dear Manny, TMC appreciates the opportunity to estimate the above -mentioned subject. After further review of the additional information and tasks (provided by the City of Vernon) TMC will purchase and/or provide 1 Valve (Torque) wrench for P.E. valve length T & 12'. The maximum torque limitation for P.E. valves is 100 ft lb. 2 Flashlight 3 Compressor with air chipping gun, air grinder, air drill, and air vacuum 4 Brass tags 504 5 Brass rods 5/32 X 8" 504 6 Brass chain 24" 504 7 Pry bars (2) . 8 Labor to perform duties Task to be performed 1 Remove valve casing lid. 2 Remove debris from casing if required ( vacuum out). 3 Verify if valve is open or closed (valve should be open). 4 Operate valve (10" steel valves require 24 turns, 6" PE valve require 1/4 turn). 5 Drill 5/32" .hole in pvc casing (Drill hole 18" below finish grade) 6Install 5/32" brass rod (Ground rod for locating PE pipe) 7Install 24" brass chain with (4 digit GPS number), and brass tag. 8 Try locating pipe on both sides of valve. 9 Document each completed task. TMC estimated cost for this service is $238,880 Schedule TMC can mobilize in two weeks from acceptance of purchase order. TMC feels that it will be able to complete between 3 and 4 valves a day according to the scope provided. Total job should take approx 7 months utilizing 3 men. If you have any questions please call me at 800-639-3523 Sincerely, DA4+4 Ed Davis Manager, Engine Division 2 EXHIBIT . h, . I EXHIBIT B 2 INSURANCE SCHEDULE 3 Thomason shall provide proof of insurance, including a standard certificate of insurance, in at least the following amounts and coverage (combined single limit permitted): 4 I. Coverage and Limits 5 Bodily Injury Prope Damage 6 Hazards Each Person Each Accident Each Accident 7 Automobile Liability Owned Automobiles $ 500,000 $1,000,000 $ 500,000 8 Hired Automobiles $ 500,000 $1,000,000 $ 500,000 Non -Owned Automobiles $ 500,000 $1,000,000 $ 500,000 9 Workers' Compensation $ Statutory 10 Employers' Liability $1,000,000 per employer 11 11. Liabili 12 General Liability $1,000,000 $2,000,000 $1,000,000 13 Premises Operations $1,000,000 $2,000,000 $1,000,000 Elevators (if applicable) $1,000,000 $2,000,000 $1,000,000 14 Independent Contractors $1,000,000 $2,000,000 $1,000,000 Products - Completed Operations $1,000,000 $2,000,000 $1,000,000 15 Contractual Liabilitv $1,000,000 $2,000,000 $1,000,000 16 Umbrella Liability $2,000,000 $2,000,000 $2,000,000 17 a. The general liability policy shall contain the following special endorsements which shall be noted on or attached to the standard certificate of insurance: 18 1. An endorsement naming the City of Vernon, its officers, and employees as additional insureds 19 under the policy. 20 2. An endorsement providing the City of Vernon thirty (30) days notice of cancellation or material reduction of coverage. 21 3. An endorsement providing coverage for all operations under this Agreement. 22 4. Such other endorsement as may be required by addendum hereto. 23 b. In addition to the standard certificate of insurance, proof of liability coverage shall be furnished in the form checked below. 24 X For each policy, a notarized letter from the underwriter or carrier certifying that the coverage and 25 statements in the standard certificate of insurance (attached thereto) are true and correct and that 26 the signator is an officer authorized to so certify. OR 27 _ A copy of each policy certified by an officer of the underwriter or carrier and notarized. City will not accept the above proofs of insurance when certified by an insurance agent or broker. 28 EXHIBIT "B" SUPPORTING DOCUMENTS 1 INSPECTION AND MAINTENANCE SERVICES CONTRACT 2 3 THIS CONTRACT is made, entered into and executed in 4 duplicate originals, either copy of which may be considered and used 5 as the original hereof for all purposes, as of this 24th day of 6 March, 2004, in the City of Vernon, County of Los Angeles, California BY AND BETWEEN THE CITY OF VERNON 8 (hereinafter referred to as "City") 9 4305 Santa Fe Avenue Vernon, CA 90058 10 AND THOMASON MECHANICAL 11 CORPORATION (hereinafter referred to as T2 "Thomason") 2150 E. 37th Street 13 Vernon, CA 90058 14 RECITALS 15 16 WHEREAS, City is constructing the Malburg Generating Station 17 Combined Cycle Power Plant at 2715 E. 50th Street in the City of 18 Vernon (the "Malburg Project") for purposes of installing additional 191 generating capacity that is capable of yielding cost effective, 20 efficient and reliable electricity to meet its goals, while meeting 21 Federal, State and local environmental and siting requirements; and 22 WHEREAS, the Malburg Project team has determined that it 23 needs the services of a vendor to inspect and maintain the gate and 24 ball valves throughout the City's gas distribution system prior to the 25 Malburg Project's first fire (hereinafter referred to as the "Valve 26 Inspection and Maintenance"); and 27 WHEREAS, Thomason prepared a Proposal dated January 12, 28 2004, to provide Valve Inspection and Maintenance (hereinafter I referred to as the "Proposal"), a copy of which is attached hereto as 2 Exhibit "A" and made a part hereof; and 3 WHEREAS, Thomason represents that it is qualified, properly 4 licensed and capable of furnishing the Valve Inspection and 5 Maintenance services that the City requires as set forth in the 6 Proposal and is willing to do so on the terms and conditions set forth 7 below; and 8 WHEREAS, the City desires to enter into an agreement with 91 Thomason to provide for the labor and materials necessary for the 10 Valve Inspection and Maintenance. 11 NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS SET 12 FORTH HEREIN: 13 1. Scope of Services. 14 Thomason agrees to provide the necessary material and 15 services for the Valve Inspection and Maintenance as set forth and 161 described in detail in the attached Exhibit "A". Thomason shall 17 provide said services at the time, place and in the manner specified 18 in the Proposal, subject to the direction of the City, through its 19 staff, as may be provided from time to time. Such services shall 20 include the following identified tasks: (1) remove valve casing lid, 21 (2) remove debris from casing if required (vacuum out), (3) verify if 22 valve is open or closed, (4) operate valve, (5) drill 5/32" hole in 23 pvc casing, (6) install 5/32" brass rod; (7) install 24" brass chain 24 and tag, (8) try locating pipe on both sides of valve, and (9) 25 document each completed task. The City will be responsible for 26 obtaining and paying for any permits necessary to perform the tasks 27 identified in herein, including any traffic control permits. It is 28 understood and agreed that in the event of a conflict between the - 2 - I Proposal and this Contract, the terms of this Contract shall,prevail. 2 2. Time of Performance. 3 Thomason' performance, as identified herein, shall commence 4 upon the full execution of this Contract. Performance of the 5 Inspection and Maintenance services is to be completed no later than 6 September 6, 2004. If the Valve Inspection and Maintenance services 7 are not completed within this time period, the City shall have the 8 option of canceling this Contract in order to proceed with another 9 vendor, if one can be located, or extending the completion date. The 10 completion date may be extended by the City at its sole discretion for 11 an additional thirty (30) days, or such other time as the parties may 12 agree. 13 3. Price. 14 The City shall pay Thomason for the actual time expended on 15 a time and material basis. The total amount to be paid to Thomason 161 for the Valve Inspection and Maintenance, as described in the 17 Proposal, shall not exceed the sum of Two Hundred Thirty -Eight 18 Thousand Eight Hundred Eighty Dollars and No Cents .($238,880.00). 19 4. Payment Terms. 20 Thomason shall submit within thirty (30) days after the last 21 day of any month in which services have been performed or costs 22 incurred hereunder an invoice to the City. Invoices shall contain an 23 itemization of services rendered, the names, labor classifications, 24 the hours worked for each workers on a specific job, the equipment 25 used and the number of hours the equipment was used, other directly 26 related job expenses and subcontract charges incurred by Thomason and 27 for which compensation is due. Thomason shall be responsible for 28 paying any subcontractors used in the performance of this Agreement. - 3 - I Subcontractors shall not bill the City directly. 2 Payment of the invoice shall be made after acceptance and 3 approval by the City within thirty (30) days of receipt. The City's 4 approval of the invoice shall not be unreasonably withheld. 5 5. Change and Extra Services. City reserves the right to 6 request changes in the equipment design, delivery dates, or additions 7 to or deletions from the Valve Inspection and Maintenance purchased 8 from Thomason. All such changes shall be incorporated in written 9 change orders executed by City and Thomason and shall specify the 10 changes ordered and the adjustment of prices, delivery schedules and 11 warranties. Any equipment or services added under this section shall 12 be executed under all applicable conditions of this Contract. No 13 claim for additional compensation or extension of time shall be 14 recognized unless contained in a duly executed change order. 15 6. Termination. This Contract may be terminated by the 16 City without cause on ten (10) days written notice to Thomason. In 17 the event of such termination by the City, Thomason shall be entitled 18 to only the compensation earned by it prior to the date the 19 termination notice, plus compensation for necessary work performed 20 during the ten (10) day notice period and authorized in the 21 termination notice. 22 7. Cancellation/Default. In the event that Thomason 23 commits a breach of a material condition of this Contract, City shall 24 notify Thomason in writing of said breach and if Thomason has not 25 cured or begun reasonable efforts to cure after fifteen (15) days of 26 receipt of said notice, and fails to diligently pursue corrective 27 action, City shall have the right to cancel this Contract for cause 28 based on Thomason' default. Thomason shall be responsible for any - 4 - I direct costs due to City's re -procurement of the equivalent of the 2 equipment or services cancelled from Thomason. 3 8. Confidential Information. 41 A. Access to Confidential Information. City may 5 provide Thomason and/or its subcontractor with, or allow Thomason 6 access to, certain information not available to the public concerning 7 City, or businesses located in City. The information may include 8 company information, taxes, sales, value of assets, or other such 9 information. All such information shall be known as "Confidential 10 Information" and may not be used to circumvent the responsibility of 11 either party to this Contract. 12 B. No Disclosure. Except as expressly permitted, 131 Thomason and/or its subcontractor shall not disclose, permit the 14 disclosure of, release, disseminate, or transfer, whether orally or by 15 any other means, any part of such Confidential Information to any 16 other person or entity, whether corporate, governmental, or 17 individual, without the express prior written consent of an authorized 18 representative of City. Thomason and/or its subcontractor shall return 19 any written Confidential Information and all copies made of such items 20 to City upon City's written request, but in any event not later than 21 the date that Thomason has performed all services to be performed 22 pursuant to this Contract. Thomason hereby agrees that such 23 Confidential Information and any documents provided may be used by 24 Thomason and/or its subcontractor only as authorized by the City. 25 Thomason shall include a contract provision in its contract with 26 subcontractors that binds the subcontractors to this non -disclosure 27 requirement. Thomason shall take reasonable measures to avoid any 28 disclosure of any such Confidential Information to any unauthorized - 5 - 1 person. 2 C. Court Ordered Disclosure. Thomason shall 3 immediately notify City of any court order or subpoena requiring 4 disclosure of Confidential Information, and shall cooperate with 5 City's legal counsel in responding to any such order or subpoena. 6 Thomason may only disclose Confidential Information required to be 7 disclosed pursuant to court order or subpoena after legal counsel has 8 exhausted any lawful and timely appeal or challenge. 9 D. Remedies. In addition to any other remedies that 10 it may have at law or in equity, City shall be entitled to a temporary 11 and permanent injunction by a court of competent jurisdiction against 12 any breach or threatened breach of the Confidential Information 13 provisions of this Agreement." Thomason acknowledges that in case of 141 such breach or threatened breach of said provisions, City would have 15 no adequate remedy at law. 16 9. Warranties. Thomason shall provide a one (1) year labor 17 and material warranty to begin upon City's acceptance of the Valve 18 Inspection and Maintenance. In addition, all manufacturers' 19 warranties, and any other warranties made applicable by law, shall 20 apply to City's purchase of the materials and labor provided by 21 Thomason. 22 10. Compliance with Laws. Thomason shall strictly observe 23 and comply with all applicable federal, state, and local laws, 24 ordinances and regulations governing this sale, including but not 25 limited to any permit or license requirements of the United States 26 Department of Commerce, as well as any laws of the United States of 27 America. 28 11. Governing Law. The validity, interpretation and - 6 - I performance of this Contract shall be controlled and construed under 2 the laws of the State of California. 3 12. Forum Selection. Any action brought relating to this 4 Contract shall be brought and held exclusively in a State Court in the 5 County of Los Angeles, California. 6 13. Notices. Notices to the parties, unless otherwise 7 requested in writing, shall be sent to: 8 City: THE CITY OF VERNON ATTN: BRUCE V. MALKENHORST 9 CITY ADMINISTRATOR 4305 SANTA FE AVENUE 10 VERNON, CA 90058-0805 11 Thomason: THOMASON MECHANICAL CORPORATION ATTN: ED DAVIS, MANAGER 12 2150 E. 37TH ST. VERNON, CA 90058 13 14 14. General Provisions. 15 A. Independent Contractor. At all times during the 16 term of this Contract, Thomason shall be an independent contractor and 17 shall not be an employee of the City. The City shall have the right 18 to control Thomason only insofar as the results of Thomason' services 19 rendered pursuant to this Contract; however, the City shall not have 20 the right to control the means by which Thomason accomplishes services 21 rendered pursuant to the Contract except to the extent that such 22 services involve the use of City property or Confidential Information. 23 B. Thomason Not Agent. Except as the City may 24 specify in writing, Thomason shall have no authority, express or 25 implied, to act on behalf of the City in any capacity whatsoever as an 26 agent. Thomason shall have no authority, expressed or implied, 27 pursuant to this Contract to bind the City to any obligation 28 whatsoever. - 7 - I C. Indemnification. Thomason shall indemnify, 2 defend, protect and hold the City and its officers, agents and 3 employees, free and harmless from and against any and all claims, 4 demands, losses, damages, liabilities, fines, charges, penalties, 5 orders, judgments and all costs and expenses incurred in connection 6 therewith, including reasonable attorney's fees and costs of defense 7 arising out of or attributable to the negligent or wrongful acts of 8 Thomason or its subcontractors, employees or agents in the performance 9 of services under this Contract, except to the extent arising from. or 10 caused by the negligence or willful misconduct of the City, its 11 officers, agents or employees. 12 D. Insurance. Thomason agrees to provide insurance 13 in the amounts and forms specified in Exhibit "B," which is attached 14 hereto and made a part hereof by reference. Comparable coverage shall 15 be provided for each subcontractor used in the performance of this 161 Contract. Thomason shall submit to the City documentation indicating 17 compliance with these minimum requirements no less than one (1) day 18 prior to the beginning of performance under this Contract. Thomason 19 shall not commence performance of its services under this Contract 20 until the above insurance has been obtained and proof of insurance has 21 been filed with and approved by the City. 22 Limitation on Contractor's Liability. Neither 231 party shall have any liability for consequential damages of any nature 24 whatsoever, however arising. In addition, the dollar amount of 25 Thomason's total liability under this Contract, shall not exceed the 26 amounts that may be recovered under the limits of the insurance 27 required to be maintained by Thomason hereunder, plus Thomason's 28 warranty. The limitation of the parties' liability shall apply - 8 - I regardless of whether liability is asserted to arise in contract, 2 negligence or under any other theory of law. 3 E. Assignment and Subcontracting Prohibited. No 4 party to this Contract may assign or subcontract any right or 5 obligation pursuant to this Contract except as especially and 6 specifically provided for in the Proposal or with the express written 7 consent of the other party. Any other attempted or purported 8 assignment of any right or obligation pursuant to this Contract shall 9 be void and of no effect. 10 F. Entire Agreement. This Contract constitutes the 11 complete and final expression of the agreement of the parties and is 12 intended as a complete and exclusive statement of the terms of their 13 agreement and supersedes all prior and contemporaneous offers, 14 promises; representations, negotiations, discussions, communications 15 and agreements which may have been made in connection with the subject 16 matter hereof. All exhibits are incorporated by reference. Thomason 17 represents that in entering into this Contract it has not relied on 18 any previous representations or understandings of any kind or nature. 19 G. Partial Invalidity. Wherever possible, each 20 provision hereof will be interpreted in such manner as to be effective 21 and valid under applicable law, but in case any one or more of the 22 provisions contained herein will, for any reason, be held to be 23 invalid, illegal or unenforceable in any respect, such provision will 24 be ineffective to the extent, but only to the extent of such 25 invalidity, illegality or unenforceability without invalidating the 26 remainder of such provision or provisions or any other provision 27 hereof, unless such a construction would be unreasonable or contrary 28 to the parties' intent as expressed in this Contract. - 9 - H. Benefit of Agreement. This Contract shall bind and benefit the parties hereto and their heirs, successors, and permitted assigns. I. Waiver. Any waiver at any time by either party of its rights with respect to a default under this Contract, or with respect to any other matters arising in connection with this Contract, shall not be deemed a waiver with respect to subsequent default or other matter. J. Amendment. All changes or modifications to this Contract shall be in writing stating that it is an amendment to this Contract and.shall be signed by both parties or their duly authorized agents. This Contract shall not be modified through course of dealing, usage or trade. K. Force Maieure. Neither Party shall be considered to be in default in any of its obligations under this Contract when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force" shall mean any cause beyond the control of the party affected, including, but not restricted to, flood, earthquake, storm, fire, lightening, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor material shortage, sabotage, federal, state, or municipal action, statute, ordinance, or regulation, embargoes of the United States Government or any other government, which by exercise of due diligence such party could not reasonably have been expected to avoid and by exercise of due diligence has been unable to overcome. Either party rendered unable to fulfill any of its obligations under this Agreement by reason of an uncontrollable force, shall give written notice within five (5) business days of such fact to the other party and shall exercise due - 10 - 2 3 GI 5 6 7 8 9 10 11 12 13 14 151 16 17 18 19 20 21 22 23 24 25 26 27 28 diligence to remove such inability with all reasonable dispatch. IN WITNESS WHEREOF, the parties have caused this Contract to be executed by and through their authorized officers on the date, month and year first written above. ATTEST: BRUCE V. MALKENHORST, City Clerk APPROVED AS TO FORM: ERIC T. FRESCH, City Attorney CITY OF VERNON By: 4 EONIS C. MALBU G, Mayo THOMASON MECHANICAL CORPORATION Title: /` B T i t l e:/G� �✓ s pc�.ra �— . = ��tee► Vernon Ca.90058 WNW. IWANW Tel: (310) 639.3523 Faye (310) 639-8217 Thomaso® Mechanical Corp. �. CA 94553, Tel (925) 3T2�844 4444 L. Pasadena Frwy Pasadena. TX 775t13 . 6261 Prescott C Chino. CA 91710 Fax (925) 372r4845 Tel: (713) 472 3444 Fax (713) 472-8428 Tel: (909) sgo44600 Fax (909) sw 46W 1/12/04 Mr. Manny Garcia City of Vernon W W W.thomasonmech.com Subject: Quote for the inspection of gas shut offvalves in City of Vernon system Dear Manny, TMC appreciates the opportunity to estimate the above -mentioned subject. After further review of the additional information and tasks (provided by the City of Vemon) TMC will purchase and/or provide 1 Valve (Torque) wrench for P.E. valve length T & 12'. The maximum torque limitation for P. E. valves is 100 ft lb. 2 Flashlight 3 Compressor with air chipping gun,m. air grinder, air drill, and air vacuu 4 Brass tags 504 5 Brass rods 5/32 X 8" 504 6 Brass chain 24" 504 7 Pry bars (2) 8 Labor to perform duties Task to be performed 1 Remove valve casing lid. 2 Remove debris from casing if required ( vacuum out). 3 Verify if valve is open or closed (valve should be open). 4 Operate valve (I0" steel valves require 24 turns, 6" PE valve require 1/4 turn). 5 Drill 5/32" .hole in pvc casing (Drill hole 18" below finish grade) 6Install 5/32" brass rod (Ground rod for locating PE pipe) 7Install 24" brass chain with (4 digit GPS number), and brass tag. 8 Try locating pipe on both sides of valve. 9 Document each completed task. TMC estimated cost for this service is $238,880 TMC can mobilize in two weeks from acceptance of purchase order. TMC feels that it will be able to complete between 3 and 4 valves a day according to the scope provided. Total job should take approx 7 months utilizing 3 men, If you have any questions please call me at 800-639-3523 Sincerely, U NV -s Ed Davis Manager, Engine Division 1 t . 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 pill 27 28 EXHIBIT B INSURANCE SCHEDULE Thomason shall provide proof of insurance, including a standard certificate of insurance, in at least the following amounts and coverage (combined single limit permitted): I. Coverage and Limits Hazards Automobile Liability Bodily Injury Property Damage Each Person Each Accident Each Accident Owned Automobiles $ 500,000 $1,000,000 $ 500,000 Hired Automobiles $ 500,000 $1,000,000 $ 500,000 Non -Owned Automobiles $ 500,000 $1,000,000 $ 500,000 Workers' Compensation $ Statutory Employers' Liability $1,000,000 per employer 11 U. Liabili General Liability $1,000,000 $2,000,000 $1,000,000 Premises Operations $1,000,000 $2,000,000 $1,000,000 Elevators (if applicable) $1,000,000 $2,000,000 $1,000,000 Independent Contractors $1,000,000 $2,000,000 $1,000,000 Products - Completed Operations $1,000,000 $2,000,000 $1,000,000 Contractual Liability $1 000 000 $2 000 000 $1,000,000 Umbrella Liability $2 000 000 $2 000.000 $2,000,000 a. The general liability policy shall contain the following special endorsements which shall be noted on or attached to the standard certificate of insurance: 1. An endorsement naming the City of Vernon, its officers, and employees as additional insureds under the policy. 2. An endorsement providing the City of Vernon thirty (30) days notice of cancellation or material reduction of coverage. 3. An endorsement providing coverage for all operations under this Agreement. 4. Such other endorsement as may be required by addendum hereto. b. In addition to the standard certificate of insurance, proof of liability coverage shall be furnished in the form checked below. X For each policy, a notarized letter from the underwriter or carrier certifying that the coverage and statements in the standard certificate of insurance (attached thereto) are true and correct and that the signator is an officer authorized to so certify. OR A copy of each policy certified by an officer of the underwriter or carrier and notarized. City will not accept the above proofs of insurance when certified by an insurance agent or broker. EXHIBIT "B" SUPPORTING DOCUMENTS Date: 2/6/04 To: Eric Fresch / City Attorney From: Manuel Garcia / MGS Project Manager +�- Subject: COV Gas System - System Certification - Valve Inspection /Maint. Request to Authorize TMC to Perform Work - $238,880.00 So Cal Gas came in with a higher price than TMC. Therefore, I recommend that the City enter into a "Time and Material/Not To Exceed" agreement for the attached work with TMC. The enclosed package includes: 1. Recommendation from Daniel Garcia, 2/5/04. 2. Communication from M. Garcia, 1/16/04. (w/o attachments) 3. Proposal - TMC, $238,880.00 4. Proposal - So Cal Gas, $358,848.00 5. COV Gas System Diagram 6. Gas Utility, Capital Improvement - Project Schedule Request, 5600, FY0304 7. MGS Gas Linear Project Schedule 8. tie Contract Summary Sheet. Please call me if you have any questions. Date: 2/5/04 To: From: Subject: Manuel, Manuel Garcia / Assistant Director of Resource Management MGS Project Manager Daniel E. Garcia / Bulk Power Manager MGS Gas lead Valve Inspection Proposal from Southern California Gas Company Attached is the Gas Company's proposal for the valve inspection work. Today, Doug, David and I met with Beth Musich to discuss their proposal. The work will be performed on a time and materials basis. However, their proposal does not include a "not to exceed amount". Their proposal estimates the charge for their services to be $358,848. This amount is substantially above the proposal provided by Thomason Mechanical Corporation ($238,880 "not to exceed"). Therefore, I recommend that we move forward with the TMC proposal for the valve inspection work. Should you have any questions please call me. 0 • • F Date: 1/16/04 is To: Eric Fresch / City Attorney From: Manuel Garcia / MGS Project Manager Subject: COV Gas System — System Certification — Valve Inspections/Maintenance Request to Authorize TMC to Perform Work - $238,880. The COV gas distribution system is composed of approximately 50 miles of pipe. Within these 50 miles, the system has 17 —10 inch Gate Valves and 487 — 6 inch Ball Valves for a total of 504 valves. Prior to Gas System commissioning and operation the following work has to be performed on each valve: Tasks to be performed Remove valve casing lid. Remove debris from casing if required (vacuum out). Verify if valve is open or closed (valve should be open). Operate valve (10" steel valves require 24 turns, 6" PE valve require 1 /4 turn). Drill 5/32" hole in pvc casing (Drill hole 18" below finish grade) Install 5/32" brass rod (Ground rod for locating PE pipe) Install 24" brass chain with (4 digit GPS number), and brass tag. Try locating pipe on both sides of valve. Document each completed task. The "Gas Team" has requested estimates to perform this work from So Cal Gas and Thomason Mechanical Corp. (TMC). So Cal Gas has not provided a price, TMC has. TMC will perform the work on a time and material basis with a "not to exceed" amount of $238,880. TMC estimates that the work might last as long as seven months. Given that this work has to be performed prior to MGS first fire and that So Cal Gas has been unresponsive to our requests for an estimate, I recommend that the City enter into a "Time and Material/Not to Exceed" agreement with TMC for the aforementioned work. This work has been budgeted for fiscal year 03/04. See attached "Capital Improvement Project Request Schedule". This work is targeted for completion by 9/6/04. I am available to review this recommendation in detail. Attachments: *MGS Gas Linear Project Schedule (see lines 10-14) *TMC Quote, 1/12/04 *Gas Utility, Capital Improvement 7 Project Request Schedule, 5600, FY0304 • K, • 0 - Corporate Office: 2150 E 37" ST. a>. �I!!i► Vernon Ca. 90058 fM � � Tel: (310) 6393523 Fax: (310) 639-8217 • Thomason Mechanical Corp. 1/12/04 Mr. Manny Garcia City of Vernon No. California Office: 4595 Pacheco Blvd. Martinez, CA 94553 Tel: (925) 372-4844 Fax: (925) 372-4845 Texas Office: 3444 E. Pasadena Frwy. Pasadena, TX 77503 Tel: (713) 472-3444 Fax: (713) 472-8428 Coletel Office: 6261 Prescott Court Chino, CA 91710 Tel: (909) 590-4500 Fax: (909) 590-4600 www.thomasonmech.com Subject: Quote for the inspection of gas shut off valves in City of Vernon system Dear Manny, TMC appreciates the opportunity to estimate the above -mentioned subject. After further review of the additional information and tasks (provided by the City of Vernon) TMC will purchase and/or provide 1 Valve (Torque) wrench for P.E. valve length 7' & 12'. The maximum torque limitation for P.E. valves is 100 ft lb. 2 Flashlight 3 Compressor with air chipping gun, air grinder, air drill, and air vacuum. 4 Brass tags 504 5 Brass rods 5/32 X 8" 504 6 Brass chain 24" 504 7 Pry bars (2) 8 Labor to perform duties Task to be performed 1 Remove valve casing lid. 2 Remove debris from casing if required ( vacuum out). 3 Verify if valve is open or closed (valve should be open). 4 Operate valve (10" steel valves require 24 turns, 6" PE valve require 1 /4 turn). 5 Drill 5/32" hole in pvc casing (Drill hole 18" below finish grade) 6Install 5/32" brass rod (Ground rod for locating PE pipe) 7Install 24" brass chain with (4 digit GPS number), and brass tag. 8 Try locating pipe on both sides of valve. 9 Document each completed task. TMC estimated cost for this service is $238,880 Schedule TMC can mobilize in two weeks from acceptance of purchase order. TMC feels that it will be able to complete between 3 and 4 valves a day according to the scope provided. Total job should take approx 7 months utilizing 3 men. If you have any questions please call me at 800-639-3523 Sincerely, E.l DAv.'1 Ed Davis Manager, Engine Division • • N • 4 • C� Southem California Gas Company® A Sempra Energy utility February 4, 2004 Mr. Danny Garcia City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 Re: Valve Inspection Proposal Dear Danny, Beth Musich Account Manager Energy Markets & Capacity Products Southern California Gas Company M.L. GT22A1 555 W. Fifth Street Los Angeles, CA 90013 Tel: (213) 244-3697 Fax: (21 ) 244-8222 bmusich@semprautilities.com Please find attached our valve inspection proposal. We look forward to meeting with you tomorrow to discuss. I will provide you "Attachment 2" tomorrow. If you have any questions, please call me at 213-244-3697. Very Truly Yours, Beth Musich Account Manager LJ . Sootha California Gas Company* A �Sempra Energy°umicy Valve Inspection Proposal For City of Vernon's Gas Pipeline System Southern California Gas Company ("Company") proposes to provide services listed below under "Scope of Services" to the City of Vernon ("Customer"). 1. Scope of Services 1.1. The scope of services under this proposal includes performing the following activities. 1.2. Traffic control as needed following the standards in the Work Area Traffic Control Handbook (WATCH book) published by the American Public Works Association (APWA). 1.3. Valve Inspection work consisting of the following steps: a) Removal of existing casing lid b) Removal of debris from casing as required (vacuum out) c) Verify if valve is open or closed - Most valves should be open. There are 20 valves that are currently closed. These valves will also be operated. d) Operate valve— 10" steel valves require 24 turns, 6" PE valves require'/4 turn. 1.4. Installation of brass rod, chain and tag consisting of: a) Drilling 5/32" hole in PVC casing, approximately 18" below finish grade b) Installation of 5/32"x 8" brass rod in hole drilled per item 3a. This rod will be used as a ground for locating PE pipe, which according to City of Vernon contains locating wire terminating at the valve casing. Brass rods will be provided by City of Vernon. 2/5/2004 c) Attaching 24" brass chain and brass tag to brass rod. Both items . will be provided by City of Vernon. C] 1.5. The locating wire and brass rod in the valve casing will be used to try to locate one foot of PE pipe on each side of the valve. Company will report whether or not the attempt to locate pipe was successful. 1.6. Each completed task above will be documented using a form developed by Company or a form provided by City of Vernon. A handwritten completed form will be provided to the City of Vernon for each valve inspected. Attachment 2 contains a sample of the form that Company proposes to use for the purpose of documenting the inspection. 2. Tools and Materials Needed to Perform Work 2.1. All tools, equipment and materials needed to perform the services identified above under "Scope of Services" will be the responsibility of Company, except as listed below. a) Materials Supplied by City of Vernon • Brass tags (504 units) • Brass rods 5/32" x 8" (504 units) • Brass chain 24" (504 units) 2.2. It is estimated that Company crew will require the following equipment and materials: a) Valve (torque) wrench for P.E. valves, length 7' and 12'. b) Compressor with air chipping gun c) Air grinder d) Air drill e) Air vacuum f) Flashlight g) Pry bars (2) 2/5/2004 • 3. Information Needed from City of Vernon 3.1. The following information is needed from the City of Vernon prior to start of services. a) Manufacturer literature, including specifications for each type of valve that will be inspected. b) Detailed maps showing specific location of valve as well as the number assigned to that valve. c) Information on how the valve casing lid is identified as being part of the City of Vernon Gas Pipeline System. 4. Permits and Work Hour Restrictions 4.1. Permits As a condition of service under this proposal, the City of Vernon must obtain and pay for any permits necessary to perform the tasks listed under the section "Scope of Services". Including any traffic control 40 permits. 4.2. Work Hour Restrictions a) It is the responsibility of City of Vernon to inform Company if there will be any restrictions on the time of day when work can be performed at each of the valve locations. b) At least 7-day notice is required for work that must be performed outside of Normal Working Hours as described in Section 6 below. c) If Company performs Services outside of Normal Working Hours, City of Vernon will be charged labor rates in accordance to Section 7 below. 5. Workforce 5.1. Company shall have the right to supplement staffing through the use of subcontractors. Regardless of the workforce employed to perform Services for Vernon's Gas System, Vernon will be assessed charges as per Sections 2 and 3 below. 5.2. Company shall submit sufficient accounting data in each billing period to enable Vernon to audit the expenses and costs provided for herein. 2/5/2004 6. Fees for Services The Services performed under this agreement will be billed monthly based on actual hours incurred at the rates shown herein plus any additional charges as described below. Prior to start off, Vernon shall be required to pay a deposit in the amount of the-1-6faTestimated charges, or $358,848. This amount will be trued -up at the end of the project." 6.1. Labor Rates A two -person crew comprising the requisite skills to perform the tasks listed above under "Scope of Services" will perform the valve inspections. The rate for a 2-person crew is $267 per hour. This rate includes a crew truck outfitted with the tools and equipment necessary to carryout the valve inspections. This rate is for work performed under Normal Operating Hours as described in Section 6 below. Work performed outside of normal work hours will be charged as described in is Section 7 below. In the event of unforeseen circumstances, additional personnel or crews may be necessary. Any additional labor charges will be based on the 2-person crew rate. 6.2. Rates for Materials, Rental Equipment Fees and Miscellaneous Expenses In the event that special tools, materials or equipment rental are required to perform any part of the Service described in this proposal, these will be charged at cost and applicable taxes plus 15%. 6.3. Taxes In addition, all charges will have the appropriate federal, state and local taxes and fees added. 7. Work Schedule All Services performed under this proposal will be done between the hours of 7:30 a.m. and 3:30 p.m., Monday through Friday, excluding holidays ("Normal Is Working Hours"). Company reserves the right to work outside of these hours 2/5/2004 at its own discretion, without express permission from Vernon, so long as • Company in good faith determines that working outside its Normal Working Hours is necessary either because of its Utility Needs, or because the Services are Emergency Services. 8. Overtime is If Company performs Services outside of Normal Working Hours, City of Vernon will be charged in accordance to the following: a) Monday through Friday (excluding holidays), between 3:30 p.m. and 7:30 p.m.: One and one-half (1.5) times stated labor rates. b) Monday through Friday (excluding holidays), after 7:30 p.m.: Two g2) times stated labor rates. c) aturday, Sunday & holidays, between 7:30 a.m. and 3:30 p.m.: One and one-half (1.5) times stated labor rates. d) Saturday, Sunday & holidays, after 3:30 p.m.: Two (2) times stated labor rates. 9. Planning of Work 9.1. For planning purposes Company has estimated that the work described under the section "Scope of Services" above will take approximately 2 hours for each valve. This estimate is based on information provided by City of Vernon specifying that valves are accessible through existing casing. Therefore, absent any unforeseen circumstances including undue restrictions and insufficient data or information required to perform the work, a two -person crew will complete three to four valves on average per 8-hour day. 9.2. Customer will be billed for actual hours incurred to perform the agreed upon work. 10. Risks Associated with Valve Operation 10.1. Customer should be aware that in the experience of Company valves that have not been operated for some time run the risk of breaking while being exercised. 10.2. Company warrants to the Customer that the Services supplied will be performed in a competent, diligent manner and in accordance with generally accepted standards for such Services. Company will follow Customer's specifications for turns and torque limitations. 10.3. Company shall not be responsible for valves breaking as a result of lack of operation. 2/5/2004 Attachment 1 Terms and Conditions Scope of Services. Company shall provide the labor and materials described in the section entitled "Scope of Services" at the Customer's facility, referred to as the "Services" in a skillful and competent manner. Company shall provide all the materials, supplies, tools, equipment, and labor necessary and incidental to completion of the Services (except as described in the section entitled "Tools and Materials Needed to Perform Work"). Additional Services may be performed upon prior mutual written agreement. 2. Data and Information. All data and information obtained by Company regarding Customer's Gas System while rendering Services under this proposal (with the exception of the data and information set forth in the last sentence of this paragraph) shall be the property of Customer and shall be provided to Customer. Company may keep copies of such data, information and documentation as necessary (i) to perform Services hereunder, (ii) to maintain the safe and reliable service of its own gas system, (iii) for Company to keep or to provide to the California Public Utilities Commission ("CPUC") or any federal or state governmental or regulatory body, and, (iv) for historical purposes. Provided further, that Company shall be prohibited from disclosing • the data, information and/or documentation to any third party except as provided above, or in response to a subpoena, or for purposes of litigation between Company and Customer or between Company and any other party pertaining to this Agreement or the Services provided hereunder. Notwithstanding the foregoing, however, Company shall maintain ownership rights to all data and information in its possession prior to the Effective Date of a Valve Inspection Agreement. 3. Right of Entry. Customer warrants that it has all necessary authority and legal rights to grant, and does hereby grant, to Company such rights of ingress, use, and egress as may be necessary or convenient for the Company to install, operate, inspect, maintain, repair, replace, and remove meters, pipelines, fittings, and all other facilities, equipment and apparatus for the purpose of furnishing Services hereunder. 4. Independent Contractor Relationship. Neither Company nor its employees, agents, or contractors shall be deemed employees of the Customer for any purpose whatsoever. The Parties intend that Company shall be an independent contractor of the Customer. Company may subcontract any portion of the Services to any third party. 5. Conformity with Laws. Each party shall observe and comply with all • applicable laws, ordinances, codes, orders, and regulations of governmental 2/5/2004 agencies, including federal, state, municipal, and local governing bodies, having jurisdiction over the performance of the Services. 6. Company Not an Insurer/Limited Warranty. 6.1. Notwithstanding anything to the contrary in this proposal, Company shall not be an insurer of the operation of Customer's Gas System, shall have no duty to Customer and shall not be obligated to seek out, report or fix any problems with Customer's Gas System or any part of it. 6.2. Company shall not be responsible for Customer's Gas System, or have any liability to Customer arising out of the construction, operation or maintenance of Customer's Gas System including, but not limited to, construction defects or any incident which is the result of inaccuracies in the Gas System's as -built drawings, and Company shall be indemnified against all Liabilities arising from Customer's Gas System. 6.3. Company warrants to the Customer that the Services supplied will be performed in a competent, diligent manner and in accordance with generally accepted standards for such Services. Company makes no warranty, express or implied, as to any other matter concerning the Services provided by Company and specifically disclaims the warranties of merchantability and fitness for a particular purpose (express and • implied). Company shall not be liable to Customer for any indirect, incidental, consequential or punitive damages. 7. Limitation of Liability. Company, its contractors and suppliers of any tier, shall not be liable in contract, in tort (including active and passive negligence) or otherwise for damage or loss of other property or equipment, loss of profits or revenue, loss of use of equipment cost of capital, cost of purchased or replacement power or temporary equipment (including additional expenses incurred in using existing facilities), claims of customers of the Customer, or for any punitive, special, indirect, incidental, or consequential damages whatsoever. The remedies of the Customer set forth herein are exclusive and the liability of Company with respect to Services performed under this Agreement shall not exceed the price set forth herein for the Services. Any action for breach of contract or otherwise by the Customer against Company must be commenced within one year after the cause of action has accrued. IN NO EVENT SHALL COMPANY BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR FOR LOST BUSINESS OR LOST PROFITS, WHETHER UNDER TORT, BREACH OF CONTRACT, STRICT LIABILITY, OR ANY OTHER THEORY, EVEN IF COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 8. Force Maieure. In no event shall Company be liable for breach of this 0 Agreement if it cannot perform its obligations under this Agreement because 2/5/2004 of forces not under its control including, but not limited to, acts of God, labor • disputes or strikes (whether involving Company's or its subcontractor's workforce), shortages of parts or materials, civil unrest, war, inability to obtain governmental approvals or permits, or government or regulatory orders, including those of the California Public Utilities Code. In the event of such delay, the time for completion shall be extended by a period of time reasonably necessary to overcome the effect of such delay. 9. Differing Site Conditions. If conditions are encountered at the facilities which are (i) subsurface or otherwise concealed physical conditions which materially differ from those indicated in the Agreement or information provided by Customer to Company, or (ii) unknown physical conditions of an unusual nature, which materially differ from those ordinarily found to exist and generally recognized as inherent in the type of Services to be performed pursuant to this Agreement, and the conditions described in either (i) or (ii) cause an increase or decrease in Company's cost of, or time required for, performance of any part or the Services, then an equitable adjustment to the Project Cost or completion date or both may be requested by Company, and shall be granted by Customer in its reasonable judgment applied in good faith. Indemnity 10.1. Company will defend, indemnify, and hold Customer, its officials, directors, officers, employees and agents free and harmless from any and all liability from loss, damage, or injury to property or persons, including wrongful death (excluding only Pre -Existing Environmental Liability), in any manner arising out of or incident to any negligent acts, omissions, or willful misconduct of Company arising out of or in connection with Company's performance of this Agreement including, without limitation, the payment of attorneys' fees. Further, Company will defend at its own expense, including attorneys' fees, the Customer, its officials, officers, employees, and agents in any legal action based upon such negligent acts, omissions, or willful misconduct. 10.2. Customer will defend, indemnify, and hold the Company, its directors, officers, employees, and agents free and harmless from any and all liability from loss, damage, or injury to property or persons, including wrongful death, in any manner arising out of or incident to any negligent acts, omissions, including inaccurate or nondisclosure of material facts concerning the Services, or willful misconduct of Customer arising out of or in connection with this Agreement including, without limitation, the payment of attorneys' fees. Further, Customer will defend at its own expense, including attorneys' fees, the Company, its officials, officers, employees, and agents in any legal action based upon such negligent acts, omissions, or willful misconduct. 2/5/2004 10.3. Environmental. Customer shall indemnify and hold Company harmless from an against any and all liability (including attorneys' fees) arising out of or in any way connected with the violation of or compliance with any local, state, or federal environmental law or regulation as a result of pre- existing conditions at the facilities, release or spill of any pre-existing hazardous materials or waste, or out of the management and disposal of any pre-existing contaminated soils or groundwater, hazardous or non -hazardous, removed from the ground as a result of the Services performed under this Agreement ("Pre -Existing Environmental Liability") including, but not limited to, liability for the costs, expenses, and legal liability for environmental investigations, monitoring, containment, abatement, removal, repair, cleanup, restoration, remedial work, penalties, and fines arising from the violation of any local, state, or federal law or regulation, attorneys' fees, disbursements, and other response costs. As between Customer and Company, Customer agrees to accept full responsibility for and bear all costs associated with Pre -Existing Environmental Liability. Customer agrees that Company may stop work, terminate the Agreement, redesign any pipeline installation Services to a different location, or take other action reasonably necessary to complete the Services without incurring any Pre -Existing Environmental Liability. 11. Attorney Fees. If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party in such litigation will be entitled to have and recover from the losing party reasonable attorney's fees and costs of suits. 12. Termination of Contract. This Agreement may be terminated: (1) If one party materially breaches this Agreement and fails to remedy such breach within thirty (30) days of receiving written notice of such breach by the other party, the party suffering such breach may terminate this Agreement immediately upon written notice to the other; (2) If a party fails to make timely payments for Services, the party owed such payments may terminate this Agreement with thirty (30) days written notice; or (3) If either party provides the other party thirty (30) days prior written notice of termination. 13. Miscellaneous. Neither this Agreement nor any duties or obligations hereunder shall be assignable by Customer, whether voluntarily, involuntarily, or by operation of law, without the prior written consent of Company; Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the heirs, successors, or assigns of the Parties. This Agreement shall be construed and enforced according to the laws of the State of California applicable to agreements made and to be performed wholly within California. Any waiver of any term of this Agreement must be in writing and or failure to enforce a right under this Agreement by either party shall not be construed as a subsequent waiver of the same right or any other right such party may have. This Agreement, along with any attachments and exhibits, 2/5/2004 constitutes the entire agreement of the Parties, and there are no promises, terms, conditions, duties, obligations, or rights other than those contained herein. 14. Release of Claims by Customer. Customer agrees that it shall, and does hereby, release and forever discharge Company and its subcontractors and their directors, officers, partners, employees and agents with respect to any claims, matters and suits of every kind whatsoever, known or unknown, including, but without limitation to any and all known or unknown personal or bodily injuries, property damage, loss, regulatory penalties, fines or charges, or cost or expense of every nature whatsoever that Customer may have or claim to have as a result of the construction, operation, maintenance or repair of Customer's Gas System or Company' performance of its duties under this Maintenance Agreement, including but not limited to damages caused by Company' negligence (whether active or passive, in whole or in part) in performing its duties under this Maintenance Agreement. Customer expressly waives all rights under Section 1542 of the Civil Code of California, which reads: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." The only claims which Customer shall not be deemed to have released are its claims for damages to its property caused solely by Company' (or its contractors') active negligence or willful misconduct. • 15. Notices. Any notice, demand, information, invoice, report, or item otherwise required, authorized, or provided for in this proposal, unless otherwise specified herein, shall be deemed properly given if delivered in person, sent by telecopy during normal business hours with a confirmation copy mailed on the same business date, or sent by United States Mail, First Class postage prepaid. If sent by telecopy, notice shall be deemed received when the telecopy is sent, and if sent by mail, notice shall be deemed received two business days after mailing: To SoCalGas: Southern California Gas Company 555 West Fifth Street, ML22A1 Los Angeles, California, 90013-1011 Attention: Beth Musich Title: Account Manager - Energy Markets Telephone: 213/244-3697 Telecopy: 213/244-8222 16.lnvoices and Payment. Company shall submit a monthly statement to • Customer setting forth the amount due for Services rendered and itemizing amounts due for expenses. Customer shall pay the full amount of such 2/5/2004 n LJ n LJ statement within fifteen (15) days after receipt. Any sums billed, not disputed in written form setting forth specified exceptions and unpaid after fifteen (15) days from the date of rendering, shall be subject to a late payment charge equal to the lesser of one and one-half percent (11/2%) or the maximum rate permitted by law, for each month or fraction thereof past due. Any amounts subject to such written exception by Customer which are later determined to be valid, or such part as is later determined to be valid, shall be subject to the late charge. Invoice Inquires: Southern California Gas Company Attn: Sundry Billings 555 W. Fifth Street, M/L GT72G1 Los Angeles, CA 90013-1011 Telephone: (213) 244-3622 Fax: (213) 244-8458 Mail Payment to: Southern California Gas Company Attn: Credit & Collections 555 W. Fifth Street, M/L SC711D Los Angeles, CA 90013-1011 2/5/2004 Ll 5 0 C-7 0 9 0 0 0 • 0 • CITY OF VERNON 5600 CAPITAL IMPROVEMENT PROJECT REQUEST SCHEDULE 2003-2004 DEPT: GAS UTILITY 1. Tittle of project: COMMERICALIZATION AND GAS SERVICES (FROM DISTRIBUTION MAIN TO CUSTOMER) 2. Description and location: CITYWIDE 3. Proposed to be accomplished by: FORMAL CONTRACT, FORCE ACCOUNT, PURCHASE ORDER 4. Status of plans: Preliminary estimate only, no plans required. Detail plans and specifications in progress. X Estimated completion date. 5. Estimated costs: Engineering Labor' Equipment` Supplies and Services Contracts Capital outlay, Land Capital outlay, Equipment 'Including Force Account 6. Financing Budgeted Not Budgeted Suppl approp required in the amount of 7. Action: Initiated by: Name & Date Title Approved by: Dept Head Approved by: Comm Services Dir FY 96-97 ACTUAL COSTS $1,497,355.00 FY 97-98 ACTUAL COSTS $1,945,629.00 FY 98-99 ACTUAL COSTS $2,891,629.00 FY 99-00 ACTUAL COSTS $6,444,340.00 FY 00-01 ACTUAL COSTS $1,102,900.00 FY 01-02 ACTUAL COSTS $2,124,282.00 FY 02-03 ESTIMATED COSTS $1,300,000.00 FY 03-04 ESTIMATED COSTS $1,850,000.00 $19,156,135.00 $100,000 $1,000,000 Total: $1,100,000 PG. 8 04-Jun-2003 Funds are available charge to account number. Funds not available. 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