Construction Agreement with Paveco Inc

City of Glendale — Regular Meeting (2024-11-26)

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05/10/2023
C

CONSTRUCTION AGREEMENT

This Construction Agreement ("Agreement") is entered into this _____ day of _________________, 2024, and is
effective between the City of Glendale, an Arizona municipal corporation ("City"), and Paveco, Inc., an Arizona
Corporation authorized to do business in the State of Arizona (“Contractor").
RECITALS
A.
City intends to undertake a project for the benefit of the public, with public funds, that is more fully set forth
in Exhibit A attached ("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;
C.
City and Contractor desire to memorialize their agreement with this document.
AGREEMENT
The parties hereby 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
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.
c.
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.
2.
Schedule. The Project will be undertaken in a manner that ensures it is completed in a timely and efficient
manner. If not otherwise stated in Exhibit A, the Project shall be completed no later than one hundred
twenty (120) consecutive calendar days from and including the date of receipt of the Notice to Proceed.

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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 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 Approval 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, color, religion, sex, national origin, age, marital status, sexual orientation, gender identity or
expression, genetic characteristics, familial status, U.S. military veteran status or any
disability. Contractor will require any Sub-contractor to be bound to the same requirements as stated
within this section. Contractor, and on behalf of any subcontractors, warrants compliance with 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.
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.

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4.
Compensation for the Project.
4.1
Compensation. Contractor's compensation for the Project, including those furnished by its Sub-
contractors will not exceed $2,423,779.10, as specifically detailed 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.
Unless Exhibit B (Compensation) dictates otherwise, 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 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 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.

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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 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 furnished, City will pay the
amount due to Contractor, less City's damages.
b.
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-contactors 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

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(3)
Any other material modification of Contractor or Sub-contractor's Policies related
to this Agreement.
g.
Certificates of Insurance.
(1)
Within 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.
c.
Contractor and Sub-contractors must provide to the City proof of Required Insurance
whenever requested.
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,

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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 provision 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 warrants
their compliance and that of its subcontractor 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. 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.

10. Uyghur Forced Labor Prevention Act (UFLPA). Contractor certifies that it does not currently, and during
the term of this Agreement, will not use:

a.
the forced labor of ethnic Uyghurs in the People’s Republic of China;

b.
any goods or services produced by the forced labor of ethnic Uyghurs in the People’s
Republic of China; and

c.
any contractors, subcontractors or suppliers that use the forced labor or any goods or
services produced by the forced labor of ethnic Uyghurs in the People’s Republic of China.

11.
Attestation of PCI Compliance. When applicable, the Contractor will provide the City annually with a
Payment Card Industry Data Security Standard (PCI DSS) attestation of compliance certificate signed by an
officer of Contractor with oversight responsibility.
12.
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.
13.
Notices.
13.1
A notice, request or other communication that is required or permitted under this Agreement (each
a "Notice") will be effective only if:

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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).
c.
Notice will be deemed to have been delivered to the person to whom it is addressed as of
the date of receipt, if:
(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.
13.2
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:
Paveco, Inc.
Attn: Steven A. Combs
P.O. Box 1067
Sun City, AZ 85372

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 W. 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
c.
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.
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.
14.
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.

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15.
Entire Agreement; Survival; Counterparts; Signatures.
15.1
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.
15.2
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.
c.
The Agreement will be interpreted in accordance with the laws of the State of Arizona.
15.3
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.
15.4
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.
15.5
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.
15.6
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.
15.7
Counterparts. This Agreement may be executed in counterparts, and all counterparts will together
comprise one instrument.
16.
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.
17.
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

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05/10/2023
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:

Julie K. Bower
City Clerk

(SEAL)
APPROVED AS TO FORM:

Michael D. Bailey
City Attorney
Paveco, Inc.,
an Arizona Corporation
_____________________________________
By: Steven A. Combs
Its: President
WOMEN-OWNED/MINORITY BUSINESS ☐ YES ☐ NO

EXHIBIT A
CONSTRUCTION AGREEMENT

PROJECT

This project consists of an asphalt mill and overlay of 67th Avenue from Greenway Road to Bell Road, including the
Bell Road intersection. The existing median islands will be narrowed, and some hardscape sections will be replaced.
This project also includes new signing, striping and a Wavetronix detection signal system at Greenway Road and
Paradise Lane intersections.

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 term of the Project must not exceed $2,423,779.10.
DETAILED PROJECT COMPENSATION
As shown in detail on the Bid Schedule.