Agreement by and between
the City and County of San Francisco,
Municipal Transportation Agency
and
Alcatel Transport Automation (U.S.) Inc.
for the
Procurement and Installation of an
Advanced Train Control System (ATCS)
THIRD AMENDMENT TO CONTRACT NO. MR-1034R
AND SETTLEMENT AGREEMENT
Third amendment to contract mr-1034r
The City and County of San Francisco, acting by and through its Municipal Transportation Agency ("the City"), and Alcatel Transport Automation (U.S.), Inc. (“Alcatel”) amend Contract No. MR-1034R for the Procurement and Installation of Advanced Train Control System, dated August 10, 1992. This Third Amendment to the Contract and Settlement Agreement ("Third Amendment") is dated for convenience as August _ , 2005 (the "Effective Date").
RECITALS
A. In July 1992, the City and Alcatel entered into a contract for the procurement and installation of an Advanced Train Control System (“ATCS”), known as Contract No. MR-1034R ("the Contract").
B. The City and Alcatel twice previously amended the Contract, by Amendment No. 1 on or about December 13, 1994, and by Amendment No. 2 on or about December 10, 1996.
C. Certain claims have arisen between the City and Alcatel concerning project and contract specifications and requirements, site claims, third party liability indemnities, prolongation costs and work delays.
D. The City and Alcatel mutually acknowledge the existence but make no representation as to the merits of said claims, and have endeavored to resolve all outstanding matters through negotiation and through the execution of this Third Amendment.
E. Work under the Contract remains to be completed. The parties have negotiated the scope of work to be performed to complete the Contract (“Contract Closeout Work”) and payment terms and schedules for that work, the details of which are set out in this Third Amendment.
NOW, THEREFORE, in consideration of the mutual covenants set forth below, the City and Alcatel agree as follows:
1. Contract Closeout Work.
The work listed on Appendix 1 to this Third Amendment is a complete list of all Contract Closeout Work to be completed under the Contract. Alcatel shall perform the Contract Closeout Work as specified in Appendix 1 in nine Batches, in the order described in Appendix 2 to this Third Amendment, and according to the schedule set out in Appendix 3 to this Third Amendment. Time is of the essence for Alcatel's completion of the Remaining Work.
2. Modification of Project Milestones.
The Project Milestones Nos. 13, 14, 15, and 16, listed in the chart below and set out in Amendment No. 2 to the Contract, are deleted and replaced with the project work Batches 1-9 set forth below and more fully described in Appendices 1 and 2 to this Third Amendment.
Deleted Milestones
Milestone Description Payment
13 Release 3 Commissioning Complete $1,324,711.38
14 Release 3 Substantial Completion $ 357,671.00
15 Reliability/Availability/Maintainability Demo $1,324,711.38
16 As Built Documentation and Escrow $1,324 711,38
Upon completion of the Contract Closeout Work is described and listed by Batches in Appendices 1 and 2 with the acceptance criteria set out in Appendix 1. Upon completion of each Batch listed below, the City shall deem the work required in the Batch complete and accepted and make the following payments:
a. Batch 1 $206,000 directly to Alcatel and $100,000 to the Escrow Account held by Union Bank of California (the "Escrow Account") within 30 days from the date of Alcatel's successful demonstration of features included in Batch 1 and invoice for that work.
b. Batch 2 $206,000 directly to Alcatel and $100,000 to the Escrow Account held by Union Bank of California (the "Escrow Account") within 30 days from the date of Alcatel's successful demonstration of features included in Batch 2 and invoice for that work.
c. Batch 3 $206,000 directly to Alcatel and $100,000 to the Escrow Account held by Union Bank of California (the "Escrow Account") within 30 days from the date of Alcatel's successful demonstration of features included in Batch 3 and invoice for that work.
d. Batch 4 $306,000 directly to Alcatel within 30 days from the date of Alcatel's successful demonstration of features included in Batch 4 and invoice for that work.
e. Batch 5 $306,000 directly to Alcatel within 30 days from the date of Alcatel's successful demonstration of features included in Batch 5 and invoice for that work.
f. Batch 6 $306,000 directly to Alcatel within 30 days from the date of Alcatel's successful demonstration of features included in Batch 6 and invoice for that work.
g. Batch 7 $306,000 directly to Alcatel within 30 days from the date of Alcatel's successful demonstration of features included in Batch 7 and invoice for that work.
h. Batch 8 $306,000 directly to Alcatel within 30 days from the date of Alcatel's successful demonstration of features included in Batch 8 and invoice for that work.
i. Batch 9 Within 30 days of Alcatel's successful demonstration of features included in Batch 9 and the City's acceptance of work required by Batches 1-8, the City shall release remaining funds held in escrow with Union Bank of California ("UBOC") and issue a letter to Alcatel confirming that Reliability, Availability & Maintainability Demonstrations have been successfully performed in accordance with the criteria set out in Appendix 1.
City acceptance of any Closeout Work in the above Batches does not relieve Alcatel from correcting service affecting latent defects that appear during the testing period set out in section 21 (“ Completion of Availability Demo”) of Appendix 1 (“MR-1034R Close Out Scope of Work”) of this Agreement.
3. Payment of Purchase Orders and reduction of Performance Bond and Labor and Material Bond
Within 30 days of execution this Third Amendment by both parties, the City shall pay outstanding purchase orders nos. 6.0, 7.0, 8.0, 12.0, and 14.1, for a total amount of $79,618.
Within 10 days of execution this Third Amendment by both parties, the City shall issue a letter to the Surety ( copy to Alcatel) confirming the parties’ agreement to reduce the Performance Bond to four million four hundred thousand dollars ($ 4,400,000) and the Labor and Material Bond to five hundred thousand dollars ($ 500,000).
4. Escrow Funds.
Within 7 days of executing this Agreement, the City will:
(1) Inform UBOC of Alcatel's entitlement to retain all escrowed funds previously dispersed by UBOC to Alcatel from the Escrow Account;
(2) Notify UBOC of the City's waiver and release of all claims against UBOC relating to its release of escrowed funds relating to Contract No. MR-1034R up to the Effective Date of this Third Amendment.
5. Return of Escrow Funds to City for Alcatel's Failure to Complete.
Alcatel shall have twenty-four (24) months from the Effective Date of this Agreement to complete the Contract Closeout Work. If Alcatel, through its own unexcused delay or unexcused delay that it reasonably could have avoided, fails to complete the Contract Closeout Work within twenty-four (24) months of the Effective Date , upon Alcatel's request, the City may, in its sole discretion, provide Alcatel a twelve (12) month extension to complete the Contract Closeout Work. If the City grants such an extension and Alcatel fails to complete the Contract Closeout Work within that extension period, then the total price for the Contract Closeout Work shall be reduced by one million dollars ($1,000,000) which shall be returned to the City from the Escrow Account by UBOC upon demand to UBOC by the City in accordance with Article 6 of the Escrow Agreement For Security Deposits In Lieu Of Retention. Any remaining balance in the Escrow Account shall be released to Alcatel. The parties agree that said reduction in price and return of funds from the Escrow Account is not a penalty, but is a reduction in price for the Contract Closeout Work equal to the reduction in value to the City and to the public of the delayed, incomplete and unfinished Advanced Train Control System ("ATCS"). Said reduction and non-payment for milestones of Batches not met are the City’s sole remedies, and Alcatel’s sole liability, in the event the Contract Closeout Work fails to meet the requirements of this Agreement. The return of the Escrow funds to the City shall be construed as the deemed Final Acceptance of the Contract Closeout Work and Article 9 of this Agreement shall be applicable. For the avoidance of doubt, in the event any delay resulting from the City’s failure to provide support such as the unavailability of vehicles, the City shall grant a reasonable extension of time.
6. Delivery of Software.
Prior to and as a condition of Final Acceptance, Alcatel shall have delivered and installed all "City-specific application software" (as defined in the Contract at 3.4.7 ("Software Ownership") (Part 1, vol. 1, p. VI-78) to the City.
7. Station Controller Relay Check.
Alcatel and the City agree to attempt, within sixty (60) days of the Effective Date, to persuade the California Public Utilities Commission ("CPUC") and the Federal Transit Administration ("FTA") that the Station Controller relay check functionality is not needed. Should the CPUC and the FTA still require the implementation of a Station Controller relay check, then Alcatel will provide that functionality in accordance with the payment terms set out in Section 3, above. In the event Alcatel and the City are successful in persuading the PUC and the FTA that the Station Controller relay check functionality is not needed and Alcatel does not have to provide this functionality, the payment schedule described in Section 3 above will be modified so that upon the completion of each Batch of the work described in Appendices 1 and 2 in accordance with the acceptance criteria set out in Appendix 1, the City will make payments to Alcatel for Batches 1 - 8 as follows upon completion of the work for that Batch:
a. Batch 1 – No payment due
b. Batch 2 – No payment due
c. Batch 3 – No payment due
d. Batch 4 – Payment of $389,600 directly to Alcatel and $100,000 to the Escrow Account
e. Batch 5 – Payment of $389,600 directly to Alcatel and $100,000 to the Escrow Account
f. Batch 6 – Payment of $389,600 directly to Alcatel and $100,000 to the Escrow Account
g, Batch 7 – Payment of $489,600
h. Batch 8 – Payment of $489,600
8. Final Acceptance.
Upon completion of Batches 1-9 and delivery of deliverables required by this Amendment 3, the City shall provide Final Acceptance, and the Contract shall be deemed complete and terminated and the City shall, within thirty (30) calendar days of such completion and termination do the following:
(a) Issue a letter of Final Acceptance in a form to be mutually agreed;
(b) Cause the Performance Bond and the Labor and Material Bond to be released to Alcatel;
(c) Cause the balance of the monies held in escrow in accordance with Article 9 (g) of the Contract to be released to Alcatel.
As a condition of the City’s release of the Labor and Material Bond, Alcatel shall not subcontract any of the Contract Closeout Work and shall certify prior to completion that all suppliers have been paid .
9. Software and Maintenance Support Services Agreement.
On or before June 1, 2006, the City shall formally provide to Alcatel the specification and work scope of maintenance support. Alcatel will respond with a proposal. The parties shall make their best efforts to negotiate and execute a Software and Maintenance Support Services Agreement by December 1, 2006. Said Agreement shall address, at a minimum, responsibilities, procedures, cost and response constraints, and any other conditions for: (i) reporting and resolving software defects detected after expiration of warranties, and (ii) modifying system and the City-specific software when requested by the City.
10. Settlement and Release of Claims.
(a) Scope of Release.
To the extent that this Third Amendment pertains to disputed claims, it does not constitute an admission of liability by either of the Parties. To the extent that this Third Amendment constitutes a release or waiver of claims by either the City or Alcatel, any such release and waiver is expressly intended to apply and shall apply only to those claims of or against the City or Alcatel arising from or related to Alcatel's Work on the ATCS arising prior to the Effective Date of this Third Amendment. Said release or waiver expressly is intended to exclude and shall not apply to, extend to, encompass, release, discharge, waive, impair, or otherwise adversely affect any claims arising from or related to Alcatel's Work on any City project other than the ATCS.
(b) No Third Party Beneficiaries.
Any waiver or release of claim(s) by either the City or Alcatel effected by this Third Amendment shall not inure to the benefit of any third party. This Third Amendment is expressly intended by the parties to benefit only the City and Alcatel, and no third party beneficiary is created or intended. No part of this Third Amendment shall effect a waiver of claim(s) except as specifically provided for herein as to claims that the City and Alcatel might bring against each other that arise prior to the Effective Date of this Third Amendment.
11. Alcatel’s Release of Claims.
Except as otherwise provided in this Third Amendment and subject to the limitations set forth in Paragraph No. 10(a) ("Scope of Release") above, Alcatel fully and finally releases and discharges the City, and each of the City’s past, present and future departments, agencies, boards, commissions, officials, employees, representatives, agents, consultants or attorneys, from any and all claims, demands, actions, causes of action, rights, remedies, obligations, penalties, costs, expenses, damages, interest, attorneys’ fees, losses and liabilities, of any kind or nature, including but not limited to claims for delay costs, impact costs, extended overhead costs, home office overhead, field office overhead, and/or standby time, whenever or however derived, foreseen or unforeseen, suspected or unsuspected, past, present or future, constituting, arising from or related to the Contract and/or Alcatel's Work on the ATCS prior to the Effective Date of this Third Amendment.