03.48 Killefer Park Rose Ave Building HVAC �`������q�
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��::, ;�= A GENDA ITEM
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�- June 11, 2019
TO: Honorable Mayor and Members of the City Council
THRU: Rick Otto, City Manager ^ /
1
FROM: Bonnie Hagan, Community Services Director ���
REVIEW: City Mana r Finance r�/�
1 . SUBJECT
Contract with Diversified Thermal Services, Inc. for replacement of the heating,
ventilation, and air conditioning unit at the Killefer Park Rose Avenue building.
2. SUMMARY
This contract is for replacement of the failing heating, ventilation, and air conditioning unit
in the Rose Avenue building at Killefer Park used by the Friendly Center.
3. RECOMMENDED ACTION
Approve the contract with Diversified Thermal Services, Inc. in the amount of $27,454
and authorize the Mayor and the City Clerk to execute on behalf of the City.
4. FISCAL IMPACT
The total expenditure for this contract is$27,454 and will be funded through General Fund
(100).
5. STRATEGIC PLAN GOALS
Goal 3: Enhance and_ promote quality of life in the community
a: Refurbish, maintain, develop and or expand public use places and spaces.
6. DISCUSSION AND BACKGROUND
The City owns Killefer Park located at 615 N. Lemon Street. On the southeast section of
the park is the Rose Avenue building. The City leases the building to the local non-profit,
The Friendly Center, who provides an array of needed social services to the community.
The City is responsible for maintenance of the structural, mechanical, and exterior
plumbing of the building.
The heating, ventilation, and air conditioning (HVAC) system in the Rose Ave. building
has reached the end of its useful life. The air conditioning portion of the system requires
frequent repair and now the furnace portion of the system is no longer functioning and
ITEM 3. `�� � 06/11/2019
beyond repair. Replacement of the entire HVAC unit is required to maintain proper
heating and cooling of the building.
Bid requests for replacement of the HVAC unit were sent to three qualified HVAC
contractors. A bid abstract is attached for reference. Diversified Thermal Services, Inc.
(DTSI) submitted the lowest responsible bid in the amount of$24,958. Staff recommends
award of contract to DTSI in the not to exceed amount of $27,454, which includes a 10%
contingency of $2,496 to address any unforeseen conditions that may arise.
DTSI is currently under contract with the City for ongoing preventative maintenance and
repair of all City HVAC systems. DTSI has demonstrated the ability to perform quality
wo rk.
Although this individual contract is under the City Manager's $30,000 threshold for
approving services, DTSI's cumulative total exceeds$30,000, and therefore requires City
Council approval.
7. ATTACHMENTS
1. Bid Abstact Summary
2. Contract
� ITEM 2 06/11/2019
Project: Killefer Park HVAC Replacement
BID ABSTRACT SUMMARY
� Date Advertised: n/a
Bid Due Date: 4/22/2019
Engineer's Cost Estimate: $25,000
Company/Contractor �� Diversified ,��� Mechanical Envise
-;_ � .ThermaC:; �';;;; Inc.
-:'�Services;:;:lnc.:=:.
: Y�; ` `'�`°`,,:'''.�� La Puente, Garden
:,Anaheim:;;:Ca:�::; Grove,
City(Location of Company) _ Ca. Ca.
Bid Amount Per Request for Bids `� : -:$24,958` '" $26,640 $27,882
.'Recomrnendecl:
Award:,-,.�_ ; .
CONTRACT
[Killefer Park AVAC Replacement]
THIS CONTRACT (the "Contract") is made and entered into as of , 2019
("Effective Date") by and between the CITY OF ORANGE, a municipal corporation ("City"),
and Diversified Thermal Services, Inc., a California corporation("Contractor"),with its principal
office for putposes of this Contract at 1220 North Barsten Way,Anaheim, Ca., 92806.
ARTICLE 1
Work Performed
a. For and in consideration of the payments and agreements hereinafter mentioned,
to be made and performed by City, Contractor hereby agrees to and shall do all the work and
furnish all the labor, materials, tools and equipment, except such as are mentioned in the
specifications to be furnished by City to Contractor, necessary to complete in good workmanship
and substantial manner the work(herein refened to as the"Work") described in:
(1) Contractor's Proposal(Exhibit A),which includes scope of services ("Plans");
(2) The latest edition of the "City of Orange Standard Plans and Specifications" (the
"Orange Book")with the term "Engineer", as used in the Orange Book and in this
Contract,to specifically include the City Engineer(or his/her designee);
(3) The "Standard Specifications for Public Works Construction" (the "Green
Book"), and all amendments thereto;
(4) The City of Orange Landscape Standards and Specifications.
b. Contractor acknowledges that it has received the Plans from City and that a
complete copy of the Plans are in its possession and are hereby specifically referred to and by
such reference made a part hereof. The Orange Book, Green Book, and City of Orange
Landscape Standards and Specifications are on file with City's Community Services Department
and are hereby specifically referred to and by such reference made a part hereof. Contractor
hereby acknowledges that it has read, reviewed and understands the Plans, the Orange Book, the
Green Book, and the City of Orange Landscape Standards and Specifications as they relate to the -
Work, all of which documents shall be referred to herein collectively as the "Plans and
Specifications".
c. Contractor acknowledges the provisions of Chapter 8.28 of the Orange Municipal
Code which requires, among other things, that Contractor utilize City's exclusive solid waste
hauler for the rental of bins for trash and debris removal and imposes mandatory recycling
requirements for self-hauled construction and demolition waste. The terms and conditions set
forth in this Contract shall control over any terms and conditions in the Plans and Specifications
to the contrary.
d. The Work shall be performed in conformity with the Plans and Specifications and
the Proposal and all applicable laws, including any and all applicable federal and state labor laws
and standards and applicable prevailing wage requirements and any and all state, federal and
local statutes, regulations and ordinances relating to the protection of human health or the
environment.
e. Unless and until otherwise notified in writing by City's Community Services
Director, City Parks Maintenance Supervisor Paul Miller, ("Authorized City Representative"),
shall be the person to whom Contractor will report for the performance of the Work hereunder.
It is understood that Contractor's performance hereunder shall be under the direction and
supervision of the Authorized City Representative or such other person as City's Community
Services Director may designate from time to time, that Contractor shall coordinate the Work
hereunder with the Authorized City Representative to the extent required by the Authorized City
Representative, and that all performances required hereunder by Contractor shall be performed
to the satisfaction of the Authorized City Representative or City's Community Services Director.
f. It is expressly agreed by and between the parties hereto that should there be any
conflict between the terms of this instrument and the bid or proposal of Contractor, then this
instrument shall control and nothing herein shall be considered as an acceptance of the said
terms of said proposal conflicting herewith.
ARTICLE 2
Commencement of Work
Contractor agrees to commence the Work provided for in this Contract within fifteen
(15) days of the date of the issuance by City of a Notice to Proceed and to diligently prosecute
completion of the Work within thirty(30)calendar days from such date or as otherwise agreed to
by and between the Project Manager and Contractor. Time is of the essence in this Contract.
Contractor shall do all things necessary and incidental to the prosecution of Contractor's work.
ARTICLE 3
Compensation
Contractor agrees to receive and accept an amount not to exceed TWENTY-SEVEN
THOUSAND FOUR HLTNDRED FIFTY-THREE DOLLARS AND 80/100 ($27,453.80) as full
compensation for fiirnishing all materials and doing all the Work contemplated and embraced in
this Contract. Said compensation covers (1) all loss or damage arising out of the nature of the
Work, from the acts of the elements; (2) any unforeseen difficulties or obstructions which may
arise or be encountered in the prosecution of the Work until its acceptance by City; (3) all risks
of every description connected with the Work; (4) all expenses incurred by or in consequence of
the suspension or discontinuance of the Work; (5) and well and faithfully completing the Work,
and for the whole thereof, in the manner and according to the Plans and Specifications, and
requirements of the Authorized City Representative under them.
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ARTICLE 4
Licenses
Contractor represents that it and any subcontractors it may engage, possess any and all
licenses which are required under state or federal law to perform the Work contemplated by this
Contract and that Contractor and subcontractors shall maintain all appropriate licenses, including
a City of Orange business license, at its cost, during the performance of this Contract.
ARTICLE 5
Guarantees
a. Contractor guarantees the construction and installation of all work included in the
Plans and Specifications for which Contractor has been awarded this Contract.
b. Should any of the materials or equipment installed pursuant to this Contract prove
defective or should the Work as a whole prove defective, due to faulty equipment,worlananship,
materials furnished or methods of installations, or should said Work or any part thereof fail to
function properly, as designed, due to any of the above causes within twelve (12) months after
the date on which said Work specified in this Contract is accepted by City, Contractor shall make
repairs and furnish such materials and equipment as are necessary to be furnished and installed
within fifteen(15) calendar days after the receipt of a demand from City.
c. Said Work will be deemed defective within the meaning of this guarantee in the
event that it fails to function as originally intended either by the Plans and Specifications of this
Contract or by the manufacturer(s) of the equipment incorporated into the Work.
d. In the event repairs are not made within fifteen (15) calendar days after
Contractor's receipt of a demand from City, City shall have the unqualified option to make any
needed repairs or replacements itself or by any other contractor. Contractor shall reimburse City,
upon demand, for all expenses incurred in restoring said Work to the condition contemplated in
this Contract, including the cost of any equipment or materials replaced.
e. It is understood that emergency repairs may, by necessity, be made by City.
Therefore, when defective equipment, materials or workmanship result in emergency repairs by
City, Contractor shall reimburse City, upon demand, for all expenses incurred. Emergency
repairs will be deemed as those repairs determined by City's Director of Community Services to
be necessary due to an immediate detriment to the health, safety, welfare or convenience of the
residents of City.
ARTICLE 6
Water Quality
a. The Santa Ana Regional Water Quality Control Board ("RWQCB") has issued
National Pollutant Discharge Elimination System ("NPDES") Permit No. R8-2009-0030 (the
"Permit"), which govems storm water and non-storm water discharges resulting from municipal
activities performed by City or its contractors. In order to comply with the Permit requirements,
the County of Orange has prepared a Drainage Area Management Plan ("DAMP"), containing
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Model Maintenance Procedures with Best Management Practices ("BMPs") that City and its
contractors must adhere to. The Model Maintenance Procedures contain pollution prevention
and source control techniques to minimize the impact of those activities upon dry-weather urban
runoff, storm water runoff, and receiving water quality. Examples include: wash water from
cleaning of sidewalks or parking lots must be collected and disposed of in the sewer or
landscaped areas.
b. The Permit, the DAlVIP and the Model Maintenance Procedures are on file in the
office of City's Director of Public Works. Contractor hereby acknowledges that it has read,
reviewed and understands the Pernut, the DAMP and the Model Maintenance Procedures, as
they relate to the Work and hereby agrees to perform the Work in conformance therewith.
ARTICLE 7
, Independent Contractor, Contractor not Agent
a. At all times during the term of this Contract, Contractor shall be an independent
contractor and not an employee of City. City shall have the right to control Contracto� only
insofar as the result of Contractor's services rendered pursuant to this Contract. City shall not
have the right to control the means by which Contractor accomplishes services rendered pursuant
to this Contract. Contractor shall, at its sole cost and expense, furnish all facilities, materials and
equipment which may be required for furnishing services pursuant to this Contract. Contractor
shall be solely responsible for, and shall indemnify, defend and save City harmless from all
matters relating to the payment of its subcontractors, agents and employees, including
compliance with social security, withholding and all other wages, salaries, benefits, taxes,
exactions, and regulations of any nature whatsoever. Contractor acknowledges that Contractor
and any subcontractors, agents or employees employed by Contractor shall not, under any
circumstances, be considered employees of City, and that they shall not be entitled to any of the
benefits or rights afforded employees of City, including, but not limited to, sick leave, vacation
leave, holiday pay, Public Employees Retirement System benefits, or health, life, dental, long-
term disability or workers'compensation insurance benefits.
b. Except as City may specify in writing, Contractor shall have no authority, express
or implied,to act on behalf of City in any capacity whatsoever as an agent. Contractor shall have
no authority, express or implied,to bind City to any obligation whatsoever.
ARTICLE 8
Public Work,Prevailing Wage
a. The Work which is the subject of this Contract is a "public work", as that term is
defined in Section 1720 of the California Labor Code, for which prevailing wages must be paid.
To the extent Contractor's employees will perform any work that falls within any of the
classifications for which the Department of Labor Relations of the State of California
promulgates prevailing wage deternunations, Contractor hereby agrees that Contractor, and any
subcontractor under it, shall pay not less than the specified prevailing rates of wages to all such
workers. The general prevailing wage determinations for crafts can be located on the website of
the Department of Industrial Relations (www.dir.ca.�ov/DLSR). Additionally, to perform work
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under this Contract, Contractor must meet all State registration requirements and criteria,
including project compliance monitoring.
b. Attached hereto as E�chibit B, and incorporated herein by this reference is a copy
of the provisions of Sections 1725.5, 1771, 1771.1, 1771.4, 1775, 1776, 1777.5, 1813 and 1815
of the California Labor Code. Contractor hereby acknowledges that it has read, reviewed and
understands those provisions of the Labor Code and hereby agrees to and shall prosecute and
complete the Work under this Contract in strict compliance with all of those terms and
provisions.
c. Contractor hereby agrees to and shall secure the payment of compensation to its
employees in accordance with the provisions of Section 3700 of the California Labor Code.
Accordingly, and as required by Section 1861 of the California Labor Code, Contractor hereby
certifies as follows:
"I am aware of the provisions of Section 3700 of the Labor Code which
require every employer to be insured against liability for workers'
compensation or to undertake self-insurance in accordance with the provisions
of that code, and I will comply with such provisions before commencing the
performance of the work of this contract."
d. Contractor hereby agrees to and shall indemnify, protect, defend and hold
harnlless City and its officers, employees, contractors and agents, with counsel reasonably
acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense,
and/or"increased costs" (including reasonable attorney's fees, court and litigation costs, and fees
of expert witnesses) which result or arise in any way from the noncompliance by Contractor of
any applicable local, state and/or federal law, including, without limitation, any applicable
federal and/or state labor laws (including, without limitation, the requirement to pay state .
prevailing wages). It is agreed by the parties that, in connection with the construction of the
Work which is the subject of this Contract, Contractor shall bear all risks of payment or non-
payrnent of state prevailing wages. "Increased costs" as used in this paragraph shall have the
meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or
amended from time to time. The foregoing indemnity shall survive termination of this Contract.
ARTICLE 9
Equal Employment Opportunity
During the performance of this Contract, Contractor agrees as follows:
a. Contractor shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex,national origin,mental or physical disability, or
any other basis prohibited by applicable law. Contractor shall ensure that applicants are
employed and that employees are treated during employment, without regard to their race, color,
religion, sex, national origin, mental or physical disability,.or any other basis prohibited by
applicable law. Such actions shall include, but not be limited to the following: employment,
upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination,
rates of pay or other forms of compensation and selection for training, including apprenticeship.
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Contractor agrees to post in conspicuous places, available to employees and applicants for
employment, a notice setting forth provisions of this non-discrimination clause.
b. Contractor shall, in all solicitations and advertisements for employees placed by,
or on behalf of Contractor, state that all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, national origin, mental or physical
disability, or any other basis prohibited by applicable law.
c. Contractor shall cause the foregoing paragraphs (a) and (b) to be inserted in all
subcontracts for any work covered by this Contract, provided that the foregoing provisions shall
not apply to subcontracts for standard commercial supplies or raw materials.
ARTICLE 10
Conflicts of Interest
Contractor agrees that it shall not make, participate in the making, or in any way attempt
to use its position as a contractor to influence any decision of City in which Contractor lrnows or
has reason to know that Contractor, its officers, partners, or employees have a financial interest
as defined in Section 87103 of the Government Code. -
ARTICLE 11
Indemnity
Contractor agrees to and shall defend, indemnify and hold harmless City and its officers,
officials, agents, employees, attorneys, and contractors from and against any and all claims,
liabilities, losses, damages, penalties, costs or expenses (including reasonable attorneys' fees and
court costs) which City may directly or indirectly sustain or suffer arising from or as a result of
the death of any person or any accident, injury, loss or damage whatsoever caused to any person
or the property of any person which shall occur on or adjacent to the real property which is the
subject of this Contract, or in connection with performance of this Contract which may be
directly or indirectly caused by.the acts or omissions of Contractor or its officers, employees,
contractors or agents, or as a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release of a hazardous waste or substance. Contractor shall not be
_ responsible for (and such indemnity shall not apply to) any willful misconduct, negligence or
breach of this Contract by City or its officers, o�cials, agents, employees, attorneys, or
contractors. The foregoing indemnity shall survive termination of this Contract.
ARTICLE 12
Insurance
' a. Contractor shall procure and maintain for the duration of this Contract insurance
against claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the work hereunder and the results of that work by
Contractor, its agents,representatives, employees or subcontractors.
b. Coverage shall be at least as broad as:
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(1) ISO Form CG 00 O1 - Commercial General Liability coverage.
(2) ISO Form CA 00 O1 -Automobile Liability, code 1 (any auto).
(3) Workers' Compensation insurance as required by California law.
(4) Employer's Liability Insurance.
c. Contractor shall maintain the following minimum amount of insurance: the
greater of(a)the limits set forth in 1 through 4, below; or(b) all of the insurance coverage and/or
limits carried by or available to Contractor.
(1) General Liability $2,000,000 per occurrence for bodily injury, personal
injury and property damage. If
Commercial General Liability insurance
or other form with a general aggregate
limit is used, either the general aggregate
limit shall apply separately to this
project/location or the general aggregate
limit shall be twice the required
occurrence limit.
(2) Automobile Liability $1,000,000 per accident for bodily injury and
property damage.
(3) Workers' Compensation as required by the State of California.
(4) Employer's Liability $1,000,000 per accident for bodily injury or disease.
d. Any insurance proceeds in excess of or broader than the minimum required
coverage and/or minimum required limits which are applicable to a given loss shall be available
to City. No representation is made that the minimum insurance requirements of this Contract are
sufficient to cover the obligations of Contractor under this Contract.
e. Any deductibles or self-insured retentions must be declared to and approved by
City. At the option of City, either: the insurer shall reduce or eliminate such deductibles or self-
insured retentions with respect to City, its officers, officials, agents and employees; or Contractor
shall provide a financial guarantee satisfactory to City guaranteeing payment of losses and
related investigations, claim administration, and defense expenses.
f. Each policy of general liability and automotive liability insurance shall contain, or
be endorsed to contain, the following provisions:
(1) City, its officers, officials, agents and employees are to be covered as additional
insureds with respect to liability arising out of automobiles owned, leased, hired
or borrowed by or on behalf of Contractor(any auto), and with respect to liability
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arising out of work or operations performed by or on behalf of Contractor,
including materials,parts or equipment furnished in connection with such work or
operations.
(2) General Liability coverage shall be provided in the form of an Additional Insured
Endorsement(ISO Form CG 20 10 11 85 or such other form as may be acceptable
to City)to Contractor's insurance policy, or as a separate owner's policy.
(3) For any claims related to this project, Contractor's insurance coverage shall be
primary insurance with respect to City, its officers, officials, agents and
employees. Any insurance or self-insurance maintained by City, its officers,
officials, agents and employees shall be excess of Contractor's insurance and shall
not contribute with it.
(4) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be canceled by either party, except after thirty (30) days' prior
written notice has been provided to City.
g. The minimum liability coverage required above shall apply to City as an
additional insured.
h. Contractor shall furnish City with original certificates of insurance and
endorsements effecting coverage required by this Article 12. The endorsements should be on
forms acceptable to City. All certificates and endorsements are to be received and approved by
City before work commences. However, failure to do so shall not operate as a waiver of these
insurance requirements. City reserves the right to require complete, certified copies of all
required insurance policies, including endorsements effecting the coverage required by these
specifications at any time.
i. All insurance procured and maintained by Contractor shall be issued by insurers
admitted to conduct the pertinent line of insurance business in California and having a rating of
Grade A or better and Class VII or better by the latest edition of Best's Key Rating Guide.
j. Contractor shall immediately notify City if any required insurance lapses or is
otherwise modified and cease performance of this Contract unless otherwise directed by City. In
such a case, City may procure insurance or self-insure the risk and charge Contractor for such
costs and any and all damages resulting therefrom by way of set-off from any sums owed
Contractor.
k. Contractor agrees that in the event of loss due to any of the perils for which it has
agreed to provide insurance, Contractor shall look solely to its insurance for recovery.
Contractor hereby grants to City, on behalf of any insurer providing insurance to either
Contractor or City with respect to the services of Contractor herein, a waiver of any right to
subrogation which any such insurer may acquire against City by virtue of the paytnent of any
loss under such insurance. The Workers' Compensation policy shall be endorsed with a waiver
of subrogation in favor of City for all work performed by Contractor, its employees, agents and
subcontractors. Contractor agrees to obtain any other endorsement that may be necessary to
effect this waiver of subrogation. .
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1. Contractor shall require and verify that all subcontractors maintain insurance
meeting all of the requirements stated herein.
ARTICLE 13
Termination
City, acting through its City Manager or his/her designee, reserves the right to terminate
this Contract for any reason by giving five (5) days' written notice of intent to terminate to
Contractor. Upon receipt of notice, Contractor shall immediately cease work, unless the notice
provides otherwise. Should City terminate this Contract, City shall pay Contractor for services
satisfactorily provided and all allowable reimbursements incurred to the date of termination in
compliance with this Contract, unless such termination shall be for cause, in which event City
may withhold any disputed compensation. City shall not be liable for any claim of lost profits.
ARTICLE 14
Maintenance and Inspection of Records
In accordance with generally accepted accounting principles, Contractor and its
subcontractors shall maintain reasonably full and complete books, documents, papers,
accounting records and other information (collectively, the "records") pertaining to the costs of
and completion of services performed under this Contract. During the term of this Contract and
for a period of three years after termination or completion of this Contract, City shall have the
right to inspect and/or audit Contractor's records pertaining to the performance of this Contract at
Contractor's office. Contractor agrees to make available all such records for inspection or audit
at its offices during norxnal business hours and upon three (3) days' notice from City, and copies
thereof shall be furnished if requested.
ARTICLE 15
Compliance with Laws
a. Contractor shall be knowledgeable of and comply with all local, state and federal
laws pertaining to the subject matter hereof or in any way regulating the activities undertaken by
Contractor or any subcontractor hereunder.
b. Contractor represents and warrants that Contractor
(1) Has complied and shall at all times during the term of this Contract comply, in all
respects, with all immigration laws, regulations, statutes, rules, codes, and orders,
including, without limitation, the Immigration Reform and Control Act of 1986
(IRCA); and
(2) Has not and will not knowingly employ any individual to perform services under
this Contract who is ineligible to work in the United States or under the terms of
this Contract; and
9
(3) Has properly maintained, and shall at all times during the term of this Contract
properly maintain, all related employment documentation records including,
without limitation, the completion and maintenance of the Form I-9 for each of
Contractor's employees; and
(4) Has responded, and shall at all times during the term of this Contract respond, in a
timely fashion to any government inspection requests relating to immigration law
compliance and/or Form I-9 compliance and/or worksite enforcement by the
Department of Homeland Security, the Department of Labor, or the Social
Security Administration.
c. Contractor shall require all subcontractors and/or sub-consultants to make these
same representations and warranties required by this Article 15 when hired to perform services
under this Contract.
d. Contractor shall, upon request of City, provide a list of all employees working
under this Contract and shall provide, to the reasonable satisfaction of City, verification that all
such employees are eligible to work in the United States. All costs associated with such
verification shall be borne by Contractor. Once such request has been made, Contractor may not
change employees working under this Contract without written notice to City, accompanied by
the verification required herein for such employees. Contractor shall require all subcontractors
and/or sub-consultants to make the same verification when hired to perform services under this
Contract.
e. Any Contractor, subcontractor, or sub-consultant who lrnowingly employs an
employee providing work under this Contract who is not authorized to work in the United States,
and/or fails to follow federal laws to deternune the status of such employee shall constitute a
material breach of this Contract and may be cause for immediate termination of this Contract by
City.
f. Contractor agrees to indemnify and hold City, its officials and employees
harmless for, of and from any loss, including but not limited to fines, penalties and corrective
measures, City may sustain by reason of Contractor's failure to comply with said laws, rules and
regulations in connection with the performance of this Contract.
ARTICLE 16
Governing Law and Venue
This Contract shall be construed in accordance with and govemed by the laws of the
State of California and Contractor agrees to submit to the jurisdiction of California courts.
Venue for any-dispute arising under this Contract shall be in Orange County, California.
ARTICLE 17
Integration
This Contract constitutes the entire agreement of the parties. No other agreement, oral or
written,pertaining to the work to be performed under this Contract shall be of any force or effect
10
unless it is in writing and signed by both parties. Any work performed which is inconsistent with
or in violation of the provisions of this Contract shall not be compensated.
ARTICLE 18
Notice
Except as otherwise provided herein, all notices required under this Contract shall be in
writing and delivered personally, by e-mail, or by first class mail, postage prepaid, to each party
at the address listed below. Either party may change the notice address by notifying the other
party in writing. Notices shall be deemed received upon receipt of same or within three (3) days
of deposit in the U.S. Mail, whichever is earlier. Notices sent by e-mail shall be deemed
received on the date of the e-mail transmission.
"CONTRACTOR" "CITY"
Diversified Thermal Services, Inc. City of Orange
1220 North Barsten Way 300 E. Chapman Avenue
Anaheim, CA 92806 Orange, CA 92866-1591
Attn: Manuel Beltran Arin: Paul Miller
Telephone No.: (714) 632-7401 Telephone No.: (714) 532-6472
E-Mail Address: manuelb@dthermal.com E-Mail Address: pmiller@cityoforange.org
ARTICLE 19
Claim Resolution
City and Contractor agree that the claim resolution process applicable to any claim by
Contractor in connection with the work provided herein shall be subject to the procedures set
forth in California Public Contract Code Section 9204, attached hereto as Eachibit C, and
incorporated herein by this reference.
ARTICLE 20
Counterparts
This Contract may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
Signatures transmitted via facsimile and electronic mail shall have the same effect as original
signatures.
[Remainder of page intentionally left blank;sighatures on next pageJ
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IN WITNESS WHEREOF,the parties have entered into this Contract as of the date and
year first above written.
"CITY"
CITY OF ORANGE, a municipal corporation
By:
Mark A. Murphy
Mayor of the City of Orange
CONTRACT AND 1NSUR.ANCE
APPROVED BY: ATTEST:
Mary E. Binning Pamela Coleman, City Clerk
Senior Assistant City Attorney
"CONTRACTOR"
DIVERSIFIED THERMAL SERVICES, INC.,
a California corporation
[Note: Signature of Chairman of the By:
Board,President or Vice President is Printed Name:
requiredJ Title:
[Note: Signature ofSecretary,Assistant By:
Secretasy, Chief Financial Officer or Printed Name:
Assistant Treasurer is also requiredJ Title:
12
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REQUEST FOR BID (RFB)
KILLEFER PARK HVAC REPLACEMENT
CITY OF ORANGE
COMMUNITY SERVICES DEPARTMENT
230 E.Chapman Ave.
Orange,CA 92866
(714)744-7274
Date: April 15,2019
PROJECT NAME:KILLEFER PARK HVAC REPLACEMENT
Location Address: 615 N.Lemon Street,Orange,Ca.92866
Contact Name: Paul Miller,Park Maintenance Supervisor,714-532-6472
E-Mail Address: pmiller@cityoforange.org
PROJECT DESCRIPTION: The City of Orange, CA, a Municipal Corporation, is requesting qualified
contractors to provide bids to replace two(2)three ton HVAC systems. All work shall conform to City of
Orange codes,ordinances and standards.The work will generally include,but not be lunited to:
1. Provide,deliver,and install all job related material to the jobsite.
2. Remove(2)ground mounted condensing units and(2)gas furnace units.
3. Disconnect all electrical from old units and reconnect electrical to new units.
4. Recover all refrigerant and disconnect refrigerant lines. '
5. Disconnect fiunace,coil,gas,electrical and flue pipe and remove from storage cabinet.
6. Rig and set(2)new 3 ton condensing units and place on new or exisring pads.
7. Install new coils and secure all connections to new units.
8. Install all new sheet metal extensions and connections from coil to existing plenums.
9. Reconnect gas line,condensate,main feed power and refrigerant piping.
10. Leak test all new connections.
11. Extend and reconfigure all ventilation pipes and connect to new units.
12. Flush and connect e�cisting refrigerant pipes and reconnect to new units.
13. Ensure both systems are charges with the proper amount of correct refrigerant.
14. Provide start-up of the new equipment and provide start up report.
15. Work site to be left clean.
16. Properly dispose of old units and debris.
Exhibit A
Page 1 of 6
GENERAL PROVISIONS:
- NOTE:All construction work shall be performed in adherence to City of Orange Standards and
Specifications (available at the Public Works counter for NON-REFUNDABLE charge of
$12.00 ($15.00 if mailed), the current edition of the CalTrans "Green Book"and the City of
Orange Public Works Standards and Specifications. Contractor shall, at all times, carry valid
insurance which meets all City of Orange insurance requirements.
- The contractor shall pay prevailing wages per the current Department of Industrial Relarions
wage rate(including all scheduled increases)and furnish Certified Payroll Reports for all work
days.
- All work shall conform to the specifications contained in the Request for Bids and any
subsequent Agreements.
- Contractor shall be required to provide a$1,000.00 deposit for use of a City water meter on a
City fire hydrant if needed for the project. Contractor shall be charged $2.00/day for water
meter rental and shall be responsible for all water charges associated with project.
SCOPE OF WORK AND PROJECT SPECIFICATIONS:
SITE PREPARATION:
1. Supply all equipment and labor necessary for all work to be performed under this Request for Bids.
2. The contractor is responsible for making him/herself familiar with all existing site conditions at the
work site within the boundaries detailed of this project including,but not limited to tenain,utilities,
point of connection/supply,parking.
3. The contractor is to at all times during construcrion maintain/keep the job site in a safe condition.
This will include,but not be limited to,the filling of all exposed/open trenches or holes, securing
all components and the removal of construction equipment/tools from the job site.
4. At the conclusion of each day's work,the contractor shall remove all tools and equipment and secure
the work site to ensure safety. The project site shall be left each day in a clean, neat and safe
condition.
SPECIAL INSTRUCTIONS:
1. The City reserves the right to reject any contractor who they feel does not meet a qualifying work
experience or satisfying references.
2. The City reserves the right to rej ect at any time any or all bids,or parts thereof, and to waive any
variances, technicalities and informalities which do not impair the quality, or perfortnance of the
project.
3. Existing site ameniries(ex.building,sidewalks,walls,etc.)are to be protected from all construction
work. Any damage to any existing site amenities including irrigation outside of the work area and
associated landscape that may be affected by this work will be repaired or replaced at the
contractor's expense to the satisfaction of the City of Orange.
Exhibit A
Page 2 of 6
BID SHEET
HILLEFER PARK HVAC REPLACEMENT
Date:
Bid Submitted by:
Company Name:
Address:
Phone#:
Fax#:
E-mail Address:
Contact Name:
Signature of Responsible Officer or Employee Print Name
PROJECT
PROJECT NAME:KILLEFER PARK HVAC REPLACEMENT
Location Address: 615 N.Lemon Street,Orange,Ca.92866
Contact Name: Paul Miller,Park Maintenance Supervisor,714-532-6472
E-Mail Address: pmiller(�a,cityoforange.org
The stated bid amount below constitutes the total dollar amount to perform the work described in the above
scope of services to include all that is required to provide the work product and/or install all materials required
to complete the work to a professional workmanship standard,and to install and apply all materials per the
approved landscape plans and all manufacturer's specifications and recommendations.
Contractor represents and warrants that it has thoroughly invesrigated and considered the scope of services
and fully understands the difficulties and restrictions in performing the work. Contractor represents that it is
experienced in performing the work and will follow professional standards in performance of the work. All
services provided shall conform to all federal, state and local laws, rules and regulations and to the best
professional standards and practices.
Bid may be submitted on company form in place of this bid sheet.
Total bid amount: $
Exhibit A
Page 3 of 6
� (�/�R S I �I�� PROPOSAL
TH�RMAL ��RVIC��
CUSTOMER INFORMATION PROJECT INFORMATION
ATTN: Paul Miller NAME: ORANGE-KILLEFER ROSE HVAC PROJECT
ADDRESS: 300 E Chapman ADDRESS: ROSE ST
CITY: Orange CA ZIP: 92866 CITY: Orange CA 92866
QUOTE#: C17-8636
SCOPE: REMOVE AND REPLACE(2)3-TON RECALLED HVAC SPLIT SYSTEMS
INCLUDES:
1 Order,pickup and deliver all job related material to the jobsite
. 2 Safe off (2)ground mounted condensing units and(2)gas furnace units.
3 Recover R-22 refrigerant and disconnect refrigerant lines.
4 Disconnect furnace,coil,gas,electrical and flue pipe and remove from closets.
5 Rig and set(2)new 3 ton condensing units and place on existing pads.
6 Install new coils and secure to furnace's.
7 Install(2)new sheet metal extension's and connect from coil to existing plenum's.
8 Rework and reconnect gas line,condensate,main feed power and refrigerant piping.
9 Extend and rework flue vent pipe and connect to new units.
10 Flush existing R-22 refrigerant pipes and reconnect.
11 Weld refrigerant pipes and test for leaks.
12 Evacuate and charge each system with the proper amount of R410A refrigerant.
13 Provide start-up of the new equipment and provide start up report.
14 Clean up all job related debris and properly dispose of
NOTES:
* This proposal does NOT allow for permits/fees,finding of any existing system deficiencies,engineering,
and any overtime labor.
* Prevailing Wage Project
All work is based on being completed during normal business hours of 7am to 4:30 pm. Lead Time: 2 Weeks
The total price of this work is $24,958.00 , including all taxes. Terms of payment, unless modified above are
down payment and the balance due upon receipt of invoice.
THIS BID CONTRACT INCLUDES THE TERMS AND CONDITIONS PRINTED ON THE REVERSE SIDE-THEY ARE A PART HEREOF
AND SHOULD BE READ BEFORE SIGNING THIS AGREEMENT.
Your signed acceptance of this agreement within 30 days from April 29,2019 constitute a contract to perform the work
described above,including all Terms and conditions contained herein.Seller shall be defined to mean Diversified Thermal Services
or it's assignees.Buyer shall be defined to mean the owner,Owners/Agents,Builder,Architect,Leases,or any person acting on
behalf of any of the foregoing.
Prepared in duplicate on: April 29,2019 by Diversified Thermal Services,Inc.
BY� Accepted for Buyer:
Ma-v�,�,�.e,L f3e,(�ra.w
(Authorized Signature) (Authorized Signature)
Manuel Beltran
(Name/Title) (Name/Title)
(Date of Acceptance)
REFRIGERATION•AIR CONDITIONING•BUILDING AUTOMATION•VAPOR RECOVERY Exhibit A
1220 NORTH BARSTEN WAY,ANAHEIM,CA 92806•(714)632-7401•FAX(714)632-7402 Page 4 of 6
LICENSE#609967
TERMSAND CONDITIONS
1.A11 work shall be performed during normal worldng hours,unless otherwise stated herein.
2.Seller agrees to maintain in full force and effect a Worlanen's compensation Insurance policy and a Comprehensive Liability Insurance policy in substantial
amounts to protect all parties to this agreement,furnishing certificates of insurance,if required by Buyer.
3.Buyer shall prepare the premises to permit free movement and erection of materials providing necessary openings,supports,cutting,necessary public utility
patchin�,and steam services,and pay all fees in accordance with codes and ordinances unless otherwise indicated in this Bid contract
4.In the event that the Seller encounters any asbestos product or material in the course of performing its work,the Seller shall have the right ta immediately
discontinue its work,and remove its employees from the project,or that portion of the project wherein such product or materials were encountered,until such
rime as any hazards connected therewith are abated,encapsulated ar removed and/or it is determined that no hazard exists;further,Seller shall receive an
extension of time to complete its work and compensation for delays encountered and compensarion for any change in the sequence or method of its work
occasioned as a consequence of said encounter.
S.Seller provides manufacturer's standard warranries on all new equipment,misuse or abuse excluded,for a total period not to exceed one year from date of first
beneficial use,which shall be defined as the Start-up date.Seller guarantees all repaired materials,parts and labor for a period of 90 days from the date of first
beneficial use.There are no warranties,expressed or implied other than the above,unless so noted herein.
6.Seller shall not be liable for any consequential damages including,but not limited to,liquidated damages,loss of rent,interest expense,extended overhead or
any other delay damages of any ldnd,nature or description.It is expressly understood and agreed that the only liability of Seller is to replace defective
workmanship or material as herein above set forth. ,
7.Seller agrees that for a period of ninety days following the initial operation of the installation,it will replace any refrigerant loss caused by defects in the
equipment,material,parts,or worlananship furnished under this contract Replacement of refrigerant due to failure or defects other than items furnished by
S.Seller shall not be liable for the corrosive or erosive action of liquids and/or gases upon the equipment specified,and no part of such equipment shall be
deemed defecrive by reason of its failure to resist physical or chemical acrion of such elements or items upon such equipment.
9.This agreement shall not be binding until duly accepted by an authorized officer of Seller.No person has authority to make or claim any representation,
warranty,term,promise or condition,expressed or implied statutory or otherwise,which is not expressed herein,this agreement constitutes the enrire
agreement between the parties and supersedes and revokes any previous agreement,written or oral,with respect to the labor and equipment covered hereby,
and may not be amended or modified except in writins executed bv the parries hereto.
10.The Seller shall not be bound by any plans and specifications or condirions,e�tisting or otherwise,that have not been presented to or delivered to it,for the
purpose of submitting this bid,nor shall the Seller be bound by any city ordinances,State laws or other governmental regulations not in effect at the time of
submitting this bid,or which had become obsolete and which no longer was enforced by such public body enacring the same.
11.The Seller shall be excused for any delay in completion of this Bid Contract,caused by acts of God,including,but not limited to,wind,rain,flood,storm,
landslide,subsidence and earthquake,acts of neglect of owner or architect or by any employees or agent of either,acts of neglect of separate contractors
employed by owner,acts of public utilities or governmental or public bodies or their agents,material shortages,labor trouble,labor slowdowns,strikes,union
activity causing a reduction in productivity,fire,casualty,delay in transportation,changes ordered in the work.Failure of Buyer to make payments to Seller as
required under this Bid Contract,or other causes beyond the reasonable control of Seller,any of which shall automatically entitle Seller to reasonable or
necessary extensions of the completion date of the work and to an equitable adjustment of the contract price to compensate Seller for all costs and expenses of
additional labor,service,equipment or material and extended overhead resulting from any such delay.If any of the materials specified are not readily available,
the seller may substitute equally efficient materials or fixtures of generally similar character in lieu of the equipment,materials or fixtures specified,and it shalt
allow any differential between the original cost of the materials specified,and the materials furnished.
12.No additional work will be performed unless the Buyer authorizes it in writing.If the Buyer refuses to sign a written work authorization or change order for
the extra work,Seller reserves the right to refuse to perform the extra work. Any extra work performed pursuant to a signed change order shall be subject to
13.Should either party hereto bring suit in court to enforce the terms hereof,any judgment awarded shall include costs,including reasonable attorney's fees to
the prevailing party.
14.Seller assumes no responsibility for the design or funcrionality where Seller prepares shop drawings from existing designs or operation.unless explicitly
stated on the obverse side of this Bid Contract.
15.Seller may suspend further performance under this Bid Contract upon three days written notice to the Buyer in the event the Buyer is in breach of this Bid
Contract for breach other than non-payment.Notice need not be given if work is suspended due to non-payment,or due to the failure of the Buyer to pay for
change orders as provided herein.In the event Seller elects to suspend performance,Seller shall be entitled to remobilization costs,including profit and
overhead,upon the Buyer,bringing payments current or issuing proper change orders for extra work Such costs will equal actual losses sustained by Seller in ,
terminating and restartin�worlc.
16.This contract is entered into upon the understanding that in the prosecution of any work herein specified.Seller will be allowed su�cient time for
performance of said work on the basis of a normal eight-hour day,and in the event that Buyer or any subcontractor,require Seller to perfortn such labor on an
overtime basis,then such addirional expense of every kind and character as Seller mav be required to incur on account of said overtime labor,shall constitute an
17.Any loss or damage to Seller's work,materials or equipment occurring at the site of the project occasioned by fire,tlood,windstorm,riot or civil commotion
shall be protected by Builder's Risk Insurance procured by the contractor or owner without cost to Seller,and Seller shall receive a proportionate share of the
amount of any payment loss under any such policy or policies according as Seller's interest may appear.
18.Notwithstanding any provision in the plans,specificarions,contract between prime contractor and owner,general conditions,or any contract documents
executed by and betuveen contractor and owner having to do with the subject now stated,Seller shall not be liable for the cost of correcting defects occasioned by
the acts or omissions of employees of other sub-contractors,the prime contractor,owner or any segregated contractor,to work performed by Seller.Before
Seller proceeds with any corrective work to repair such damage,the prime contractor or other person or entity contracting with the Seller in this Bid Contract,
shall give Seller unqualified instructions to proceed with the work upon their responsibility to compensate Seller therefor as an extra.
19.The Seller expressly reserves the right to assign all or any portion of its rights and/or duties under the Bid Contract with or without notice to the Buyer
herein.
21.If,in Seller's opinion,Buyer's credit becomes impaired,Seller may at its oprion,suspend work and deliveries under this contract,until it has received full
settlement or security for services rendered,and is satisfied as to Buyer's credit for further shipments.If Buyer fails or refuses to make such payment,or give
such security,then the full amount due under this contract at such time,for labor and material and/or equipment furnished,shall immediately become due and
payable and Seller shall have the right and the oprion to terminate this agreement.In the event that a suspension of this contract is required,because of Buyer's
doubtful credit,an extension of time fixed for the performance of this contract equal to the rime of such suspension,shall automarically occur.If any action is
necessary,to effect collection of any sums due hereunder,Seller shall be entitled to its costs,including reasonable attomey's fees,in addition to all other damages
22.Seller shall serve the owner of the proper[y,Buyer,and the construction lender,if any,a written preliminary notice as prescribed by Civil Code secrions 3097
and 3098. Fxhibit A P�ge 5 of 6
� I�/�RSI �I�� CUSTOMER
TH�RMAL S�RV1C�5
INFORMATION SHEET
PLEASE COMPLETE AND RETURN THE FOLLOWING INFORMATION WITH SIGNED PROPOSAL. DATE:
CUSTOMER BILLING INFORMATION
CUTOMER NAME:
JOB ID:
BILLING ADDRESS:
BUILDING OWNER INFORMATION
LEGAL ENTITY NAME:
ADDRESS:
CONTACT PERSON:
CONTACT PHONE#:
GENERAL OR PRIME CONTRACTOR
CONTRACTOR NAME:
ADDRESS:
CONTACT PERSON:
CONTACT PHONE#:
PRIVATE WORKS-CONSTRUCTION LENDER
CONTRACTOR NAME:
ADDRESS:
CONTACT PERSON:
CONTACT PHONE#:
LOAN#:
PAYMENT BOND INFORMATION(REQUIRED FOR PUBLIC WORKS)
CONTRACTOR NAME:
ADDRESS:
CONTACT PERSON:
CONTACT PHONE#:
BOND#:
REFRIGERATION•AIR CONDITIONING•BUILDING AUTOMATION•VAPOR RECOVERY Exhibit A
1220 NORTH BARSTEN WAY,ANAHEIM,CA 92806•(714)632-7401•FAX(714)632-7402 Page 6 of 6
LICENSE#609967
EXHIBIT B
SECTIONS 1725.5, 1771, 1771.1, 1771.4, 1775, 1776, 1777.5, 1813 and 1815
OF THE CALIFORNIA LABOR CODE
Section 1725.5. Itegistration of contractors; mandatory registration; qualifications and application;
fees; exempt contractors
A contractor shall be registered pursuant to this section to be qualified to bid on, be listed in a bid proposal,
subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of
any public work contract that is subject to the requirements of this chapter. For the purposes of this section,
"contractor"includes a subcontractor as defined by Section 1722.1.
(a)To qualify for registration under this section, a contractor shall do all of the following:
(1)Beginning July 1, 2014,register with the Department of Industrial Relations in the manner prescribed by
the department and pay an initial nonrefundable application fee of three hundred dollars ($300) to qualify
for registration under this section and an annual renewal fee on or before July 1 of each year thereafter. The
annual renewal fee shall be in a uniform amount set by the Director of Industrial Relations, and the initial
registration and renewal fees may be adjusted no more than annually by the director to support the costs
specified in Section 1771.3.
(2)Provide evidence, disclosures, or releases as are necessary to establish all of the following:
(A) Workers' Compensation coverage that meets the requirements of Division 4 (commencing with Section
3200) and includes sufficient coverage for any worker whom the contractor employs to perform work that is
subject to prevailing wage requirements other than a contractor who is separately registered under this
section. Coverage may be evidenced by a current and valid certificate of workers' compensation Insurance
or certification of self-insurance required under Section 7125 of the Business and Professions Code.
(B) If applicable, the contractor is licensed in accordance with Chapter 9 (commencing with Section 7000)
of the Business and Professions Code.
(C) The contractor does not have any delinquent liability to an employee or the state for any assessment of
back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or
determination by a court or any federal, state, or local administrative agency, including a confirmed
arbitration award. However, for purposes of this paragraph, the contractor shall not be disqualified for any
judgment, order, or determination that is under appeal,provided that the contractor has secured the payment
of any amount eventually found due through a bond or other appropriate means.
(D) The contractor is not currently debarred under Section 1777.1 or under any other federal or state law
providing for the debarment of contractors from public works.
(E) The contractor has not bid on a public works contract, been listed in a bid proposal, or engaged in the
performance of a contract for public works without being lawfully registered in accordance with this
section, within the preceding 12 months or since the effective date of the requirements set forth in
subdivision (e), whichever is earlier. If a contractor is found to be in violation of the requirements of this
paragraph,the period of disqualification shall be waived if both of the following are true:
Exhibit B
Page 1 of 10
(i) The contractor has not previously been found to be in violation of the requirements of this paragraph
within the preceding 12 months.
(ii) The contractor pays an additional nonrefundable penalty registration fee of two thousand dollars
($2,000).
(b) Fees received pursuant to this section shall be deposited in the State Public Works Enforcement Fund
established by Section 1771.3 and shall be used only for the purposes specified in that section.
(c) A contractor who fails to pay the renewal fee required under paragraph (1) of subdivision (a) on or
before the expiration of any prior period of registration shall be prohibited from bidding on or engaging in
the performance of any contract for public work until once again registered pursuant to this section. If the
failure to pay the renewal fee was inadvertent, the contractor may renew its registration retroactively by
paying an additional nonrefundable penalty renewal fee equal to the amount of the renewal fee within 90
days of the due date of the renewal fee.
(d)If, after a body awarding a contract accepts the contractor's bid or awards the contract,the work covered
by the bid or contract is determined to be a public work to which Section 1771 applies, either as the result of
a determination by the director pursuant to Section 1773.5 or a court decision, the requirements of this
section shall not apply, subject to the following requirements:
(1) The body that awarded the contract failed, in the bid specification or in the contract documents, to
identify as a public work that portion of the work that the determination or decision subsequently classifies
as a public work.
(2) Within 20 days following service of notice on the awarding body of a determination by the Director of
Industrial Relations pursuant to Section 1773.5 or a decision by a court that the contract was for public work
as defined in this chapter, the contractor and any subcontractors are registered under this section or are
replaced by a contractor or subcontractors who are registered under this section.
(3) The requirements of this section shall apply prospectively only to any subsequent bid, bid proposal,
contract, or work performed after the awarding body is served with notice of the determination or decision
referred to in paragraph(2) of this subdivision.
(e)The requirements of this section shall apply to any bid proposal submitted on or after March 1, 2015, and
any contract for public work, as defined in this chapter, entered into on or after April 1, 2015.
5ection 1771. Payment of general prevailing rate
, Except for public works projects of one thousand dollars ($1,000) or less, not less than the general
prevailing rate of per diem wages for work of a similar character in the locality in which the public work is
performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work
fixed as provided in this chapter, shall be paid to all workers employed on public works.
This section is applicable only to work performed under contract, and is not applicable to work
carried out by a public agency with its own forces. This section is applicable to contracts let for maintenance
work.
Section 1771.1. Registration as a contractor or subcontractor required prior to bici submission;
exceptions; substitutions; Internet listing of registered contractors
Exhibit B
Page 2 of 10
(a) A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the
requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for
public work, as defined in this chapter, unless currently registered and qualified to perform public work
pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid
that is authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5
of the Public Contract Code, provided the contractor is registered to perform public work pursuant to
Section 1725.5 at the time the contract is awarded.
(b)Notice of the requirement described in subdivision (a) shall be included in all bid invitations and public
works contracts, and a bid shall not be accepted nor any contract or subcontract entered into without proof
of the contractor or subcontractor's current registration to perform public work pursuant to Section 1725.5.
(c) An inadvertent error in listing a subcontractor who is not registered pursuant to Section 1725.5 in a bid
proposal shall not be grounds for filing a bid protest or grounds for considering the bid nonresponsive,
provided that any of the following apply:
(1)The subcontractor is registered prior to the bid opening.
(2) Within 24 hours after the bid opening, the subcontractor is registered and has paid the penalty
registration fee specified in subparagraph(E) of paragraph(2) of subdivision(a)of Section 1725.5.
(3) The subcontractor is replaced by another registered subcontractor pursuant to Section 4107 of the Public
Contract Code.
(d)Failure by a subcontractor to be registered to perform public work as required by subdivision (a) shall be
grounds under Section 4107 of the Public Contract Code for the contractor
, with the consent of the awarding authority, to substitute a subcontractor who is registered to perform
public work pursuant to Section 1725.5 in place of the unregistered subcontractor.
(e) The department shall maintain on its Internet Web site a list of contractors who are currently registered
to perform public work pursuant to Section 1725.5.
(fl A contract entered into with any contractor or subcontractor in violation of subdivision (a) shall be
subject to cancellation, provided that a contract for public work shall not be unlawful, void, or voidable
solely due to the failure of the awarding body, contractor, or any subcontractor to comply with the
requirements of Section 1725.5 or this section.
(g) This section shall apply to any bid proposal submitted on or after March l, 2015, and any contract for
public work entered into on or after April 1,2015.
Section 1771.4. Additional requirements when bidding and avvarding pubiic works contracts
(a) All of the following are applicable to all public works projects that are otherwise subject to the
requirements of this chapter:
(1) The call for bids and contract documents shall specify that the project is subject to compliance
monitoring and enforcement by the Department of Industrial Relations.
(2) The awarding body shall post or require the prime contractor to post job site notices, as prescribed by
regulation.
(3) Each contractor and subcontractor shall furnish the records specified in Section 1776 directly to the
Exhibit B
Page 3 of 10
Labor Commissioner, in the following manner:
(A)At least monthly or more frequently if specified in the contract with the awarding body.
(B) In a format prescribed by the Labor Commissioner.
(4) The department shall undertake those activities it deems necessary to monitor and enforce compliance
with prevailing wage requirements.
(b) The Labor Commissioner may exempt a public works project from compliance with all or part of the
requirements of subdivision(a) of this section if either of the following occurs:
(1) The awarding body has enforced an approved labor compliance program, as defined in Section 1771.5,
on all public works projects under its authority, except those deemed exempt pursuant to subdivision (a) of
Section 1771.5, continuously since December 31, 2011.
(2) The awarding body has entered into a collective bargaining agreement that binds all contractors
performing work on the project and that includes a mechanism for resolving disputes about the payment of
wages.
(c)(1) The requirements of paragraph (1) of subdivision (a) shall only apply to contracts for public works
projects awarded on or after January 1, 2015.
(2)The requirements of paragraph(3) of subdivision(a) shall only apply to the following projects:
(A) Projects that were subject to a requirement to furnish records to the Compliance Monitoring Unit
pursuant to Section 16461 of Title 8 of the California Code of Regulations, prior to the effective date of this
section.
(B)Projects for which the initial contract is awarded on or after April l, 2015.
(C) Any other ongoing project in which the Labor Commissioner directs the contractors or subcontractors
on the project to furnish records in accordance with paragraph(3) of subdivision(a).
(D)All projects,whether new or ongoing, on or after January 1, 2016.
Section 1775. Penalties for violations
(a)(1) The contractor and any subcontractor under the contractor shall, as a penalty to the state or political
subdivision on whose behalf the contract is made or awarded, forfeit not more than fifty dollars ($ 50) for
each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates as determined
by the director for the work or craft in which the worker is employed for any public work done under the
contract by the contractor or, except as provided in subdivision (b), by any subcontractor under the
contractor.
(2)(A) The amount of the penalty shall be determined by the Labor Commissioner based on consideration of
both of the following:
(i) Whether the faiiure of the contractor or subcontractor to pay the correct rate of per diem wages was a
good faith mistake and, if so,the error was promptly and voluntarily corrected when brought to the attention
of the contractor or subcontractor.
Exhibit B
Page 4 of 10
(ii) Whether the contractor or subcontractor has a prior record of failing to meet its prevailing wage
obligations.
" (B)(i) The penalty may not be less than ten dollars ($10) for each calendar day, or portion thereof, for each
worker paid less than the prevailing wage rate, unless the failure of the contractor or subcontractor to pay
the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and
voluntarily corrected when brought to the attention of the contractor or subcontractor.
(ii) The penalty may not be less than twenty dollars ($20) for each calendar day, or portion thereof, for each
worker paid less than the prevailing wage rate, if the contractor or subcontractor has been assessed penalties
within the previous three years for failing to meet its prevailing wage obligations on a separate contract,
unless those penalties were subsequently withdrawn or overturned.
(iii) The penalty may not be less than thirty dollars ($30) for each calendar day, or portion thereof, for each
worker paid less than the prevailing wage rate, if the Labor Commissioner deternunes that the violation was
willful, as defined in subdivision(c) of Section 1777.1.
(C) When the amount due under this section is collected from the contractor or subcontractor, any
outstanding wage claim under Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 against
that contractor or subcontractor shall be satisfied before applying that amount to the penalty imposed on that
contractor or subcontractor pursuant to this section.
(D) The determination of the Labor Commissioner as to the amount of the penalty shall be reviewable only
for abuse of discretion.
(E) The difference between the prevailing wage rates and the amount paid to each worker for each calendar
day or portion thereof for which each worker was paid less than the prevailing wage rate shall be paid to
each worker by the contractor or subcontractor, and the body awarding the contract shall cause to be
inserted in the contract a stipulation that this section will be complied with.
(b) If a worker employed by a subcontractor on a public works project is not paid the general prevailing rate
of per diem wages by the subcontractor, the prime contractor of the project is not liable for any penalties
under subdivision (a) unless the prime contractor had knowledge of that failure of the subcontractor to pay
the specified prevailing rate of wages to those workers or unless the prime contractor fails to comply with
all of the following requirements:
(1) The contract executed between the contractor and the subcontractor for the performance of work on the
public works project shall include a copy of the provisions of Sections 1771, 1775, 1776, 1777.5, 1813, and
1815.
(2) The contractor shall monitor the payment of the specified general prevailing rate of per diem wages by
the subcontractor to the employees,by periodic review of the certified payroll records of the subcontractor.
(3) Upon becoming aware of the failure of the subcontractor to pay his or her workers the specified
prevailing rate of wages, the contractor shall diligently take corrective action to halt or rectify the failure,
including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the
public works project.
Exhibit B
Page 5 of 10
(4) Prior to making final payment to the subcontractor for work performed on the public works project, the
contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the
subcontractor has paid the specified general prevailing rate of per diem wages to his or her employees on the
public works project and any amounts due pursuant to Section 1813. ,
(c) The Division of Labor Standards Enforcement shall notify the contractor on a public works project
within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure
of a subcontractor on that public works project to pay workers the general prevailing rate of per diem wages.
Section 1776. Pavroll records; retention; inspection; noncompliance penalties; rules and re�ulations
(a) Each contractor and subcontractor shall keep accurate payroll records, showing the name, address, social
security number, work classification, straight time and overtime hours worked each day and week, and the
actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or
her in connection with the public work. Each payroll record shall contain or be verified by a written
declaration that it is made under penalty of perjury, stating both of the following:
(1)The information contained in the payroll record is true and correct.
(2) The employer has complied with the requirements of Sections 1771, 1811, and 1815 for any work
performed by his or her employees on the public works project.
(b) The payroll records enumerated under subdivision (a) shall be certified and shall be available for
inspection at all reasonable hours at the principal office of the contractor on the following basis:
(1) A certified copy of an employee's payroll record shall be made available for inspection or furnished to
the employee or his or her authorized representative on request.
(2) A certified copy of all payroll records enumerated in subdivision (a) shall be made available for
inspection or furnished upon request to a representative of the body awarding the contract, the Division of
Labor Standards Enforcement, and the Division of Apprenticeship Standards of the Department of Industrial
Relations.
(3) A certified copy of all payroll records enumerated in subdivision (a) shall be made available upon
request by the public for inspection or for copies thereof. However, a request by the public shall be made
through either the body awarding the contract, the Division of Apprenticeship Standards, or the Division of
Labor Standards Enforcement. If the requested payroll records have not been provided pursuant to
paragraph (2), the requesting party shall, prior to being provided the records, reimburse the costs of
preparation by the contractor, subcontractors, and the entity through which the request was made. The
public may not be given access to the records at the principal office of the contractor.
(c) The certified payroll records shall be on forms provided by the Division of Labor Standards Enforcement
or shall contain the same information as the forms provided by the division.
(d)A contractor or subcontractor shall file a certified copy of the records enumerated in subdivision(a)with
the entity that requested the records within 10 days after receipt of a written request.
(e) Any copy of records made available for inspection as copies and fizrnished upon request to the public or
any public agency by the awarding body,the Division of Apprenticeship Standards, or the Division of Labor
Exhibit B
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Standards Enforcement shall be marked or obliterated to prevent disclosure of an individual's name, address,
and social security number. The name and address of the contractor awarded the contract or the
subcontractor performing the contract shall not be marked or obliterated. Any copy of records made
available for inspection by, or furnished to, a joint labor-management committee established pursuant to the
federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) shall be marked or obliterated
only to prevent disclosure of an individual's name and social security number. A joint labor management
committee may maintain an action in a court of competent jurisdiction against an employer who fails to
comply with Section 1774. The court may award restitution to an employee for unpaid wages and may
award the joint labor management committee reasonable attorney's fees and costs incurred in maintaining
the action. An action under this subdivision may not be based on the employer's misclassification of the
craft of a worker on its certified payroll records. Nothing in this subdivision limits any other available
remedies for a violation of this chapter.
(fl The contractor shall inform the body awarding the contract of the location of the records enumerated
under subdivision (a), including the street address, city, and county, and shall, within five working days,
provide a notice of a change of location and address.
(g) The contractor or subcontractor has 10 days in which to comply subsequent to receipt of a written notice
requesting the records enumerated in subdivision (a). In the event that the contractor or subcontractor fails
to comply within the 10-day period, he or she shall, as a penalty to the state or political subdivision on
whose behalf the contract is made or awarded, forfeit twenty-five dollars ($25) for each calendar day, or
portion thereof, for each worker, until strict compliance is effectuated. Upon the request of the Division of
Apprenticeship Standards or the Division of Labor Standards Enforcement, these penalties shall be withheld
from progress payments then due. A contractor is not subject to a penalty assessment pursuant to this section
due to the failure of a subcontractor to comply with this section.
(h) The body awarding the contract shall cause to be inserted in the contract stipulations to effectuate this
section.
(i) The director shall adopt rules consistent with the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and the Information
Practices Act of 1977 (Title 1.8 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code)
governing the release of these records, including the establishment of reasonable fees to be charged for
reproducing copies of records required by this section.
Section 1777.5. Employment of re�istered apprentices; wages; standards; number; apprenticeable
craft or trade; exemntions; contributions
(a) Nothing in this chapter shall prevent the employment of properly registered apprentices upon public
works.
(b) Every apprentice employed upon public works shall be paid the prevailing rate of per diem wages for
apprentices in the trade to which he or she is registered and shall be employed only at the work of the craft
or trade to which he or she is registered.
(c) Only apprentices, as defined in Section 3077, who are in training under apprenticeship standards that
have been approved by the Chief of the Division of Apprenticeship Standards and who are parties to written
apprentice agreements under Chapter 4 (commencing with Section 3070) of Division 3 are eligible to be
Exhibit B
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employed at the apprentice wage rate on public works. The employment and training of each apprentice
shall be in accordance with either of the following:
(1)The apprenticeship standards and apprentice agreements under which he or she is training.
(2)The rules and regulations of the California Apprenticeship Council.
(d) When the contractor to whom the contract is awarded by the state or any political subdivision, in
performing any of the work under the contract, employs workers in any apprenticeable craft or trade, the
contractor shall employ apprentices in at least the ratio set forth in this section and may apply to any
apprenticeship program in the craft or trade that can provide apprentices to the site of the.public work for a
certificate approving the contractor under the apprenticeship standards for the employment and training of
apprentices in the area or industry affected. However, the decision of the apprenticeship program to approve
or deny a certificate shall be subject to review by the Administrator of Apprenticeship. The apprenticeship
program or programs, upon approving the contractor, shall arrange for the dispatch of apprentices to the
contractor. A contractor covered by an apprenticeship program's standards shall not be required to submit
any additional application in order to include additional public works contracts under that program.
"Apprenticeable craft or trade," as used in this section, means a craft or trade determined as an
apprenticeable occupation in accordance with rules and regulations prescribed by the California
Apprenticeship Council. As used in this section, "contractor" includes any subcontractor under a contractor
who performs any public works not excluded by subdivision(o).
(e) Prior to commencing work on a contract for public works, every contractor shall submit contract award
information to an applicable apprenticeship program that can supply apprentices to the site of the public
work. The information submitted shall include an estimate of journeyrnan hours to be performed under the
contract, the number of apprentices proposed to be employed, and the approximate dates the apprentices
would be employed. A copy of this information shall also be submitted to the awarding body if requested by
the awarding body. Within 60 days after concluding work on the contract, each contractor and subcontractor
shall submit to the awarding body, if requested, and to the apprenticeship program a verified statement of
the journeyman and apprentice hours performed on the contract. The information under this subdivision
shall be public. The apprenticeship programs shall retain this information for 12 months.
(fl The apprenticeship program that can supply apprentices to the area of the site of the public work shall
ensure equal employment and affirmative action in apprenticeship for women and minorities.
(g) The ratio of work performed by apprentices to journeymen employed in a particular craft or trade on the
public work may be no higher than the ratio stipulated in the apprenticeship standards under which the
apprenticeship program operates where the contractor agrees to be bound by those standards, but, except as
otherwise provided in this section, in no case shall the ratio be less than one hour of apprentice work for
every five hours of journeyman work.
(h) This ratio of apprentice work to journeyman work shall apply during any day or portion of a day when
any journeyman is employed at the jobsite and shall be computed on the basis of the hours worked during
the day by journeymen so employed. Any work performed by a journeyman in excess of eight hours per day
or 40 hours per week shall not be used to calculate the ratio. The contractor shall employ apprentices for the
number of hours computed as above before the end of the contract or, in the case of a subcontractor, before
the end of the subcontract. However,the contractor shall endeavor,to the greatest extent possible,to employ
apprentices during the same time period that the journeymen in the same craft or trade are employed at the
jobsite. Where an hourly apprenticeship ratio is not feasible for a particular craft or trade, the Chief of the
Exhibit B
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Division of Apprenticeship Standards, upon application of an apprenticeship program, may order a
minunum ratio of not less than one apprentice for each five journeymen in a craft or trade classification.
(i) A contractor covered by this section that has agreed to be covered by an apprenticeship program's
standards upon the issuance of the approval certificate, or that has been previously approved for an
apprenticeship program in the craft or trade, shall employ the number of apprentices or the ratio of
apprentices to journeyrnen stipulated in the applicable apprenticeship standards,but in no event less than the
1-to-5 ratio required by subdivision(g).
(j) Upon proper showing by a contractor that he or she employs apprentices in a particular craft or trade in
the state on all of his or her contracts on an annual average of not less than one hour of apprentice work for
every five hours of labor performed by journeymen, the Chief of the Division of Apprenticeship Standards
may grant a certificate exempting the contractor from the 1-to-5 hourly ratio, as set forth in this section for
that craft or trade.
(k) An apprenticeship program has the discretion to grant to a participating contractor or contractor
association a certificate, which shall be subject to the approval of the Administrator of Apprenticeship,
exempting the contractor from the 1-to-5 ratio set forth in this section when it finds that any one of the
following conditions is met:
(1)Unemployment for the previous three-month period in the area exceeds an average of 15 percent.
(2)The number of apprentices in training in the area exceeds a ratio of 1 to 5.
(3) There is a showing that the apprenticeable craft or trade is replacing at least one-thirtieth of its
journeymen annually through apprenticeship training, either on a statewide basis or on a local basis.
(4) Assignment of an apprentice to any work performed under a public works contract would create a
condition that would jeopardize his or her life or the life, safety, or property of fellow employees or the
public at large, or the specific task to which the apprentice is to be assigned is of a nature that training
cannot be provided by a journeyman.
(1) When an exemption is granted pursuant to subdivision (k) to an organization that represents contractors
in a specific trade from the 1-to-5 ratio on a local or statewide basis, the member contractors shall not be
required to�submit individual applications for approval to local joint apprenticeship committees, if they are
already covered by the local apprenticeship standards.
(m)(1) A contractor to whom a contract is awarded, who, in performing any of the work under the contract,
employs journeymen or apprentices in any apprenticeable craft or trade shall contribute to the California
Apprenticeship Council the same amount that the director determines is the prevailing amount of
apprenticeship training contributions in the area of the public works site. A contractor may take as a credit
for payments to the council any atnounts paid by the contractor to an approved apprenticeship program that
can supply apprentices to the site of the public works project. The contractor may add the amount of the
contributions in computing his or her bid for the contract.
(2) At the conclusion of the 2002-03 fiscal year and each fiscal year thereafter, the California
Apprenticeship Council shall distribute training contributions received by the council under this subdivision,
less the expenses of the Division of Apprenticeship Standards for administering this subdivision,by making
Exhibit B
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grants to approved apprenticeship programs for the purpose of training apprentices. The funds shall be
distributed as follows:
(A) If there is an approved multiemployer apprenticeship program serving the same craft or trade and
geographic area for which the training contributions were made to the council, a grant to that program shall
be made.
(B) If there are two or more approved multiemployer apprenticeship programs serving the same craft or
trade and geographic area for which the training contributions were made to the council, the grant shall be
divided among those programs based on the number of apprentices registered in each program.
(C) All training contributions not distributed under subparagraphs (A) and (B) shall be used to defray the
future expenses of the Division of Apprenticeship Standards.
(3) All training contributions received pursuant to this subdivision shall be deposited in the Apprenticeship
Training Contribution Fund, which is hereby created in the State Treasury. Notwithstanding Section 13340
of the Government Code, all money in the Apprenticeship Training Contribution Fund is hereby
continuously appropriated for the purpose of carrying out this subdivision and to pay the expenses of the
Division of Apprenticeship Standards.
(n) The body awarding the contract shall cause to be inserted in the contract stipulations to effectuate this
section. The stipulations shall fix the responsibility of compliance with this section for all apprenticeable
occupations with the prime contractor.
(o) This section does not apply to contracts of general contractors or to contracts of specialty contractors not
bidding for work through a general or prime contractor when the contracts of general contractors or those
specialty contractors involve less than thirty thousand dollars ($30,000).
(p)All decisions of an apprenticeship program under this section are subject to Section 3081.
Section 1813. Forfeiture for violations; contract stipulation; report of violations
The contractor or subcontractor shall, as a penalty to the state or political subdivision on whose behalf the
contract is made or awarded, forfeit twenty- five dollars ($25) for each worker employed in the execution of
the contract by the respective contractor or subcontractor for each calendar day during which the worker is
required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar
week in violation of the provisions of this article. In awarding any contract for public work, the awarding
body shall cause to be inserted in the contract a stipulation to this effect. The awarding body shall take
cognizance of all violations of this article committed in the course of the execution of the contract, and shall
report them to the Division of Labor Standards Enforcement.
Section 1815. Overtime
Notwithstanding the provisions of Sections 1810 to 1814, inclusive, of this code, and notwithstanding any
stipulation inserted in any contract pursuant to the requirements of said sections, work performed by
employees of contractors in excess of 8 hours per day, and 40 hours during any one week, shall be permitted
upon public work upon compensation for all hours worked in excess of 8 hours per day at not less than 1 1/2
times the basic rate of pay.
Exhibit B
Page 10 of 10
EXHIBIT C
CALIFORNIA PUBLIC CONTRACT CODE SECTION 9204
§ 9204. Legislative findings and declarations regarding timely and complete payment of contractors for
public works projects; claims process
Effective: January 1, 2017
(a) The Legislature finds and declares that it is in the best interests of the state and its citizens to�ensure that
all conshuction business performed on a public works project in the state that is complete and not in dispute
is paid in full and in a timely manner.
(b) Notwithstanding any other law, includirig, but not limited to, Article 7.1 (commencing with Section
10240) of Chapter 1 of Part 2, Chapter 10 (comtnencing with Section 19100) of Part 2, and Article 1.5
(commencing with Section 20104) of Chapter 1 of Part 3, this section shall apply to any claim by a
contractor in connection with a public works project.
(c)For purposes of this section:
(1) "Claim" means a separate demand by a contractor sent by registered mail or certified mail with return
receipt requested, for one or more of the following:
(A) A time extension, including, without limitation, for relief from damages or penalties for delay assessed
by a public entity under a contract for a public works project.
(B) Payment by the public entity of money or damages arising from work done by, or on behalf of, the
contractor pursuant to the contract for a public works project and payment for which is not otherwise
expressly provided or to which the claimant is not otherwise entitled.
(C)Payment of an amount that is disputed by the public entity.
(2) "Contractor" means any type of contractor within the meaning of Chapter 9 (commencing with Section
7000) of Division 3 of the Business and Professions Code who has entered into a direct contract with a
public entity for a public works project.
(3)(A) "Public entity" means, without limitation, except as provided in subparagraph (B), a state agency,
department, office, division,bureau, board, or commission,the California State University,the University of
California, a city, including a charter city, couniy, including a charter county, city and county, including a
charter city and county, district, special district,public authority,political subdivision,public corporation, or
nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the
public agency. •
(B) "Public entity"shall not include the following:
(i)The Deparhnent of Water Resources as to any project under the jurisdiction of that department.
(ii)The Department of Transportation as to any project under the jurisdiction of that department.
(iii)The Deparhnent of Parks and Recreation as to any project under the jurisdiction of that department.
Exhibit C
Page 1 of 4
(iv) The Department of Corrections and Rehabilitation with respect to any project under its jurisdiction
pursuant to Chapter 11 (commencing with Section 7000) of Title 7 of Part 3 of the Penal Code.
(v)The Military Department as to any project under the jurisdiction of that deparhnent.
(vi)The Department of General Services as to all other projects.
(vii) The High-Speed Rail Authority.
(4) "Public works project"means the erection, construction, alteration,repair, or improvement of any public
structure,building,road, or other public improvement of any kind.
(5) "Subcontractor" means any type of contractor within the meaning of Chapter 9 (commencing with
Section 7000) of Division 3 of the Business and Professions Code who either is in direct contract with a
contractor or is a lower tier subcontractor.
(d)(1)(A) Upon receipt of a claim pursuant to this section, the public entity to which the claim applies shall
conduct a reasonable review of the claim and, within a period not to exceed 45 days, shall provide the
claimant a written statement identifying what portion of the claim is disputed and what portion is
undisputed. Upon receipt of a claim, a public entity and a contractor may, by mutual agreement, extend the
time period provided in this subdivision.
(B)The claimant shall furnish reasonable documentation to support the claim.
(C) If the public entity needs approval from its goveming body to provide the claimant a written statement
identifying the disputed portion and the undisputed portion of the claim, and the governing body does not
meet within the 45 days or within the mutually agreed to extension of time following receipt of a claim sent
by registered mail or certified mail, return receipt requested, the public entity shall have up to three days
following the next duly publicly noticed meeting of the governing body after the 45-day period, or
extension, expires to provide the claimant a written statement identifying the disputed portion and the
undisputed portion.
(D) Any payment due on an undisputed portion of the claim shall be processed and made within 60 days
after the public entity issues its written statement. If the public entity fails to issue a written statement,
paragraph(3) shall apply.
(2)(A) If the claimant disputes the public entity's written response, or if the public entity fails to respond to
a claim issued pursuant to this section within the time prescribed, the claimant may demand in writing an
informal conference to meet and confer for settlement of the issues in dispute. Upon receipt of a demand in
writing sent by registered mail or certified mail, return receipt requested, the public entity shall schedule a
meet and confer conference within 30 days for settlement of the dispute.
(B) Within 10 business days following the conclusion of the meet and confer conference, if the claim or any
portion of the claim remains in dispute, the public entity shall provide the claimant a written statement
identifying the portion of the claim that remains in dispute and the portion that is undisputed. Any payment
due on an undisputed portion of the claim shall be processed and made within 60 days after the public entity
issues its written statement. Any disputed portion of the claim, as identified by the contractor in writing,
shall be submitted to nonbinding mediation, with the public entity and the claimant sharing the associated
costs equally. The public entity and claimant shall mutually agree to a mediator within 10 business days
after the disputed portion of the claim has been identified in writing. If the parties cannot agree upon a
mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to
Exhibit C
Page 2 of 4 �
mediate with regard to the disputed portion of the claim. Each party shall bear the fees and costs charged by
its respective mediator in connection with the selection of the neutral mediator. If inediation is unsuccessful,
the parts of the claim remaining in dispute shall be subject to applicable procedures outside this section.
(C) For purposes of this section, mediation includes any nonbinding process, including, but not limited to,
neutral evaluation or a dispute review board, in which an independent third party or board assists the parties
in dispute resolution through negotiation or by issuance of an evaluation. Any mediation utilized shall
conform to the timeframes in this section.
(D) Unless otherwise agreed to by the public entity and the contractor in writing, the mediation conducted
pursuant to this section shall excuse any further obligation under Section 20104.4 to mediate after litigation
has been commenced.
(E) This section does not preclude a public entity from requiring arbitration of disputes under private
arbitration or the Public Works Contract Arbitration Program, if inediation under this section does not
resolve the parties' dispute.
(3) Failure by the public entity to respond to a claim from a contractor within the time periods described in
this subdivision or to otherwise meet the time requirements of this section shall result in the claim being
deemed rejected in its entirety. A claim that is denied by reason of the public entity's failure to have
responded to a claim, or its failure to otherwise meet the time requirements of this section, shall not
constitute an adverse finding with regard to the merits of the claim or the responsibility or qualifications of
the claimant.
(4) Amounts not paid in a timely manner as required by this section shall bear interest at 7 percent per
annum.
(5) If a subcontractor or a lower tier subcontractor lacks legal standing to assert a claim against a public
entity because privity of contract does not exist, the contractor may present to the public entity a claim on
behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing, either on his
or her own behalf or on behalf of a lower tier subcontractor, that the contractor present a claim for work
which was performed by the subcontractor or by a lower tier subcontractor on behalf of the subcontractor.
The subcontractor requesting that the claim be presented to the public entity shall furnish reasonable
documentation to support the claim. Within 45 days of receipt of this written request, the contractor shall
notify the subcontractor in writing as to whether the contractor presented the claim to the public entity and,
if the original contractor did not present the claim,provide the subcontractor with a statement of the reasons
for not having done so.
(e) The text of this section or a summary of it shall be set forth in the plans or specifications for any public
works project that may give rise to a claim under this section.
(fl A waiver of the rights granted by this section is void and contrary to public policy, provided, however,
that (1) upon receipt of a claim, the parties may mutually agree to waive, in writing, mediation and proceed
directly to the commencement of a civil action or binding arbitration, as applicable; and (2) a public entity
may prescribe reasonable change order, claim, and dispute resolution procedures and requirements in
addition to the provisions of this section, so long as the contractual provisions do not conflict with or
otherwise impair the timeframes and procedures set forth in this section.
(g)This section applies to contracts entered into on or after January l,2017.
Exhibit C
Page 3 of 4
i
(h) Nothing in this section shall impose liability upon a public entity that makes loans or grants available
through a competitive application process, for the failure of an awardee to meet its contractual obligations.
(i) This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a
later enacted statute,that is enacted before January 1,2020, deletes or extends that date.
Exhibit C
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