HomeMy WebLinkAboutStaff Report 4057
City of Palo Alto (ID # 4057)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 9/16/2013
City of Palo Alto Page 1
Summary Title: Mayfield Reservoir Emergency Repairs Contract
Title: Approval of Utilities Enterprise Fund Construction Contract No.
C141541174 with DN Tanks, Inc. In a Not to Exceed Amount of $340,000 for
Repairs at Mayfield Reservoir
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to
execute the attached contract with DN Tanks, Inc. (Attachment A) in a not to exceed amount of
$340,000 for repair work completed on the City’s Mayfield Reservoir.
Background
The Mayfield Reservoir is an underground concrete structure which was built in the late 1920’s.
To help ensure its continued functionality the reservoir was drained from October 2011 to
January 2013 to allow extensive seismic rehabilitation work to be performed and to rebuild the
adjacent pump station. After the rehabilitation work was completed in January 2013, the
reservoir was refilled. However, the cracks which had formed in the concrete slabs and floors
caused the reservoir to leak.
Between January and June 2013, while the reservoir was filled, the City made a number of
attempts to locate and repair the cracks and stop the leaks. Divers were hired to enter the tank
on two separate occasions (February 25, 2013 and April 1, 2013) to attempt to repair the
problem areas. Some of the cracks were located and sealed, however, the amount of water
leaking from the reservoir continued unabated.
After further analysis, staff found that the rate of water leakage from the reservoir was
approaching 10,000 gallons a day and that the leaking water was causing a significant risk of
damage to nearby properties, as well as to the reservoir structure itself. To reduce the risks
City of Palo Alto Page 2
caused by the leaks, the reservoir was emptied again in mid-June, 2013 to allow further
inspection of the concrete and to determine what could be done to repair the cracks.
The City’s staff and Engineer of Record (URS) evaluated the problem and determined that the
cracks in the reservoir had not been caused by the recent seismic rehabilitation activity but
were due to the age of the concrete and the expansion and contraction of the structure during
the time the reservoir had been empty for pump station and seismic repairs.
The Mayfield reservoir is a critical part of preserving the level of service for the City’s
emergency water supply and is an integral part of the City’s water reserve resources for fire
suppression. When the reservoir is not filled, the City’s water storage capacity is reduced by 4
million gallons and, as a result, there is an increased risk that the City may not have sufficient
water supply to provide adequate fire suppression during certain emergency events.
Discussion
To minimize the risk of further damage to the reservoir and adjacent properties, and to avoid
concerns regarding the City’s ability to respond to emergency fire suppresssion events, staff
requested, and the City Manager agreed, that it was critically important to proceed with the
required repair work on the Mayfield Reservoir as quickly as possible. DN Tanks, Inc. was
determined to be one of the few west coast based contractors which have the ability to
perform this specialized repair work. DN Tanks had a repair crew available and was able to
commit to perform and complete the necessary repair work before the start of school on
August 15th at Lucille Nixon Elementary School, which is next to the reservoir, as the school’s
parking lot was affected by staging of construction equipment.
The construction work had been disrupting the parking and reducing the available playground
space at the school since the construction work began in October, 2011. In response to the
schools concerns about continuing disruption to their activities, the City had reached an
agreement with the School Principal to make every effort to complete all the work prior to the
start of the school year beginning August 15, 2013.
Due to the urgent nature of this repair work, the Utilities Department requested approval
through Purchasing from the City Manager for a sole-source contract with DN Tanks so that
repair work could begin immediately. When the contract was negotiated and awarded during
the Council’s July, 2013 summer recess, the cost of the work was not expected to exceed
$250,000, which was within the City Manager’s contracting authority.
However, as DN Tanks proceeded to perform its crack assessment within the reservoir and
City of Palo Alto Page 3
began filling the voids that had developed under the reservoir and sealing cracks in the
concrete slab inside the reservoir, it was noted that the joint sealant material between the slabs
was delaminating in a number of locations. After additional inspection, DN Tanks
recommended that additional work was required to reduce the leakage from the reservoir.
These joints had been previously sealed in the early 1990’s, and more recently had been
resealed by the seismic rehabiliation contractor, Anderson Pacific. These problems were not
found during the intial inspection and were identified near the end of the crack sealing process.
Staff and the City’s Engineer of Record (URS) are now reviewing the sealant work performed
and materials used during the seismic rehabilition project to determine if the contractor may
bear some responsibility for the costs which the City incurred to repair the reservoir leaks.
This unanticipated additional repair work was estimated to require an additional cost of
$90,000 in labor and materials, and two additional weeks of time to complete. The City’s
Engineer of Record (URS) reviewed the need for, and cost estimate related to the additional
work and recommended that it be done while DN Tanks was still mobilized on the site. Utilities
staff concurred recommended to the City Manager that the City should proceed with the
additional repairs immediately, s as taff felt that any delays in contracting for the additional
work would result in the de-mobilization of DN Tanks’ work crews at the site and an increase in
the cost to re-stage the work site. More delays would also have exacerbated the disruptions for
the Lucille Nixon Elementary School and increased the risk associated with having a key fire
suppresssion water source continue to be unavailable during the summer fire season. This
additional repair work caused the cost for the reservoir repairs to increase to a total not to
exceed amount of $340,000, an amount which exceeded the City Manager’s signature
authority. It is for this reason that staff now requests that the Council approve, and authorize
the City Manager to execute the attached construction contract with DN Tanks, Inc.
Staff confirmed with the Contractor’s State License Board that DN Tanks, Inc. has an active
California license on file. Staff also checked references supplied by the contractor for previous
work performed and found no significant complaints.
The work completed on the reservoir ahead of Council’s now requested approval was of an
urgent nature and was required to address possible structural problems developing at the
reservoir resulting from the undermining of the soil under the reservoir from the water leakage.
When the additional problems with the joints was identified at the end of the crack repair work
conducted in July, 2013, a business decision was made to keep the contractor on site to avoid
increasing the amount of time the reservoir would be out of service during the fire season; to
avoid additional charges that would result for the contractor having to demobilize for some
uncertain time period and re-mobilize to complete the needed repairs; and to avoid increased
disruption to the Lucille Nixon Elementary School.
City of Palo Alto Page 4
While Utilities staff learned of the expanded problems in just enough time to have informed the
City Manager so that an item could have been placed on the Council agenda for approval of the
amendment—last minute if necessary-- before the last August meeting, this was not done as
staff focused on the urgency of getting the work done. In review of this item, the City Manager
has made it clear that Utilities staff should have made extra efforts to ensure that Council was
notified at the time of the decision to move forward quickly with the repair work earlier in the
process. Staff certainly concurs.
Resource Impact
Funds to pay for this repair work to the Mayfield Reservoir, in the amount of up to $340,000
are included in the WS-11004 Water Supply System Improvements. The work was managed by
existing Utility Engineering staff and Engineer of Record (URS).
Policy Implications
The approval of this contract is consistent with the Council-approved Utilities Strategic Plan-
Strategic Objections: BP1. Ensure a reliable supply of utility resources, BP2, and operate the
utility systems safely, BP3.
Environmental Review
This project is categorically exempt from California Environmental Quality Act (CEQA) pursuant
to CEQA Guidelines 15301 (b) repair, maintenance of existing facilities and 15302 (c)
replacement or reconstruction of existing facilities.
Attachments:
Attachment A: Revised Construction Contract - DN Tanks, Inc (PDF)
1 Rev. July 2012
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
Contract No. C14151174
City of Palo Alto
and
DN Tanks, Inc.
PROJECT
“REPAIR AT MAYFIELD RESERVOIR”
2 Rev. July 2012
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
TABLE OF CONTENTS
SECTION 1. INCORPORATION OF RECITALS AND DEFINITIONS……………………………….. .................... 5
1.1 Recitals ................................................................................................................ 5
1.2 Definitions ........................................................................................................... 5
SECTION 2. THE PROJECT……………………………………………………………………………… .............................. 5
SECTION 3. THE CONTRACT DOCUMENTS…………………………………………………………. ......................... 5
3.1 List of Documents …………………………………………………………………………………………. ..... 5
3.2 Order of Precedence …………………………………………………………………………… ................ 6
SECTION 4. THE WORK ………………………………………………………………………………… .............................. 6
SECTION 5. PROJECT TEAM ………………………………………………………………………….. ............................. 7
SECTION 6. TIME OF COMPLETION ………………………………………………………………….. .......................... 7
6.1 Time Is of Essence ........................................................................................ ……… 7
6.2 Commencement of Work ..................................................................................... 7
6.3 Contract Time ....................................................................................................... 7
6.4 Liquidated Damages ............................................................................................. 7
6.4.1 Entitlement……………………………………………………………………………………………. 7
6.4.2 Daily Amount…………………………………………………………………………………………. 8
6.4.3 Exclusive Remedy………………………………………………………………………………….. 8
6.4.4 Other Remedies…………………………………………………………………………………... 8
6.5 Adjustments to Contract Time ........................................................................... … 8
SECTION 7. COMPENSATION TO CONTRACTOR………………………………………………………………………... 8
7.1 Contract Sum ……………………………………………………………………………………………………… 8
7.2 Full Compensation …………………………………………………………………………………………….. 9
7.3 Compensation for Extra or Deleted Work …………………………………………………………….9
7.3.1 Self Performed Work………………………………………………………………………………… 9
7.3.2 Subcontractors…………………………………………………………………………………………. 9
SECTION 8. STANDARD OF CARE ................................................................................................... 9
SECTION 9. INDEMNIFICATION ...................................................................................................... 10
9.1 Hold Harmless…………………………………………………………………………………………………….. 10
9.2 Survival………………………………………………………………………………………………………………. 10
SECTION 10. NONDISCRIMINATION .............................................................................................. 10
SECTION 11. INSURANCE AND BONDS .......................................................................................... 10
3 Rev. July 2012
CONSTRUCTION CONTRACT
SECTION 12. PROHIBITION AGAINST TRANSFERS .......................................................................... 11
SECTION 13. NOTICES .................................................................................................................... 11
13.1 Method of Notice ………………………………………………………………………………………………..11
13.2 Notice Recipients ................................................................................................. 11
13.3 Change of Address ............................................................................................... 12
14.1 Resolution of Contract Disputes ........................................................................... 12
14.2 Resolution of Other Disputes ............................................................................... 12
14.2.1 Non‐Contract Disputes ……………………………………………………………………………….12
14.2.2 Litigation, City Election ……………………………………………………...........................13
14.3 Submission of Contract Dispute …………………………………………………………………………..13
14.3.1 By Contractor …………………………………………………………………………………………. 13
14.3.2 By City ……………………………………………………………………………………………………. 13
14.4 Contract Dispute Resolution Process ............................................................... …… 13
14.4.1 Direct Negotiation………………………………………………………………………… ………….13
14.4.2 Deferral of Contract Disputes ………………………………………………………………… 14
14.4.3 Mediation ………………………………………………………………………………………………….14
14.4.4 Binding Arbitration ……………………………………………………………………………………15
14.5 Non‐Waiver …………………………………………………………………………………………………………16
SECTION 15. DEFAULT ................................................................................................................... 16
15.1 Notice of Default .................................................................................................. 16
15.2 Opportunity to Cure Default ................................................................................ 16
SECTION 16. CITY'S RIGHTS AND REMEDIES .................................................................................. 16
16.1 Remedies Upon Default ....................................................................................... 16
16.1.1 Delete Certain Servic………………………………………………………...........................16
16.1.2 Perform and Withhold ……………………………………………………………………………. 16
16.1.3 Suspend The Construction Contract ………………………………………………………….16
16.1.4 Terminate the Construction Contract for Default ……………………………………..17
16.1.5 Invoke the Performance Bond ………………………………………………………………….17
16.1.6 Additional Provisions ……………………………………………………………………………….17
16.2 Delays by Sureties ................................................................................................ 17
16.3 Damages to City ................................................................................................... 17
16.3.1 For Contractor's Default …………………………………………………………………………..17
16.3.2 Compensation for Losses ………………………………………………………………………….17
16.5 Suspension by City for Convenience ..................................................................... 18
16.6 Termination Without Cause ................................................................................. 18
4 Rev. July 2012
CONSTRUCTION CONTRACT
16.6.1 Compensation ………………………………………………………………………………………….18
16.6.2 Subcontractors …………………………………………………………………………………………18
16.7 Contractor’s Duties Upon Termination ................................................................. 19
SECTION 17. CONTRACTOR'S RIGHTS AND REMEDIES ................................................................... 19
17.1 Contractor’s Remedies ......................................................................................... 19
17.1.1 For Work Stoppage ………………………………………………………………………………….. 19
17.1.2 For City's Non‐Payment …………………………………………………………………………… 19
17.2 Damages to Contractor ........................................................................................ 19
SECTION 18. ACCOUNTING RECORDS ............................................................................................ 19
18.1 Financial Management and City Access .......................................................... ……. 19
18.2 Compliance with City Requests ........................................................................ …. 20
SECTION 19. INDEPENDENT PARTIES ............................................................................................. 20
SECTION 20. NUISANCE ................................................................................................................. 20
SECTION 21. PERMITS AND LICENSES ............................................................................................ 20
SECTION 22. WAIVER .................................................................................................................... 20
SECTION 23. GOVERNING LAW ..................................................................................................... 20
SECTION 24. COMPLETE AGREEMENT ........................................................................................... 21
SECTION 25. SURVIVAL OF CONTRACT .......................................................................................... 21
SECTION 26. PREVAILING WAGES .................................................................................................. 21
SECTION 27. NON APPROPRIATION .............................................................................................. 21
SECTION 28. GOVERNMENTAL POWERS ........................................................................................ 21
SECTION 29. ATTORNEY FEES ........................................................................................................ 21
SECTION 30. COUNTERPARTS ........................................................................................................ 21
SECTION 31. SEVERABILITY ........................................................................................................... 21
5 Rev. July 2012
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
THIS CONSTRUCTION CONTRACT entered into on July 11, 2013 (“Execution Date”) by and between the CITY
OF PALO ALTO, a California chartered municipal corporation ("City"), and DN TANKS, INC. ("Contractor"), is
made with reference to the following:
R E C I T A L S:
A. City is a municipal corporation duly organized and validly existing under the laws of the State of
California with the power to carry on its business as it is now being conducted under the statutes of the
State of California and the Charter of City.
B. Contractor is a corporation duly organized and in good standing in the State of California,
Contractor’s License Number 979914. Contractor represents that it is duly licensed by the State of
California and has the background, knowledge, experience and expertise to perform the obligations set
forth in this Construction Contract.
C. On July 10, 2013, City issued a Sole Source Justification for the Repair at Mayfield Reservoir
(“Project”). In response to the sole source, Contractor provided a quote.
D. City and Contractor desire to enter into this Construction Contract for the Project, and other
services as identified in the Bid Documents for the Project upon the following terms and conditions.
NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually agreed by and between the undersigned parties as follows:
SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS.
1.1 Recitals.
All of the recitals are incorporated herein by reference.
1.2 Definitions.
Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the
General Conditions. If there is a conflict between the definitions in this Construction Contract and
in the General Conditions, the definitions in this Construction Contract shall prevail.
SECTION 2 THE PROJECT.
The Project is the Repair at Mayfield Reservoir ("Project").
SECTION 3 THE CONTRACT DOCUMENTS.
3.1 List of Documents.
The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist
of the following documents which are on file with the Purchasing Division and are hereby incorporated by
reference.
1) Change Orders
2) Field Change Orders
6 Rev. July 2012
CONSTRUCTION CONTRACT
3) Contract
4) Project Plans and Drawings
5) Technical Specifications
6) Special Provisions (not applicable)
7) Notice Inviting Bids (not applicable)
8) Instructions to Bidders (not applicable)
9) General Conditions
10) Bidding Addenda (not applicable)
11) Invitation for Bids (not applicable)
12) Contractor's Bid/Non‐Collusion Affidavit (not applicable)
13) Reports listed in the Bidding Documents (not applicable)
14) Public Works Department’s Standard Drawings and Specifications dated 2007 and
updated from time to time
15) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards dated 2005
and updated from time to time
16) City of Palo Alto Traffic Control Requirements
17) City of Palo Alto Truck Route Map and Regulations
18) Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐
Qualification Checklist (if applicable)
19) Performance and Payment Bonds
20) Insurance Forms
21) URS Memorandum dated August 12, 2013
3.2 Order of Precedence.
For the purposes of construing, interpreting and resolving inconsistencies between and among the
provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the
preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City
shall have the sole power to decide which document or provision shall govern as may be in the best
interests of the City.
SECTION 4 THE WORK.
The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other
things necessary for Contractor to perform its obligations and complete the Project, including, without
7 Rev. July 2012
CONSTRUCTION CONTRACT
limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable
Code Requirements.
SECTION 5 PROJECT TEAM.
In addition to Contractor, City has retained, or may retain, consultants and contractors to provide
professional and technical consultation for the design and construction of the Project. The Project requires
that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of
the Project Team and other contractors retained by City to construct other portions of the Project.
SECTION 6 TIME OF COMPLETION.
6.1 Time Is of Essence.
Time is of the essence with respect to all time limits set forth in the Contract Documents.
6.2 Commencement of Work.
Contractor shall commence the Work on the date specified in City’s Notice to Proceed.
6.3 Contract Time.
Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be
completed no later than August 23, 2013.
6.4 Liquidated Damages.
6.4.1 Entitlement.
City and Contractor acknowledge and agree that if Contractor fails to fully and
satisfactorily complete the Work within the Contract Time, City will suffer, as a result of
Contractor’s failure, substantial damages which are both extremely difficult and
impracticable to ascertain. Such damages may include, but are not limited to:
(i) Loss of public confidence in City and its contractors and consultants.
(ii) Loss of public use of public facilities.
(iii) Extended disruption to public.
8 Rev. July 2012
CONSTRUCTION CONTRACT
6.4.2 Daily Amount.
City and Contractor have reasonably endeavored, but failed, to ascertain the actual
damage that City will incur if Contractor fails to achieve Substantial Completion of the
entire Work within the Contract Time. Therefore, the parties agree that in addition to all
other damages to which City may be entitled other than delay damages, in the event
Contractor shall fail to achieve Substantial Completion of the entire Work within the
Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per
day for each Day occurring after the expiration of the Contract Time until Contractor
achieves Substantial Completion of the entire Work. The liquidated damages amount is
not a penalty but considered to be a reasonable estimate of the amount of damages City
will suffer by delay in completion of the Work.
6.4.3 Exclusive Remedy.
City and Contractor acknowledge and agree that this liquidated damages provision shall
be City’s only remedy for delay damages caused by Contractor’s failure to achieve
Substantial Completion of the entire Work within the Contract Time.
6.4.4 Other Remedies.
City is entitled to any and all available legal and equitable remedies City may have where
City’s Losses are caused by any reason other than Contractor’s failure to achieve
Substantial Completion of the entire Work within the Contract Time.
6.5 Adjustments to Contract Time.
The Contract Time may only be adjusted for time extensions approved by City and agreed to by
Change Order executed by City and Contractor in accordance with the requirements of the
Contract Documents.
SECTION 7 COMPENSATION TO CONTRACTOR.
7.1 Contract Sum.
Contractor shall be compensated for satisfactory completion of the Work in compliance with the
Contract Documents in the not to exceed Contract Sum of Three Hundred Forty Thousand Dollars
($340,000).
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9 Rev. July 2012
CONSTRUCTION CONTRACT
7.2 Full Compensation.
The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor
and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover
all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen
difficulties or obstructions which may arise or be encountered in performance of the Work until
its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to
suspension or discontinuance of the Work. The Contract Sum may only be adjusted for Change
Orders issued, executed and satisfactorily performed in accordance with the requirements of the
Contract Documents.
7.3 Compensation for Extra or Deleted Work.
The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving
Extra Work or Deleted Work based on one or more of the following methods to be selected by
City:
1. Unit prices stated in the Contract Documents or agreed upon by City and Contractor,
which unit prices shall be deemed to include Contractor Markup and
Subcontractor/Sub‐subcontractor Markups permitted by this Section.
2. A lump sum agreed upon by City and Contractor, based on the estimated Allowable
Costs and Contractor Markup and Subcontractor Markup computed in accordance
with this Section.
3. Contractor’s Allowable Costs, plus Contractor Markup and Subcontractor Markups
applicable to such Extra Work computed in accordance with this Section.
Contractor Markup and Subcontractor/Sub‐subcontractor Markups set forth herein are the full
amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is
attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors
and Sub‐subcontractors, of every Tier. When using this payment methodology, Contractor
Markup and Subcontractor/Sub‐subcontractor Markups, which shall not be compounded, shall be
computed as follows:
7.3.1 Markup Self‐Performed Work.
10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be
performed by Contractor with its own forces.
7.3.2 Markup for Work Performed by Subcontractors.
15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be
performed by a first Tier Subcontractor.
SECTION 8 STANDARD OF CARE.
Contractor agrees that the Work shall be performed by qualified, experienced and well‐supervised
personnel. All services performed in connection with this Construction Contract shall be performed in a
manner consistent with the standard of care under California law applicable to those who specialize in
providing such services for projects of the type, scope and complexity of the Project.
10 Rev. July 2012
CONSTRUCTION CONTRACT
SECTION 9 INDEMNIFICATION.
9.1 Hold Harmless.
To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its
City Council, boards and commissions, officers, agents, employees, representatives and volunteers
(hereinafter collectively referred to as "Indemnitees"), through legal counsel acceptable to City,
from and against any and all Losses arising directly or indirectly from, or in any manner relating to
any of, the following:
(i) Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub‐
subcontractors, of any tier;
(ii) Performance or nonperformance by Contractor or its Subcontractors or Sub‐
subcontractors of any tier, of any of the obligations under the Contract Documents;
(iii) The construction activities of Contractor or its Subcontractors or Sub‐subcontractors, of
any tier, either on the Site or on other properties;
(iv) The payment or nonpayment by Contractor to any of its employees, Subcontractors or
Sub‐subcontractors of any tier, for Work performed on or off the Site for the Project; and
(v) Any personal injury, property damage or economic loss to third persons associated with
the performance or nonperformance by Contractor or its Subcontractors or Sub‐
subcontractors of any tier, of the Work.
However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses
resulting from the sole or active negligence or willful misconduct of the Indemnitee. Contractor
shall pay City for any costs City incurs to enforce this provision. Nothing in the Contract
Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor
against City or any other Indemnitee.
9.2 Survival.
The provisions of Section 9 shall survive the termination of this Construction Contract.
SECTION 10 NONDISCRIMINATION.
As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of
this Agreement, it shall not discriminate in the employment of any person because of the race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. Contractor acknowledges that it has read and understands
the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination
Requirements and the penalties for violation thereof, and will comply with all requirements of Section
2.30.510 pertaining to nondiscrimination in employment.
SECTION 11 INSURANCE AND BONDS.
On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance
and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions.
Failure to do so shall be deemed a material breach of this Construction Contract.
11 Rev. July 2012
CONSTRUCTION CONTRACT
SECTION 12 PROHIBITION AGAINST TRANSFERS.
City is entering into this Construction Contract based upon the stated experience and qualifications of the
Contractor and its subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign,
hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by
operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or
transfer without said consent shall be null and void.
The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of
Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor
is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of
Contractor, shall be construed as an assignment of this Construction Contract. Control means more than
fifty percent (50%) of the voting power of the corporation or other entity.
SECTION 13 NOTICES.
13.1 Method of Notice.
All notices, demands, requests or approvals to be given under this Construction Contract shall be given in
writing and shall be deemed served on the earlier of the following:
(i) On the date delivered if delivered personally;
(ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and
addressed as hereinafter provided;
(iii) On the date sent if sent by facsimile transmission;
(iv) On the date sent if delivered by electronic mail; or
(v) On the date it is accepted or rejected if sent by certified mail.
13.2 Notice Recipients.
All notices, demands or requests (including, without limitation, Claims) from Contractor to City
shall include the Project name and the number of this Construction Contract and shall be
addressed to City at:
To City: City of Palo Alto
City Clerk
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
Copy to: City of Palo Alto
Public Works Administration
250 Hamilton Avenue
Palo Alto, CA 94301
Attn:
Or
12 Rev. July 2012
CONSTRUCTION CONTRACT
City of Palo Alto
Utilities Engineering
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Romel Antonio
In addition, copies of all Claims by Contractor under this Construction Contract shall be provided
to the following:
Palo Alto City Attorney’s Office
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, California 94303
All Claims shall be delivered personally or sent by certified mail.
All notices, demands, requests or approvals from City to Contractor shall be addressed to:
DN Tanks, Inc.
351 Cypress Lane
El Cajon, CA 92020
13.3 Change of Address.
In the event of any change of address, the moving party shall notify the other party of the change
of address in writing. Each party may, by written notice only, add, delete or replace any
individuals to whom and addresses to which notice shall be provided.
SECTION 14 DISPUTE RESOLUTION.
14.1 Resolution of Contract Disputes.
Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section
14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial
court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set
forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such
Contract Disputes.
14.2 Resolution of Other Disputes.
14.2.1 Non‐Contract Disputes.
Contract Disputes shall not include any of the following:
(i) Penalties or forfeitures prescribed by statute or regulation imposed by a
governmental agency;
(ii) Third party tort claims for personal injury, property damage or death relating to
any Work performed by Contractor or its Subcontractors or Sub‐subcontractors
of any tier;
(iii) False claims liability under California Government Code Section 12650, et. seq.;
(iv) Defects in the Work first discovered by City after Final Payment by City to
Contractor;
(v) Stop notices; or
(vi) The right of City to specific performance or injunctive relief to compel
performance of any provision of the Contract Documents.
13 Rev. July 2012
CONSTRUCTION CONTRACT
14.2.2 Litigation, City Election.
Matters that do not constitute Contract Disputes shall be resolved by way of an action
filed in the Superior Court of the State of California, County of Santa Clara, and shall not
be subject to the Contract Dispute Resolution Process. However, the City reserves the
right, in its sole and absolute discretion, to treat such disputes as Contract Disputes.
Upon written notice by City of its election as provided in the preceding sentence, such
dispute shall be submitted by the parties and finally decided pursuant to the Contract
Dispute Resolution Process in the manner as required for Contract Disputes, including,
without limitation, City’s right under Paragraph 14.4.2 to defer resolution and final
determination until after Final Completion of the Work.
14.3 Submission of Contract Dispute.
14.3.1 By Contractor.
Contractors may commence the Contract Dispute Resolution Process upon City's written
response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.10 of the
General Conditions. Contractor shall submit a written Statement of Contract Dispute (as
set forth below) to City within seven (7) Days after City rejects all or a portion of
Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a
timely manner shall result in City’s decision by City on the Claim becoming final and
binding. Contractor’s Statement of Contract Dispute shall be signed under penalty of
perjury and shall state with specificity the events or circumstances giving rise to the
Contract Dispute, the dates of their occurrence and the asserted effect on the Contract
Sum and the Contract Time. The Statement of Contract Dispute shall include adequate
supporting data to substantiate the disputed Claim. Adequate supporting data for a
Contract Dispute relating to an adjustment of the Contract Time shall include both of the
following:
(i) All of the scheduling data required to be submitted by Contractor under the
Contract Documents to obtain extensions of time and adjustments to the
Contract Time and
(ii) A detailed, event‐by‐event description of the impact of each event on
completion of Work. Adequate data to support a Statement of Contract Dispute
involving an adjustment of the Contract Sum must include both of the following:
(a) A detailed cost breakdown and
(b) Supporting cost data in such form and including such information and
other supporting data as required under the Contract Documents for
submission of Change Order Requests and Claims.
14.3.2 By City.
City's right to commence the Contract Dispute Resolution Process shall arise at any time
following City's actual discovery of the circumstances giving rise to the Contract Dispute.
City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor.
A Statement of Contract Dispute submitted by City shall state the events or
circumstances giving rise to the Contract Dispute, the dates of their occurrence and the
damages or other relief claimed by City as a result of such events.
14.4 Contract Dispute Resolution Process.
The parties shall utilize each of the following steps in the Contract Dispute Resolution
Process in the sequence they appear below. Each party shall participate fully and in good
faith in each step in the Contract Dispute Resolution Process, and good faith effort shall
be a condition precedent to the right of each party to proceed to the next step in the
process.
14.4.1 Direct Negotiations.
Designated representatives of City and Contractor shall meet as soon as possible (but not
later than ten (10) Days after receipt of the Statement of Contract Dispute) in a good
14 Rev. July 2012
CONSTRUCTION CONTRACT
faith effort to negotiate a resolution to the Contract Dispute. Each party shall be
represented in such negotiations by an authorized representative with full knowledge of
the details of the Claims or defenses being asserted by such party in the negotiations,
and with full authority to resolve such Contract Dispute then and there, subject only to
City’s obligation to obtain administrative and/or City Council approval of any agreed
settlement or resolution. If the Contract Dispute involves the assertion of a right or claim
by a Subcontractor or Sub‐subcontractor, of any tier, against Contractor that is in turn
being asserted by Contractor against City (“Pass‐Through Claim”), then the Subcontractor
or Sub‐Subcontractor shall also have a representative attend the negotiations, with the
same authority and knowledge as described above. Upon completion of the meeting, if
the Contract Dispute is not resolved, the parties may either continue the negotiations or
any party may declare negotiations ended. All discussions that occur during such
negotiations and all documents prepared solely for the purpose of such negotiations shall
be confidential and privileged pursuant to California Evidence Code Sections 1119 and
1152.
14.4.2 Deferral of Contract Disputes.
Following the completion of the negotiations required by Paragraph 14.4.1, all
unresolved Contract Disputes shall be deferred pending Final Completion of the Project,
subject to City’s right, in its sole and absolute discretion, to require that the Contract
Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that
have been deferred until Final Completion shall be consolidated within a reasonable time
after Final Completion and thereafter pursued to resolution pursuant to this Contract
Dispute Resolution Process. The parties can continue informal negotiations of Contract
Disputes; provided, however, that such informal negotiations shall not be alter the
provisions of the Agreement deferring final determination and resolution of unresolved
Contract Disputes until after Final Completion.
14.4.3 Mediation.
If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph
14.4.1, the parties shall submit the Contract Dispute to non‐binding mediation before a
mutually acceptable third party mediator.
.1 Qualifications of Mediator. The parties shall endeavor to select a mediator who
is a retired judge or an attorney with at least five (5) years of experience in
public works construction contract law and in mediating public works
construction disputes. In addition, the mediator shall have at least twenty (20)
hours of formal training in mediation skills.
.2 Submission to Mediation and Selection of Mediator. The party initiating
mediation of a Contract Dispute shall provide written notice to the other party
of its decision to mediate. In the event the parties are unable to agree upon a
mediator within fifteen (15) Days after the receipt of such written notice, then
the parties shall submit the matter to the American Arbitration Association
(AAA) at its San Francisco Regional Office for selection of a mediator in
accordance with the AAA Construction Industry Mediation Rules.
.3 Mediation Process. The location of the mediation shall be at the offices of City.
The costs of mediation shall be shared equally by both parties. The mediator
shall provide an independent assessment on the merits of the Contract Dispute
and recommendations for resolution. All discussions that occur during the
mediation and all documents prepared solely for the purpose of the mediation
shall be confidential and privileged pursuant to California Evidence Code
Sections 1119 and 1152.
15 Rev. July 2012
CONSTRUCTION CONTRACT
14.4.4 Binding Arbitration.
If the Contract Dispute is not resolved by mediation, then any party may submit the
Contract Dispute for final and binding arbitration pursuant to the provisions of California
Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be
final and may be entered as a judgment by any court of competent jurisdiction. Such
arbitration shall be conducted in accordance with the following:
.1 Arbitration Initiation. The arbitration shall be initiated by filing a complaint in
arbitration in accordance with the regulations promulgated pursuant to
California Public Contract Code Section 10240.5.
.2 Qualifications of the Arbitrator. The arbitrator shall be approved by all parties.
The arbitrator shall be a retired judge or an attorney with at least five (5) years
of experience in public works construction contract law and in arbitrating public
works construction disputes. In addition, the arbitrator shall have at least
twenty (20) hours of formal training in arbitration skills. In the event the parties
cannot agree upon an arbitrator, the provisions of California Public Contract
Code Section 10240.3 shall be followed in selecting an arbitrator possessing the
qualifications required herein.
.3 Hearing Days and Location. Arbitration hearings shall be held at the offices of
City and shall, except for good cause shown to and determined by the arbitrator,
be conducted on consecutive business days, without interruption or
continuance.
.4 Hearing Delays. Arbitration hearings shall not be delayed except upon good
cause shown.
.5 Recording Hearings. All hearings to receive evidence shall be recorded by a
certified stenographic reporter, with the costs thereof borne equally by City and
Contractor and allocated by the arbitrator in the final award.
.6 Limitation of Depositions. The parties may conduct discovery in accordance
with the provisions of section 10240.11 of the Public Contract Code; provided,
however, that depositions shall be limited to both of the following:
(i) Ten (10) percipient witnesses for each party and 5 expert witnesses per
party.
Upon a showing of good cause, the arbitrator may increase the number of
permitted depositions. An individual who is both percipient and expert shall, for
purposes of applying the foregoing numerical limitation only, be deemed an
expert. Expert reports shall be exchanged prior to receipt of evidence, in
accordance with the direction of the arbitrator, and expert reports (including
initial and rebuttal reports) not so submitted shall not be admissible as
evidence.
.7 Authority of the Arbitrator. The arbitrator shall have the authority to hear
dispositive motions and issue interim orders and interim or executory awards.
16 Rev. July 2012
CONSTRUCTION CONTRACT
.8 Waiver of Jury Trial. Contractor and City each voluntarily waives its right to a
jury trial with respect to any Contract Dispute that is subject to binding
arbitration in accordance with the provisions of this Paragraph 14.4.4.
Contractor shall include this provision in its contracts with its Subcontractors
who provide any portion of the Work.
14.5 Non‐Waiver.
Participation in the Contract Dispute Resolution Process shall not waive, release or compromise
any defense of City, including, without limitation, any defense based on the assertion that the
rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by
Contractor due to Contractor’s failure to comply with the Contract Documents, including, without
limitation, Contractor’s failure to comply with any time periods for providing notice of requests
for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting
documentation of Claims.
SECTION 15 DEFAULT.
15.1 Notice of Default.
In the event that City determines, in its sole discretion, that Contractor has failed or refused to
perform any of the obligations set forth in the Contract Documents, or is in breach of any
provision of the Contract Documents, City may give written notice of default to Contractor in the
manner specified for the giving of notices in the Construction Contract.
15.2 Opportunity to Cure Default.
Except for emergencies, Contractor shall cure any default in performance of its obligations under
the Contract Documents within two (2) Days (or such shorter time as City may reasonably require)
after receipt of written notice. However, if the breach cannot be reasonably cured within such
time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as
City may reasonably require) and will diligently and continuously prosecute such cure to
completion within a reasonable time, which shall in no event be later than ten (10) Days after
receipt of such written notice.
SECTION 16 CITY'S RIGHTS AND REMEDIES.
16.1 Remedies Upon Default.
If Contractor fails to cure any default of this Construction Contract within the time period set forth
above in Section 15, then City may pursue any remedies available under law or equity, including,
without limitation, the following:
16.1.1 Delete Certain Services.
City may, without terminating the Construction Contract, delete certain portions of the Work,
reserving to itself all rights to Losses related thereto.
16.1.2 Perform and Withhold.
City may, without terminating the Construction Contract, engage others to perform the Work or
portion of the Work that has not been adequately performed by Contractor and withhold the cost
thereof to City from future payments to Contractor, reserving to itself all rights to Losses related
thereto.
16.1.3 Suspend The Construction Contract.
City may, without terminating the Construction Contract and reserving to itself all rights to Losses
related thereto, suspend all or any portion of this Construction Contract for as long a period of
time as City determines, in its sole discretion, appropriate, in which event City shall have no
17 Rev. July 2012
CONSTRUCTION CONTRACT
obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor
for damages if City directs Contractor to resume Work.
16.1.4 Terminate the Construction Contract for Default.
City shall have the right to terminate this Construction Contract, in whole or in part, upon the
failure of Contractor to promptly cure any default as required by Section 15. City’s election to
terminate the Construction Contract for default shall be communicated by giving Contractor a
written notice of termination in the manner specified for the giving of notices in the Construction
Contract. Any notice of termination given to Contractor by City shall be effective immediately,
unless otherwise provided therein.
16.1.5 Invoke the Performance Bond.
City may, with or without terminating the Construction Contract and reserving to itself all rights to
Losses related thereto, exercise its rights under the Performance Bond.
16.1.6 Additional Provisions.
All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in
addition to those rights and remedies available in law or in equity. Designation in the Contract
Documents of certain breaches as material shall not waive the City’s authority to designate other
breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the
City from terminating the Agreement for breaches that are not material. City’s determination of
whether there has been noncompliance with the Construction Contract so as to warrant exercise
by City of its rights and remedies for default under the Construction Contract, shall be binding on
all parties. No termination or action taken by City after such termination shall prejudice any other
rights or remedies of City provided by law or equity or by the Contract Documents upon such
termination; and City may proceed against Contractor to recover all liquidated damages and
Losses suffered by City.
16.2 Delays by Sureties.
Without limiting to any of City’s other rights or remedies, City has the right to suspend the
performance of the Work by Contractor’s sureties in the event of any of the following:
(i) The sureties’ failure to begin Work within a reasonable time in such manner as to insure
full compliance with the Construction Contract within the Contract Time;
(ii) The sureties’ abandonment of the Work;
(iii) If at any time City is of the opinion the sureties’ Work is unnecessarily or unreasonably
delaying the Work;
(iv) The sureties’ violation of any terms of the Construction Contract;
(v) The sureties’ failure to perform according to the Contract Documents; or
(vi) The sureties’ failure to follow City’s instructions for completion of the Work within the
Contract Time.
16.3 Damages to City.
16.3.1 For Contractor's Default.
City will be entitled to recovery of all Losses under law or equity in the event of
Contractor’s default under the Contract Documents.
16.3.2 Compensation for Losses.
In the event that City's Losses arise from Contractor’s default under the Contract Documents, City
shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the
Project. If City incurs Losses due to Contractor’s default, then the amount of Losses shall be
deducted from the amounts withheld. Should the amount withheld exceed the amount deducted,
the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the
Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the
difference and shall promptly remit same to City.
18 Rev. July 2012
CONSTRUCTION CONTRACT
16.4 Suspension by City for Convenience.
City may, at any time and from time to time, without cause, order Contractor, in writing, to
suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an
aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as
a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s
expense, comply with the order and take all reasonable steps to minimize costs allocable to the
Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if
any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered
by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume
and continue with the Work. A Change Order will be issued to cover any adjustments of the
Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order
shall not be the exclusive method for City to stop the Work.
16.5 Termination Without Cause.
City may, at its sole discretion and without cause, terminate this Construction Contract in part or
in whole by giving thirty (30) Days written notice to Contractor. The compensation allowed under
this Paragraph 16.5 shall be the Contractor’s sole and exclusive compensation for such
termination and Contractor waives any claim for other compensation or Losses, including, but not
limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential,
direct, indirect or incidental damages of any kind resulting from termination without cause.
16.5.1 Compensation.
Following such termination and within forty‐five (45) Days after receipt of a billing from
Contractor seeking payment of sums authorized by this Paragraph 16.5, City shall pay the
following to Contractor as Contractor’s sole compensation for performance of the Work :
.1 For Work Performed. The amount of the Contract Sum allocable to the portion
of the Work properly performed by Contractor as of the date of termination,
less sums previously paid to Contractor.
.2 For Close‐out Costs. Reasonable costs of Contractor and its Subcontractors and
Sub‐subcontractors for:
(i) Demobilizing and
(ii) Administering the close‐out of its participation in the Project (including,
without limitation, all billing and accounting functions, not including
attorney or expert fees) for a period of no longer than thirty (30) Days
after receipt of the notice of termination.
.3 For Fabricated Items. Previously unpaid cost of any items delivered to the
Project Site which were fabricated for subsequent incorporation in the Work.
16.5.2 Subcontractors.
Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts
permitting termination for convenience by Contractor on terms that are consistent with this
Construction Contract and that afford no greater rights of recovery against Contractor than are
afforded to Contractor against City under this Section.
19 Rev. July 2012
CONSTRUCTION CONTRACT
16.6 Contractor’s Duties Upon Termination.
Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the
notice directs otherwise, do the following:
(i) Immediately discontinue the Work to the extent specified in the notice;
(ii) Place no further orders or subcontracts for materials, equipment, services or facilities,
except as may be necessary for completion of such portion of the Work that is not
discontinued;
(iii) Provide to City a description, in writing no later than fifteen (15) days after receipt of the
notice of termination, of all subcontracts, purchase orders and contracts that are
outstanding, including, without limitation, the terms of the original price, any changes,
payments, balance owing, the status of the portion of the Work covered and a copy of
the subcontract, purchase order or contract and any written changes, amendments or
modifications thereto, together with such other information as City may determine
necessary in order to decide whether to accept assignment of or request Contractor to
terminate the subcontract, purchase order or contract;
(iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions
thereof, that City elects to accept by assignment and cancel, on the most favorable terms
reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,
that City does not elect to accept by assignment; and
(v) Thereafter do only such Work as may be necessary to preserve and protect Work already
in progress and to protect materials, plants, and equipment on the Project Site or in
transit thereto.
SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES.
17.1 Contractor’s Remedies.
Contractor may terminate this Construction Contract only upon the occurrence of one of the
following:
17.1.1 For Work Stoppage.
The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any
Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of
an order of a court or other public authority other than City having jurisdiction or due to an act of
government, such as a declaration of a national emergency making material unavailable. This
provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension
notice issued either for cause or for convenience.
17.1.2 For City's Non‐Payment.
If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of
notice from Contractor, Contractor may terminate the Construction Contract (30) days following a
second notice to City of Contractor’s intention to terminate the Construction Contract.
17.2 Damages to Contractor.
In the event of termination for cause by Contractor, City shall pay Contractor the sums provided
for in Paragraph 16.5.1 above. Contractor agrees to accept such sums as its sole and exclusive
compensation and agrees to waive any claim for other compensation or Losses, including, but not
limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential,
direct, indirect and incidental damages, of any kind.
SECTION 18 ACCOUNTING RECORDS.
18.1 Financial Management and City Access.
Contractor shall keep full and detailed accounts and exercise such controls as may be necessary
for proper financial management under this Construction Contract in accordance with generally
20 Rev. July 2012
CONSTRUCTION CONTRACT
accepted accounting principles and practices. City and City's accountants during normal business
hours, may inspect, audit and copy Contractor's records, books, estimates, take‐offs, cost reports,
ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase
orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these
documents for a period of three (3) years after the later of (i) final payment or (ii) final resolution
of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by
law.
18.2 Compliance with City Requests.
Contractor's compliance with any request by City pursuant to this Section 18 shall be a condition
precedent to filing or maintenance of any legal action or proceeding by Contractor against City
and to Contractor's right to receive further payments under the Contract Documents. City many
enforce Contractor’s obligation to provide access to City of its business and other records referred
to in Section 18.1 for inspection or copying by issuance of a writ or a provisional or permanent
mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such
court, without the necessity of oral testimony.
SECTION 19 INDEPENDENT PARTIES.
Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’
of the other party. City, its officers or employees shall have no control over the conduct of Contractor or
its respective agents, employees, subconsultants, or subcontractors, except as herein set forth.
SECTION 20 NUISANCE.
Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in
connection in the performance of services under this Construction Contract.
SECTION 21 PERMITS AND LICENSES.
Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall
provide, procure and pay for all licenses, permits, and fees, required by the City or other government
jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses
for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation
shall be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set
forth in the licenses or permits issued by other agencies.
SECTION 22 WAIVER.
A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be
deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition
contained herein, whether of the same or a different character.
SECTION 23 GOVERNING LAW.
This Construction Contract shall be construed in accordance with and governed by the laws of the State of
California.
21 Rev. July 2012
CONSTRUCTION CONTRACT
SECTION 24 COMPLETE AGREEMENT.
This Agreement represents the entire and integrated agreement between the parties and supersedes all
prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended
only by a written instrument, which is signed by the parties.
SECTION 25 SURVIVAL OF CONTRACT.
The provisions of the Construction Contract which by their nature survive termination of the Construction
Contract or Final Completion, including, without limitation, all warranties, indemnities, payment
obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect
after Final Completion or any termination of the Construction Contract.
SECTION 26 PREVAILING WAGES.
This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the
performance and implementation of the Project, because the City, pursuant to its authority as a chartered
city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the
exemption from the state prevailing wage requirement for this Project and declares that the Project is
funded one hundred percent (100%) by the City of Palo Alto.
SECTION 27 NON APPROPRIATION.
This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto
Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the
event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time
within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds
for this Construction Contract are no longer available. This section shall take precedence in the event of a
conflict with any other covenant, term, condition, or provision of this Agreement.
SECTION 28 AUTHORITY.
The individuals executing this Agreement represent and warrant that they have the legal capacity and
authority to do so on behalf of their respective legal entities.
SECTION 29 ATTORNEY FEES.
Each Party shall bear its own costs, including attorney’s fees through the completion of mediation. If the
claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2,
the prevailing party in any action brought to enforce the provision of this Agreement may recover its
reasonable costs and attorney’s fees expended in connection with that action. The prevailing party shall be
entitled to recover an amount equal to the fair market value of legal services provided by attorneys
employed by it as well as any attorney’s’ fees paid to third parties.
SECTION 30 COUNTERPARTS
This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,
constitute a single binding agreement.
SECTION 31 SEVERABILITY.
In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not be affected.
IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the
date and year first above written.
CITY OF PALO ALTO
City M anager
Name: William J. Hendrickson
APPROVED AS TO FORM: Title: Executive Vice President
Sen ior Asst. City Attorney
22 Rev. July 2012
CONSTRUCTION CONTRACT
California AII·Purpose Acknowledgment
State of California
Cou nty of _____ "'S"'a"'nC!O"'i"'e"'g"'o ____ _
o n _----'S"'e"'p"'te"'-m=be"'r--'4!.,,-'2~O'_'1_"3'_____ before me, ____ ---:-?R"'o':-'-n ,cK",1 u"c]t",hcO;' ",N"o!"tac-rY:,-;,;;P;,u",b",,1 ic"----_______ _
Name and Title of the Officer
personally appeared ____ --'W=ill"'ia"'m"-';'J;-, ""H"'e"'nd"'r,;'ic"'k"'s"'o"'n _________________ _
Name of Signer
who proved to me on the basis of satisfactory evidence to be the person(s1 whose name(s1 isiafe subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacityfje&), and that by his/her/their signature(s1 on the instrument the person(s1, or the entity upon behalf of
which the person(s1 acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand and official seal.
(Seal)