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Item 4 - Agreement with HASA, Inc., for Supply of Chemicals for the Poway Swim Center, Bid 23-005DATE: TO: FROM: CONTACT: SUBJECT: Summary: AGENDA REPORT CityofPoway January 17, 2023 Honorable Mayor and Members of the City Council Audrey Denham, Director of Community Services AO Roger Morrison, Senior Management Analyst @ (858) 668-4581 or rmorrison@poway.org CITY COUNCIL Agreement with HASA, Inc., for the Supply of Chemicals for the Poway Swim Center, Bid 23-005 A bid request for pool chemicals for the Poway Swim Center was issued on November 16, 2022. Two responsive bids were received. Staff is recommending award of the agreement to the lowest responsible bidder, HASA, Inc. As the cost of pool chemicals has increased and now exceeds the budgeted amount, an appropriation of $18,000 is required to award the agreement. Recommended Action: It is recommended the City Council approve the Agreement for Supply of Chemicals for the Poway Swim Center to HASA, Inc., authorize the City Manager to execute all necessary documents associated with the Agreement, and appropriate funds for the remainder of the fiscal year. Discussion: The City contracts supply and delivery of sodium hypochlorite (chlorine) and hydrochloric acid used to operate the pool. Because of the large quantities and the special delivery requirements to pump the chemicals into the large storage tanks at the pool, as well as consolidation within the pool chemicals industry, there are few companies who have the capability to provide these chemicals. In 2018 after a competitive bidding process with two bidders, the City awarded the contract to Commercial Aquatic Services, Inc., which was subsequently acquired by The Illini Companies, Inc., and then sold to HASA, Inc. The agreement had a term of one year with up to four one-year extensions. The agreement also allowed a Consumer Price Index-based increase in costs at each extension, not to exceed 5% annually. Based on this agreement, three extensions were executed. Costs for pool chemicals have greatly increased across the industry due to inflation and supply chain issues, and the contractor declined the fourth extension, requesting a much higher increase. The City 1 of 8 January 17, 2023, Item #4 therefore put the contract back out to bid. The bid was advertised in the Poway News Chieftain on November 24 and December 1, 2022. Two bids were received by December 13, 2022: Contractor Annual Cost HASA, Inc. $80,623.00 Waterline Technologies, Inc. $94,292.00 An additional nonresponsive proposal was received by email but did not meet bid requirements. Staff is recommending award of the contract to the lowest responsible bidder, HASA, Inc., in the amount of $80,623. The term is once again one year with four potential one-year extensions that allow a Consumer Price Index-based increase in costs at each extension, not to exceed 5% annually. Because the cost of the new agreement is greater than the amount budgeted for FY22/23, an appropriation of $18,000 from the General Fund will be required to fund the chemical purchases for the rest of the fiscal year. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: The annual cost of the agreement based on estimated chemical use is $80,623. Staff is recommending the City Council appropriate $18,000 from the General Fund's Unassigned Fund Balance to the Aquatics Division Budget -Chemicals account (203020-41200) to ensure sufficient budget for the remainder of the fiscal year. Sufficient funds are available for this request. Public Notification: None. Attachment: A. Agreement Reviewed/ Approved By: Wendyl!iaserman Assistant City Manager 2 of8 Reviewed By: Alan Fenstermacher City Attorney Approved By: January 17, 2023, Item #4 CITY OF POWAY FORM OF CONTRACT SALE AND PURCHASE OF GOODS AND MA TE RIALS This Contract, entered into this 17th day of January, 2023, by and between the CITY OF POWAY, a general law city and municipal corporation (the "City"), and HASA, Inc., a California corporation, (the "Seller"). 1. Sale and Purchase. Seller will sell, transfer and deliver to City, and City will accept and purchase from Seller at the location identified in Section 5, below, and in Bid Schedule, attached hereto as Exhibit "A" and made part hereof, all of the goods, materials and other items in such quantities as City may require, of such specified sizes, quality and types, classifications, and minimum order for each shipment, as defined by the Community Services Department, and as are identified in the Bid Schedule. 2. Term. The length of this contract shall be for one year beginning on or about January 17, 2023. The contract may be extended annually for four (4) additional one-year periods for a maximum total of five (5) years. Each year of the Contract, the Seller's costs may be adjusted based on the annual change of the Consumer Price Index for the San Diego-Carlsbad area from January 1 to December 31 of the previous year. The CPI shall be based on "All Urban Consumers", not to exceed five (5) percent. The CPI increase to start with the contract renewal in 2024, if executed. The City may terminate this contract without cause upon providing a 60-day notice. The City requires a 90-day written notice for contractors who have the intention not to renew an extension or to exit the contract. 3. Price. Seller agrees to invoice the goods and services, as it may apply, sold at the prices identified in Bid Schedule. Price to include any State or Federal fees e.g. CA Mill assessment fee. 4. Payment. The City shall make payment within 30 days of receipt of invoice after delivery of chemical product. Payment shall be considered as having been made upon the date such payment is deposited in the U.S. Mail, first-class postage pre-paid and addressed to Seller. 3 of 8 ATTACHMENT A January 17, 2023, Item #4 5. Delivery. Delivery shall be to the City of Poway Swim Center at 13094 Civic Center Drive, Poway, CA 92064, as needed. Delivery hours are Monday-Friday from 7:30 a.m. to 6:30 p.m. and per the requirements of the bid document. 6. Supply and Output Capability of Seller. If Seller is unable for any reason to supply City's requirements, Seller shall immediately notify City and provide its best estimate of the delivery and installation, as it may apply. City may, at its sole and exclusive option, notify Seller in writing of City's decision to terminate the order without liability. If the inability to supply City with its needs is not due to the negligence or faults of Seller, and Seller has notified City in writing as soon as Seller discovers the circumstances necessitating a revised delivery date, the termination of the order shall not entitle City to any damages. 7. Claims. The shipment will be FOB Poway, CA at the address set forth in Section 5, above, with all delivery charges and claims for damage in route are the responsibility of the Seller. Evident damage to any shipment will be indicated by a notation, which will, with the exception of concealed damages, be made by the carrier's agent on the delivery receipt before the receipt is signed for acceptance. The notation must clearly specify the extent of damage. Concealed damage must be reported to the carrier within 15 days of delivery. 8. Assignment and Delegation: Successors. Neither Seller nor City shall assign any rights or delegate any obligations to the Contract without express written approval and acceptance of the other party. Any such assignment or delegation without express written approval and acceptance shall be null and void. All terms, conditions and provisions of this bid proposal shall inure to and bind each of the parties hereto, and each of their successors in interest, executors, and administrators. 9. Indemnification. Seller agrees to indemnify, defend by an attorney of the City's own choice, and hold harmless, the City, and its elected and appointed officers, agents and employees (the "lndemnitees") against any and all liabilities, claims, actions, causes of action, proceedings, suits, damages, judgments, liens, levies, costs and expenses of whatever nature, including reasonable attorneys' fees and disbursements (collectively "Claims"), which lndemnitees may suffer or incur or to which lndemnitees may become subject by reason of or arising out of any injury to or death of any person(s), damage to property, loss of use of property, economic loss or otherwise occurring as a result of or allegedly caused by the City's use of the product and installation services sold by seller to City, 4 of8 January 17, 2023, Item #4 provided that City has not altered or tampered with such product in any way and has used such product in accordance with Seller's or manufacturer's instructions and warnings. If any action or proceeding is brought against lndemnitees by reason of any of the matters against which Seller has agreed to indemnify lndemnitees as provided above, Seller, upon notice from City, shall defend lndemnitees at Applicant's expense by counsel acceptable to City, such acceptance not to be unreasonably withheld. lndemnitees need not have first paid for any of the matters to which lndemnitees are entitled to indemnification in order to be so indemnified. The insurance required to be maintained by Seller under Section 10 of this Agreement shall ensure Seller's obligations under this section, but the limits of such insurance shall not limit the liability of Seller hereunder. Seller shall, upon receipt of written notice of any Claim, promptly take all action necessary to make a claim under any applicable insurance policy; however, if Seller fails to take such action as is necessary to make a claim under any such insurance policy, Seller shall reimburse City for any and all costs, charges, expenses, damages and liabilities incurred by City in making any claim on behalf of Seller under any insurance policy or policies required pursuant to this Agreement. The provisions of this section shall survive the expiration or earlier termination of this Agreement. The provisions of this section do not apply to Claims occurring as a result of this City's sole negligence or willful acts or omissions. The parties agree to cooperate fully in the resolution of any claims for such liability, loss or damage. 10. Seller's Insurance. The City shall be named as an additional insured with the bidder. Refer to the Insurance Code of the State of California. Evidence shall be furnished that the requirements of said code are met. Unless specified otherwise, the minimum requirements are as follows: • Comprehensive General Liability: $1,000,000 Bodily Injury & Property Damage combined each occurrence and $2,000,000 aggregate; • Automobile Liability, including owned, hired, and non-owned vehicles: $1,000,000 Combined Single Limit coverage; • Workers' Compensation insurance: Per the statutory amount. Each policy is to provide primary coverage to City and its elected and appointed boards, officers, agents, and employees. It is not secondary or in any way subordinate to any other insurance or coverage maintained by City. The failure of bidder to provide City with insurance meeting all requirements of this Contract within 15 calendar days after the Award of Bid shall constitute a material breach of the Contract, entitling City to terminate the Contract. All bonds and all insurance shall meet the following standards. The issuing 5 of 8 January 17, 2023, Item #4 company: a. Shall be an "admitted surety" or an insurance company listed by the State Insurance Commissioner; and b. Shall have a rating in the latest Best's Rating Guide of "A-" or better and Class VI or better; or be "treasury listed" for the size of risk to be undertaken. In the event that the company does not satisfy subsection (b) above, the City Attorney or City Manager may only approve such company if the small size of the insurance or surety obligation or other risk factor justify approval, and satisfactory evidence is produced by the company that its financial responsibility and performance capability are sufficient to insure or secure adequately the risk obligation. (See City Council Resolution 90-082.) 11. Integration. The terms of this Contract are intended by the parties to be the final expression of our agreement with respect to such terms and also as a complete and exclusive statement of such terms. Any documents prepared and issued by City in preparation for and preliminary to the award and execution of a Purchase Order are expressly made a part of this Bid. However, in the event of any conflict between the written expressions of such prior documents and the written expressions of this document, the terms and interpretations given to the provisions of this writing shall prevail. No agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of either party, shall be of any effect unless it is in writing and executed by the party to be bound thereby. 12. Applicable Law. The order shall be governed by the laws of the State of California. Any legal action brought to enforce the terms and conditions of this Agreement shall be filed in a court of competent jurisdiction with San Diego County. Seller hereby waives any right to remove any action from San Diego County as is otherwise provided in California Code of Civil Procedure Section 394. In the event any legal action is taken by either party to this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees. costs of suit and other litigation expenses, including expert witness fees, from the other party. [Remainder of Page Left Blank Intentionally] 6 of 8 January 17, 2023, Item #4 IN WITNESS WHEREOF, the parties hereto have caused this order to be executed by their respective authorized representatives. SELLER: ____________ _ Company Name BY: ------------------Signature of Seller's Authorized Representative PRINT NAME: --------------CITY OF POWAY: BY: ------------------Chris Hazeltine, City Manager Date: -----------------ATTEST: BY: Date: --------------------------Carrie Gallagher, CMC, City Clerk Approved as to form: BY: Date: --------------------------A I an Fenstermacher, City Attorney 7 of 8 January 17, 2023, Item #4 8 of 8 EXHIBIT A BID SCHEDULE SUPPLY OF CHEMICALS FOR THE POWAY SWIM CENTER, Bid No. 23-005 (To be completed by bidder.) CHEMICAL DESCRIPTION UNIT QUANTITY UNIT PRICE Sodium Hypochlorite (12.5% Gallons 20,000 $ 3.09 solution) for Main Pool Hydrochloric Acid (31 % solution) for Gallons 2,000 $ 4.31 Main Pool Sodium Hypochlorite (12.5% Gallons 1,500 $ 6.45 solution) for Splash Pad Hydrochloric Acid (31% solution) for Gallons 100 $ 5.28 Splash Pad Total Price •• All costs for delivery are to be borne by the bidder .. TOTAL AMOUNT OF BID IN FIGURES: $ 80,623.00 TOTAL.,. $ 61,800.00 $ 8,620.00 $ 9,675.00 $ 528.00 $ 80,623.00 ------------------TOTAL AMOUNT OF BID IN WORDS: __ ei=g_ht~y_th_o_u_s_a_nd_si_x_h_u_nd_r_e_d_a_nd_tw_e_n~ty~t_h_re_e __ _ _______________ DOLLARS and ___ z_e_r_o ______ CENTS PRICES SHALL BE FIRM FROM DATE OF AWARD OF BID THROUGH JANUARY 16, 2024. DEPOSIT POLICY: (Show Item for Reference) even exchange deposit policy. 53g Drums $75 DEMURRAGE POLICY: (Show Item for Reference) ______________ _ ******************************"k,l:***********"l:-ll:lnt-:t-lr*tt~******HH*~tt***¼>l:***:t-,1:*~*******tt..,._tt~** January 17, 2023, Item #4