090624-GPC NAPA INTEGRATED SUPPLY AGREEMENT.DOCX
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INTEGRATED SUPPLY AGREEMENT BY AND BETWEEN GENUINE PARTS COMPANY AND CITY OF TEMPE, ARIZONA NAPA IBS Contract #090624-GPC (Sourcewell) SOURCEWELL CONTRACT 1 INTEGRATED SUPPLY AGREEMENT BY AND BETWEEN GENUINE PARTS COMPANY AND CITY OF TEMPE, ARIZONA THIS INTEGRATED SUPPLY AGREEMENT (this “Agreement”) is made by and between GENUINE PARTS COMPANY, a Georgia corporation (d/b/a NAPA Auto Parts) (“NAPA”), and CITY OF TEMPE, ARIZONA, a municipality, (“CUSTOMER”), to be effective as of the __ day of _________, 2026 (the “Effective Date”). W I T N E S S E T H WHEREAS, pursuant to a competitive bidding and selection process by Sourcewell (hereinafter, “Sourcewell”), a Minnesota-based Service Cooperative created by Minnesota Legislative Statute 123A.21, Sourcewell and NAPA executed contract #090624-GPC on December 26, 2024 (hereinafter, “Sourcewell Contract”), attached hereto as Exhibit C, to establish a source of supply for certain auto, truck and bus parts as well as to provide Integrated Business Solutions services; and WHEREAS, by becoming a participating member of Sourcewell (hereinafter, “Member”), CUSTOMER and its related entities (hereinafter, “User Agencies”) are authorized to utilize the pricing and incentives available to Sourcewell Members set forth in the Sourcewell Contract; and WHEREAS, CUSTOMER desires to become a User Agency under such Sourcewell Contract and desires to receive integrated business solutions services from NAPA; and WHEREAS, CUSTOMER and NAPA agree that the Sourcewell Contract is a vehicle by which CUSTOMER may contract directly with NAPA for parts and services. The terms and conditions of both the Sourcewell Contract and this contract are hereby recognized as being pertinent to this contract; and WHEREAS, NAPA desires to provide integrated business solutions services and to establish inventories in CUSTOMER’s locations to service the fleet parts needs of CUSTOMER and to serve as the primary supplier of automotive replacement parts and other supplies and/or equipment (the “Inventory” or “Products”) to serve the needs of CUSTOMER; and WHEREAS, CUSTOMER desires to provide space for the Inventory on the premises of CUSTOMER for use by NAPA (“On Site Store”) and agrees that NAPA will be its primary supplier of the Inventory pursuant to the terms herein. SOURCEWELL CONTRACT 2 NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereto agree as follows: AGREEMENT 1. DEFINITIONS. For purposes of this Agreement, the following terms shall have the meanings set forth below: (a) Primary Supplier shall mean the parts supplier that provides a minimum of ninety percent (90%) of the Inventory needs of CUSTOMER. (b) NAPA Owned Store shall mean an auto parts store lawfully using the tradename or trademark “NAPA” which is wholly owned by NAPA. (c) NAPA Jobber shall mean an auto parts store lawfully using the tradename or trademark “NAPA” with respect to which NAPA maintains no ownership interest. (d) Current NAPA Jobber Acquisition Cost shall mean NAPA’s current gold price as set forth on NAPA’s Confidential Jobber Cost and Suggested Resales price list. 2. CUSTOMER’S CURRENT LOCATIONS. NAPA will establish On Site Store(s) and service the Satellite Locations at the CUSTOMER’S following location(s): On- Site Store: 2070 W. Rio Salado. Tempe, AZ 85281 Manager: Jerry Campos 3. TERM. Subject to the terms and conditions set forth below, this Agreement shall begin on the Effective Date and shall end when the Sourcewell Contract terminates or expires or when terminated earlier in accordance with the applicable terms and conditions stated herein. As the Sourcewell Contract is renewed or extended, this Agreement may be renewed or extended for a period of time equal to or shorter than the period of time the Sourcewell Contract is renewed or extended upon the mutual written agreement of the parties. Notwithstanding the foregoing, should the parties desire to extend this Agreement past the termination or expiration date of the Sourcewell Contract, the parties may do so by entering into a mutually agreed upon written amendment to this Agreement. Further, as Sourcewell awards new successive agreements to NAPA following expiration of the Sourcewell Contract, any new contract number and/or new terms and conditions may be added with mutual agreement via a written amendment to this Agreement. Either party may terminate this Agreement at any time for its convenience by giving the other party ninety (90) days prior written notice of such termination. Initial Term: 4/30/2026 through 12/3/2027 Renewal: 12/4/2027 through 12/3/2028 SOURCEWELL CONTRACT 3 Renewal: 12/4/2028 through 12/3/2029 Renewal: 12/4/2029 through 12/3/2030 Renewal: 12/4/2029 through 12/3/2031 4. DUTIES AND RESPONSIBILITIES OF NAPA. NAPA shall have the following duties and responsibilities during the term of this Agreement: (a) NAPA will operate the On Site Store(s) and provide the Inventory to CUSTOMER’s now existing locations. NAPA shall provide all personnel required to operate the On Site Store(s). (b) In those circumstances when delivery is required by CUSTOMER, NAPA will provide parts to CUSTOMER’s locations on a daily route basis. In addition, NAPA will accelerate delivery on those items CUSTOMER requires to be delivered on an expedited basis. NAPA will make all reasonable efforts to ensure prompt delivery to the CUSTOMER’s location(s) requesting part(s). (c) NAPA shall provide all computers and reports necessary to monitor monthly expenses as they pertain to the daily operation of the On Site Store(s). NAPA shall provide computer ordering and cataloging to each On Site Store. (d) NAPA shall provide a profit and loss statement of the parts operations to the CUSTOMER on approximately the 25th of each month for each On Site Store. (e) NAPA shall provide back-up emergency service during non-working hour contingencies. This overtime expense (calculated at time and one half) will be charged on a cost basis to CUSTOMER and must be pre-approved by CUSTOMER. The parties shall mutually agree upon the pre-approval process for such emergency situations. (f) NAPA will provide a list of personnel, including telephone numbers, who will respond to emergency service requests. The list shall be provided within 48 hours, containing personnel information and hours worked. (g) NAPA will use commercially reasonable efforts to properly allocate tire recaps across the CUSTOMER’s contracted tire retreading vendors at the direction of the CUSTOMER’s Fleet Manager. 5. DUTIES AND RESPONSIBILITIES OF CUSTOMER. CUSTOMER shall have the following duties and responsibilities during the term of this Agreement: (a) CUSTOMER shall provide, at its sole expense, usable space for NAPA’s On Site Store(s) and the Inventory. CUSTOMER shall provide access to restroom facilities for NAPA employees. Further, CUSTOMER shall furnish, at its sole expense, all utilities for the On Site Store(s) including: water, sanitation, sewer, light, telephone, heat, gas, electricity, power, fuel, janitorial and all other utilities and services rendered or delivered to the On Site Store(s) whatsoever. CUSTOMER shall provide NAPA a safe work environment that is free from hostility, violence, or discrimination. NAPA reserves the right to terminate the contract immediately should NAPA encounter a hostile, violent, discriminatory, or unsafe work environment. SOURCEWELL CONTRACT 4 (b) CUSTOMER shall use NAPA as its Primary Supplier of the Inventory under this Agreement. CUSTOMER reserves the right to purchase any item outside this Agreement where it is determined to be more economical or timely so long as the purchase of aforesaid part or parts does not result in NAPA no longer being CUSTOMER’s Primary Supplier in which case NAPA may terminate this Agreement. (c) Each On Site Store location shall be appropriately secured or otherwise maintained separate and apart from the business of CUSTOMER. There shall be no intermingling of CUSTOMER’s parts or other inventory with NAPA’s parts or inventory. Access to the secured On Site Store(s) shall be restricted to NAPA employees and authorized NAPA representatives only. With the exception of CUSTOMER’s Fleet Manager and two (2) supervisors whose names shall be provided to NAPA prior to access, CUSTOMER’S employees, contractors or agents shall not be permitted to enter the secured On-Site Store area unless accompanied by a NAPA employee or other authorized NAPA representative. CUSTOMER hereby assumes and shall bear any and all risk of loss or damage from any cause to the Inventory and other personal property located in the On Site Store(s), except for loss or damage arising out of the acts, errors or omissions of NAPA. NAPA shall invoice CUSTOMER for any such loss of or damage to the Inventory and/or other personal property located in the On Site Store(s), and CUSTOMER shall pay such invoiced amount to NAPA in accordance with the payment terms set forth in Section 7 below. (d) CUSTOMER shall, at all times during the term of this Agreement, at CUSTOMER’S sole expense, maintain in good condition and repair (so as to prevent any damage or injury to NAPA’s employees, the Inventory or other personal property located in the On Site Store(s) and Satellite Locations) the roof, exterior walls, foundation, and structural portions of the On Site Store(s) and Satellite Locations and all portions of the electrical and plumbing systems lying outside of the On Site Store(s) and Satellite Locations but serving the On Site Store(s) and Satellite Locations. (e) CUSTOMER shall provide information regarding fleet changes to NAPA as soon as possible. Fleet changes include but are not limited to the removal of types of vehicles from the fleet and the addition of new vehicles to the fleet. 6. INTENTIONALLY OMITTED. 7. PAYMENT TERMS/PRICING. NAPA shall invoice the CUSTOMER for all Inventory purchased pursuant to this Agreement on a monthly basis according to the pricing plan below. CUSTOMER agrees to pay the entire amount of all statements/invoices received from NAPA within thirty (30) days of receipt of a properly submitted statement. Sourcewell Member Pricing Option 4: Not-to-Exceed 11% Markup Model • Goods are sold to Participating Entity at a 10% markup over NAPA’s acquisition cost • Operating expenses are billed to Participating Entity • NAPA’s return is built into the price of the part so no separate management fee is billed SOURCEWELL CONTRACT 5 The overall objective of CUSTOMER’s pricing plan is for NAPA to provide Products in accordance with the agreed upon Pricing Plan Summary set forth below and reimbursement by CUSTOMER of each On Site Store’s operating expenses. By billing CUSTOMER for these two categories, NAPA’s On Site Store(s) will achieve its target ten percent (10%) net profit for the Agreement (the “Net Profit Target”). These categories are defined as follows: (a) Product Price. The pricing of the Products to be supplied to CUSTOMER by NAPA pursuant to this Agreement shall be divided into: 1) “NAPA Product Price,” which is the pricing of NAPA branded or NAPA cataloged supplier manufactured products; and 2) “Non-NAPA Product Price,” which is the pricing of products which have not been manufactured by NAPA suppliers or do not exist in NAPA’s proprietary catalog system but which have been acquired for CUSTOMER by NAPA pursuant to this Agreement. The pricing of NAPA Product and Non-NAPA Product shall be billed in accordance with the Pricing Plan Summary defined below. (b) Operational Expenses: Any and all costs and expenses associated with the operation of the On Site Store(s), including, but not limited to, vehicle gas and maintenance costs, salary and benefits payable to NAPA employees at the On Site Store(s), worker’s compensation benefits and insurance, unemployment insurance, personal property insurance for the On Site Store(s) and Inventory, any deductible for losses covered under the personal property, automobile liability, or general liability insurance policies of NAPA, all equipment supplied by NAPA, Corporate Allocation Expenses (as defined below), inventory investment expense, obsolescence expense, pension funding costs, accounting fees, general office expenses, and shared service expenses. An example of a profit and loss statement reflecting such costs and expenses is attached hereto as Exhibit B. CUSTOMER acknowledges and agrees that the costs and expenses reflected on the profit and loss statement set forth on Exhibit B are subject to change based on actual monthly costs, expenses or Corporate Allocation Expenses incurred relative to the operation of the On Site Store(s). To achieve economies of scale, NAPA utilizes certain headquarter and corporate personnel to assist in the performance of this Agreement. As a result, each On Site Store location is charged certain corporate allocation expenses for various line items shown on Exhibit B (“Corporate Allocation Expenses”) which are calculated as a percentage of total Product sales for each month. As such, there is not a supportive invoice for such expenses other than a monthly allocation rate statement. These Corporate Allocation Expenses allow NAPA to have fewer employees performing routine general administrative tasks such as paper work and filing at the On Site Store(s), allowing NAPA counter personnel to focus more attention on serving the On-Site Store operations, and maximizing on-site cost efficiency. PRICING PLAN SUMMARY - Custom Pricing NAPA Product Price Billed to CUSTOMER at a 10% mark-up (The formula for NAPA Product Price for CUSTOMER is the Current NAPA Jobber Acquisition Cost multiplied by 1.10) This formula will achieve the mark-up set forth SOURCEWELL CONTRACT 6 Non-NAPA Product Price Tire Price above. Example: Current NAPA Jobber Acquisition Cost is $1.00. CUSTOMER’s price would be $1.00 multiplied by 1.10 = $1.10 Billed to CUSTOMER at a 10% mark-up (The formula for Non-NAPA Product Price for CUSTOMER is NAPA’s current product acquisition cost multiplied by 1.10) This formula will achieve the mark-up set forth above. Example: current product acquisition cost is $1.00. CUSTOMER’s price would be $1.00 multiplied by 1.10 = $1.10 Billed to CUSTOMER at a 5% mark-up (The formula for a Tire Price for CUSTOMER is the current product acquisition cost multiplied by 1.05). This formula will achieve the mark-up set forth above. Example: current product acquisition cost is $1.00. CUSTOMER’s price would be $1.00 multiplied by 1.05=$1.05. This is predicated on NAPA utilizing the CUSTOMER contracts, currently in place with the State of Arizona for tires and tire retreading. Operational Expenses Billed to CUSTOMER in accordance with Section 7(b) above. Net Profit Target 10% net profit for the NAPA On Site Store(s) after Products and Operational Expenses are billed to CUSTOMER. Both NAPA Product and Non-NAPA Product shall be set by NAPA to yield a gross profit of ten percent (10%). Operational Expenses will be charged to CUSTOMER in accordance with Section 7(b) above, with all such charges for Operational Expenses to be included in CUSTOMER’s monthly billing statement. CUSTOMER will be billed at the end of each month for Operational Expenses on an “in arrears” basis. CUSTOMER and NAPA mutually agree that CUSTOMER’S maximum annual payment obligation for all Products and Operational Expenses billed to CUSTOMER pursuant to this Section 7 shall be set at $2.6 M per annum; and CUSTOMER has encumbered such amount to cover this potential liability. The parties agree to mutually work together to adjust the amount if such amount must be increased during the term of the contract. In addition, NAPA may use any subcontractor for the procurement of “outside” services (i.e., those services not traditionally performed by NAPA), and CUSTOMER will be billed an additional charge for any such purchases so as to yield NAPA a ten percent (10%) gross profit on such purchases. CUSTOMER must provide pre-approval in writing of such outside service purchases. CUSTOMER is solely responsible for improper or inappropriate instructions by CUSTOMER’s employees to NAPA regarding NAPA’s purchases of nontraditional parts or services, unless CUSTOMER provided prior written notice to NAPA of parts or services that may not be procured by NAPA in relation to this Agreement. SOURCEWELL CONTRACT 7 8. INSURANCE. (a) CUSTOMER shall maintain during the term of this Agreement workers’ compensation insurance for its employees and general liability insurance covering its property. NAPA acknowledges that CUSTOMER may elect to self-insure such obligations. (b) NAPA shall maintain during the term of this Agreement workers’ compensation insurance coverage for its employees located at the On Site Store(s) in amounts required by law. In addition, NAPA shall maintain personal property insurance during the term of this Agreement in an amount sufficient to cover any loss or damage to the Inventory and any other personal property owned by NAPA that is located at the On Site Store(s). An annual Certificate of Liability Insurance specifying NAPA’s general liability, automobile liability, umbrella liability and employer’s liability insurance required under this Agreement shall be email to alicia_ruiz@tempe.gov within 30 days of renewal. 9. NO LIENS. CUSTOMER warrants that it shall take no action, including but not limited to the granting of a security interest, or fail to take any action, which would operate or does operate in any way to encumber the Inventory of NAPA located in the On Site Store(s). 10. PERSONNEL. NAPA and CUSTOMER shall attempt in good faith to mutually agree upon the identity of the persons that will be selected to staff the On Site Store(s). In the event that CUSTOMER for any reason wishes to remove or replace any of the NAPA personnel in the On Site Store(s), the parties will attempt to resolve CUSTOMER’s request by mutual agreement. If the issue is not resolved by mutual agreement, CUSTOMER reserves the right to (1) require NAPA to immediately remove any of the NAPA personnel from the On Site Store(s) in such instances where the conduct of any NAPA personnel poses a threat to the health and safety of others or is otherwise detrimental to the safe operation of the On Site Store( s) or (2) require NAPA to remove NAPA personnel from the On Site Store(s) for Cause upon fifteen (15) days written notice where Cause is defined as the failure to perform job functions or any type of general misconduct including but not limited to misrepresentation. 11. WARRANTY/LIABILITY DISCLAIMER. All Products supplied pursuant to this Agreement are subject to the terms of written warranties provided by the manufacturer of each Product, and NAPA shall use reasonable commercial efforts to assist the CUSTOMER in processing all warranty claims that the CUSTOMER may have against a manufacturer. The manufacturer’s warranty will be the sole and exclusive remedy of the CUSTOMER in connection with any claims concerning the Products supplied to CUSTOMER pursuant to this Agreement. ALL OTHER WARRANTIES, BOTH EXPRESS AND IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED. Copies of the manufacturers’ warranties are available to CUSTOMER upon request. For suppliers (or categories of suppliers) of Non-NAPA Products that CUSTOMER instructs NAPA to utilize or consider for future purchases, NAPA is under no obligation to (and NAPA disclaims all liability in connection with) investigate product quality, management, ownership, SOURCEWELL CONTRACT 8 reputation, certifications, qualifications, price competitiveness, or any other related characteristics of the products, individuals or entities at issue. 12. TERMINATION FOR CAUSE. This Agreement may be terminated immediately, unless otherwise stated in this Section 12, by either party for cause: (a) In the event that the other party fails or refuses to pay any amounts due under this Agreement and such failure continues for thirty (30) days; (b) In the event that the other party fails or refuses to perform any other obligation required under this Agreement, and such failure or refusal continues for thirty (30) days after written notice thereof; or (c) In the event that the other party files any bankruptcy petition, has any bankruptcy petition filed against it, makes any assignment of its assets for the benefit of creditors, or admits in writing its inability to pay its debts as they become due. 13. EFFECT OF TERMINATION. Immediately upon termination, expiration, or non-renewal of this Agreement for any reason: (a) All duties, responsibilities and other obligations of each party hereunder shall terminate, except for the payment of any amounts due and owing to NAPA at the time of termination, expiration, or non-renewal. (b) Each party shall immediately return to the other party all equipment, software, books, records, tools and any other personal property owned by the other party that are in such party’s possession. CUSTOMER shall allow NAPA full and unrestricted access to enter into the On Site Store(s) and immediately remove all equipment and other items of personal property owned by NAPA without being deemed guilty of trespass or any other violation of the law. All inventory records, sales history, sales analysis and all other information generated by NAPA under this Agreement will be returned to CUSTOMER. Nothing contained in this Section shall be deemed a waiver of, or in any other manner impair or prejudice, any other legal rights that either party may have against the other party for any breach of this Agreement. The provisions and obligations of Sections 9, 11, 13, 14, 15, 16, and 22 shall survive the termination, expiration, or non-renewal of this Agreement for any reason. 14. BUY-BACK OF INVENTORY. Upon termination, expiration, or non-renewal of this Agreement, NAPA shall have the option to require CUSTOMER to purchase all non-NAPA Inventory owned by NAPA and located in each On Site Store at NAPA’s On Site Store’s current product acquisition cost. Further, upon termination, expiration or non-renewal of this agreement, CUSTOMER shall have the option to purchase all NAPA Inventory, owned by NAPA and located in each On Site Store at the Current NAPA Jobber Acquisition Cost. Notwithstanding the foregoing, in no event shall the amount of non-NAPA Inventory for which the CUSTOMER is responsible exceed $1,000,000 in the aggregate. Upon CUSTOMER’s request, NAPA shall SOURCEWELL CONTRACT 9 provide CUSTOMER with a listing of all NAPA and non-NAPA Inventory owned by NAPA and located in the On Site Store(s). 15. INDEMNIFICATION. NAPA shall be responsible for and shall indemnify and hold CUSTOMER harmless from and against all damages, claims or demands that may, during the term of this Agreement, arise or be occasioned by the negligent or intentional acts of NAPA or NAPA’s employees. 16. NOTICES. Whenever any notice, demand or request is required or permitted hereunder, such notice, demand or request shall be hand-delivered in person or sent by overnight mail through a reputable service, or by certified mail, return receipt requested, to the addresses set forth below: As to NAPA: Genuine Parts company 2999 Wildwood Parkway Atlanta, GA 30339 Attn: Corporate Counsel As to CUSTOMER: City of Tempe 20 E 6th Street, 2nd Floor Tempe, AZ 85281 Attn: Alicia Ruiz Telephone: 480-350-8548 Email; alicia_ruiz@tempe.gov Each such notice shall be deemed delivered (i) on the date of receipt if delivered by hand or overnight courier service or (ii) on the date three (3) business days after depositing with the United States Postal Service if mailed by registered or certified mail. Either party may change its address specified for this notice by giving the other party at least ten (10) days written notice in accordance with this Section 16. 17. FORCE MAJEURE / DAMAGE OF PREMISES. (a) Whenever performance by either party of any of their respective obligations (other than the obligation to make payment of money due hereunder) is substantially prevented by reason of any act of God, other industrial or transportation disturbance, fire, floods, riots, acts of enemies, national emergencies, pandemics, or by any other cause not within the reasonable control of such party and not occasioned by its negligence, then such performance shall be excused and the performance of such obligations under this Agreement shall be suspended for the duration of such prevention and for a reasonable time thereafter; provided that the foregoing in this Section 17 shall not apply to obligations relating to the payment of money. (b) NAPA may terminate this Agreement immediately in the event that the CUSTOMER’s premises are damaged by any casualty, or such portion of the premises is SOURCEWELL CONTRACT 10 condemned by any legally constituted authority, such as will make the CUSTOMER’s premises unusable for the On Site Store(s) in the reasonable judgment of NAPA. 18. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective officers, directors, employees, successors and assigns. Notwithstanding the foregoing, the rights and obligations of either party to this Agreement may not be assigned without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld. 19. AMENDMENTS. No amendment to this Agreement shall be binding on either party hereto unless such amendment is in writing and executed by both parties with the same formality as this Agreement is executed. The CUSTOMER’s procurement department shall review and approve amendments, which shall be signed by the Procurement Officer. 20. NO WAIVER OF RIGHTS. No failure of either party hereto to exercise any power given such party hereunder or to insist upon strict compliance by the other party to its obligations hereunder, and no custom or practice of the parties in variance with the terms hereof, shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof. Notwithstanding the same, only waivers made in writing shall be valid and enforceable. 21. LIMITATIONS ON RIGHTS OF THIRD PARTIES. All obligations of a party under this Agreement are imposed solely and exclusively for the benefit of the parties, and no other person shall, under any circumstances, be deemed to be a beneficiary of such obligations. 22. LIMITATION OF LIABILITY. WHILE NOT APPLICABLE TO BREACHES OF CONFIDENTIALITY PROVISIONS, THE PARTIES HEREBY DISCLAIM ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE, OR SPECIAL DAMAGES IN ANY WAY RELATED TO THIS AGREEMENT, THEIR OTHER BUSINESS RELATIONSHIPS, OR THE TRANSACTIONS CONTEMPLATED HEREIN. 23. INDEPENDENT CONTRACTOR. The parties hereto are independent contractors. Nothing in this Agreement shall create or shall be deemed to create any fiduciary relationship or the relationship of principal and agent, partnership, joint venturers or any other similar or representative relationship between the parties hereto. 24. CHOICE OF LAW. This Agreement shall be construed and interpreted under the laws of the State of Arizona. 25. COUNTERPARTS. This Agreement may be executed in one or more counterparts and each counterpart shall, for all purposes, be deemed an original, but all such counterparts shall together constitute but one and the same instrument. 26. SECTION HEADINGS. Section titles or captions contained herein are inserted only as a matter of convenience for reference and in no way define, limit, extend, or describe the scope hereof or the intent of any provision hereof. SOURCEWELL CONTRACT 11 27. SEVERABILITY. In the event any part of this Agreement shall be finally determined by a court of law to be illegal or unenforceable for any reason, then that illegal or unenforceable part shall be severed from the Agreement, and the remaining terms shall continue in full force and effect. 28. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the parties hereto and no prior representation, inducement, promise or agreement, oral or written, between the parties not embodied herein shall be of any force and effect. 29. SCOPE OF SERVICES. In addition to the terms and conditions set forth in Sections 1through 28 above of this Agreement (the "Main Body of the Agreement"), the parties further agree to the terms and conditions set forth in the Scope of Services attached to this Agreement as Exhibit D, and by this reference, incorporated herein (the "Scope of Services"). In the event of a conflict between the terms and conditions set forth in the Main Body of the Agreement and those terms and conditions set forth in the Scope of Services, the terms and conditions set forth in the Main Body of the Agreement shall control. [Signatures Appear on Next Page] IN WITNESS WHEREOF, the parties hereto cause their hands and seals to be affixed by their duly-authorized representatives effective as of the date and year first above written. GENUINE PARTS COMPANY By: Name: __________________ Title: ___________________ By: _____ Name: _________________ Title: __________________ CITY OF TEMPE, ARIZONA By: Name: Corey D. Woods Title: Mayor, City of Tempe ATTEST: SOURCEWELL CONTRACT 12 Kara A. DeArrastia, City Clerk APPROVED AS TO FORM: Eric C. Anderson, City Attorney EXHIBIT A Intentionally omitted. EXHIBIT B SAMPLE PROFIT AND LOSS STATEMENT EXHIBIT C SOURCEWELL CONTRACT A copy of Sourcewell Contract #090624-GPC is located at: https://files.sourcewell.org/public/Shared%20Documents/Solicitations/10967/00006760/Contract %20Documents/Int.%20Bus.%20Sol.-NAPA%20Contract%20090624.pdf SOURCEWELL CONTRACT 2 EXHIBIT D SCOPE OF SERVICES See attached. SOURCEWELL CONTRACT 3 EXHIBIT D Scope of Services On-Site Fleet Services IBS Inventory Program The City of Tempe is pleased to partner with Genuine Parts Company d/b/a NAPA Auto Parts and is looking forward to a successful partnership. This Scope of Services identifies the terms, requirements, conditions, some of the tasks and expected outcomes for CUSTOMER and NAPA when utilizing NAPA IBS as an inventory management solution. NAPA shall provide an Integrated Business Solution (“IBS”) service for the City of Tempe Fleet Services Department, also known as the CUSTOMER. Services to consist of managing and operating one (1) stand-alone IBS with NAPA-staffed employees and NAPA and NON-NAPA inventory, at the CUSTOMER’S designated location as identified within the Agreement and this Exhibit B. The purpose of incorporating a NAPA IBS program is to employ a stand-alone full-service provider who can support CUSTOMER with inventory to maintain, repair and support the fleet of vehicles and equipment managed by the CUSTOMER. This requires measuring, assessing, planning, stocking, allocating, and administering inventory and inventory management services to meet the needs of the CUSTOMER. Vehicles and equipment include, but are not limited to sedans, light trucks, vans, medium and heavy-duty trucks, busses, construction equipment, portable and stationary equipment, and trailers. NAPA understands the need to maintain security of information and confidentiality. All NAPA personnel and or contractors or sub-contractors employed by NAPA at CUSTOMER’S location shall comply with any and all mutually agreed upon CUSTOMER policies, practices, and procedures including but not limited to security and confidentiality. Duties, responsibilities, and requirements for NAPA’S IBS services are described in more detail below and shall be provided in accordance with the provisions of this Scope of Services and the Agreement between Genuine Parts Company and the City of Tempe. This Agreement shall be for one (1) year from the Effective Date. Upon expiration of the initial term, this Agreement may be renewed for three (3) additional one (1) year terms upon the mutual written agreement of the parties. Notwithstanding the foregoing, either party may terminate this Agreement at any time for its convenience by giving the other party 120 days prior written notice of such termination. 1. CONTRACT ADJUSTMENT. The Agreement may be adjusted from time to time by a written amendment executed by both parties. The CUSTOMER’s procurement department shall review and approve adjustments, which shall be signed by the Procurement Officer. 2. NON-ENDORSEMENT. CUSTOMER will be under no obligation to endorse or suggest that NAPA IBS services are the best or only solution. NAPA shall agree SOURCEWELL CONTRACT 4 to make no reference to the CUSTOMER in any literature, promotional material, brochures, sales presentation or the like without the express written consent of the CUSTOMER. 3. LICENSING. NAPA shall provide evidence to perform business in State of AZ. 4. AUDIT RIGHTS. During this Agreement and for three (3) years thereafter, CUSTOMER, at its sole cost and expense, shall have the right to inspect NAPA’S records pertaining to this Agreement and to perform an audit in accordance with generally accepted auditing practices and standards upon providing at least ten (10) days prior written notice to NAPA. NAPA shall make these records available without charge upon a written request. Audit results will be based upon overcharges and undercharges being combined to determine the net impact. Audits will be limited to once per calendar year unless the audit reveals a net impact of three percent (3%) or more. 5. NAPA DUTIES AND RESPONSIBILITIES. In addition to the duties and responsibilities set forth in Section 4 of the Agreement, the following duties and responsibilities shall be delivered to the CUSTOMER by NAPA during the duration of this Agreement: a. NAPA shall provide CUSTOMER with the personnel and management to efficiently operate a full-service store at the CUSTOMER’S location. b. NAPA shall maintain and manage the CUSTOMER’S on-site IBS location with NAPA and NON-NAPA inventory based on the CUSTOMER’S historical information of inventory required to maintain and repair a highly reliable fleet of vehicles and equipment. c. Upon request, NAPA shall utilize the CUSTOMER’S established contracts for inventory items (vehicle parts, chemicals, safety items, tire re-treading etc.) when determined to be most advantageous to the CUSTOMER, and NAPA will bill CUSTOMER for such inventory in accordance with the pricing terms set forth in Section 7 (Payment Terms/Pricing) of the Agreement. NAPA shall alternate purchases with all contracted vendors. Only in cases where the established contractor cannot meet the City’s needs or for emergency purchases is it ok for NAPA to purchase outside these contracts. d. NAPA shall provide CUSTOMER with a balanced inventory tailored to the CUSTOMER’S vehicle maintenance and repair needs to insure a highly reliable fleet of vehicles and equipment. e. NAPA shall provide CUSTOMER access to the area’s largest inventory for automotive and heavy-duty vehicles and equipment as provided through daily stock orders to the CUSTOMER’S location from NAPA’s Local and Regional Distribution Centers to replenish the inventory on a regular basis. SOURCEWELL CONTRACT 5 f. NAPA shall provide assurance that when requested, Original Equipment (“O.E.”) quality parts are provided and sold to the CUSTOMER. g. To the extent permitted, NAPA shall pass through all limited and unlimited warranties available to and from the manufacturer to the CUSTOMER. h. Any applicable product rebates will be included in the price of the product. i. NAPA shall adhere to any mutually agreed upon CUSTOMER protocols and approval processes for any purchases or allocation of any inventory or services. j. NAPA will use commercially reasonable efforts to obtain the pre-approval of CUSTOMER’s Fleet Services Manager or designee before purchasing any inventory item containing chemicals. k. To the extent made available by the applicable manufacturer, NAPA will provide to CUSTOMER a SDS sheet for any Product supplied to CUSTOMER hereunder. CUSTOMER will provide access to SDS sheets for current inventory. l. NAPA shall provide classroom and hands-on training through NAPA’S representatives and factory-trained instructors as requested by the CUSTOMER. NAPA and CUSTOMER shall agree on all associated costs or expenses prior to NAPA providing any requested training to the CUSTOMER. m. NAPA shall provide CUSTOMER with real time data entry of all related inventory management information into CUSTOMER’S fleet asset maintenance, management, and inventory database system for any and all orders, receiving, purchases and allocation of inventory at the time of each sale. n. NAPA shall provide CUSTOMER with a Total Automotive Management System (TAMS) that is capable of: i. Invoicing, cataloging, inventory control, custom pricing, inventory stocking information, inventory on order, inventory on backorder, lost sales reports and analysis, inventory min/max, and inventory costing, ii. Checking inventory levels and ordering from any NAPA Distribution Centers in the Western Division, iii. Invoicing for purchases at the time of sale in accordance with the terms set forth in the Agreement, iv. Providing detailed statements at the end of the month showing all invoice numbered purchases, work order number, purchase description, purchase quantities, cost of sale for each purchase, and date of each purchase. 6. CUSTOMER DUTIES AND RESPONSIBILITIES. In addition to the terms SOURCEWELL CONTRACT 6 and conditions set forth in Section 5 of the Agreement, the following duties and responsibilities shall be provided by CUSTOMER to NAPA during the term of this Agreement: a. CUSTOMER shall provide NAPA access to CUSTOMER’S facilities. 1. Access to all store rooms with NAPA inventory shall be secured, restricted, and monitored in a reasonable method that is mutually agreeable to both NAPA and the CUSTOMER. If no reasonable method can be agreed upon, NAPA has the right to restrict, secure, and monitor all NAPA store parts rooms at NAPA’s expense, 2. Access will be provided to washroom and lunchroom facilities. b. CUSTOMER shall provide NAPA the right to maintain stock and non-stock inventory items at the CUSTOMER’S location. c. CUSTOMER shall provide NAPA with full access to any and all locations where NAPA and NON-NAPA inventory is stored during business hours, CUSTOMER shall provide NAPA with full access and availability to existing and available shelves, drawers, bins, and storage cabinets for stocking and management of NAPA provided inventory. d. CUSTOMER shall provide NAPA with controlled user rights to look-up, enter, and edit, information and enter data into CUSTOMER’S Fleet Management system where it pertains to inventory management in regard to maintaining, repairing, and supporting the fleet of vehicles and equipment managed by the CUSTOMER. e. CUSTOMER shall provide NAPA with a Vehicle Removed from Service list, identifying vehicles being removed from service. The list will be provided every July. 7. NAPA INVENTORY. NAPA agrees to use every reasonable effort to provide stock and non-stock inventory of high quality for: a. OEM, NAPA, and aftermarket automotive replacement parts, supplies, and accessories, b. OEM, NAPA, and aftermarket heavy duty replacement parts, supplies, and accessories, c. OEM, NAPA, and aftermarket farm and small engine equipment replacement parts, supplies, and accessories, d. OEM, NAPA, and aftermarket turf equipment replacement parts, supplies, and accessories, SOURCEWELL CONTRACT 7 e. OEM, NAPA, and aftermarket construction equipment replacement parts, supplies, and accessories, f. OEM, NAPA and aftermarket supplies, consumables and shop related inventory, g. NAPA shall allow CUSTOMER to inspect the quality of the NAPA provided inventory to be furnished and if so elected, the CUSTOMER reserves the right to reject any inventory that does not meet the quality as deemed by the CUSTOMER, h. If NAPA cannot locate or procure the inventory or quality of inventory required by the CUSTOMER, NAPA shall immediately notify the CUSTOMER shop supervisor or interim shop supervisor, i. If after notification, should the CUSTOMER know of a source, NAPA should be notified to permit NAPA to procure the specified inventory for the CUSTOMER, j. If NAPA cannot provide the specified inventory within a reasonable amount of time, the CUSTOMER shall have the right to source and procure such inventory on its own, k. NAPA shall not be liable for any inventory that is obtained by the CUSTOMER that fails to perform satisfactorily. l. NAPA shall use City’s Vehicle Removed from Service list to monitor and adjust inventory levels for these end-of-life vehicles. 8. NAPA INVENTORY REPORTS In addition to the terms and conditions set forth in Section 4 of the Agreement, NAPA agrees to provide the following reports: a. Upon request - A Daily Inventory Replenishment report utilizing NAPA and NON-NAPA inventory sources, b. A weekly Inventory Availability report with an on-demand fill rate equal to or greater than 85% percent of the time at the time of request, c. Upon request - A Daily Status Report (i.e. estimated time for delivery, back orders, etc.) for stock or non- stock parts on back order that result in a delay of CUSTOMER vehicle and equipment repairs, d. Upon request - A Daily detailed reports to reconcile inventory sales to CUSTOMER purchase request, purchases, and allocations, e. Upon request - Monthly detailed reports showing BIN and DRAWER location of all stock inventory at CUSTOMER’S location, (could require a custom report). To include min & max order points and quantity on hand. SOURCEWELL CONTRACT 8 f. After every inventory cycle detailed reports showing results of parts availability, cycle count and level of inventory accuracy count at CUSTOMERS location, g. Quarterly detailed reports showing shrinkage, obsolescence, and slow-moving inventory, - check to see if can go with Buy-back, need definition for obsolescence. 9. NAPA INVENTORY DELIVERY. NAPA shall make every reasonable effort to deliver inventory to CUSTOMER, when needed as referenced in Section 4b of the Agreement. 10. INVOICING. NAPA shall invoice CUSTOMER for all inventory purchased hereunder in accordance with the following terms: a. Each invoice shall be itemized to meet mutually agreed upon CUSTOMER accounting requirements—no exceptions. Individual invoices shall be for: 1. Operational Costs: 2. Parts: Account 2218: 3. Miscellaneous Account 2221: b. Invoice shall include; quantity, NAPA inventory number, description of inventory item, price, invoice number, purchase order or reference number, work order where allocated, name of mechanic requesting and equipment unit number. c. NAPA shall not issue any inventory to CUSTOMER without a CUSTOMER open and approved work order number and associated vehicle and or equipment number and parts request. d. NAPA shall provide a detailed statement at the end of the month, showing all invoice numbers and amounts purchased in month. e. Each statement shall have numerical listings of all invoices as well as any information that is in the P.O. field of original invoice. 11. NAPA STAFFING. NAPA shall provide all personnel required to operate NAPA IBS store at CUSTOMER’S location at days and hours designated by CUSTOMER. There will be a fully agreed upon staffing level maintained on daily basis, including coverage for sick, vacation, holidays and absenteeism. a. NAPA shall review the staffing needs of the CUSTOMER, with the CUSTOMER, prior to any adjustments being made to staffing and staffing levels. NAPA shall discuss with CUSTOMER, at least annually, potential pay increases for NAPA employees, and NAPA shall consider CUSTOMER’s recommendations with respect to such increases. SOURCEWELL CONTRACT 9 b. NAPA shall provide able, experienced, knowledgeable, and skilled personnel. CUSTOMER requires a SITE MANAGER at the CUSTOMER’S NAPA IBS on- site store. Along with meeting the job requirements of the NAPA job description, a NAPA IBS Site Manager must: Meet CUSTOMER’S expectations with valued inventory management support, Have the ability, experience, and knowledge to manage the inventory requirements of a full-service fleet maintenance and repair shop, Provide positive leadership to all NAPA on-site IBS store employees while encouraging strong CUSTOMER relations, Have the experience and ability to fully implement and support NAPA and CUSTOMER programs and objectives, Have experience, knowledge, and skills for researching and sourcing inventory using technology and other modes of information gathering, Pass a Arizona State background check, Have a Arizona State driver license. A background as a NAPA IBS store Manager is preferred Be able to report to work within an hour notice if needed in an emergency c. CUSTOMER requires a COUNTER / DRIVER at the CUSTOMER’S NAPA IBS on- site store. Along with meeting the job requirements of the NAPA job description, a NAPA IBS Counter / Driver must: Provide excellent CUSTOMER service, Have the ability to learn and apply learned skills to use technology to perform research, look-up, source, and secure NAPA and NON-NAPA inventory in a timely and effective manner, Have the ability to quickly learn and understand the CUSTOMER’S inventory needs in regard to maintaining and servicing the CUSTOMER’S fleet of vehicles and equipment, Pass an Arizona State background check and provide evidence, Possess and maintain a valid Arizona State driver license Must be able to report to CUSTOMER location within an hour notice in an emergency. 12. NAPA IBS STORE HOURS AND WORK DAYS. NAPA IBS store day and hours of operation shall be based on the work schedule required by the CUSTOMER. a. NAPA IBS on-site store shall be open Monday thru Friday, except for the observed holidays of New Year’s Day, Thanksgiving Day, and Christmas. On any holiday on which the CUSTOMER works, NAPA shall provide coverage for the on-site store. b. NAPA shall be notified by CUSTOMER, 24 hours to five (5) days in advance of any and all CUSTOMER work schedule changes that could impact on-site NAPA IBS employees work schedule, unless otherwise agreed upon by the parties. SOURCEWELL CONTRACT 10 c. NAPA shall notify CUSTOMER, 24 hours to five (5) days in advance of any and all work schedule changes that could impact on-site NAPA IBS store hours and work days, unless otherwise agreed upon by the parties. d. Hours of operation for NAPA IBS personnel shall be as identified in the table below: Shift Position Shift Times (AZ TIME) Manager 7a - 5p Counter 1 5a - 1p Counter 2 2p - 10p Delivery Driver 9a - 5p 13. EMERGENCY WORK SCHEDULE. NAPA shall provide services during non- regular working hours when working conditions require CUSTOMER located NAPA IBS store to be open for service. To do so, a. NAPA personnel shall use best efforts, subject to safe and responsible driving practices, to respond to an emergency services request within one (1) hour of being notified. b. NAPA shall provide a prioritized list with contact information of personnel who will respond within one (1) hour of notice for emergency services, an updated list will be provided to the CUSTOMER as changes are made to this list. c. Emergency services request for NAPA personnel by CUSTOMER, must be pre- approved by the CUSTOMER’S Fleet Services Manager or designee, d. All emergency service request will be performed by CUSTOMER’S Fleet Services Manager or designee, via direct contact by phone. e. When emergency services are requested during non-regular working hours, NAPA shall provide a NAPA IBS Site Manager as first priority option and a NAPA IBS Counter/Driver as the second priority option. f. Any hourly employee who is required to work in excess of 40 hours in any given work week shall qualify for overtime hourly pay rate of 1.5 times their normal hourly pay rate. 14. CITY OF TEMPE ANTIDISCRIMINATION ORDINANCE. The Tempe City Council approved Ordinance No. 02016.25 that requires vendors who are being recommended for award to provide evidence of their compliance with the City’s antidiscrimination policy as shown below SOURCEWELL CONTRACT 11 EXHIBIT E City of Tempe-Anti Discrimination Policy COMPLIANCE WITH CITY’S ANTIDISCRIMINATION ORDINANCE NO. 02016.25 _________________________________________________ The Tempe City Council approved Ordinance No. 02016.25 that requires vendors who are being recommended for award to provide evidence of their compliance with the City’s antidiscrimination policy as shown below: Sec. 2-601. Policy. It is declared to be the policy for the citizens of Tempe, Arizona, to be free from discrimination in public accommodations, employment, and housing, and contrary to public policy and unlawful to discriminate against any person on the basis of race, color, gender, gender identify, sexual orientation, religion, national origin, familial status, age, disability, or United States military veteran status, in places of public accommodation, employment, and housing; and contrary to the policy of the city and unlawful for vendors and contractors doing business with the city to discriminate, as set forth in this article. Sec. 2-603. Unlawful Practices. The following shall constitute a violation of this article: For a city vendor or city contractor, because of race, color, gender, gender identify, sexual orientation, religion, national origin, familial status, age, disability, or United States military veteran status, to refuse to hire or employ or bar or discharge from employment any person, or to discriminate against such person in compensation, conditions, or privileges or employment. City vendors and contractors of fifteen (15) or more employees shall provide a copy of its antidiscrimination policy to the Procurement Officer to confirm compliance with this article. Employers having fourteen (14) or less employees may attest in writing to compliance with this article. Vendor Requirements Vendors who have fifteen (15) or more employees shall include with their bid/proposal submittal a copy of its antidiscrimination policy that must mirror the City’s policy as stated above. Suppliers who have fourteen (14) or less employees may include their antidiscrimination policy or complete a written affidavit of compliance per the attached. To be completed by responding company and returned with submittal: _____ Our company has 15 or more employees and has included its antidiscrimination policy that mirrors the City’s policy; _____ Our company has fourteen (14) or less employees and is attaching the signed AFFIDAVIT OF COMPLIANCE WITH TEMPE CITY CODE CHAPTER 2 ARTICLE VIII SECTION 2-603(5). Please include this document along with the company’s antidiscrimination policy or the completed affidavit with final signed contract SOURCEWELL CONTRACT 12 EXHIBIT F City of Tempe Certification Policy 1. Certification: By signing the final agreement, NAPA certifies: A. The submission of the vendor’s proposal Offer response did not involve collusion or other anti-competitive practices. B. Offeror agrees that it will comply with section 2-603(5) of the Tempe City Code (“TCC”), and will not refuse to hire or employ or bar or discharge from employment any person or discriminate against such person in compensation, conditions, or privileges of employment because of race, color, gender, gender identity, sexual orientation, religion, national origin, familial status, age, disability, or United States military veteran status. Offeror further agrees to provide a copy of its antidiscrimination policy to the Procurement Officer to demonstrate compliance with TCC section 2-603(5) or attest in writing to its compliance in accordance with the attached Affidavit of Compliance. C. Offeror has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the submitted Offer. Failure to sign the “Vendor’s Offer” or signing it with a false statement shall void the submitted proposal and any resulting Contract. In addition, the Offeror may be barred from future proposal and bidding participation with the City and may be subject to such further actions as permitted by law. D. The Offeror agrees to promote and offer to the City only those materials and/or services as stated and allowed by this Request for Proposal and resultant Contract award. Violation of this condition shall be grounds for Contract termination by the City. E. The Offeror expressly warrants that it has and will continue to comply in all respects with Arizona law concerning employment practices and working conditions, pursuant to A.R.S. § 23-211, et seq., and all laws, regulations, requirements and duties relating thereto. Offeror further warrants that to the extent permitted by law, it will fully indemnify the City for any and all losses arising from or relating to any violation thereof. F. Contractor agrees and covenants that it will comply with any and all applicable governmental restrictions, regulations and rules of duly constituted authorities having jurisdiction insofar as the performance of the work and services pursuant to the Contract, and all applicable safety and employment laws, rules and regulations, including but not limited to, the Fair Labor Standards Act, the Walsh- Healey Act, and the Legal Arizona Workers Act (LAWA), and all amendments thereto, along with all attendant laws, rules and regulations. Contractor acknowledges that a breach of this warranty is a material breach of this Contract and Contractor is subject to penalties for violation(s) of this provision, including SOURCEWELL CONTRACT 13 termination of this Contract. City retains the right to inspect the documents of any and all contractors, subcontractors and sub-subcontractors performing work and/or services relating to the Contract to ensure compliance with this warranty. Contractor hereby agrees to indemnify, defend and hold City harmless for, from and against all losses and liabilities arising from any and all violations thereof. G. If Contractor engages in for-profit activity and has 10 or more employees, and if this Agreement has a value of $100,000 or more, Contractor certifies it is not currently engaged in, and agrees for the duration of this Agreement to not engage in, a boycott of goods or services from Israel. This certification does not apply to a boycott prohibited by 50 U.S.C. § 4842 or a regulation issued pursuant to 50 U.S.C. § 4842. Unless and until the U.S. District Court, District of Arizona’s injunction is lifted, A.R.S. § 35-393.01 is unenforceable.