Construction Agreement

City of Glendale — Regular Meeting (2023-02-14)

Extracted text (via pymupdf) 27498 characters

CONSTRUCTION AGREEMENT

This Construction Agreement ("Agreement") is entered into and effective between the CITY OF GLENDALE, an
Arizona municipal corporation ("City"), and Hydra Contracting LLC, an Arizona limited liability company
(“Contractor") as of the _____ day of ____________, 2023.

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;

C.
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
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.

1.2
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;
(C)
MAG General Conditions, Supplemental General Conditions, Special and Technical
Provisions;
(D)
Proposal;
(E)
Bid Bond;
(F)
Payment Bond;
(G)
Performance Bond;
(H)
Certificate of Insurance;
(I)
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.

1.3
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 produced by
Contractor is consistent with applicable standards as detailed in this Agreement.

(B)
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.

(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.

2.
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.

3.
Contractor’s Work.

3.1
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.

3.2
Licensing. Contractor warrants that:

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

(B)
Neither Contractor nor any Sub-contractor has been debarred or otherwise legal1y
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
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.

3.4
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.

3.5
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.

3.6
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.

3.7.
Bonds. Upon execution of this Agreement, and if applicable, Contractor must furnish
Payment and Performance bonds as required under A.R.S. § 34-608.

4.
Compensation for the Project.

4.1
Compensation. Contractor's compensation for the Project, including those furnished by its
Sub-contractors will not exceed $1,000,000 per term, with a maximum not to exceed amount
of $5,000,000, as specifically detailed in the Contractor’s bid and set forth in Exhibit B
("Compensation").

4.2 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.
a. Adjustments to the Scope or Compensation require a written amendment to this
Agreement and may require City Council approval.
b. 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.
c. 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.

5.
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 will 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)
If the Payment Application is rejected, the Project Manager will issue a written listing
of the items not approved for payment.

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

(C)
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.

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

6.
Termination.

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

(B)
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)
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
(B)
furnished, City will pay the amount due to Contractor, less City's damages.
(C)
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.
Insurance.

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

(A)
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.

(B)
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 must 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.

(C)
Auto. A business auto policy providing a liability limit of at least $1,000,000 per
accident for Contractor and 1,000,000 per accident for Sub-contractors and covering
owned, non-owned and hired automobiles.

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

(E)
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.

(F)
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.

(G)
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.

(H)
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).

(I)
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.

(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.

7.2
Sub-contractors.

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

(B)
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.

7.3
Indemnification.

(A)
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.

(B)
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.

(C)
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.

7.4
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.

8.
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 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.

9.
No Boycott of Israel. The Parties agree that they are not currently engaged in, and agree that for the
duration of the Agreement they will not engage in, a boycott of Israel, as that term is defined in A.R.S.
§35-393.

10.
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.

11.
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:

Hydra Contracting LLC

Attn: David Munoz

222 South Mill Avenue, Suite 800

Tempe, Arizona 85281

(B)
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: Hugh Alter

5850 West Glendale Avenue, Suite 315

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

(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.

(D)
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.

12.
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.

13.
Entire Agreement; Survival; Counterparts; Signatures.

13.1
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)
Neither Party has made any representations, warranties or agreements as to any
matters concerning the Agreement's subject matter.

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

(C)
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.

13.2
Interpretation.

(A)
The parties fairly negotiated the Agreement's provisions to the extent they 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.

14.
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.

15.
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

Hydra Contracting LLC,

an Arizona limited liability company

_____________________________________

By: David Munoz
Its: Operations Manager

WOMEN-OWNED/MINORITY BUSINESS [ ] YES [ ] NO

EXHIBIT A
CONSTRUCTION AGREEMENT

PROJECT

Work consists of the removal and replacement of existing valves and fire hydrants and installing
new valves and fire hydrants throughout the city of Glendale.

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
must not exceed $1,000,000 per term. The contract includes an option to renew for up to four (4) additional
terms, at $1,000,000 per term, for a total not to exceed amount of $5,000,000.

DETAILED PROJECT COMPENSATION

As shown in detail on the Bid Schedule