HomeMy WebLinkAboutStaff Report 347-08City of Palo Alto
CRy Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
SEPTEMBER 15, 2008
DEPARTMENT: PUBLIC WORKS
CMR:347:08
APPROVAL OF MEMORANDUM OF AGREEMENT WITH TROJAN
TECHNOLOGIES TO PROVIDE ULTRAVIOLET (UV) DISINFECTION
EQUIPMENT FOR THE PALO ALTO REGIONAL WATER QUALITY
CONTROL PLANT UV DISINFECTION FACILITY PROJECT WQ-06014
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or designee to execute
the attached Memorandum of Agreement (MOA) with Trojan Technologies (Attachment A).
DISCUSSION
Scope of Services Description
The MOA (Attachment A) creates a binding commitment for Trojan Technologies to supply UV
disinfection equipment to a city-selected contractor who will install the disinfection equipment
and appurtenant facilities. In approving the MOA, the City is not obligated to Trojan
Technologies should Council decide not to award the construction contract later this year. In
short, the MOA:
o
Establishes the cost of the UV disinfection equipment at $1,618,3 3 8 (includes sales tax);
Requires Trojan Technologies to provide identical bid prices to bidders on the UV
disinfection construction project;
Requires Trojan Technologies to manufacture and deliver UV disinfection equipment to
the contractor .awarded the construction contract; and
Requires Trojan Technologies to furnish consumable parts to the RWQCP at fixed prices
for five years after construction.
Trojan Technologies was selected over other firms because they provided the lowest life-cycle
cost. The life-cycle cost analysis gives the best value by considering capital as well as operation
and maintenance (O&M) costs. Selection of Trojan Technologies was completed prior to
construction bidding, allowing the City to avoid significant extra design costs and avoid delays
related to preparing multiple, customized designs for each UV equipment manufacturer. The
State Water Resources Control Board (SWRCB) approved the RFP and selection of Trojan
Technologies as consistent with the state funding requirements for a low-interest loan.
CMR:347:08 , Page 1 of 3
Trojan Technologies will manufacture and deliver to the contractor a UV3000Plus disinfection
system including modules, lamps, controls, and appurtenant equipment. Trojan Technologies
will also coordinate the final design as well as furnish submittals, system documentation, a patent
agreement, training, and start-up services. After project completion, Trojan will provide
consumables (e.go, replacement lamps, ballasts, etc.) at a guaranteed price for five years and at
current list price thereafter.
Summary_ of Solicitation Process
UV Disinfection Equipment/
RFP 125217
18 months
4
30
April 10, 2008
4
Supply of UV Disinfection Equipment/
RFP 125217
Proposed Length of Project
Number of Proposals Mailed
Total Days to Respond to Proposal
Pre-proposal Meeting Date
Number of Company Attendees at Pre-proposal
Meeting
Number of Proposals Received:
Company Name
1. Trojan Technologies Inc.
2. Infilco Degrcmont/Denard
3. WEDECO
3
Location (City, State)
London, Ontario, Canada
Richmond, VA
Charlotte, NC
Three firms submitted proposals. A fourth farm did not submit a proposal because the California
Department of Public Health had not yet approved their disinfection equipment for recycled
water.
Proposal review was performed by an evaluation committee consisting of representatives from
the Public Works Department RWQCP and from the design-consulting firm of RMC Water and
Environment. The committee carefully reviewed each firm’s qualifications and submittal in
response to the criteria identified in the RFP. The evaluation team considered proposal
completeness, financial capabilities of the firm, adequacy of technical support, satisfactory
availability of replacement parts, acceptance of the MOA terms, patent license agreement, and
specifications and adequacy of existing equipment installations. All three firms were well
qualified and responsive. For the qualified firms, the RFP based selection on lowest overall life-
cycle cost. The 30-year life-cycle equipment, installation, and O&M costs were developed per
the RFP through vendor submittals and engineering estimates; the costs are summarized below.
UV Disinfection Equipment:Lifercyele Cost Evaluation Summary
Trojan Infilco Degremont/
Item Technologies Denard WEDECO
Equipment Cost $1,618,338 $1,708,185 $2,361,203
Installation Cost $4,437,231 $4,550,971 $6,067,567
O&M Cost $2,346,692 $2,335,016 $3,842,018
Overall Life-cycle Costs $8,402,261 $8,594,172 $12,270,788
CMR:347:08 Page 2 of 3
A project update is included as Attacl:a~aent B.
TIMELINE
The project is in the final stages of design. A project timeline is below.
Bid Construction Project
Award Construction Project
Construction Start
Construction Complete
October 2008
December 2008
April 2009
October 2010
RESOVRCE IMPACT
The UV disinfection equipment will be procured through a construction contract estimated at
$11 million, which includes the equipment committed by Trojan Technologies in this MOA at a
price of $1,618,338 (includes sales tax). Funds for the UV disinfection project have been
budgeted in the FY 2008-2009 Wastewater Treatment Fund capital budget (WQ-06014) in the
amount of $20,000,000.
POLICY IMPLICATIONS
This staff report does not represent a char~ge to existing City policies.
]~NVIRONMI~NIFAL REVIF, W
The City of Palo Alto performed an environmental review under provisions of the California
Environmental Quality Act (CEQA). An environmental impact assessment was prepared for the
project and it was determined that no potentially adverse impacts would result from the
development and that the project would have a less than significant impact on the environment.
The environmental-impact assessment and negative declaration were unanimously approved by
City Council on April 28, 2008 (CMR:214:08).
ATTACHMENTS
Attachment A: Memorandum of Agreement
Attachment B: UV Disinfection Project Update
Attachment C: Certification of Nondiscrimination
PREPARED BY:James S. Allen, Senior Engineer, RWQCP
Richard A. Wetzel, Manager, RWQCP
GLENN S. ROBERTS
Director of Public Works
CITY MANAGER APPROVAL:
CMR:347:08 Page 3 of 3
ATTACHMENT
CITY OF PALO ALTO
UV SYSTEM EQUIPMENT
MEMORANDUM OF AGREEMENT
This Memorandurn of Agreement (MOA) is entered into this __ day of _, 2008 by
and between T rojan Technologies and the City of P alo Alto, a California chartered municipal
corporation (City).
Recitals
The following recitals are a substantive portion of this MOA.
A. The purpose of this MOA is to document the agreement between the City of Palo Alto (City)
and Trojan Technologies to supply the ultraviolet disinfection system (UV System) for the
Regional Water Quality Control Plant at 2501 Embarcadero Way, F’alo Alto, CA 94303 UV
System Project (Project).
B. This MOA references other documents which are considered integral parts of this MOA. The
following documents are incorporated into this MOA:
1.Specifications
2.Patent License Agreement
3.Proposal from Trojan Technologies (dated April 29, 2008)
4.Notification Letter
5.Request for Proposal (including all Addenda)
C. This MOA is intended to create a binding commitment by Trojan Technologies to supply the
UV System equipment to the City through a contract or purchase order between Trojan
Technologies and the City’s General Contractor pursuant to the terms and conditions of this
MOA. ~.,
D. The City plans to select a general contractor for installation of the UV system through a
public bid process and to include appropriate conditions within the contract documents for the
selected installation contractor (City’s Contractor) to implement the terms of this MOA.
City of Palo Alto - RFP 125217 MOA - 1
AGREEMENT
,Supply of Equipment and Deviations from Specifications
Trojan Technologies agrees to supply the UV System Equipment for the Project as set forth in
the Specifications and RFP with only the changes where Requested Deviations are accepted by
the City, or are accepted with modifications, as reference(J below. The scope of supply and
services shall be in accordance with the S pecifications, the RFP, and the UV supplier’s proposal
with the following modifications listed below. The following modifications to the specifications
were requested by Trojan Technol ogles and the City’s determination regarding these requested
exceptions is set forth below. Trojan Technologies requested deviations identified in the
proposal but not defined below are not accepted and Trojan Technologies shall meet the
specification and RFP requirements. For any conflicting information or requirements between
documents, the Specifications shall govern followed by the RF P, followed by the U V supplier’s
proposal.
I. No modifications or exceptions were taken by Trojan Technologies.
Ii. Scope of Services Provided by Vendor
In addition to supplying the UV System Equipment, Trojan Technologies shall also perform
the following services:
Provide final design coordination with the City’s Project Design Engineer in their
completion of the final design of the ultraviolet disinfection system. Design coordination
shall include review of design documents by the UV supplier’s Engineers and providing
detailed design comments back to the City’s Design Engineer. Design review comments
from the UV supplier’s Engineers shall be provided within two weeks of the submittal to
the UV supplier’s. Trojan Technologies shall review and provide comments on up to
three submittals including drawings and specificati on. The intent of this coordination is
to eliminate change orders during construction associated with the UV supplier’s
Equipment. Trojan Technologies assumes financial responsibility for change orders or
major design changes associated with the UV equipment due to inadequate review and
coordination during the final design process.
Provide equipment supply bids to the bidding general contractors that are identical to,
and in accordance with the RFP terms and specifications, UV supplier’s proposal, and
this MOA. The terms and conditions offered to the general contractors shall be
customary to California public works market place, to the extent the terms and conditions
are not specifically addressed herein.
Prepare submittals to the general contractors and Engineer consistent with the RFP
specifications, this MOA and the Proposal. The submittals shall be delivered to the
Contractor within approximately eight (8) weeks after execution of the Purchase Order or
Contract between the UV SUPPLIER and Contractor.
4.Deliver the UV System consistent with the RFP specifications according to a schedule
mutually agreed upon with the City’s Contractor.
City of Palo Alto - RFP 125217 MOA - 2
10.
Assist the Contractor to startup, test and put into operation the system to meet all
specified requirements.
Provide preliminary operation and maintenance (O&M) manuals with storage and
installation requirements prior to delivery of equipment. Provide O&M manL~als and
training to City Ernployees for operation of UV System.
Provide executed Patent License Agreement.
Meet other commercia! warranty and risk management requirements set forth in this
MOA.
Trojan Technologies shall provide a performance bond equal in value to the total
equipment supply cost listed in Article IV-Price of this MOA if the requirement for the
bond is included in the final Bid Documents.
Operations Manual and Training: Trojan Technologies shall provide an operations
manual and training to the City’s employees as is set forth in the Specifications.
City Obligations
1. The City is currently undertaking the design of the Project and will incorporate UV
SUPPLIER’s UV System Equipment into the final design for the Project. The City plans to
competitively bid and award the public works contract for the installation of the UV System not
later than May 1, 2009. The City agrees that subject to the conditions below, it shall award the
public works construction contract to the lowest responsible and responsive bidder consistent
with California law and the City’s Charter and Municipal Code.
2. The City shall require City’s selected Contractor to install UV supplier’s UV System
equipment pursuant to the terms of this MOA. City shall require its Contractor to enter into a
purchase order or contract with Trojan Technologies_to acquire UV System so~ely from Trojan
Technologies. The City shall further require that City’s Contractor obtain UV System Equipment
from Trojan Technologies in full compliance with the terms set forth in this MOA.
3. This obligation to obtain UV System from Trojan Technologies shall be conditioned upon the
award of the construction contract for the Project, and the favorable result of any legal challenge
to this process which could result in a court order or judgment preventing the City from either
executing the construction contract for the Project or requiring City’s Contractor to install Trojan
Technologies’ UV System equipment. If City fails to proceed with the Project, is prevented from
entering into the construction contract, or is prevented by legal proceedings from designating
Trojan Technologies’ UVSystem equipment for inclusion in City’s Project, the City shall have
the right to terminate this MOA pursuant to Article Vl and the City shall not be liable to Trojan
Technologies for any damages including, but not limited to restocking, proposal preparation and
contracting costs, or loss of prospective profit.
City of Palo Alto - RFP 125217 MOA - 3
~V. Price
The UV System equipment shall be manufactured, assembled, insured, crafted, delivered, and
maintained prior to acceptance for the sum of $1,495,000 dollars in US currency, exclusive of
California sales tax. This total amount shall be inclusive of all payments for the Trojan
Technologies’ costs including the services listed in Article II of this MOA and those costs set
forth below.
Element
Supply lamps, banks, ballasts, power distribution
centers and electrical distribution system
Ultraviolet transmittance monitor
Cleaning system
Factory testing
Supply instrumentation and controls
Configure instrumentation and controls
Assembly and fabrication
Prepare submittals
Freight / delivery to site
Training, start-up, and testing ass istance
Patent license
Performance bond
Hydraulic gates and associated equipment
Module storage racks, stilling plates
480V de[~a-wye transformers
Checkpoint bioassay (recycled water channel)
Total Equipment Supply Cost
Cost
$725,850
$12,500
$84,000
$20,0O0
$75,0OO
$30,000
$40,000
$40,000
$13,000
$40,000
$o
$22,500
$323,000
$9,150
$25,000
$35,00O
$1,495,000
1. Trojan Technologies agrees to offer all proposing contractors on the Project the
equipment and services specified in this MOA, and as more specifically set foflh in the
Specifications, at the price set forth herein and without additional terms and conditions
inconsistent with this MOA. Any such additional terms and conditions offered to proposing
contractors, not inconsistent with the terms of this MOA, shall be those customary to the
public works marketplace in California and offered at no additional cost.
2. The price set forth herein shall reflect shipping F.O.B. City of Palo Alto. Contractor will
not accept C.O.D. shipments. Trojan Technologies shall be responsible for payment of all
charges for handling, shipping, pack aging, wrapping, bags, container, boxing, crating,
labeling, customs and duties, taxes (except for California sales tax), storage, insurance and
other related matters. Trojan Technologies shall cause all UV System equipment to be
insured for the full value during al! phases of packaging and delivery and such insurance
shall remain in place for five (5) working days after delivery, during which time, Contractor
shall inspect the equipment to insure that all equipment has been provided and that the
equipment has arrived in an undamaged condition.
3. Price Escalation: The costs included in this MOA shall remain in effect and are not
subject to escalation unless the Contractor does not accept delivery of equipment prior to
May 1, 2009. After such date, pricing is subject to an escalation clause based on selec ted
and mutually agreeable Bureau of Labor Statistics (BLS) indices, computed from May 1,
2009 until the accepted delivery date.
City of Palo Alto - RFP 125217 MOA - 4
4. The following consumable parts price, including shipping and handling shall be
guaranteed and shall remain in effect and not subject to escalation for a period of 5 years
following project completion:
Element and Price~ncl.~din.q ship_p_in_.~ and handlincz).
UV Lamp, $150
Electronic ballast, $400
Quartz sleeve, $83
Wiper, $23
UV transmittance monitor, $12,500
UV intensity monitor, $2,100
Cleaning system filter assembly, $150
Cleaning solution (ActiClean TM), gallon, $15
Fuses (power distribution center), $20
Following the 5 year period, the maximum allowable price for Consumable Parts shall be the
Manufacturer’s current list prices.
V.Payment Terms
Trojan Technologies agrees to supply the UV System equipment and services at the proposed
price on the fo.llowing payment terms:
t.75% of the sum set forth above on delivery of UV Disinfection Equipment to site
and acceptance by City’s Contractor and delivery of preliminary operation and
maintenance (O &M) manual.
2. 15% on installation of UV System.
3.10% on successful completion of performance testing, submittal and approval of
O&M manual, training of City’s employees and upon substantial completion of
the UV System.
The partial payments set forth above shall be due only upon full and complete performance of
each benchmark task listed above for all equipment and services required pursuant to the
specifications.
A 10% retention wil! be withheld by the City and Contractor from each of the payments listed
above. Such 10% retention shall be provided to Contractor for payment to Trojan Technologies
at the time of final payment as required by the contract documents and prevailing California law.
The City will include in the Contract with the Contractor the Contractor’s obligation to make
payment for undisputed amounts for the UV Vendor’s costs within two (2) weeks of receipt of
payment for such amounts from the City.
Vl.Terms and Conditions
1. Factory Inspections: Trojan Technologies acknowledges that time is of the essence for the
manufacture, assembly and delivery of the UV System. Accordingly, Trojan Technologies shal
City of Palo Alto - RFP 125217 MOA - 5
authorize and arrange for manufacturing and assembly site inspection(s) by representatives of
the City and City’s Contractor. The factory inspection requirements are set forth in the
specifications.
The City and/or Contractor will visually inspect shipment(s) from Trojan Technologies upon
receipt at construction site to determine whether they conform to the requirements of this MOA.
Notwithstanding these provisions for inspection, Trojan Technologies ac knowledges that the UV
System is not reasonably subject to mere visual inspections to ascertain whether the equipment
fully conforms to the specifications and that testing after installation is required prior to final
acceptance of the equipment. Contractor shall be required to schedule performance testing to
allow for the presence of Trojan Technologies.
2. Patent License Agreement: The price set forth above shall include the cost for the Patent
License Agreement attached hereto as Attachment "A". Trojan Technologies shall execute said
Patent License Agreement and take such other actions as may be required to effectuate the
licensing terms contained therein. The Patent License Agreement shall be executed and
delivered to the City within 10 days of receipt of tile payment due from the City Contractor for
.delivery and acceptance of the equipment to the construction site.
3. Storage of The UV System Prior to the Time for Delivery: Trojan Technologies shall store
said equipment at its cost in a safe manner until City’s Contractor is ready for delivery to site.
4. Warranty: Trojan Technologies expressly warrants that all goods and services shall conform
to all specifications, drawings and samples. Goods and services shall be new and of good
merchantable quality, free from material defects of workmanship and fit for the purpose for
which sold or provided. For purposes of this warranty, any parts not meeting the foregoing
quality shall be deemed defective. Trojan Technologies provides warranties on all equipment
provided as set forth in the specifications, including the extended war ranties defined in the
Specification Section 11285. Trojan Technologies warrants the goods and services shall
conform to the description contained herein and be free from defects in material and
workmanship for a period of one (1)year from the substantial completion of the UV system.
Upon Trojan Technologies’ receipt of written notice within thirty (30) days of discovery of any
defect, and a determination Trojan Technologies that such defect is covered under the
foregoing warranty, Trojan Technologies’ responsibility is to correct the defect at Trojan
Technologies’ option, repair or replace the defective part or parts at the Project site. This
warrant,/does not cover failure or damage due to storage, installation, operation or
maintenance not in conformance with Trojan Technologies’ written instructions and
requirements or due to accident, misuse, abuse, neglect or corrosion. This warranty does not
apply to any equipment other than the UV system provided by Trojan Technologies. Trojan
Technologies shall have no responsibility for the condition of primed or finish painted surfaces
after the Productions leave their point of manufacture. Trojan Technologies shall not be
required, pursuant to this warranty, to install replacement or repaired parts for which installation
is the responsibility of the City’s Contractor, whether or not Trojan Technologies may otherwise
be responsible for costs associated therewith. Field touch-up of shop primed or painted
surfaces are normal and shall be at Contractor or City’s expense. Any touch-up or repainting
required to shop primed or painted surfaces, for reasons other than improper or incorrect
application in the shop, shall be Contractor or City’s responsibility. The foregoing warranty
provisions shall also be applicable to equipment or software supplied to Trojan Technologies by
a third party entity and provided to Contractor via this MOA. Any warranties provided by third
party equipment or software supplier shall be assigned to the City after final acceptance.
City of Palo Alto - RFP 125217 MOA - 6
5. Liens, Claims And Encumbrances: Trojan Technologies warrants and represents that all the
goods when delivered will be free and clear of all liens, claims, encumbrances and
infringements of any patents, trademarks, copyrights or franchise rights.
6. Independent Contractor: Trojan Technologies, and Vendor’s employees or persons under
contract to Trojan Technologies in the performance of services on this MOA, including services
provided on City property, shall ped:orm work as independent contractors. Trojan Technologies
shall provide insurance to cover its work and its employees as required by the Contractor.
Furflqer, neither party to tMs MOA is the agent or legal representative of the other party for any
purpose, nor shall the actions of either party under this MOA create a partnership, joint venture
or relationship of principal and agent between the parties. ~I~rojan Technologies shall maintain
the following forms of insurance coverage for all work done on City property, and similarly
require its subcontractors doing work on City property to maintain similar insurance, including:
(1) Public Liability and Property Damage Insurance, including contractual liability, both general
and automobile, in the amount of at least $1,000,000 per occurrence for general liability, and
$1,000,000 per occurrence combined single linlit for bodily injury and property damage for
automobile liability (2) Workers’ Compensation Insurance as required by law and for not less
than $1,000,000. With the exception of Worker’s Compensation Insurance, the City and the
Contractor shall be added as additional insureds to such policies.
7. Indemnification: To the fullest extent permitted by law, Trojan Technologies shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents and the Contractor and its officers, employees and agents (each an "Indemnified Party")
from and against any and all demands, claims, or liability of any nature, including death or injury
to any person, property damage or any other loss, including all costs and expenses of whatever
nature including attorneys fees, experts fees, court costs and disbursements ("Claims") resulting
from, arising out of or in any manner related to performance or nonperformance by Trojan
Technologies, its officers, employees, agents or contractors under this Agreement, regardless of
whether or not it is caused in part by an Indemnified Party.
Notwithstanding the above, nothing in this Section 7 shall be construed to require Trojan
Technologies to indemnify an Indemnified Party from Claims arising from the active negligence,
sole negligence or willful misconduct of an Indem nified Party.
8. Assignment: Assignment by Trojan Technologies of its responsibilities under this MOA, will
not be binding upon the City or City’s Contractor unless such assignment has had prior written
approval of the City and City’s Contractor, which approval shall be solely within the discretion of
City and its Contractor. The City shall place conditions in the City Contractor’s construction
documents which similarly prevent assignment by City’s Contractor of responsibilities without
prior written approval of the City and Trojan Technologies. Failure to obtain approval of any
assignment, including an involuntary assignment to creditors, shall constitute a breach of this
MOA which may lead to termination.
9. Jurisdiction: This MOA shall be administered and interpreted under the laws of the State of
California, without regard to the conflict of laws provisions thereof. The United Nations
Convention on the International S ale of Products will not apply. The jurisdiction for any litigation
arising from this Purchase Order shall be in the state of California, and shall be venued i n the
County of Santa Clara of the U.S. District Court.
10. Modifications: No modification to this MOA, nor any waiver of any rights, shall be effective
unless agreed to in writing by both Parties.
City of Palo Alto - RFP 125217 MOA - 7
11. Liquidated Damages: The Contractor may include liquidated damage penalties in the
Purchase Order agreement with Trojan Technologies. Such damages are only applicable if
directly related to the Trojan Technologies’ failure to deliver the equipment within the time period
stipulated in this MOA, failure to support the startup of the equipment, or failure of the
equipment during the startup where any such failures result in a delay to the critical path of the
construction project schedule. The amount of such darn ages in the aggregate shall not exceed
ten (10) percent of the total equipment contract price as listed in Article IV.-Price of this MOA.
12. Notices: All notices under this MOA shall be in writing and shall be considered delivered
and effective on the earlier of actual receipt or (i) the day following transmission if sent by
facsimile when followed by written confirmation by overnight carrier or certified United States/
Canadian mail; or (ii) one (1) day after dispatch if sent by private overnight carrier (e.g., DHL,
Federal Express); or (iii) five (5) days after posting if sent by certified mail. Notice shall be sent
to the following persons:
"To the Cit~
City o.f Palo Alto
Attn: James Allen
Public Works Department
Regional Water Quality Control Plant Div.
2501 Embarcadero Way
Palo Alto, CA 94303
Phone: 650-617-3130
Fax: 650-856-0196
E-mail: iames.allen@cityofpaloalto.or.q
To the Su#_plier:
Trojan Technologies
Attn: Carl McDonald
3020 Gore Road
London, ON Canada N5V 4T7
Phone: 519-457-3400 x2234
Fax: 519-457-3030
E-mail: cmcdonald@troianuv.com
13.Severability: If any portion of this MOA is held invalid, the Parties agree that such invalidity
shall not affect the validity of the remaining portions of this MOA, and the Parties shall seek in
good faith to agree to substitute for the invalid provision a valid provision that most closely
approximates its terms.
14. Entire Agreement: This MOA along with the incorporated Specifications and Attachments
supersedes all proposals, oral or written, all negotiations, conversations or discussions between
the Parties and contains the entire understanding and agreement of the Parties relating to this
subject matter. In the event of a conflict between the terms and conditions of this MOA and its
attachments, this MOA shall control.
15. Patent and Copyright Infringement: Trojan Technologies shall defend any action or
proceeding brought against Contractor or the City based on any claim that the equipment
infringes any patent or copyright, provided the equipment is used in the manner specified and
are not modified, altered, or combined with any other equipment without Trojan Technologies’
prior written permission. Contractor or the City shall give prompt written notice to Trojan
Technologies of an~, such action or proceeding and will reasonably provide authority,
information and assistance (at Contractor or City’s expense) in the defense of same. If
Contractor or the City is enjoined from the operation or use of the equipment, Trojan
Technologies shall take reasonable steps to procure the right to operate or use the equipment.
If Trojan Technologies cannot so procure such right within a reasonable time, Trojan
Technologies shall promptly, at Trojan Technologies’ option and at Trojan Technologies’
expense, (i) modify the equipment so as to avoid infringement of any such patent or copyright,
City of Palo Alto - RFP 125217 MOA - 8
(ii) replace said equipment with equipment that does not infringe or violate any such patent or
copyright, or (iii) as a last resort, remove the equipment and refund the purchase price.
16. Excusable Delay: Trojan Technologies shall not be liable for any delay in performance or
failure to perform due to fire, flood or any other act of God, strike or other labor difficulty, act of
any civil or military authority or of Contractor, Engineer, or the City, insurrection, riot, embargo,
unavailabilit~ or delays in transportation or car shortages, or any other cause beyond Trojan
Technologies’ reasonable control. In the event Trojan Technologies’ pen~ormance is delayed by
any of the foregoing causes, Trojan Technologies’ schedule for performance shall be extended
accordingly without penalty.
17. Termination for Convenience: Prior to award of the Construction Contract, the City may
terminate this MOA without cause by giving ten (!0) days prior written notice to Trojan
Technologies. Upon receipt of such notice Trojan Technologies will immediately discontinue its
activities under this MOA.
18. Cancellation by City’s Contractor: If City’s Contractor cancels the contract or refuses to
accept delivery of Trojan Technologies’ fully conforming equipment, Contractor shall be liable to
Trojan Technologies for reasonable cancellation charges, administrative costs, commissions to
sales representatives, costs incurred by Trojan Technologies for all work performed or in
process up to the time of cancellation or refusal to accept delivery, and any other expenses
incurred by Trojan Technologies in connection with City Contractor’s cancellation or refusal to
accept delivery.
19. Default by the City or City’s Contractor: In the event that City or City’s Contractor should
breach its obligations under this MOA, then Trojan Technologies may, without prejudice to any
other right or remedy it may have at law or equity, terminate the contract or suspend
performance if City or City’s Contractor fails to cure such breach within sixty (60) days of written
notice to City and City’s Contractor. In such event, Trojan Technologies shall be paid for all
work performed prior to termination/sus pension, including all costs related to the
termination/suspension. If payments are not made in accordance with the terms contained
herein, a service charge may, without prejudice to the right of Trojan Technologies to immediate
payment, be added in an amount equal to the lower of 1% per month or fraction thereof or the
highest legal rate on the unpaid balance.
20. Default by Trojan Technblogies: In the event of any default by Trojan Technologies and
prior to City’s Contractor terminating the purchase contract for default, The City or City’s
Contractor shall give written notice of default to Trojan Technologies. Trojan Technologies shall
remedy the default to the reasonable satisfaction of the City’s Contractor within forty-five (45)
days of receipt of such written notice or, if such default cannot reasonably be remedied within
such forty-five (45) day period, Trojan Technologies shall promptly begin to remedy the default
within the forty-five (45) day period and thereafter provide satisfactory accommodations and/or
additional assurances to the City and City’s Contractor as may be necessary to promptly
remedy the default, in such event such default shall be deemed to be remedied.
21. Limitation of Liabil ity. Neither Trojan Technologies nor City’s Contractor shall be liable to
the other party for any consequential or punitive damages arising from their obligations under
the agreement between each other or under this Agreement, whether such damages are based
upon breach of contract, breach of warranty, tort, strict liability or otherwise. Liquidated
Damages shall not be considered consequential or punitive damages. In no event shall either
party’s liability exceed the purchase price of the UV System. Nothing in this paragraph shall
City of Palo Alto - RFP 125217 MOA - 9
limit the City, City Contractor or Trojan Technologies partys’ liability with regard to claims made
by third par~ies or indem nification for such claims.
However, the parties understand and agree that as to any agreement(s) entered into between
Trojan Technologies and City’s Contractor, the City shall be considered a third party. This
limitation of liability as between the City and Trojan Technologies shall not limit Trojan
Technologies’ liability with respect to any bonafide extra work claim or liability imposed on the
City for delay or impact damages by City’s Contractor arising from any failure of Trojan
Technologies to perform in a timely manner as required by the contracto r-vendor contract.
Liquidated damages imposed on Trojan Technologies by City’s Contractor will be an offset to
any such claim.
This Memorandum of Agreement is hereby entered into between the City of Palo Alto and
Trojan Technologies. By signing this Memorandum of Agreement, the undersigned asserts that
they have the authority to enter into this agreement.
City Supplier
City of Palo Alto
City Manager or Designee Date T-,f’0jan Technologies
City of Palo Alto
Attest:
City Clerk
Approved as to Form:
Sr. Asst. City Attorney
-END OF MOA-
City of Palo Alto - RFP 125217 MOA - 10
ATTAC H M E NT "A"
CITY OF PALO ALTO
UV SYSTEM EQUIPMENT
PATENT LICENSE AGREEMENT
THIS AGREEMENT is made as of the__ da y of ,200_ (the "Effective Date").
BETWEEN:
Trojan Techno!oqie_~s
("Manufacturer")
-and -
City_ of Palo Alto
(the "City")
WHEREAS Manufacturer is the registered owner of the Patents (as defined herein) and
is prepared to grant the City limited licenses under the Patents, as more fully set forth
hereinafter;
AND WHEREAS the City desires to Obtain a license under the Patents in order that it
may, if necessitated, negotiate for the purchase of, acquire, and/or have manufactured
equipment necessary to operate and maintain the ultra-violet light water disinfection equipment
supplied by the M anufacturer to the City;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
promises and mutual covenants contai ned herein and other good and valuable consider ation
(the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
1, Definitions. In this Agreement, including the recitals and schedules hereto, the
following terms shall have the meanings ascribed to them below:
"Licensed Technology" shall mean the inventions and/or methods claimed in or by the
Patents.
"System" means an ultra-violet light water disinfection system to be installed at the
City’s facility located at 2501 Embarcadero Way, Palo Alto, CA 94303 (the "Facility").
"Patents" means al! patents and patent applic ations owned by Manufacturer or its
suppliers that would be infringed by any person making, using, selling, or offering for
sale, the System or the component parts thereof.
2. License and License Fee / Credit For Purchase In consideration of the City’s
payment of the License Fee, as defined in section 2.2 below, Manufacturer hereby grants the
City a fully paid, irrevocable, non-assignable license under the Patents to negotiate for and
purchase the replacement parts and components of the System, use and operate the System,
City of Palo Alto - RFP 125217 PLA - 1
and commission the production of and/or purchase of replacement components for the System
from third parties solely in the event Manufacturer goes bankrupt or otherwise ceases or is
unable to provide such replacement components to City under commercially reasonable terms,
which shall include, but shall not be limited to, price, delivery schedule and quality.
2.1 Manufacturer hereby represents and warrants to the City that it is the owner of the
Patents and that no other person or entity has any rights in the Patents.
2.2 The City shall provide payment in full satisfaction of the license fee required as
consideration for the licenses granted hereunder (the "License Fee"). The payment for
tile License Fee shall be considered as fully paid when the City provides payment for the
acceptable delivery of the equipment to the site as stipulated in the Memorandum of
Agreement between the City and Manufacturer, Article V-Payment Terms, subparagraph
!.
2.3 The licenses described in this agreement shall only become effective upon receipt by
Manufacturer of the License Fee through paym ent for the acquisition of the system.
3. Maintenance Services and Replacement Components included. It is acknowledged
that the City may seek to obtain maintenance services and replacement components for the
System from the Manufacturer in connection with the city’s use of the System for as long as the
System continues in operation. Nonetheless, in the event of a bankruptcy or any other event
causing Manufacturer to cease providing replacement components for the System in a
commercially reasonable manner, the City will be permitted under this license agreement to
enlist the services of another manufacturer to produce spare parts and to provide maintenance.
The City or its chosen manufacturer shall use any design drawings, plans and/or models of the
System or the subject components solely to replace com portents for use in the System and not
for any other purpose.
4. Proprietary Ri,qhts Notices. The Manufacturer agrees to reproduce and place on the
System all proprietary rights notices required by law including, but not lim ited to, notices in
compliance with 35 U.S.C. section 287.
5. Taxes. All taxes, duties or other charges of any kind relating to the license rights
granted hereunder (except for taxes based solely on Manufacturer’s profits), shall be the
responsibility of the City.
6. Benefit of the Aqreement. This agreement will enure to the benefit of and be binding
upon the respective successors and permitted assigns of the parties hereto.
7. Assicj.nment. Neither this agreement, nor any of the rights granted hereunder, shall be
assigned by the City without the written consent of Manufacturer.
8. Notices. Any notice or other communication to .be given in connection with this
agreement will be given in writing and will be given by personal delivery or by electronic means
of communication addressed to the recipient as follows:
City of Palo Alto - RFP 125217 PLA - 2
To the City:
City of Palo Alto
Attn: James Allen
Public Works Department
Regional Water Qualit3~ Control Plant
Division
2501 Embarcadero Way
Palo Alto, CA 94303
Phone: 650-617-3130
Fax: 650-856-0196
Email:james.allen(-~aioalto.org
To the Mar~ufacturer:
Trojan Technologies
Attn: Carl IVlcDonald
3020 Gore Road
London, ON Canada N5V 4T7
Phone: 519-457-3400 x2234
Fax: 519-457- 3030
E-mail: cmcdonald~anuv.com
or to such other address or individual as rnay be designated by notice by any party to the other
parties. Any demand, notice or other communication given by personal delivery will be
conclusively deemed to have been given on the date of actual delivery thereof and, if given by
electronic communication, on the day of transmittal thereof if given during the normal business
hours of the recipient and on the business day of the recipient during which such normal
business hours next occur if not given during normal business hours on any day.
9. No Partnership, Agency. The parties hereto shall be independent contractors with
respect to each other, and nothing in this agreement shall in any way be construed to constitute
any party as an agent, employee or representative of any other, and further, nothing in this
agreement shall be construed to make any of the parties partners, joint venturers or agents or to
render them liable for the debts and obligations of any other.
10. Indemnification. The Manufacturer shall indemnify and hold harmless the City from
and against any and all claims, attorney’s fees, damages and related costs and expenses
arising out of the City exercising the license rights granted hereunder.
11. Governin L#...~_~. This agreement is governed by and will be construed in accordance
with the laws of California and the U hired States. The jurisdiction for any litigation arising from
this Agreement shall be in the State of California, and shall be venued in the County of Santa
Clara.
12. Counterparts. This agreement may be executed in any number of counterparts, each
of which wilt be deemed to be an original and all of which taken together will be deemed to
constitute one and the sam e instrument.
IN WITNESS WHEREOF the parties have executed this agreement in counterparts where
necessary.
MANUFACTURER:
By:
Authorized Signing Officer
CITY OF PALO ALTO:
By:
Authorized Signing Officer
City of Palo Alto - RFP 125217 PLA - 3
Attachment B
UV Disinfection Project Update
Currently, the RWQCP disinfects final treated water by adding 12.5% strength sodium
hypochlorite, a chlorine based disinfectant. The Plant’s sodium hypochlorite is industrial grade
bleach, about twice the strength of commercial bleach. Chlorine based disinfection generates
byproducts and leaves a chlorine residual in the water. Byproducts are minimized by adding a
small amount of ammonium hydroxide to the effluent prior to chlorination. The chlorine
residual is removed by addition of 25% strength sodium bisulfite to the clean, treated effluent
just prior to discharge to the San Francisco Bay. No chlorine is discharged to the Bay.
Project History
The RWQCP began planning for a sustainable future with the initiation of the Long-Term Goals
Study in 2000. Through a series of workshops, the RWQCP and community stakeholders set
goals for the Plant that met the environmental and socioeconomic needs of member
communities. The Plant’s disinfection system and hazardous chemical use was the focus of
community stakeholder meetings in 2004 and 2005, with the result that UV presented the most
viable alternative to replace the existing chemical disinfection system. On June 19, 2006
(CMR:266:06), Council authorized RMC Water and Environment to prepare the UV
Disinfection Facility Plan to assess the feasibility of implementing a UV system to replace the
RWQCP’s existing chlorine based disinfection system. The life-cycle assessment determined
that the UV disinfection alternative has a lower long-telan cost, consumes less energy, lowers the
RWQCP’s greenhouse gas emissions, and releases fewer toxins. The UV alternative also offers
higher reliability, fewer regulatory risks, and fewer risks of safety and health impact.
Life-Cycle Results
30-year present worth costs
Energy Consumption (kWh!year)
Greenhouse Gas, CO2 (lb/year)
Trihalomethanes (lb/year)
N-Nitrosodimethylamine (NDMA), (lb/year)
Cyanide (lb/year)
Dioxin (toxic equivalent) (lb/year)
Ultraviolet Existing
Disinfection Chemical
Alternative Alternative
$15.5M $20.1M
611,038 808,389
751,403 1,138,605
0 1520
0 8
0 190
9.7xl 0-l°5.0xl 0-v
UV disinfection is a proven technology with more than 104,000 worldwide installations and use
in more than 20% of North America’s wastewater plants. For the RWQCP’s UV project,
hundreds of ultraviolet lamps will be submerged in channels to safely disinfect treated
wastewater flowing across the lamps. A UV system transfers electromagnetic energy from a
mercury arc lamp to an organism’s genetic material. When UV radiation penetrates the cell wall
of an organism, it destroys the cells’ ability to reproduce and subsequently kills them.
The physical structure of the UV disinfection facility will be built with durable materials such as
concrete, stainless steel, and aluminum and is expected to have a life expectancy of 30 years or
more. The UV channels will contain consumable parts such as lamps, ballasts, and sensors that
Page 1 of 3
will be kept in stock, replaced on a routine basis, and restocked through the original equipment
manufacturer.
The UV system has been designed to disinfect up to 80 million gallons per day, during peak wet-
weather periods. This matches the capacity of the existing chemical disinfection system. During
Summer and early Fall, irrigation demand is high and wastewater flows are lower, averaging 23
million gallons per day. The surplus UV system capacity will be used to disinfect up to 8.6
million gallons per day of recycled water. After construction and testing of the UV system, there
will be a number of regulatory steps that must be completed before the UV system is approved
by the state for recycled water. In the interim, the Plant’s existing chorine based system will be
used to disinfect recycled water.
Environmental and Community Benefits
UV disinfection will require less total energy and produce less total carbon dioxide than the
Plant’s current chemical based disinfection system. UV requires more onsite energy; however
the chemicals used by the RWQCP have a greater sum of energy use and carbon dioxide
emissions embedded in chemical manufacturing and delivery activities. A total annual carbon
dioxide emission from the UV disinfection process is estimated to be 751,403 pounds while
chemical based disinfection is estimated to be 1,138,605 pounds.
UV disinfection will eliminate or reduce delivery, storage, and use of hazardous chemicals.
With UV, overall chemical deliveries to the RWQCP will be reduced from about 141 to about 31
bulk mack deliveries per year, thus reducing hazardous chemical transport locally and regionally.
After UV startup, the Plant will close the ammonium hydroxide and sodium bisulfite chemical
storage and feed facilities and minimize the use of sodium hypochlorite. This is consistent with
the Plant’s long-term goal to (a) maximize worker safety and (b) minimize or eliminate chemical
use. Delivery, storage, and annual use of approximately 134,000 gallons of sodium bisulfite,
approximately 290,000 gallons of sodium hypochlorite, and approximately 50,000 gallons of
ammonium hydroxide will be eliminated. Annual use of sodium hypochlorite will be reduced
from about 222 tons currently to about 77 tons after UV system startup.
Release of toxins is among the greatest challenges when using chlorine-based disinfection. UV
disinfection will not create the same toxins produced in chlorine based disinfection, including
ammonia residuals, chlorine residuals, trihalomethanes (THMs), N-Nitrosodimethylamine
(NDMA), or cyanide. Consequently, UV disinfection affords a greater level of environmental
protection than chlorine based disinfection.
Project Financing
Staff submitted an application for the UV disinfection project to the SWRCB for a low-interest
State Revolving Fund (SRF) loan. In October 2008, the SWRCB is expected to commit to
funding the project, subject to the outcome of actual project construction bids. The low-interest
loan will reduce the project’s financial impacts on customers by spreading out upfront expenses
for construction, design, and construction management over a 20-year period. Staff will return to
Council to authorize the loan amount and future payments as well as to request authority to
execute the loan agreement. The funding commitment is for an approximately 2.5% interest, 20-
year loan. The construction cost of the UV project is currently estimated at $11.0 million. Total
Page 2 of 3
project cost, including design and construction management is expected to be $13.2 million.
Total project costs covered by the loan are expected to be $11.9 million. The annual operating
cost of UV is estimated to be $166,000. Annual loan payments to the SWRCB are estimated to
be $840,000, and are partially offset by the lower operating cost of UV,. disinfection compared to
chemical based disinfection (approximately. $210,400 savings per year).
The breakdown of loan payments by contributing local agencies is shown below. More accurate
cost details will be developed when the design is finalized.
Estimated SRF Loan Payments by Contributing Partner Agency
Capacitya
Contributing Partner Agency MGD
City of Palo Alto 15.30
City of Mountain View 15.1
City of Los Altos 3.8
East Palo Alto Sanitary District 3.06
Stanford University 2.11
Town of Los Altos Hills 0.63
Annual Loan
%Payment
38.16 $320,544
37.89 $318,276
9.47 $79,548
7.64 $64,176
5.26 $44,184
1.58 $13,272
Totals 40.0 100
aCapacity expressed in annual average flow, million gallons per day
$840,000
The UV disinfection facility will expand recycled water capacity. The additional capacity
qualifies the RWQCP for a state grant under the Water Recycling Program. Staff is monitoring
state and federal grants for the project and will report to Council when the grant application
process commences.
Page 3 of 3
CMR:347:08 Attachment C
Attachment B
Certification of Nondiscrimination
As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below
certify that they do not discriminate in employment of any person because of race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status,
marital status, familial status, weight or height of such person; that they arein compliance with all
Federal, State and local directives and executive orders regarding nondiscrimination in
employment. ~
1.If Proposer is ~NDIV]DUAL, sign here:
Date:
Pr6poser’s Signature
Proposer’s typed name and title
If Proposer is PARTNERSHIP or JOINT VENTURE, atleast (2) Partners or each of
the Joint Venturers shall sign here:
TROJAN TECHNOLOGIES
Partnership or Joint Venture Name (type or print)
Helen No~i~/~.coti&.,Ig, nlirnited Liability Company
Per" / ~’[~’~ ~,~.V.P.
Membel!of the PaRnership or Joint Venture signature
Trojan Teq~[og e~ ~C ~-.,
Per: !~ a~d V.P.
Member ~f the Pa4hdrship or Joint Venture signature
3.If Proposer is a CORPORATION, the duly authorized officer(s) shall sign as follows:
The undersigned certify that they are respectively:
and
Title Title
Of the corporation named below; that they are designated to sign the Proposal Cost Form by
resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its
authenticity or Secretary’s certificate of authorization) for and on behalf of the below named
CORPORATION, and that they are authorized to execute same for and on behalf of said
CORPORATION.
Corporation Name (type or print)
By:Date:
Title:
By:Date:
Title:
City of Palo Alto - RFP 125217 1