Construction Agreement with Hydra Contracting, LLC

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

Extracted text (via pymupdf) 28907 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, authorized to do business in Arizona (“Contractor") as of the _____ day
of ____________, 2024.

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 15 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. 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 $1,000,000.
4.
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 $1,000,000 per term,
with a maximum not to exceed amount of $3,000,000, 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.
(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 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-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 within 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 warrants its 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.
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.
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.

12.
Notices.

12.1
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.

12.2
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: Michael Munoz

9885 South Priest Drive, Suite 102

Tempe, Arizona 85284

(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: Joe Hernandez

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

(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.

13.
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.

14.
Entire Agreement; Survival; Counterparts; Signatures.

14.1
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.

14.2
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.

14.3
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.

14.4
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.

14.5
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.

14.6
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.

14.7
Counterparts. This Agreement may be executed in counterparts, and all
counterparts will together comprise one instrument.

15.
Term. Renewals. The term of this Agreement commences upon the effective date and
continues for a one (1) year initial period. The City may, at its option and with the approval
of the Consultant, extend the term of this Agreement an additional two (2) one-year periods,
renewable on an annual basis. Consultant will be notified in writing by the City of its intent
to extend the Agreement period at least thirty (30) calendar days prior to the expiration of
the original or any renewal Agreement period. 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.

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
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
(SEAL)
City Clerk
APPROVED AS TO FORM:
Michael D. Bailey
City Attorney
Hydra Contracting LLC,
an Arizona limited liability company
________________________________
By: David Munoz
Its: Operations Manager

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 during the entire term of the Project must not exceed $1,000,000 per term. The
contract includes an option to renew for up to two (2) additional terms, at $1,000,000 per term,
for a total not to exceed amount of $3,000,000.
DETAILED PROJECT COMPENSATION
As detailed in the Bid Schedule.