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HomeMy WebLinkAbout1992/01/07 Item 11 COUNCIL AGENDA STATEMENT Item II Meeting Date 1/7/92 ITEM TITlE: Resolution 1¡,"5~ Approving an agreement between the City of Chula Vista; VTN Consultants, Inc, j and Ni nyo & Moore for engineering services during the construction of Telegraph Canyon Road/Otay lakes Road Phase III SUBMITTED BY: Director of Public Work~ REVIEWED BY: City Manage!0&t b.ð@ (4/5ths Vote: Yes___No-x-) On March 7, 1989, the City Counci 1 by Resolution No. 13990 approved an agreement between the City of Chul a Vi sta and VTN Consultants, Inc. for the preparation of construction documents and construction support services necessary for the improvement and widening of Telegraph Canyon Road/Otay lakes Road Phase III (between Apache Drive and Rutgers Avenue) and paralleling channel. A first amendment to the agreement was approved by the City Counc il by Resolution No. 15471 on January 23, 1990. This amendment provided for additional engineering services during the design phase of the project. The second amendment to the agreement was approved by the City Counc il by Resolution No. 16411 on November 12, 1991. Thi s amendment, like the first, was necessary to provide engineering services that were unanticipated at the time the original contract was negotiated with VTN. These serv ices became known once the project was under construction. The proposed agreement is necessary because VTN Consultants, Inc. has experienced severe financial difficulties, including having a related corporate entity file for bankruptcy under Chapter 11, and is, therefore, financially unable to keep Ninyo & Moore on the job without our assistance. Ninyo & Moore is a subcontractor to VTN Consultants, Inc. and provides geotechnical and soil s services for the project. The proposed agreement allows the City to deal directly with Ninyo & Moore in the event that VTN Consultants, Inc. defaults their obligations under the original contract. RECOMMENDATION: That Council adopt a resolution approving the agreement. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: In March 1989, the City contracted with VTN Consultants for the preparation of construction documents and plans necessary for the improvement and widening of Telegraph Canyon Road/Otay lakes Road (between Apache Drive and Rutgers Avenue) and parallel ing channel. This contract has been amended twice to accommodate unanticipated engineering services during the design and construct i on phase of the project. The current cap on the VTN Consul tants, Inc. contract is $361,300. To perform their duties under the contract, VTN Consultants, Inc. subcontracted with Ninyo & Moore for geotechnical consulting services and laboratory testing. We are obligated to pay VTN Consultants, Inc. for /1-1 "----..- -----.. Page 2, Item~ Meeting Date 1 7 92 geotechni ca 1 consulting services and 1 aboratory testing during the construct i on phase of the project the 1 ump sum of $22,500. Th is amount was negotiated with VTN Consultants, Inc. the prime contactor and not directly with Ninyo & Moore, This amount was based on 21 working days as stated in VTN's original proposal. This 21 working day limitation was negotiated out of the contract in favor of the flat 1 ump sum amount wi th no time 1 imitat i on. The actual working days requiring geotechnical services and laboratory testing has exceeded 21 days and is expected to cost an additional $40,000 and would require another 100 working days to complete. This has now developed into a problem as the subcontract between VTN Consultants, Inc. and Ni nyo & Moore was based on the same amount ($22,500), but contained a time limitation of 21 working days. The subcontract between VTN Consultants, Inc. and Ninyo & Moore expired on December 13, 1991. Ninyo & Moore has stayed on the job to allow time for a resolution of this problem. It has been staff's position that VTN Consultants, Inc. is responsible to provide the geotechnical services needed to complete the construction of the project regardless of the cost and/or their contract with Ninyo & Moore. Unfortunately, VTN Consultants, Inc. has severe financial difficulties, has a related corporate entity which has filed for bankruptcy under Chapter 11 and is financially unable to absorb the loss and keep Ninyo & Moore "on the job". Ninyo & Moore is providing quality services to the City and the project is at a point where their continuing services are critical. To change geotechnical consultants at this time, although possible, woul d di srupt the construct i on schedule and would result in additional expend itures. For these reasons we would 1 ike to keep Ninyo & Moore on the job and have worked with the City Attorney to negotiate a solution to the problem. The actual amendment to the contract has not been final ized yet, however, it is expected to be completed by the Council meeting. The proposed amendment to the contract generally accomplishes these goals: a. Keep Ninyo & Moore on the job until it is completed. b. Set a cap on the cost of the geotechni ca 1 consulting services and laboratory testing at $32,000 and $8,000 respectively. c. Guarantee payment to Ninyo & Moore by the City d. Keep VTN Consultants, Inc. "on the job" until it is completed. e. Reserve the rights the City and VTN Consultants, Inc. have for claims against each other for breach of contract. In thi s area no more than $12,000 of the $40,000 will be considered "additional payment" to VTN. f. Make VTN Consultants, Inc. responsible for all expenses incurred by Ni nyo & Moore from March 7, 1 989 to December 20, 1991 (despite the subcontract) . /1-;1. --------..--.---- -----.....-.- Page 3, Item~ Meeting Date 1 7 2 Staff, therefore, recommends that the proposed agreement with VTN Consultants, Inc. and Ninyo & Moore as approved by the City Attorney be approved. FISCAL IMPACT: This agreement could increase the cost of the contractual services by $12,000 from $361,300 to $373,300. In addition, there is the possibility of $28,000 in costs to be paid to Ninyo and Moore and possible 1 ega 1 costs in the event of a suit against VTN Consultants, Inc. to recover these funds. Adequate funds are available in Account No. 621-6210-511318 - Widening of Telegraph Canyon Road from Apache Road to Rutgers Avenue to cover this expense, The City will be reimbursed a portion of the design and construction costs from Federal Defense Access and FAU funds. RS:AN-012 WPC 5839E //'3/11- ~ -...----"...........-,-.-,-.-.--,.-."--------,-----.-_..._,~,------ RESOLUTION NO. 1¿L/5Y RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AGREEMENT BETWEEN THE CITY OF CHULA VISTA; VTN CONSULTANTS, INC. ; AND NINYO & MOORE FOR ENGINEERING SERVICES DURING THE CONSTRUCTION OF TELEGRAPH CANYON ROAD/OTAY LAKES ROAD PHASE III WHEREAS, on March 7, 1989, the City Council by Resolution No. 13990 approved an agreement between the city of Chula Vista and VTN Consultants, Inc. for the preparation of construction documents and construction support services necessary for the improvement and widening of Telegraph Canyon Road/Otay Lakes Road Phase III between Apache Drive and Rutgers Avenue and paralleling channel; and WHEREAS, a first amendment to the agreement was approved by the City Council by Resolution No. 15471 on January 23, 1990. and provided for additional engineering services during the design phase of the project; and WHEREAS, the second amendment to the agreement was approved by the City Council by Resolution No. 16411 on November 12, 1991 which amendment was necessary to provide engineering services that were unanticipated at the time the original contract was negotiated with VTN but became known once the project was under construction; and WHEREAS, the proposed agreement is necessary because VTN Consultants, Inc. has experienced severe financial difficulties including having a related corporate entity file for bankruptcy under Chapter 11, and is therefore financially unable to keep Ninyo & Moore on the job without our assistance; and WHEREAS, Ninyo & Moore is a subcontractor to VTN Consultants, Inc. and provides geotechnical and soils services for the project and the proposed agreement allows the City to deal directly with Ninyo & Moore in the event that VTN Consultants, Inc. defaults their obligations under the original contract. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby approve an agreement between the City of Chula Vista; VTN Consultants, Inc. , and Ninyo & Moore for engineering services during he construction of Telegraph Canyon Road/Otay Lakes road Phase III, a copy of which is on file in the office of the City Clerk. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby authorized and directed to execute said agreement for and on behalf of the City of Chula Vista. Presented by Approved as to form by John P. Lippitt, Director of D. ~chard Rudolf, Public Works City Attorney C:\RS\VI'N NiD,yo 01; Mooro 11...5"/1/--6 . - .._-~------_._._... .1-.1<'-"\ " Re.>J,~t:D I-ï-~"" Memorandum of Terms of Standstill Agreement between city of Chula vista ("city") VTN Consultants, Inc. ("VTN"), and Ninyo & Moore ("Ninyo") 1. Recitals A. City of Chula vista ("City") desired the widenipg and improvement of Telegraph Canyon RoadjOtay Lakes Road between Apache Drive and Rutgers Avenue ("project"), and in connection therewith, city contracted with VTN Consultants ("VTN") for design work according to the terms of an agreement liTo Provide Engineering Services for the Improvement and Widening of Telegraph Canyon RoadjOtay Lakes Road (between Apache Drive and Rutgers Avenue) And Parelleling Channel II (" Contract ") dated March 7, 1989, and twice amended thereafter. B. City subsequently contracted with Erreca's to construct the Project. C. Among other services, said design Contract between City and VTN required geotechnical consulting services. D. VTN subcontracted with Ninyo & Moore ("Ninyo") for said geotechnical consulting services, E. VTN warrants that they are in financial difficulty, and can not keep Ninyo on the job without the assistance required by the agreement. They further warrant that they have the authority to enter into this agreement. 2. Obligations Now, therefore the parties agree as follows: A. VTN and Ninyo agree that Ninyo will continue to provide the geotechnical consulting services and lab testing to VTN at the time and material rates set forth on the schedules attached hereto as Exhibit A, and will agree that, on the condition that the construction of the Project will not take more than 100 working days from Monday, December 23, 1991, the maximum compen- sation for said geotechnical services will not exceed $32,000, and if the construction of the Project takes more than 100 working days from such date, that the maximum compensation for vtn2 . wp Settlement MOU January 6, 1992 Page 1 //-7 . ---- said geotechnical services will not exceed $32,000 without further review and approval from the City and VTN. (1) Said maximum compensation is not to include lab testing. Ninyo will agree that, in the absence of significant unforseen circumstances such as significant hazardous contamination, the maximum compensation for all lab testing is to be $8,000, but that they will meet and confer with the City for the purpose of seeking the City's judicious consultation prior to making lab tests as to the need for such testing. (2) Invoices from Ninyo shall show hours and charges for each fee schedule classification pursuant to the fee schedule attached. B. VTN agrees not to charge the city for the costs of administrative overhead in connection with the services provided by Ninyo after December 23, 1991. VTN agrees that they will not charge the City an~ additional monies for the preparation of the final report and as built plans, which will be provided in accordance with the terms of the original Contract. C. City guarantees Ninyo, that upon declaration of VTN's inability to pay due to their financial condition, that VTN will pay Ninyo for services provided under this agreement (not for previous contractual services rendered by Ninyo prior to December 23, 1991). Upon such declaration and non-payment by VTN, City shall promptly pay Ninyo by warrant made payable jointly to VTN and Ninyo, which will be endorsed by VTN and transferred to Ninyo for negotiation. D. The agreement is intended only to achieve the completion of the work required by VTN and Ninyo during the construction of the project in order to mitigate further and greater losses. This agreement is not intended by the parties to constitute a release of any claim of breach or default by one party against the other, or a waiver of any breach committed by one party to the offense or detriment of the other party, or a waiver of any defense that one party may have to the claim of breach or default by another party. Each party specifically reserves the right to make any claim that would have existed prior to this agreement. Nothing in this agreement is intended to negate such rights. E. This agreement shall not waive any right of VTN to submit change orders for additional work, and City will consider such change orders in good faith on their own merits. F. This agreement does not become binding upon the City until approved by the city Council. vtn2 . wp Settlement MOU January 6, 1992 Page 2 //-7 .--. .···.·_·_.......____..____._________n____._._ Signature Page Now, therefore, the parties, having read and understood the terms of this agreement, do hereby express their consent to the terms by setting their hand as of the date adjacent thereto. Dated: January 5, 1992 city Manager Dated: City of Chula vista by: its Mayor Attest: Beverly Authelet, City Clerk Approved as to form: Bruce M. Boogaard City Attorney Dated: January 5, 1992 Ninyo & Moore Geotechnical Consultants, Inc. by: Avram Ninyo, President Dated: January 5, 1992 VTN Consultants, Inc. , by: David Ragland, Senior vice President Approved as to form: Pat Cameron, Esq. vtn2 . wp Settlement MOU January 6, 1992 Page 3 )/ -1 M__"