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HomeMy WebLinkAboutContracts & Agreements_12-2011_CCv0001.pdf AGREEMENT WITH LOCKHEED MARTIN CORPORATION FOR REIMBURSEMENT OF CITY OF REDLANDS COSTS ASSOCIATED WITH BLENDING OF AGATE No. 2 WELL. This agreement for reimbursement of the City of Redlands' costs for blending of the Agate No. 2 well ("Agreement") is made this 15"' day of February, 2011 ("Effective Date"), by and between Lockheed Martin Corporation ("LMC") and the City of Redlands ("City"). LMC and the City are sometimes individually referred to herein as a "Party" and, together, as the "Parties." RECITALS WHEREAS, LMC has been investigating and remediating a plume of trichloroethylene ("TCE") and a plume of perchlorate in the Bunker Hill Basin (together, the "Plume") pursuant to Cleanup and Abatement Orders Nos. 94-37, 97-58 and 01-56 issued by the Santa Ana Regional Water Quality Control Board (the "Regional Board"); and WHEREAS, consistent with that effort, LMC prepared a Water Supply Contingency Plan (the"Plan") which was approved by the Regional Board in March 1997; and WHEREAS, LMC has taken several measures, since March 1997, to implement and execute the Plan, including the financing and construction of new potable water supply wells for the City, static mixing systems to improve blending capacity, and perchlorate treatment for the City's Rees well; and WHEREAS, observations in monitoring wells located at the former Lockheed Propulsion Company site ("Site"), much of which is currently the San Bernardino Valley Water Conservation District's Mill Creek spreading grounds (used for ground water recharge) in the community of Mentone, suggest that there may be releases of residual perchlorate in soils to groundwater at the Site during periods of high groundwater levels that are caused by high precipitation or recharge operations; and WHEREAS, the release of residual perchlorate in soils has the potential to subsequently cause concentrations exceeding water quality standards at City water supply wells located downgradient of the Site, in particular the Agate No. 2 and possibly the Rees well; and WHEREAS, pursuant to an agreement between LMC and the City dated November 17, 2009, LMC has retrofitted existing equipment at the Rees well to provide perchlorate treatment, location and is funding operations and maintenance of the treatment plant operations; and WHEREAS, observations and analyses performed by LMC and shared with the City indicate that impacts at the Agate No. 2 well from such releases are projected to be brief(on the order of a few months), infrequent (not more than every two to three years), and decreasing in magnitude (as a result of decreasing mass of perchlorate in the soil); and WHEREAS, the City has plans to modify the Agate Reservoir and associated piping to improve blending of the sources of water to this reservoir, which includes the Agate No. 2 well; and while these modifications are designed to address issues minimizing disinfection by- products and contaminants in the Agate No. 1 and Crafton wells, they will also address the projected potential future perchlorate impacts to the Agate No. 2 well to the benefit of LMC; 2 NOW, THEREFORE, in consideration of the mutual promises contained herein, and for such other good and valuable consideration the receipt of which is hereby acknowledged, the City of Redlands and Lockheed Martin Corporation agree as follows: AGREEMENT Section 1. Recitals. The foregoing recitals are true and correct and are incorporated herein by this reference. Section 2. Purpose and Intent 2.1 The purpose of this Agreement is to protect the public health, to fulfill in part the requirements set forth by the Regional Board (correspondence to LMC dated July 31, 1996) and to implement the Water Supply Contingency Plan Requirements in that correspondence. 2.2 This Agreement's specific objective is to ensure that the City has use of its Agate No. 2 well, unencumbered by concentrations of perchlorate which have the potential to briefly and occasionally exceed the current Maximum Contaminant Level ("MCL") of 6 Itg/L. 2.3 This Agreement is not an admission or acknowledgement in fact or law by LMC that it is responsible for the perchlorate contamination, TCE contamination or any other contaminants, or their potential adverse effects on the public health or environment. Section 3. LMC Responsibilities and Actions. LMC shall have the following responsibilities and actions: 3 3.1 LMC shall review and comment on design plans and specifications developed by the City's contractors who are responsible for designing and constructing the modifications to the Agate Reservoir and associated appurtenances (the "Modification Work"). The Modification Work will be performed on the City's existing reservoir and equipment currently located at 1580 Agate Avenue, San Bernardino County. The objective of the Modification Work is to improve blending performance and capacity for water from sources to the reservoir to assure that the City's water supply complies with California Department of Public Health ("DPH") drinking water requirements. 3.2 LMC shall review the scope of work and bid and contract documents prepared by the City for the Modification Work and provide comments to the City for its review and approval prior to construction. The bid and contract documents will be the basis for establishing the amount of the costs for the Modification Work that LMC will fund to the City. LMC will fully fund the costs for the elements of the Modification Work in the scope of work of the bid and contract documents that are directly related to the blending of water from the Agate No. 2 well. The initial amount to be funded will be established prior to initiating the Modification Work. It is likely that there will be changes to the scope of work and to project costs during the execution of the Modification Work. To address such changes, LMC agrees to add ten percent to the initial amount for costs of the agreed-upon elements of the Modification Work. LMC shall consider, but shall not be obligated to fund, changes to the scope of work. LMC shall also have the opportunity to request changes to the scope of work, and will additionally fund the specific costs for such changes. 4 3.3 LMC will not be responsible for operations or maintenance of the Agate Reservoir, associated appurtenances, or the Agate No. 2 well, nor any other asset of the City unless specified under another agreement between LMC and the City. 3.4 LMC is funding the Modification Work in accordance with this Agreement only to address impacts resulting from perchlorate. If additional contaminants or degradation products attributable to past LMC operations at its former Menton site are identified at concentrations exceeding applicable state and federal water quality standards (i.e., state or federal MCL or state NL), the Parties shall meet and confer to identify and implement a mutually-acceptable solution to the issue. 3.5 LMC shall reimburse the City for any necessary analytical testing related to the start up and operation of the blending facilities associated with the Modification Work. LMC shall assist the City with its preparation of blend plans if requested. 3.6 LMC's participation in the Modification Work is based on the City's commitment to operate its water supply system in a manner that does not exacerbate or cause perchlorate impacts, and uses best efforts to minimize the need for any additional measures to mitigate perchlorate impacts in the City's water supply system. Section 4. City Responsibilities and Actions. The City shall have the following responsibilities and actions: 4.1 The City shall develop the scope of work, bid and contract documents, and perform the bid and award activities for the Modification Work, in accordance with public procurement regulations applicable to the City. The City shall provide the scope of work 5 and bid and contract documents to LMC prior to initiating the work in order to allow LMC to review and comment on the scope of work and to establish the funding by LMC described in paragraph 3.2 above. 4.2 The City shall prepare and submit progress invoices to LMC for the agreed-upon Modification Work. Invoices shall be submitted on not more than a monthly frequency. The invoices shall detail the status of each element and task in the agreed upon work (i.e., the percent complete) and the detail shall be consistent with the bid tab in the bid and award documents. The invoice shall also detail the progress costs and total costs, and provide sufficient backup information to allow LMC to approve the invoice for payment. 4.3 The City shall be responsible for all operations and maintenance of the wells, reservoir and piping and appurtenances, and for blending all constituents in sources of water to the Agate Reservoir to concentrations below their respective MCLS. If additional contaminants or degradation products attributable to past LMC operations at this Site are identified at concentrations exceeding applicable state and federal water quality standards (i.e., state or federal MCL or state NL), the Parties shall meet and confer to identify and implement a mutually-acceptable solution to the issue. If the facilities cannot be operated under normal conditions to reduce the concentration of perchlorate to below the MCL, then the Parties shall meet and confer to identify and implement a mutually-acceptable solution to the issue. 4.4 The City shall continue to be the owner of all the existing equipment for the Agate No. 2 well, connecting piping and appurtenances, the Agate Reservoir and all the other sources 6 of water to the reservoir. Further, the City will own all new equipment installed as part of the Modification Work provided for herein. 4.5 The City shall be responsible for all normal sampling and testing required by local and state regulatory agencies, while LMC shall be responsible for the incremental cost relating to operational monitoring of the blending systems (i.e., testing of perchlorate to assure compliance with the MCL). The City shall utilize a laboratory that is mutually acceptable to the Parties. 4.6 In addition, following construction, the City shall provide LMC with as-built plans, including any changes to the original design plans incorporated therein. 4.7 The City shall prepare all documentation required for any modifications to the City's Water Supply System Permit from DPH. The City (and its Contractor) shall be responsible for obtaining all permits and regulatory approvals for construction and operation of the Modification Work. 4.8 The City will collect and analyze samples, and provide copies of all periodic reports required by regulatory agencies (not less than monthly well production data, treatment system specific flow rates, system pressure data, and all analytical data) to LMC. 4.9 The City shall be responsible for compliance with all other regulatory compliance associated with the subject equipment, including NPDES discharge requirements. 4.10 The City shall be responsible for compliance with the California Environmental Quality on all matters covered by this Agreement, where applicable. 7 4.11 The City agrees to take no action against LMC on matters covered by this Agreement so long as LMC is performing of its obligations under this Agreement. Section 5. Defense and IndemnitObligations 5.1 LMC shall defend, indemnify, and hold harmless the City and its elected officials, officers, and employees from and against any and all actions, damages, losses, causes of action, and liability imposed or claimed relating to the injury or death of any person, or damage to any property, including attorneys' fees and other legal expenses, arising directly or indirectly from any negligent or intentionally wrongful act or omission of LMC in performing its obligations under this Agreement. This section 5.1 shall survive any termination of this Agreement. This section 5.2 shall survive any termination of this Agreement. 5.2 The City shall defend, indemnify, and hold harmless LMC and its officers, employees, and agents from and against any and all actions, damages, losses, causes of action, and liability imposed or claimed relating to the injury or death of any person or damage to any property, including attorneys' fees and other legal expenses, arising directly or indirectly from any negligent or intentionally wrongful act or omission of the City in performing its obligations under this Agreement. 5.3 The indemnities set forth in this Section 5 shall not apply to any third party toxic tort claims arising out of the presence of perchlorate or any other contaminant in water purveyed by the City to the City's customers. Nothing in this Agreement shall limit the right of either Party to seek, by an appropriate civil action, indemnity, whether implied or 8 equitable, from the other in the event of a claim by a third party, including but not limited to, a third Party toxic tort claim against either party to this Agreement arising out of or related to perchlorate or any other contaminant from the Bunker Hill Basin. Section 6. Procedure for Reimbursement 6.1 The City shall utilize the City's purchasing policy to secure the services and materials required to perform the Modification Work. 6.2 For those costs that LMC has agreed to pay pursuant to Section 3 above, LMC shall reimburse the City within forty-five (45) days of receipt of complete and detailed invoices from the City. Each invoice shall be broken down into the same cost categories as set forth in the bid documents for the contractor. The statement shall include copies of all relevant documentation, including purchasing documents, backup documentation for all internal costs, and all invoices, including backup documentation to support all invoiced contracted-for costs, and a declaration by an authorized representative of the City that each amount requested in the statement is due and payable to a party who provided materials or services for construction activities with respect to the Modification Work. Invoices should be submitted on not more than monthly basis. The City shall send its invoices to LMC, at the address provided by LMC, as per the terms and conditions of the LMC purchase order to be issued to the City for this the Modification Work. Any invoice seeking payment for an expenditure outside a cost category in the bid documents and any statement which will cause the applicable cost category amount to be exceeded must be accompanied by an explanation of the necessity for that expenditure. 9 Section 7. Miscellaneous 7.1 This Agreement shall be governed by and construed in accordance with the laws of the state of California. 7.2 This Agreement may not be modified except by a written document signed by the Parties. 7.3 This Agreement shall be binding upon and inure to the benefit of the Parties' respective representatives, successors and assigns. 7.4 Severability. If any provision of this Agreement shall be adjudged invalid by any court, the remaining provisions of this Agreement shall remain valid and enforced to the full extent permitted by law. 7.5 No Third Party Beneficiaries. There are no third party beneficiaries of any kind to this Agreement. 7.6 Attorneys' Fees. In the event any legal action or proceeding is brought to enforce or interpret any of the terms or conditions of this Agreement, the prevailing party, in addition to any costs and other relief, shall be entitled to recover its reasonable attorneys' fees, including fees for use of in-house counsel by a Party. 7.7 Cooperation. The Parties agree to cooperate with each other to accomplish the purposes of this Agreement, including exchanging data and information to assist LMC in completing the work under this Agreement. 10 7.8 Integration. This Agreement fully integrates the Parties' agreement and understanding with respect to all matters covered herein. Each Party agrees that it has not relied on any fact, statement or representation other than as specifically recited herein. 7.9 Assignment. This Agreement shall not be assigned without the prior written consent of the City. Any assignment or attempted assignment without such consent shall be null and void and, at the sole option of the City, may result in the immediate termination of this Agreement. Section 8. Termination 8.1 LMC's obligations under this Agreement with regard to the construction of Modification Work shall terminate upon LMC's issuance of final payment. 8.2 LMC's obligations under this Agreement to address perchlorate impacts in the Bunker Hill Basin shall terminate at the time the Santa Ana Regional Water Quality Control Board determines that LMC is no longer required to supply replacement water to water purveyors (which includes the City). Section 9. Notices. All notices or other communications under or in connection with the Agreement shall be in writing and shall be given by (a) personal delivery, (b) telephone facsimile, (c) overnight courier, or (d) U.S. mail. Such notices shall be addressed to the Parties at the addresses set forth below: Lockheed Martin Corporation (LMC) Municipal Utilities and Engineering Director David Constable, Vice President City of Redlands 6801 Rockledge Dr., MP CLE610 P.O. Box 3005 Bethesda, Maryland 20817 Redlands, CA 92373 11 Changes may be made to the names and addresses of the person to whom notices or reports are to be given by giving notice pursuant to this section. WHEREFORE, this Agreement has been executed by the Parties as of the date first written above in San Bernardino County, California. CITY OF REDLANDS LOCKHEED MARTIN CORPORATION Pete Aguilar,Mayor Gene Matsushita, Senior Technical Project Manager ATTEST: Sam Irwin, Citi Clerk 12