Construction Agreement

City of Glendale — Regular Meeting (2021-06-08)

Extracted text (via ocr_local) 27918 characters

CONSTRUCTION AGREEMENT

This Construction Agreement ("Agreement") is entered into and effective between the CITY OF
GLENDALE, an Arizona municipal corporation ("City"), and Southwest Sawcutting & Milling, LLC dba

SWB Paving, an Arizona corporation (“Contractor") as of the day of ,20_.
RECITALS
A. City intends to undertake a project for the benefit of the public and with public funds that is

more fully set forth in the Notice to Contractors and the attached Exhibit A ("Project");

B. City desires to retain the services of Contractor to perform those specific duties and produce
the specific work as set forth in the Project, the plans and specifications, the Information for
Bidders, and the Maricopa Association of Governments (“MAG”) General and Supplemental
Conditions and Provisions;

Cc. City and Contractor desire to memorialize their agreement with this document.

AGREEMENT

In consideration of the Recitals, which are confirmed as true and correct and incorporated by this
reference, the mutual promises and covenants contained in this Agreement, and other good and
valuable consideration, City and Contractor agree as follows:

1. Project.

1.1

1.2

1.3

Scope. Contractor will provide all services and material necessary to assure the Project
is completed timely and efficiently consistent with Project requirements, including, but
not limited to, working in close interaction and interfacing with City and its designated
employees, and working closely with others, including other contractors, providers or
consultants retained by City.

Documents. The following documents are, by this reference, entirely incorporated into
this Agreement and attached Exhibits as though fully set forth herein:

(A) Notice to Contractors;

(B) Information for Bidders;

(D) Proposal;

(E) Bid Bond;

(F) Payment Bond;

(G) Performance Bond;

(H) Certificate of Insurance;

(0) Appendix; and

(J) Plans and Addenda thereto.

Should a conflict exist between this Agreement (and its attachments), and any of the
incorporated documents as listed above, the provisions of this Agreement shall govern.

Project Team.

(A) Project Manager. Contractor will designate an employee as Project Manager
with sufficient training, knowledge, and experience to, in the City's opinion, to
complete the project and handle all aspects of the Project such that the work

(B)

(C)

produced by Contractor is consistent with applicable standards as detailed in
this Agreement.

Project Team.

(1) The Project manager and all other employees assigned to the project by
Contractor will comprise the "Project Team."

(2) Project Manager will have responsibility for and will supervise all other
employees assigned to the project by Contractor.

Sub-contractors.

(1) Contractor may engage specific technical contractor (each a "Sub-
contractor") to furnish certain service functions.

(2) Contractor will remain fully responsible for Sub-contractor's services.

(3) Sub-contractors must be approved by the City, unless the Sub-contractor
was previously mentioned in the response to the solicitation.

(4) Contractor shall certify by letter that contracts with Sub-contractors have
been executed incorporating requirements and standards as set forth in
this Agreement.

Schedule. The Project will be undertaken in a manner that ensures it is completed in a timely
and efficient manner. The Project shall be completed within the term detailed in Section 14 of
this Agreement.

Contractor’s Work.

3.1

3.2

Standard. Contractor must perform services in accordance with the standards of due
diligence, care, and quality prevailing among contractors having substantial experience
with the successful furnishing of services and materials for projects that are equivalent
in size, scope, quality, and other criteria under the Project and identified in this
Agreement.

Licensing. Contractor warrants that:

(B)

Contractor and Sub-contractors will hold all appropriate and required licenses,
registrations and other approvals necessary for the lawful furnishing of services
C‘Approvals"); and

Neither Contractor nor any Sub-contractor has been debarred or otherwise
legally excluded from contracting with any federal, state, or local governmental
entity (‘Debarment").

(1) City is under no obligation to ascertain or confirm the existence or
issuance of any Approvals or Debarments or to examine Contractor's
contracting ability.

(2) Contractor must notify City immediately if any Approvals or Debarment
changes during the Agreement's duration and the failure of the
Contractor to notify City as required will constitute a material default of
this Agreement.

3.3

3.4

3.5

3.6

3.7.

Compliance. Services and materials will be furnished in compliance with applicable
federal, state, county and local statutes, rules, regulations, ordinances, building codes,
life safety codes, or other standards and criteria designated by City.

Contractor must not discriminate against any employee or applicant for employment on
the basis of race, religion, color sex or national origin. Contractor must develop,
implement and maintain non-discrimination policies and post the policies in
conspicuous places visible to employees and applicants for employment. Contractor
will require any Sub-contractor to be bound to the same requirements as stated within
this section.

Coordination; Interaction.

(A) If the City determines that the Project requires the coordination of professional
services or other providers, Contractor will work in close consultation with City
to proactively interact with any other contractors retained by City on the Project
("Coordinating Entities").

(B) Subject to any limitations expressly stated in the budget, Contractor will meet to
review the Project, schedules, budget, and in-progress work with Coordinating
Entities and the City as often and for durations as City reasonably considers
necessary in order to ensure the timely work delivery and Project completion.

(C) If the Project does not involve Coordinating Entities, Contractor will proactively
interact with any other contractors when directed by City to obtain or
disseminate timely information for the proper execution of the Project.

Hazardous Substances. Contractor is responsible for the appropriate handling,
disposal of, and if necessary, any remediation and all losses and damages to the City,
associated with the use or release of hazardous substances by Contractor in connection
with completion of the Project.

Warranties. At any time within two years after completion of the Project, Contractor
must, at Contractor’s sole expense and within 20 days of written notice from the City,
uncover, correct and remedy all defects in Contractor's work. City will accept a
manufacturer’s warranty on approved equipment as satisfaction of the Contractor’s
warranty under this subsection.

Bonds. Upon execution of this Agreement, and if applicable, Contractor must furnish
Payment and Performance bonds as required under A.R.S. § 34-608. As the city
anticipates an annual term expenditure of $1,000,000, the bonds shall be issued at
$1,000,000 per term. New bonds will be required each time the contract is renewed. If,
during any term, the value of work is expected to exceed $1,000,000, the Contractor
will increase the value of the bonds at a minimum in an equivalent amount expected to
the increase in value of the work, but no less than $100,000.

Compensation for the Project.

4.1

4.2

Compensation. Contractor's compensation for the Project, including those furnished by
its Sub-contractors will not exceed $5,000,000, as specifically detailed in the
Contractor's bid and set forth in Exhibit B (‘Compensation’).

Change in Scope of Project. The Compensation may be equitably adjusted if the
originally contemplated scope of services as outlined in the Project is significantly
modified by the City.

Adjustments to the Scope or Compensation require a written amendment to
this Agreement and may require City Council approval.

Additional services which are outside the scope of the Project and not contained
in this Agreement may not be performed by the Contractor without prior written
authorization from the City.

Notwithstanding the incorporation of the Exhibits to this Agreement by
reference, should any conflict arise between the provisions of this Agreement
and the provisions found in the Exhibits and accompanying attachments, the
provisions of this Agreement shall take priority and govern the conduct of the
parties.

Billings and Payment.

5.1 Applications.

(A) The Contractor will submit monthly invoices (each, a "Payment Application") to
City's Project Manager and City will remit payments based upon the Payment
Application as stated below.

(B) The period covered by each Payment Application wil! be one calendar month
ending on the last day of the month.

5.2 Payment.

(A) After a full and complete Payment Application is received, City will process and
remit payment within thirty (30) days.

(B) Payment may be subject to or conditioned upon City's receipt of:

(1) Completed work generated by Contractor and its Sub-contractors; and

(2) Unconditional waivers and releases on final payment from Sub-
contractors as City may reasonably request to assure the Project will be
free of claims arising from required performances under this Agreement.

5.3 Review and Withholding. City's Project Manager will timely review and certify Payment
Applications.

(A)

(B)

(C)

(D)

Termination.

If the Payment Application is rejected, the Project Manager will issue a written
listing of the items not approved for payment.

City may withhold an amount sufficient to pay expenses that City reasonably
expects to incur in correcting the deficiency or deficiencies rejected for payment.

Contractor will provide, by separate cover, and concurrent with the execution of
this Agreement, all required financial information to the City, including City of
Glendale Transaction Privilege License and Federal Taxpayer identification
numbers.

City will temporarily withhold Compensation amounts as required by A.R.S. 34-
221(C).

6.1 For Convenience. City may terminate this Agreement for convenience, without cause,

by delivering a written termination notice stating the effective termination date, which
may not be less than fifteen (15) days following the date of delivery.

(A)

(B)

Contractor will be equitably compensated any services and materials furnished
prior to receipt of the termination notice and for reasonable costs incurred.

Contractor will also be similarly compensated for any approved effort expended
and approved costs incurred that are directly associated with Project closeout
and delivery of the required items to the City.

6.2 For Cause. City may terminate this Agreement for cause if Contractor fails to cure any
breach of this Agreement within seven (7) days after receipt of written notice specifying
the breach.

(A)

(B)

Insurance.

Contractor will not be entitled to further payment until after City has determined
its damages. If City's damages resulting from the breach, as determined by
City, are less than the equitable amount due but not paid Contractor for Service
and Repair furnished, City will pay the amount due to Contractor, less City's
damages.

If City's direct damages exceed amounts otherwise due to Contractor,
Contractor must pay the difference to City immediately upon demand; however,
Contractor will not be subject to consequential damages more than $1,000,000
or the amount of this Agreement, whichever is greater.

7.1 Requirements. Contractor must obtain and maintain the following insurance ("Required
Insurance’):

(A)

(B)

(C)

Contractor and Sub-contractors. Contractor, and each Sub-contractor
performing work or providing materials related to this Agreement must procure
and maintain the insurance coverages described below (collectively,
“Contractor's Policies"), until each Parties’ obligations under this Agreement are
completed.

General Liability.

(1) Contractor must at all times relevant hereto carry a commercial general
liability policy with a combined single limit of at least $1,000,000 per
occurrence and $2,000,000 annual aggregate.

(2) Sub-contractors at all times relevant hereto carry a general commercial
liability policy with a combined single limit of at least $1,000,000 per
occurrence.

(3) This commercial general liability insurance must include independent
contractors' liability, contractual liability, broad form property coverage,
products and completed operations, XCU hazards if requested by the
City, and a separation of insurance provision.

(4) These limits may be met through a combination of primary and excess
liability coverage.

Auto. A business auto policy providing a liability limit of at least $1,000,000 per

(D)

(E)

(F)

(G)

(H)

(I)

accident for Contractor and 1,000,000 per accident for Sub-contractors and
covering owned, non-owned and hired automobiles.

Workers' Compensation and Employer's Liability. A workers' compensation and
employer's liability policy providing at least the minimum benefits required by
Arizona law.

Equipment Insurance. Contractor must secure, pay for, and maintain all-risk
insurance as necessary to protect the City against loss of owned, non-owned,
rented or leased capital equipment and tools, equipment and scaffolding,
staging, towers and forms owned or rented by Contractor or its Sub-contractors.

Notice of Changes. Contractor's Policies must provide for not less than 30 days'
advance written notice to City Representative of:

(1) Cancellation or termination of Contractor or Sub-contractor's Policies;

(2) Reduction of the coverage limits of any of Contractor or and Sub-
contractor's Policies; and

(3) Any other material modification of Contractor or Sub-contractor's
Policies related to this Agreement.

Certificates of Insurance.

(1) Within ten (10) business days after the execution of the Agreement,
Contractor must deliver to City Representative certificates of insurance
for each of Contractor and Sub-contractor's Policies, which will confirm
the existence or issuance of Contractor and Sub-contractor's Policies in
accordance with the provisions of this section, and copies of the
endorsements of Contractor and Sub-contractor's Policies in accordance
with the provisions of this section.

(2) City is and will be under no obligation either to ascertain or confirm the
existence or issuance of Contractor and Sub-contractor's Policies, or to
examine Contractor and Sub-contractor's Policies, or to inform
Contractor or Sub-contractor in the event that any coverage does not
comply with the requirements of this section.

(3) Contractor's failure to secure and maintain Contractor Policies and to
assure Sub-contractor policies as required will constitute a material
default under this Agreement.

Other Contractors or Vendors.

(1) Other contractors or vendors that may be contracted by Contractor with
in connection with the Project must procure and maintain insurance
coverage as is appropriate to their particular agreement.

(2) This insurance coverage must comply with the requirements set forth
above for Contractor's Policies (e.g., the requirements pertaining to
endorsements to name the parties as additional insured parties and
certificates of insurance).

Policies. Except with respect to workers' compensation and employer's liability
coverages, the City must be named and properly endorsed as additional
insureds on all liability policies required by this section.

7.2

7.3

7.4

(1) The coverage extended to additional insureds must be primary and must
not contribute with any insurance or self-insurance policies or programs
maintained by the additional insureds.

(2) All insurance policies obtained pursuant to this section must be with
companies legally authorized to do business in the State of Arizona and
acceptable to all parties.

Sub-contractors.

(A)

(B)

(C)

Contractor must also cause its Sub-contractors to obtain and maintain the
Required Insurance.

City may consider waiving these insurance requirements for a specific Sub-
contractor if City is satisfied the amounts required are not commercially
available to the Sub-contractor and the insurance the Sub-contractor does have
is appropriate for the Sub-contractor's work under this Agreement.

Contractor and Sub-contractors must provide to the City proof of Required
Insurance whenever requested.

Indemnification.

(A)

(B)

(C)

To the fullest extent permitted by law, Contractor must defend, indemnify, and
hold harmless City and its elected officials, officers, employees and agents
(each, an "Indemnified Party," collectively, the "Indemnified Parties"), for, from,
and against any and all claims, demands, actions, damages, judgments,
settlements, personal injury (including sickness, disease, death, and bodily
harm), property damage (including loss of use), infringement, governmental
action and all other losses and expenses, including attorneys’ fees and litigation
expenses (each, a "Demand or Expense"; collectively, "Demands or Expenses")
asserted by a third-party (i.e. a person or entity other than City or Contractor)
and that arises out of or results from the breach of this Agreement by the
Contractor or the Contractor’s negligent actions, errors or omissions (including
any Sub-contractor or other person or firm employed by Contractor), whether
sustained before or after completion of the Project.

This indemnity and hold harmless policy applies even if a Demand or Expense is
in part due to the Indemnified Party's negligence or breach of a responsibility
under this Agreement, but in that event, Contractor shall be liable only to the
extent the Demand or Expense results from the negligence or breach of a
responsibility of Contractor or of any person or entity for whom Contractor is
responsible.

Contractor is not required to indemnify any Indemnified Parties for, from, or
against any Demand or Expense resulting from the Indemnified Party's sole
negligence or other fault solely attributable to the Indemnified Party.

Waiver of Subrogation. Contractor waives, and will require any Subcontractor to waive,
all rights of subrogation against the City to the extent of all losses or damages covered
by any policy of insurance.

E-verify, Records and Audits. To the extent applicable under A.R.S. § 41-4401, the Contractor
warrant their compliance and that of its subcontractors with all federal immigration laws and
regulations that relate to their employees and compliance with the E-verify requirements under

10.

11.

A.R.S. § 23-214(A). The Contractor or subcontractor’s breach of this warranty shall be deemed
a material breach of the Agreement and may result in the termination of the Agreement by the
City under the terms of this Agreement. The City retains the legal right to randomly inspect the
papers and records of the other party to ensure that the other party is complying with the
above-mentioned warranty. The Contractor and subcontractor warrant to keep their respective
papers and records open for random inspection during normal business hours by the other
party. The parties shall cooperate with the City’s random inspections, including granting the
inspecting party entry rights onto their respective properties to perform the random inspections
and waiving their respective rights to keep such papers and records confidential.

No Boycott of Israel. To the extent A.R.S § 35-393 through § 35-393.03 are applicable, the
parties hereby certify that they are not currently engaged in, and agree for the duration of the
Agreement to not engage in, a boycott of goods or services from Israel, as that term is defined
iN A.R.S § 35-393.

Conflict. Contractor acknowledges this Agreement is subject to A.R.S. § 38-511, which allows
for cancellation of this Agreement in the event any person who is significantly involved in
initiating, negotiating, securing, drafting, or creating the Agreement on City's behalf is also an
employee, agent, or consultant of any other party to this Agreement.

Notices.

11.1 A notice, request or other communication that is required or permitted under this
Agreement (each a "Notice") will be effective only if:

(A) The Notice is in writing, and

(B) Delivered in person or by private express overnight delivery service (delivery
charges prepaid), certified or registered mail (return receipt requested).

(1) Received on a business day, or before 5:00 p.m., at the address for
Notices identified for the Party in this Agreement by U.S. Mail, hand
delivery, or overnight courier on or before 5:00 p.m.; or

(2) As of the next business day after receipt, if received after 5:00 p.m.

(D) The burden of proof of the place and time of delivery is upon the Party giving the
Notice.

(E) Digitalized signatures and copies of signatures will have the same effect as
original signatures.

11.2 Representatives.

(A) Contractor. Contractor's representative ("Contractor's Representative")
authorized to act on Contractor's behalf with respect to the Project, and his or
her address for Notice delivery is:

SWB Paving

Attn: John Zyadet

2115 West Melinda Lane
Phoenix, Arizona 85022

12.

13.

(B)

(C)

(D)

City. City's representative ("City's Representative") authorized to act on City's
behalf, and his or her address for Notice delivery is:

City of Glendale

Attn: Dan Gerhard

5850 West Glendale Avenue
Glendale, Arizona 85301

With required copies to:

City of Glendale City of Glendale

City Manager City Attorney

5850 West Glendale Avenue 5850 West Glendale Avenue
Glendale, Arizona 85301 Glendale, Arizona 85301

Concurrent Notices.

(1) All notices to City's representative must be given concurrently to City
Manager and City Attorney.

(2) A notice will not be considered to have been received by City's
representative until the time that it has also been received by City
Manager and City Attorney.

(3) City may appoint one or more designees for the purpose of receiving
notice by delivery of a
written notice to Contractor identifying the designee(s) and their
respective addresses for notices.

Changes. Contractor or City may change its representative or information on
Notice, by giving Notice of the change in accordance with this section at least
ten days prior to the change.

Financing Assignment. City may assign this Agreement to any City-affiliated entity, including a
non-profit corporation or other entity whose primary purpose is to own or manage the Project.

Entire Agreement; Survival; Counterparts; Signatures.

13.1

13.2

Integration. This Agreement contains, except as stated below, the entire agreement
between City and Contractor and supersedes all prior conversations and negotiations
between the parties regarding the Project or this Agreement.

(A)

(B)

(C)

Neither Party has made any representations, warranties or agreements as to any
matters concerning the Agreement's subject matter.

Representations, statements, conditions, or warranties not contained in this
Agreement will not be binding on the parties.

Any solicitation, addendums and responses submitted by the Contractor are
incorporated fully into this Agreement as Exhibit A. Any inconsistency between
Exhibit A and this Agreement will be resolved by the terms and conditions stated
in this Agreement.

Interpretation.

(A)

The parties fairly negotiated the Agreement's provisions to the extent they

14.

15.

16.

believed necessary and with the legal representation they deemed appropriate.

(B) The parties are of equal bargaining position and this Agreement must be
construed equally between the parties without consideration of which of the
parties may have drafted this Agreement.

13.3 Survival. Except as specifically provided otherwise in this Agreement each warranty,
representation, indemnification and hold harmless provision, insurance requirement,
and every other right, remedy and responsibility of a Party, will survive completion of
the Project, or the earlier termination of this Agreement.

13.4 Amendment. No amendment to this Agreement will be binding unless in writing and
executed by the parties. Any amendment may be subject to City Council approval.

13.5 Remedies. All rights and remedies provided in this Agreement are cumulative and the
exercise of any one or more right or remedy will not affect any other rights or remedies
under this Agreement or applicable law.

13.6 Severability. If any provision of this Agreement is voided or found unenforceable, that
determination will not affect the validity of the other provisions, and the voided or
unenforceable provision will be reformed to conform to applicable law.

13.7 Counterparts. This Agreement may be executed in counterparts, and all counterparts
will together comprise one instrument.

Term. The first term of this Agreement shall be for one year from and including the effective
date of this agreement. The City may, at its option and with the approval of the Contractor,
extend the term of this Agreement for an additional four (4) one (1) year periods, renewable on
an annual basis. Contractor will be notified in writing by the City of its intent to extend the
Agreement period at least (30) calendar days prior to the expiration of the original or any
renewal Agreement period. The City has no obligation to extend or renew this Agreement, and
any decision to do so is at the sole discretion of the City. Price adjustments will only be
reviewed during the Agreement renewal period and will be a determining factor for any renewal.
There are no automatic renewals of this Agreement. Contractor will be required to provide new
payment and performance bonds prior to execution of any term renewal as outlined in Section
3.7 of this agreement.

Dispute Resolution. Any controversy or claim arising out of or relating to this contract, or the
breach thereof, shall be settled by arbitration administered according to the American
Arbitration Association’s Commercial Arbitration Rules, and judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof.

Exhibits. The following exhibits, with reference to the term in which they are first referenced,
are incorporated by this reference.

Exhibit A Project
Exhibit B Compensation

;

The parties enter into this Agreement as of the date shown above.

City of Glendale,
an Arizona municipal corporation

By: Kevin R. Phelps
Its: City Manager

ATTEST:

City Clerk (SEAL)

APPROVED AS TO FORM:

City Attorney

Southwest Sawcutting & Milling, LLC
dba SWB Paving,
an Arizona limited liability corporation

By: John Zyadet
Its: President

WOMEN-OWNED/MINORITY BUSINESS [ ] YES [ ]NO
CITY OF GLENDALE TRANSACTION PRIVILEGE TAX NO.
FEDERAL TAXPAYER IDENTIFICATION NO.

EXHIBIT A
CONSTRUCTION AGREEMENT

This project will be for miscellaneous concrete and asphalt repairs throughout the City of
Glendale. Work orders will come from water services and transportation departments and will
consist of minor asphalt repairs, ADA ramps, sidewalks curb and gutter, etc.

EXHIBIT B
CONSTRUCTION AGREEMENT

COMPENSATION

METHOD AND AMOUNT OF COMPENSATION
By bid, including all services, materials and costs.
NOT-TO-EXCEED AMOUNT

The total amount of compensation paid to Contractor for full completion of all work required by the
Project during the entire five (5) year term of the Project must not exceed $5,000,000.

DETAILED PROJECT COMPENSATION

Compensation shall be based on unit rates costs detailed in the Bid Schedule. The total amount of
compensation to be paid under this agreement shall not exceed $5,000,000.