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HomeMy WebLinkAbout08 - Amendment to Agreement for On -Call M/RSA for Maintenance and Repair of Variable Frequency Drives Manufactured by ToshibaQ �EwPpRT CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report July 27, 2021 Agenda Item No. 8 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Mark Vukojevic, Utilities Director - 949-644-3011, mvukojevic@newportbeachca.gov PREPARED BY: Joshua Rosenbaum, Senior Management Analyst, josenbaum@newportbeachca.gov PHONE: 949-644-3057 TITLE: Amendment No. Two to Agreement with Sulzer Electro — Mechanical Services (US), Inc., for On -Call Maintenance/Repair Services for Maintenance and Repair of Variable Frequency Drives Manufactured by Toshiba ABSTRACT: In June 2018, the City of Newport Beach (City) Utilities Department entered into an Agreement with Brithinee Electric for maintenance and repair services of variable frequency drives manufactured by Toshiba. In November 2018, Sulzer-Electro Mechanical (US) acquired Brithinee Electric and agreed to accept the assignment and perform the obligations of the original contract. If approved, Amendment No. Two would extend the contract through June 15, 2023 and increase the contract compensation by $120,000. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and; b) Approve Amendment No. Two to the On -Call Maintenance/Repair Services Agreement with Sulzer -Mechanical Services (US), Inc. to increase the contract compensation limit by $120,000 and extend the contract term to June 15, 2023, and authorize the Mayor and City Clerk to execute the agreement. 8-1 Amendment No. Two to Agreement with Sulzer Electro — Mechanical Services (US), Inc., for On -Call Maintenance/Repair Services for Maintenance and Repair of Variable Frequency Drives Manufactured by Toshiba July 27, 2021 Page 2 DISCUSSION: The Utilities Departments maintains the City's ten Toshiba manufactured variable frequency drives. In basic terms, variable frequency drives are electrical panels that operate the motors for our large water pumps, pumping water throughout the city. They are highly sophisticated and allow the best efficiency in operating the flow of water, pressure and electricity for our water pumps. This efficient control of the motors saves electrical costs and allows staff better control of the water system. A specialized contractor is required to perform the scheduled maintenance and repairs due to wear or power surges. On June 16, 2018, the City's Utilities Department entered into a sole source agreement with Brithinee Electric for maintenance and repair services of variable frequency drives manufactured by Toshiba, with a not -to -exceed amount of $120,000 for a contract term through June 15, 2021. At that time, Brithinee Electric, Inc., was the sole designated Toshiba repair contractor in the region. In November 2018, Sulzer-Electro Mechanical (US), acquired Brithinee Electric and agreed to accept the assignment and perform the obligations of the City's agreement with Brithinee Electric in January 2020. Amendment No. One to the Agreement extended the contract term to June 15, 2022 and allowed for a modest two percent cost adjustment to the hourly labor rates under the original Brithinee contract. Approximately $100,000 has been spent to date and a typical repair is approximately $25,000 when needed. This Amendment No. Two will extend the contract term to June 15, 2023 (total of five years) and increase the contract compensation by $120,000. The total amount may not be needed over the next two years. However, with the current incentives for increased groundwater pumping, this amount over the next two years gives staff the greatest flexibility in performing repairs quickly and maintaining cost efficiency with electricity and imported water costs. FISCAL IMPACT: The adopted FY2021-22 budget includes sufficient funding for these contract services. The Utilities Department will expense the required services to various maintenance and repair accounts in the Water Fund including: 7019052-851073 (Pump and Motor Repairs), 7019052-851049 (Maintenance SCADA) and 7019052-851033 (Wells and Pump Station Maintenance), respectively. =1011yjI-To]kiIJil=1kikC NNATAIAT3 Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 8-2 Amendment No. Two to Agreement with Sulzer Electro — Mechanical Services (US), Inc., for On -Call Maintenance/Repair Services for Maintenance and Repair of Variable Frequency Drives Manufactured by Toshiba July 27, 2021 Page 3 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Amendment No. Two to On -Call Maintenance/Repair Services Agreement with Sulzer Electro-Mechanical Services (US), Inc. 8-3 ATTACHMENT A AMENDMENT NO. TWO TO ON -CALL MAINTENANCE/REPAIR SERVICES AGREEMENT WITH SULZER ELECTRO-MECHANICAL SERVICES (US) INC. FOR MAINTENANCE AND REPAIR OF VARIABLE FREQUENCY DRIVES AND SOFT STARTS MANUFACTURED BY TOSHIBA THIS AMENDMENT NO. TWO TO ON -CALL MAINTENANCE/REPAIR SERVICES AGREEMENT ("Amendment No. Two") is made and entered into as of this 27th day of July, 2021 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and SULZER ELECTRO-MECHANICAL SERVICES (US) INC., a Delaware corporation ("Contractor"), whose address is 1910 Jasmine Drive, Pasadena, Texas 77503, and is made with reference to the following: RECITALS A. On June 16, 2018, City and Brithinee Electric, a California corporation ("Brithinee") entered into an On -Call Maintenance/Repair Services Agreement ("Agreement") to perform on -call maintenance and/or repair services for City ("Project"). B. On March 4, 2020, City and Contractor entered into an Assignment Agreement to the Agreement ("Assignment Agreement") to assign the rights under the Agreement from Brithinee to Contractor. C. On April 19, 2021, City and Consultant entered into Amendment No. One to the Agreement ("Amendment No. One") to extend the term of the Agreement, to add a Consumer Price Index ("CPI") adjustment, to update the Project Manager, to update the Notice provisions, and to update the Insurance Requirements. D. The parties desire to enter into this Amendment No. Two to extend the term of the Agreement to June 15, 2023, to increase the total compensation, to update the responsibility for damages or injury, and to update Insurance Requirements. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM Section 1 of the Agreement is amended in its entirety and replaced with the following: "The term of this Agreement shall commence on the Effective Date, and shall terminate on June 15, 2023, unless terminated earlier as set forth herein." 2. COMPENSATION TO CONSULTANT Section 4.1 of the Agreement is amended in its entirety and replaced with the following: "City shall pay Contractor for the Services on a time and expense not -to - exceed basis in accordance with the provisions of this Section, the Letter Proposal, and the Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein by reference. Except as otherwise provided herein, no rate changes shall be made during the term of this Agreement without the prior written approval of City. Contractor's compensation for all Services performed in accordance with this Agreement, including all reimbursable items and subcontractor fees, shall not exceed Two Hundred Forty Thousand Dollars and 00/100 ($240,000.00), without prior written amendment to the Agreement." The total amended compensation reflects Contractor's additional compensation for Services to be performed in accordance with this Amendment No. Two, including all reimbursable items and subcontractor fees, in an amount not to exceed One Hundred Twenty Thousand Dollars and 00/100 ($120,000.00). 3. RESPONSIBILITY FOR DAMAGES OR INJURY Section 9.1 of the Agreement is amended in its entirety and replaced with the following: "9.1 City and all officers, employees and representatives thereof and all persons and entities owning or otherwise in legal control of the property upon which Contractor performs the Project and/or Services shall not be responsible in any manner for any loss or damage to any of the materials or other things used or employed in performing the Project or for injury to or death of any person as a result of Contractor's performance of the Services required hereunder; or for damage to property from any cause arising from the performance of the Project and/or Services by Contractor, or its subcontractors, or its workers, or anyone employed by either of them." Section 9.2 of the Agreement is amended in its entirety and replaced with the following: "9.2 Contractor shall be responsible for any liability imposed by law and for injuries to or death of any person or damage to property resulting from defects, obstructions or from any cause arising from Contractor's Work on the Project and/or Services, or the Work of any subcontractor or supplier selected by Contractor." Sulzer Electro-Mechanical Services (US) Inc. Page 2 8-5 Section 9.3 of the Agreement is amended in its entirety and replaced with the following: "9.3 To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employeesemployees, and any person or entity owning or otherwise in legal control of the property upon which Contractor performs the Project and/or Services contemplated by this Agreement (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any Work performed or Services provided under this Agreement including, without limitation, defects in workmanship or materials or Contractor's presence or activities conducted on the Project (including the negligent and/or willful acts, errors and/or omissions of Contractor, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them)." 4. INSURANCE REQUIREMENTS Exhibit C (Insurance Requirements) is amended in its entirety and replaced with the Exhibit C that is attached hereto and incorporated herein by this reference. 5. INTEGRATED CONTRACT Except as expressly modified herein, all other provisions, terms, and covenants set forth in the Agreement shall remain unchanged and shall be in full force and effect. [SIGNATURES ON NEXT PAGE] Sulzer Electro-Mechanical Services (US) Inc. Page 3 8-6 IN WITNESS WHEREOF, the parties have caused this Amendment No. Two to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: kd11 �7,a'L� CITY OF NEWPORT BEACH, a California municipal corporation Date: By: ChL � By: Aaron C. Harp (00^ 000111 Brad Avery City Attorney Mayor ATTEST: CONTRACTOR: Sulzer Electro- Date: Mechanical Services (US) Inc., a Delaware corporation Date: By: By: Leilani I. Brown Jim Mugford City Clerk Chief Executive Officer Date: By: Melissa Turner Chief Financial Officer/Controller [END OF SIGNATURES] Attachments: Exhibit C — Insurance Requirements Sulzer Electro-Mechanical Services (US) Inc. Page 4 8-7 EXHIBIT C INSURANCE REQUIREMENTS — MAINTENANCE/REPAIR/JANITORIAL SERVICES 1. Provision of Insurance. Without limiting Contractor's indemnification of City, and prior to commencement of Work, Contractor shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Contractor agrees to provide insurance in accordance with requirements set forth here. If Contractor uses existing coverage to comply and that coverage does not meet these requirements, Contractor agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Contractor shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Contractor shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its City Council, boards and commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Contractor performs the Project and/or Services contemplated by this Agreement. B. General Liability Insurance. Contractor shall maintain commercial general liability insurance and, if necessary, umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) general aggregate. The policy shall cover liability arising from premises, operations, products - completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). Sulzer Electro-Mechanical Services (US) Inc. Page C-1 8.8 C. Automobile Liability Insurance. Contractor shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Contractor arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit each accident. 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its City Council, boards and commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Contractor performs the Project and/or Services contemplated by this Agreement or shall specifically allow Contractor or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Contractor hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subcontractors. B. Additional Insured Status. All liability policies including general liability, products and completed operations, excess liability, pollution liability, and automobile liability, if required, shall provide or be endorsed to provide that City, its City Council, boards and commissions, officers, agents, volunteers, employees, and any person or entity owning or otherwise in legal control of the property upon which Contractor performs the Project and/or Services contemplated by this Agreement shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self- insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar days' notice of cancellation (except for nonpayment for which ten (10) calendar days' notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Contractor shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance Sulzer Electro-Mechanical Services (US) Inc. Page C-2 8.9 shall be kept on file with City at all times during the term of this Agreement. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, Contractor shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Contractor sixty (60) calendar days advance written notice of such change. If such change results in substantial additional cost to Contractor, City and Contractor may renegotiate Contractor's compensation. C. Right to Review Subcontracts. Contractor agrees that upon request, all agreements with subcontractors or others with whom Contractor enters into contracts with on behalf of City will be submitted to City for review. Failure of City to request copies of such agreements will not impose any liability on City, or its employees. Contractor shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage, subcontractors shall provide coverage with a format at least as broad as CG 20 38 04 13. D. Enforcement of Agreement Provisions. Contractor acknowledges and agrees that any actual or alleged failure on the part of City to inform Contractor of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. E. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Contractor maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. Sulzer Electro-Mechanical Services (US) Inc. Page C-3 8.10 F. Self -insured Retentions. Any self -insured retentions must be declared to and approved by City. City reserves the right to require that self -insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these requirements unless approved by City. G. City Remedies for Non -Compliance. If Contractor or any subcontractor fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Contractor's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Contractor or reimbursed by Contractor upon demand. H. Timely Notice of Claims. Contractor shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. Contractor's Insurance. Contractor shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Sulzer Electro-Mechanical Services (US) Inc. Page C-4 8_11