HomeMy WebLinkAboutUS Filter Wastewater Group Inc; 2002-08-12; 3675 Part 1 of 5CARLSBAD MUNICIPAL
WATER DISTRICT
San Diego County
California
CONTRACT DOCUMENTS AND SPECIAL
PROVISIONS
FOR
PROCUREMENT OF
MEMBRANE FILTRATION
SYSTEM EQUIPMENT
CONTRACT NO. 3675
May, 2001
CARLSBAD MUNICIPAL WATER DISTRICT
5950 EL CAMINO REAL
CARLSBAD, CALIFORNIA 92008
ts 4/27/01
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Contract No. 3675 Page I of 96 Pages
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_. Item
TABLE OF CONTENTS
Notice Inviting Bids .......................................................................................................................... 7
Instructions to Bidders .................................................................................................................. 11
MFEM's Proposal .......................................................................................................................... 17
Attachment: Bid Calculation Spreadsheet
Equipment Material Source Information ....................................................................................... 44
Bid Security Form .......................................................................................................................... 45
MFEM's Bond to Accompany Proposal ........................................................................................ 46
MFEM's Statement Of Financial Responsibility ............................................................................ 48
MFEM's Statement Of Current Commitments .............................................................................. 49
MFEM's Certificate Of Insurance For General Liability, Employers' Liability Automotive
Liability, Property And Workers' Compensation ........................................................................... 50
MFEM's Statement Of Re-Debarment .......................................................................................... 51
Non-Collusion Affidavit To Be Executed By Bidder And Submitted With Bid .............................. 52
Contract for the Procurement of Goods and Special Services .................................................... 53
Labor And Materials Bond ............................................................................................................ 59
Faithful PerformanceMlarranty Bond ........................................................................................... 61
Escrow Agreement For Surety Deposits In Lieu Of Retention (Optional) .................................... 63
SUPPLEMENTAL PROVISIONS
Part 1 General Provisions
Section 1 Terms Definitions. Abbreviations And Symbols
1-1 Terms .................................................................................................................... 66
1-2 1 -3 Abbreviations ........................................................................................................ 70
Definitions 66 .. .............................................................................................................
Section 2 Scope And Control Of The Work
2-2 [Not Used]
2-4
2-5
Contract Bonds 70
Plans And Speclflcatlons ...................................................................................... 71
2-1 Award and Execution of the Contract ................................................................... 70
2-3 Subcontracts ......................................................................................................... 70 "
..................................................................................................... ...
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Contract No . 3675 Page 2 of 96 Pages
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2-6 Work to be Done ................................................................................................... 72
2-7 [Not Used]
2-8 [Not Used1 ~~
2-9
2-1 0
Section 3
3-2
3-1
3-3
Section 4
4-1
4-2
4-3
4-4
Section 5
Section 6
6-1
6-2
6-3
6-4
6-5
6-6
6-7
6-8
6-9
Section 7
7-1
7-2
7-3
7-4
7-5 7-6
7-7
7-8
7-9
7-1 0
7-1 1
7-1 2
7-1 3
7-14
7-1 5
Section 8
Section 9
9-1
9-2
9-3
7"
iNot Usedi Authority Of Board And Engineer ......................................................................... 73
Changes In Work
Changes in Goods or Special Services ................................................................ 74
Extra Work ............................................................................................................ 75
Disputed Work ...................................................................................................... 76
Materials And Workmanship ................................................................................. 78
Shipment and Delivery of the Goods .................................................................... 78
Substitute Goods .................................................................................................. 80
[Not Used]
Prosecution, Progress And Acceptance Of The Work
Construction Schedule And Commencement Of Work ........................................ 81
Control Of Materials
Access to Goods in Production ............................................................................. 80
Prosecution Of Work ............................................................................................. 85
Suspension of work .............................................................................................. 86
Delays And Extensions Of Time ........................................................................... 87
Time of Completion ............................................................................................... 87
.................................................................................................. Termination of Contract 87 Default by MFEM 86 ........................................................................................
Completion And Acceptance ................................................................................ 88
Liquidated Damages ............................................................................................. 89
Responsibilities Of The MFEM
[Not Used]
[Not Used]
Workers' Compensation Insurance 90
Liability Insurance 90
Permits .................................................................................................................. 90
Cooperation and Collateral Work ......................................................................... 90
[Not Used]
[Not Used]
[Not Used]
Patent Fees or Royalties ....................................................................................... 90
Taxes and Duties .................................................................................................. 91
Indemnification ...................................................................................................... 91
MFEM's Continuing Obligation; Warranties, Guarantees .................................... 91
Correction of Defective Work ................................................................................ 92
[Not Used]
[Not Used]
Measurement & Payment
Lump Sum Work ................................................................................................... 93
Payment ................................................................................................................ 94
.................................................................................................
......................................................................
MFEM's Representative ........................................................................................ 90
@ 4/27/01 Contract No . 3675 Page 3 of 96 Pages
- Part 2 Construction Materials - Not Used
Part 3 Construction Methods - Not Used
SPECIAL CONDITIONS
TECHNICAL SPECIFICATIONS
DIVISION 1 GENERAL REQUIREMENTS
01010 Summary of Goods and Special Services ............................................................... 01010-1
01091 Reference Standards ............................................................................................... 01091-1
01092 Abbreviations and Symbols ..................................................................................... 01092-1
01340 Shop Drawing Procedures ....................................................................................... 01340-1
01610 Transportation and Handling of Goods ................................................................... 01600-1
0161 1 Protection of Goods ................................................................................................. 01610-1
01620 Installation of Membrane Equipment ....................................................................... 01620-1
01660 Commissioning of Membrane Equipment ................................................................ 01660-1
01670 Acceptance Testing of Membrane Equipment ........................................................ 01670-1
01680 Operations Assistance During Correction Period .................................................... 01680-1
01730 Operation and Maintenance Manuals ...................................................................... 01730-1
01731 Training of Operations and Maintenance Personnel ............................................... 01731-1
01740 Membrane System and Module Warranty .............................................................. 01740-1
.. - 01750 Spare Parts .............................................................................................................. 01750-1
DIVISION 2 SITE WORK
NOT USED
DIVISION 3 CONCRETE
NOT USED
DIVISION 4 MASONRY
NOT USED
DIVISION 5 METALS
05503 Anchor Bolts and Expansion Anchors ..................................................................... 05503-1
DIVISION 6 WOODlPLASTlCS
NOT USED
DIVISION 7 ELEMENT PROTECTION
NOT USED
DIVISION 8 DOOWINDOW
,.-
@ 4/27/01 Contract No. 3675 Page 4 of 96 Pages
. NOT USED
DIVISION 9 FINISHES
09900 Painting .................................................................................................................... 09900-1
DIVISION 11 EQUIPMENT
1121 1 Horizontal End Suction Pumps ................................................................................ 1121 1-1
11213 Vertical Turbine Pumps ............................................................................................ 11213-1
11215 Liquid Ring Vacuum Pumps .................................................................................... 11215-1
11240 Chemical Feed Systems, General ........................................................................... 11240-1
1 1246 Memclean Feed System .......................................................................................... 1 1246-1
11214 Vertical In-Line Pumps ............................................................................................. 11214-1
11244 Sodium Hypochlorite System ................................................................................... 11244-1 11245 Citric Acid Feed System ........................................................................................... 11245-1
11248 Sodium Hydroxide Feed System ............................................................................. 11248-1
11250 Fiberglass Reinforced Plastic Tanks ....................................................................... 11250-1
11255 Polyethylene Storage Tanks .................................................................................... 11255-1
11 300 Membrane Filtration (MF) System, General ............................................................ 11300-1
11 306 Memcor CMF-S Membrane Filtration System ......................................................... 11305-1
11307 Pall Membrane Filtration System ............................................................................. 11306-1
11308 Zenon Membrane Filtration System ......................................................................... 11308-1
11340 Automatic Self-cleaning Strainers ........................................................................... 11340-1
11375 Rotary Positive Displacement Blowers .................................................................... 11 375-1
11 305 Memcor CMF Membrane Filtration System ............................................................. 11304-1
.- I 1370 Compressed Air System .......................................................................................... 11370-1
...
DIVISION 12 FURNISHING
NOT USED
DIVISION 13 SPECIAL CONSTRUCTION
13320 Instrumentation and Control System. General ........................................................ 13320-1
13325 Control Panels .......................................................................................................... 13325-1
13335 Programmable Logic Control (PLC) System ........................................................... 13335-1
13340 Supervisory Control System ..................................................................................... 13340-1
13350 Control Loop Functional Descriptions ...................................................................... 13350-1
13330 Instrument Specifications ......................................................................................... 13330-1
DIVISION 14 CONVEYANCE SYSTEMS
NOT USED
DIVISION 15 MECHANICAL
15062 Stainless Steel Piping Systems ............................................................................... 15062-1
15063 Copper Plplng Systems ........................................................................................... 15063-1
15065 PVC Piping Systems ................................................................................................ 15065-1
15070 CPVC Piping Systems ............................................................................................. 15070-1
15071 HDPE Piping Systems ............................................................................................. 15071-1
15072 ABS Piping Systems ................................................................................................ 15072-1
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4/27/01 Contract No . 3675 Page 5 of 96 Pages
15100 Valves and Appurtenances ...................................................................................... 15100-1
DIVISION 16 ELECTRICAL
16100 Electrical Work ......................................................................................................... 16100-1
16484 Low Voltage Variable Frequency Drives (6 pulse) .................................................. 16484-1
DRAWINGS
BOUND SEPARATELY
INFORMATION FOR CONTRACTOR
A. TO OBTAIN A COPY OF CURRENT PIAN HOLDERS LIST
PHONE (760) 602-2460
B. QUESTIONS PERTAINING TO PLANS AND CONTRACT DOCUMENTS
DEPUTY CITY ENGINEER
PHONE (760) 602 - 2768
Q 4/27/01 Contract No. 3675 Page 6 of 96 Pages
CARLSBAD MUNICIPAL WATER DISTRICT
NOTICE INVITING BIDS
Until 4:OO P.M. on the 28th day of June, 2001, the City shall accept bids, clearly marked as such, at
the Faraday Center, 1635 Faraday Avenue, Carlsbad, CA 92008-7314, Attn: Purchasing Ofticer, by
mail, delivery service or by deposit in the Bid Box located in the first floor lobby, at which time they
will be opened and read, for performing the work as follows: procurement of Goods and Special
Services for hollow fiber membrane filtration system equipment as described herein.
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM EQUIPMENT
the Board of Directors of the Carlsbad Municipal Water District on file with the Engineering
The work shall be performed in strict conformity with the drawings and specifications as approved by
description of the work.
Department. Reference is hereby made to the drawings and specifications for full particulars and
The District intends to enter a contract with a qualified membrane filtration equipment manufacturer
(MFEM) to furnish the specified Goods and Special Services.
The Carlsbad Municipal Water District encourages the participation of minority and women-owned
businesses.
" The Carlsbad Municipal Water District encourages all bidders, suppliers, manufacturers, and
fabricators to utilize recycled and recyclable materials when available, appropriate and approved by
the Engineer.
The Carlsbad Municipal Water District may disqualify a MFEM from participating in bidding when a
MFEM has been debarred by the Carlsbad Municipal Water District or another jurisdiction in the
State of California as an irresponsible bidder.
No bid will be received unless it is made on a proposal form furnished by the Purchasing
Department. Each bid must be accompanied by security in a form and amount required by law. The
Contract has been fully executed. The security submitted by all other unsuccessful bidders shall be
bidder's security of the second and third next lowest responsive bidders may be withheld until the
returned to them, or deemed void, within ten (IO) days after the Contract is awarded. Pursuant to the
provisions of law (Public Contract Code section 10263), appropriate securities may be substituted for
any obligation required by this notice or for any monies withheld by the District to ensure
performance under this Contract. Section 10263 of the Public Contract Code requires monies or
securities to be deposited with the District or a state or federally chartered bank in California as the
escrow agent. The escrow agent shall maintain insurance to cover negligent acts and omissions of
the agent in connection with the handling of retentions under this section in an amount not less than
$1 00,000 per contract.
The documents which comprise the MFEM's proposal and that must be completed and properly executed, including notarization where indicated are:
t"s 4/27/01 Contract No. 3675 Page 7 of 96 Pages
1. MFEMs Proposal
3. Non-Collusion Affidavit
4. Bidder's Statement of Financial Responsibility
5. Bidder's Statement of Current Commitments
6. Acknowledgment of Addendum@)
7. Certificate of Insurance, the riders covering the City, its officials, employees and volunteers may
,__~ 2. MFEMs Bond
be omitted at the time of bid submittal but shall be provided by the Bidder prior to award of this
contract
8. Bidder's Statement Re Debarment
9. Escrow Agreement for Security Deposits - (optional, must be completed if the Bidder wishes to
use the Escrow Agreement for Security)
All bids will be compared on the basis of the bid evaluation procedure described in the Instructions to
Bidders.
If the MFEM intends to utilize the escrow agreement included in the procurement documents in lieu
with the signed contract. The escrow agreement may not be substituted at a later date.
of the usual 10% retention from each payment, these documents must be completed and submitted
Sets of plans, special provisions, and procurement documents may be obtained at the Purchasing
Department, City Hall, 1635 Faraday Avenue, Carlsbad, California, for a non-refundable fee of $100
per set. If plans and specifications are to be mailed, the cost for postage should be added.
Any prospective bidder who is in doubt as to the intended meaning of any part of the drawings,
specifications or other procurement documents, or finds discrepancies in or omissions from the
drawings and specifications may submit to the Engineer a written request for clarification or
correction. Any response will be made only by a written addendum duly issued by the Engineer a
copy of which will be mailed or delivered to each person receiving a set of the procurement
documents. No oral response will be made to such inquiry. Prior to award of the contract neither
addition to, modification of nor interpretation of any provision in the procurement documents
will be given by any agent, employee or contractor of the City of Carlsbad or the District, nor
may any bidder rely on directions given by any agent, employee or contractor of the City of
Carlsbad or the District except as hereinbefore specified.
The Carlsbad Municipal Water District reserves the right to reject any or all bids and to waive any
minor irregularity or informality in such bids.
The general prevailing rate of wages for each craft or type of worker needed to execute the Contract
shall be those as determined by the Director of Industrial Relations pursuant to the sections 1770,
1773, and 1773.1 of the Labor Code. Pursuant to section 1773.2 of the Labor Code, a current copy
of applicable wage rates is on file in the Office of the Public Works Director. The MFEM to whom the
Contract is awarded shall not pay less than the said specified prevailing rates of wages to all workers
employed by him or her in the execution of the Contract.
The MFEM shall be responsible for insuring compliance with provisions of section 1777.5 of the
Labor Code and section 4100 et seq. of the Public Contracts Code, "Subletting and Subcontracting
Fair Practices Act." The Public Works Director is the District's "duly authorized officer" for the
purposes of section 4107 and 4107.5.
The provisions of Part 7, Chapter 1, of the Labor Code commencing with section 1720 shall apply to
the Contract for work.
~"
@ 4/27/01 Contract No. 3675 Page 8 of 96 Pages
A pre-bid meeting and tour of the project site will not be held.
All bids are to be computed on the basis of the bidding forms provided, as indicated in this proposal. In evaluating bids, discrepancies between words and figures will be resolved in favor of words.
Discrepancies in the multiplication of units of work and unit prices will be resolved in favor of the unit
prices. Discrepancies between the indicated sum of any column of figures and the correct sum
thereof will be resolved in favor of the correct sum.
All prices must be in ink or typewritten. Changes or corrections may be crossed out and typed or
written in with ink and must be initialed in ink by a person authorized to sign for the MFEM.
Bidders are advised to verify the issuance of all addenda and receipt thereof one day prior to
bidding. Submission of bids without acknowledgment of addenda may be cause of rejection of bid.
The MFEM shall provide bonds to secure faithful performance and warranty of the work in an amount
equal to one hundred percent (100%) of the Contract price will be required for work on this project.
The MFEM shall provide bonds to secure payment of laborers and materials suppliers, in an amount
equal to:
1) One hundred percent (100%) of the total amount payable by the terms of the contract when the
total amount payable does not exceed five million dollars ($5,000,000).
2) Fifty percent (50%) of the total amount payable by the terms of the contract when the total
amount payable is not less than five million dollars ($5,000,000) and does not exceed ten million
dollars ($10,000,000).
3) Twenty-five percent (25%) of the total amount payable by the terms of the contract if the contract
exceeds ten million dollars ($10,000,000).
These bonds shall be kept in full force and effect during the course of this project, and shall extend in
full force and effect and be retained by the District until they are released as stated in the General
Provisions section of this contract. All bonds are to be placed with a surety insurance carrier
admitted and authorized to transact the business of insurance in California and whose assets exceed
their liabilities in an amount equal to or in excess of the amount of the bond. The bonds are to be
accompanied by the following documents:
1) An original, or a certified copy, of the unrevoked appointment, power of attorney, by laws, or other
instrument entitling or authorizing the person who executed the bond to do so. 2) A certified copy of the certificate of authority of the insurer issued by the insurance commissioner.
If the bid is accepted, the District may require copies of the insurer's most recent annual statement
with section 900) of Chapter 1 of Part 2 of Division 1 of the Insurance Code, within 10 calendar days
and quarterly statement filed with the Department of Insurance pursuant to Article 10 (commencing
of the insurer's receipt of a request to submit the statements.
Insurance is to be placed with insurers that:
2) Are admitted and authorized to transact the business of insurance in the State of California by the
1) Have a rating in the most recent Best's Key Rating Guide of at least A-:V
Auto policies offered to meet the specification of this contract must:
2) Cover any vehicle used in the performance of the contract, used onsite or offsite, whether owned,
1) Meet the conditions stated above for all insurance companies.
non-owned or hired, and whether scheduled or non-scheduled. The auto insurance certificate
,- -
Insurance Commissioner.
-~ must state the coverage is for "any auto" and cannot be limited in any manner. .
Workers' compensation insurance required under this contract must be offered by a company
meeting the above standards with the exception that the Best's rating condition is waived. The
@ 4/27/01 Contract No. 3675 Page 9 of 96 Pages
District does accept policies issued by the State Compensation Fund meeting the requirement for
~ workers' compensation insurance.
.The MFEM shall be required to maintain insurance as specified in the Contract. Any additional cost
of said insurance shall be included in the bid price.
The award of the contract by the Board of Director's is contingent upon the MFEM submitting the
required bonds and insurance, as described in the contract, within twenty days of bid opening. If the
third lowest bidder and the bid security of the lowest bidder may be forfeited.
MFEM fails to comply with these requirements, the District may award the contract to the second or
Approved by the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad,
California, by Resolution No 2001-10 A~ril
2001.
3y15.0 1
Date Lorrai$ M. Wood, Secretary
Contract No. 3675 Page 10 of 96 Pages
CONTRACT NO. 3675
PROCURMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
DEFINED TERMS
Terms used in these instructions to bidders that are defined in the General Provisions, have the
meanings assigned to them in the General Provisions. The term "successful biddel" means the
MFEM to whom District makes an award.
UNITS OF MEASURE
All dollar amounts contained in the Procurement Documents are expressed as U.S. dollars. All
dollars amounts contained in all bids shall also be expressed as U.S. dollars.
All gallon amounts contained in the Procurement Documents are expressed as U.S. gallons. All
gallon amounts contained in all bids shall also be expressed as US. gallons.
COPIES OF PROCUREMENT DOCUMENTS
Complete sets of Procurement Documents shall be used in preparing bids; neither District nor
Engineer assume any responsibility for errors or misinterpretations resulting from the use of
incomplete sets of Procurement Documents.
The District and the Engineer will make copies of the Procurement Documents available on the
above terms only for the purpose of obtaining bids for furnishing the Goods and Special Services.
Receipt of these copies does not confer a license or grant for any other use.
QUALIFICATIONS OF MFEMS
MFEMs shall be experienced in providing the Goods and Special Services as described herein.
MFEMs shall possess sufficient equipment, capital and manpower to provide the Goods and Special
Services within the time allowed. Bids received from MFEMs who have previously failed to provide
and Special Services in an unsatisfactory manner, may be rejected. A bid may be rejected if MFEM Goods and Special Services within the time required, or who have previously provided similar Goods
cannot show that MFMEM has the necessary ability, plant, and equipment to provide the Goods and
Special Services at the time prescribed and thereafter to prosecute and complete the Work at the
rate or within the time specified. A bid may be rejected if MFEM is already obligated to provide
Goods and Special Services that would delay the commencement, prosecution, or completion of the
work described herein.
PREPARATION OF BID
The MFEM's Proposal and required supplements are bound in the Procurement Documents. A bid
must be made on the proposal form provided and shall not be separated from the Procurement
The Contract Price of each item on the form must be stated in words and numerals.
Documents or altered in any way. All blank spaces for Contract Prices must be completed in ink.
Q 4/27/01 Contract No. 3675 Page 11 of 96 Pages
Bid Calculation Spreadsheet
An electronic bid calculation spreadsheet (Microsoft Excel compatible) is provided on a CD with the
Procurement Documents and shall be completed by the MFEM in conjunction with the MFEM's
Proposal form. A blank printed copy of the spreadsheet is attached to the MFEM's Proposal form for
reference. Information regarding the spreadsheet and instructions for its completion are as follows:
The MFEM shall complete the spreadsheet electronically by entering values into the indicated cells,
as required. Cells for which the MFEM is required to provide values are shaded blue, and
associated explanatory fields (e.g., item descriptions, units, etc.) are noted in red font. The values
entered by the MFEM should be specific to the particular membrane filtration system that is
submitted for consideration as a component of hislher bid.
The MFEM must provide values for all required cells. All values must be entered in the terms of the
specified units. Any required cells that are not applicable to the MFEM's membrane filtration system
should be completed with 'NA and all such cells must be accompanied by an explanation of non- applicability in the "Comment l Note" column.
All non-shaded cells (noted in black font) represent District-specified parameters, calculations, or
other information that may not be altered by the MFEM. One exception is the "Comment l Note" field,
which may be overwritten by the MFEM as necessary to provide clarification or explanation.
The spreadsheet is organized in a series of five (5) tabs according to each major bid Item
classification. Two (2) additional tabs specifying system design parameters and summarizing the
required MFEM-supplied information are also included. Tab-specific instructions for completing the
spreadsheet are as follows:
Design Basis: The MFEM shall provide information on this tab for the proposed membrane filtration
system designed to produce 0.85 mgd (net) of filtered water.
parameters, for the proposed membrane filtration system designed to produce 0.85 mgd (net) of
Item 1 - Equipment: The MFEM shall provide information on this tab, including cost and design
filtered water.
Item 2 - Energy: The MFEM shall provide information to determine the cost of energy for an average
daily filtered water production flow of 0.85 mgd.
Item 3 - Backwash, Chemical Washing, and Chemical Cleaning: The MFEM shall provide
information to determine these costs for an average daily filtered water production flow of 0.85 mgd.
Item 4 - Membrane Replacement: The MFEM shall provide information for membrane replacement
costs entered on this tab.
Item 5 - Contract Value: This tab summarizes the value associated with the MFEM's proposal. No
and MFEM selection. Item 5.1 represents the Contract Price.
MFEM information is required on this tab. Item 5.5 represents the primary basis for bid evaluation
Parameter Summary: This tab is provided strictly for the MFEM's benefit and summarizes the
required MFEM-provided information that shall be included in each of the other six tabs. The
"Parameter Summary" tab has been designed to be used as a checklist for the MFEM'S
convenience. The MFEM is not required to utilize this tab, and any information entered on this tab will
not be considered in the evaluation of the bid.
<--
Contract No. 3675 Page 12 of 96 Pages
MFEMs shall complete the bid calculation spreadsheet electronically and submit an electronic
version on a new CD as a component of the MFEM’s Proposal. The MFEM shall also submit a
printed copy of the completed spreadsheet in place of the blank reference copy provided with the bid +
documents. Any single copy of the MFEM’s Proposal shall be considered incomplete without both
the electronic and printed version of the spreadsheet. Any discrepancies between the electronic and
printed versions of the bid calculation spreadsheet and the prices stated elsewhere in the MFEM‘s
Proposal shall be resolved in favor of the printed version submitted with the bid. All questions
regarding the spreadsheet shall be submitted in writing to the District.
SUBMISSION OF BIDS
Bidders shall complete the MFEM’s Proposal form and all supporting documents (including the
electronic and printed copies of the bid calculation spreadsheet) and submit six copies of a written
proposal on company letterhead signed by the responsible officer of the MFEM to provide Goods
and Special Services as specified herein for evaluation. Detailed system information shall be
provided in a well-organized, bound document with a table of contents that follows the outline below.
All calculations shall be provided in English units, unless otherwise specified. The proposal shall
include the following information, prepared and presented as specified:
Required bid Information as stated above.
MFEMs Company Overview: MFEM shall provide information on its organization and the key
elements of its bid. MFEM shall describe the features of the membrane system of interest to the
District and Engineer when considering its Bid Proposal. MFEMF shall identify the key members of
its project team and designate who is responsible for providing for delivery of the project including
Unit fabrication and design of the electrical and operator interface for this project. The MFEM shall
also identify how it intends to provide operational support to the project. MFEM shall provide the
name and address of the factory authorized service organization nearest to the District’s location.
Exceptions and Requests for Modifications to the Procurement Document: MFEMs shall carefully
the General Provisions. MFEM’s “Standard Terms and Conditions of Sale” will not be accepted.
review the Notice Inviting Bids, Contract for the Procurement of Membrane Filtration Equipment, and
MFEMs shall identify 1) exceptions (required changes) and 2) requests for modifications (suggested
changes), to the Procurement Documents including any changes to the Contract and General
Provisions at the time of bid. The District reserves the right to reject any bid based upon exceptions
to the Procurement Documents. The District is not obligated to accept any request for modifications
to the Procurement Documents.
Capital and Operational Costs: MFEM shall calculate costs for the following items as specified:
Capital Cost for Goods and Special Services: The Contract Price for Goods and Special Services
shall be based upon the requirements of the Procurement Documents. The Contract Price for the
provision of Goods and Special Services shall be entered into the bid calculation spreadsheet in the
appropriate cell under Item 1.1.
Operation and Maintenance Costs: MFEMs shall calculate design parameters for all pumps,
membrane replacement, and chemicals based on the operating conditions as specified in the service
conditions under Section 11300, Membrane Filtration (MF) System Equipment, General and
applicable system specifications which follow. All design parameters shall be entered into the bid
calculation spreadsheet in the appropriate cells, as required. Operation and maintenance costs shall
be calculated and incorporated into the spreadsheet.
Component Operating Parameters:
43 4/27/01 Contract No. 3675 Page 13 of 96 Pages
MFEMs shall list in their proposal design parameters for primary system equipment items and
operational sequences. This information shall be provided in the form of printed documentation in
addition to any required inputs into the bid calculation spreadsheet. Include the following as a
minimum:
Pumps.
Compressed air equipment.
Backwash duration (length in time of backwash sequence, listed individually).
individually).
Chemical washing sequence duration (length of time in a chemical washing sequence, listed
Chemical cleaning duration (time necessary to clean unit).
Volume of backwash water (raw or filtered) used per backwash.
Volume of chemical washing makeup water (filtered or RO permeate) used per chemical washing
sequence.
Supplemental Information: The District and Engineer require the MFEM to submit the following
information:
tolerance levels (mgIL continuous and maximum concentration), maximum module feed pressure,
Membrane module operating conditions including pH and temperature ranges, free and total chlorine
of water temperature.
maximum module transmembrane pressure, and membrane flux compensation factor as a function
Membrane Module Replacement Price Guarantee: The MFEM shall establish the initial membrane
replacement price in the bid evaluation spreadsheet and warranty that the membranes will be sold at
ten (IO) year period.
that price adjusted by no more than the prevailing Consumer Price Index (CPI) over the successive
A listing of interconnecting piping, valves, and other items within the process area not provided by
the MFEM. The MFEM shall identify the acceptable materials of construction for the identified
components.
MFEM shall specify the materials of construction and provide a list of the bidder-supplied equipment
and appurtenances to be installed by the Installation Contractor.
Quality Assurance I Quality Control: The MFEM shall provide a detailed quality assurance and quality
control (QNQC) plan for this project with the bid.
Drawings: MFEMs shall prepare and include with the proposal the drawings specified below. All
drawings shall be to scale and shall show the equipment and floor space requirements within a
designated area for the capacity required. All drawings shall be prepared in AutoCAD v.14 and
submitted in both hardcopy (printed in black ink on D-size sheets) and electronic format (CD).
Plan, elevation, and arrangement drawings of the proposed membrane system giving physical
dimensions of the units, locations of the backwash, clean-in-place (CIP) system, air supply system,
electrical control panels, compressors, blowers, tanks, and all other ancillary equipment.
*). \# 4/27/01 Contract No. 3675 Page 14 of 96 Pages
Plan, elevation, and arrangement drawings for a unit giving physical dimension and locations of the
connection points.
Hydraulic, pneumatic, and electrical process and instrumentation diagrams for the units and system.
Diagrams and schematics shall clearly identify the equipment supplied by the MFEM.
Floor loads of all equipment as shipped and during operation.
Clearances required above the equipment and other ancillary equipment such as hoists and other
lifting devices.
AMENDING AND WITHDRAWAL OF BID
Withdrawal Prior to Bid Opening:
Bids may be withdrawn by letter provided the withdrawal is received before the specified time. If a bidder wishes to submit a new bid, he must first withdraw his bid, and then submit a new bid.
Amending Prior to Bid Opening:
Bids may be amended by letter provided the amendment is received before the specified time and
provided a bid has been submitted in accordance with the requirements of the Procurement
Documents. The amendment shall specify only Contract Price adjustments and shall not indicate
either the final adjusted price or the price specified within the bidding documents. Otherwise, the
bidder shall withdraw hidher bid and submit a new bid.
OPENING OF BIDS
-
Bids will be opened as indicated in the Notice Inviting Bids.
Bids received by mail or otherwise after the time specified for the opening of bids will not be accepted
and will be returned to the bidder unopened.
DISQUALIFICATION OF MFEMS
More than one bid for furnishing Goods and Special Services from an individual, or a firm,
partnership, corporation, or an association under the same or different names will not be considered.
Reasonable grounds for believing that any MFEM is interested in more than one bid for furnishing
Goods and Special Services may be cause for disqualification of that MFEM and the rejection of all
bids in which that MFEM is interested.
AWARD OF CONTRACT
The District reserves the right to reject all bids, to waive any and all irregularities, and the right to
disregard all nonconforming, non-responsive, or conditional bids.
The District reserves the right to reject any bid not accompanied by specified documentation and bid
security.
The District reserves the right to reject any bid if it shows any omissions, alterations of form,
additions not called for, conditions or qualifications, or irregularities of any kind.
Contract No. 3675 Page 15 of 96 Pages
- The District reserves the right to reject any bid that, in its sole discretion, is considered to be unbalanced or unreasonable as to the amount bid for any lump sum or unit price item.
The District and the Engineer will evaluate bids to determine which bid is in the best interest of the
District.
The evaluation of bids will include the use of quantitative parameters to determine the overall best
value for the District. These specific parameters include capital and operational costs, membrane
replacement costs, process chemical costs, and energy costs. These values will be provided by the
MFEM using the electronic spreadsheet specified. Values submitted will be reviewed by the District
to determine the lowest cost system based on calculated Present Worth.
MFEMs are advised that the calculated operating cost will be used in the evaluation of bids to
determine the basis for award. The MFEM assumes responsibility for the accuracy of the
calculations provided. The MFEM’s calculations will be reviewed and the District or the Engineer
may request additional information to verify calculations that appear abnormal or erroneous. The
lack, incompleteness, or inaccuracy of data or calculations furnished by the MFEM as required herein
may be considered as a non-responsive bid and constitute basis for bid rejection.
In evaluating bids, the District will consider whether or not the bids comply with the prescribed
requirements; the alternatives, if any; and the lump sum and unit prices, if requested in the Proposal
Form.
The District may conduct such investigations as deemed necessary to assist in the evaluation of any
bid and to establish the responsibility, qualifications, and financial ability of the bidder to furnish the
the right to reject the bid of any bidder who does not pass any such evaluation to District‘s
Goods and Special Services in accordance with the Procurement Documents. The District reserves
satisfaction.
It will be the intent that the analysis of bids will compare all processes on an equal basis and the
District‘s decision will be final.
If the contract is awarded, it will be awarded to the lowest responsive and responsible MFEM, based
on lowest Present Worth Cost to a MFEM who has neither been disqualified nor rejected pursuant to
the provisions specified herein.
MFEMs are advised that because of differences in the facility requirements of proprietary membrane
systems, the selection of the bidder will not be based solely on the lowest cost Contract Price for
Goods and Special Services. In submitting the Bid, the MFEM accepts that the District may award
the Contract to a MFEM that has a higher contract price.
t”s 4/27/01 Contract No. 3675 Page 16 of 96 Pages
CARLSBAD MUNICIPAL WATER DISTRICT
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
MFEM'S PROPOSAL
Board of Directors
Carlsbad Municipal Water District
5950 El Camino Real
Carlsbad, California 92008
The undersigned declares helshe has carefully examined the location of the work, read the Notice
Inviting Bids, Instructions to Bidders, examined the Drawings, Specifications, General Provisions and
addenda thereto, and hereby proposes to furnish all labor, materials, equipment, transportation, and
services required to furnish Goods and Special Services for Contract No. 3675 in accordance with
the Drawings, Specifications, General Provisions and addenda thereto. In accordance with the
above understandings and agreements, the MFEM shall furnish the Goods and Special Services as
specified for the contract prices as tabulated in the bid calculation spreadsheet attached hereto and
cited herein. Indicate the prices as follows:
ITEM I: PRESENT WORTH OF MEMBRANE FILTRATION
SYSTEM
Total amount of bid for Item 1 in numbers: $ 1 ,130 ,786.00
ITEM 2 - CONTRACT PRICE FOR GOODS AND SPECIAL
SERVICES
Total amount of bid for Item 2 in words:
nine hundred and eighty five dollars
Total amount of bid for Item 2 In numbers: $ 76 1 ,985.00
The price given above is firm for 180 days after date of bid opening and comprises the Contract
Price for the Goods and Special Services. Should the award of contract extend beyond 180 days,
the Contract Price shall be adjusted by the CPI averaged over the preceding six months from the
time the contract is awarded until the expiration of the 180 day award period. In no case will the
award period extend beyond 360 days without separate written agreement between the District and
4- rrs 4/27/01 Contract No. 3675 Page 17 of 96 Pages
the Successful MFEM. .-
The basis of award will be the sum listed for bid Item I.
Addendum(a) No(s). 1.2, and 3 haslhave been received and islare included in this
proposal.
The Undersigned has carefully checked all of the above figures and understands that the District will
not be responsible for any error or omission on the part of the Undersigned in preparing this bid.
The Undersigned agrees that in case of default in executing the required Contract with necessary
bonds and insurance policies within twenty (20) days from the date of award of Contract by the Board
of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, the District may
administratively authorize award of the contract to the second or third lowest MFEM and the bid
security of the lowest MFEM may be forfeited.
The Undersigned MFEM hereby represents as follows:
1. That no Board of Directors member, officer, agent, or employee of the Carlsbad Municipal Water
District is personally interested, directly or indirectly, in this Contract, or the compensation to be paid
hereunder; that no representation, oral or in writing, of the Board of Directors, its officers, agents, or
employees has inducted himlher to enter into this Contract, excepting only those contained in this
form of Contract and the papers made a part hereof by its terms; and
2. That this bid is made without connection with any person, firm, or corporation making a bid for the
same work, and is in all respects fair and without collusion or fraud.
Accompanying this proposal is hand (Cash, Certified Check, Bond or
Cashier's Check) for ten percent (10%) of the amount bid.
The Undersigned is aware of the provisions of section 3700 of the Labor Code which requires every
accordance with the provisions of that code, and agrees to comply with such provisions before
employer to be insured against liability for workers' compensation or to undertake self-insurance in
commencing the performance of the work of this Contract and continue to comply until the contract is
complete.
The Undersigned is aware of the provisions of the Labor Code, Part 7, Chapter 1, Article 2, relative
to the general prevailing rate of wages for each craft or type of worker needed to execute the
Contract and agrees to comply with its provisions.
(3 4/27/01 Contract No. 3675 Page 18 of 96 Pages
IF A SOLE OWNER OR SOLE MFEM SIGN HERE:
(1) Name under which business is conducted N /A
(2) Signature (given and surname) of proprietor
(3) Place of Business \
(Street and Number)
City and State
(4) Zip Code Telephone No.
IF A PARTNERSHIP, SIGN HERE:
(1) Name under which business is conducted N/A
(2) Signature (given and surname and character of partner) (Note: Signature must be made by a
general partner)
(3) Place of Business
(Street and Number)
City and State
(4) Zip Code Telephone No.
IF A CORPORATION. SIGN HERE:
(1) Name under which business is conducted u - s. Filter Wastewater Group, Inc .
I ,
(2) (Signature)’
(Title)
Vice President of Global Enqineerinq
Impress Corporate Seal here
... ... ... ... ...
n a# 4/27/01 Contract No. 3675 Page 19 of 96Pages
" (3) Incorporated under the laws of the State of Delaware
(4) Place of Business 125 Wooten Road
(Street and Number)
Cityand State Colorado Springs, Colorado
(5) Zip Code 8 0 9 15 Telephone No. - - n
NOTARIAL ACKNOWLEDGMENT OF EXECUTION BY ALL SIGNATORIES MUST BE
ATTACHED
-
List below names of president, vice president, secretary and assistant secretary, if a corporation; if a
partnership, list names of all general partners, and managing partners:
Charles Biskner Sr Vice President 6 General Mqr
Stratton Tragellis Vice President of Sales and Marketing
Ken Recker roller
Gilbert Paqe Vice President of G-eering
4127101
*
Contract No. 3675 Page 20 of 96Pages
USF/GEN FILTER +++ GIL @i002/u02
NO, 812 P. 319
/ POWER OF ATTORNEY
SPECIAL DELIVERY
Knmr all men by these presents: tlut I, Kevin L. Sme, ("'principal"), Vice Pre-sidaat af U. S. Filter Wastewater Group, hc., a Delaware colpwation (the "Corporation"), hereby
make, constitute and appoint filbert J. Page, principal's me and lawfd attorney to act for principal and in principal's name, place and stead and for principal's wc and benefit
as set fort?? herein.
Principal hereby granw to said anomey-in-fact full power and authoriy to negotiate, execute and perfom mattors related to obtakiig and maintaking contracts, bids, bank
accounts, licenses and psmits required Fa connection with tht day-to-day business of the
Corporatian, each and every act and thing which may be naessw, or conveniant, in
comection with any of the foregoing, as fully, IO all intents and pluposes. as principal miat or could do ifpersonally present, hereby ratifying and conhing all that my said
attorney-in-facr shall lawfully do or cause to be done by autharity hereof.
Decemba 31,2001, at which time this Special Power of Attorney and the pourers granted
This Special Power of Att~rney shall be effective @am Januaty 1,2001 dvough
haeh shall expire and be of no further force and effect.
WlW'T'sS my hand &.is cday of December, 2000,
rc - Kevin L. Spa D ice Presidmt
STATE OF CALIFORNIA j
COUNTY OF RIVERSIDE )
thie eday of Deembar> 2000.
Subscribed aad sworn to before me
1 ss
.. .
!
..
SUN-28-2001 15:39 MISCO SW 9494585500 P.02/02
.- City of - Carlsbad . D-. -
June 28,2601
ADDENDUM NO, 1
RE: BID FOR CONTRACT NO. 3875 - PROCUREMENT OF MEMBRANE
FILTRATION SYSTEM EQUIPMENT
Please include this addendum In the Request for Bid you have for the above project:
Thio bid opening has been rescheduled. There will be an addendum issued that
will significantly change the spedcations and requirements ofthe bid.
This bid is now due and will be opened on JULY IO. 2001 AT 4:OO PM. The bid
delivery location is unchanged.
This addendum-receipt acknowledged-must be attached to your bid when it is submitted.
8 uyer
I ACKNOWLEDGE RECEIPT OF ADDENDUM NO. 1
1695 Faraday Avenue Cerlsbad, CA 92008-7314 = (760) 602-2460 FAX (760) 602-8556 @
08/28/2001 TAU 15:08 [TX/RX NO 82851
TOTFlL P. 02
- City of Carlsbad
June 29,2001
ADDENDUM NO. 2
RE: PROCUREMENT OF MEMBRANE FILTRATION SYSTEM EQUIPMENT,
Contract No, 3675
Please include the attached addendum in the Notice to Bidder/Request for Bids you
have for the above project.
Please note change in due date for the abovs-mentioned bid.
New date for bid ownins I!E
July 10,2001
Time remalns the 6me: 400 p.m.
This addendum-receipt acknowledged-must be altached to your Pmpsai FodBid - when your bid is submitted.
RUTH FLETCHER Purchasing Officer
RFjlk
Attachment
I ACKNOWLEDGE RECEIPT OF ADDENDUM NO. 2
c"
1635 Faraday Avenue CarlSb;ld, CA 92008-7314 (760) 60Z-E460 FAX (760) 6"€I556
CARLSBAD 3lUNICIPAL WATER DISTRICT
HPROC'LTREM3XT OF MEMBRANE FILTRATION SYSTEM"
CONTRACT NO. 3675
ADDENDUM NO. 2
The Carlsbad Municipal Water District issues this Addendum No. 2 to the Contract Documents
for Jle Procurement of Membrane Filtration System Equipment, Contract No. 3675. The
addendum consists of 1 revised sheet from the Bid Calculation Spreadsheet, a new Compact Disc
with the revised electronic file ofthe Bid Calculation Spreadsheet, this notice and a coyer &et.
Contraa Docment Revisions:
1) Revise Page 36 of96 which is the page for Item 4 -Membrane Replacement of the Bid Catculatinn Sprc&cct. Use the attached repIeccment page.
2) &via the elecwonic file of the Bid Calculation Spreadsheet. Use thc attached
replacement Compact Disc labeled 6/28,2001.
July 5, 2001
ADDENDUM NO. 3
RE: PROCUREMENT OF MEMBRANE FILTRATION SYSTEM - CONTRACT NO. 3875
Please include the attached addendum in the Notice to BidderlRequest for Bids you have for the above pmject.
THE NEW BID DUE DATE IS JULY 12,2001 AT 4:OO PM
This addendum - receipt acknowledged - must be attached to your Proposal
FordBid when your bid is submitted.
RUTH FLETCHER Purchasing mcer
RF:kld
Attachment
I ACKNOWLEDGE RECEIPT OF ADDENDUM NO. 3
-
1635 Faraday Avenue - Carisbad. CA 92006-7314 (760) 602-2460 FAX (760) 602-8556
JilL-a9-moB1 11: 07 MISCO 511
ChRLSBAD MUNICIPAL WATER DISTRICT
“PROCUREMENT OF MEMBRANE FLLTRATION SYSTEM”
CONTRACT NO. 3675
ADDENDUM NO. 3
The Carlsbad Mcipal Water District issues thls AddcDdum No. 3 to tb Contract Documents
for the Procuromcut of Munbraoc Filration System Equipment, Contract No. 3675. The
addendum consists of a new Compact Disc with the revised electronic file of the Bid Calculation
Spreadsheet, this notice and a cover sheet.
Coatran Document Revisions:
1) Revise the electronic file of the Bid Calculation Spreadsheet. Use the mched
21 ’ The new bid due date is JULY 12, 2001 at 4:OO W.
raplacemcat Compact Disc labeled - ‘W Pmcu~rnent07/03/2001”.
x
x
r
w C
(Y E g' j
,-
.-
x
I
9 m
,"
"
EQUIPMENT/MATERIAL SOURCE INFORMATION
TO ACCOMPANY PROPOSAL
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
r 2. Variable Frequency Drives
(Manufacturer)
1 PV -
(Manufacturer)
3. Horizontal End Suction Pumps
(Manufacturer)
w 4/27/01 Contract No. 3675 Page 44 of 96 Pages
BID SECURITY FORM
(Check to Accompany Bid)
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
(NOTE: The following form shall be used if check accompanies bid.)
Accompanying this proposal is a *Certified 'Cashiers check payable to the order of CARLSBAD
MUNICIPAL WATER DISTRICT, in the sum of
dollars ($
this amount being ten percent (10%) of the total amount of the bid. The proceeds of this check shall
become the property of the District provided this proposal shall be accepted by the District through
action of its legally constituted contracting authorities and the undersigned shall fail to execute a
contract and furnish the required Performance, Warranty and Payment Bonds and proof of insurance
coverage within the stipulated time: otherwise, the check shall be returned to the undersigned. The
withdraw his or her bid within the period of fifteen (1 5) days after the date set for the opening thereof,
proceeds of this check shall also become the property of the District if the undersigned shall
unless otherwise required by law, and notwithstanding the award of the contract to another MFEM.
MFEM
*Delete the inapplicable word.
(Note: If the MFEM desires to use a bond instead of check, the Bid Bond form on the following pages
shall be executed--the sum of this bond shall be not less than ten percent (10%) of the total amount
of the bid.)
Contract No. 3675 Page 45 of 96Pages
MFEM'S BOND TO ACCOMPANY PROPOSAL
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
KNOW ALL PERSONS BY THESE PRESENTS:
That we.- GROU
as Surely are held and firmlv bound unto the Carlsbad Municioal Water District. Carlsbad. California
U.S. FILTER P, INC. , as Principal, and AMERICAN HOME ASSURANCE COMPANY
in an amount as follow;: (must be at least ten percent (10%) of the bid amountj
heirs, executors and administrators, successors or assigns, jointly and severally, firmly by these
presents.
THE CONDITION OF THE FOREGOING OBLIGATION IS SUCH that if the proposal of the above-
bounden Principal for:
Contract No. 3675 - Procurement of Membrane Filtration System Equipment
in the City of Carlsbad, is accepted by the Board of Directors, and if the Principal shall duly enter into
and execute a Contract including required bonds and insurance policies within twenty (20) days from
the date of award of Contract by the Board of Directors of the Carlsbad Municipal Water District of
the City of Carlsbad, being duly notified of said award, then this obligation shall become null and
void; otherwise, it shall be and remain in full force and effect, and the amount specified herein shall
be forfeited to the said District.
~, ~~
10% OF BID AMOUNT for which payment, well and truly made, we bind ourselves, our
....
...
....
....
....
....
....
...
....
- ....
In the event Principal executed this bond as an individual, it is agreed that the death of Principal shall
not exonerate the Surety from its obligations under this bond.
&,,tract No. 3675 Paae 46 of 96 Pnons
-
Executed by PRINCIPAL this 26 day Executed by SURETY this ZZND day of
of JUME ,200\. JUNE ,2001.
PRINCIPAL: SURETY:
U.S. FILTER WASTEWATER GROUP, INC. AMERICAN HOME ASSURANCE COMPANY
(name of Surety)
175 WATER STREET NEW YORK, NY 10038
(address of Surety)
c;/LB6CT J. /& 66 (212)
(print name here) (telephone number of S rely)
770-7000
0 y: ,&J
(Title and Organization of Signatory)
By:
(sign here) MECHELLE LARKIN
/
(signature of Attorney-in-Fact)
(printed name of Attorney-in-Fact)
- (print name here)
(Attach corporate resolution showing current
(title and organization of signatory)
power of attorney.)
(Proper notarial acknowledge of execution by PRINCIPAL and SURETY must be attached.)
one officer signs, the corporation must attach a resolution certified by the secretary or assistant
(President or vice-president and secretary or assistant secretary must sign for corporations. If only
secretary under corporate seal empowering that officer to bind the corporation.)
(if signed by an individual partner, the partnership must attach a statement of partnership authorizing
the partner to execute this instrument.)
APPROVED AS TO FORM:
RONALD R. BALL
General Counsel
tintract No. 3675 Page 47 of 36 Pages
. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Oranae
On JUN 22 Mol
, before me, C.M. Jules, Notaw Public
DATE NAME, TITLE OF OFFICER - E.G.. "JANE DOE. NOTARY PUBLIC
personally appeared Mechelle Larkin NAME(S) OF SIGNER@)
personally know to me - OR - 0 proved to me on the basic of satisfactory evidence to be
the person(s) whose name(s) islare subscribed to
the within instrument and acknowledged to me that
helshelthey executed the same in hislherltheir
authorized capacity(ies), and that by hislherltheir
signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
f5kkzLm SIGNATU& OF NOTARY
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
fl INDIVIDUALS 0 CORPORATE OFFICER
TITLE@) TITLE OR TYPE OF DOCUMENT
PARTNER(S) 0 LIMITED
0 GENERAL
ATTORNEY-IN-FACT NUMBER OF PAGES
0 TRUSTEE(S)
0 GUARDlANlCONSERVATOR
[7 OTHER:
DATE OF DOCUMENT
SIGNER IS REPRESENTING: NAME OF PERSONIS) OR ENTINIIESI
SIGNER(S) OTHER THAN NAMED ABOVE
krm (1/2000)
E Countyof a? Pw Before Me, )”#.&
3 in and for said County and State, on this day personally appeared x Y ,&,&Lo+ d. known to me to be the person - whose
.
.-
. AmQriCan Home Assurance Company
National Union Fire Insurance Company of Pittsburgh, Pa.
Principal Bond Office 70 Pine Street. New York, N.Y. 10270
POWER OF ATTORNEY
No. 05-8-45538
,-KNOW ALL MEN BY THESE PRESENTS:
That American Home .4ssurance Company. a New York corporation, and National Union Fire Insurance Company of Pittsburgh, Pa.. a
Pennsylvania corporation, does each hereby appoint
---Irene Lau, Kathy R. Mair, Mechelle Larkin: of Newport Beach, California---
its true and lawful Attorney(s)-in-Fact, with full authority to execute on its behalf bonds, undertakings, recognizances and other contracts of
indemnity and writings obligatory in the nature thereof, issued in the course of its business, and to hind the respective company thereby.
IN WITNESS WHEREOF. American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pa. have each
executed these presents
this =day of March. 2000.
National Union Fire Insurance Company of Pittsburgh, PA.
Vice President, American Home Assurance Company
STATE OF NEW YORK }
COUNTY OF XEW YORK }ss.
On this 29th day of March, 2000 before me came the above
named officer of American Homc Assurance Company and National
Union Firc Insurance Company of Pittsburgh. Pa., to me personally
known to be the individual and otlicer described herein, and
ie seals of said corporations thereto by authority of his office.
.- acknowledged that he evecursd the foregoing instrument and affixed Ndw Public. Stale : llew YorL NO. m-~04652754
EcTm~3l h Qmllfed in Waacheslw CnWW
CERTIFICATE
60 L
Excerpts of Resolutions adopted by the Boards of Directors of American Home Assurance Company and National Union Fire lnsurancc Company uf
Pittsburgh, Pa. on hlay 18, 1976:
"RESOI.VED. that the Chairman of the Board. the Prcsi&mt. or any Vice Pr-.:idcnt bs, and huh) is. wthorizcd to appoint ~~tl~j,:~?~-i,,.i:~~l iu , :p:~sm :t::.I
thereof, and lo attach thereto the corporate seal of the Company, in the transaction of its surety business; act for and on buhalfof the Company to execute bonds, undertakings. recognirmces and ~tlxr contracts ol.indcmnity and writings abligalory 11, the nmre
"RESOLVED. that the signatures and attestations of such officers and the sed of the Company may be affixed to any such Power of Attorney or to my
certificate relating thereto by facsimile, and any such Power of Attorney or certificate bearing such Ihcsimile signatures or facsimile seal shall be valid and
binding upon the Cnmpany \vhen so affixed with respect to any bond, undertaking, recognizance or other contract of indemnity or writing obligatory in the
"GtUiC thcrcof.
"RESOLVED. that any such Attorney-in-Fact delivering a secretarial certification that the foregoing resolutions still be in effect may insert in such
certification the date thereof, said date to be not later than the date ofdelivery thereof by such Attorney-in-Fact."
I, Elizabeth M. Tuck. Secretar?. of American Ibme Ansar;incc Company and of National Union Fire lnsurmce Compmy oTPittsburgh, Pa. do hcrcby csrtify
that the foregoing excerpts of Resolutions adopted by thc I3oards of Directors of these corporations, and the I'ower~ of Attorney issued pursu;m 1hercto. arc
true and correct. and that both the Resolutions and the Po\\ers of Attorney are in full force and effect.
IX li i 1'NiS.S WHEIIEOF. I ihc i)crc:::>,~l L: .::', ixL a:J d<,k,~ :ix I~G:~;Ic sai of &aLh ,' wrnorxiun
this __ day of JUN 22 2001 . "
651bb (lr4Y)
,-
USF/GEN FILTER e++ GIL Q002/002
NO, 012 P. 319
POWER OF ATTORNEY
SPECIAL DELIVERY
Know all men by these presents: that I, Kevin L. Spanre, (“priacipal“), Vice President Of U. S. Filter Wastewater Group, Inc.. a Delaware corporation (the “Corporation’% hereby
make. constitute and appoint Gilbert J. Page, principal’s true and lawfd attorney to act for pxincipal and in principal’s name, place and stead and for principal’s use and benefit
u set fort5 herein.
Principal hereby granw lo said atrcrmey-&-fact fw1 power and authoriy to negoriaZC, execute and perf- mattes related to obtaining and maintaining conums, bids, bank
accounts, licenses and permits required in coxmction with rhc day-to-day business ofthe Corporadon, each and cvay act and thing which may be n6cesaary. 05 tonvenient, in
mi&t or could do ifparonally present, hereby ratifying and confirming all that my said
comection with any dthe foregoing, as fully, to all intents aod purposes, as principal
attorney-in-facr shall lawfully do or cause to be dono by authcriry hereof.
This Special Power of Attorney sha!l be effective from January 1,2001 through
December 31,2001, at which time this Specid Power of Attorney and the powerr panred herein shall expire and be of no firher force and effect.
WITNESS my hand &is c&y of December, 2000.
_-
STATE OF CALfFORNIA )
COUNTY OF RIVERSIDE )
Subscribed and sworn to before me
1 ss
thie Wday of Deurmbsr, 2000.
MFEM'S STATEMENT OF FINANCIAL RESPONSIBILITY
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
(To Accompany Proposal)
Copies of the latest Annual Report, audited financial statements or Balance Sheets may be
submitted under separate cover marked CONFIDENTIAL.
Attached are copy of the latest Financial Report.
,-
a 4/27/01 Contract No. 3675 Page 48 of 96 Pages
-
Consolidated Financial Statements
69
Vivendi
!
/i .<
Consolidated financial statements ........................................................................
...............................................................................................................................................................
Five-year consolidated financial summary
...............................................................................................................................................................
70
Vivendi
. , . Consolidated . . . . . , , , . . . . . . . . . . . . . . . . . . . . financial . , . . , . . . . . . . . . , , statements . . . . . . . . . . . . . . . . . j
L
71
Vivendi
Consolidated financial statements ................................................................................... -
MANAGEMENTREPORT
...........................................................................
Highlights of the year
...........................................................................
A. Main acquisitions
During 1999. Vivendi enjoyed buoyant growth. both internally
and externally. Businesses acquired in 1999 had net sales of
nearly €6.5 billion and were mainly concentrated in the water,
xraste management and multimedia sectors. These acquisi-
tions were mainly carried out in the United States and Europe.
As regards the water sector. at the end of April 1999. Vivendi
acquired control of USFilter, a US group which is the leading
global treatment manufacturer of water equipment and sys- - terns. USFilter has been consolidated into Vivendi's financial
statements as from hlay 1, 1999. Over this eight-month period.
net sales of USFiiter included in Vivendi's financial statements
amounted to nearly E3.601m.
The waste management business sector developed in the
United States with, on the one hand, the acquisition from
\Vaste Management of certain toxic waste businesses (this
agreement was completed at the end of the second quarter of
19991 and on the other hand the acquisition of a controlling
stake in Superior Services after a take-over bid which suc-
ceeded on July 15, 1999, at a cost of F932.2m. These acquisi-
tions represent nearlyF360m in additional net sales.. ..
In telecommunleations, Vivendi acquired indirectly through
its subsidiary Vivendi Telecom International a 51% interest in
Monaco Tei6com. The final agreement was signed at the end of
the second quarter and accordingly Monaco TCiCcom is ac-
counted for by the equity method for a seven-month period in
1999, with net sales totallingf45m.
At the end of the year. Vivendi entered into an agreement with
Eiektrim in order to create a joint venture company which will
control PTC, the Polish mobile telephony operator. and Palish
cable operator Bresnan. With an investment totalling $1.2 bil-
~.
lion, Vivendi will hold 49% of this new entity. consolidated
with effect from 2000.
As regards audiovisual activities. Vivendi increased its interest
in Canal+ by acquiring the 15% interest held by Richemont in
exchange for Vivendi shares. Vivendi currently owns 49% of the
first-ranking European pay-TV channel which is now fully
consolidated. Also, \?vendi acquired a stake of nearly 25% in
i3SkyB through its merger with Path6 SA and through acquisi-
tion of the interests previously held by Granada and Pearson.
All other assets held by Path6 SA have since that date been sold.
These operations were approt'ed by the Extraordinary Share-
holders' meeting on September 10, 1999 and were described in
"documents E" registered with the COB on August 3. 1999 (visa
.' number E.99-3591 and on August 12.1999 (visa numbers E.99-
, 359 and E.99-367).
in the media sector, Havas acquired Havas Interactive Inc.
(formerly Cendant Software). a US company whlch is a leader
in the creation of games software. This acquisition has been
integrated into the 1999 financial statements for the entire 12-
month period with net sales totalling E535m. Havas Interac-
tive Inc.'s business is highly seasonal. and the marketing of
new educational and entertainment products is concentrated
on the fourth quarter.
Haws also acquired control of Barbour. a UK company spe-
cializing in trade information. whose results have been inte-
grated into the financial statements for the entire year. and of
MediMedia, a company which was acquired more recently and
specializes in medical information. and which vas consoli-
dated for the second half-year of 1999. Vivendi also acquired
100% of Aique through subsidiary Anaya. Funhermore, acqui-
sitions made at the end of 1998 and which were not then
consolidated (L'Etudiant and OVPVidall have had a full impact
over 1999.
SGE acquired Teerbau the first-ranking German roadworks
firm, and Terre Arm& International, as well as 97.75% of
Sogeparc. number nvo in European parking space manage-
72
Vivendi
. Consolidated . , . . . . . . . . . . . . . financial . . . . . . . . . . . . . . . . . . . statements . . . . . . . . . . . . . . . . . .
through a take-over bid which was completed On
September 30, 1999.
hstly, the acquisitions completed and consolidated during the
second half of 1998 have had a full impact on 1999 financial
statements. The main cases in point are FCC. a Spanish
services and construction group. and the acquisition of Span-
ish pubiisherhaya.
B. Main new contracts
Vivendi won new contracts. particularly in its Environmental
Services Division. The main examples are the privatization of
the Berlin Water service, for which Vivendi was awarded, in
cooperation with RWE., a contract for the provision of services
to 3.5 million inhabitants generating annual net sales of nearly
E500m (E103m on a pro rata basis in 19991: the ten year
agreement for the operation of the Stockholm metro signed by
CGFATransport with annual net sales of f180m (f90m on a pro
rata basis for 1999); and the 15-year contract for the operation
the Hillside rail franchise in Melbourne with annual net
ofE120m (E40m on a pro rata basis for 19991.
With the new contracts awarded in the Environmental Services
division and commercial efforts made in the telecommunica-
tions business, Vivendi's internal growth reached nearly IO%,
(23% for communications activities and.8% for environmental
services). Outside France, internal growth reached 13% for
environmental services and 5% for communications.
C. Asset disposals
In line with its refocusing policy. Vivendi sold a number of
assets in 1999. For instance, it sold a portfolio Of PrOPerV
assets in the Greater Paris region to Unibail. as well as the
hotels it held directly or indirectly which were sold to a
consortium composed of Accor. Blackstone and Colony. These
transactions which totalled €1.2 billion generated a capital loss
of €386.7111 before deferred taxes.
In 1999, Vivendi announced and completed the sale of Ham'
billboard advertising activity (Avenir group). This sale was
1.
completed for a total amount of f877m excluding an excep-
tional dividend and was effective at the end of lune, with a
capital gain amounting to F575.4m.
At the end of the year, Havas sold 9% of Havas Advertising, the
world's fourth-ranking communications consulting firm. Ha-
vas' interest was accordinglyreduced to20.7%. The transaction
was completed for an amount of E198.4m and generated a
capitakgain of fi48.7m. Vivendi also sold, to Groupe Bruxelles
Lambert. headed by Albert Frere. its 18.7% interest in Audi-
ofina for a consideration ofE704.lm. thus generating a capital
gain of f275.2m.
D. Financial operations
During 1999, Vivendi made several issues on financial markets
in order to fund its external gronth. in particular in the United
States.
For instance, after having launched on January 5,1999 France's
first convertible euro-denominated bond issue for an amount
of €1.7 billion (1.2596. with a term of five years COB visa
number99-001 datedJanuary5.19991,VivendilaunchedaneW
issue through subsidiary Vivendi Environnement in the form
of a convertible bond (COB visa number 99-390 dated April 14,
1999). The bonds may be exchanged for Vivendi shares or. at
the holder's election and subject to the terms and conditions
defined in the registration document, for Vivendi Environne-
ment shares. The total amount of the issue was €2.85 billion
with interest at 1.5% per annum. The term of the bond is five
years and eight months.
In May 1999, Vivendi decided to increase its capital by €2.73
(COB visa number 99-586 dated May 11. 19991 billion and
launched a public offering for 11.5 million shares (COB visa
number 99-769 dated June 4, 1999). This procedure considera-
bly extended Vivendi's shareholder base and enabled Vivendi
to collect f809m. In total. taking into account amounts sub-
scribed under the Group Savings Scheme for E480.lm. Vivendi
will have raised more than €8 billion in new capital in 1999.
73
Vivendi
Consolidated financial statements ................................................................................. -
E. Creation of Vivendi
Environnernent
Vivendi Environnement w'as formed at the end of 1999. This
new group is wholly-owned by Vivendi and brings together al!
its water, energy services (Dalkia), waste management and
transport businesses, as well as its interest in FCC.
The major part of the operation was carried out by either the
contribution of existing businesses and companies or the
purchase of shares. GCnerale des Eaux. Dalkia and CGEA were
transferred at book vaiue in accordance nith tax provisions
applicable to certain mergers. USFilter and FCC were acquired
by Vivendi Environnemenr.
This new group has prepared consolidated financial state-
ments as of December 31, 1999. which are restricted to a
balance sheet, as the contributions were made without any
retroactive effect. Pro forma financial statements for 1999 will
be prepared upon the IPO of part of the capital of Vivendi - Environnement. as announced by Vivendi.
F. Year 2000
The safety measures taken over the past four years and the
verifications carried out on December 31. 1999 and January 1,
2000 were successful. The changeover to the Year 2000 took
place without any particular problems in any of the business
sectors. Costs incurred in 1999. were provided for in the 1998
accounts through a pro\ision of €38.11~1, which proved
sufficient.
...........................................................................
Vivendi's financial performance
in 1999
...........................................................................
A. Main developments
A) COSSOLIDATED NET SALES PER DIVISIOX
Vivendi's consolidated net sales reached €41.6 billion in 1999,
compared with €31.7 billion in 1998. This represents a 31.2%
increase. of which 10% is due to internal gronth. The impact Of
exchange rates does not exceed 2%. the remaining part of
Vivendi's growth being due to external gromh (see above).
Environmental Services recorded net sales of €22.4 billion, i.e.
neerly 54% of Vivendi's total; in 1998. net sales of these
businesses represented approximately €16 billion and 50% of
Yirendi's total net sales. The growh rate exceeded 40%. of
:which 29% is due to external growth (principally USFilter and
Superior Services). while nearly 8% was due to internal growth.
The Communications Division had net sales of €8.6 billion in
1999 compared with €6 billion in 1998. The growth rate
reached 44%, and includes internal growth of 23% and external
growth of 21% (principally Havas Interactive lnc. formerly
Cendant Software. MediMedia and Canal+).
The Construction & Property businesses accounted for
€10.6 billion of Vivendi's net sales in 1999 compared with
€9.7 billion in 1998 (an increase slightly exceeding 9%). -. A.
The table below summarizes the relative weight of the various divisions in Vivendi's net sales and its breakdown between net sales
made in France and outside France.
Environmental Services 10.0 42% 12.5 70% 22.5 54%
Communications 6.8 29% 1.7 10% 8.5 21%
Subtotal Environmental Services + Communications 16.8 71% 14.2 80% 31.0 75%
Construction & Prooem 7.0 29% 3.6 20% 10.6 25%
Total 23.8 100% 17.8 lW% 41.6 100%
74
Vivendi
Consolidated financial statements .......................................................................
Vivendi's net sales outside France amounted to €17.8 billion, total net sales. This proportion even reached 55% for the
up 73%. of which nearly 10% was due to internal growth. Environmental Services division.
Business outside France now represents 42.8% of Vivendi's
'i
The breakdown ofVivendi's net sales per geographic area (outside France1 was as foliows:
(in € billion1
Euro Eurooe
zone outside Euro Europe
outside the euro France zone Americas Other Total 1998
zone Out&
outside the euro France zone Americas Other Total 1998
~~ ~
Environmental Services
Communications
Construction & Property
Subtotal Environmental Services + Communications
Total
...................................................................................
.............................................................................
1998
In Europe, the increase in net sales reached 42.8% with
internal growh at 7.5%. -
'ncrease in net sales in the euro zone outside France.
reached 46.7% and is due to: the integration of FCC over a
12-month period. the acquisition of Teerbau in Germany. the
integration of the European businesses of USFilter and Canal+
and the awarding of the Berlin water contract.
Three quarters of net sales in this area were made in Germany
and Spain, with €2.3 billion and €2.1 billion, respectively.
In European countries not belonging to the Euro zone. the
increase is mainly due to the inclusion of USFilter's European
businesses and to the impact of the Stockholm metro contract.
The United Kingdom is the main market in this regionwith net
sales of €3.5 billion, up 17.6%. including 4.3% of internal
growth.
In the US, Vivendi increased its net sales nearly fourfold
principally with the acquisitions of USFilter, Superior Services
.......
.......
3.1 3.6 4.9 0.9 12.5 6.6
0.7 0.3 0.6 0.1 1.7
3.8 3.9 5.5 1 .O 14.2
0.9
7.5
2.1 1.0 0.1 0.4 3.6 2.8
5.9 4.9 5.6 1.4 17.8 10.3
33% 28% 31% 8% 100% 100%
4.0 3.8 39% 1.5 37% 1.0 15% 10.3 9%
..................................................................................
................................................................................
and Havas Interactive Inc. Internal growth amounted to 23.8%
including 20.5% for environmental services businesses other
than Sithe Energies.
In the Asla PaciAc region, net sales reached €0.8 billion,
including €0.3 billion in Australia, up 71%. Vivendi's exposure
to risks related to emerging markets remained very limited.
since net sales in these areas only represent 2.4% of the total, in
an amount of €1 billion.
8) CONSOLIDATED STATEMENT OF INCOME
Vivendi's operating income amounted in 1999 to €2.28 billion,
or a 71.3% increase as compared with the preceding year.
These figures take into account the cost of the profit-sharing
pian, which is now treated as a payoll expense in Vivendi's
financial statements. the same policy being adopted for profit
sharing schemes in force in certain subsidiaries. Profit-sharing
amounted to f63.8m compared with €59.3111 in 1998.
Vivendi
75
Consolidated financial statements ....................................................................
The table below summarizes the various contributions.
(in billions of euros1 1999 1998
Water
Energy
Waste management
Transport
FCC
792.7 405.0
297.3 290.5
277.7 225.8
96.1 75.2
190.5 74.5
Subtotal Environmental Services 1,654.3 1.071.0
Teiecommunications 350.6 22.5
Internet 150.31 16.41
Media 344.1 247.4
Audiovisual activities 192.81 -
Subtotal Communications 551.6 263.5
Construction 175.7 82.4
Property 36.8 (3.0)
Subtotal Construction 8, Prooertv 212.5 79.4
.................................................................................
............................................................................
....................................................................
Other 1137.91 (82.61 - Total 2,280.5 1,331.3
On a like-to-like consolidation basis and at constant exchange
rates. the increase reached 33.5% during the year and is largely
due to Vivendi's telecommunications operations.
In the environmental services division. operating income
amounted toE1.65 billion comparedwithf1.07 billion in 1998,
or a 54.4% increase. due in particular to the consolidation of
USFiiter. This company contributed approximately E340m to
Vivendi's operating income, with a 9.5% margin. If industrial
services are not included, the margin is equal to 115% in.ljne
nith Vivendi's rbrecasts.
This division represents 73% of Vivendi's operating income.
compared with slightly over 80% in 1998.
The communications division more than doubled its contri-
bution to operating income, at E551.6m against f263.5m in
1998. The communications division already represents more
than 24% of total operating income compared with less than
20% in 1998 despite a negative contribution from Canal+
which was consolidated for the fourth quarter only. On a iike-
to-like basis, the contribution reached nearly 30%.
Vivendi's other businesses have significantly increased their
contribution to operating income, which doubled for the
construction business and amounted to nearly f37m for the
property business as compared with af3m loss in 1998.
c) NET FINANCIAL EXPENSE
Vivendi's net financial expense amounted to E220.h and
included in particular:
€871.9111 in financing costs, compared with E408m in 1998.
The increase is mainly due to an increase in Vivendi's
average net debt which more than doubled in 1999. Taking
into account the hedging policy put in place at the end of
1998, Vivendi's average cost of debt has been reduced from
5.45% IO 5.13% between 1998 and 1999. despite rising
interest rates:
* E450.6m of capital gains in connection with the sale of
portfolio securities as compared with E553.2m in 1998.
primarily relating to Saint-Gobah (reduction of cross-hold-
ings), Vivendi and Alcatel shares; - E162.9m in financial provisions compared uith E298m in
1998, primarily consisting in protisions for financial risks
recognized byvivendi's reinsurance company:
* Other operations mainly consisted in other financial income
(f200.5m). in particular dividends received from non-con-
solidated companies (€63.2111). foreign exchange gains
(f102.6rn). and premiums related to unexercized put options
in respect of securities (f61m).
D) OPERATING INCOME LESS NET FINANCIAL
EXPENSE
Vivendi's operating income less net financial expense reached
€2.1 billion, up 53.7% in 1999. It has multiplied by seven over a
two-year period and is three times higher than the best level
observed during the ten previous years.
E) NET EXCEPTIONAL EXPENSE
In 1999, Vivendi recorded net exceptional expense of €837.8111
compared~vithnetexceptionalincomeofE249.3min1998.Net
exceptional expense primarily includes:
. . Consolidated . . . . . . . . . . . . . . . . . . . . financial . . . . . . . . . . . . . . . . . . . . statk,meflts . . ,,,,,,,
f650.8m in capital gains made in connection with the sale of
assets and dilution profit and in particular the capital gain
resulting from the sale of Havas' billboard advertising busi-
ness, i.e. €575.41~1 in respect of a total sale price of E972.7m
(only the capital gain arising over the valuation of this
business in 1998 at the time of the Havas merger has been
taken into account as net exceptional income); the capital
gain of E275.2m made in connection with the sale of 18.7% of
Audiofina (total amount ofthe sale E704.lm). and the sale of
9% of Havas Advertising generating a capital gain of
f148.7m.
In contrast. the sale of CGIS's property assets resulted in a
pre-tax capital loss of €386.7m (this amount is after the
reversals of provisions made in order to cover these risks and
carried mostly by Vivendi's captive reinsurance companyl.
* €1.42 billion in exceptional charges, of which nearly f8OOm
in provisions related to property assets retained by Vivendi.
E318.5m in provisions recording the accelerated wite-off of
"anal+ digital set-top boxes which must he replaced sooner
.)an expected by a new generation of equipment made
necessary by the development of multi-access portals; and a
number ofsmaller transactions. including for instanceE29m
for the discarding of switches in the telecommunications
business, etc.
* E95m in restructuring expenses, involving the Environmen-
tal Services division in an amount of E63m and SGE for
f2S.lm.
The group has reviewed the value of its long-term property
assets and in particular multiannual construction programmes
in order be in a position to sell them, where appropriate. This
review has had the following impact on the 1999 financial
statements:
* sales of assets mainly to Unihail and to Accor, resulting in
capital losses ofE1,537.4m;
the review of the value of the retained assets has resulted in
additional provisions in an amount of E890m;
* these have given rise to tax losses that the group has used or
will use with a deferred tax asset in an amount of €1 billion; -
part of these losses has been covered by the reversal of ' provisions in an amount of €1.15 billion.
In total and taking into account the recovery of operations,
property impacted on Vivendi's financial statements in a net
amountofE240m.
f) TAXES
In 1998. Vivendi considered that the prospects of generating
taxable profits were such as to give valid reasons fo consider
that it would use only two years out of the five years of tax
losses carried fonvard at the end of that year.
In 1999, the taxable net income recognized during the year. the
likelihood that this trend will continue during the next few
years and the forecast capital gains resulting from sales which
have been initiated or announced, are valid grounds for
recognizing the full amount of the assets corresponding to the
utilization of tax losses carried forward. whether presently
available or potentially arising over the next five years. Accord-
ingly, deferred taxes give rise to income of €1.02 billion
compared with slightly less than €280111 in 1998. They were
calculated on the basis of the reduced tax rate applicable. They
are mainly the consequence of the disposals and restructuring
of the property sector (see above).
c) VIVENDI'S SHARE IN NET EARNINGS of COMPA-
NIES ACCOUNTED FOR BY THE EQUITY METHOD
Vivendi's share in net earnings of companies accounted for by
theequitymethod amounted toE32.9m in 1999 compared with
€42311 in 1998. This year again, it consists primarily in the net
income generated by Cofiroute (E26m compared with f21.4m
in 1998). by Havas Advertising for €11.3111 compared with
13.6m in 1998 and by General Utilities' UK subsidiaries for
f21.3m compared with €17.4111 in 1998.
Furthermore. Canalt, which was fully consolidated during the
last quarter, was accounted for by the equity method during
the first nine months of 1999. Canalt and its subsidiaries had a
negative contribution of EZOm, compared wlth E9.h in 1998.
BSQB also had a negative contribution in an amount of
E13.7m.
77
Vivendi
, . , . . . . . . , , , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated financial statements -
The remainder consists of smaller amounts such as Phiiadel-
phia Suburban for E5.4m and UGC for f0.7m.
H) NET INCOME
Vivendi's consolidated net income amounted to €1,431.4m, up
27.7% against 1998. This corresponds to net earnings per share
of €2.7 as compared with €2.46 in 1998. and represents a 10%
increase before dilution.
I) FINAKCIAL FLOWS FOR THE YEAR
The gross operating surplus increased by 51%. from €3.45 bii-
lion to €5.2 billion.Converseiy. the cash outfloir relating to
financial and exceptional operations had a negative impact of
€1.6 billion, of which €934.5111 due to disposals of property
assets. Vivendi's working capital requirements increased by
€944111, mainly because of the impact of newly consolidated
companies. In total, operating transactions generated
€2.42 billion in cash in 1999. - Vivendi's total investments represented more than €21.5 bii-
lion, or three times more than in 1998. This reflects efforts
made in order to accelerate the group's growth and interna-
tionalization. Capital expenditure amounted to €5.6 billion, up
by more than 40%. More than two-thirds of this total was used
for the Environmental Services division, and in particular Sithe
Energies 1,ith the acquisition of GPU's assets for 51.7 billion. In
the Communications Division. capital expenditure is mainly
related to the continued strengthening of Cegetel's mobile
telephony network. Acquisition of investments reached
€15.9 billion and were in respect of the following:
* Vivendi's international expansion for €9.2 billion-(princi.-.
pally Superior~Shces, USFilter. Havas Interactive Inc., the
Berlin water contract and Elektriml;
* development of audiovisual actinties forf3.7 billion (Canal+
and BSkyB1; - to a lesser extent, the development of Vivendi's interests in
its subsidiaries for €1 billion. more than haif of which was
allocated to SGE's take-over bid for Sogeparc.
As indicated in the above paragraph, Vivendi's capital was
increased by more than €6 billion. through -
* the capital increase through cash contributions for
€2.7 billion; - in consideration of Path6 and Richemont contributions for
€2.2 billion;
* subscriptions by employees to Group Savings Schemes in an
amount ofapprodmately€480m.
Taking into account sales of securities and industrial assets in
an amount of nearly €4.5 billion, cash flow related to financial
activities resulted in an increase in indebtedness off10 billion.
This increase, combined with the debt contributed by the
companies which have recently been fully consolidated (prin-
cipally USFilter. Canal+. Berliner ViasserBetriebe and, to a
lesser extent, Superior Senicesl. had increased total net debt
to €22.8 billion at the end of theyear, includingE4.55 billion for
convertible bonds issued by Vivendi and Vivendi
Environnement.
Taking into account disposals that have been announced and
already completed at the beginning of 2000, this net debt
should rapidly be reduced to around €19 billion.
I) CONSOLIDATED SHAREHOLDERS' EQUITY
Total consolidated shareholders' equity amounted to €14.9 bil-
lion as of December 31. 1999 compared with €10.3 billion in
1998.
Vivendi's share ofconsolidated net equityreachedE10.9 billion
at the end of 1999 after taking into account the various capital
increases completed during the year [see above). Minority
interest amounted to €4.0 billion mainly in the capital of
Berliner Wasser Betriebe. Canal+, Cegetel, SGE, Sithe Energies
and FCC.
At the end of 1999 net debt represented 150% of total share-
holders' equity and biil probably be reduced to 115% following
the disposals announced in 1999 and already wholly com-
pleted or launched in the first quarter of 2000. Stock market
capitalization was €74 billion at February 29,2000.
E. Developments within each
division
The following paragraphs explain in more detail developments
within each division, in respect of net sales, operating income.
capital expenditure, acquisitions of investments and cash flow.
A) ENVIRONMENTAL SERVICES
* Summnry
As regards the environmental services division, 1999 was
marked by very strong international expansion, with a growth
................... Consolidated financial statements
rate exceeding 88% and net sales ofE12.5 billion made in 1999,
compaied with €6.6 billion in 1998. The table below details
each business sector's contribution to the division's perform-
ance both in and outside France.
1999 1998 1997 Net sales Environmental Services Outside (in billion of euros1 France France France France France France Outside Outside
Water
Energy
Waste management
Transport
FCC .............................................................................
...................................................................
Operating income increased by more than 54% over the same
period, principally because of the significant contribution of
E388.5m made by companies acquired during the year. The
operating margin is 7.4% of net sales. compared with 8.8% in
1998. The margin increased by nearly 9%.
Capltal expenditure amounted to €3.9 billion in 1999 com-
pared with €2.2 billion in 1998. These figures include those of
Sithe Energies. the US power production subsidiary, in an
amount of €2 billion in 1999. compared with €6951~1 in 1998.
Excluding Sithe Energies and the main acquisitions made
during the year, investments remained stable at €1.5 billion.
Cash flowgenerated by the environmental services businesses
amounted to €1.8 billion in 1999. unchanged from 1998, which
included €391111 in non-recurring inflows.
* Wafer
In 1999, Vivendi's water business generated net sales of
€10.7 billion, up 58.9% from 1998. This increase is mainly due
-
5.5 5.2 5.3 1.5 5.1 1.4
1.8 2.1 1.7 1.7 1.7
2.0
2.2
0.6
1.5
1 .e 0.6
1.8 1 .o 1.6
1.4 0.6
0.7
1.1 - 1.9 - 1.0 - -
9.9 12.5 9.4 6.6 9.0 5.4
.....................................................
............................ ..........................
to the acquisition of USFilter, which contributed €3.6 billion
over an eight-month period. Overall, internal growth
amounted to 4.7%.
In France, net sales increased by 2.8% to €5.31 billion. One-
third of this growth was due to an increase in volume distrlb-
uted. In a competitive environment. construction businesses
Outside France, excluding USFilter and Aqua Alliance. net
managed to maintain net sales at a level close to f580m.
sales increased by 7.5% to E845m. in North America, net sales
amounted to €4 billion, compared with €382111 in 1998.
The water business sector contributed E792m to Vivendi's
operatlng Income. a 95.7% nominal increase. or 9.2% growth
on a like-to-like consolidation basis and at constant exchange
rates. Overall. water-related businesses generated a margin of
7.4%. compared with 6.2% in 1998.
Capital expendlnrre amounted to €736111 including f160.5m
for renewal costs, a 6.6% increase from 1998.
Vivendi
79
, , , , , , , , , , , , , Consolidated , . . , , . . . . . . . . . . . . . . . . . financial . . . . . . . . . . . . . . . . . . . statements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
Water-related businesses' contribution to Vivendi's cash flow
from operations reached f738m and covered capital expendi-
ture. including both replacement and expansion expenditure.
* Energy
In the energy business sector, Vivendi had net sales of nearly
€3.9 billion, comprising €2.8 billion in services and €1.1 bili:on
in power production. Net sales of services increased by 5.2%
including 3.5% in internal growth. As regards independent
power production. net sales increased by 13.8% on the basis of
constant exchange rates, despite the very small impact of
assets acquired-from GPU (f30.3mI.
The contribution to operating Income was f297.3m including
f170.6m for Dalkia and €126.7~1 for Sithe Energies. The contri-
bution made by service businesses increased by 25.7%, due to
productivity gains in France, reductions in tixed expenses, and
expansion outside France, mainly in Moravia. Operating in-
come contributed by independent power production de-
creased by 29.5% in local currency. This apparent reduction is
- due to the assignment to Nimo in 1998 of contracts for which
F77.6m in operating income had been recognized in 1998. If
this impact is eliminated, growth would have been nearly
23.3%. mainly because of the Beco assets, which were acquired
during 1998. and because of the improved performance of the
Independence power plant.
In 1999, capital expenditure amounted to nearly €2.4 billion,
including €2 billion in independent power production. repre-
sented mainly by the purchase of assets from GPU for
€1.7 billion.
Cash flow from operations reached €362111, of bvhichS320m is
due to the energy services business, thus covering all the
sector's capital expenditure.
* WnsrelWmngernenr
Vivendi's waste management businesses generated net sales
of €3.5 billion in 1999. up 24.1% including internal growth in
excess of 9%. In France, business remained buoyant through
marketing efforts which, through contracts won, led to an 8.8%
increase in net sales at €2 billion. Outside France. overall
growth was in excess of 51%. nearly 30% being due to external
-
.. 80
Vivendi
~~
growth which has been described earlier, and more than 13.4%
due to internal growth.
Waste management business contributed €277.71" to operat-
ing income, up 23%, most of this increase being due to
external growth.
Capital expenditure and acquisition of investments
amounted to €1.6 billion, including €1.2 billion for external
growth. Capital expenditure amounted to f412.6m. including
nearly €106m relating to acquisitions made in 1999.
Cash flow from operations of waste management businesses
covered capital expenditure up to f402m. - Trmsporr
Vivendi's transport businesses generated net sales of €2.5 bil-
lion, up 23.3% compared with the previous year. External
growh \\-as nearly 2% while internal growth from new con.
tracts reached 15.2%. This strong growth is mainly due to
marketing successes outside France. in particular in Scandina-
via with the contract for the operation of the Stockholm metro
(SLY month contribution), and the contract for the operation of
the Melbourne transport system (four month contribution).
Operating income amounted to E96.h. up 27.7% from 1998.
This increase is mainly due to the strong performance of UK
businesses. where. despite reduced subsidies, the group's two
rail passenger transport licences generated a significantly
higher margin due to increased passenger numbers.
Capital expenditure and acquisition of Investments
amounted to E337m in 1999. This figure includes E241.5m of
capital expenditure. E122m ofwhich was covered by cash flow
from operations.
* FCC
FCC is a Spanish group operating in the construction. public
works and environmental services sectors. with total sales of
nearly €4 billion. €1.9 billion of which was contributed to
Vivendi's consolidated net sales, reflecting its 49% interest.
This amount was generated by construction and other busi-
nesses (€1.3 billion] and services (€0.6 billion], principally in
the water and waste management businesses.
Consolidated financial statements ...................................................................
FCC's contribution to Vivendi's operatlng income amounted
to f190.5m for the entire year, while in 1998, if contributed '
f74.5m for a period of six months only.
Vivendi's share of FCC's capital expenditure and investment
acquisitions amounted to F436.2m including approximately
ElOOm in capital expenditure. This was largely covered by cash
flow from operaflons which amounted to f200m.
8) COMMUNICATIONS
* Summary
In 1999. the communications division recorded a strong in-
crease in Cegetel's subscriber base, with 7.34 million mobile
The division's net sales were as follovvs:
phone subscribers compared with 4.25 million in 1998, as well
as 1.1 million bed-line subscribers compared with 0.4 million
at the end of 1998.
Follobtmg Vivendi's acquisition of Richemont's 15% stake in
Canal+. the European leader in the pay-TV secfor. Vivendi
owns 49% of Canal+ as from September 10, 1999. Accordingly,
Canal+ is fully consolidated in Vivendi's financial statements
as fromOctober 1, 1999.
Havas pursued its international expansion policy in particular
through the acquisition of Havas Interactive Inc.. hlediMedia
and several smaller companies.
-
1999 1998 1997
(in billions of euros1 Net sales Communications Outside France France France France France France Outside Outside - Telecommunications
dedia
4.1
Audiovisual activities
2.1
0.6
Internet -
Total 6.8
..................................................................................
..............................................................................
The operating income contributed by the communications
division more than doubled, due to internal growth of the
telecommunications business, but also to the contribufion of
to E58m from acquired companies. On the other hand, the
operating performance of companies which have been consol-
idate on a different basis than previously had a negative impact
of E98.4m. mainly in respect of Canal+ (E92.8m) whose sea-
sonal fluctuations are particularly strong at the end of the year
(subscriber and programme acquisition costs).
In 1999, capital expenditure ofE1.4 billion [the same amount
as in 19981. consisted of:
expenditure linked to the strengthening of the
* continued development of the fixed-line network E 63.0m
capacity of the mobile telephone network f889.0m - capital expenditure of Havas f 95.5111
* capital expenditure of Canal+ E182.2m -
- 2.9
1.4 2.2 0.8
0.3 -
- 1.6 - - -
- - - - -
- - -
..............................................................................
1.7 5.1 0.8 1.6 - ...............................................................................
Cash flow generated by these operations did not fully cover
capital expenditure because of the time-lag between invest-
ment and generation of cash flow.
* Telecommunications
In 1999. Vivendi's telecommunications businesses generated
net sales of €4.1 billion, up 42.7% compared with 1998. This
amount is partly due to Cegetel's activities, with net sales of
E4.080m including f3,678m for SFR, and partly due to sales of
E24m of Matel, a Hungarian tixed line telephony operator.
Strong growth in French mobile telecommunications enabled
SFR to pursue its expansion policy. In the face of intense
competition, SFR was able to maintain its market share at a
satisfactory Level (around 36%) with average income per cus-
tomer higher than that of its competitors. Net sales increased
by 37% in one year.
81
Vivendi
. . . . . . . . . . . . . Consolidated . . . . . , . . . . . . . . . . . . . . . . . . . financial . . . . . . . . . . . . . . . . . . . statements . . . . . . . . . . . . . . . . . . . .
The activity of the "7" fixed-line service and business services
generated nearly €320111 in net sales compared with €144111
in 1998.
The entire teiecommunications business' contribution to
Vivendi's operating income amounted to E350.6m compared
with E22.5m in 1998 and represents a major part of the increase
in Vivendi's operating iiicome.
Capital expenditure amounted to Ei.1 billion in the telecom-
munications business. Of that amount. E889.2m was allocated
for the development and strengthening of the mobile tele-
phone network.
Cash flow from telecommunications operations amounted to
Ei.07im and did not fully cover capital expenditure. except for
SFR whose operations generated cash flow of Fi.091rn. suffi-
cient to cover capital expenditure of E850m. - Medin
Vivendi's media businesses generated net sales of €3.5 billion
in 1999, compared with €3 billion in 1998, i.e. a 14.3% increase.
Havas accounts for nearly all these sales, with €2.1 billion from
publishing. E676m from local media and €536111 from mul-
timedia, mainly from Havas Interactive inc. Net sales outside
France represent 40% of the total, including €677111 in Euro-
pean countries other than France and E589m in the Americas.
Media businesses contributed E344m to Vivendi's operating
income. up 39.1% from the previous year. On a like-to-like
consolidation basis and at constant exchange rates, growth
reached 22.1% and even nearly2590 for Havas.
Havas made capltal expenditure of f95.5m which Gas largely
covered by f282m in cash generated by media operations.
* A~rdiovir~rnl flcriuiries
In 1999. after increasing its interest in Canal+, Vivendi fully
consolidated the pay-TV company's accounts as from Octo-
ber 1, 1999. Accordingly, Canal+ contributed E95lm to net
sales, one-third of which were generated outside France,
mainly in other European countries.
Vivendrs operatlng income was adversely impacted by the
negative contribution of f92.8m from Canal+ for the fourth
quarter, which included f65m for TelCpiWs Italian operations.
For the entire year. the operating expense of Canalt was f24m.
* Inrerner
Vivendi's Internet businesses expanded rapidly in 1999. Cash
outflows consisted in capitai expenditure and in expenditure
related to the development of new technical platforms and
new content.
These businesses generated an operating expense of €50.3111
and investments of fl85.4m. Taking into consideration actixi-
ties accounted for by the equity method and minority interest
which has not been consolidated. Vivendi's investments in this
business sector amounted to f285m in 1999.
c) CoxsTnucTloN & PnoPEnTY - Sfrrnrnnry
Vivendi's construction and property businesses consist of the
SGE and CGlS groups. They made net sales of €10.6 billion
compared with €9.7 billion in 1998. up 9.1%.
This growth is on the one hand due to acquisitions made in
1999, mainly by SGE with Teerbau. Terre Armee International
and Sogeparc, and on the other hand the internal growth of the
property businesses, in particular in the housing and commer-
cial real estate sectors.
Disposals of property assets, which represented more than
E350m in net sales in 1998. reduced 1999 net sales.
The Construction & Property division contributed E2i2.4m to
operating income. or 9.3% of the total. This is a 170% increase
compared with the previous year.
P
.......................................... Consolidated financial state,men,t,s., ,,
Net sales Construction & Property Outside Outside
lin billions of euros1 France France France France Outside. France France
Construction (SGE) 5.4 3.5 5.1 2.8 5.2
Property (CGIS) 1.6 .O.l 1.8 ..........................................................................................................................................................
Total 7.0 - 3.6 6.9 ....................................................................................................................................................................................
2.7 - 1.4 0.1
2.8 6.6 2.8
.............
- Conrtrtrction consolidation basis. This is due to the impact on 1999 net sales of the sale of buildings and hotels. the individual homes
sGE's contribution to Vivendi's net sales amounted tO €8.9 construction business and Foncia. In 1998. these businesses
billion, up 12.9% from the previous year. In France, net sales together represented more than C350m in net sales. On alike-
amounted to €5.4 billion, up 5% primarily due 10 internal fo.iike basis, the increase is due to the construc.
grorvth. Net sales outside France amounted to €3.5 billion. UP tion of housing, which increased by 18% during the year. and
27.4%, nearly 23% of which is due to external growth. to commercial real-estate services. which grew by 25%.
~175.7~ was contributed to operating income, double the In terms of operating income, this division contributed
1998 amount. This increase is due to the sharp recovery of the E36.8m. compared with an operating expense of €3 million in
building and civil engineering business, to a significant in- 1998. Without the impact of the disposals. this contribution
crease in roadworks contracts and to the fact that Sogeparc has would have amounted to nearlyf44m.
been included for six months.
-
Properly
CGIS contributed €1.7 billion to Vivendi's net sales, an appar-
ent 7.3% decrease, but a 14.5% increase on a like-to-like
83
Vivendi
, , . , . . . , , . . . , , . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . Consolidated financial statements
”
Events occurring after the end
of the financial year and
outlook
A. Recent disposals
A) SGE
In accordance with the disposal plan announced in 1999,
Vivendi reduced on February 10, 2000 its interest in SGE from
49.3% IO 14.9%.
This transaction was undertaken through a private placement
with institutional investors. covering 13.8 million shares.
Under this transaction. Vivendi received a payment exceeding , - E600m and will realize a net capital gain of €300~1 in its .’
consolidated financial Statements. In line with this disinvest-
ment, Vivendi intends to waive its double voting rights.
After 12 months, during which Vivendi has agreed not to sell
SGE shares - SGE being the only part). entitled to engage in
such a sale - Vivendi will complete its disinvestment by
making use of opportunities existing on the market.
6) SITHE ENERGIES
Sithe Energies. a Vivendi subsidiary. sold to Reliant 21 inde-
pendent power production plants for €2.13 billion. This ttans-
action involved the plants purchased from GPU and generated
a capital gain of E450m.
c) CGIS
Vivendi’s withdrawal from the property sector is being contin-
ued wirh the sale of the principal businesses of CGIS, whose
shares will be soid. On March 10. 2000. a memorandum of
understanding was signed benreen Vivendi and a group of
investors. The operation contains a certain number of condi-
tions that should be lifted in the next few weeks in order to
I finalize the deal.
B. New developments
AI CANAL+ AND LACARD~RE
Canal+, a subsidiary in which Vivendi has a 49% interest.
entered into an industrial alliance with the Lagardkre group.
The objective is to develop, both within and outside France,
the creation and distribution of television channels and inter-
active services.
This agreement enables both groups to combine their capabili-
ties and impact in terms of programming, technological exper-
tise, television assets. brand portfolio and creative potential.
Although this deal is subject to approval by the competent
authorities. it enables Lagardhre to become a shareholder of
MultiThhatique - a company whose capital will. once the
transactions are completed, be held by Canal+ (27.42%).
Lagardhre l27.42%), Liberty Media 127.42%). Vivendi (9.09%)
and PartCom (8.64%) - and to hold a 34% interest in
CanalSatellite.
Furthermore. the two groups will create fwo joint venture
companies: one for the creation of theme channels and the
other one for the development of interactive services.
61 VIVENVI/VVVAfONE AIRTOUCH
On lanuary 30,2000, Vivendi and Vodafone AirToouch entered
into a cooperation agreement in order to develop a multi-
access portal for European markets.
This multi-access portal will provide customers with a trans-
parent environment on various devices 1e.g. television, per-
sonal computer. mobile or ked telephone and other personal
systems) for Web-based communication services. e-commerce
and leisure. The multi-access portal \vi11 give customers privi-
leged exclusive access to high-quality sewices and content
provided by Vivendi companies, including VivendiNet, Canal+
and Hams.
Vodafone AirTouch and Vivendi believe that the multi-access
portal will become the prevailing solution for European con-
tent providers, because of the quality of the Internet and
e-commerce services it will enable them to offer to their
customers.
c) INDUSTRIAL OUTSOURCING IN THE WATER
TREATMENT BUSINESS
In line with its expansion in the area of industrial services,
Vivendi Water signed a major contract with Hyundai in South
Korea. Under this agreement. Hyundai Petrochemical has
awarded Vivendi Water the operation of the drinking water and
industrial water facilities of its Daesan petrochemical complex.
This is the largest complex of its type in Korea.
This agreement. one of the most significant of this type
woridrvide, reflects Hyundai Petrochemical's policy of focusing
on its core business by outsourcing the management ofcertain
of its facilities to specialist contractors. This is also in line with
Vivendi's growth strategy in the industrial sector. as reflected
in the acquisition of USFilter. Piel sales generated by this
contract will amount to approximately€l billion over a twenty
year period.
"MENTAL SERVICES DIVISION
D) NEW CONTRACTS AWARDED TO THE ENVIRON-
mce the beginning of 2000, several major contracts have been
signed, in particular for water and wastewater services with
local authorities in France (Boulogne sur Mer1 and outside
(Berne in Switzerland. Zhu Hai. Beijing, Dujiangyan and
Hui Yin in China, and Tartous in Syria) and for the operation of
heating networks by Dalkia which continues to expand in
Eastern and Central European countries (Slovakia and
Moravia).
C. Financial outlook
. , . Consolidated . . . . . . . . . . . . . . . . . . . . financial . . . . . . . , . . . . statements . . . . . . . . . . . . . . . .
, year impact of the acquisitions of USFilter. Superior Services,
the Waste Management businesses and so on). Vivendi is
therefore again expecting very rapid growrh in net sales, which
are likely to increase by over 20% on a like-to-like basis.
Taaking into account the new perimeter (excluding Sithe Ener-
gies, Construction and Property, and with the full year impact
of the above mentioned acquisitionsl. Vivendi expect signifi-
cant growth in cash flow generation. defined as the difference
benveen EBiTDA and capital expenditure. for its Environmen-
tal Services and Communications divisions.
On top of the increase in cash flow generation and of the
potential flotation of a minority stake of Vivendi Environne-
rnent. Vivendi will pursue its non-core asset disposal pro-
grahlme. As a result the group's investment capacity should
increase byapproximatelyf10 billion.
As part of this asset disposal programme. Uvendi intends to
sell Sithe Energies. Vivendi does not intend to dispose of a 9%
stake in Canal+, unless the disposal would represent an
opportunity for both groups to undertake a significantly value
enhancing industrial cooperation.
Vivendi also envisages making significant investments in the
Internet industry, in order to offer senices to its subscriber
bases and develop the content under its control. At present,
Vivendi and Canal+ estimate internet investments, through
their 50150 joint venture VivendiNet. at approximately €500111
per annum over the next few years. This amount can be subject
to significant changes depending on the evolution of invest-
Taking into account all these elements. and on the basis of the
budgets and business plans established by Vivendi's various
subsidiaries. the group expects to have business of close to
€40 billion for 2000 based on a scope of consolidation includ-
ing solely environmental services (water. energy services,
waste management and transport] and communications (tele-
communications, media, audiovisual activities and Internetl. Under these conditions. and taking into account disposals
In 1999, business would have been around €32 billion based on already under way or completed, net income should be sum-
the same scope of consolidation (i.e. without the construction cient to accelerate the rate of growth in earnings per share.
and property businesses and Sithe Energies. and with the full- despite the increase in the number of shares outstanding.
ment opportunities in the European Internet sector. By mid-
2000, Vivendi and Canal+. will have access to a customer base
of close to 80 million subscribers, which could reach 100 mil-
lion in 2001. Vivendi and Canal+ intend to quote some of their
internet portals as soon as possible in order to enhance their
external growth capacity.
-
85
Vivendi
. , . . . . . . , . . , , . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . , . . . . . . . . Consolidated financial statements
-
D. Euro customers changeover to the euro. whether local authorities.
Since the autumn of 1996. Vivendi has gradually been planning
for the changeover to the singie currency. Each Vivendi busi-
ness sector has developed its strategy, designed changeover
businesses or consumers.
in 1999, Vivendi's cash management transactions were de-
nominated in euros after all necessary modifications had been
plans and taken necessary steps for the adoption of the made computer systems in ,998, ,,,diddual financial stare.
euro. Costs incurred in connection with these activities are
charged to expenses as incurred without any allocation to ments will be adjusted gradually during the transition period,
future financial yeas. but Vivendi's financial statements are already prepared and
approved in euros by the Board of Directors. Documents
At the end of 1998. most employees in direct contact with providing financial information are prepared in line with
Vivendi's customers had been trained. In each business sector. recommendations issued by the COB [the French stock ex-
initiatives have been taken in order to facilitate Vivendi's change commission) regardingthe francleuro relation.
86
Vivendi
Consolidated financial statements
FINANCIAL STATEMENTS
.....
Statement of income
....................................................................................................................................................
Consistent 1998'
(In millions of euros1
Net sales 1.1 41,622.5 31,737.1 31.706.3 25.476.6
Other revenue
Purchases
1.2 1,951.3 1.516.8 1.516.8
123,712.91 118,575.31
954.6
118.691.01 114,810.91
18.165.81 18.165.8)
Taxes other than income fayes
16,760.5)
1659.31
Other operating expenses 13.811.81 12.662.51
1627.91 1627.9) 1475.71
12.662.51
Depreciation
12,434.31
Employee profit-sharing
3 12,678.31 11.831.71
163.81 159.31
11.755.61 11.314.01
159.31 140.3)
Operating income 2,280.5 1.331.4 1.261.0 595.5
Financial (expensellincome 157.21 307.3 364.1 1180.51
1162.91 1298.01 1298.01 1120.81
detfinancial (expense)/income 1220.11 9.3 66.1 1301.31
Operating income less net financial expense/plus net
.... ........................................................................................... ............. ............................
Payroil costs 110,367.31
................................................................................................ ......................
... ................................................................................. .. .........................
'nancial provisions 3 .. ...............................................................................................................................
................................................................ ........................................................................
financial income 2.060.4 1.340.7 ...................... .....................................................................
1.327.1 294.2
1914.31 42.7 42.7
76.5
1,777.5
1206.61 1206.61 1898.91
Exceptional items
Depreciation 3
Net exceptional (expense)/income 1837.81 249.3 249.3 878.6
Income taxes and deferred tax 4 793.2 190.0) 190.01 1194.71
Net income before goodwill amortization, equity
..........................................................................................................................................
................................................................................................................................
................................................................................. ....................................................
interest and minority interest 2,015.8 1,500.0 1,486.4 978.1 ............................. ........................................................................................................
Goodnill amortization
Net income after goodwill amortization and before
.... ..............
equlty interest and minority interest
............................................................
Share in net earnings of companies accounted for by the equip method
1612.01 1209.51 1209.51 1374.71
...........................................................
1,403.8 1,290.5 1,276.9 603.4
.........................................................
32.9 42.5 42.5 103.6
Minoriry interest (5.31 1212.21 1208.9) 115.1
Net income 1.431.4 1.120.8 1,110.5 822.1
..........................................................................................................................................................
..........................................................................................................................................................................
*In 1398rheVivendigroupdecidedroadapt, in its financial starements,theDptionr setout in the recommendations made bytheTonreii Nationalde la
Comprabiiire" on June 18. 1337. regarding capital leases, pension commitments and lump sum payments on retirement. and the recognition of profits
from long-rerm construction contracts using the percentage of completion method.
Consolidated financial statements ....................................................................................... -
Cash flow statement
lin millions of euros1 -
Consistent 1998'
1999 1998 oolicies 1997 accounting
Operating transactions Gross operating surplus Financial and exceptional transactions Income taxes
5.235.0 3.453.0 3,324.3 2.144.2 11.641.61 1229.01 52.5 108.1 523.8 1369.41 1369.41 1140.81 Change in working capital requirements
TOTAL
Investment transactions
Acquisition of investments Capital expenditure
Property assets held as hxed assets
Deferred charges
Proceeds from disposal of securities Proceeds from disposal of assets
Set change due to long-term loans and deposits
........................................................................
..............................................................................
1944.31
2.420.1"'
............ ................
................................
15.628.31 115,851.71 11.094.31 168.91
3.377.8 1.092.1"'
1176.31 ..............................................
TOTAI . .... -
Financine transactions ...................................................................................
...... ...- ............... Issue of parent company stock hlinority interest in capital increases of subsidiaries Dividends paid to parent company shareholders Dividends paid to minoriv interest in consolidated subsidiaries
216.5 216.5 468.7
3,352.6 3,279.5 1.948.3
.......................................
............................................
13,908.8) 13,580.51 13.895.51 12.145.51
536.1 13,580.51 13,416.51
(33.41 1536.11 423.5 133.41 1144.41 2,470.4 191.7 2,470.4 191.7 3,223.0
111.21 289.1 111.21 33.7 ..........................
(18.349.6) 15,407.91 ...................................
6.077.1 63.2 1.158.3
1413.51 61.5
(70.31 1305.61 142.71
......
....... (5.394.6) .............
1,158.3 61.5 1305.61 142.71
............ (2,584.1) ............
1,085.2 2,269.0 1225.81 6.6 Dividends ieceived from companies accounted for by the equity method 83.7 Other long-term liabilities 230.9 81.3 81.3 76.2 575.5 567.8 299.1 .........................................................................................................................
TOTAL 5,971.1 1.528.3 1.520.6 3.510.3 .................................................................................................................................................... Cash flows for!he financial year Net debt at lanuarv 1
~- . .. 19.958.41 6.502.2 1527.01 1594.51 4.177.0 2.874.5 4.117.0 6.874.6 Impact of exchange rates, scope of consolidation and other Change in accounting policy relating to capital leases Net debt at December31
.~ ~ 6:372.2" 839.8 839.8 '176.9 958.4 22.832.7'' 6.502.2 5,611.3 4.177.0 ................................................................................................................................................................
~ini998theVivendigroupdecidedtaadopt,initrfinancialstatementr,theoptionrretoutintherecommendatlonsmadebythe"ConreiiNationaldela ComprabilirV on lune 18.1997. regarding capital leases, pension CommirmentS and lump rum payments on retirement. and the recognition of profits from long-term COn8trUCtion contracts using the percentage of completion method.
(11 This amount includes the impact oidirporalr ofproperty assets iorf934.5m
12) including €775.3m of property asset disposals.
for Berliner WarserBerriebe and €1.9 billion for USFilter. 131 A1 the date on which newly canrolidated companies entered the group. they carried a debt of €6.3 billion including f2 billion for Canal+. €1.2 billion
IO This corresponds to the amount posted an Vivendi's balance sheet ar oiDecember 31. Thir amount has been calculated tabing into account the debt oiCanai+ and Berlin. It has been calculated before the anticipated impact of the raier planned for the beginning of 2000.
.-
Consolidated financial statements ............................................................................
...............................................................................................................................................................
Assets
1998' Consistent accounting See
lin miliions of euros1 notes 1999 1998 Dolicies 1997
Intangible assets apart from goodwill 5 8,681.9 3,282.7 3.282.7 1,727.9
Goodwill 6 10,388.6 4.514.9 4,514.9 3,769.6
Tangible assets 7 ' 19,977.4 12,242.1 11,458.7 8,388.5
Owned property plant and equipment 26,569.1 18.641.1 17.400.9 12,439.5
Publiclyowned utility networks financed and managed by the
.......................................................................................................................................................................
group 3.985.8 1.206.3 1.206.3 1.069.6
Accumulated depreciation (10.577.51 17,605.3) 17.148.5) (5.120.6)
hancial assets 6.293.0 6,032.9 5.982.7 6,924.4
lnvesfments accounted for by the equity method 8 781.9 1,738.1 1.738.1 2,510.3
Unconsolidated investments 9 2.415.6 668.6 668.6 775.5
Portfolio investments held as tixed assets 10 534.4 876.3 876.3 1.253.6
Other investments held as fixed assets and other financial assets 11 2.561.1 2.749.9 2,699.7 2,385.0
Total fixed assets 45,340.9 26,072.6 25,239.0 20.810.4
Total current assets 37.436.1 22,909.8 24.258.7 18,554.8
Inventories and work in process 12 4.900.3 2,996.0 4.258.6 4,161.4
Accounts receivables 22,391.7 13.369.2 13.455.5 10,114.7
Shon-term financial receivables 3,035.6 2,078.8 2,078.8 1,567.3
Cash and marketable securities 14 7,108.5 4,465.8 4,465.8 2.711.4
TOTAL ASSETS 82,777.0 48.982.4 49.497.7 39,365.2
Comptabilite" an lune 18. 1997. regarding capital leases. pension commitments and Lump sum payments on retirement, and the recognition of profits ~Ln1998rheVivendigroupdecidedtoadapt,init~financiaLrtatemenrr,cheoptionr~etoutintherecommendationsmadebythe"Conreilh'aIionaideia
from long-term con6trmtion c~ntraets using the percentage of completion method.
....................................................................................................................................................................... -
i. ..................................................... .....................................................................................................
..............................................................................................................................................................
..........................................................................................................................................................................
..........................................................................................................................................................................................
89
Vivendi
........ - Consolidated financial statements .............................................................
...............................................................................................................................................................
Shareholders' equity and liabilities
...............................................................................................................................................................
Consistent 1998'
lin millions of euros)
See notes 1999 1998 policies 1997 accounting
Capital stock
Additional paid-in capital
Retained earninas
3.276.1 2,431.0 2,431.0 2,043.5
4.350.8 3.429.1 3.429.1 3,237.3
3,265.3 1.980.1 2,206.9 1.565.9
Shareholders' equity [after income for theyearl 16.1 10,892.2 7.840.2 8,067.0 6,846.7
Minoritv Interest 16.2 4.052.4 2.423.0 2,418.7 1.742.3
........................................................................................................................................................................
Deferred income 17 1.306.4 715.4 715.4 462.7
Provisions 18.1 6,883.3 5,931.7 5.784.5 5,429.8
Subordinated securities 19 178.3 174.0 174.0 185.5
Project financing ,' 20 1.193.0 1.059.7 1,059.7 902.2
Other long-term debt 17,861.7 8,722.8 7,829.0 5,818.5
Total long-term debt 21 19,054.7 9,782.5 8,888.7 6,720.7
Other long-term liabilities 1,560.2 987.7 987.7 617.4
Long-term capital 43,927.5 27,854.5 27.036.0 22.005.1
Accounts payable 24 23,832.1 16.077.3 17,477.4 13,972.2
Short-term debt 15.017.4 5,050.6 4,984.3 3.387.9
Total current liabilities 38,849.5 21,127.9 22,461.7 17.360.1
TOTAL SHAREHOLDERS'EQUITYAND LIABILITIES 82,777.0 48,982.4 49,497.7 39.365.2
* In 1998 thevivendi group decided to adapt. in its finayi$slatementr. the options ret out in the recommendations made by 1he"Conreii National de la
Comptabiiite" pn lune 18, 1997. regarding capital leases, pen& commitments and lump sum papentr on retirement, and the recognition of profits
from long-term construction contracts using the percentage of cornpietion method.
.............................................................................................................................................
...................................................................................................................................................
..............................................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................................
................................................................................................................................................
.....................................................................................................................................................................
...........................................................................................................................................................
.... Co.ns.olidated..fj.nanci.aI state$e.nt.s ..,.,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
...........................................................................
Accounting policies
...........................................................................
The 1999 consolidated financial statements of Vivendi have
been prepared using the accounting policies described below
and are in conformity with the French law of January 3. 1985
and the decree of February 17,1986. The group has not opted
to apply the new methodology approved by the French ac-
counting standards board in April 1999 (the "ComitC de la
Reglementation Comptable") to its 1999 financial statements.
The financial statements of Subsidiaries have. where neces-
sary. been restated in conformity with the accounting policies
used by Vivendi. Any departures from this practice are war-
ranted by specific industry circumstances.
In order to bring Vivendi's accounting policies nore into line
-. 4th international standards. the group decided to adopt the
:commendations made by the "Conseil National de la
Comptabilite" (the "CNC") in an opinion dated June 18. 1997,
and to change the accounting treatment. as of the 1998
financial statements, of assets financed by capital leases,
pension commitments and lump-sum payments on retire-
ment. and the recognition of profits from long-term construc-
tion contracts using the percentage of completion method.
A) SECTOR-RELATED DISTINCTIONS
SPEClFtC PROVISIONS RELATING TO WATER DISTRI-
BUTION AND HEATING MANAGEMENT COMPANIES
a. Fixed assets on publicly-owned
utility networks
Vivendi and its subsidiaries in the water distribution and
heating sectors operate. as "concessionaires"'" of public ser-
vices. numerous utility networks owned by local authorities or
(11 The word "concessionaire" is used here in its broader sense to
Indicate a business which manages a public sewice.
-
by private or public bodies. These utility networks are financed
either by the authorities, as is most often the case. or by the
group.
Only the installations financed by the group are carried on the
consbiidated balance sheet (Tangible fxed assets held under
concession), These installations are depreciated (still called
depreciation of assets under concession) over the contract
period so that the accumulated depreciation equals the carry-
ing value of the assets at the end of the contract. when the
assets are returned to the local authority. The accumulated
depreciation is booked as a liability under the heading "Provi-
sion for financial risk', to show clearly that it does not reflect a
reduction in value of the utilities, but is designed to defer the
charge resulting from the eventual transfer of these assets over
the contract period.
Furthermore. in order to fulfil its contractual obligations as a
concessionaire. the group usually assumes the expense of
replacing installations and equipment on the property it
manages under the concession agreement for the term of the
contract. The utility nenrorks which Vivendi must replace
include those on the publicly-owned property and financed at
its own expense. or by local authorities, or which belong IO
private or public entities.
As a result ofthe group's restructuring ofthe water distribution
sector in 1996, the energy sector in 1997 and the financial risk
management policy introduced in 1997. the obligations to
replace installations have, wherever possible, been guaranteed
by the parent company. In this situation. the financial commit-
ments which the parent company has assumed have been
hedged by setting up swap contracts between Vivendi and
General Re Financial Products. inc.
If, for specific reasons. Vivendi is unable to guarantee its
obligations under certain contracts, these are covered by
provisions. The amount of the provisions is determined. fol-
91
Vivendi
, . . . . , . . , . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . - Consolidated financial statements
lowing a change in the method of calculation in 1996. by
discounting the forecast expenditures over the average esti-
mated term of the contracts'21. The discount rate adopted is
based on the interest rate in effect for an estimated equivaient
period, which for 1999 and 1998 was 5%. compared with 696 in
1997.
At the date of replacement. the following accounting methods
are applied - where the utility nenvorks were originally financed by and
replaced by the concessionaire. their residual value on the
balance sheet is substituted for the cost of the new equip-
ment: the related replacement provision, for contracts in
which it continues to apply. is reclassified as amortization of
assets under concession;
c
I
* in all other cases, the replacement cost is charged to income
and the reversal of the provision for financial risk or provi- ~
sion for replacement is recorded as income. The cost of
replacement is nevertheless treated as a capital expenditure
in the "Statement of changes in financial position".
b. Accounting for repayment of
debt contracted by local authorities
and relating to utility networks
Vivendi and its subsidiaries are. under some water distribution
concession agreements. contractually obliged~to.assume re-
sponsibility lor the repayments of debt entered into by local
authorities relating to utility nehvorks managed by the group.
The annual payments generally decrease each year and extend
over a period shorter than the contract period.
This expense is charged to income on a straight-line basis over
the contract period. The difference benveen the amounts paid
to the local authorities and the expense charged to income is
treated as a deferred charge on the balance sheet.
(21 Nine years for the water sector, shyears for the energy sector
92
Vivendi
SPECIFIC PROVISIONS RELATING TO CONSTRUC-
TION COhIPANLES
Building, civil engineering and roadworks companies record
income from contracts by applying the percentage of comple-
tion method, in keeping with the rules specified by the
"Conseil National de la Conlptabilite" (French chart of ac-
counts plan for building and civil engineering companiesl.
Consequently, the portion ofwork carried out between the last
contractual status report and the end of the year is included at
cost under work in process.
Water distribution and heating companies, whose construc-
tion work is generally of short duration, use the completed
contract method.
In all cases, a provision is made for liabilities and charges on
construction work in process at year end whenever the project
is forecast to incur a loss.
SPECIFIC PROVISIONS RELATING TO PROPERTY
COSIPhNIES
Property development and housing companies recognize in-
come upon delivery, in accordance with the accounting poli-
cies in use in those industries. except where a departure from
these policies would be justified. Uncompleted buildings are
included in construction work in process at the lower of cost or
market value. Property development companies adjust the
value of inventories to their market value every six months.
Development programmes running for a number of years are
re-examined periodically. operation by operation. so that the
forecast outcome fairly reflects current earnings expectations.
As regards investment properties. the annual difference be-
nveen the rental income and the financing and aperational
costs is charged to income. Furthermore, provisions are made.
as appropriate. in the case of a low occupancy rate.
TELECOMMUNICATIONS
SPECIFIC PROVISIONS RELATING TO
Subscriber acquisition costs incurred in connection with the
mobile telephone business, comprising commissions paid to
co.?solidated..fina?c.i.a! .stat.e.m.ent.s..
distributors and the cost of free calling periods granted to new
customers under promotional offers. are recorded as intangi-
ble assets other than goodwill and amortized over a period of
one year.
SPECIFIC PROVISIONS RELATlNG TO THE AUDIO-
VISUAL SECTOR
Films and broadcast rights ofproduction ond rights manage-
menrsubsidiaries
Film distribution rights held by the production subsidiary. Le
Studio Canal+, are recorded as intangible assets other than
good\dl when advances are requested by the producers or
holders of rights.
The total commitment is recorded at the date shooting ends, in
the case of co-productions, and when broadcast rights are
granted in cases where such rights are acquired.
In keeping with international practice. the cost of film co- - duction shares. which are financed by borrowings outside
,e group, incorporates the interest expense directly chargea-
ble to them.
Amortization is based on the estimated revenue method,
which consists of applying to film costs the ratio resulting from
a comparison of actual net revenues and estimated ultimate
net revenues of the film. Estimated ultimate net revenues are
periodically reviewed by management and revised if necessary
to reflect actual income from the films. If estimated ultimate
net revenues are inadequate to cover film production costs. a
provision for the same amount is made.
The same amortization method is used for broadcast rights.
Premium chanrrel programmes and broadcast rights
The programmes and broadcast rights recorded as inventory
include:
* the acquisition of broadcast rights, when the copy delivered
by the supplier has been accepted by the stations and the
rights in question have neither expired nor been used - programmes produced by the stations that have not yet been
broadcast; -
, - programmes being acquired or produced for which the copy
has not been accepted for delivery by the stations. Such
progranmes are valued on the basis of costs incurred at the
balance sheet date.
Programmes are considered "used" once they have been
broadcast.
B) CROUP-WIDE ACCOUNTING POLICIES
TANGIBLE ASSETS AND DEPRECIATION
Accounting policies applied in respect of the valuation of gross
caqing amounts and depreciation are similar within each
activity sector and conform to current practice. in particular as
regards the useful economic life of the asset. This is from 20 to
50 years for buildings, 7 to 12 years for technical systems. and 3
to 12 years for transport equipment.
FINANCI.AL ASSETS
The gross value of unconsolidated investments represents
acquisition cost. Where the gross value is higher than the value
in use, the difference is charged to income as a provision for
depreciation. The value in use is calculated on the basis of
Vivendi's share of the equity of the companies concerned
(adjusted to market value in the case of listed securitiesl. and
of their earnings growth prospects and their interest to
Vivendi.
Disposals made under a conditional contract (where the
meeting of the condition is not dependent on a decision of
either party1 are recognized as at the date on which the
agreement was made, only when the condition has been
satisfied before the date of the Board of Directors' meeting
called to approve the financial statements.
VALUIKG INVENTORIES
Group companies other than property and construction sub-
sidiaries and audiovisual subsidiaries (see specific paragraphs
above) value inventories according to the provisions of the
French Commercial Code, on either a FIFO or a weighted
average cost basis.
93
Vivendi
Consolidated financial statements .....................................................................................
L
ACCOUNTS RECEIVABLE
Accounts receivable are carried net of provisions for had debts,
which are calculated on the basis of credit risk. In some activity
sectors, had debts are assessed using statistical data.
MARKETABLE SECURITIES
Marketable securities are carried at their acquisition cost. If
their probable market value at the year end (on the basis of the
last quoted price or the fair value) falls below the acquisition
price. a provision is made.
Pursuant to recommendations issued by the CNC and the COB
(the French securities and exchange commission), shares of
treasury stock are classified as marketable securities when they
are used to stabilize the trading price of the Vivendi share or in
connection with stock options granted to directors and execu-
tive or other employees. Vivendi shares held for other reasons
are deducted from shareholders' equity.
.- RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses are charged to income as
incurred.
SUBSIDIES AND DEFERRED INCOME
Deferred income on the balance sheet relates to operating
revenue collected from long-term projects.
SUBORDINATED SECURITIES
In accordance with the method used by Vivendi, the .net
proceeds from the issue of subordinated securities are re-
corded as liabilities on the balance sheet. The regular annual
repayments which will he made in respect of these securities
will be fully amortized at maturity. Management and place-
ment commissions are deferred and charged to income over
the debt amortization period.
OPERATING INCOME LESS NET FINANCIAL EXPENSE
Operating income less net financial expense takes account of
the operation of companies within the scope of consolidation
and the cost of financing their operations. -
It does not take account of elements of a non-recurring nature,
such as the costs of restructuring. costs associated with dispo-
sal operations, the incidence of the disposal of assets except
where this is an integral part of operations. the costs of closing
companies or industrial sites, the writing-off of debt and the
effect of guarantees given when these are exercised.
...........................................................................
Consolidation methods
The companies' financial statements are consolidated accord-
ing to three methods:
the consolidated financial statements include the accounts
of the parent company and its directly or indirectly con-
trolled subsidiaries:
* the financial statements of jointly controlled companies are
included in the consolidated financial statements using
proportionate consolidation:
* when the ownership interests range between 20% and 50%
and these interests do not give exclusive or joint power to
control the affiliates, but also when the group exercises
significant influence. investments are accounted for by the
equity method.
BALANCE SHEET DATE FOR NEWLY ACQUIRED
COMPANIES
For companies whose financial year does not coincide with the
calendar year, interim Statements have been used except when
the year-end was less than three months prior to December 31.
Acquisitions of subsidiaries are accounted for as of the acquisi-
tion date or, for practical reasons and when the effect is not
significant, using the most recent balance sheet available prior
to acquisition.
The balance sheet at acquisition date used for the first consoli-
dation of a newly acquired company is restated in accordance
with the accounting policies selected byvivendi. Provisions for
acquisition-related restructuring costs may be made, effective
at the date of acquisition.
94 I
Vivendi ..
. . . Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . financial . . , . . . . . . . . . . . . . . . statements . . . . . . . . . . . . . . . . . . . . . . . . . . _-
INTERCOMPANY TRANSACTIONS \
Ail intercompany transactions have been eliminated. In the
case ofproportionately consolidated companies, such transac-
tions are eliminated on the basis of Vivendi's interest in the
company involved.
Adjustments in respect of investments and receivables relating
to consolidated companies are eliminated from income, to the
extent that they are also recorded in the statement of income of
the companies in question. Any material intercompany profits
included in inventories are eliminated.
Only the gains on the transfer of tixed assets within the group
are eliminated (in the case of tangible assets, only gains over
Elm are taken into account). The Losses on the transfer of fixed
assets within Vivendi, where they arise, are either retained in
the statement of income or entered in the form of exceptional
amortization of residual goodwill.
The depreciation of depreciable assets transferred internally
-:thin Vivendi is restated.
A~~~~~~~~~~ OF FOREIGN SUBSIDIARIES'
-~
FINANCIAL STATEMENTS
The balance sheets and statements of income of foreign
subsidiaries have been translated at year-end exchange rates.
Gains or losses arising from foreign exchange translation on
opening net assets are recorded in shareholders' equity, and
thus have no impact on net income for the year. However,
prior to the application of this method of translation, the
financial statements of consolidated companies with an activ-
ity in a country with a high inflation rate are translated into the
stable currency of the country that has the most similar type of
economy. after elimination of the impact of local inflation. The
effect of this restatement is recorded in net financial expense
or income.
GOODWILL
1) Goodwill represents the excess of the purchase price of the
securities of a consolidated company over the share of the net
assets acquired. Since 1989. in accordance with recommended
practice. the goodnill is assigned, whenever possible.
The assignment is made:
"
- either to unamortizable intangible assets. such as market
shares, IO the extent that the value of these market shares
can he determined according to a sufficiently accurate and
objective method and that this method makes it possible to
review in the future the value initially allocated: - or to tangible assets on the basis of appraised values
determined by experts:
I
* or to specific assets and liabilities of the acquired
companies.
The assignment of goodwill is made over a period that does not
go beyond the end of the first complete financial year subse-
quent to acquisition.
2) Any remaining excess that cannot be allocated to the
aforementioned assets, especially when this is not significant,
is either amortized as goodwill or, in certain specific circum-
stances, deducted from retained earnings. These amounts are
amortized on a straight-line basis as follows:
Goodwill arising from the acquisition of utilities companies
is amortized over a maximum 40-year period. which reflects
the length and the renewal rate ofutiiities contracts.
Goodwill from companies in the construction sector is
amortized over a maximum of 20 years.
* Goodwill from companies in the communications division
(telecommunications and media) is amortized over a maxi-
mum of 40 years.
* Non-allocated goodwill. which may be linked to assets with a
specific period of use. is amortized over the remaining life of
the assets in question.
* Goodwill with a value under €150,000 is witten off in the
year of acquisition. - In accordance with recommended practice. goodwill is de-
ducted from consolidated shareholders' equity when the
acquisition is paid for through a stock issue, up to the
amount of the related share premium.
Where appropriate (major structural changes to prevailing
technical, regulatory or operating market conditions), a write-
Vivendi
95
Consolidated financial statements ..................................................................
doum of goodwill in excess of the normal amortization expense
is charged to income.
DEFERRED TAXES
Deferred taxes are provided for. using the liability method. in
order to reflect the impact of timing differences betueen
pre-tax accounting income and taxable income. Timing differ-
ences also arise where regulated provisions and accelerated
depreciation are eliminated in the course of the consolidation
process.
Deferred tax assets (including those relating to tax loss carry-
fonvards) are recognized when it is probable that they will be
used in the future. Accordingly, since the earnings outlook for
the Vivendi tax group is positive for the years to come,
substantially all the tax credits related to tax losses are now
recognized as assets.
CAPITAL LEASES
As provided for by accounting regulations, Vivendi changed its
accounting policy in 1998 to capitalize in its consolidated
financial statements assets financed by leasing contracts. The
1997 financial statements have not been restated to reflect this
change.
PROVlSiON FOR PENSION COMMITMENTS
In 1998, Vivendi and all its subsidiaries adopted a change in
accounting policy for calculating their pension commitments
and redundancy pay for all their current and retired employ-
ees, both in and outside France. The impact of these commit-
ments for ;he full financial year. calculated from January 1,
1998. was allocated to consolidated shareholders' equity (see
note 161.
Pension commitments and redundancy pay are subject to
actuarial forecasts, using the projected unit credit method.
This evaluation takes intoconsideration theprobabilityofstaff
remaining with the company until retirement. the foreseeable
changes in compensation and the appropriate discounted
cash flow rates. The rates used are specific to each country. In
France, the rate used was 5%. Outside France, the rates used
range between 5% and 6%.
This accounting treatment, which complies with the new
recommendations of the accounting authorities, has been
used by companies invivendi's construction sector, headed by
SGE. since 1997.
...........................................................................
Notes to the consolidated
financial statements
...........................................................................
A. Statement of income
1. OPERATING REVENUE
lin millions of euro9 1999 1998 1997
Billings
Costs transferred to
inventories
Capitalized costs
1.1 Net sales 41.622.5 31,737.1 25,476.6
Subsidies related to
operations 34.3
Other operating revenues''' 738.6"' 852.0
43.1
43i.8
25.7
Share in results ofjoinr
ventures 29.4
Property income 54.5
25.5
61.9
29.8
44.3
Operating costs transferred
41,429.3 32.146.8 25,159.7
1137.21 1710.51 70.9
330.4 300.8 246.0 ................................................................................
..........................................................................
to assets as deferred
expenses"' l,094Sn 534.3 423.0 ..............................................................................
1.2 Other revenue 1.951.3 1,516.8 954.6 ....................................................................................
I11 Including royalties, rebates from suppliers and costs billed IO third
parties, especially in the construction rector. where COPS are billed to
unconsolidated joint venturer.
I21 including the deferral of subscriber acquirio'on costs amounting to
E77S.3m in i999. compared with E309.2m In 1998 and f3i5.6m in 1997.
2. ANALYSIS OF PRO FORMA INCOME
The consolidation scope for the calculation of pro forma items
corresponds to the companies held at end 1999 and already
present in the group In 1998. The fuU-year impact of compa-
nies acquired in 1998 was taken into account.
96 1 Vivendi
Consolidated financial statements ...............................................................
Acquisitions in 1999 have been eliminated from pro forma y 4. INCOME TAXES
income for 1999. For 1998 pro forma income, disposals made
in 1999 have been eliminated, as have the full year impacts on
income of acquisitions made in 1998.
(actual) (actual) (pro formal (pro formal 1999 1998 1999 1998
Net sales
Operatingincome 2.280.5 1.331.4 1,891.7 1.376.2
41.622.5 31,737.1 35,213.5 31,493.1
..................................................................................... + 71.3% + 37.5% .............................................................................
On a like-to-like consolidation basis, net sales grew 11.8%.
3. ALLOCATION TO PROVISIONS
The total net provision reversals in the consolidated statement
of income for 1999 amounted to E117.8m. against E50m in
1998.
Net charges to operating provisions amounted to f91m.
against E70m in 1998.
.Jet financial provisions amounted to f162.9m. against a net
allocation of E298m in 1998. These include E90.4m of alloca-
tion for risks covered by a group company with respect to the
swaps set up in 1997 and revalued to their market value,
f29.8m relative to the amortization of the redemption pre-
mium on bond issues, and E27.3m in respect of treasury shares
held in connection with stock option plans.
Net reversals of exceptional provisions amounted to f371.7m
in 1999, compared with a net reversal of €413111 in 1998.
_-
B. Balance sheet - Assets
5. INTANGIBLE ASSETS OTHER THAN GOODWILL
5.1 Mouemenfs duringfheyenr
Income taxes include:
An income tax expense of E228.9m, compared with €369.5111
in 1998. Subsidiaries in the Vivendi tax group paid Vivendi
€474m, compared with €247.2111 in 1998.
* Deferred taxincomeofE1,022.lm,versusE279.3m in 1998.111
1298, as a result of improvements in its tax visibility, the
Vivendi group recognized deferred tax assets in respect of a
portion of its tax operating loss carry-fonvards whose recov-
ery was deemed likely in the short term. For 1999, the
Vivendi tax group is now assured of using these tax losses
within a five-year period. Consequently. the tax loss gener-
ated by property disposals has been primarily assigned to
capital gains that the group plans to realize and which will be
taxed at the reduced rate. This position led to the recognition
of deferred tax income of E952m in 1999.
Consequently, the group's overall tax position is an asset of
E1.152.5m. compared with a liability of E177m.
In addition, certain tax audits are under way, in particular
concerning the Vivendi tax group. Anjou Patrimoine and SGE.
It is the opinion of the Vivendi management that these audits
are unlikely to change its overall financial position in any
material respect.
Change in scope of Additions/ Disposals/ Other 1998 consolidation allocations reversals movements 1999 (in millions of eurosl
Gross amount 4.158.5 6,3225 960.1 1122.21 150.01 11,268.9
Change in scope of Additions/ Disposals/ Other 1998 consolidation allocations reversals movements 1999 (in millions of eurosl
Gross amount
Accumulated amortization 1875.81 11.42i.31 (367.21 74.9 2.4 12.587.01
Net intangible assets 3,282.7 4,901.2 592.9 (47.31 147.61 8.681.9
...........................................................................................................................................................................................
........................................................................................................................................................................................... -
97
Vivendi
Consolidated ............................. financiz.1 statem,ents
Changes in the scope of consolidation - gross amounts -
concern the allocation to mdet=.rrks of goodwill of €2,045m
arising in connection !\ith the USFilter acquisition and good-
will of E585.8m in respect of subsidiaries acquired by Hams in
1999. In addition, the full conso'idation of Canal+ increased
intangible assets byE1.934m.
5.2 Bmnkdoam by businas mor
At December 31. 1999. net inragible assets amounted to
€8,681.9m, analTsedas follorrj:
lmillions of euros1 :3'? 1998 1997
Environmental Services 2.752.C 941.2 1,150.2
Including - Water r.:67.1 308.5 780.3
Energy .x.,. 153.4 115.5
Waste management ?!E.€ 201.1 190.7 3
Transport 214.5 194.0 63.7 ,'
:33.1 84.2
......................... ........................
..
. -. L
- FCC ............................ ..................
Communications
Including
* Telecommunications
* hledia
* Audiovisual acthities - Internet
Construction 8. Properly
* Construction
..........
...........
.............
Property ..............
2.571.3 1.712.2 ...... 394.8 .........
- -_ . /dl 1,113.3
587.1 598.9 393.4
1.4
..:A1 - . ._
- - - - ........................
:X2 163.5 181.2
70.4 74.4 68.9
34.8 89.1 112.3
..........................
...........................
Other 113.6 465.8 . . 1.7
TOTAL 8.681.9 3.282.7 1.727.9
........................... .............
~~ .
.............................. .........................
5.3 Nntwe of infnngibleh
Net intangible assets principa-include: - up-front pa>menrs IO local authorities amounting to
E516.9m [versus Eiil.;m in 1598) in accordance with con-
cession conuacts to operate public water and wastewater
services. primad!- in France. Tkese were amortized over the
term of the conmcts to r\-&cb they relate.
98
Vivendi
- trademarks, market shares, goodwill and editorial resources:
E5.395.7m (against €1,453.9111 in 1998). These were mostly
recorded invivendi's water (€2,059.2ml. waste management
and transport [€318.8mI. publishing and multimedia
(f1,726.4m) and audiovisual [€1,067.7m) activities. Inpartic-
ular. this includes the allocation of part of the goodniii
arising on the acquisition of USFilter (see 6.2 below). Havas
(E698.9m) and Havas's acquisitions (E585.8m).
The reference value of market shares is re-examined each
year on the basis of criteria used to assess their initial value.
such as the market position, net sales, and gross operating
surplus or deficit. - Net intangible assets also include expenses off1.192m to be
allocated over several financial years, of which E283.6rn
relates to the difference between the contractual amounts of
debt servicing payments to local authorities and the expense
charged to income over the contract period (see above.
"Accounting policies"), and E446.5m. which relates to the
balance of SFR's subscriber acquisition costs to be amor-
tized over 12 months.
6. GOoDWiLL
6.1 Mouernenfs drrring the yenr
Goodwill atJanuary 1,1999 5.826.7
Changes in the scope of consolidation 5,825.5
Foreign currency translation adjustments 485.8
Goodwill at DecemberBLl999 12.138.0
Accumulated depreciation and provisions"' 11,749.41
Net amount in balance sheet 10.388.6
(I) ofwhich E612rn for the year, includingE292.6rn cla3sified as excep-
tional amortization expenses
................................................................
..........................................................
......................................................................
.......................................................................
............................................................................
6.2 %nsnctions during the period
6.2.1 Acquisition of IJSFilrer
Goodwill arising from the acquisition of USFilter totalled
E6.622m. of which E2,045m was allocated to weli-know and
established trademarks, valued on the basis of the royalties to
be earned in connection with their indirect exploitation. The
Consolidated financial statements ...................................................................................
remaining sum was charged to issue premiums in connection ,
with capital increases used in part to finance this acquisition
(f2.776m). The balance of f1.801m was written off on a pro
rating basis over eight months.
6.2.2 Merger with PathP
The acquisition of a 19.6% interest in Path6 on February 25.
1999 and the merger of the laner with Vivendi in September
ofE1,006m. E843m of this amount was allocated to the value of
1999, effective retroactively from January 1. generated goodwill
the assets sold to Fornier (€2291~1): to the CanalSatellite securi-
ties soid by Vivendi at the beginning of 2000 (€154111); to
goodwill on consolidated British Sky Broadcasting Securities
that were included among Pathe's assets (E300m): and to
British Sky Broadcasting securities that have not been consoli-
dated in order to satisfy possible demands to redeem bonds
convertible into BSkyB stock recorded as liabilities (E160m).
The remaining balance of €163111 was charged to the merger
premium.
.-
6.2.3 Ad~irionaincql~isition of British Sky Broadcastingstock
The acquisition of close to a 25% interest in British Sky
Broadcasting resulted in good\nll of E1.604m. of which €306111
was charged to issue premiums in connection with capital
increases used in part to finance this acquisition. The remain-
ing balance of f1.298m was recorded as goodwill and is being
amortized over 40 years.
In ail. including the goodwili resulting from the Path6 merger.
the goodwill in respect of British Sky Broadcasting was re-
corded as an asset at E1.598m.
6.2.4 Acquisition of Cnnnl+ stock
Goodwill arising in connection with the acquisition of a 15%
interest in Canal+ totalled f1.159m. charged to issue premiums
in connection with the capital increases used in part to finance
this acquisition.
6.2.5 Acqicisition ofHavm Interacrilw Inc. (formerly Cendant
Sojiware)
Goodrvill arising in connection wlth the acquisition of Havas
Inretactive Inc. totalled f560.4m. of which f278.6m was allo-
ca@d to trademarks. Remaining goodwill of E281.8m will be
amortized over ten years.
6.3 Breakdown by business sector
(in millions of euros1 1999 1998 1997
Environmental Services 5.117.2 1.834.8 1.148.7
Including - Water 2,426.9 336.2 292.2 - Energy 685.1 352.8 450.8
* Waste management and
transport 1,346.4 518.2 367.9
* FCC 658.8 627.6
Communications 4.472.8 2.332.4 2,225.6
Including
* Telecommunications 1,712.7 1.566.5 1,467.0
Media 887.5 484.3 758.6
Audiovisual activities 1,872.6 281.6
.................................................................................
............................................................................
Construction &Property 792.0 348.4 362.7
Including
* Construction 702.3 236.7 242.7
* Property 89.7 111.7 120.0
Other 6.6 10.71 32.6
................................................................................
TOTAL 10.388.6 4.514.9 3.769.6
99
Vivendi
Consolidated financial statements ....................................................................................................
-
7. TANGIBLE ASSETS
7.1 Movemenfs during the year
(in millions 01 euros)
Change in scope of Additions/ Disposals/ Other 1998 consolidation allocations reversals movements Igg9
Owned property, plant and equipment 18.641.1 5,505.7 4,741.5 i1.991.0~ i330.21 26.569.1
Publicly-owned utility networks financed and
managed by the Vivendi group 1.206.3 3,160.2 178.1 1632.8) 74.0 3.985.8
Gross tangible assets 19.847.4 8.667.9 4,919.6 (2.623.81 1256.21 30,554.9
Depreciation (7.605.31 12.166.01 (2.027.71 1,247.4 125.91 (10.577.51
Net tangible assets 12.242.1 6,501.9 2.891.9 (1.376.41 1282.11 19,997.4
...............................................................................................................................................................................................
..............................................................................................................................................................................................
................................................................................................................................................................................................
.............................................................................................................................................................................................
At year-end 1999, owned property, plant and equipment Changes in the scope of consolidation primarily include
included land (E1.877.4m versus f1.539m at year-end 19981, USFiiter (E980.8m). Berliner WasserBetriebe (E2.190m). Supe-
buildings (E3.902.7m versus €3,979m in 19981. technical sys- rior Services [€481.3m) and Canal+ (E2.169m).
tems (€13,474.1111 versus €9,026m in 1998). and various other
fixed assets (f7.314.8m. of which €1,371.6111 in assets under
construction, versus €4,097111, of which E908m in assets under ,'
Disposals primarily concern property (E1,204m).
- construction at year-end 1998).
Consolidated financial statements .....................................................................
7.2 Breakdown by bushes3 sector
Owned orooertv Publiclv-owned Net
pia4 an7 utility - . ~~
(in millions of euros) equipment networks 1998 1997 Depreciation assets tangible Summary Summary
-Water 4.397.1 2.652.0
-Energy
11.587.41 5.461.7 2.152.3 2,133.5'"
5.442.1 575.1
-Waste management
11,196.41 4.820.8 2,730.7 1,889.0
3.988.6
"Transport
12.5 -
1,425.3
(1,770.81 2.230.3 1.505.7
200.9
860.6
1658.01 968.2 533.9
-FCC
181.2
1.130.0 1484.11 645.9 462.8 ............................................................................................................................................................................................
Environmental services 16.383.1 3,440.5 15.696.71 14.126.9 7,385.4 5,044.3
Telecommunications 3,642.3 7.2
Media
11,012.61 2,636.9 2.104.4 1.297.6
Pay-TV
577.2 0.9 (278.51 299.6
2,272.6 11.664.8)
371.1 41.4
Internet
607.8
Communications 6.492.1 8.1 12,955.91 3,544.3 2,475.5 1.339.0
Construction
Property
529.2 11,560.11 1.209.0 786.7 642.4
1341.61 998.2 1,536.9 1,357.7
, "lstruction and Property 3.571.7 537.2 11,901.7) 2,2072 2.323.6 2,000.1 . .~er 122.2 123.21 99.0 57.6 5.1
TOTAL 26,569.1 3.905.8 (10.577.5) 19.977.4 12.242.1 8.388.5
(21 Ofwhich E601.5m in land and E566.4m in investment properties.
11) in 1997, Vivendi Holding was pan of the water business sector.
.......................................................................................................................................................................................
- - - - - - - -
...............................................................................................................................................................................................
........................................................................................................................................................................................
2.239.9
1.331.8"' 8.0
..........................................................................................................................................................................................
..............................................................................................................................................................................
..........................................................................................................................................................................................
.............................................................................................................................................................................................
101
Vivendi
Consolidated financial statements .................................................................................
8. INVESTMENTS ACCOUNTED FOR BY THE EQUiTY METHOD
The principal companies accounted for by the equiry method are as follows:
Percentage Share of net
held shareholders' Share of equity at
(in millions of euros) (directly1 December 31,1999 net income
1999
Telecom D6veloppement (11 50.00% 241.4 (1.1)
Havas Advertising (2) 19.71% 127.8 11.3
Cofiroute
UGC
.31.13% 105.0 26.0
39.34% 71.1 0.4
AOL Compuserve France SAS (31 55.00% 59.3 (8.61
Philadelphia Sub (4) 15.87%
UGC Cine-Cite (5)
5.4
19.44% 52.0 0.3
South Staffordshire 32.71% 47.0 10.1
Bristol Waterworks Co. 24.14% 36.3 5.1
Midkent 23.82% 27.2 6.1
British Sky Broadcasting (6) 23.36% (250.01 (13.71
Other (shareholders' equity value less than E20ml 209.8 (8.41
TOTAL 781.9 32.9
55.0
.........................................................................................................................................................................
...............................................................................................................................................................................
Due to the acquisition by Vivendi of 15% of the capital stwk of Canal+. the laner is fully consolidated as of October 1, 1999. At the end of the year.
Audiofina was entirely disposed of, and the businerr assets of Havar Advertiring were partly sold. Foiiming a series of acquisitions. Magyar Teiecom io
now iuiiy consolidated.
(11 SNCF is the main shareholder ofTeiecom Deveioppement.
(2) The Vivendi group interest was diluted at the yeear end by the exercise of conversion rights by same band holders. it nevertheless remains the main
shareholdeioTHaMr Advenising.
(3) The rights granted to minoritics limit Vivendi's role to that of significant influence.
(41 Vivendi is the largest shareholder ofthir company.
(5) The largest shareholder is UGC.
@)Vivendi consobdater this equity stake with an interest-rate deduction made on securities likely to be delivered to bond holders in the case of
conversion.
102
Vivendi
Consolidated financial statements ...................................................................
9. UNCONSOLIDATED INVESTMENTS AT DECEMBER ql, 1999
Percentage of capital held at Book value Book value
(in millions of euros) December 31,1999 1999 1998
Eiektrim Telekomunikacja SP Zoo Ill 49.00% 1,209.2
CanalSafeilite 121 30.05% 304.0
Mediaset Sp A
Television Holding SA 121 100.00% 85.7
Domino 30.00% 59.3 59.3
Csatorna Uzemeltetesi Holding Reszvenyta 25.00% 40.0 -
Fovarosi Csatomazasi Muvek Reszvenytarsasag 12.50% 37.8 37.8
Mitteldeutsche Wasserversorgungsgeselt 11) 25.10% 34.2
Coprim 19.90% 31.5 31.5
Norsk Gjenvinning 68.57% 29.2
CGU Bresil I11 100.00% 23.7 -
Misrfone 7.00% 22.5 22.5
Arviso Ill 50.00% 20.1
Other investments (gross book value less than E20m in 1999) 676.5 788.2
Gross book value 2,717.3 939.3
-
- -
3.50% 143.6 - -
-
-
-
................................................................................................................................................................................ -
.........................................................................................................................................................................
Provision .............. 1301.71 1270.71
Net book value 2,415.6 668.6
(I) Companies acquired or set-up at the end of 1999.
121 Equity stakes disposed of in 2000.
103
Vivendi
Consolidated financial statements ........................................................................................ -
10. PORTFOLIO INVESTMENTS HELD AS FIXED ASSETS
Portfolio investments held as fixed assets are unconsolidated investments in listed companies (with the exception of FACIO that form
part of Vivendi's investment portfolio, the overall value of which is indicated in note 15.
At December 31,1999 At December 31,1998
% book value market value"] % book value market value Gross Estimated Gross Estimated (in millions of euros)
Saint-Cobain 1.56% 119.2 249.9 5.09% 341.9 675.3
Washington Baltimore through Facie@' 9.96% 185.1 185.1 9.96% 185.1 185.1
Alcatel Alsthom 0.98% 145.1 443.9 1.22% 167.3 253.6
Eiffage . 4.65% 56.6 42.6 4.86% 56.6 41.0
SociCte CBnCrale - - - - 21.8 34.5
Others (with unit book value of under €401111 - 49.0 106.7 - 127.8 133.5
Total gross amount 555.0 1.0282 900.2 1.323.0
Depreciation (20.61 (23.9)
Total net amount 534.4 876.3
....................................................................................................................................................................................
....................................................................................................................................................................................
.............................................................................................................................................................................
............................................................................................................................................................................
111 Stock market value at December 30.1399.
(2) Subsidiary of Sourhwverrern Bell Corporation, an unlisted company, whore fair value is not less than the net book value.
11. OTHER INVESTMENTS HELD AS FIXED ASSETS
ASD OTHER LONG-TERM INVESTMENTS
12. IHVENTORIES AND WORK IN PROCESS BY BUSI-
XESS SECTOR
After providing for depreciation of €126m, other investments
held as fixed assets and other long-term investments total (in Oi
€2.561.lm, compared with €2,749.9111 in 1998. Unlisted invest- Environmental Services,
ments included in this total amount to f393.5m. against including: 2,i02.7 743.3 554.3
E315.6m in 1998, and other financial assets represent \Vater"' 1,474.0 295.9 280.7
f2.165.9m. against E2.434.3m in 1998 (including long-term FCC 216.4 177.2
financial receivables mentioned in note 22 amounting to Sithe Energies 80.0 20.8 3.0
E892.3m. of which f128.8m is being hedged under the swap Communications,'2'including: 1.043.7 313.6 61.5
contracts entered into with General Re Finanfial Pr~ucts. pay-n' 759.7
Inc.). Con~truction'~' 332.7 302.8 1.639.0
Property 1.421.3 1,636.3 1,906.6
TOTAL 4.900.3 2,996.0 4,161.4
Berliner \VasrerBetriebe lf59Sml.
(1lAt December 31. 1999. consolidation of USFilrer lf613m) and
(21 At Deeember31.1998. consolidation afHavar (E171.4ml.At Decem-
ber31. 1933.conaolidatlonofCanalt (f759.7mI.
from rhe completed contract method fo the percentage of completion
(3) The impact m work in pmcers of the change in accounting policy.
mpthod. amounted tof1.263m at January 1.1998.
1999 1998 1997
..............................................................................
............................................................................. ....
.................................................................................
...............................................................................
lo4 I Vivendi
. . . . . , . . . . . . . . . . . . , . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . Consolidated financial statements
These figures are net of write-downs amounting to f657.8m at ,
December 31, 1999, of which f401.8m relating to the property
sector.
For Compagnie Generale d'lmmobilier et de Services, invento-
ries and construction in process amount to €1,421.3m, versus
E1.636.Zm in 1998.
They include in particular: - f814.9m of assets booked as "Vivendi Valorisation" net of a
f335.9m provision. of which E586.5m. net of €193.9111 of
provisions, represent multi-year development projects in the
Greater Paris region (in the La Defense business district). in
other parrs of France and in Babelsberg near Potsdam in
Germany.
* f606.3m for assets pooled in a new legal structure called
"New CGIS" scheduled for disposal in 2000.
Stocks and work in process in respect of Canal+ relates to the
company's films and programmes (f759.7m). -
13. ADIUSTMENTS FOR DEPRECIATION OF CUR-
RENT ASSETS OTHER THAN INVENTORIES
Adjustments have been made in respect of trade receivables of
f1.068.3m. versus f706.2m in 1998, and in respect of financial
receivables amounting to E249.8m. compared with E160.7m
in 1998.
14. CASH AND MARKETABLE SECURITIES
Cash and marketable securities include listed securities of
€2.284.2m, unlisted securities of E2.020.3m (primarily mutual
funds) and cash of €2,861.8m. In total, aher writedowns of
€57.9111. these items have been recorded on the balance sheet
at E7.108.5m.
15. GROUP INVESThlENT PORTFOLIO
15.1 Treasury stock
Vivendi and its subsidiaries own 33,238.663 Vivendi shares
amounting to f2.029.9m. at an average cost price of €61 per
share. Nearly all these shares (94%) are carried on the balance
sheet as marketable securities. and the remainder is deducted
from shareholders' equity. Around 2.1 million shares are held
in treasury to cover needs related to employee stock option
plans.
During the year, 21,394,722 Vivendi shares were acquired at an
a~'eragepriceoff72.7pershare,and4.950,930sharesweresold
at an average price of €76.4 per share.
15.2 Ofherporvolio lnwesments
The investment portfolio consists oflistedshares andconverti-
ble bonds (with the exception of FACIC, see above) issued by
unconsolidated companies. These securities are included in
the balance sheet under the headings, "Unconsolidated in-
vestments", "Portfolio investments held as fixed assets", and
"Cash and marketable securities". Their market value (with
the exception of the 10% shareholding in the Washington-
Baltimore mobile telephone Franchise. which is given at its
book value) at December 31, 1999 was €1,049.lm, for a net
bookvalue ofE550.4m.
105
Vivendi
Consolidated financial statements ..................................................................................................
"
C. Shareholders' equity and liabilities
16. SHAREHOLDERS' EQUITY AND MINORITY iNTEREST
I) Group share in skarehoiders'equiiy
Additional Czpital paid-in stack Retained capital earnings Net income equity (in millions of euros1 Shareholders'
Balance at December 31, '97 2,043.5 3,237.3 743.8 822.1 6,846.7
Changes in me.thod 1226.81
Restated net total at December 31, '97 2,043.5 3,237.3 517.0 822.1 6,619.9
capital increase"' 387.5 770.8 1,158.3
Goodwill allocation"' (579.01 1579.01
Dividends paid and net income appropriation 516.2 1822.11 1305.91
Foreign currency translation adjustmentU' (168.71 1168.71
Release of revaluation surplus and other"' 15.21 (5.21
1998 net income 1,120.8 1,120.8
.....................................................................................................................................................................................
.........................................................................................................................................................................................
...........................................................................................................................................................................................
.................................................................................................................................................................................
,- Balance at December 31, '98 2.431.0 3.429.1 859.3 1.120.8 7.840.2
Capital increase"' 845.1 5.232.0 6.077.1
GoodwJl allocation"' (430.31 (4.310.31
Dividends paid and net income appropriation 707.3 (1,120.81 (413.51
Foreign currency translation adjustment"' 383.3 383.3
Release of revaluation surplus and other 1116.0) (116.01
...................................................................................................................................................................................
1999 net income 1.431.4 1,431.4 .....................................................................................................................................................................................
Balance at December 31, '99 3,276.1 4.350.8 1.833.9 1.431.4 10,892.2 ................................................................................................................................................................
exercise of stock options and E29.6m in connection rdth the conversion afbondn and rvarrantr. In 1539, a capital increase with preferential subscription
(I) In 1998. E923.2m in connection with the merger with Harar. El56.8m in connection with the Group Saving3 Scheme. €48.7111 in connection with the
rights IE2.681ml. the merger OfPathCwithYivendi carried out by means afabrorption lE522ml.WEI's contribution ofBritirhS~BBroadcartingsecuritier
bands and wmants (E6i3ml and subscription warrants (E39.lml.
(E325ml. Richemont's contribution of Canal+ recurides lE1373ml. Group Savings Scheme lE480ml. the exercise of stock options (E44ml. converrian of
(2) In 1998. the merger with Hams led to an allocation of €579m to the merger premium. in 1999, as a result of the acquisition of USFiiter and
transactionr involving Farhe. British Sky Broadcasting and Canal+. f4.401.3m was charged 10 merger premiums. Total allocations were f5.222m. in the
abrenceofanychargertorhareholders'equiry,therelatedaccumuiatedgoodwiiiamanirationwarE296.7matDecember3i.1999afwhichE119.5m~ras
in respect of 1999. This assumes straight-line amonization in line with the group's usual policies.
I31 in 1998. the principal fluctuations concerned the pound sterling (a decrease of 1122.2ml and the US dollar la decrease of S23.6mI. in 1999. the
principal fluctuations concerned the dollar 1f23Oml and the pound sterling (Ei4lm). At December 31. 1999. the aggregate amount in retained earnings
wasf311.9.
(41 lncludingE170.6mduetothechangeinaccountingpolicyrelatlvetatherertatementofcapitallearerlreeAccountingpalicierandnotes7.1.21.iand
22.11. and E56.2m due to the change in accounting poiicy for pension commitments [see Accounting principles and notes 18.1 and 28 from the 1998
annual repart1.
106
Vivendi
Consolidated financial statements ...............................................................
ZJ Change in minorily interest , 1995 for f204.2m. and to the 50-year special construction
Minority interest amounted to f4.052.4m at December 31,
1999, cornpared with f2,423m in 1998 and E1.742.3m in 1997.
lease on the Lindencorso building in Berlin. signed in 1997
with a group of German investors for E94.7m. These are
amortized on a straight-line basis over the duration of the
The net change during the year mainly resulted from changes leases
in the scope of consolidation, which had an impact of
E1.596.9m. which primarily included the full consolidation of
Canal+ as of October 1. 1999 (E784.9m). the increase in Sithe
Energies's capital that was opened to third parties (f173mI.
and the acquisition of Berliner WasserBetriebe (E545.8m).
Net 105s attributable to minority interest was E5.3m. The
minority share in the distribution of dividends and foreign
currency translation adjustments were. respectively, a debit of
E70.3m and a credit off84.lm.
17. DEFERRED ISCOME
This section refers principally to:
- Prepayments relating to the %-year construction lease
signed with Philip hlorris Capital Corporation at the end of
18. PROVISIONS FOR LIABILITIES AND CHARGES
18.1 Change in provisions for liabifines and charges
Payments made since the end of 1997, totalling f607.8m in
respect of the securitization of income on future debts. This
operation was organized as part of the financing of cogener-
ation projects in the energy sector. and the income was
amortized from January 1. 1998 using the discounted cash
flow method, for the term of the debt, Le. between five and
twelve years. In 1999. additional income of f289.7m was
recorded in connection with debt securitization.
This heading also contains investment subsidies amounting to
f405.4m, compared with €97.9111 in 1998. The increase in
subsidies can be attributed to the water K168m) and transport
(f139m) sectors.
Changes in scope of consolidation 1998 and other (in millions of euros1
Provisions for replacements and full warranty"' 320.4 100.2
Provisions for pension commitments and redundancy pay"' 458.7 96.6
Financial provisions for liabilities and charges"' 1.515.5 13.41
Other urovisions for liabilities and charges"' 3,637.1 963.8
currency Foreign
adjustments for the year 1999 translation Net expense
4.3 7.8 432.7
2.7 33.6 591.6
11.053.81
61.5 738.5
458.3
5,400.8
TOTAL PROVISIONS 5,931.7 1.157.1 68.5 (273.9) 6,883.3 .....................................................................................................................................................................................
Ill This provision corers replacement costs that could not be hedged under the swap contracts concluded with General Re Financial Products, Inc.
I21 See note concerning pension commitments.
(3) This item includes a technical provision for financial risk at year end designed to cover a guarantee granted by a Vivendi subsidiary In a swap deal
with General Re Financial Products, Inc. (flZ8.8m). as well ar amortiration of assets under concession (f329.4ml. During the year, provision reverralr
amounted to f IXbn and partially covered the lorren on property disposals.
(41 This Item includes in particular potential IOII~O on contracts fhar extend beyond the financial year.
L
107
Vivendi
Consolidated financial statements ......................................................................
Changes in the scope of consolidation primarily concern
USFilter (f444ml and Canalt lE400ml.
18.2 Breakdown Ly btrsiness sector
(in millions of euros1 1999 1998 1397
* Water 1.577.9 694.7 573.3
* Energy senices 680.6 598.2 510.5 - Independent power
production 24.1 54.1 54.4 - Waste management 316.4 262.8 201.0 - Transport 64.5 . 51.4 22.5 - FCC 111.5 78.0
Environmental Services 2,755.1 1,739.2 1,361.7
* Telecommunications 128.3 143.3 211.4 - Media 303.7 261.1
* Audiovisual activities
1.9
400.2
Communications 832.2 404.4 213.3 ,
* Construction 1.408.1 1.268.8 1,333.9
* Property 1.400.4 855.6 937.1
Construction 8. Propelty 2,808.5 2.124.4 2,271.0
Other"' 467.6 1.663.6 1.583.8
TOTALI" 6,883.3 5,931.6 5,429.8
(11 Includes a technical prmirion of E128.8m to hedge the swap that
cwers the group's financial eommirment.
rirkrandliabiiitiermainlyinrerpecrafproperryatE1.39~.2m,construc-
(21 Includes as at December 31. 1999. E5.400.8m of other provisions for
tionatE1,363.2m,~rateratE981.7m,andener~atE546m.
......................................................................................
..............................................................
.....................................................................
...................................................................................
.............................................................................
..................................................................................
.......................................................................................
................................................................................
19. SUBORDINATED SECURITIES
These malnlyinclude:
* a loan of E244m to finance the wastewater treatment plant in
Zaragoza. Spain, undennitten by OW on December 27,
1991 and repayable over 15 years;
-.
S70m of securities repayable over IS years. issued on lanu-
ary29. 1991 byEnergies USA.
The exchange and interest rate exposures have been hedged.
The sums made available to OW and Energies USA amount to
f191.5m (of which f57.3m has already been amortized) and
550111 [of which S21m has already been amortized). The
repackaged portion (Le. transferred to a trust) amounts to
€52.4111 and $20m respectively. The rates of interest are six-
month PiBOR + 0.75% and LiBOR + 0.5%. Repayment of the
loans , will be offered to'the holders of the securities for
Energies USA in January 2006 and December 2006 for OW.
Under the agreement reached with the French tax legislation
office, interest is deductible over a 15-year period up to the
amount of capital effectively made available to the companies
(E191.5m and S50ml. i.e. after deduction of the repackaged
portion (€52.4111 and S20ml.
The amount initially recorded as a liability in the balance sheet
equals the net amount of the subordinated securities [Ei91.5m
and $50m). The interest charged to income is equal to the
interest calculated as if the subordinated securities were tradi-
tional loans amounting to f191.5m and S50m amortized over
15 years by means of regular annual repayments. KO interest is
recognized as income for the period relating to the portion
transferred to the trust.
20. PROJECT FINANCING
This is non-recourse financing, i.e. it is guaranteed solely by
the projects which it finances. It concerns the Sithe Energies
power plants (f1.193ml.
The corresponding assets are primarily included under the
heading "Owned property. plant and equipment". They total
€1.373.3m, of which f642.3m relates to the Independence
power plant.
lo8I Vivendi
Consolidated financial statements .............................................................................
21. LONG-TERM DEBT
21.1 Breakdown by bruinesssecfor
Foreign currency
adjustments, translation
Amount at Changes in reclassification Amount at December 31, New (in millions of euros) 1998 borrowings Repayment consolidation accounting policy 1999 scope of and change in December 31,
* Water
* Energy
* Waste management
* FCC
. Transport
Vivendi Environnement ...................................................................
Environmental Services ...................................................................
* Telecommunications
* Media
* Audiovisual activities
468.8
1.707.4
770.0
400.4
308.2
................
3,654.8
461.1
220.5
................
3.732.8 14.110.41
206.3
285.4
1156.61
1352.01
217.2 1155.71
283.5 183.21
3.058.1
7.783.2 14.857.91
632.3 1203.61
36.2
412.8
161.2)
(17.91
....................................
...................................
2,871.1
272.7
22.5
194.7
32.7
................
3,393.7
126.2
(65.4)
1.190.5
...............
10,595.3
1,945.2
406.6
192.7)
137.41
..........................
12,821.0
18.91
8.6
14.41
..........................
13.561.6
3,724.8
1.382.7
563.9
503.8
3,058.1
22.794.8
1.024.6
121.3
..................
..................
1,581.0 - .. Communications 681.6 1.081.4 1282.7) 1.251.2 (4.71 2,726.9 - Construction 216.1 204.1 147.5) 110.7 9.7 493.2
........................................................................................................................................................................................
* property 1,577.1 102.9 13.445.4) 2.869.5 1 ,I 04.1 .................................................................................................................................................................................
Construction 8. Property 1.793.2 307.0 13.492.91 2.980.2 9.7 1,597.3
Other activities 3,652.9 2.288.4 11.460.1) 174.31 112,471.11 (8.064.2)
Total 9.782.5 11.460.0 (10,093.51 7,550.9 354.9 19.054.7
.................................................................................................................................................................................
..............................................................................................................................................................................
...............................................................................................
21.2 Maturities
(in millions of euros1 1999 1998 1997
Due behveen one and
two years 4,781.0 2,435.6 1.131.7
five yean 8,080.4 2.485.5 1,646.4
Due after five years 6.192.8 4.861.4 3,942.6
Due between two and
TOTAL , ................................................................... ................... 19.054.7 9.782.5 6.720.7 ?’ $3
21.3 Liabllities sentred by collateral
At the end of 1999, f2.lbn in bank borrowings was supported
by collateral guarantees, includingE1Sbn for the financing of
powerplantsintheUnitedStatesandf90mforthefinancingof
the water treatment plants of Wyuna Water in Australia.
21.4 Long-term debt denominated in foreign crrrrencies
Outside the euro zone, long-term debt denominated in foreign
currencies Is primarily composed of fl.6bn in dollar debt.
Most of these debts have been issued by foreign subsidiaries
and bear no exchange risk.
21.5 Bonn ksue:
On January 26, 1999. Vivendi issued 6.028.363 bonds in the
amount of €1.7bn, with options to convert into new or out-
standing shares. The term ofthe loan is five years. The nominal
_-
109
Vivendi
4;
i
1 -.
Consolidated financial statements ....................................................................................... -
value of the bonds is €282, and each bond may be converted
into 3.047 Vivendi shares at the option of the holder.
On April 26, 1999, Vivendi Environnement issued 10,516,606
bonds (5-year and 250-day maturity) with a nominal value of
€271, redeemable at €288. bringing the total amount of the
borroning to E3bn. premium included. At the option of the
holder. each bond may be converted into 3.047 Vivendi shares
or into Vivendi Environnement stock if and when the latter is
listed on the stock market.
22. NET DEBT
lin millions of euros) 1999 1998 1997
Project financing
Other long-term debt
1,193.0 1,059.7 902.2
of which capital leases
17.861.7 8.722.8 5,818.5
818.0 892.9 ..... .....................................................
Sub-total of long-term debt 19,054.7 9.782.5 6.720.7 ..........................................................................
- Subordinated securities
Long-term financial
Net cash"'
178.3 174.0 185.5
receivabies"l 11.273.6) (1.960.3) 11,838.41
of which capital leases
Net debt on the balance
4,873.3 11.494.1) (890.81
53.2 66.4 ...................................................................
sheet''' 22,632.7 6,502.2 4,177.0 ............................................................................
cial assets" in the balance sheet1 granted by Vivendi or its subsidiaries
I11 fB92m consists of long-term receivables Iclarrified as "Orher finan-
pre!iiourly mentioned swap contra~ts.
in connection with disposals, of which E128.8m is hedged under the
marketable securities and cash.
(21 There include short-term debt less short-term financial receivables,
13) Of which factoring Of receivables amounting ta'fZS%m in 1999,
f600.tm in 1998.andEj82.Jmin 1997.
including E5OOm in vendor loans arranged in connection with
earlier disposals of proper! assets and excluding the so-called
%on-recourse" liabilities. the group's total financing
amounted to F22.lbn. equivalent to 50.3% of shareholders'
equiy and 41.3% of its market capitalization at December 31,
1999.
..
23. DEBT AND FiNANCIAL 8iSK MANAGEMENT
a) Debtmarurgementinsrniments
Vivendi's cash management and financing policy involves the
use of financial instruments for non-speculative hedging
purposes.
In 1999, interest-rate hedging covered on average E6.8bn in
long- and short-term debt. The main hedging instruments
used were swaps and caps. Hedging operations amounted to
some f6.6bn. and mainly concerned Vivendi and CGIS. The
average term of such hedging instruments was ten years.
Taking into account fixed-rate hedging operations and issues,
approximately 18.5% of total debt had a variable interest rate,
against 3% in 1998.
In 1999,62% of Vivendi's average net debt was denominated in
euros. The average interest rate, including bank margins, was
4.1% for the year, against 4.36% for 1998. The other borrowings
were primarily in dollars (35%. increased on a one-off basis in
1999 by bridge financing in the United States), pounds sterling
and Australian dollars. at an average financing cost of 6.76%,
6.87% and 7.56%. respectively. This amounts to an average
financing cost for all currencies of 5.13%. including margin. in
1999, versus 5.44% in 1998 and 5.88% in 1997.
interest rate hedges for the years 2000-2008 represent on
average E5.5bn at a maximum rate of 4.56%.
The breakdown of the hedges is as follows:
Interest rate hedges in force in 1999
lin Em1 Average Average Instrument amount rate CounterPam
Swap - payer - ked rate 3.874.7 4.94% Banks
Swap - receiver - fixed
rate 1972.0) 6.32% Banks
Cao ourchases 3.864.1 3.86% Banks
ID/C CGlSl
Sub-total 6,766.8 4.13%
110
Vivendi
Consolidated financial statements ..........................................................
Interest rate hedges thereafter (2000-2008)
lintml
Average
Instrument amount Average Effective 12000-20081 rate Counterparty duration
Sxap -
payer - fixed
rate 4,370.7 4.66% Banks 9 years
Swap -
receiver -
fixed rate 1347.81 5.96% Banks 8years
Cap purchases 1,427.2 4.59% Banks 8 years
IP/C CGISI
..............................................................................
Sub.total 5,450.1 4.56% .............................................
In conclusion, Vivendi's fixed-rate debt, comprised of out-
standing fixed-rate borrowings and variable rate borrowings
hedgedatfixedrates,wnlitotalf16.5bnin2000,€14.7bnin2001
and E14.2bn in 2002. Compared with the average estimated
debt of the Vivendi group. the fixed-rate hedge ratio is esti-
mated at 100% for 2000,90% for 2001 and 91% for 2002. -
b) Finarrcinl risk mnnngement instruments
In 1997. Vivendi finalized its policy of hedging its main
financial risk linked to replacement obligations in the water
and energy sectors and to the risk, which had not emerged by
the year-end. of non-reimbursement of the principal of certain
long-term vendor loans to purchasers of property, which had
been granted in the past when property assets were being
disposed of.
In order to meet these obligations, Vivendi entered into two
swap contracts for a term of 15 years each with General Re
Financial Products, Inc. These swaps resulted in an initial
pa)ment to General Re Financial Products. Inc.. of E990m in
199i. supplemented by a payment of f236.3m in 1998. In
exchange, the latter reimbursed the water distribution and
energy companies for their replacement and full warranty
expenditures (E197.3m in 1999).
In 1999. Vivendi's financial subsidiaries sold vendor loans that
they had granted in previous years in connection with the sale
of certain property assets. This transaction, which brings to an -
end most of their commitments. was covered by General Re
Financial Products Inc. for f1.009m. In addition. Vivendi
received f158.8m from General Re Financial Products Inc.,
accounted for as exceptional income, for guarantees the latter
had given to certain property subsidiaries when they withdrew
from some major property development projects.
24. ACCOUNTS PAYABLE AND RECEIVABLE
In the consolidated balance sheet. prepaid expenses of €877111
in 1999. versus E818.5m in 1998, are included in accounts
receivable.
The corresponding entries under liabilities (deferred income)
are included in accounts payable and amount to €2,426111 in
1999, compared with E1,631.2m in 1998.
25. PRO FORMA BALANCE SHEET
The principal acquisitions of the financial period (USFilter.
Havas Interactive Inc., Canalt, BSkyB, Superior Services and
Teerbau) had the following impact on the consolidated bal-
ance sheets:
* Balance sheet total: t20.0bn - Net debt of acquired companies t6.3bn
Fixed assets (excluding goodwiil) E8.2bn
ofwhich. intaneible assets: E4.5bn
Residual goodwill arising from these transactions totalled E5bn
afrer allocation of merger and issue premiums of E4.4bn.
D. Commitments
26. COMhllThlENTS GIVEN
26.1 Commitments giver: - breakdown by type
fin millions of euros1 1999 1998 1997
Guarantees given 2.472.7 1,535.6 2.147.4
Other commitments given 1,949.9 1.402.9 1,100.8
TOTAL 4.422.6 2.938.5 3*248.2
....................................................................................
I
111
Vivendi
............................................................................... Consolidated financial statements
.
26.2 Commiments given - brenkdozun by business sector
lin miiiions of euros) 1999 1998 1997
Construction"' 1.213.1 960.2 1,158.5
\Vater"' and'" 1,175.4 1.070.9 1,149.0
Waste management 369.5 341.4 671.1
Audiovisual activities 393.0 -
Property and other
-
activities"" 1.271.6 566.0 269.6
TOTAL 4.422.6 2.938.5 3240.2
(1)The increase in commitments given in the Construction sector is
amibutabie td the consolidation afTeerbau and Sogeparc.
(21 There guarantees include f328m (E466.9m in 19981 representing the
annual repaynenrr of borrowings which Vivendi and its water dirtribu-
tion subsidiaries are contractually obliged to refund Io iocai authorities.
(31 The 1998 amount includes the additional sum la maximum ofE84m)
co be paid on the acquisition of 49% of the holding company which
controls 56.53% of Foment0 de Canrrruccioner y Contratar (FCC).
Howrer. it doer not include the undenaking IO purchase SNCF's
inremnent in TCiCcom DCveloppement given by Cegetel on April 11.
i99iforafi~e-)-earperiodlarpaRoftheagreemenrrsignedwithSNCFl.
sale of propert). assets 1€5OOmI.
(I) The increase is due to commitments given in connection with the
The increase in commitments given is primarily due to the
impact of consolidation: easements in respect of the Berlin
water contract (E613ml. consolidation of Teerbau and
Sogeparc in the construction sector (E259ml and consolidation
of Canal+ (E393ml.
Cross-guarantees given by Vivendi subsidiaries amounted to
€2.542m, versus €1,802.lm in 1998. They include a total of
E1.433.6m, compared with E1.442rn in 1998. in guarantees
given by buildingand civil engineering companies in ionnec-
tion with major construction projects. These guarantees cover
prepayments received as well as performance guarantees.
Such guarantees commonly represent 20-30% of the value of a
contract. and in some cases 100%.
Commitments given by Canal+ in film (contracts granting
exclusive broadcasting rights over future productionsl, pro-
gramming (catalogue acquisitions). sports (broadcasting rights
for football and Formula 1 motor-racing for the most part) and
satellite (rental of satellite space) totalled €6.535 billion at year
end 1999.
27. COMMITMENTS RECEIVED
(in millions of euros) 1999 1998 1997
Guarantees received 342.1 405.5 450.1
Other commitments received"' 960.9 504.1 128.8
TOTAL 1.303.0 909.6 578.9
........................................................................................
lil including €608m for commitments received from EDF an future
debtragainst€318.lm in 1998.
28. RECLPROCAL COMMiTMENTS
28.1 Cnpitnl lenses
The Vivendi group uses capital leases in order to finance
certain operating assets and investment properties. As stated
in the accounting policies given at the beginning of the Kotes
to the consolidated financial statements. Vivendi has been
capitalizing these assets as of 1998. Payments in respect of
I capital leases during the year totalled f137.3m. compared rdth
I E132.im in 1998. Future payments represent €1.1 billion, as
against €1.3 biiiion in 1998.
28.2 Long-term lenses
Certain disposals (for a total of €1.34 biiiionl of operating
assets (CNIT and hotels) or investment properties (the Arlane.
Galilee and La Viiiette tower blocks and Village Valmy proper-
ties) made in 1999 to Unibail and Accor terminated lease-back
arrangements for renewable periods ranging from 12 to 24
years, entered into between 1994 and 1996. The leases repre-
sented a total annual charge off116.3m.
At year-end 1999, only the long-term lease-back arrangement
concluded with the owner of the La Villette tower block
remained in force (E9.Sm per annum).
In addition, the disposal to Philip Morris Capital Corporation
of three buildings currently under construction in the Danton
area of La Defense in April 1996 was accompanied by a 30-year
lease-back arrangement effective upon completion of the
April 1998 and the third is to be handed over in April 20001.
buildings (two of the buildings were completed, as planned, in
In 1996. three buildings in Berlin were sold. The sale contracts
contained lease-back arrangements for periods ranging from
"'1 Vivendi
Consolidated financial statements .........................................................................
ten to thirty years. The annual rental charge is f21.9m. An
additional provision for rental contingency amounting to
f123.7m was added during the financial year 1999 to the 1998
provision of €69.3111 when the estimated difference between
the rental obligation of Vivendi under the leases and the
market rent receivable was unfavourable.
In the case of the Berlin water contract. certain facilities are
available on long-term leases.
28.3 Reduction of cross-holdings inSainf-Gobain
On April 30, 1999. Saint-Gobain and Vivendi began a partial
reduction of their cross-sharehoidings by jointly exercising call
options initially granted in July 1998. This transaction was
accompanied by the unwinding of stock price hedges that had
been implemented benveen the two companies at the same
time.
Upon completion of these nvo transactions:
* Saint-Gohain purchased from Vivendi three million Saint-
Jhain shares for a total consideration of €483111 (€161 per
share),bringingSaint-Gohain'stotalshareholdinginVivendi
to 3.4%. with 6.5% of the voting rights (at December 31.1999.
2.74% shareholding and 5.22% of the voting rights).
Vivendi purchased from Saint-Gobain 4.7 million Vivendi
shares for a total consideration of E808m (€172 per share,
before the three-for-one stock split). Its remaining sbare-
holding in SaintGobain was then 1.8% For 3.4% oFthe voting
rights [at December 31,1999. after subsequent disposals on
the open market. Vivendi's shareholding in Saint-Gobain
was 0.81% for 1.5% of the voting rights].
.-
29. SPECIFIC CONTRACTUAL OBLIGATIONS
As part of their contractual obligations as concessionaires and
in consideration of the income they receive. Vivendi and its
water and beating management subsidiaries assume responsi-
bility for the replacement of fixed assets in the publicly-owned
utility networks they manage. The accumulated expenditure
forecast for replacements which are their responsibility comes
to €2.82 billion in current euros (€2.10 billion for water and
€0.72 billion for energy].
30. PENSION COMMITMENTS
(in millions of euros1 1999 1998 1997
Commitments entered into by
French Vivendi companies
Lump sum payments on
Pension and complementary
retirement 235.9 237.1 132.9
pension benefits, of which 115.8 80.3 61.4
* current employees 67.1 54.1 33.0 - retired employees 48.7 26.2 28.4 ....................................................................................
Total pension commitments in
France 351.7 317.4 194.3
* covered by insurance
covered by provisions
included in the accounts 256.8 236.0 108.1
Commitments:
81.0 81.4 40.7
- experience differences 13.9
* not included in the balance
sheet 45.5
Commitments entered into by
subsidiaries outside France ....................................................................................
Commitments: 1.476.2 1.101.3 695.6 - covered by provisions
included in the accounts 334.8 222.7 201.5 - covered hy pension funds 1.184.1 878.6 494.1
experience difference 142.71 .........................................................................................
113
Vivendi
Consolidated financial statements ..................................................................................................... -
31. CASH FLOW FROM OPERATIONS The 0,erating cash flow in the statement is owing to reduced
cash €ow from changes in working capital. dividends received
(in millions of euros) 1999 1998 1997 from equity affiliates and amortization and provisions on
Kef income before equity
interest and minority
interest
Dividends from companies
accounted for by the equity
method 83.7 81.3 76.2
curter1 assets.
1,403.9 1.290.5 603.4
Depreciation, amortization
and provisions 3.463.0 2,456.0 2.890.9 ..........................................................................................
Gross cash flowfrorn
operations 4.950.6 3,827.8 3.570.5 ..........................................................................................
Capital gains on disposals of
ked assets and dilution
profits 670.0 297.9 2,120.7 .........................................................................................
Net cash flowfrom
operations 4.280.6 3,529.9 1.449.8
114
Vivendi
Consolidated financial statements ..............................................................
PRINCIPAL CONSOLIDATED COMPANIES IN 1999
In 1999 the Vivendi group included just over 4,600 companies, compared with 3,371 in 1998. The principal companies are:
Companies and addresses Consolidation Interest method %held
Vivendi - 780129961 03901 I11 100.00
42 avenue de Friedland - 75380 Paris
Vivendi Environnement 403 210 032 00039 Ill 100.00
42 avenue de Friedland - 75380 Paris
WATER
Vivendi Water 421 345 04200012 I11 100.00
52, rue d'hjou - 75008 Paris
Compagnie GCnerale des Eaux &bide and its subsidiaries 572 025 526 00029 I11
52 rue dhjou - 75008 Paris
In Fmnce:
WET No.
..................................................................................................................................................................................
..................................................................................................................................................................................
..................................................................................................................................................................................
100.00
...........................................................................................................................................................................
Compagnie des Eau et de I'Ozone
52. rue dhjou - 75008 Paris
Compagnie des Eaux de Paris 329 207 740 00047 Ill 100.00
4, rue du General Foy- 75008 Paris
- 775 667 363 01597 I11 100.00
...............................................................................................................................................................
...................................................................................................................................................................
Societe Franpise de Distribution dEau 542 054 945 00069 Ill 95.35
4, rue du General FDY - 75008 Paris
Compagnie Ferrniere de Senices Publics 575 750 161 00011 Ill 99.13
3. rue Marcel Sembat - lrnmeuble CAP 44 - 44100 Nantes
Compagnie hlediterraneenne d'exploitation des Services d'Eau 780 153 292 00104 I11 98.67
144. Boulevard de Cessole - 06100 Nice
Societe des Eaux de Melun 785 751 058 00047 I11 98.66
Zone Industrielle - 1981398, me Foch - 77000Vaux Le Penil
Societe des Eau de Marseille and its subsidiaries 057806 15000017 121 48.79
25. rue Edouard Delanglade - BP 29 - 13254 Marseille
SociCtC des Eaux du Nord 572 026 417 00244 121 49.53
217. boulevard de la Liberte - 59800 Lille
....................................................................................................................................................................
......................................................................................................................................................................
............................................................................................................................................................................
...........................................................................................................................................................................
......................................................................................................................................................................................
.....................................................................................................................................................................................
Societe des Eaux de Versaiiles et de Saint-Cloud
145. rue Yves le Coz - 78000 Versailles
318 634 649 00053 I21 50.00
Sade-Compagnie Generale de Travaux d'Hydraulique and
28. rue de la Baume - 75008 Paris
its subsidiaries
562 077 503 00018 I11 97.98
..........................................................................
115
Vivendi
I:-:: ;?:td financial statements ...........................................
"" I. __ . " __ TC ?:dresses SIRET No. Consolidation method Interest %held
:=;-z ?e Traitements et de Valorisation (OW and its subsidiaries 542 078 688 01065
l.x;~+nc - 1, place Montgolfier - 94417 -St Maurice Cedex
..........................................................................................................
562 087 346 00366 :-- :=me - 5, Place de la hramide - 92800 hteauq La Defense ""
I-.. 22ge SA
..-z.:=zne - 5, Place de la Pyramide - 92800 Puteaux La Defense - 966 505 76000217
I11
......
I11
100.00
98.23
Ill 100.00
"
.................. Consolidated financial statements
.-
"
-
Companies and addresses Consolidation Interest method %held .I SlRET No.
ENERGY
Energy Services:
Dalkia and its subsidiaries 456 500 537 00018 (11 99.47
37, avenue du MI de Lattre de Tassigny - 59350 St Andre Les Lille Cedex ..............................................................................................................................................................................
Independent PowerProduction
Energies USA 337 529 259 00059
L'Aauarhe - 1. Place Montaolfier - 94417 St Maurice Cedex - ill 100.00
Sithe Energies Inc.
450LexinetonAvenue-37thFloor-10017NelvYork~USA)
WASTE MANAGEMENT
Compagnie GenCrale d'Entreprises Automobiles and 572 221 034 00778 Ill
its subsidiaries (CGFAI
Parc des Fontaines - 163/169, avenue Georges Clemenceau-
92000 Nanterre
Societe d'Assainissement Rationnel et de Pompage and 775 73481700353 (11
its subsidiaries (SARP)
Courbevoie Cedex
162/16EnergyParkIV-162/166BoulevarddeVerdun-92413
.....................................................................................................................................................................
100.00
............
98.20
SARP Industries and its subsidiaries 303 772 982 00029 ill 99.37
427, route du Huay - Zone Porfuaire Limay-Porchedle - 78520 Limay
SociCtC d'Equipernents Manutentions et Transport (SEMATI 778 128 462 00034 ill 99.66
335, avenue lean Guiton - 17028 La Rochelle Cedex 01
Sedibex 303 687 867 00034 Ill 99.67
8, Esplanade du Champs de Mars - 76100 Rouen
Onyx Environmental Group PIC (11 100.00
Onyx House - 401 Mile End Road - F.3 4PB - London (UKI
Onyt North America Corp. iil 10.00
3225 Aviation Avenue - 4th Floor - 33133 Miami - Florida (USA1
Superior Services (11 100.00
One Honey Creek Corporate Center - 125 South -
84th Street - Suite 200
Milwaukee, Wl53214 (USA)
Collex Waste Management FTy Ltd. Ill 97.00
280GeorgesStreet-Level12-PP.O.BoxH126Austr~iaSquare-
NSW 1215 -Sydney (AUSTRALIA1
ONYXUmweltseMce GmbH 11) 51 .OO
Am Miihlengarten 4 - 66292 Riegelsberg (GERMANY)
...........................................................................................................................................................................................
........................................................................................................................................................................................
.............................................................................................................................................................................................
..........................................................................................................................................................................................
...........................................................................................................................................................................................
...............................................................................................................................................................................................
............................................................................................................................................................................................
...............................................................................................................................................................................................
117
Vivendi
Consolidated financial statements .................................................................................
~~
Companies and addresses SlRET No. Consolidation Interest method %held
TRANSPORT
Cornpagnie GCnerale d'Entreprises Automobilies 383 607 090 00016 I11 100.00
Parc des Fontaines - 163/ 169, avenue Georges Clemenceau - 92200
and its subsidiaries [CGEA Transport)
Nanterre
Aktiebolaget tinjebuss 111 100.00
Englundavagen 9 -Box 1820 - 17124 Solna (SWEDEN)
Connex Rail Ltd IlJ 100.00
41 /45 Blackfriars Road - SE18PG London (UKI
FCC AND ITS SUBSIDUWES (FCC) (21 27.70
Calle Balmes 36 - 08007 Barcelona (SPAIN)
COMMUNICATIONS
Cegetei and its subsidiaries 403 106 537 00034 (11 44.00
42. avenue de Friedland - 75008 Paris
including:
.............................................................................................................................................................................................
..............................................................................................................................................................................................
...........................................................................................................................................................................................
.........................................................................................................................................................................................
....................................................................................................................................................................................
- Societe FranGaise de Radiotelephone [SFR) 343 960 720 00245 ................................................................................................................................................................. - Cegetel7 413 084 690 00010 - Cegetel Enterprises 40971022500015 - Telecom Developpernent 409 527 454 00071
Compagnie Transatlantique de TClecornrnunications (Transtei) 398 868 182 00013 (11 70.00
42, avenue Friedland - 75008 Paris
Vivendi TdCcornrnunications International and its subsidiaries 343 059 564 00017 (11 100.00
42, avenue Friedland - 75008 Paris
Havas and its subsidiaries 542 10331203067 Ill 100.00
............................................................................................................................................................................................
.......................................................................................................................................................................................
....................................................................................................................................................................................
.....................................................................................................................................................................................
........................................................................................................................................................................................
31, rue du Colisee - 75008 Paris ...............................................................................................................................................
indrufing:
Havas Interactive Inc
19840 Pionner Avenue - Torrance - 90503 California (USA)
........................................................................................................................................................................................
UGC and its subsidiaries 562 038 182 00274 131 39.34
24, avenue du General Charles de Gaulle - 92522 Neuilly-sur-Seine
British Sky Broadcasting Group (BSkyB) I31 23.36
Isleworth (Middiesex) -Centaurs Business Park - Grant Way (UK)
Canal+ and its subsidiaries 329211 73400176 (1) 49.00
85/89, quai Andre Citrogn -75015 Paris
Antennes Tonna 33588086000010 ' 121 49.00
36. avenue Hoche - 51 100 Reims
...........................................................................................................................................................................................
.........................................................................................................................................................................................
.............................................................................................................................................................................................
......... Consolidated financial statements
_-
Companies and addresses Consolidation SIRET No. Interest method 96 held
PROPERN MANAGEMENT
Societe Generale dEntreprises and its subsidiaries WE)
1, cours Ferdinand de Lesseps - 92500 Rueil Malmaison
Compagnie GBnerale d'lmmobilier et de Services (CGISI
10. rue du Gdneral Fov - 75008 Paris
....................................................................................
552 037 806 W585 111
378 206 932 00022 Ill
49.21
100.00
MULTIPLE ACTIVIN AND HOLDING COMPANIES
Vivendi North America Company Inc.
800 Third Avenue - 38th Floor - New York 10022 lUSAl
(11 100.00
Vivendi Asia Pacific Pte Ltd Ill 100.00
3 Temasek Avenue X30-03 -Centennial Tower - SINGAPORE 039190
Vivendi UK Pic 111 100.00
37/41 Old Queen Street - Westminster - London SWlH 91A (Uh7
Gelgin Limited 111 100.00
2 Harbour Master Place - Custom House Dock - Dublin 1 (IREWYDI
...........................................................................................................................................................................................
.........................................................................................................................................................................................
..............................................................................................................................................................................
(11 Fullyconralidated companies.
12) Proportionately consolidated companies.
I31 Companies accounted for by the equity method
119
Vivendi
_-
MFEM'S STATEMENT OF
CURRENT COMMITMENTS
(To Accompany Proposal)
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
The MFEM is required to state what work of a similar character to that included in the proposed
which will enable the District to judge hidher ability to meet contractual commitments under this
Contract helshe is currently committed to providing and give references, with telephone numbers,
project. An attachment can be used.
Name and Phone
I Summit, UT 801-355-1112
I I I I
Contract No. 3675 Page 49 of 96 Pages
MFEM'S CERTIFICATE OF INSURANCE FOR
GENERAL LIABILITY, EMPLOYERS' LIABILITY, AUTOMOTIVE
LIABILITY, PROPERTY AND WORKERS' COMPENSATION
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
(To Accompany Proposal)
As a required part of the MFEMs proposal the MFEM must attach either of the following to this page.
1. Certificates of insurance showing conformance with the requirements herein for:
El Comprehensive General Liability
W Workers Compensation
g~ Automobile Liability
B] Employer's Liability
@ Property insurance
- 2. Statement with an insurance carrier's notarized signature stating that the carrier can, and upon
payment of fees andlor premiums by the MFEM, will issue to the MFEM Policies of insurance for
Comprehensive General Liability, Employer's Liability, Automobile Liability and Workers
Compensation in conformance with the requirements herein and Certificates of insurance to the
Agency showing conformance with the requirements herein.
All certificates of insurance and statements of willingness to issue insurance for auto policies offered to meet the specification of this contract must:
(1) Meet the conditions stated in The Notice Inviting Bids, the Standard Specifications for Public
Works Construction and the Supplemental Provisions for this project for each insurance
company that the MFEM proposes.
(2) Cover any vehicle used in the performance of the contract, used onsite or offsite, whether owned,
non-owned or hired, and whether scheduled or non-scheduled. The auto insurance certificate
must state the coverage is for "any auto" and cannot be limited in any manner.
,-
a %4 4/27/01 Contract No. 3675 Page 50 of 96 Pages
June 21,2001
AIG Environmental
One MacArthur Place. 6th Floor
South Coast Metro, CA 92707
Telephone: (714) 436-3252
Carlsbad Municipal Water District
5950 El Camino Real
Carlsbad, CA 92008
RE: United States Filter Corporation
Carlsbad, CA Contract #3675
Gentlemen:
With respect to the insurance provisions of contract #3675 for the procurement of
membrane filtration system equipment, please be advised that should USFilter
Corporation be awarded this contract, their insurance company will provide to the
Carlsbad Municipal Water District the insurance coverage as required during the project,
," and as required by the final, signed contract.
The insurance coverage placed for United States Filter Corporation are with companies
who are licensed to do business in the State of California and have a Best insurance rating
of A or better.
Branch Manager, AIG Environmental
CC: Shawn C. Doherty, Marsh Risk and Insurance Services
f-
sf A Division of Western Risk Specialists, Inc. - License # 0434795
RSC@ Used with Permission of Risk Specialists Companies, Inc.
. . . . -. . . . . . -. - Nashville, TN 372305191 I INSURERSAFFOROING COVERAGE I
INSURER& Commerce and Induetry Insurance Company 19410-001
INSURERBTravslees Indemnity Co. Of Ill. 25674-004
INSURERCThe Travelera Insurance Company
INSURERD: Factory YUtual Inllurance company
39357-002
21482-003
SCHEDULEDAUTOS
HIREDAUTOS
NONOWNEDAUTOS I
GARAQE UABIUTY
ANYAUTO
EXCESS LlABlliTY 3 OCCUR 0 CWMSMADE
DEDUCTIBLE
RETENTION I
c WORKERSCOMPENSATIONANO
C EHPLOIERS'UABILITY TCZJUB419J4441TIL02
TRJW419J4293TIL02
D UA941 OTHER
c-erci.1 P*op*rty
DESCRlPTlONOFOPERITIONSILOCATIDNSE~~~~E~EXCLUSIONSDEDBYENDORSEHl
I AUTOONLY-EAACCIDENT IS I
OTHERTHAN I AUTOONLY: AGO I
ADDITIONAL NAMED INSURED: USFILTER WASTEWATER GROUP, TNC.
Re: Procurement of Membrane Filtration System Equipment - Project X3675
CERTIFICATE HOLDER 1 1 ADDmONAL INSURED: INSURER LETTER: CANCELLATION
WKXC#MWlK"-=-
wklKax"Huxakx-="
"Ex&x&w%K~"~X?f~
Carlsbad Municipal Water Dietriot
and The City of Carlebad Attn: Ruth Fletcher 1635 Faraday Avenue Carlebad, CA 92008
~WY1l"XKSlKIW%WXW3%WWXXXZBL%XM
"
I ACORDZCS(7/97) Coll:516694 Tpl:114218 Cert:2086783 OACORD CORPORATION 1988
WIIIIS CERTIFICATE OF LIABILITY INSURANCE Page 2 of 3 I 08/07/2002 DATE
PRODUCER 877-945-1378 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
willis Nozth America, mc. - aegional cert center HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
26 Century Blvd.
P. 0. Box 305191
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
INSURERSAFFORDING COVERAGE m.hville, TN 371305191 I
The District and the City of Carlsbad, their officers, employees, agents, consultants, and volunteers shall be Additional Insureds under the Commercial General Liability policy as respects liability arising out of activities performed by or on behalf of the Named Insured; products and completed operations of the Named Insured; premises owned, leased, hired or borrowed by the Named Insured. Coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability stated hereunder.
USFilter's insurance coverage (excluding Workers' compensation and Auto Liability) shall be primary as respects the District and City, their officers, employees, agents consultants and volunteers. Any insurance or self-insurance maintained by the District or City, their officers, employees, agents, consultants or volunteers shall be excess of USFilter's insurance and shall not contribute with it.
&ny failure to comply with reporting provisions of the policies shall not affect coverage provided to the District and City, their officers, employees, agents, consultants or volunteers.
NOTICE OF CANCELLATION: Coverage shall not be nonrenewed, suspended, voided, canceled, or reduced in coverage or limits except after thirty (30) days' prior written notice has been given to the District by certified mail, return receipt requested.
USFilter waives all rights of subrogation the insurer may have or may acquire against the District or City or any of their officers, employees, agents, or consultants.
coll:516694 Tpl:114218 Cert:2086783
Page 3 of 3 -
IMPORTANT
on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
if the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement
If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may
require an endorsement. A statement on this certificate does not confer rights to the certificate
holder in lieu of such endorsement(s).
DISCLAIMER
The Certificate of Insurance on the reverse side of this form does not constitute a contract between
the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it
affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.
ACORD 254 (7197) Coll:516694 Tpl:114218 Cert:2086783
This endorsement, effective 1201 A.M. 3/31/2002 forms a part of
Policy No.: GL 417-77-98 RA issued to: UNIT CORPORATION
By: COMMERCE AND INDUSTRY INSURANC
BLANKET ADDITIONAL INSURED
This endorsement modifies insurance provided qnder the following:
COMMERCIAL GENERAL LI~BILITY COVERAGE PART
SECTION II -WHO IS AN INSURED is amend to include as an insured that person, or
organization, which requires by written contract be so named, but only with respect to liability arising out of "your work for that insured by or
All other terms and conditions remain unchanged
AUTHORIZED REPRESENTATIVE
JUL 25 2602 17:08 FR 213 689 1812
-
.-
POLICY NUMBER: GL 417-7740 RA
213 689 1812 TO 916158723897 P.22
COMMERCIAL GENERAL LIABILITY co 24 04 11 as
THIS ENDORSEMENT CHANQES THE POLICY, PLEASE READ IT CAREFULLY.
WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AOAlNST OTHER8 TO US
This endorsement modHles Insurance provided under the followlng: COMMERCIAL QENERAL LIABILITY COVERAGE PART
SCHEDULE
Name of Pmon or OrganWon:
BLANKET WHEN REQUIRED BY WEN CONTRACT
shown in the Dedaretlons as applicable to this endorsemant.)
(If no entry appears ebove, information required to complete this rndonrmmt wlll be
The TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US Condition(Srcti0n IV
following: - COMMERCIAL OENERAL LIABILITY CONDITIONS) Is emended by the addltlon of the
the Schedule becsure of payments we make for Injury or damage ariaing out of your
We weive my right of rrcovrry wr may heve sgalnst the psnon or organlzatlon shown In
ongoing operations or "your work' done under e contract with that perron or organization
the person or organlzation shown In the Schedule above. and included in the 'products-completmd operations hazard.' Thls welver ~PPII~s only to
CG 24 04 1186 Copyright, Inaunnco Servloes Office, Inc., 1992
WORKERS COMPENSATION
AND
EMPLOYERS LIABILITY POLICY
ENDORSEMENT WC 00 03 13 (00)-01
WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT
We have the rlght to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right agalnst the prson or organlzatlon named in the Schedule. (This agreement applles only to the extent that you perform work under a wrHten contract that requlres you to obtaln this agreement from us.)
Thls agreement shall not operate directly or indirectly to benefit any one not named In the Schedule.
SCHEDULE
DESIGNATED PERSON:
ANY PERSON OR ORGANIZATION FOR WM THE NAMED INSURED FAAS
DESIGNATED OROANIZATION:
AGREED BY WRITTEN CONTRACT TO FURNISH THIS WAIMR,.
DATE OF ISSUE 04-04-02 ST ASSIGN:
Account No. 1-72285 Policy No. UA941
d) any changes in the title, use, occupation, location, possession or exposures of the property since the effective date of this Policy.
e) by whom and for what purpose any location insured by this Policy was occupied on the date of loss, and whether or not it then stood on leased ground.
5) include a copy of all the desxiptions and schedules in all policies and, if required, provide verified plans and specifications of any buildings, lixtures, machinery or
equipment destroyed or damaged.
6) fwther, the Insured, will as often as may be reasonably required:
a) exhibit to any person designated by the Company all that remains of any property;
b) submit to examination under oath by any person designated by the Company and sign the written records of examinations; and
c) produce for examination at the request of the Company:
(i) all books of accounts, business records, bills, invoices and other vouchers; or
(ii) certified copies if originals are lost,
representative and permit extracts and machine copies to be made.
at such reasonable times and places that may be designated by the Company or its
B. COMPANY OPTION
The Company has the option to take all or any part of damaged property at the agreed or appraised value. 'The Company must give notice to the Insured of its intention to do so
within 30 days ah receipt of proof of loss.
c. ABANDONMENT
There may be no abandonment of any property to the Company.
D. SUBROGATION
The Insured i required to cooperate in any subrogation proceedings. The Company may require hm the Insured an assignment or other transfer of all rights of recovery against any
party for loss to the extent of the Company's payment.
The Company will not acquire any rights of recovery that the Insured has expressly waived
prior to a loss, nor will such waiver affect the Insured's rights under this Policy.
proceedings, will be payable to the Insured in the proportion that the amount oE Any recovery hm subrogation proceedings, less costs incurred by the Company in such
ENDORSEMENT
This endorsement, effective 1201 A.M., 03/01/02 forms part of
Policy No. GL 4177798 issued to: UNITED STATES FILTER CORPORATION
By: COMMERCE AND INDUSTRY INSURANCE COMPANY
ADDITIONAL INSURED - BY CONTRACT, AGREEMENT OR PERMIT
Under SECTION I1 - WHO IS AN INSURED, paragraph 5. is added as follows:
5. Each of the following is also an insured
a. Any person or organization you are required by a written contract,
agreement or permit to name as an insured but only with respect to
liability arising out of:
1. “work performed” or being performed by or on behalf of the
named insured.
2. premises owned, rented, or used by you.
3. equipment rented, leased, or used by you.
b. This insurance does not apply unless the contract, agreement or
permit is made prior to the “bodily injury” or property damage”.
c. This insurance does not apply to the rendering or failure to render
any professional services.
d. This insurance is primary if that is required by the contract,
agreement or permit.
e. The Limits of Insurance provided on behalf of the Additional
Insured are not greater than those required by such contract.
All other terms and conditions remain the same.
AMORIZED REPRESENTATIVE
COMMERCIAL GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
This Endorsement, effective 12:Ol A.M. 3/01/2002, forms a part of
Policy No.: GL 417-77-98 RA issued to UNITED STATES FILTER CORPORATION
By: COMMERCE AND INDUSTRY INSURANCE COMPANY
AMENDMENT - AGGREGATE LIMITS OF INSURANCE
(PER PROJECT)
This endorsement modlfies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
- The General Aggregate Limit under LIMITS OF INSURANCE (SECTION 111) applies
separately to each of the projects away from premises owned by or rented to you,
that are scheduled on file with the Insurer:
Carlsbad Municipal Water District and the City of Carlsbad -
Microfiltration Equipment
All other terms and conditions remain unchanged.
AUTHORIZED REPRESENTATIVE
,-
MFEM'S STATEMENT RE DEBARMENT'
(To Accompany Proposal)
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
\
1. Have you or any of your subcontractors ever been debarred as an irresponsible bidder by
another jurisdiction in the State of California?
X
Yes no
- 2. If yes, what washere the name@) of the agency(ies) and what washere the period(s) of
debarment(s)? Attach additional copies of this page to accommodate more than two debarments.
party debarred party debarred
agency agency
.. r
period of debarment .. period of debarment
BY MFEM:
U.S Filter Wastewater Grou Inc.
Ci1 P~rro/ V
(print na'm'e/title)
P Global Enaineering
Page of pagesof the Re Debarment form
m t# 4/27/01 Contract No. 3675 Page 51 of 96Pages
NON-COLLUSION AFFIDAVIT TO BE EXECUTED
BY MFEM AND SUBMITTED WITH BID
CONTRACT NO. 3675
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
PUBLIC CONTRACT CODE SECTION 7106
state Of Colorado
Countyof ~1 Paso
1
)
) ss.
U.S. Filter Wastewat
(Nam-
Tnc , being first duly sworn. deposes
and says that he or she is "=ni n"ri nn (Title)
of U.S. Filter Wastewater Group, Inc.
(Name of Firm)
the party making the foregoing bid that the bid is not made in the interest of, or on behalf of, any
genuine and not collusive or sham; that the MFEM has not directly or indirectly induced or solicited
undisclosed person, partnership, company, association, organization, or corporation; that the bid is
any other MFEM to put in a false or sham bid, and has not directly or indirectly colluded, conspired,
connived, or agreed with any MFEM or anyone else to put in a sham bid, or that anyone shall refrain
from bidding; that the MFEM has not in any manner, directly or indirectly, sought by agreement,
communication, or conference with anyone to fix the bid price of the MFEM or any other MFEM, or to
fix any overhead, profit, or cost element of the bid price, or of that of any other MFEM, or to secure
any advantage against the public body awarding the contract of anyone interested in the proposed
contract; that all statements contained in the bid are true; and, further, that the MFEM has not,
directly or indirectly, submitted his or her bid price or any breakdown thereof, or the contents thereof,
or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation,
partnership, company association, organization, bid depository, or to any member or agent thereof to
effectuate a collusive or sham bid.
I declare under penalty of perjury that the foregoing is true and correct and that this affidavit was
executed on the 26 day of June ,20k.
Signature of MFEM
Subscribed and sworn to before me on the 26 day of June ,2033.
(NOTARY SEAL)
Signature of Notary
Contract No. 3675 Page 52 of 96 Pages
CONTRACT FOR THE
PROCUREMENT OF GOODS AND SPECIAL SERVICES
This agreement is made this /&?I+ day of P uc h5-r , 20-, by and
between the Carlsbad Municipal Water District of Carlsbad, California, a municipal corporation,
(hereinafter called "District"),
and US FILTER WASTEWATER GROUP INC whose principal place of business is
725 WOOTEN ROAD, COLORADO SPRINGS, CO, 80915 (hereinafter
called "MFEM").
District and MFEM agree as follows:
1. Description of Work. MFEM shall perform all work specified in the Contract documents for:
Contract No. 3675 - Procurement of Membrane Filtration System Equipment, March 2001
(hereinafter called "project")
2. Provisions of Labor and Materials. MFEM shall provide all labor, materials, tools,
equipment, and personnel to furnish the Goods and Special Services specified by the Contract
Documents.
3. Contract Documents. The Contract Documents consist of this Contract, Notice Inviting Bids,
Instructions to Bidders, MFEM's Proposal, MFEM's Bond, MFEM's Statements of Financial
Responsibility, Current Commitments, Re Debarment, Non-collusion Affidavit, Escrow Agreement,
the Drawings and Specifications, the General Provisions, addendum@) to said Drawings and
Specifications and General Provisions, and all proper amendments and changes made thereto in
accordance with this Contract or the Drawings and Specifications, and all bonds for the project; all of
which are incorporated herein by this reference.
specified, and implied by the Contract Documents. Any items of work not indicated or specified, but
MFEM and her/his materials suppliers shall furnish Goods and Special Services as indicated,
which are essential to the completion of the work, shall be provided at the MFEM's expense to fulfill
the intent of said documents. In all instances through the life of the Contract, the District will be the
will be final and binding. Failure of the MFEM to apprise materials suppliers of this condition of the
interpreter of the intent of the Contract Documents, and the District's decision relative to said intent
Contract will not relieve responsibility of compliance.
4. Payment. For all compensation for MFEM's performance of work under this Contract, District
shall make payment to the MFEM per section 9-3 PAYMENT of the General Provisions. The
Engineer will close the estimate of work completed for progress payments on the last working day of
each month.
5. Independent Investigation. MFEM has made an independent investigation of the jobsite,
access to the jobsite, and all other conditions that might affect the furnishing of Goods and Special
Services, and is aware of those conditions. Any information that may have been furnished to MFEM
the conditions are as thus indicated. MFEM is satisfied with all job conditions and has not relied on by District about job conditions is for MFEM's convenience only, and District does not warrant that
-
G 4/27/01 Contract No. 3675 Page 53 of 96 Pages
information furnished by District.
6. Hazardous Waste or Other Unusual Conditions. If the contract involves digging
trenches or other excavations that extend deeper than four feet below the surface MFEM shall
promptly, and before the following conditions are disturbed, notify District, in writing, of any:
A. Hazardous Waste. Material that MFEM believes may be material that is hazardous waste, as
defined in section 25117 of the Health and Safety Code, that is required to be removed to a Class I,
Class II, or Class 111 disposal site in accordance with provisions of existing law.
B. Differing Conditions. Subsurface or latent physical conditions at the site differing from those
indicated.
C. Unknown Physical Conditions. Unknown physical conditions at the site of any unusual
nature, different materially from those ordinarily encountered and generally recognized as inherent in
work of the character provided for in the contract.
District shall promptly investigate the conditions, and if it finds that the conditions do materially so
differ, or do involve hazardous waste, and cause a decrease or increase in MFEMs costs of, or the
time required for, performance of any part of the work shall issue a change order under the
procedures described in this contract.
In the event that a dispute arises between District and MFEM whether the conditions materially differ,
or involve hazardous waste, or cause a decrease or increase in the MFEM's cost of, or time required
for, performance of any part of the work, MFEM shall not be excused from any scheduled completion
date provided for by the contract, but shall proceed with all work to be performed under the contract.
MFEM shall retain any and all rights provided either by contract or by law which pertain to the
resolution of disputes and protests between the contracting parties.
7. Immigration Reform and Control Act. MFEM certifies it is aware of the requirements of
the Immigration Reform and Control Act of 1986 (8 USC sections 1101-1525) and has complied and
will comply with these requirements, including, but not limited to, verifying the eligibility for
employment of all agents, employees, subcontractors, and consultants that are included in this
Contract.
I"'
8. Prevailing Wage. Pursuant to the California Labor Code, the director of the Department of
California Labor Code, section 1773 and a copy of a schedule of said general prevailing wage rates
Industrial Relations has determined the general prevailing rate of per diem wages in accordance with
is on tile in the office of the City Engineer, and is incorporated by reference herein. Pursuant to
California Labor Code, section 1775, MFEM shall pay prevailing wages. MFEM shall post copies of
all applicable prevailing wages at all applicable sites of work.
9. Indemnification. MFEM shall assume the defense of, pay all expenses of defense, and
indemnify and hold harmless the District and the City of Carlsbad, and their officers, employees,
agents and consultants from all claims, loss, damage, injury and liability of every kind, nature and
work; or from any failure or alleged failure of MFEM to comply with any applicable law, rules or
description, directly or indirectly arising from or in connection with the performance of the Contract or
regulations including those relating to safety and health; and from any and all claims, loss, damages,
injury and liability, howsoever the same may be caused, resulting directly or indirectly from the nature
of the work covered by the Contract, except for loss or damage caused by the sole or active
negligence or willful misconduct of the District or City, The expenses of defense include all costs and
expenses including attorneys' fees for litigation, arbitration, or other dispute resolution method.
m +P 4/27/01 Contract No. 3675 Page 54 of 96 Pages
consultants against any challenges to the award of the contract to MFEM, arising in whole or in part
MFEM shall also defend and indemnify the City, District. and their officers, employees, agents and
from alleged inaccuracies or misrepresentation by MFEM, whether intentional or othewise, and
agents and consultants. Defense costs include the cost of separate counsel for City and District, if
MFEM will pay all costs, including defense costs for the City, District and their officers, employees,
City or District request separate counsel.
10. Insurance. MFEM shall procure and maintain for the duration of the contract insurance
with the performance of the work hereunder by the MFEM, his or her agents, representatives,
against claims for injuries to persons or damage to property which may arise from or in connection
employees or subcontractors. Said insurance shall meet the District's policy for insurance as stated
in Resolution No. 772.
(A) Coverages And Limits MFEM shall maintain the types of coverages and minimum limits
indicted herein:
a. Comprehensive General Liability Insurance: $1,000,000 combined single limit per
occurrence for bodily injury and property damage. If the policy has an aggregate limit, a separate
aggregate in the amounts specified shall be established for the risks for which the District and City, or their agents, consultants, officers or employees are additional insured.
and property damage. In addition, the auto policy must cover any vehicle used in the performance of
b. Automobile Liability Insurance: $1,000,000 combined single limit per accident for bodily injury
the contract, used onsite or offsite, whether owned, non-owned or hired, and whether scheduled or
non-scheduled. The auto insurance certificate must state the coverage is for "any auto" and cannot
be limited in any manner.
c. Workers' Compensation and Employers' Liability Insurance: Workers' compensation limits
as required by the Labor Code of the State of California and Employers' Liability limits of $1,000,000
per incident. Workers' compensation offered by the State Compensation Insurance Fund is
acceptable to the City.
d. Property Insurance: The MFEM shall assume all risk of loss or damage to the Goods prior to
District's receipt thereof at the Point of Delivery. The MFEM shall also purchase and maintain
insurance on the Goods during the process of fabrication and while in transit to ensure against the
damage, including theft, vandalism and malicious mischief, collapse, water damage, and such other
perils of fire, as well as extended coverage including "all risk" insurance for physical loss and
perils as may be provided in the General Provisions (if any) and as the MFEM deems appropriate.
(B) Additional Provisions. MFEM shall ensure that the policies of insurance required under this
agreement with the exception of Workers' Compensation and Business Automobile Liability
Insurance contain, or are endorsed to contain, the following provisions:
a. The District and City, their officers, employees, agents, consultants and volunteers are to be
covered as additional insured as respects: liability arising out of activities performed by or on behalf
of the MFEM; products and completed operations of the MFEM; premises owned, leased, hired or
borrowed by the MFEM. The coverage shall contain no special limitations on the scope of protection
afforded to the District or City, their officers, employees, agents, consultants or volunteers. All
additional insured endorsements must be evidenced using separate documents attached to the
certificate of insurance; one for each company affording general iiability and employers' liability.
b. The MFEM's insurance coverage shall be primary insurance as respects the District and City,
a p,s 4/27/01 Contract No. 3675 Page 55 of 96 Pages
their officers, employees, agents, consultants and volunteers. Any insurance or self-insurance
maintained by the District or City, their officers, employees, agents, consultants or volunteers shall be
in excess of the MFEM's insurance and shall not contribute with it.
c. Any failure to comply with reporting provisions of the policies shall not affect coverage provided
to the District and City, their officers, employees, agents, consultants or volunteers.
d. Coverage shall state that the MFEM's insurance shall apply separately to each insured against
whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.
(C) Notice Of Cancellation. Each insurance policy required by this agreement shall be endorsed to
state that coverage shall not be nonrenewed, suspended, voided, canceled, or reduced in coverage
or limits except after thirty (30) days' prior written notice has been given to the District by certified
mail, return receipt requested.
(D) Deductibles And Self-Insured Retention (S.I.R.) Levels. Any deductibles or self-insured
retention levels must be declared to and approved by the District and City. At the option of the City
and District, either: the insurer shall reduce or eliminate such deductibles or self-insured retention
levels as respects the District and City, its officers, employees, agents and consultants; or the MFEM
shall procure a bond guaranteeing payment of losses and related investigation, claim administration
and defense expenses.
(E) Waiver Of Subrogation. All policies of insurance required under this agreement shall contain a
waiver of all rights of subrogation the insurer may have or may acquire against the District or City or
any of their officers, employees, agents or consultants.
(F) Subcontractors. MFEM shall include all subcontractors as insured under its policies or shall furnish separate certificates and endorsements for each subcontractor. Coverages for
subcontractors shall be subject to all of the requirements stated herein.
(G) Acceptability Of Insurers. Insurance is to be placed with insurers that have a rating in Best's
Key Rating Guide of at least A-:V. Insurers must also be authorized to transact the business of
insurance by the State of California Insurance Commissioner as admitted carriers as evidenced by a
the standards specified by the Board of Directors in Resolution No. 772.
listing in the official publication of the Department of Insurance of the State of California andlor under
(H) Verification Of Coverage. MFEM shall furnish the District with certificates of insurance and
original endorsements affecting coverage required by this clause. The certificates and
endorsements for each insurance policy are to be signed by a person authorized by that insurer to
bind coverage on its behalf. The certificates and endorsements are to be in forms approved by the
District and are to be received and approved by the District before the Contract is executed by the
District.
(I) Cost Of Insurance. The Cost of all insurance required under this agreement shall be included
in the MFEM's bid.
11. Claims and Lawsuits. All claims by contractor for $375,000 or less shall be resolved in
accordance with the provisions in the Public Contract Code, Division 2, Part 3, Chapter 1, Article 1.5
(commencing with section 20104) which are incorporated by reference. A copy of Article 1.5 is
included in the General Provisions. The MFEM shall initially submit all claims over $375,000 to the
20104.2(a), (c), (d). Notwithstanding the provisions of this section of the contract, all claims shall
District using the informal dispute resolution process described in Public Contract Code subsections
comply with the Government Tort Claim Act (section 900 et seq., of the California Government Code)
%# 4/27/01
e
Contract No. 3675 Page 56 of 96 Pages
for any claim or cause of action for money or damages prior to filing any lawsuit for breach of this
agreement.
(A) Assertion of Claims. MFEM hereby agrees that any contract claim submitted to the District
must be asserted as part of the contract process as set forth in this agreement and not in anticipation
of litigation or in conjunction with litigation.
considered fraud and the MFEM may be subject to criminal prosecution.
(B) False Claims. MFEM acknowledges that if a false claim is submitted to the District, it may be
(C) Government Code. MFEM acknowledges that California Government Code sections 12650 et
seq., the False Claims Act, provides for civil penalties where a person knowingly submits a false
claim to a public entity. These provisions include false claims made with deliberate ignorance of the
false information or in reckless disregard of the truth or falsity of the information.
(D) Penalty Recovery. If the Carlsbad Municipal Water District seeks to recover penalties pursuant
to the False Claims Act, it is entitled to recover its litigation costs, including attorney's fees.
subject the MFEM to an administrative debarment proceeding wherein the MFEM may be prevented
(E) Debarment for False Claims. MFEM hereby acknowledges that the filing of a false claim may
from further bidding on public contracts for a period of up to five years.
(F) Carlsbad Municipal Code. The provisions of Carlsbad Municipal Code sections 3.32.025,
3.32.026, 3.32.027 and 3.32.028 pertaining to false claims are incorporated herein by reference.
(G) Debarment from Other Jurisdictions. MFEM hereby acknowledges that debarment by another jurisdiction is grounds for the Carlsbad Municipal Water District to disqualify the MFEM from
participating in future contract bidding.
(H) Jurisdiction. MFEM agrees and hereby stipulates that the proper venue and jurisdiction for
resolution of any disputes between the parties arising out of this agreement is San Diego County,
California.
I have read and understand all provisions of Section 11 above.
12. Maintenance of Records. MFEM shall maintain and make available at no cost to the City,
the Labor Code. If the MFEM does not maintain the records at MFEM's principal place of business
upon request, records in accordance with sections 1776 and 1812 of Part 7, Chapter 1, Article 2, of
as specified above, MFEM shall so inform the District by certified letter accompanying the return of this Contract. MFEM shall notify the District by certified mail of any change of address of such
records.
13. Labor Code Provisions. The provisions of Part 7, Chapter 1, commencing with section 1720
of the Labor Code are incorporated herein by reference.
14. Security. Securities in the form of cash, cashier's check, or certified check may be substituted
for any monies withheld by the District to secure performance of this contract for any obligation
established by this contract. Any other security that is mutually agreed to by the MFEM and the
District may be substituted for monies withheld to ensure performance under this Contract.
4.P- ( Iti8l) (Initial)
15. Provisions Required by Law Deemed Inserted. Each and every provision of law and
clause required by law to be inserted in this Contract shall be deemed to be inserted herein and
included herein, and if, through mistake or otherwise, any such provision is not inserted, or is not
G 4/27/01 Contract No. 3675 Page 57 of 96 Pages
correctly inserted, then upon application of either party, the Contract shall forthwith be physically
amended to make such insertion or correction.
16. Additional Provisions. Any additional provisions of this agreement are set forth in the
"General Provisions" attached hereto and made a part hereof.
NOTARIAL ACKNOWLEDGMENT OF EXECUTION BY ALL SIGNATORIES MUST BE
AlTACHED
(CORPORATE SEAL)
MFEM:
(print name and title)
(sign here)
By:
(print name and title)
.-
President or vice-president and secretary or assistant secretary must sign for corporations. If only
one officer signs, the corporation must attach a resolution certified by the secretary or assistant
secretary under the corporate seal empowering that officer to bind the corporation.
If signed by an individual partner, the partnership must attach a statement of partnership authorizing
the partner to execute this instrument.
APPROVED AS TO FORM:
RONALD R. BALL
General Counsel
By: %.,A&
Depufleneral Counsel
Contract No. 3675 Page 58 of 96 Pages
_- State of 'Zc~l
L County of Si@&
I'D On this ZP- day of uu ,20& before me personally came ;g t2L dPkFjL to me known,
E .m ;E,
)X c
8 /
who being by me duly sworn, did depose and say that he is the A?/, .@! fd?
of L./cc\- mhd /A~G5#~k?Jz/Z flmc? T->- the corporation described in and which executed the&ove ihstrument; that he knows the seal of said corponwn;
that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like or er
/ -.
R. n
My commission expires ()/rn('/-jtb/l
Notary Public
c
POWER OF ATTORNEY
SPECIAL
Know all men by these presents: that I, Deborah M. Newell, Vice President and Assistant
Secretary of US. Filter Wastewater Group, Inc., a Delaware corporation (the “Principal”),
hereby make, constitute and appoint KENNETH J. RECKER as Principal’s true and lawful
attorney to act for Principal and in Principal’s name, place and stead and for Principal’s use and
benefit as set forth herein.
Principal hereby grants to said attorney-in-fact full power and authority to negotiate, execute and
perform matters related to obtaining and maintaining contracts, bids, bank accounts, licenses and
permits required in connection with the day-to-day business of the WTC Business Group of
Principal, and to perform each and every act and thing which may be necessary, or convenient, in
connection with any of the foregoing, as fully, to all intents and purposes, as Principal might or
could do if personally present, hereby ratifying and confirming all that said attorney-in-fact shall
lawfully do or cause to be done by authority hereof; provided that such authority is limited to
transactions having a value of up to Two Million Dollars.
This Special Power of Attorney shall be effective from August 1,2001, through July 3 1, 2002 or
until such time as a superceding policy is adopted, whichever is earlier, at which time this
and effect.
WITNESS my hand this 13 day of August, 2001.
U,S, Filter Wastewater Group, Inc
.- Special Power of Attorney and the powers granted herein shall expire and be of no further force
4”“
M.-&li., x md
Deborah M. Newell, Vice President and Assistant Secretary
Sworn to and subscribed before me this E day of August, 2001.
Patricia L. Hasselbusch, Notary Public Notarial Seal
Member. Pennsyivania AWatkm ol Notanes
Bond No. 29-03-13
Premium Included in Performance
Bond
LABOR AND MATERIALS BOND
WHEREAS, the Board of Directors of the City of Carlsbad, State of California, by Resolution : I:
NO. 1147 , adopted MAY 7. 2002 , has awarded to
(hereinalter designated as the 'Principal"), a Contract for: Contract No, 3675 - .Ppxurement of
Membrane Filtratlon System Equipment.in the City of Carlsbad, in strict conformlty with the drawings
and specifications. and other Contract Documents now on file in the Office of the S@cretary of the
Board of Directors'(City Clerk of the City of Carlsbad) and all of which are incorporated her& by this
reference.
WHEREAS, Principal has executed or is about to execute said Contract and the terms thereof
require the furnishing of a bond, providing that If Principal or any of their subcontractors shall fail to
pay for any materials, provisions, provender or other supplies or teams used In, upon or about the
performance of the work agreed to be done, or for any work or labor done thereon of any kind, the
Surety on this bond will pay the same to the extent hereinafter set forth.
US FILTER WASTEWATER GROUP INC
NOW, THEREFOE, WE, US FILTER WASTEWATER GROUP INC
as Principal, (hereinafter designated as the "MFEW), and National Union Fire Insurance* &
Sure are held firm1 bound unto the Carlsbad Municipal Water District in the sum of SE&N HUNDRED glXxx 9,NE THOUSAND bliars ($ 761.985.00 ______-_)
-n& Ii;n-%) of the total estimated amount payable under , said sum
said contract by the Carlsbad Municipal Water District under the terms of the contract when the total
amount payable does not exceed five million dollars ($5,000,000) or, Fifty permnt (50%) of the total
estimated amount payable under said contract by the City of Carlsbad under the terms of the
contract when 'the total amount payable is not less than five million dollars ($5,000,000) and Floes not
exceed ten million dollars ($lO.OOO.OOO) or, Twenty-five percent (25%) of the total estimated amount
payable under said contract by the City of Carlsbad under the terms of the contract if the contract
exceeds ten million dollars ($lO,ocW,OOO) and for which payment well and truly io be made we bind
firmly by these presents.
ourselves, our heirs, executors and administrators, successors, or assigns, jointly and severally.
THE CONDITION OF THIS OBLIGATION IS SUCH that if the MFEM or hidher-subcontractors fail to
pay for any materials, pmvlsions, provender, supplies, or teams used in, upon, for, or about the
for amounts due under the Unemployment Insurance Code with respect to such work or labor, or for performance of the work contracted to be done, or for any other work or labor tliereon of any kind, or
any amounts required to be deducted, withheld, and paid over to the Employment Development
Department from the wages of employees of the MFEM and subcontractors pursuant to saction .
13020 of the Unemployment Insurance Code with respect to such work and labor that the Surety will
the bond, costs and reasonable expenses and fees, including reasonable attornevs fees, to be fixed
pay for the same, not to exceed the sum spedtied in the bond, and, also, in case suit is brought upon
by the court, as required by the provisions of section 3248 of the California Civil Code.
This bond shall inure to the benefit'cf any and all persons, companies and corporations entitled to file
claims under Title 15 of Part 4 of Division 3 of the Civil Code (commencing with section 3082).
*Company of Pittsburgh PA
Surety stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract, or to the work to be pelformed thereunder or the specifications accompanying the
same shall affect its obligations on this bond. and it does hereby waive notice of any change,
-
extension of time, alterations or addition to the tens of the contract or to the work or to the
specifications.
In the event that MFEM is an individual, it is agreed that the death of any such MFEM shall not
exonerate the Surety from its obligations under this bond.
Executed by CONTRACTOR this 2-
day of h ,2oE.
MFEM:
/
US Filter Wastewater Group Inc.
(name of MFEM)
- By: (sign here)
(print name here)
(title and organization of signatory)
Executed by SURETY this 29th day
of May ,20-. 02
SURETY: National Union Fire Insurance Company
of Pittsburgh PA
(name of Surety)
4695 MacArthur Court, Ste700, Newport Beach
(address OfsUW) CA 92606
(signature of Attorney-in-Fact)
Mechelle Larkin
(printed name of Attorney-in-Fad)
(attach corporate resolution showing current
power of attorney)
(Proper notarial acknowledge of execution by MFEM and SURETY must be attached.)
(President or vice-president and secretary or assistant secretary must sign for corporations. If only
one officer signs, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering that officer to bind the corporation.)
APPROVED AS ro FORM:
RONALD R. BALL
General Counsel
By:
Deputy General Cou
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Oranae
On MAY 2 9 2002 before me, Kathy R. Mair, Notary Public
DATE NAME, TITLE OF OFFICER - E.G.. "JANE DOE, NOTARY PUBLIC
personally appeared Mechelle Larkin NAME(S1 OF SIGNER(S)
personally know to me - OR - 0 proved to me on the basic of satisfactory evidence to be
the person@) whose name(s) islare subscribed to
the within instrument and acknowledged to me that
helshelthey executed the same in hislhedtheir
authorized capacity(ies), and that by hislherltheir
signature@) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
0 INDIVIDUALS
0 CORPORATE OFFICER
TITLE@) 0 PARTNER(S) 0 LIMITED
TITLE OR TYPE OF DOCUMENT
0 GENERAL
ATTORNEY-IN-FACT NUMBER OF PAGES
0 TRUSTEE(S)
0 GUARDlANlCONSERVATOR
0 OTHER:
DATE OF DOCUMENT
SIGNER IS REPRESENTING: NAME OF PERSON(S1 OR ENTITY(IES)
SIGNER(S) OTHER THAN NAMED ABOVE
krrn (5/2001)
., Am<rican Home Assurance Company
National Union Fire Insurance Company of Pittsburgh, Pa.
Principal Bond Office 70 Pine Street, New York, N.Y. 10270
POWER OF ATTORNEY
No. 05-8-45538
"NOW ALL MEN BY THESE PRESENTS:
That American Home Assurance Company, a New York corporation, and National Union Fire Insurance Company of Pittsburgh, Pa., a
Pennsylvania corporation, does each hereby appoint
---Irene Lau, Kathy R. Mair, Meehelle Larkin: of Newport Beach, California-..
its true and lawful Attorney(s)-in-Fact, with full authority to execute on its behalf bonds, undertakings, recognizances and other contracts of
indemnity and writings obligatory in the nature thereof, issued in the course of its business, and to bind the respective company thereby.
IN WITNESS WHEREOF. American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pa. have each
executed these presents
thissday oflune, 20OJ
STATE OF NEW YORK }
COUNTY OF NEW YORK )ss.
On this 14th day of % 2001 before me came the above
namcd officer of American Home Assurance Company and National
Union Fire Insurance Company of Pittsburgh, Pa., to me personally
known to be the individual and officer described herein, and
cknowledgcd that he executed the foregoing instrument and affixed
.>IC xals of said corporations thereto by authority ofhis office.
-
Excerpts of Resolutions adopted by the Boards of Directors of American Home Assurance Company and National Union Fire Insu~i~nce Cornpan! of
Pittsburgh, Pa. on May 18, 1976:
"RESOLVED, that the Chairman of the Board, the President, or any Vice President be, and hcrcby is, authorized to appoint Attorneys-i~~-Tact to represent and act for and on behalf of the Company to execute bonds, undertakings, recognizances and other cantracls of indemnity and writings obligatory iu the tnatuIc
thercof, and lo attach thereto the corporate seal of the Company, in the transaction of its surety business;
"RESOLVED. that the signatures and attestations of such oflicers and the seal of the Company may he affixcd to any such Powcr of Attorney or tn any
certiiicate relating thereto by hcsimile. and any such Power of Attorney or certificate bearing such facsimile signatures or facsimile seal shall he valid and
binding upon the Company when so affixed with respect to any bond, undertaking. rccognizancc or otlxr c~ntract of indcmnity or \wiling obligator! in tl~c
)nature thereof,
"RESOLVED, that any such Attorney-in-Fact delivering a secretarial certification that the foregoing resolutions still be in clfccct may insen in such
certification the date thereof, said dale to he not latir lhari the date of delivery thereof by such Attorncy-in-Fact."
I. Elizabeth M. Tuck, Secretary of American Home Assurance Campany and of National Union Fire Insurance Company of l'ittsburgl,. 1):). do herub) wnif!
lhal tile foregoing cxccrptr nfI<esolutions adopted by tlw Boards of Directors of these corporations, and the 1'0wc1.s of,\ttorncy mod l~ursLi"31~t II,UICI~.
true and correct. and that both the Ilcsolulions and the Powers of Attorney are in full force and effect.
IN \VI'CNESS \VHEREOF. I have Ihc~.cunto set my hand and affixed the facsimile seal ofcach coporation
CERTIFICATE
this ~ day of' ._ -
-
.. .I.. ... . ., . ,
65166 (4199)
My commission expires
Notary Public
POWER OF ATTORNEY
SPECIAL
Know all men by these presents: that I, Deborah M. Newell, Vice President and Assistant
Secretary of US. Filter Wastewater Group, Inc., a Delaware corporation (the “Principal”),
hereby make, constitute and appoint KENNETH J. RECKER as Principal’s true and lawful
attorney to act for Principal and in Principal’s name, place and stead and for Principal’s use and
benefit as set forth herein.
Principal hereby grants to said attorney-in-fact full power and authority to negotiate, execute and
perform matters related to obtaining and maintaining contracts, bids, bank accounts, licenses and
permits required in connection with the day-to-day business of the WTC Business Group of
Principal, and to perform each and every act and thing which may be necessary, or convenient, in
connection with any of the foregoing, as fully, to all intents and purposes, as Principal might or
could do if personally present, hereby ratifying and confirming all that said attorney-in-fact shall
lawfully do or cause to be done by authority hereof; provided that such authority is limited to
transactions having a value of up to Two Million Dollars.
This Special Power of Attorney shall be effective from August 1,2001, through July 31, 2002 or
Special Power of Attorney and the powers granted herein shall expire and be of no further force
and effect.
WITNESS my hand this 13 day of August, 2001.
UA Filter Wastewater Group, Inc
” until such time as a superceding policy is adopted, whichever is earlier, at which time this
+
D&&&. TI.,, & Deborah M. Newell, Vice President and Assistant Secretary
Sworn to and subscribed before me this E day of August, 2001,
My Cbrnmission Expires: /.%/e 1 /03
Premium: $6,40l/tem
Bond No. 29-03-13
- FAITHFUL PERFORMANCENVARRANTY BOND
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad,
State of California, by Resolution No. 1147 , adopted MAY 7, 2002. , has awarded
to US FILTER WASTEWATER GROUP INC (hereinafter
designated as the "Principal"), a Contract for: Contract No. 3675 - Procurement of Membrane
Filtration System Equipment in the Carlsbad Municipal Water District, in strid conformity with the
contract, the drawings and specifications, and other Contract Documents now on file in the Oftice of
the Secretary of the Board of Directors (City Clerk of the City of Carlsbad), all of which are
incorporated herein by this reference.
WHEREAS, Principal has executed or is about to execute said Contract and the terms thereof
require the furnishing of a bond for the faithful performance and warranty of said Contract,
NOW, THEREFORE, WE, US FILTER WASTEWATER CROUP INC , as Principal,
(herelnafterdesignated as the "FEW), andNationa1 Union Fire Insurance Company Of Pittsburgh
PA , as Surety, are held and firmly bound unto the Carlsbad Municipal
- Water District, in thesum of SEVEN HUNDRED SIXTY ONE THOUSAND NINE
HUNDRED EIGHTY FIVE AND NO/OO------------------- Dollars ($ 76lI985.O0-----j,
said sum beina eaual to one hundred oercent (100%) of the estimated.amount of the Contract. to be
paid to Districi6r ik certain attorney, ik successors and assigns; for which payment, well and thyto
be made, we bind ourselves, our heirs, executors and administrators, successors or assigns, jointly
and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH that If the above bounden MFEM. their heirs,
executors, administrators, successors or assigns, shall in all things stand to and abide by, and well
alteration thereof made as therein provided on their part, to be kept and perfonned at the time and in and truly keep and perform the covenants, conditions, and agreements in the Contract and-any
the manner therein specified, and in all respects according to their true intent and meaning, and shall
indemnify and save harmless the Carlsbad Municipal Water District, its officers, employees and
agents, as therein stipulated, then this obligation shall become null and void; otherwise it shall
remain in full force and effect.
As a part of the obligation secured hereby and in addition to the face amount specified therefor, there
shall be included costs and reasonable expenses and fees, including reasonable attorney's fees,
incurred by the District in successfully enforcing such obligation, all to be taxed as costs and included
in any judgment rendered.
Surety stipulates and agrees that no change, extension of time, alteration or addition to the terms of '
the Contract, or to the work to be performed thereunder or the specifications accompanying the
same shall affect its obligations on this bond, and it does hereby waive notice of any change,
extension of time, alterations or addition to the terms of the contract or to the work or to the
specifications.
~~ ~ ~ ~ ~
_. i
.- In the event that MFEM is an individual, It is agreed that the death of any such MFEM shall not
exonerate the Surety from its obligations under this bond.
Executed by MFEM this zw
day of hj ,20&.
Executed by SURETY this 29th day of
May ,2002.
MFEM: SURETY: National Union Fire Insurance Company
US Filter Wastewater Group Inc
(name of MFEM) (nameof Surely)
4695 MacArthur Court, Suite 700, Newport Beach
(address of Surety) CA 92606
1-949-399-5856
By:
(signature of Attorney-in-Fact)
By: Mechelle Larkin (printed name of Attorney-in-Fact)
(sign here)
(Attach corporate resolution showing' current
(print name here) power of attorney.)
(Title and Organization of signatory)
(Pmper notarial acknowledge of execution by CONTRACTOR and SURETY must be attached.)
one officer signs, the corporation must attach a resolution certified by the secmkry or assistant
(President or vice-president and secretary or assistant secretary must sign for corporaions. If only
secretary under corporate seal empowering that ofticer to bind the corporation.)
APPROVED AS TO FORM:
RONALD R. BALL
General Counsel
By:
Deputy Generflounsel
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Oranae
On MAY 2 9 2002
DATE
before me, Kathv R. Mair. Notaw Public
NAME, TITLE OF OFFICER - E.G.. 'JANE DOE. NOTARY PUBLIC
personally appeared Mechelle Larkin NAME(S) OF SIGNER(S)
personally know to me - OR - 0 proved to me on the basic of satisfactory evidence to be
the person(s) whose name(s) islare subscribed to
the within instrument and. acknowledged to me that
helshelthey executed the same in hislherltheir
authorized capacity(ies), and that by hislherltheir
signature@) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
- SIGNME OF NOTARY
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
0 INDIVIDUALS
0 CORPORATE OFFICER
TITLE(S) TITLE OR TYPE OF DOCUMENT 0 PARTNER(S) 0 LIMITED 0 GENERAL
ATTORNEY-IN-FACT NUMBER OF PAGES
TRUSTEE(S)
0 GUARDIAN/CONSERVATOR
0 OTHER:
DATE OF DOCUMENT
SIGNER IS REPRESENTING: NAME OF PERSONIS) OR ENTINIIES)
SIGNER(S) OTHER THAN NAMED ABOVE
krm (Wool)
of
that the Seal affixed to said instrument is such Corporate seal; that it was so aked by order of the Board of
the corporation described in and which executed the hbove inbtw'ment; that he knows the seal of said corporat&;
Directors of said corporation. and that he signed his name thereto by like order. -. n
My commission expires IJmtliSMJt
Notary Public
POWER OF ATTORNEY
SPECIAL
Know all men by these presents: that I, Deborah M. Newell, Vice President and Assistant
Secretary of U.S. Filter Wastewater Group, Inc., a Delaware corporation (the “Principal”),
hereby make, constitute and appoint KENNETH J. RECKER as Principal’s true and lawful
attorney to act for Principal and in Principal’s name, place and stead and for Principal’s use and
benefit as set forth herein.
Principal hereby grants to said attorney-in-fact full power and authority to negotiate, execute and
perform matters related to obtaining and maintaining contracts, bids, bank accounts, licenses and
permits required in connection with the day-to-day business of the WTC Business Group of
Principal, and to perform each and every act and thing which may be necessary, or convenient, in
connection with any of the foregoing, as fully, to all intents and purposes, as Principal might or
could do if personally present, hereby ratifying and confirming all that said attorney-in-fact shall
lawfully do or cause to be done by authority hereof; provided that such authority is limited to
transactions having a value of up to Two Million Dollars.
This Special Power of Attorney shall be effective from August 1,200 1, through July 3 1,2002 or
Special Power of Attorney and the powers granted herein shall expire and be of no further force
and effect.
WITNESS my hand this 13 day of August, 2001.
U . Filter Wastewater Group, Inc.
- until such time as a superceding policy is adopted, whichever is earlier, at which time this
41“
Lb4Arc & Deborah M. Newell, Vice President and Assistant Secretary
ss COUNTY OF ALLEG d~,.//
Sworn to and subscribed before me this /3” day of August, 2001.
”.
My Commission Expires: /.-/a / /03
Notarial Seal
Mwnbw. PennWania AssOClatim 01 Nolanes
OPTIONAL ESCROW AGREEMENT FOR
SECURITY DEPOSITS IN LIEU OF RETENTION
- This Escrow Agreement is made and entered into by and between the Carlsbad Municipal Water
District whose address is 5950 El Camino Real, Carlsbad, California, 92008. hereinafter called
“District” and
whose address is
hereinafter called
“MFEM and whose address is
hereinafter
called “Escrow Agent.”
For the consideration hereinafter set forth, the District, MFEM and Escrow Agent agree as follows:
1. Pursuant to sections 22300 and 10263 of the Public Contract Code of the State of California,
the MFEM has the option to deposit securities with the Escrow Agent as a substitute for retention
earnings required to be withheld by the District pursuant to the Procurement Contract entered into
between the District and MFEM for Contract No. 3675 - Procurement of Membrane Filtration System
Equipment in the amount of dated (hereinafter
referred to as the “Contract“). Alternatively, on written request of the MFEM, the District shall make
securities as a substitute for Contract earnings, the Escrow Agent shall notify the District within 10 payments of the retention earnings directly to the escrow agent. When the MFEM deposits the
days of the deposit. The Escrow Agent shall maintain insurance to cover negligent acts and
omissions of the escrow agent in connection with the handling of retentions under these sections in
an amount not less than $100,000 per contract. The market value of the securities at the time of the
substitution shall be a least equal to the cash amount then required to be withheld as retention under
the terms of the contract between the District and MFEM. Securities shall be held in the name of the , and shall designate the MFEM as the beneficial owner.
2. The District shall make progress payments to the MFEM for such funds which otherwise would
be withheld from progress payments pursuant to the Contract provisions, provided that the Escrow
Agent holds securities in the form and amount specified above.
3. When the District makes payment of retentions earned directly to the escrow agent, the escrow
agent shall hold them for the benefit of the MFEM until such time as the escrow created under this
contract is terminated. The MFEM may direct the investment of the payments into securities. All
terms and conditions of this agreement and the rights and responsibilities of the parties shall be
equally applicable and binding when the District pays the escrow agent directly.
4. The MFEM shall be responsible for paying all fees for the expenses incurred by the Escrow
Agent in administering the Escrow Account and all expenses of the District. These expenses and
payment terms shall be determined by the District, MFEM and Escrow Agent.
5. The interest earned on the securities or the money market accounts held in escrow and all
withdrawal by MFEM at any time and from time to time without notice to the District.
interest earned on that interest shall be for the sole account of MFEM and shall be subject to
6. MFEM shall have the right to withdraw all or any part of the principal in the Escrow Account only by written notice to Escrow Agent accompanied by written authorization from District to the Escrow
Agent that District consents to the withdrawal of the amount sought to be withdrawn by MFEM.
7. The District shall have a right to draw upon the securities in the event of default by the MFEM.
Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by
Upon seven days’ written notice to the Escrow Agent from the District of the default, the Escrow
Contract No. 3675 Page 63 of 96 Pages
the District.
8. Upon receipt of written notification from the District certifying that the Contract is final and
complete and that the MFEM has complied with all requirements and procedures applicable to the
fees and charges of the Escrow Account. The escrow shall be closed immediately upon
Contract, the Escrow Agent shall release to MFEM all securities and interest on deposit less escrow
disbursement of all moneys and securities on deposit and payments of fees and charges.
9. The Escrow Agent shall rely on the written notifications from the District and the MFEM pursuant
to sections (1) to (8), inclusive, of this agreement and the District and MFEM shall hold Escrow Agent
harmless from Escrow Agent's release, conversion and disbursement of the securities and interest
as set forth above.
10. The names of the persons who are authorized to give written notices or to receive written notice
on behalf of the District and on behalf of MFEM in connection with the foregoing, and exemplars of
their respective signatures are as follows:
For District: Title
Name
Signature
Address
.-
For MFEM: Title
Name
Signature
Address
For Escrow Agent:
Title
Name
Signature
Address
73 4/27/01 Contract No. 3675 Page 64 of 96 Pages
At the time the Escrow Account is opened, the District and MFEM shall deliver to the Escrow Agent a
fully executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the
date first set forth above.
For District:
For MFEM:
” For Escrow Agent:
t9 4/27/01
*
Title
Name
Signature
Address
Title
Name
Signature
Address
Title
Name
Signature
Address
Contract No. 3675 Page 65 of 96 Pages
SUPPLEMENTAL PROVISIONS
FOR
PROCUREMENT OF MEMBRANE FILTRATION SYSTEM
EQUIPMENT
CONTRACT NO. NNNN
PART I, GENERAL PROVISIONS
SECTION I -- TERMS, DEFINITIONS ABBREVIATIONS AND SYMBOLS
1-1 TERMS
1-1.1 Reference to Drawings. Where words "shown", "indicated", "detailed", "noted", "scheduled",
or words of similar import are used, it shall be understood that reference is made to the drawings
accompanying these provisions, unless stated otherwise.
1-1.2 Directions. Where words "directed", "designated", "selected", or words of similar import are
used, it shall be understood that the direction, designation or selection of the Engineer is intended,
unless stated otherwise. The word "required" and words of similar import shall be understood to
mean "as required to properly complete the work as required and as approved by the Engineer,"
unless stated otherwise.
1-1.3 Equals and Approvals. Where the words "equal", "approved equal", "equivalent", and such
words of similar import are used, it shall be understood such words are followed by the expression "in
the opinion of the Engineer", unless otherwise stated. Where the words "approved", "approval", "acceptance", or words of similar import are used, it shall be understood that the approval,
acceptance, or similar import of the Engineer is intended.
1-1.4 Perform. The word "perform" shall be understood to mean that the MFEM, at its expense,
shall perform all operations, labor, tools and equipment, and further, including the furnishing of
Goods and Special Services that are indicated, specified or required to mean that the MFEM, at its
expense, shall furnish the Goods and Special Services, including furnishing of necessary labor,
materials, tools, equipment, and transportation.
1-2 DEFINITIONS. The following words, or groups of words, shall be exclusively'defined by the
definitions assigned to them herein.
Addenda -written or graphic instruments issued prior to the opening of bids which clarify, correct, or
change the Procurement Documents.
Agency -see District.
Application for Payment - the form accepted by the Engineer which is to be used by the MFEM in
requesting progress or final payments and which is to include such supporting documentation as is
required by the Procurement Documents.
Bank - a grouping of membrane filtration units that share common ancillary equipment.
Contract No. 3675 Page 66 of 96 Pages
Bid - the offer or proposal of the bidder submitted on the prescribed form setting forth the price(s: for
furnishing the Goods and Special Services.
Bidder - any person, firm, or corporation submitting a bid for providing the Goods and Special
Services.
Board of Directors -the Board of Directors of the Carlsbad Municipal Water District of the City of
Carlsbad.
Bonds - bid and Performance Bonds and other instruments of security.
Calendar Day - see day,
Change Order - a written order to the MFEM signed by the District authorizing an addition, deletion,
or revision in the Goods or Special Services, or an adjustment in the Contract Price or the Contract
Time issued afler the Effective Date of the Contract.
Contract - the written agreement between the District and the MFEM covering the furnishing of the
Goods and Special Services and other services in connection therewith. Other Procurement
Documents are attached to the Contract and made a part thereof as provided therein.
Contract Price - the monies payable by the District to the MFEM under the Contract.
Contract Time - the dates or milestones stated in the General Provisions for furnishing the Goods
and Special Services under the Contract.
Contract Year - a period of 365 calendar days or 366 days every 4th year beginning with year 2000.
Day - the word “daf or “calendar day“ shall constitute twenty-four (24) hours measured from
midnight to the next midnight.
Defective - an adjective used to describe Goods or Special Services which are unsatisfactory, faulty
or deficient, do not conform to the Procurement Documents, or do not meet the requirements of any
inspection, reference standard, test, or approval referred to in the Procurement Documents.
Design Change Request - a request by the District or the Engineer to the MFEM for changes in the
Goods and/or Special Services.
Dispute Board - persons designated by the Executive Manager to hear and advise the Executive
Manager on claims submitted by the MFEM. The Executive Manager is the last appeal level for
informal dispute resolution.
District - the Carlsbad Municipal Water District of Carlsbad, California.
Deputy City Engineer - the Deputy City Engineer of the City of Carlsbad or hislher approved
representative.
Drawings - the Drawings which show the character and scope of the Goods to be furnished and
which have been prepared or approved by the Engineer and are included in the Procurement
Documents.
Effective Date of the Contract - the date indicated in the Contract on which the Contract becomes effective, or if no date is indicated, the date on which the Contract is signed and delivered by the last
e 4/27/01 Contract No. 36l5 Page 67 of 96 Pages
of the two patties to sign and deliver.
Engineer - the Public Works Director of the City of Carlsbad or hislher approved representative.
The Public Works Director is the third level of appeal for informal dispute resolution.
Engineer Order - an order written by the Engineer which clarities or interprets the Procurement Documents or orders minor changes or alterations in the Goods or Special Services but does not
involve a change in the Contract Price or the Contract Time.
Executive Manager - the Executive Manager of the Carlsbad Municipal Water District or hislher
approved representative.
Final Acceptance - refers to such time as the MFEM has fulfilled all its obligations, other than
warranties and guarantees, under the Procurement Documents.
General Requirements -sections of Division 1 of the Specifications.
Goods - all tangible material property required under the Procurement Documents.
Installation Contractor - the person, fin, or corporation with whom the District has entered into
contract for installation of the Goods.
MFEM - The person, firm or corporation who submits a bid to the District for the Contract for
Procurement of Goods and Special Services.
Modification - (a) a written amendment of the Procurement Documents signed by both parties; (b) a
of the Contract.
Change Order; or (c) an Engineer Order. A modification may only be issued after the Effective Date
Module - a grouping of hollow fiber membranes that are secured into a common potting compound.
Notice of Acceptability - the written notice by the Engineer that the MFEM has furnished all Goods
and Special Services, and delivered all maintenance and operating instructions, schedules,
guarantees, certificates of inspection, and other documents as required by the Procurement
Documents.
Notice of Award - the written notice by the District to the apparent successful bidder stating that
upon compliance by the apparent successful Bidder with the conditions precedent enumerated
therein, within the time specified, the District will sign and deliver the Contract.
Notice of Substantial Completion - the written notice by the MFEM to the Distrtict that
commissioning of the Goods has been completed.
Own Organization -When used in Section 2-3.1 - Employees of the MFEM who are hired, directed,
supervised and paid by the MFEM to accomplish the completion of the Work. Further, such
employees have their employment taxes, State disability insurance payments, State and Federal
income taxes paid and administered, as applicable, by the MFEM. When used in Section 2-3.1 "own
organization" means equipment that the MFEM owns or leases and uses to accomplish the Work.
Equipment that is owner operated or leased equipment with an operator is not part of the MFEMs
Own Organization and will not be included for the purpose of compliance with section 2-3.1 of the
General Provisions.
Ckner OperatorLessor - Any person who provides equipment or tools with an operator provided
a 4/27/01 Contract No. 3675 Page 68 of 96 Pages
who is employed by neither the MFEM nor a subcontractor and is neither an agent Or employee Of
the Agency or a public utility.
Point of Delivery - the place designated in the Procurement Agreement where the Goods are to be
delivered.
Principal Inspector - the Senior Inspector's immediate supervisor and second level of appeal for
informal dispute resolution.
Procurement Documents - the Contract, Addenda (which pertain to the Procurement Documents),
MFEM's Bid (excluding the MFEM's Bid Proposal unless specifically attached as an exhibit to the
Contract), and any post-Bid documentation when attached as an exhibit to the Contract, the Bonds,
insurance certificates, these General Provisions, the Supplemental Provisions (if any), the
Specifications, and the Drawings, together with all Modifications issued after .execution of the
Contract.
Project Inspector - the Engineer's designated representative for inspection, contract administration
and first level for informal dispute resolution.
Project Manager - the District Engineer of the Carlsbad Municipal Water District or hislher
approved representative.
Samples - physical examples furnished by the MFEM to illustrate materials, equipment, or
workmanship and to establish standards by which some portion of the Goods will be judged.
Senior Inspector - the Project Inspector's immediate supervisor and first level of appeal for informal
dispute resolution.
Shop Drawings - all drawings, diagrams, illustrations, schedules, and other data which are
specifically prepared by or for the MFEM to illustrate some portion of Goods.
Special Services - services to be furnished by the MFEM at the designated site(@ as required by the
Procurement Documents.
Specifications - those portions of the Procurement Documents consisting of written technical
descriptions of materials, equipment, construction systems, standards, and workmanship as applied
to the Goods and Special Services, and certain administrative details applicable thereto.
Successful MFEM - The person, fim, or corporation with whom District has entered into the
Contract for Procurement of Goods and Special Services.
System - hollow fiber membrane filtration system equipment. The System is comprised Units and
ancillary equipment.
Tender - see bid.
equipment. appurtenances. support systems, and filtration modules required to treat the raw water.
Unit(s) - a prefabricated assembly that includes piping, valves, instrumentation, controls, ancillary
Work - a general description for providing Goods and Special Services as required by the
Procurement Documents.
Working Days - used to describe traditionally accepted business work days of Monday through
b 4/27/01 Contract No. 3675 Page 69 of 96 Pages
Friday inclusive, exclusive of any official organizational or official government holidays for the
applicable organization.
1-3 ABBREVIATIONS. Abbreviations are as defined in the General Requirements. Section 01092.
SECTION 2 -- SCOPE AND CONTROL OF THE WORK
2.1 AWARD AND EXECUTION OF THE CONTRACT. When the District gives a Notice Of Award to
the Successful Bidder, it will be accompanied by at least three unsigned copies of the Contract for the procurement of Goods and Special Services and all other Procurement Documents. Within 15
days thereafter, the MFEM shall sign and deliver at least three copies of the Contract to the District
with the bonds, insurance certificates and all other Procurement Documents attached. When the
Contract has been executed by the District, a fully signed copy will be sent to the MFEM. The
Contract shall become effective and commence upon execution of the Agreement by the District and
MFEM on the date the last party signs the Contract, provided the District does not stipulate an
alternate date when transmitting the Contract for signature to the MFEM.
2-2 [NOT USED]
2-3 SUBCONTRACTS. The MFEM shall not subcontract any portion of the work under the Contract
without express written authorization from the District.
2-4 CONTRACT BONDS. The MFEM shall provide a faithful performance/warranty bond and
shall be in the amount of 100 percent of the contract price. The MFEM shall provide bonds to secure
payment bond (labor and materials bond) for this contract. The faithful performance/warranty bond
payment of laborers and material suppliers, in an amount equal to:
1) One hundred percent (100%) of the total amount payable by the terms of the contract when the
total amount payable does not exceed five million dollars ($5,000,000).
2) Fifty percent (50%) of the total amount payable, by the terms of the contract when the total
amount payable is not less than five million dollars ($5,000,000) and does not exceed ten million
dollars ($ZO.OOO.OOO).
3) Twenty-five percent (25%) of the total amount payable by the terms of the contract if the contract
exceeds ten million dollars ($10,000.000). Both bonds shall extend in full force and effect and be retained by the Agency during this project until
they are released according to the provisions of this section.
The faithful perforrnance/warranty bond will be reduced to 25 percent of the original amount 30 days
after recordation of the Notice of Completion and will remain in full force and effect for the one year
warranty period and until all warranty repairs are completed to the satisfaction of the Engineer. The
bonds to secure payment of laborers and material suppliers shall be released six months plus 30
days after recordation of the Notice of Completion if all claims have been paid.
All bonds shall be in the forms prescribed by the Procurement Documents.
All bonds are to be placed with a surety insurance carrier admitted and authorized to transact the
business of insurance in California and whose assets exceed their liabilities in an amount equal to or
in excess of the amount of the bond. The bonds are to contain the following documents:
1) An original, or a certified copy, of the unrevoked appointment, power of attorney, by laws. or other
Contract No. 3675 ~ .~ Page 70 of 96 Pages
instrument entitling or authorizing the person who executed the bond to do so.
2) A certified copy of the certificate of authority of the insurer issued by the insurance commissioner.
If the bid is accepted, the Agency may require a financial statement of the assets and liabilities of the
execution of the bond. The financial statement shall be made by an officer's certificate as defined in insurer at the end of the quarter calendar year prior to 30 days next preceding the date of the
Section 173 of the Corporations Code. In the case of a foreign insurer, the financial statement may
be verified by the oath of the principal officer or manager residing within the United States.
2-5 PLANS AND SPECIFICATIONS.
2-5.1 General. The procurement plans consist of a single set of drawings bound separately. The
set is designated as City of Carlsbad Project No. 3675 and consists of 51 sheets.
2-5.2 Precedence of Contract Documents. If there is a conflict between Procurement Documents,
the document highest in precedence shall control. The precedence shall be the most recent edition
of the following documents listed in order of highest to lowest precedence:
1) General Provisions.
2) Specifications.
3) Plans.
5) Reference Specifications.
6) Manufacturer's Installation Recommendations.
Change Orders, Supplemental Agreements and approved revisions to Plans and Specifications will
take precedence over items 2) through 6) above.
2-5.3 Shop Drawings. The MFEM shall submit to the District in accordance with the accepted
schedule of Shop Drawing submissions five copies of all Shop Drawings which will have been
checked by and bear a specific notation or indication of approval of the MFEM and be identified as
the District may require. The data shown on the Shop Drawings shall be complete with respect to
dimensions, design criteria, materials of construction and like information to enable the District to
review the information as required.
2-5.3.1 Samples. The MFEM shall also submit to the District with such promptness as to cause no
All Samples shall have been checked by and accompanied by a specific indication of approval of the
delay in the timely production of the Goods, all Samples required by the Procurement Documents.
the use for which intended.
MFEM, and will be identified clearly as to material, manufacturer, any pertinent catalog numbers, and
2-5.3.2 Review and Approval. At the time of each submission, the MFEM shall in writing call attention to any deviations that the Shop Drawings or Samples may have from the requirements of
the Procurement Documents.
The District and the Engineer will review and approve with reasonable promptness Shop Drawings
and Samples, but the review and approval will be only for conformance with the design concept of
the Goods and for compliance with the information given in the Procurement Documents. Such
review and approval will not extend to design data reflected in the Shop Drawings which is within the
special expertise of the MFEM or any party for whom the MFEM is responsible. The review and approval of a separate item as such will not indicate approval of the assembly in which the item
functions.
For each submittal, the MFEM shall make corrections required by the Engineer and shall return the
required number of corrected copies of the Shop Drawings and, if necessary, shall submit new
a 4/27/01 Contract No. 3675 Page 71 of 96 Pages
Samples for review and approval. The MFEM shall direct specific attention in writing to revisions
other than the corrections called for by the Engineer on previous submittals. The MFEM's
submission of any Shop Drawing or Sample bearing the MFEM'S approval shall constitute a
representation to the District and the Engineer that the MFEM assumes full responsibility for having
determined and verified the design criteria, quantities, dimensions, installation requirements,
materials, catalog numbers, and similar data, and that the MFEM has reviewed or coordinated each
Shop Drawing or Sample with the requirements of the Procurement Documents.
When Shop Drawings, Submittals, or Samples are required by the Specifications, the MFEM shall
not commence production of any part of the Goods affected thereby until such Shop Drawings or
production of goods shall be undertaken by the MFEM without express written authorization from the
Samples have been reviewed and approved by the District. In addition, no procurement or
District as provided for herein.
The District's review and approval of Shop Drawings, Submittals, andlor Samples will not relieve the
MFEM from responsibility for any deviations from the Procurement Documents unless the MFEM has
in writing called the District's attention to such deviation at the time of submission and the District
deviations by the District will not relieve the MFEM from responsibility for errors or omissions in the
has given written concurrence and approval to the specific deviation. Concurrence or approval of
Shop Drawings.
2-5.3.3 Submittals, Submittals shall be made as specified in the General Requirements, Section
01340.
2-5.4 Record Drawings. The MFEM shall provide and keep up-todate a complete "as-built"
record set of all shop drawings for system components and facilities furnished under the contract.
including control panels and wiring diagrams. This set of drawings shall be maintained by the MFEM
and shall be used only as a record set and shall be delivered to the Engineer upon completion of the
work. Final revisions shall be completed electronically in Autocad v. 14 format for all drawings
prepared by the MFEM and submitted in both hard copy and electronic format on CD. Payment for
performing the work required by this section shall be included in various bid items and no additional
payment will be made therefor.
2-5.5 Confidentiality of Documents. All Special Services performed by the MFEM, including but
not limited to all drafts, data, correspondence, proposals, reports, and estimates compiled or
composed by the MFEM, pursuant to the Procurement Agreement, are for the sole use of the District,
its agents and employees. Neither the documents nor their contents shall be released to any third
party without the prior written consent of the District. This provision does not apply to information that
(a) was publicly known, or otherwise known to the MFEM, at the time that it was disclosed to the
MFEM by the District, (b) subsequently becomes publicly known through no act oromission by the
MFEM, or (c) otherwise becomes known to the MFEM other than through disclosure by the District.
Neither the documents nor their contents shall be released to any third party without the prior written
consent of the District.
2.6 WORK TO BE DONE.
2.6.1 Intent. The Procurement Documents comprise the entire agreement between the District and
the MFEM concerning the furnishing of Goods and Special Services. After execution of the
agreement, the Procurement Documents may be altered only by a Change Order. All materials,
equipment, and services that may reasonably be inferred from the Procurement Documents as being
required to produce the intended result will be supplied whether or not specifically called for. When
words that have a well-known technical or trade meaning are used to describe materials, equipment,
or services, such words will be interpreted in accordance with such meaning.
*)
4/27/01 Contract No. 3675 Page 72 of 96 Pages
2.6.2 Document Conflicts. The Procurement Documents are complementary; the requirements or
specifications of one of the Procurement Documents should be construed as if required or specified
by all the Procurement Documents. If, during execution of the contract, the MFEM finds a conflict,
error, or discrepancy in the Procurement Documents, the MFEM shall SO report to the District in
writing at once and shall obtain a written interpretation or clarification from the District before
proceeding further; however, the MFEM shall not be liable to the District or the Engineer for failure to
report any conflict, error, or discrepancy in the Procurement Documents unless the MFEM had actual
knowledge or should reasonably have known thereof.
2.6.3 Standard Documents. Reference to standard specifications, manuals, or codes of any
technical society, organization or association, or to the code of any governmental authority, whether
such reference be specific or by implication, shall mean the latest standard specification, manual, or
code in effect at the time of opening of Bids (or, on the Effective Date of the Contract if there were
no Bids), except as may be otherwise specifically stated. However, no provisions of any referenced
standard specification, manual or code (whether or not specifically incorporated by reference in the
Procurement Documents) shall change the duties and responsibilities of the District, MFEM, or
Engineer, or any of their agents, consultants, or employees from those set forth in the Procurement
Documents. If there is any conflict between the provisions of the Procurement Documents and any
referenced provisions of a standard specification, manual, or code of a technical society,
organization, or association, the language of the Procurement Documents will take precedence over
that of the standard specification, manual, or code.
2.6.4 Clarifications. Clarifications and interpretations of the Procurement Documents shall be
issued by the Owner or the Engineer as provided for herein.
2-7 [NOT USED]
2-8 [NOT USED]
2-9 [NOT USED]
2-10 AUTHORITY OF BOARD AND ENGINEER. The District will issue communications to the
MFEM through the Engineer. The District agrees to fumish the data required of the District under the
Procurement Documents with reasonable promptness and shall make payments in accordance'with
The District's authority with respect to receiving delivery of the Goods is set forth in Section 4. The
Section 9. The District's authority with respect to the right to order changes is set forth in Section 3.
District will provide the MFEM, the MFEM's representatives, testing agencies, and other
governmental agencies with jurisdictional interests, proper and safe access to the Point of Delivery or
other designated site(s) at reasonable times as is necessary for performance of their functions in
connection with the Procurement Documents. The duties, responsibilities, and limitations of authority
of the Engineer are set forth in the Procurement Documents and will not be extended without written
consent of the Engineer and written notice to the MFEM.
240.1 Availability of Records. The MFEM shall maintain books, records, logs, documents and
other evidence sufficient to record all actions taken with respect to the providing of Goods and
completion of the obligations under the procurement contract. The MFEM further agrees to allow the
Special Services, throughout the performance of the contract and for a period of ten years following
District to inspect, copy, and audit such books, records, documents and other evidence at all
reasonable times. Upon request, The MFEM agrees to provide the District with backup copies for all
electronic documents generated by the MFEM in performing under the terms of this contract or to
provide the District with proof of insurance coverage for valuable papers and records. The MFEM
shall make available all requested data and records during normal business hours.. Failure to make
Contract No. 36-72 Page 73 of 96 Pages
requested records available for audit by the date requested will result in the immediate termination of
the Contract.The MFEM shall, at no charge to the agency, provide copies Of all records in the MFEM's or subcontractor's possession pertaining to the work that the Engineer may request.
2-10.2 Audit And Inspection. The MFEM agrees to maintain and/or make available, to the
Engineer, within San Diego County, accurate books and accounting records relative to all its
activities and to contractually require all subcontractors to this contract to do the same. The
Engineer shall have the right to monitor, assess, and evaluate MFEM's and its subcontractor's
performance pursuant to this contract, said monitoring, assessments, and evaluations to include, but
not be limited to, audits, inspection of premises, reports, contracts, subcontracts and interviews of
MFEM's staff and the staff of all subcontractors to the contract. At any time during normal business
hours and as often as the Engineer may deem necessary, upon reasonable advance notice, MFEM shall make available to the Engineer for examination, all of its, and all subcontractors to this contract.
records with respect to all matters covered by this Contract and will permit the Engineer to audit,
examine, copy and make excerpts or transcripts from such data and records, and to make audits of
all invoices, materials, payrolls, records of personnel, and other data relating to all matters covered
by this Contract. However, any such activities shall be carried out in a manner so as to not
unreasonably interfere with MFEM's ongoing business operations.
240.3 Clarifications and Interpretations. The Engineer will issue with reasonable promptness
such written clarifications or interpretations of the requirements of the Procurement Documents (in
the form of drawings or otherwise) as the Engineer may determine necessary. If the MFEM believes
that a written clarification or interpretation justifies an increase in the Contract Price or Contract Time,
the MFEM may make a request for change as provided in Section 3.
2-10.4 Rejecting Defective Goods. The Engineer will recommend to the District to disapprove or
reject Goods or Special Services that are defective.
2-10.5 Limitations on Engineer's Responsibilities. Neither the Engineer's authority to act under
these General Provisions or elsewhere in the Procurement Documents nor any decision made by
Engineer in good faith either to exercise or not to exercise such authority shall give rise to any duty or
responsibility of the Engineer to the MFEM or any of the MFEM's agents or employees or any other
person furnishing materials or equipment for incorporation in the Goods or furnishing services
incidental thereto. The Procurement Documents include the terms "as allowed," "as approved". "as
ordered," "as directed," "as required," or terms of like effect or import are used, or the adjectives
"reasonable," "suitable," "acceptable," "proper," "satisfactory" or adjectives of like effect or import are
used to describe an action of the District or the Engineer as to the Goods and Special Services. It is
intended that such exercise the professional judgement, action or determination will be solely to
evaluate the Goods and Special Services for compliance with the Procurement Documents (unless
there is a specific statement indicating otherwise). The use of any such term or adjective is not
intended to and shall not indicate that the District or the Engineer shall have authority to supervise or
direct any of the MFEM's operations or activities.
SECTION 3 -- CHANGES IN WORK
3-1 CHANGES IN GOODS OR SPECIAL SERVICES
3-1.1 Change Orders. Without invalidating the Procurement Agreement, the District may, at any
time or from time to time, order additions, deletions, modifications, or revisions in the Goods or the
furnishing of Special Services; these changes will be authorized by Change Order. Upon receipt of a
Change Order, the MFEM shall proceed on the basis of the change involved. If any Change Order
causes an increase or decrease in the Contract Price or an extension or shortening of the Contract
4/27/01 Contract No. 36z5 Page 74 of 96 Pages
Time, an equitable adjustment will be made as provided hereafter on the basis of a request for
change made by either party.
Change Orders prepared by the Engineer covering changes which are required by the District, or
because of any request for Change Order of the MFEM for a change to the Contract Time or
Contract Price, shall be in writing and shall state the dollar amount or establish the method of
payment, any adjustment in contract time and when negotiated prices are involved, shall provide for
the MFEM's signature indicating acceptance.
3-1.2 Engineer's Orders. The District or the Engineer may authorize minor changes in the Goods or
Special Services not involving an adjustment in the Contract Price or the Contract Time, which are
consistent with the overall intent of the Procurement Documents. These minor changes may be
accomplished by Engineer's Order and will be binding on the District, and also on the MFEM, who
shall perform the change promptly. If the MFEM believes that an Engineer's Order justifies an
increase in the Contract Price or Contract Time, the MFEM may make a request for change as
provided for herein. '
3-2 EXTRA WORK
3-2.1 Notification by MFEM. The MFEM shall not be entitled to the payment of any additional
compensation for any act, or failure to act, by the Engineer, including failure or refusal to issue a
change order, or for the happening of any event, thing, occurrence, or other cause, unless the MFEM
shall have first given the Engineer due written notice of potential claim as hereinafter specified.
7.3 Contract Time Accounting. The written notice of potential claim for changed conditions shall be Compliance with this section shall not be required as a prerequisite to notice provisions in Section 6-
submitted by the MFEM to the Engineer upon their discovery and prior to the time that the MFEM
performs the work giving rise to the potential claim. The MFEM's failure to give written notice of
potential claim for changed conditions to the agency upon their discovery and before they are
disturbed shall constitute a waiver of all claims in connection therewith.
The MFEM shall provide the District with a written document containing a description of the particular
circumstances giving rise to the potential claim, the reasons for which the MFEM believes additional
compensation may be due and nature of any and all costs involved within 20 working days of the
date of service of the written notice of potential claim for changed conditions. Verbal notifications are
disallowed.
The potential claim shall include the following certification relative to the California False Claims Act,
Government Code Sections 12650-12655.
"The undersigned certifies that the above statements are made in full cognizance of the California
False Claims Act, Government Code sections 12650-12655. The. undersigned further understands
and agrees that this potential claim, unless resolved, must be restated as a claim in response to the
City's proposed final estimate in order for it to be further considered."
By: Title:
Date:
Company Name:
The MFEM's estimate of costs may be updated when actual costs are known. The MFEM shall
submit substantiation of its actual costs to the Engineer within 20 working days after the affected
work is completed. Failure to do so shall be sufficient cause for denial of any claim subsequently
a 4/27/01 Contract No. 3675 Page 75 of 96 Pages
filed on the basis of said notice Of potential claim.
It is the intention of this section that differences between the parties arising under and by virtue Of the
contract be brought to the attention of the Engineer at the earliest possible time in order that such
matters be settled, if possible, or other appropriate action promptly taken.
3.2.2 Contract Price Adjustment. The Contract Price constitutes the total compensation (subject to
authorized adjustments) payable to the MFEM for furnishing the Goods and Special Services and
performing other services in connection therewith. All duties, responsibilities, and obligations
assigned to or undertaken by the MFEM shall be at the MFEM's expense without change in the
Contract Price. The Contract Price may only be altered by Change Order. Any claim for an increase
in the Contract Price shall be based on written notice delivered to the District as set forth above.
If notice to the surety of any change in the Procurement Agreement is required by the provisions of
any bond, the giving of such notice shall be the responsibility of the MFEM, and the amount of each
applicable bond shall be adjusted accordingly.
3-3 DISPUTED WORK. The MFEM shall give the agency written notice of potential claim prior to
commencing any disputed work. Failure to give said notice shall constitute a waiver of all claims in
connection therewith.
Prior to proceeding with dispute resolution pursuant to Public Contract Code (PCC) provisions
specified hereinafter, the MFEM shall attempt to resolve all disputes informally through the following
dispute resolution chain of command:
1. Project Inspector
2. Senior Inspector
3. Principal Inspector
4. Public Works Director
5. Executive Manager
The MFEM shall submit a complete report within 20 working days after completion of the disputed
work stating its position on the claim, the contractual basis for the claim, along with all documentation
supporting the costs and all other evidentiary materials. At each level of claim or appeal of claim the
District will, within 10 working days of receipt of said claim or appeal of claim, review the MFEM's
report and respond with a position, request additional information or request that the MFEM meet
and present its report. When additional information or a meeting is requested the District will provide
its position within 10 working days of receipt of said additional information or MFEM's presentation of
its report. The MFEM may appeal each level's position up to the Executive Manager after which
MFEM may proceed under the provisions of the Public Contract Code.
The authority within the dispute resolution chain of command is limited to recommending a resolution
to a claim to the Executive Manager. Actual approval of the claim is subject to the change order
provisions in the contract.
All claims by the MFEM for $375,000 or less shall be resolved in accordance with the procedures in
the Public Contract Code, Division 2, Part 3, Chapter 1, Article 1.5 (commencing with Section 20104)
which is set forth below:
4- r.$ 4/27/01 Contract No. 3z5 Page 76 of 96 Pages
ARTICLE 1.5 RESOLUTION OF CONSTRUCTION CLAIMS
20104. (a)(l) This article applies to all public works claims of three hundred seventy-five thousand
dollars ($375,000) or less which arise between a contractor and a local agency.
(2) This article shall not apply to any claims resulting from a contract between a contractor and a
public agency when the public agency has elected to resolve any disputes pursuant to Article 7.1
(commencing with Section 10240) of Chapter 1 of Part 2.
(b)(l) "Public work" has the same meaning as in Sections 3100 and 3106 of the Civil Code, except
that "public work" does not include any work or improvement contracted for by the state or the
Regents of the University of California.
(2) "Claim" means a separate demand by the contractor for (A) a time extension, (B) payment of
money or damages arising from work done by, or on behalf of, the contractor pursuant to the contract
for a public work and payment of which is not otherwise expressly provided for or the claimant is not
otherwise entitled to, or (C) an amount the payment of which is disputed by the local agency.
(c) The provisions of this article or a summary thereof shall be set forth in the plans or specifications
for any work which may give rise to a claim under this article. (d) This article applies only to contracts entered into on or after January 1, 1991.
20104.2. For any claim subject to this article, the following requirements apply:
(a) The claim shall be in writing and include the documents necessary to substantiate the claim.
Claims must be filed on or before the date of final payment. Nothing in this subdivision is intended to
extend the time limit or supersede notice requirements otherwise provided by contract for the filing of
claims.
(b)(l) For claims of less than fifty thousand dollars ($50,000), the local agency shall respond in
writing to any written claim within 45 days of receipt of the claim, or may request, in writing, within 30
days of receipt of the claim, any additional documentation supporting the claim or relating to
defenses to the claim the local agency may have against the claimant.
(2) If additional information is thereafter required, it shall be requested and provided pursuant to this
subdivision, upon mutual agreement of the local agency and the claimant.
(3) The local agency's written response to the claim, as further documented, shall be submitted to the
claimant within 15 days after receipt of the further documentation or within a period of time no greater
than that taken by the claimant in producing the additional information, whichever is greater.
(c)(l) For claims of over fifty thousand dollars ($50,000) and less than or equal to three hundred
seventy-five thousand dollars ($375,000). the local agency shall respond in writing to all written
claims within 60 days of receipt of the claim, or may request, in writing, within 30 days of receipt of
the claim, any additional documentation supporting the claim or relating to defenses to the claim the
local agency may have against the claimant.
(2) If additional information is thereafter required, it shall be requested and provided pursuant to this
subdivision, upon mutual agreement of the local agency and the claimant.
(3) The local agency's written response to the claim, as further documented, shall be submitted to
the claimant within 30 days after receipt of the further documentation, or within a period of time no
greater than that taken by the claimant in producing the additional information or requested
documentation, whichever is greater.
(d) If the claimant disputes the local agency's written response, or the local agency fails to respond
within the time prescribed, the claimant may so notify the local agency, in writing, either within 15
days of receipt of the local agency's response or within 15 days of the local agency's failure to
respond within the time prescribed, respectively, and demand an informal conference to meet and
confer for settlement of the issues in dispute. Upon a demand, the local agency shall schedule a
tneet and confer conference within 30 days for settlement of the dispute.
(e) Following the meet and confer conference, if the claim or any portion remains in dispute, the
claimant may file a claim as provided in Chapter 1 (commencing with Section 900) and Chapter 2
(commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the Government Code. For
purposes of those provisions, the running of the period of time within which a claim must be filed
a 4/27/01 Contract No. 3675 Page 77 of 96 Pages
shall be tolled from the time the claimant submits his or her written claim pursuant to subdivision (a)
until the time that claim is denied as a result of the meet and confer process, including any period of
time utilized by the meet and confer process. (9 This article does not apply to tort claims and nothing in this article is intended nor shall be
construed to change the time periods for filing tort claims or actions specified by Chapter 1
(commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division
3.6 of Title 1 of the Government Code.
20104.4. The following procedures are established for all civil actions filed to resolve claims subject
to this article:
(a) Within 60 days, but no earlier than 30 days, following the filing or responsive pleadings, the court
shall submit the matter to nonbinding mediation unless waived by mutual stipulation of both parties.
The mediation process shall provide for the selection within 15 days by both patties of a disinterested
third person as mediator, shall be commenced within 30 days of the submittal, and shall be
concluded within 15 days from the commencement of the mediation unless a time requirement is
extended upon a good cause showing to the court or by stipulation of both parties. If the parties fail
to select a mediator within the 15day period, any party may petition the court to appoint the mediator.
(b)(l) If the matter remains in dispute, the case shall be submitted to judicial arbitration pursuant to
Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3 of the Code of Civil Procedure,
notwithstanding Section 1141.11 of that code. The Civil Discovery Act of 1986 (Article 3
(commencing with Section 2016) of Chapter 3 of Title 3 of Part 4 of the Code of Civil procedure) shall
apply to any proceeding brought under the subdivision consistent with the rules pertaining to judicial
arbitration.
(2) Notwithstanding any other provision of law, upon stipulation of the parties, arbitrators appointed
for purposes of this article shall be experienced in construction law, and, upon stipulation of the
parties, mediators and arbitrators shall be paid necessary and reasonable hourly rates of pay not to
exceed their customary rate, and such fees and expenses shall be paid equally by the parties, except
in the case of arbitration where the arbitrator, for good cause, determines a different division. In no
event shall these fees or expenses be paid by state or county funds.
(3) In addition to Chapter 2.5 (commencing with Section 1141 .lo) Title 3 of Part 3 of the Code of Civil
obtain a more favorable judgment shall, in addition to payment of costs and fees under that chapter,
Procedure, any party who after receiving an arbitration award requests a trial de novo but does not
pay the attorney's fees of the other party arising out of the trial de novo.
(c) The court may, upon request by any party, order any witnesses to participate in the mediation or
arbitration process.
20104.6. (a) No local agency shall fail to pay money as to any portion of a claim which is undisputed
except as otherwise provided in the contract.
(b) In any suit filed under Section 20104.4, the local agency shall pay interest at the legal rate on any
of law.
arbitration award or judgment. The interest shall begin to accrue on the date the suit is filed in a court
SECTION 4 - CONTROL OF MATERIALS
4-1 MATERIALS AND WORKMANSHIP.
4-1.1 General. Unless otherwise specified, the materials and equipment incorporated in the Goods
will be new and of good quality. All workmanship will be of good quality and free from defects. The
MFEM shall, if required by the District or the Engineer, furnish satisfactory evidence as to the
source, kind, and quality of the materials and equipment incorporated in the Goods. Special
Services shall be performed by competent and qualified personnel.
tc 4/27/01 Contract No. 3675 Page 78 of 96 Pages
4-2 SHIPMENT AND DELIVERY OF THE GOODS.
4-2.1 General. The MFEM shall order, purchase, transport, coordinate delivery. accept delivery,
confirm the quality and quality received, prepare Storage area(s), Store, handle. Protect, move
relocate, remove and dispose excess of all materials used to accomplish the furnishing Of Goods to
the Point of Delivery. Goods shall be delivered to the site of the work only during working hours and shall be accompanied by bills of lading that shall clearly state for each delivery: the name Of the
MFEM as consignee, the project name and number, address of delivery and name Of consignor and
a description of the materia@) shipped, Prior to storage of any materials which have been shipped
to or by the MFEM to any location within the Agency's boundaries the MFEM shall provide the
Engineer a copy of lease agreements for each property where such materials are stored. The lease
agreement shall clearly state the term of the lease, the description of materials allowed to be stored and shall provide for the removal of the materials and restoration of the storage site within the time
allowed for the Work. All such storage shall conform to all laws and ordinances that may pertain to
the materials stored and to preparation of the storage site and the location of the site on which the
materials are stored. Loss, damage or deterioration of all stored materials shall be the MFEM's
responsibility. Conformance to the requirements of this section, both within and outside the limits of
work are a part of the Work. The Engineer shall have the right to verify the suitability of materials
and their proper storage at any time during the Work.
4-2.2 Coordination of Shipment. The MFEM shall hold the Goods until directed by the District to
deliver the Goods to the Point of Delivery. The Goods shall be delivered to the Point of Delivery by
the MFEM following the expiration of the Contract Time stipulated herein. The MFEM shall select the
means and methods of transportation. All transportation charges, including but not limited to rail,
switching, trucking, insurance, and special handling shall be paid by the MFEM.
4-2.3 Delays in Shipment by District. If the District has not notified the MFEM that the Point of
Delivery is available to receive the goods for a period of 90 days following the expiration of the
Contract Time, the MFEM may increase the Contract Price (per calendar day of storage) for the
direct cost, excluding MFEM's overhead and profit, of holding the Goods at its location. The cost of
such storage shall be executed by Change Order in amounts acceptable to the District.
4-2.4 Notification by District. The District will provide the MFEM with written notice at least 90 days
prior of the date when the Goods, excluding the membrane modules, will be ready for receipt at the
Point of Delivery. The MFEM shall coordinate the actual delivery dates in writing with the District in
accordance with the Contract Time. The MFEM shall also coordinate the manner of shipment of the
Goods to the Point of Delivery with the District. The MFEM shall notify the District of the manner of
shipment. The MFEM shall provide the District with written instruction concerning any special
equipment or services required at the Point of Delivery to unload and care for the Goods. MFEM
shall also give the District not less than 48 hours notice by telephone of the anticipated hour of
delivery.
4-2.5 Responsibilities of Installation Contractor. The District's Installation Contractor will provide
facilities for receipt and unloading of the Goods at the Point of Delivery. The District will provide the
carrier reasonable access within the site to the Point of Delivery.
4-2.6 Delivery Period. The MFEM shall deliver the approved Goods to the Point of Delivery within a
delivery window of 28 days after notification by the District that the Point of Delivery is ready to
accept the Goods. The District will not be obligated to receive any delivery of Goods, excluding the
membrane modules, not made within the delivery window. Additional costs arising from delivery prior
t0 Or after the delivery period shall be the responsibility of MFEM. The District may, by Change
*) w 4/27/01 Contract No. 3675 Page 79 of 96 Pages
Order, direct the MFEM to ship to another point of delivery or to accelerate or postpone the delivery
period.
4-2.7 Inspection. The District, accompanied by the Engineer and the MFEM. shall inspect the
Goods upon delivery for the sole purpose of identifying the Goods and general verification of
quantities and observation of apparent condition in order to provide a basis for a progress payment.
with the Procurement Documents. If, when delivered, there are apparent defects in the Goods Such inspection will not be construed as final or as acceptance of any Goods not in conformance
(through damage, conflicts with Specifications or submittals, and/or otherwise), the Engineer will give
prompt written notice thereof to the MFEM, who shall correct the defect or replace the defective
Goods with nondefective Goods without cost to the District. If the MFEM does not do so promptly
and to the satisfaction of the District and Engineer, District may, upon Engineer's recommendation,
receive delivery of the defective Goods or modules and remedy the defects as necessary with an
appropriate reduction in the Contract Price as provided for herein instead of requiring removal or
replacement. The District may refuse to receive delivery of any Goods that are apparently defective.
If there are no apparent defects, the Engineer will provide notice to MFEM that will acknowledge
receipt of the Goods. The MFEM shall demonstrate the conformance of the Goods and Special
Services with the Procurement Documents at the Point of Delivery.
4-2.8 Membrane Modules. Unless otherwise approved by the District, the membrane modules
shall be retained by the MFEM at its location and will be delivered to the construction site during the
commissioning of the Goods. The District, accompanied by the Engineer and the MFEM. shall
inspect the modules upon delivery for the sole purpose of identifying the Goods and general
verification of quantities and observation of apparent condition in order to provide a basis for a
progress payment. Such inspection will not be construed as final or as acceptance of any Goods
defects in the modules (through damage, conflicts with Specifications or submittals, or otherwise),
not in conformance with the Procurement Documents. If, when delivered, there are apparent
the Engineer will give prompt written notice thereof to the MFEM, who shall correct the defect or
replace the defective Goods with non-defective Goods without cost to the District. The District may
defects, the Engineer will provide notice to MFEM that will acknowledge receipt of the modules.
refuse to receive delivery of any Goods that are apparently defective. If there are no apparent
4-3 ACCESS TO GOODS IN PRODUCTION.
The MFEM shall provide representatives of the District, testing agencies, and governmental
agencies with jurisdictional interests proper and safe access to Goods in the process of production
at reasonable times as is necessary for the performance of their functions in connection with the
Procurement Documents. Such free and safe access shall include means of safe access and
egress, ventilation, lighting, and all elements pertaining to the safety of persons as contained in the
State of California, California Code of Regulations, Title 8, Industrial Relations, Chapter 4, Division
of Industrial Safety, Subchapter 4, Construction Safety Orders and such other safety regulations as
may apply. MFEM shall furnish Engineer with such information as may be necessary to keep the
Engineer fully informed regarding progress and manner of work and character of materials.
Inspection or testing of the whole or any portion of the work or materials incorporated in the work
shall not relieve MFEM from any obligation to fulfill this Contract.
4-4 SUBSTITUTE GOODS.
4-4.1 Trade names or Equals. Whenever materials or equipment are specified or described in the
Procurement Documents by using the name of a proprietary item or the name of a particular
manufacturer, fabricator, supplier, or distributor, the naming of the item is intended to establish the
type, function, and quality required.
4/27/01 Contract No. 3675 Page 80 of 96 Pages
44.2 Substitutions. Whenever the Engineer has identified by name three or more acceptable
manufacturers fabricators suppliers or distributors, and has identified the acceptable model by type,
no substitution is permitted. If the Engineer has identified that no substitution is permitted, the MFEM
shall provide the specified acceptable brands of materials or equipment. Materials or equipment of
other manufacturers, fabricators, suppliers, or distributors may be accepted by the District if
sufficient information is submitted by the MFEM to allow the District to determine that the material or equipment proposed is equivalent to that named. The procedure for review by the District or the
Engineer will be as set forth below.
44.2.1 Procedure. Requests for review of substitute items of material or equipment will not be
accepted by the District from anyone other than the MFEM. If the MFEM wishes to fumish or use a
substitute item of material or equipment, the MFEM shall make written application to the District for
acceptance thereof certifying that the proposed substitute will perform the functions called for by the
general design, be similar and of equal substance to that specified, be suited to the same use, and
be capable of performing the same function as that specified. The application shall state that the
evaluation and acceptance of the proposed substitute will not prejudice the timely delivery of the
Goods, whether or not acceptance of the substitute will require a change in any of the Procurement
Documents to adapt the design to the substitute, and whether or not incorporation or use of the
substitute in connection with production of the Goods is subject to payment of any license fee or
royalty. All variations of the proposed substitute from those Specified shall be identified in the
application, and available maintenance, repair, and replacement service shall be indicated. The
District or the Engineer may require the MFEM to fumish at the MFEMs expense additional data
about the proposed substitute. The District or the Engineer will be allowed a reasonable time within
which to evaluate the proposed substitute and will be the sole judge of acceptability, and no
substitute shall be ordered or made without the District‘s prior written acceptance.
44.2.2 Performance. The MFEM is responsible for the satisfactory performance of substituted
items. If, in the sole opinion of the Engineer, the substitution is determined to be unsatisfactory in
performance, appearance, durability, compatibility with associated items, availability of repair parts
and suitability of application the MFEM shall remove the substituted item and replace it with the
originally specified item at no cost to the Agency. The District may require the MFEM to furnish at
the MFEM’s expense a special performance guarantee or other surety conditional to acceptance of
any substitute.
SECTION 5 -- [NOT USED]
SECTION 6 -- PROSECUTION, PROGRESS AND
ACCEPTANCE OF THE WORK
6-1 CONSTRUCTION SCHEDULE AND COMMENCEMENT OF WORK. Except as otherwise
by law the MFEM shall begin work within.3 calendar days afler receipt of the “Notice to
provided herein and unless otherwise prohibited by permits from other agencies as may be required
Proceed”.
em r.$ 4/27/01 Contract No. 3675 Page 81 of 96 Pages
6.1.1 prexonstruction Meeting. After, or upon, notification Of contract award, the Engineer will
set the time and location for the Preconstruction Meeting. Attendance Of the MFEM'S management
for the meeting to be convened. Failure of the MFEM to have the MFEM'S responsible project
personnel responsible for the management, administration, and execution of the project is mandatory
personnel attend the Preconstmction Meeting will be grounds for default by MFEM. No separate
payment will be made for the MFEM's attendance at the meeting.
6-1.1.1 Baseline Construction Schedule Submittal. The MFEM shall submit the Baseline
Procurement Schedule per the submittal requirements of section 2-5.3. The submittal of the
Baseline Procurement Schedule shall include each item and element of sections 6-1.2 through 6-
1.2.9 and shall be on hard (paper) copy and electronic media conforming to section 6-1.3.3
Electronic Media.
6-1.2 Preparation and Review of the Baseline Procurement Schedule. The MFEM shall
prepare the Baseline Procurement Schedule as a Critical Path Method (CPM) Schedule in the
precedence diagram method (activity-on-node) format. The Baseline Procurement Schedule shall
depict a workable plan showing the sequence, duration, and interdependence of all activities
required to represent the complete performance of all project work as well as periods where work is
precluded. The Baseline Procurement Schedule shall begin with the projected date of issuance of
the notice to proceed and conclude with the date of final completion per the contract duration. The
Baseline Procurement Schedule shall include detail of all project phasing, staging, and sequencing,
including all milestones necessary to define beginning and ending of each phase or stage.
6-1.2.1 TimeScaled Network Diagram. As a part of the Baseline Procurement Schedule the
MFEM shall prepare and submit to the Engineer a complete time-scaled network diagram showing all
of the activities, logic relationships, and milestones comprising the schedule.
6-1.2.2 Tabular Listing. As a part of the Baseline Procurement Schedule the MFEM shall prepare
and submit to the Engineer a tabular listing of all of the activities, showing for each activity the
identification number, the description, the duration, the early start, the early finish, the late start, the
late finish, the total float, and all predecessor and successor activities for the activity described.
6-1.2.3 Bar Chart. As a part of the Baseline Procurement Schedule the MFEM shall prepare and
submit to the Engineer a chart showing individual tasks and their durations arranged with the tasks
on the vertical axis and duration on the horizontal axis. The bar chart shall use differing texture
patterns or distinctive line types to show the critical path.
6-1.2.4 Schedule Software. The MFEM shall use commercially available software equal to the
Windows 95 compatible "Suretrak" program by Primavera or "Project" program by Microsoft
Corporation to prepare the Baseline Procurement Schedule and all updates thereto. The MFEM shall
submit to the Agency a 89 mm (3.5") data disk with all network information contained thereon, in a
format readable by a Microsoft Windows 95 system. The Agency will use a "Suretrak", "Project" or
equal software program for review of the MFEM's schedule. Should the MFEM elect to use a
scheduling program other than the "Suretrak" program by Primavera or "Project" program by
Microsoft Corporation the MFEM shall provide the Engineer three copies of the substituted program
that are fully licensed to the Agency and 32 class hours of on-site training by the program publisher
for up to eight Agency staff members. The classes shall be presented on Mondays through
Thursdays, inclusive, between the hours of 8:OO a.m. and 5:OO p.m. The location dates and times of
the on-site training shall be submitted to the Engineer for approval five working days before the start
of the on-site training. The training shall be completed prior to the submittal of the first Baseline
Procurement Schedule.
%s 4/27/01 Contract No. 3675 Page 62 of 96 Pages
64.2.5 Schedule Activities. Except for submittal activities, activity durations shall not be shorter
than 1 working day nor longer than 15 working days, unless specifically and individually allowed by
the Engineer. The Baseline Procurement Schedule shall include between 100 and 500 activities,
including submittals, interfaces between utility companies and other agencies. Project milestones and
equipment and material deliveries. The number of activities will be sufficient, in the judgment of the
work, and to allow monitoring and evaluation of progress and of time impacts. Each activity’s Engineer, to communicate the MFEM’s plan for project execution, to accurately describe the project
description shall accurately define the work planned for the activity and each activity shall have
recognizable beginning and end points.
6-1.2.6 Float. Float or slack time within the schedule is available without charge or compensation
to whatever party or contingency first exhausts it.
6-1.2.7 Restraints to Activities. Any submittals, utility interfaces, or any furnishing of Agency
supplied materials, equipment, or services, which may impact any activity’s completion shall be
shown as a restraint to those activities. Time periods to accommodate the review and correction of
submittals shall be included in the schedule.
6-1.2.8 Late Completion. A Baseline Procurement Schedule showing a project duration longer
than the specified contract duration will not be acceptable and will be grounds for rejection of the
schedule as proposed..
6-1.2.9 Early Completion. The Baseline Procurement Schedule will show the MFEM’s plan to
support and maintain the project for the entire contractual timespan of the project. Should the MFEM
propose a project duration shorter than contract duration, a complete Baseline Procurement
Schedule must be submitted, reflecting the shorter duration, in complete accordance with all
schedule requirements of section 6-1. The Engineer may choose to accept the MFEM’s proposal of
a project duration shorter than the duration specified; provided the Agency is satisfied the shortened
Baseline Procurement Schedule is reasonable and the Agency and all other entities, public and
private, which interface with the project are able to support the provisions of the shortened Baseline
Procurement Schedule. The Agency’s acceptance of a shortened duration project will be confirmed
through the execution of a contract change order revising the project duration and implementing all
contractual requirements including liquidated damages in accordance with the revised duration,
The Engineer’s determination that the Baseline Procurement Schedule proposed by the MFEM
6-1.2.10 Engineer‘s Review. The Procurement Schedule is subject to the review of the Engineer.
complies with the requirements of these special provisions shall be a condition precedent to
issuance of the Notice to Proceed by the Engineer. If the Engineer determines that the Procurement
Schedule does not meet the requirements of these specifications the MFEM shall correct the
Procurement Schedule to meet these specifications and resubmit it to the Engineer. Failure of the
MFEM to obtain the Engineer’s determination that the initial Procurement Schedule proposed by the
MFEM complies with the requirements of these general provisions within thirty (30) working days
after the date of the preconstruction meeting shall be grounds for termination of the contract. Days used by the Engineer to review the initial Procurement Schedule will not be included in the 30
working days.
The Engineer will review and return to the MFEM, with any comments, the Baseline Procurement
marked as persections 6-1.2.10.1 through 6-1.2.10.3, Schedule within 15 working days of submittal. The Baseline Procurement Schedule will be returned
6-1.2.10.1 “Accepted.” The MFEM may proceed with the project work upon issuance of the Notice to Proceed. and will receive payment for the schedule in accordance with section 6-1 .&A,
Contract No. 3675 Page 83 of 96 Pages
6-1.2.10.2 “Accepted with Comments.” The MFEM may proceed with the Project Work upon issuance of the Notice to Proceed. The MFEM must resubmit the schedule incorporating the
comments prior to receipt of payment per section 6-1 .&I.
64.2.70.3 “Not Accepted.” The MFEM must resubmit the schedule incorporating the Corrections
and changes of the comments prior to receipt of payment per section 6-1 &I. The Notice to Proceed
will not be issued by the Engineer if the changes of the comments are not submitted as required
hereinbefore and marked “Accepted or “Accepted with Comments” by the Engineer. The MFEM, at the Sole option of the Engineer, may be considered as having defaulted the contract under the
provisions of section 6-4 DEFAULT BY MFEM if the changes of the comments are not submitted as
required hereinbefore and marked ‘Accepted” by the Engineer.
6-1.3 Preparation of Schedule Updates and Revisions. The MFEM shall submit monthly
updates of the Baseline Procurement Schedule confirming the agreements no later than the fifth
working day of the following month. The monthly update will be submitted on hard (paper) copy and
electronic media conforming to section 6-1.3.3 Electronic Media per the submittal requirements of
section 2-5.3 and will include each item and element of sections 6-1.2 through 6-1.2.9 and 6-1.3.1
through 6-1.3.7.
6-1.3.1 Actual Activity Dates. The actual dates each activity was started and/or completed during
the month. After first reporting an actual date, the MFEM shall not change that actual date in later
updates without specific notification to the Engineer with the update.
6-1.3.2 Activity Percent Complete. For each activity undeway at the end of the month, the
MFEM shall report the percentage determined by the Engineer as complete for the activity.
6-1.3.3 Electronic Media. The schedule data disk shall be a 3’/; high density diskette, labeled
with the project name and number, the MFEM’s name and the date of preparation of the schedule
data disk. The schedule data disk shall be readable by the software specified in section 6-1.2.2
Schedule Software and shall be free of file locking, encryption or any other protocol that would
impede full access of all data stored on it.
6-1.3.4 List of Changes. A list of all changes made to the activities or to the interconnecting logic,
with an explanation for each change.
6-1.3.5 Change Orders. Each monthly update will include the addition of the network revisions
reflecting the change orders approved in the previous month. The nelwork revisions will be as
agreed upon during the review and acceptance of the MFEM’s change orders.
6-1.3.6 Bar Chart. Each monthly update will include a chart showing individual tasks and their
durations arranged with the tasks on the vertical axis and duration on the horizontal axis. The bar
chart shall use differing texture patterns or distinctive line types to show the critical path.
6-1.4 Engineer’s Review of Updated Procurement Schedule. The Engineer will review and
of submittal. The Updated Procurement Schedule will be returned marked as per sections 6-1.4.1
retum the Updated Procurement Schedule to the MFEM, with any comments, within 5 working days
Accepted” by the Engineer will be returned to the MFEM for correction. Upon resubmittal the
through 6-1.4.3. Any Updated Procurement Schedule marked “Accepted with Comments” or “Not
Engineer will review and return the resubmitted Updated Procurement Schedule to the MFEM, with
any comments, within 5 working days. Failure of the MFEM to submit a monthly updated
construction schedule will invoke the same consequences as the Engineer returning a monthly
updated construction schedule marked “Not Accepted“.
Contract No. 3675 Page 84 of 96 Pages
6-1.4.1 “Accepted.” The MFEM may proceed with the project work. and Will receive payment for
subsequent pay requests.
6-1.4.2 “Accepted with Comments.” The MFEM may proceed with the project work. The MFEM
must resubmit the Updated Procurement Schedule to the Engineer incorporating the corrections and
changes noted in the Engineer‘s comments prior to receipt of subsequent payments.
6-1.4.3 “Not Accepted.” The MFEM must resubmit the Updated Procurement Schedule to the
Engineer incorporating the corrections and changes noted in the Engineer’s comments prior to
as having defaulted the contract under the provisions of section 6-4 DEFAULT BY MFEM if the
receipt of subsequent payments. The MFEM, at the sole option of the Engineer, may be considered
day of the month in which the Updated Procurement Schedule is due. If the MFEM fails to submit the changes of the comments are not submitted and marked ”Accepted by the Engineer before the last
corrected Updated Procurement Schedule as required herein the MFEM may elect to proceed with
the project at its own risk. Should the MFEM elect not to proceed with the project, any resulting
delay, impact, or disruption to the project will be the MFEM’s responsibility.
6-1.5 Late Completion or Milestone Dates. Should the Schedule Update indicate a completion
or contractually required milestone date later than the properly adjusted contract or milestone
duration, the Agency may withhold Liquidated Damages for the number of days late. Should a
subsequent “Accepted“ Schedule Update remove all or a portion of the delay, all or the allocated
portion of the previously held Liquidated Damages shall be released in the subsequent payment to
the MFEM immediately following the “Accepted schedule.
6-1.6 interim Revisions. Should the actual or projected progress of the work become
substantially different from that depicted in the Procurement Schedule, independently of and prior to
the next monthly update, the MFEM will submit a revised Baseline Procurement Schedule, with a list
and explanation of each change made to the schedule. The Revised Procurement Schedule will be
submitted per the submittal requirements of section 2-5.3 and per the schedule review and
acceptance requirements of section 6-1, including but not limited to the acceptance and payment
provisions.
6-1.7 Final Schedule Update. The MFEM shall prepare and submit a final schedule update when
one hundred percent of the work is completed. The MFEM’s Final Schedule Update must accurately
represent the actual dates for all activities. The final schedule update shall be prepared and reviewed
per sections 6-1.3 Preparation of Schedule Updates and Revisions and 6-1. 4 Engineer’s Review of
of the project and release of any and all funds retained per section 9-32,
Updated Procurement Schedule. Acceptance of the final schedule update is required for completion
61.8 Measurement and Payment. Preparation of the Baseline Procurement Schedule will be
paid for with the fint progress payment under the contract. See section 9-3-3.1,
6-2 PROSECUTION OF WORK.
6-2.1 Order of Work. The work to be done shall consist of furnishing all labor, equipment and materials, and performing all operations necessary to complete the furnishing of Goods and Special
Services as shown on the Project Plans and as specified in the Specifications. The Goods and
Special Services that are to be furnished are generally described as follows: design, fabrication and delivery of membrane filtration equipment and ancillary components, assistance during installation of
the goods, commissioning, delivery of operations and maintenance manuals, one year of operations
assistance and warranty of the membrane modules and system. The MFEM shall sequence all work
in accordance with the accepted Baseline Procurement Schedule.
Contract No. 367.5 Paqe 85 of 96 Pages
6-2.2 Continuing Work. The MFEM shall continue execution of the Procurement Agreement during
furnishing the Special Services will not be prejudiced, delayed, or postponed pending resolution of
all disputes or disagreements with the District. The production and/or timely delivery of the Goods or
any disputes or disagreements, except as the MFEM and the District may otherwise agree in writing.
6-23 Project Meetings. The Engineer will establish the time and location of required Project
by the MFEM’s Representative. The Project Representative shall be the individual determined under
Meetings where identified in the Procurement Documents. Each Project Meeting shall be attended
section 7-6, “The MFEM’s Representative”. No separate payment for attendance of the MFEM, the
MFEM’s Representative or any other employee or subcontractor or subcontractor’s employee at
these meetings will be made.
6-3 SUSPENSION OF WORK.
thereof or the furnishing of Special Services or other services for a period of not more than 90 days
The District may, at any time and without cause, suspend production of the Goods or any portion
by notice in writing to the MFEM and the Engineer. Upon 15 days written notice from the District, the
MFEM shall resume performance. The MFEM may be allowed a modification in the Contract Price or
an extension of the Contract Time, or both, directly attributable to any suspension if the MFEM
makes an approved request for change as provided in Section 3-2.
6-4 DEFAULT BY MFEM.
The District may determine a default of the contract by the MFEM and terminate the Procurement
Contract upon the occurrence of any one or more of the following events:
1) If the MFEM commences a voluntary case under any chapter of the Bankruptcy Code, as now or
hereafter in effect, of if the MFEM takes any equivalent or similar action by filing a petition or
otherwise under any other federal or state law in effect at such time relating to bankruptcy or
2) If a petition is filed against the MFEM under any chapter of said Bankruptcy Code as now or
insolvency;
hereafter in effect at the time of filing, or if a petition is filed seeking any such equivalent or similar
relief against the MFEM under any other federal or state law in effect at the time relating to
bankruptcy or insolvency;
3) If the MFEM makes a general assignment for the benefit of creditors;
4) If a trustee, receiver, custodian, or agent of the MFEM is appointed under applicable law, or under
contract, whose appointment or authority to take charge of property of the MFEM is for the purpose
for the benefit of the MFEM’s creditors;
of enforcing a lien against such property or for the purpose of general administration of such property
5) If the MFEM admits in writing an inability to pay its debts generally as they become due; or
6) If the MFEM breaches the Procurement Contract or any provision of the Procurement Documents and such breach continues for a period of 15 days after written notice to correct the breach from the
District to the MFEM;
7) If the MFEM fails to meet the requirements specified for on-site demonstration testing (Section
01670);
8) If the MFEM fails to deliver the Goods and Services according to the Procurement Contract;
9) If the MFEM fails to maintain an acceptable Procurement Schedule as required herein;
9) If the MFEM fails to provide competent management and supervision, competent staff or
materials or equipment meeting the requirements of the Procurement Contract;
IO) If the MFEM disregards laws or regulations of any public body having jurisdiction;
11) If the MFEM commits continuous or repeated serious violations of approved or legislated safety
requirements;
*) r.# 41?7/01 Contract No. 3675 Page 86 of 96 Pages
12) If the MFEM has assigned any part of the obligations under the Procurement Contract without
the District's written consent.
The District may, after giving the MFEM and the surety 10 days written notice, to the extent permitted
by law, terminate the services of the MFEM due to default. In such cases, the MFEM shall not be
entitled to receive any further payment until all Goods are provided and Special Services and other
termination to the District (including compensation for additional professional Services) exceeds the Services furnished in accordance with the Procurement Documents. If the direct Cost Of such
unpaid balance of the Contract Price, the MFEM or the surety shall pay the difference to the District.
Such costs incurred by the District will be incorporated in a Change Order. When exercising any rights or remedies under this paragraph, the District will not be required to obtain the lowest price.
Where the MFEMs services have been so terminated by the District, the transaction will not affect
any rights and remedies of the District against the MFEM then existing or which may thereafter
accrue. Any retention or payment of monies due the MFEM by the District will not release the MFEM
from liability.
6-5 TERMINATION OF CONTRACT.
The District may, at any time and without cause, upon 10 days written notice to the MFEM, cancel all
or any part of the undelivered Goods or unfurnished Special Services and shall pay the MFEM
reasonable cancellation charges. Cancellation charges shall not include any payments, partial or
otherwise, for Goods provided the contract is terminated prior to the District issuing written
authorization to proceed with procurement and construction of the Goods, as set forth in Section 2-
5.3.2.
6-6 DELAYS AND EXTENSIONS OF TIME.
The Contract Time may only be altered by a Change Order. Any claim for an extension in the
Contract Time shall be based on written notice delivered to the District within 15 days of the
occurrence of the event giving rise to the claim. Notice of the extent of the claim with supporting data
shall be delivered within 30 days after such occurrence unless the District allows an additional period
of time to ascertain more accurate data. Any change in the Contract Time resulting from any such
claim shall be incorporated in a Change Order.
The Contract Time will be extended in an amount equal to time lost due to delays beyond the control
of the MFEM if a request for change is made as provided in Section 3-2.1. Such delays shall
include, but not be limited to, acts of neglect by the District, fires, flood, labor disputes, epidemics,
abnormal weather conditions, governmental procedures, or acts of God.
6-7 TIME OF COMPLETION.
6-7.1 Completion of Goods. The MFEM shall not commence the manufacture of any Goods until
the Shop Drawings have been approved and written authorization to proceed is issued by the
District. The Goods, excluding the membrane modules, are to be fabricated and ready for delivery
prior to the date stipulated below, but no longer than 365 days from the Notice to Proceed. The
District will notify the MFEM at least 90-days prior to the date that the Goods may be received at the Point of Delivery. The MFEM shall arrange for shipment of the Goods to the construction site and
deliver the Goods within a 28day window of delivery. The membrane modules shall be delivered to
the Point of Delivery during the commissioning of the facility.
6-7.2 Completion of Special Services. Special Services shall be provided as follows:
*, w 4/27/01 Contract No. 3675 Page 87 of 96 Pages
6-7.2.1 Design Services. The MFEM shall commence design of the Goods Upon execution Of the
Agreement by the District and MFEM.
6.7.2.2 First Shop Drawing Submittal. The First Shop Drawing Submittal as described in Section
11 300, Article 1.03-A-2-b shall be submitted within 30 days of the Notice to Proceed.
6-7.2.3 Second Shop Drawing Submittal. The Shop Drawings and/or Samples associated with the
Second Shop Drawing Submittal as described in Section 11300, Article 1.03-A-2-c shall be submitted
within 60 days of the Notice to Proceed.
6-7.2.4 Installation Services. Upon notification that the Goods are to be installed, the MFEM shall
provide installation assistance to the Installation Contractor.
6-7.2.5 Commissioning Services. Approximately one month prior to the completion of the
installation of the Goods by the Installation Contractor, the District will notify the MFEM that the site is
available for the MFEM. The MFEM shall organize and deliver to the District the Special Services
associated with the commissioning and acceptance testing of the Goods.
6-7.2.6 Acceptance Testing. Upon the "notice of substantial completion" as described in Section
01660, the MFEM shall commence acceptance testing. In the case that the review identifies some
items that must be corrected, the Engineer shall prepare a list detailing the outstanding issues and
the party responsible for the correction.
6-7.2.7 Services During Correction Period. Upon the "notice of substantial completion" as
described in Section 01660, the MFEM shall commence the one-year correction period.
6-7.2.8 Warranties. The MFEM shall maintain the provision of the Membrane Module and System
Warranty in force for the times detailed in Section 01740.
6-7.3 Working Day. Unless otherwise approved in writing by the Engineer, the hours of work at the
Point of Delivery shall be between the hours of 7:OO a.m. and 4:OO p.m. on Mondays through Fridays,
excluding Agency holidays. The MFEM shall obtain the written approval of the Engineer if the MFEM
desires to work outside said hours or at any time during weekends and/or holidays. This written
permission must be obtained at least 48 hours prior to such work The Engineer may approve work
outside the hours and/or days stated herein when, in hislher sole opinion, such work conducted by
the MFEM is beneficial to the best interests of the Agency. The MFEM shall pay the inspection costs
of such work.
6-7.4 Contract Time Accounting. When any period of time is referred to in the Procurement
Documents by days, it will be computed to exclude the first and include the last day of such period. If
the last day of any such period falls on a Saturday or Sunday or on a day made a legal holiday by the
the convention for days is calendar days.
law of the applicable jurisdiction, such day will be omitted from the computation. If not noted as such
6-8 COMPLETION AND ACCEPTANCE.
The Engineer will not accept the Goods or any portion of the Goods before all of the Work is
completed and all outstanding deficiencies that may exist are corrected by the MFEM and the
Engineer is satisfied that all the materials and workmanship. and all other features of the Goods,
meet the requirements of all of the specifications for the Goods and all specified Special Services
have been provided. Use, temporary, interim or permanent, of all, or portions of, the Goods does
not constitute acceptance of the Goods or acceptability of Special Services rendered. If. in the
Engineer's judgment, the Work has been completed and is ready for acceptance the Engineer will
Contract No. 3675 Paoe 88 of 96 Pages
SO certify to the District. Upon such certification by the Engineer the District may accept the
completed Goods. Upon the District's acceptance of the Goods and Satisfactory completion Of at1
Special Services, the Engineer will cause a "Notice of Completion" to be issued. The date Of issue
shall be the date of completion of the Work under the contract.
All work shall be warranted for one (1) year after issuing the "Notice of Completion" or as otherwise
provided in the Procurement Documents and any faulty work or materials discovered during the
warranty period shall be repaired or replaced by the MFEM, at its expense. Twenty-five percent of
the faithful performance bond shall be retained as a warranty bond for the one year warranty period.
6-9 LIQUIDATED DAMAGES.
6-9.1 Furnishing of Submittals. The District and MFEM recognize that time is of the essence of this
Procurement Contract and that District will suffer damages if the submittals are not delivered to the
District within the time specified in Section 6-7 above, plus any extensions thereof allowed in
accordance with Section 6-6. They also recognize that the timely performance of services by other
parties involved in District's project are materially dependent upon the MFEM's specific compliance
with the requirements of Section 6-7. Further, they recognize the delays, expense, and difficulties
involved in proving the actual losses or damages suffered by the District if complete acceptable
submittals are not delivered on time. Accordingly, and instead of requiring proof of such losses or
damages, the District and MFEM agree that as liquidated damages for delay (but not as a penalty),
MFEM shall pay District or have withheld monies due it, the sum of $500.00 for each day that expires
after the times or dates specified in Section 6-7 for deliveries of complete submittals (adjusted for
any extensions thereof made in accordance with Section 6-6). Execution of the Contract shall
constitute agreement by the District and MFEM that $500.00 per day is the minimum value of costs
and actual damages caused by the MFEM's failure to complete the required submittals within the
allotted time. Any progress payments made after the specified completion date shall not constitute a
waiver of this paragraph or any damages.
6-9.2 Furnishing of Goods. The District and MFEM recognize that time is of the essence of this
Procurement Contract and that the District will suffer damages if 1) the Goods are not fabricated
and ready for delivery to the District within the time specified in Section 6-7 above, plus any
extensions thereof allowed in accordance with Section 6-6, or 2) the membrane modules are not
delivered in a timely manner and commissioning is delayed. They also recognize that the timely
performance of services by other parties involved in District's project are materially dependent upon
the MFEM's specific compliance with the requirements of Section 6-7. Further, they recognize the
delays, expense, and difficulties involved in proving the actual losses or damages suffered by the
requiring proof of such losses or damages, the District and MFEM agree that as liquidated damages
District if complete acceptable Goods are not delivered on time. Accordingly, and instead of
for delay (but not as a penalty), MFEM shall pay District or have withheld monies due it, the sum of
$1,000.00 for each day that expires after the times or dates specified in Section 6-7 for delivery of
Goods (adjusted for any extensions thereof made in accordance with Section 6-6). Execution of the
Contract shall constitute agreement by the District and MFEM that $1,000.00 per day is the minimum
value of costs and actual damages caused by the MFEM's failure to fumish Goods within the allotted
time. Any progress payments made after the specified completion date shall not constitute a waiver
of this paragraph or any damages.
6-9.3 Electrical Use Guarantee. If the actual electrical usage (kWI1000 gallons of net filtered
water) for the equipment supplied by the MFEM exceeds the calculated usage as determined in the
MFEM's bid by more than 15 percent, the District shall deduct from the final payment an amount
equal to the Present Worth of the difference between the calculated electrical use from the Bid Form
and the actual energy use of the system, The electrical usage for the facility will be metered
beginning 6 months after the notice of substantial completion until the end of the correction period.
Contract No. 3675 Page 89 of 96 Pages
Electrical usage shall be calculated using kWl1000 gallons of net filtered water using the average
daily flow of 0.85 mgd using the following equation:
Amount($) = (kW kgaladual - kW kga~ hd )’ Wr * 365.25 davs 0.035s 850 * 11.0185
day year kW
If the dollar amount calculated above exceeds the amount for final payment, the MFEM shall pay the
District the difference. In no case shall the dollar amount exceed a value equivalent to 30 percent of
the Contract Price.
SECTION 7 -- RESPONSIBILITIES of the MFEM
7-1 [NOT USED]
7-2 [NOT USED]
7-3 LIABILITY INSUR ANCE. Provisions for liability insurance are st ?t forth in the Contract.
74 WORKERS’ COMPENSATION INSURANCE. Provisions for workers’ compensation insurance
are set forth in the Contract.
7-5 PERMITS. Except as specified herein the District will obtain, at no cost to the MFEM, all
work for this contract on District properly. MFEM shall obtain and pay for all permits required for the
encroachment, right-of-way, grading, resource agency and building permits necessary to perform
production, transportation, and furnishing of all Goods and Special Services under the contract.
7-6 THE MFEM’S REPRESENTATIVE
The MFEM shall competently and efficiently supervise and direct production of the Goods and
furnishing of Special Services and coordinate all operations required to deliver the Goods and furnish
authority to act on behalf of the MFEM with respect to the MFEM’s obligations under the
Special Services. The MFEM shall designate in writing to the District and Engineer a person with
binding on the MFEM. Procurement Documents, and all communications given to or received from that person will be
7-7 COOPERATION AND COLLATERAL WORK.
The MFEM shall cooperate and coordinate design and construction efforts with the Engineer and
Installation Contractor as stipulated in the Procurement Documents.
7-8 [NOT USED]
7-9 [NOT USED]
7-10 [NOT USED]
7-11 PATENT FEES OR ROYALTIES.
The MFEM shall pay all license fees and royalties and assume all costs incident to the use in
production of the Goods or the incorporation in the Goods of any invention, design, process, product,
*) p,s 4/27/01 Contract No. 3675 Page 90 of 96 Pages
or device which is the subject of patent rights or copyrights held by others. The MFEM shall
indemnify and hold harmless the District, its elected officials, its officers, its employees and its agents, from and against all claims, damages, losses, and expenses (including attorney fees) arising
out of any infringement of patent rights or copyrights incident to the use in production of the Goods or
incorporation therein of any invention, design, process, product, or device not specified in the
infringement of such rights.
Procurement Documents, and shall defend all such claims in connection with any alleged
7-12 TAXES AND DUTIES.
The MFEM shall pay all sales, consumer, use, and other similar taxes and duties as required by law
to be paid in respect to the production and delivery of the Goods and the furnishing of Special
Services.
7-13 INDEMNIFICATION.
The MFEM shall defend, indemnify, and hold District and Engineer, their officials, officers,
employees, and agents free and harmless from any and all liability from loss, damage, or injury to
acts, omissions, or willful misconduct of the MFEM arising out of or in connection with the MFEM’s
property or persons, including wrongful death, in any manner arising out of incident to any negligent
performance under this Procurement Agreement, including without limitation the payment of
attorneys fees. Furthermore, the MFEM shall defend at its own expense, including attorneys fees,
the District and Engineer, their officials, officers, employees, and agents in any legal action based
upon such negligent acts omissions or willful misconduct.
7-14 MFEM’S CONTINUING OBLIGATION; WARRANTIES, GUARANTEES.
The MFEM’s obligation to fumish the Goods and Special Services and to perform other services in
connection therewith in accordance with the Procurement Documents is absolute. The MFEM
warrants and guarantees to the District that all Goods, Special Services, and other services are in
accordance with the Procurement Documents, are of merchantable quality and are fit for the
purposes intended. Warranties and guarantees to the District hereunder include the ability of the
Goods to achieve design, performance and water quality objectives as required by the Procurement
Documents as described in further detail in Specification Section 01740 and Section 11300. MFEM
warranty and guarantee hereunder excludes defects or damages caused by 1) abuse, improper
modification or improper maintenance or operation by persons other than the MFEM. and 2) normal
wear and tear under normal usage.
District to the MFEM under the Procurement Documents, nor any use of the Goods by the District.
Neither recommendation of any progress or final payment by the Engineer, nor any payment by the
nor any act of acceptance by the District, nor any failure to accept, nor the issuance of a notice of
completion by the Engineer, nor any correction of defective Goods or Special Services by the District
will constitute an acceptance of Goods or Special Services, not in accordance with Procurement
Documents.
The MFEM’s continuing obligation with respect to warranties and guarantees as described herein
shall continue until; 1) the District has received the notice of completion from the Engineer and
delivered the final payment to the MFEM and 2) the date of expiration of the Performance Bond
required by the Procurement Documents has been exceeded.
warranty as described in Specification Section 01740 shall extend until the end of the MFEM’s pro-
The MFEM’s continuing obligations with respect to membrane module and system performance
rata warranty period specified therein.
*) r.$ 4/27/01 Contract No. 3675 Page 91 of 96 Pages
7-15 CORRECTION OF DEFECTIVE WORK.
7-15.? Remedying Defective Goods. If at any time after the District's receipt Of delivery under
Section 4-2, and before expiration of the correction period under Section 7-14, the District or the
Engineer determines that the Goods are defective, the MFEM shall, upon receiving written notice
from and as required by the District, correct the defects by repair, removal, or replacement with non-
defective Goods, F.O.B. Point of Delivery. If the MFEM does not do so promptly and to the
satisfaction of the District and the Engineer, the District may accept the defective Goods instead of
requiring correction or removal and replacement.
If the MFEM fails to take action as required by the District or the Engineer in accordance with the
above paragraph, the District may, after 10 days written notice to the MFEM, remedy any such
deficiency instead of requiring removal or replacement. In an emergency where delay would cause
serious risk of loss or damage, the District may take such action without issuing prior notice or
waiting for action by the MFEM.
7-15.2 Correction Period. The MFEMs responsibility for remedying all defects in the Goods will
extend for a period of one year after the date of the "notice of substantial completion" for such longer
periods of time as may be prescribed by law or by the terms of any applicable guarantee required by
the Procurement Documents or by any specific provisions of the Procurement Documents. If the
District has provided written notice to the MFEM that the Goods are defective, the correction period
shall continue until the notice of completion has been issued.
745.3 Remedying Defective Special Services. If, at any time the District or the Engineer notifies
the MFEM in writing that any of the Special Services are defective, the MFEM shall promptly provide
acceptable services. If the MFEM fails to do so, the District may obtain the Special Services
elsewhere.
7-15.4 Costs of Remedying Defects. All direct costs of correcting, removing, and replacing of
defective Goods, or of obtaining Special Services elsewhere and of exercising the District's rights
and remedies under this section will be charged against the MFEM in an amount verified by the
Engineer. If incurred prior to final payment, a Change Order will be issued incorporating the
after final payment, all costs will be paid by the MFEM to the District. Such direct costs will include necessary revisions in the contract and a commensurate reduction in the Contract Price. If incurred
of repair, replacement and installation of Goods, or property of the District or others destroyed or
compensation for additional professional services required to oversee MFEM activities and all costs
damaged by correction, removal, or replacement of defective Goods. The MFEM will not be allowed
an extension of the Contract Time because of any delay in performance attributable to the exercise
by the District of the District's rights and remedies under this paragraph. The provisions of this
paragraph shall be in addition to all other rights and remedies available to the District under the
Procurement Agreement and any applicable laws.
SECTION 8 -- [NOT USED]
Contract No. 3675 Paqe 92 of 96 Pages
SECTION 9 -- MEASUREMENT & PAYMENT
9-1 [NOT USED]
9-2 LUMP SUM WORK.
9-2.1 General. The District will make progress payments on the lump sum Contract Price. The
payment schedule shall be as specified herein.
9.2.2 First Payment. The District will provide payment of an amount equal to 5 percent of the Contract Price upon receipt of the first Application for Payment, submitted in accordance with the
payment procedure listed below, and accompanied by the Engineer's recommendation for payment.
This payment, at the Engineers recommendation, may be less such amounts as the Engineer shall
determine in accordance with Sections 6-9.1 and 9-3.2.2.
9.2.3 Second Payment. The District will provide payment of an amount equal to 15 percent of the
Contract Price less any prior payment upon receipt of the second Application for Payment, submitted
in accordance with the payment procedures listed below, and accompanied by the Engineer's
recommendation for payment. This payment, at the Engineers recommendation, may be less such
amounts as the Engineer shall determine in accordance with Sections 6-9.1 and 9-3.2.2.
9-2.4 Third Payment. The District will provide payment of an amount equal to 70 percent of the
Contract Price less any prior payment upon receipt of the third Application for Payment, submitted in
accordance with the payment procedures listed below, and accompanied by the Engineers
recommendation for payment. This payment, at the Engineers recommendation, may be less such
amounts as the Engineer shall determine in accordance with Sections 6-9.2 and 9-3.2.2 herein.
9-2.5 Fourth Payment. The District will provide payment of an amount equal to 80 percent of the
Contract Price less any prior payment upon receipt of the fourth Application for Payment, submitted
in accordance with the payment procedures listed below, and accompanied by the Engineer's
recommendation for payment. This payment, at the Engineer's recommendation, may be less such amounts as the Engineer shall determine in accordance with Sections 6-9.2 and 9-3.2.2.
9-2.6 Fifth Payment. The District will provide payment of an amount equal to 90 percent of the
Contract Price less any prior payments upon receipt of the fifth Application for Payment, submitted in
accordance with the payment procedures listed below, and accompanied by the Engineer's
recommendation for payment. This payment, at the Engineer's recommendation, may be less such
amounts as the Engineer shall determine in accordance with Sections 6-9.2 and 9-3.2.2.
9-2.7 Sixth Payment. The District will provide payment of an amount equal to 95 percent of the
Contract Price less any prior payments upon receipt of the sixth Application for Payment, submitted
in accordance with the payment procedures listed below, and accompanied by the Engineer's
amounts as Engineer shall determine in accordance with 9-3.2.2.
recommendation for payment. This payment, at the Engineer's recommendation, may be less such
9-2.8 Final Payment. After the warranty period and following the completion of the Final Inspection as per Section 9-3.4, the final (seventh) Application for Payment shall be submitted by the MFEM
with the notice of completion issued by the District. Upon receipt of the final Application for Payment,
accompanied by the Engineer's recommendation for payment, the District shall make the final
payment Of 100 percent of the Contract Price less any prior payments in accordance with the
payment procedures listed below. This payment, at the Engineer's recommendation, may be less
such amounts as Engineer shall determine in accordance with Sections 6-9.3 and 9-3.2.2.
4/27/01 Contract No. 3675 Page 93 of 96 Pages
93 PAYMENT.
94.1 General. Guarantee periods, shall not be affected by any payment but shall m-mmce on the
date of issue of the "Notice of Substantial Completion." Any money due from the District Will not accrue
interest.
93.2 Partial and Final Payment. The Engineer will make a determination of the work performed
conditional to recommendation of each progress payment. The determination will be based on
compliance with requirements listed in the Procurement Documents and specified herein. Progress
payments shall be made no later than thirty (30) calendar days after the date on which the Engineer
recommends payment. Five (5) working days following the this date, the Engineer shall complete
the detailed progress pay estimate and submit it to the MFEM for the MFEM's information. Should
the MFEM assert that additional payment is due, the MFEM shall within ten (IO) days of receipt of
the progress estimate, submit a supplemental payment request to the Engineer with adequate
justification supporting the amount of supplemental payment request. Upon receipt of the
whether the supplemental payment request is a proper payment request. If the Engineer supplemental payment request, the Engineer shall, as soon as practicable after receipt, determine
determines that the supplemental payment request is not proper, then the request shall be returned
to the MFEM as soon as practicable, but not later than seven (7) days after receipt. The returned
request shall be accompanied by a document setting forth in writing the reasons why the
supplemental payment request was not proper. In conformance with Public Contract Code Section
20104.50, the City shall make payments within thirty (30) days after receipt of an undisputed and
properly submitted supplemental payment request from the MFEM. If payment of the undisputed supplemental payment request is not made within thirty (30) days after receipt by the Engineer, then
the City shall pay interest to the Contractor equivalent to the legal rate set forth in subdivision (a) of
Section 685.010 of the Code of Civil Procedure.
After final inspection, the Engineer will make a Final Payment Estimate and process a
corresponding payment. The estimate will be in writing and shall be for the total amount owed the
MFEM as determined by the Engineer and shall be itemized by the contract bid item and change
order item with quantities and payment amounts and shall show all deductions made or to be made
for prior payments and amounts to be deducted under provisions of the contract. All prior estimates
and progress payments shall be subject to correction in the Final Payment Estimate.
The MFEM shall have 30 calendar days from receipt of the Final Payment Estimate to make written
statement disputing any bid item or change order item quantity or payment amount. The MFEM shall
provide all documentation at the time of submitting the statement supporting its position. Should the
MFEM fail to submit the statement and supporting documentation within the time specified, the
MFEM acknowledges that full and final payment has been made for all contract bid items and
change order items.
If the MFEM submits a written statement with documentation in the aforementioned time, the
adjustments on the Final Payment. Remaining disputed quantities or amounts not approved by the
Engineer will review the disputed item within 30 calendar days and make any appropriate
Engineer will be subject to resolution as specified in subsection 3-3, Disputed Work.
The written statement tiled by the MFEM shall be in sufficient detail to enable the Engineer to
ascertain the basis and amount of said disputed items. The Engineer will consider the merits of the
MFEM's claims. It will be the responsibility of the MFEM to furnish within a reasonable time such
further information and details as may be required by the Engineer to determine the facts or
contentions involved in its claims. Failure to submit such information and details will be sufficient
cause for denying payment for the disputed items.
Contract No. 3675 Page 94 of 96 Pages
9-3.2.1 payment for Claims. Except for those final payment items disputed in the written statement
required in subsection 9-3.2 all claims of any dollar amount shall be submitted in a Written statement
by the MFEM no later than the date of receipt of the final payment estimate. Those final payment
items disputed in the written statement required in subsection 9-3.2 shall be submitted no later than
30 days after receipt of the Final Payment estimate. No claim will be considered that was not
included in this written statement, nor will any claim be allowed for which written notice or protest is
required under any provision of this contract, unless the MFEM has complied with notice or protest
requirements.
The claims filed by the MFEM shall be in sufficient detail to enable the Engineer to ascertain the
basis and amount of said claims. The Engineer will consider and determine the MFEM's claims and it will be the responsibility of the MFEM to furnish within a reasonable time such further information
and details as may be required by the Engineer to determine the facts or contentions involved in its
claims. Failure to submit such information and details will be sufficient cause for denying the claims.
Payment for claims shatl be processed within 30 calendar days of their resolution for those claims
approved by the Engineer. The MFEM shall proceed with informal dispute resolution under
subsection 3-3, Disputed Work, for those claims remaining in dispute.
9-3.2.2 Engineer's Evaluation. The Engineer's recommendation for payment associated with the
first two Applications for Payment (as per Sections 9-3.3.1 and 9-3.3.2) shall constitute a
representation by the Engineer that the applicable Shop Drawing package (including all
supplementary documentation) has been reviewed and is approved in accordance with the
Procurement Documents. However, recommendation for payment shall not constitute a
the Goods.
representation that the Engineer has made any observations or inspection of the quality or quantity of
The Engineer's recommendation for payment associated with the third and fourth Applications for
Payment (as per Paragraph 9-3.3.3 and 9-3.3.4) shall constitute a representation by the Engineer
based on Engineer's inspection of the Goods in accordance with Section 4-2.7, that to the best of
Engineer's knowledge, information, and belief, the Engineer has identified the Goods listed in the
Application for Payment and generally verified the quantities and that on the basis of such limited
inspection there are no apparent defects in the Goods, and that the Goods appear to be suitable for
installation. This recommendation for payment shall not constitute a representation that the Engineer
has made a final inspection of the Goods: that the Goods are free from defects; that the Goods are in
to the District's title to the Goods.
conformance with the Procurement Documents; or, that the Engineer has made any investigations as
The Engineer may refuse to recommend that all or any part of a progress payment be made if
inspections, tests, or other subsequently discovered evidence indicates that the Goods are defective
or that the MFEM has not fulfilled its obligations or that the MFEM has failed to perform to the
Procurement Documents. The Engineer may also refuse to recommend all or part of a payment be
because the Contract Price has been reduced due to Change Orders, application of Liquidated made if, in the Engineer's opinion, such a refusal is necessary to protect the District from loss
Damages, or if MFEM has failed to fumish acceptable Special Services.
9-33 Applications for Progress Payments. The MFEM shall submit Applications for Payment to the Engineer for review, completed and signed by the MFEM. Applications for Payment shall be
accompanied by all supporting documentation specified in the Procurement Documents or
shall be submitted according to the following schedule:
supplemental documentation as the Engineer may reasonably require. The Applications for Payment
Contract No. 3675 Page 95 of 96 Pages
9-3.3.1 FiEt Application for Payment. The first Application for Payment shall be submitted after
the Engineer has reviewed and approved all Shop Drawings and/or samPk?S associated With the
First Shop Drawing Submittal (Section 11300, Article 1.03-A-2-b) and any other submittals as
required by the Procurement Documents. The first payment shall include full Compensation for
furnishing all labor, materials including, but not limited to. the computer hardware and Software, tools.
equipment, and incidentals; and for doing all the work involved in attending meetings, preparing.
furnishing, updating, revising the tabular, bar and flow chart Procurement Schedules and narrative
reports required by these general provisions and as directed by the Engineer. The Engineer's
determination that each and any procurement schedule proposed by the MFEM complies with the
requirements of these general provisions shall be precedent to each and any payment for the
contract.
9-3.3.2 Second Application for Payment. The second Application for Payment shall be submitted
after the Engineer has reviewed and approved all Shop Drawings andlor Samples associated with
the Second Shop Drawing Submittal (Section 11300, Article 1.03-A-2-c) and any other submittals as
required by the Procurement Documents.
9-3.3.3 Third Application for Payment. The third Application for Payment shall be submitted after
the delivery of the Goods to the Point of Delivery. The Application for Payment shall be
accompanied by a bill of sale and other documentation satisfactory to the District warranting that the
District has received the Goods free and clear of all liens, charges, security interest, and
encumbrances. Such documentation shall include releases and waivers from all parties who, during
the MFEM's execution of its responsibilities under the Procurement Documents, might have obtained
or filed any such lien, charge, security, or encumbrance.
9-3.3.4 Fourth Application for Payment. The fourth Application for Payment shall be submitted
after the delivery of the membrane modules to the Point of Delivery. The Application for Payment
shall be accompanied by a bill of sale and other documentation satisfactory to the District warranting
that the District has received the Goods free and clear of all liens, charges, security interest, and
encumbrances. Such documentation shall include releases and waivers from all patties who, during
the MFEM's execution of its responsibilities under the Procurement Documents, might have obtained
or filed any such lien, charge, security, or encumbrance.
9-3.3.5 Fifth Application for Payment. The fifth Application for Payment shall be submitted after
the notice of substantial completion (i.e., completion of commissioning) has been provided by the
Engineer (refer to Section 01660 of the Specifications).
9-3.3.6 Sixth Application for Payment. The sixth Application for Payment shall be submitted after
acceptance testing (refer to Section 01670 of the Specifications), and delivery of the final Operation
and Maintenance Manuals, has been completed by the MFEM and approved by the Engineer.
9-3.3.7 Final Payment Application. The final (seventh) Application for Payment shall be submitted
following the issuance of the "Notice of Completion" by the Engineer (Section 6-8).
9.3.4 Final Inspection. After all Goods have been incorporsited .into the District's project, tested in
accordance with required field tests, and are apparently functioning as intended, and been in
operation for at least 11 months after the notice of substantial completion, the Engineer will make
final inspection and advise the District and the MFEM whether w.not the Goods appear to be
acceptable in accordance with the Procurement Documents. The MFEM will retain responsibility for
the warranty of the Goods during the correction period. If the Goods are not determined to be acceptable, the Engineer will identify the apparent defects in writing. The MFEM shall immediately
take such measures as are necessary to remedy all defects.
..
-
4/27/01 Contract No. 3675 Paae 96 of 96 Pages
City of Carlsbad
M€ EQUIPMENT PROCUREMENT
Carlsbad Recycling Facility
SECTION 01010
SUMMARY OF GOODS AND SPECIAL SERVICES
PART 1 - GENERAL
1.01 DESCRIPTION
A. Description of Work
1. The smary of the Goods and Special Services provided herein is an overall
summary of the responsibilities of the Membrane Filtration Equipment
Manufacturer (MFEM) and its relation to the District, Engineer and Installation
Contractor. It does not supersede the specific requirements of the other
Procurement Documents.
2. The Goods and Special Services consist of designing and furnishing membrane
filtration equipment and appurtenances required for the Carlsbad Water Recycling
Facility. The Goods and Special Services also consist of furnishing manufacturer
trained personnel for the initial installation training, start-up, commissioning
demonstration testing, acceptance testing, and operations assistance as specified.
3. Supply of the Goods to be provided by the MFEM:
a. Membrane system feed delivery pumps.
b. Feedwater pretreatment automatic backwashing strainers.
c. Membrane filtration units (excluding interconnecting pipework). The
membrane filtration units (racks, trains, skids, etc) shall be supplied as skid
mounted units. All piping within the membrane filtration unit framework
shall be provided by the MFEM.
d. For vacuum systems, the vacuum pumps and air removal system, equipment
(excluding interconnecting pipework).
e. Membrane integrity test system (excluding interconnecting pipework)
f. Compressed Air system (excluding interconnecting pipework)
g. Aeration blowers (excluding interconnecting pipework)
h. Backwash water supply system (excluding interconnecting pipework)
01010.SU"ARYOFGOODSANDSPEClALSERVICES.WC 01010-1 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
1.
j.
k.
1.
m.
n.
0.
Membrane clean-in-place (CIP) and chemical washing equipment.
Pumps, motors and variable frequency drives (VFDs) for pumps supplied by
the MFEM (excluding motor starters unless otherwise specified).
Electrical and pneumatic control panels.
Operator interface control stations.
Programmable Logic Controllers.
Miscellaneous field mounted instrumentation.
Control system hardware required to integrate the MF system with the
overall plant supervisory control system.
4. The Special Services consist of the following:
a.
b.
C.
d.
e.
f.
g.
h.
1.
j.
k.
1.
Design of the Goods provided by the MFEM.
Schedules: Submit to the Engineer preliminary schedules of progress, Shop
Drawing submittals, tests, and deliveries as required by the Procurement
Documents.
Submittal of Shop Drawings and Samples,
Participation in meetings and assistance to the District, Engineer and
Installation Contractor .during the design, construction, commissioning and
acceptance testing of the Goods.
Software configuration of system PLCs and operator interface stations.
Component factory demonstration tests,
Operational and Maintenance Manuals for all equipment provided.
Scheduling of equipment delivery, witnessing unloading and unpacking of
MFEM supplied equipment, and inspecting/inventorying equipment.
Installation and Commissioning phase services for the Goods.
Equipment and services for demonstratiodperforance testing.
Instruction of Installation Contractor in the proper handling and installation
of the Goods.
Calibration of MFEM supplied instrumentation.
01010.SU"ARY OF GOODS AND SPECIAL SERVICES.DC€ 01 010-2 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
m. Commissioning of the Goods.
n. Acceptance Testing.
0. Operator Training
p. Correction period service visits.
q. Membrane Module and System Warranty.
B. Work by Others
1. Engineer responsibilities.
a. Facility Design:
Overall facility design.
Design and specification of yard piping (raw, filtrate, residuals).
Design of raw water piping / valves from entry to membrane system
feed header.
Design of filtered water piping and valves from membrane system
outlet to filtered water storage.
Design of chemical feed facilities.
Design of electrical motor control centers (MCCs) and conduit
schedules.
Design of electrical room, service disconnects, MCCs, control room
and other facilities.
Design structural elements of facility not related to component
equipment items.
Design of heating, ventilation, and air conditioning WAC) and
plumbing (potable water, equipment drains and sanitary lines) for
facility.
Preparation of Bidding Documents for Installation Contractor.
Design of plant supervisory control system.
b. Project Responsibility:
0IOIO.SU"ARYOFGOODSANDSPEClALSERVlCES.DOC 01010-3 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
1) Review and approval of Shop Drawing submittals.
2) Review of applicable building codes.
3) Assist District to obtain operation and discharge permits.
4) Oversight of MFEM.
5) Oversight of Installation Contractor.
6) Assistance during installation and acceptance testing.
2. Installation Contractors Responsibilities:
a.
b.
C.
d.
e.
f.
g.
h.
Construction of facilities to house the membrane system.
Unloading of all equipment at the Point of Delivery.
Installation of all membrane filtration equipment provided by the MFEM.
Submittal, purchase, and installation of equipment specified by the
Engineer.
Installation of yard piping.
Installation of interconnecting piping and appurtenances between
components of the MF system.
Installation of electrical systems, field instrumentation, control panels, and
operator interfaces.
Corrective assistance during demonstration, field, and acceptance testing
3. Districts Responsibilities
a. Designate operators and schedule availability for training.
b. Obtain required permits.
c. Operate treatment facilities in accordance with instruction and operations
and maintenance manuals.
d. Payment of interested parties.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION (NOT USED)
0IOIO.SU"ARYOFGOODSANDSPEClALSERVICES.DOC 01010-4 APRIL. 27,2001
City of Carlsbad
MF EQUIPMENT PROCUREMENT
Carlsbad Recycling Facility
+ + END OF SECTION + +
DIOIO.SU"ARYOFGOODSANDSPECIALSERVICES.DOC 01010-5 APRIL 27,2001
City of Carlsbad
Ca&bad Recycling Facility
MF EQUIpMENT PROCUREMENT
SECTION 01091
REFERENCE STANDARDS
PART 1 - GENERAL
1.01 DESCRIPTION
A. Description of Work: When a reference standard is specified, comply with
requirements and recommendations stated in that standard, except when they are
modified by the Procurement Documents, or when applicable laws, ordinances, rules,
regulations, or codes establish stricter standards. The latest provisions of applicable
standards shall apply to the Goods and Special Services, unless otherwise specified.
B. Reference standards include, but are not necessarily limited to, the following:
1. American National Standards Institute (ANSI)
2. American Society for Testing and Materials (ASTM)
3. American Water Works Association (AWWA)
4. American Welding Society (AWS)
5. Anti-Friction Bearing Manufacturers Association (AFBMA)
6. Hydraulic Institute (HI)
7. Institute of Electrical and Electronics Engineering (BEE)
8. National Electric Code (NEC)
9. National Electrical Manufacturers Association (NEMA)'
10. National Sanitation Foundation (NSF)
1 1. Underwriters Laboratory, Inc. (UL)
12. Uniform Building Code (UBC)
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION (NOT USED)
+ + END OF SECTION + +
01091.REFERENCE STANDARDS.DOC 01091-1 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
SECTION 01092
ABBREVIATIONS AND SYMBOLS
PART 1 - GENERAL
1.01 DESCRIPTION
A. Common abbreviations that may be found in the Procurement Documents include, but are not
limited to, the following:
acrylonitrile butadiene
styrene
alternating current
American wire gauge
ampere
average
brake horsepower
British thermal unit
Centigrade (or Celsius)
chlorinated polyvinyl
chloride
cleanout
company
cubic inch
cubic foot
cubic yard
cubic feet per minute
cubic feet per second
decibel
decibels, A-weighted
degree Centigrade (or Celsius)
degree Fahrenheit
diameter
direct current
dollars
ductile iron
each
efficiency
elevation
ABS
AWG
ac
A, amp
avg
bhP B tu
C
CPVC
co
co
cu in
cu ft
cu yd
cfm
cfs
db
dBA
"C
"F
dia
dc
$
DI
ea
eff
El
ethylene propylene rubber EPDM
Fahrenheit F
feet ft
feet per hour fPh
feet per minute fPm
feet per second fps
fiberglass reinforced FRP
figure Fig
flange flg
foot-pound ft-lb
gallons (U.S.) gal
gallons (US.) per hour Qh
gallons (US) per minute Qm
gallons (U.S.) per second gPs
gallons (US.) per square foot day gfd
galvanized galv .
hand/off/automatic HOA
Hertz Hz
hour hr
horsepower ' hP
inch in
inch-pound in-lb
input/output IO
inside diameter i.d.
instrumentation and control I&C
kilovolt KV
kilovolt-ampere kva
kilowatt kW
plastic
01092.Abbmiatinu and Symbolr.drx 01092-1 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
kilowatt-hour
length
length to least radius
light emitting diode
linear
linear foot
liter
liter per hour square meter
maximum
membrane filtration
MF Equipment Manufacturer
micron
milli-amp
milliampere DC
milligram
milligrams per liter
milliliter
millimeter
million gallons (U.S.)
million gallons per day (U.S.)
minimum
motor control center
net positive suction
head available
net positive suction
head required
National Pipe Threads
nephelometric turbidity unit
Operation and Maintenance
ounce
outside diameter
parts per million
polytetrafluorethylene
polyvinyl chloride
pounds per square foot
pounds per square inch
pounds per square inch
absolute
pounds per square inch
of gyration
. pound
gage
kW-hr
1
Vr
LED
lin
LF
L
L/hr-m2
max
MF
MFEM
mA or ma
mADC
mg
mL
MG
MCC
min
NPSHA
NPSHR
NPT
NTU
O&M
0.d.
PTFE PPm
PVC
lb
PSf psi
psia
wn
mglL
mm
mgd
02
Psig
pounds per square inch
differential
Process and Instrumentation
Diagrams
random access memory
reverse osmosis
reverse osmosis permeate
revolutions per minute
specific gravity
square foot
square inch
square yard
stainless steel
standard
standard cubic feet
total dynamic head
totally-enclosed, fan-
cooled
totally-enclosed, non-
ventilated
twisted shielded
variable frequency drive
volt
volts alternating current
volts direct current
water column
per minute
psid
P&D
RAM
RO
ROP
rpm
SP gr
sq in
ss
std
scfm
TDH
TEFC
TENV
TWSH
VFD
V
VAC
VDC
WC
sq ft
sq Yd
01092-2 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
B. Abbreviations of organizations that may be used in the Procurement Documents include, but
are not limited to, the following:
ANSI
ASTM
ASME
AWS
AWWA
FM
HI
IEEE
ISA
IS0
MSS
NAAMM
NBS
NEMA
NFPA
NSF
OSHA
SAE
SPI
SSPC
TEMA
UL
C. Symbols:
American National Standards Institute
American Society for Testing and Materials
American Society of Mechanical Engineers
American Welding Society
American Water Works Association
Factory Mutual Research
Hydraulic Institute
Institute of Electrical and Electronics Engineers, Inc.
International Society for Measurement and Control
Insurance Services Office
Manufacturers Standardization Society of the Valve and Fittings
Industry, Inc.
National Association of Architectural Metal Manufacturers
National Bureau of Standards
National Electrical Manufacturers Association
National Fire Protection Association
National Sanitation Foundation
Occupational Safety and Health Administration
Society of Automotive Engineers
Society of the Plastics Industry, Inc.
Steel Structures Painting Council
Tubular Exchanger Manufacturers Association
Underwriters Laboratory, Inc.
Refer to drawings for symbols used on the drawings.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION (NOT USED)
+ + END OF SECTION ++
01092-3 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIF"ENT PROCUREMENT
SECTION 01340
SHOP DRAWING PROCEDURES
PART 1 - GENERAL
1.01 DESCRIPTION
A.
B.
C.
D.
Description of Work
1. The submittal of Shop Drawings shall conform to requirements and procedures of
this Section and as otherwise described in the Procurement Documents.
2. A separate transmittal form shall be used for each specific item or class of
material or equipment for which a submittal is required.
Reference Specifications
1. Section 1 1300, Membrane Filtration (MF) System, General
Coordination
1. Transmittal of Shop Drawings on various items using a single transmittal form
shall be permitted only when the items taken together constitute a manufacturer's
"package" or are so functionally related that expediency supports review of the
group or package as a whole.
Special Considerations
1. Definitions
a. The term "Shop Drawings," as used herein, shall be understood to include
detailed design calculations, process and instrument diagrams, assembly and
installation drawings, lists, bill of materials, graphs, test data, operating
instructions, and other items that shall include:
1) Drawings and catalog information and cuts.
2) Specifications, parts list, suggested spare parts lists, and equipment
drawings.
3) Wiring diagrams of systems and equipment.
01340.SHOP DRAWING PROCEDURES.DOC 01340-1 APRIL 27,2001
City of Carlsbad Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
4) Lubrication, maintenance and operation instructions, including initial
start-up instructions as described in Section 01731, Training of
Operations and Maintenance Personnel.
5) Applicable certifications.
6) Anchor bolt templates, mounting instructions, and mounting design
calculations, as required.
7) Required maintenance operations to allow all installed equipment to
remain idle for a period of time not to exceed twenty-four (24)
months.
8) Other technical, installation, and maintenance data, as applicable,
9) Unloading and handling methods and storage requirements.
10) Notes, highlights, and explanations of proposed deviations from
requirements of the Procurement Documents.
11) Type of paint and the mil thickness of coating system used
1.02 QUALITY CONTROL / QUALITY ASSURANCE (QNQC) - (NOT USED)
1.03 SUBMITTALS
A. Schedule
1, The MFEM shall develop an itemized listing (schedule) of all Shop Drawings and
Submittals required by the Procurement Documents and submit the listing to the
District within 30 days after the execution of the Procurement Agreement. The
MFEM shall identify the Shop Drawings that will be provided as part of the First
Shop Drawing submittal and the Second Shop Drawing submittal as described in
the Section 11300, Article 1.03.
B. Shop Drawing Procedures
1. Submit Shop Drawings to the Engineer at the address indicated below.
Richard Ten-Bosch, P.E.
Black & Veatch
6 Venture Suite 3 15
Irvine, CA 92718
(949) 753-0500
01340.SHOP DRAWMG PRC€EDURE.S.DG€ 01340-2 APRIL 27,2001
City of Carlsbad
MF EQUIPMENT PROCUREMEm Carlsbad Recycling Facility
2.
3.
4.
5.
6.
7.
8.
9.
A letter of transmittal shall accompany each submittal.
All letters of transmittal shall be submitted in duplicate.
At the beginning of each leaer of transmittal, provide a reference heading
indicating the following:
District's Name
Project Name
Contract No.
Transmittal No.
Section No.
If a Shop Drawing deviates from the requirements of the Procurement
Documents, the MFEM shall specifically note each variation in his letter of
transmittal.
All Shop Drawings submitted for approval shall have a title block with complete
identifylng information satisfactory to the District.
All Shop Drawings submitted shall bear the stamp of approval and signature of
the MFEM as evidence that they have been reviewed by the MFEM. Submittals
without this stamp of approval will not be reviewed by the District and will be
returned to the MFEM. The MFEM's stamp shall contain the following minimum
information:
Project Name:
MFEMs Name:
Date:
Reference Item:
Specification Section:
Page No.: "
Para. No.:
Drawing No.: of
Location:
Submittal No.:
Approved By:
A number shall be assigned to each submittal by the MFEM starting with No. 001
and then numbered consecutively. Re-submittals shall be identified by the
original submittal number followed by the suffix "A" for the first re-submittal, the
suffix "B" for the second re-submittal, etc.
The MFEM shall submit to the District a minimum of eight (8) copies of all
submittals. Drawings larger than 11 -inches by 17-inches shall be unfolded.
0134o.SHOP DRAWING PROCEDURES.DOC 01340-3 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMEN?
10.
11.
12.
13.
14.
15.
16.
After the District and the Engineer completes their review, Shop Drawings will be
affixed with a stamp and marked with one of the following notations:
Approved
Approved as Noted
Approved as Noted -Resubmit Requested Information
Revise and Resubmit
Rejected
If a submittal is acceptable, it will be marked "Approved" or "Approved as
Noted." Four (4) prints or copies of the submittal will be returned to the MFEM.
Unless specifically denoted in the Procurement Agreement or the Procurement
General Conditions, upon return of a submittal marked "Approved" or "Approved
as Noted", the MFEM may order, ship, or fabricate the materials included on the
submittal in accordance with the corrections indicated.
If a Shop Drawing is marked "Approved as Corrected - Resubmit Requested
Information", the District requires that the MFEM make the indicated corrections
and resubmit the Shop Drawings for record purposes. The corrected Shop
Drawing shall be a pre-condition for any payment associated with the Shop
Drawing submittal.
If a submittal is unacceptable, two (2) copies will be returned to the MFEM with
one of the following notations:
Revise and Resubmit
Rejected
In the case of an unacceptable submittal as indicated by either of the two notations
above, the District may return the Shop Drawing(s) indicating the necessary
corrections and/or changes to the MFEM and/or issue a correspondence
discussing the unacceptable aspects of the Shop Drawings.
Upon return of a submittal marked "Revise and Resubmit", the MFEM shall make
the corrections indicated and repeat the initial approval procedure. The
"Rejected" notation is used to indicate material and/or equipment that is not
acceptable. Upon return of a submittal so marked, the MFEM shall repeat the
initial approval procedure utilizing acceptable material and/or equipment.
All Shop Drawings and Samples shall be submitted prior to the dates established
in Article 5 of the Procurement Agreement. For any Shop Drawing that is
Submitted after the dates established in Article 5 of the Procurement Agreement,
if the Shop Drawing is deemed "Revise and Resubmit" or "Rejected" the District
shall notify the MFEM within five working days after receipt the Shop Drawings
01340.SHOP DRAWMG PROCEDURESEN 01340-4 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
that the shop drawings furnished were not acceptable. Upon notification, the
MFEM has five working days to produce and deliver to the District an acceptable
Shop Drawing(s).
17. The MFEM shall assume all risk responsibility for the fabrication and delivery of
any Goods and Special Services associated with a Shop Drawing that has not
been either "Approved" or "Approved as Noted".
18. Engineer will review and process all submittals within twenty (20) days after
receipt.
19. It is.the MFEM's responsibility to review submittals made by its suppliers before
transmitting them to the Engineer. The MFEM shall ensure proper coordination
of the Goods and Special Services with its suppliers and to determine that each
submittal is in accordance with its requirements and that sufficient information is
provided for the Engineer to determine compliance with the Procurement
Documents. Incomplete or inadequate submittals will be returned for revision
without review.
20. The MFEM shall furnish required submittals with complete information and
accuracy in order to achieve required approval without exceeding two (2) re-
submittals. All costs to the Engineer involved with subsequent re-submittals of
Shop Drawings, Samples, or other items requiring approval will be back-charged
to the MFEM at the rate of 3 times the direct technical labor cost by deducting
such costs from payments due the MFEM for Goods and Special Services
completed. In the event that the MFEM requests a substitution for a previously
approved item, all of the Engineer's costs in the reviewing and approval of the
substitution will be back-charged to the MFEM, unless the need for such
substitution is beyond the MFEM's control.
21. Errors and omissions by the MFEM in the proper execution of the Shop Drawing
procedures andor failure of the MFEM to obtain approval for submittals does not
absolve the MFEM from its contractual obligations under the Procurement
Agreement, as detailed in the Procurement Documents. The District and the
Engineer may review the conformance of all Goods and Special Services with
respect to the Procurement Documents at any time prior to Final Acceptance.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION (NOT USED)
i+ END OF SECTION ++
01340.SHOP DRAWMG PROCEDWS.DOC 01340-5 APRIL 27,2001
City of Carlsbad
MF EQUIPMENT PROCUREMENT
Carlsbad Recycling Facility
SECTION 01610
TRANSPORTATION AND HANDLING OF GOODS
PART 1 - GENERAL
1.01 DESCRIPTION
A. Description of Work
1. The MFEM shall make all arrangements for transportation and delivery of
equipment and materials to the Point of Delivery.
2. Shipments of materials shall be delivered to the Point of Delivery only during
regular working hours. Shipments shall be addressed, consigned, and delivered to
the DISTRICT, except where otherwise directed.
1.02 QUALITY CONTROL / QUALITY ASSURANCE (QNQC) - (NOT USED)
1.03 SUBMITTALS
A. Shop Drawings
1. Prior to the delivery of the Goods, the MFEM shall develop and submit to the
District a bill of materials for the contents of all shipments. This list shall detail
contents, size, weights and tag numbers of each item shipped. Upon receipt of the
Goods, the bill of materials shall be used to determine that the Goods have been
received by the District in accordance with Article 5 of the Procurement General
Conditions.
1.04 PRODUCT DELIVERY STORAGE AND HANDLING
A. The MFEM shall arrange deliveries of products in accord with the Contract Time
requirements stipulated in the Procurement Agreement (Section 00500).
B. The MFEM shall coordinate deliveries that occur between specified Contract Times to
accommodate the following:
1. Work of other Contractors or District
2. Limitations of storage space.
3. ' Availability of equipment and personnel for handling products.
01610.TRANSWRTATIONANDHANDLTNGOFGOODS.WC 01610-1 APRIL 27,2001
City of Carlsbad
MF EQUIPMENT PROCWMEm
Carlsbad Recycling Facility
C.
D.
E.
F.
G.
H.
The MFEM shall not have products delivered to project site until related Shop
Drawings have been approved by the Engineer.
Partial deliveries of component parts of equipment shall be clearly marked to identify
the equipment to simplify accumulation of parts and facilitate assembly.
Each part within a shipment shall be clearly labeled with the reference numbers and tag
numbers included in the Bill of Materials.
Upon delivery, the Engineer shall inspect shipment(s) to ensure:
1. Product complies with requirements of approved submittals.
2. Containers and packages are intact
3. Labels are legible.
4. Products are properly protected and undamaged.
The Installation Contractor will provide equipment and personnel necessary to handle
products by methods designed to prevent soiling or damage.
The Installation Contractor will provide storage facilities in accordance with the MFEM
storage requirements to be submitted prior to delivery and along with the delivered
equipment under Section 0161 1.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION
3.01 DELIVERY AND INSTALLATION
A. A representative of the MFEM shall be present when the MF equipment is delivered to
the site, off-loaded, and unpacked by the Installation Contractor, in order to provide
technical guidance and certify proper delivery condition and handling methods. The
MFEM representative shall provide a letter certifying that all equipment has been
delivered, off-loaded and unpacked in accordance with the recommendations of the
manufacturer.
B. A representative of the MFEM shall visit the site when all equipment to be provided
under this Contract has been delivered, or at such other time as requested by the
Engineer, to inventory the equipment and confirm identification of all individual items.
+ + END OF SECTION + +
01610.TRRANSPORTATIONANDHANDUNGOFGOODS.DOC 01610-2 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
SECTION 0161 1
PROTECTION OF GOODS
PART 1 - GENERAL
1.01 DESCRIF'TION
A. Description of Work
1. The MFEM shall protect Goods in accordance with manufacturer's
recomniendations and the requirements of the Procurement Manual.
2. The MFEM shall make all arrangements and provisions necessary for the
protection of Goods during transit to the Point of Delivery.
3. Manufacturer's containers shall not be opened until the time of installation, unless
recommended by the manufacturer or otherwise specified.
B. Coordination: The MFEM shall coordinate with the District and Installation Contractor
for Goods that require special protection, storage or handling
1.02 QUALITY CONTROL / QUALITY ASSURANCE (QNQC) -NOT USED
1.03 SUBMITTALS
A. The MFEM shall provide the Installation Contractor and District with a list of pumps,
motors, drives, electrical equipment, instrumentation equipment (controls, devices,
panels, etc.), and other equipment having anti-fiction or sleeve bearings for storage in
weather tight storage facilities, such as warehouses.
B. At least thirty (30) days prior to delivery of the Goods, the MFEM shall provide
Installation Contractor with a list of all panels, microprocessor-based equipment, and
all other Goods and devices subject to damage or useful life decrease due to
1. Temperatures below 40 degrees F or above 120 degrees F.
2. Relative humidity above ninety (90) percent.
3. Exposure to rain.
4. Exposure to direct sunlight.
C. Fully Protected Storage
01611.PROTMTIONOFGOODS.WC 01611-1 APRIL 27,2001
City of Carlsbad
MF EQUIPMENT PROCUREMENT
Carlsbad Recycling Facility
1. The MFEM shall provide the Installation Contractor and District with a list of
Goods which could be damaged by low or high temperature and require
temperature-controlled storage space.
2. The MFEM shall provide the Installation Contractor and District a list of Goods
required to be protected from contamination by dust, dirt, and moisture.
3. The MFEM shall provide the Installation Contractor and District with a list of
Goods required to be maintained at specific humidity levels as recommended by
manufacturer.
D. MFEM Storage and Handling Instructions
1. The MFEM shall provide specific storage and handling instruction for each loose-
MFEM.
shipped item of equipment, instrumentation, materials and crates provided by the
1.04 PRODUCT STORAGE AND HANDLING
A.
B.
C.
D.
E.
Goods shall be boxed, crated, or otherwise completely enclosed and protected during
shipment, handling, and storage. Each container shall be clearly marked with the
MFEM'S name, project name, and location. Goods shall be protected from exposure to
the elements and shall be kept thoroughly dry at all times. Painted surfaces shall be
protected against impact, abrasion, discoloration, and other damage. Painted equipment
surfaces that are damaged prior to acceptance shall be repainted in entirety to the
satisfaction of the Engineer.
Electrical equipment, controls, an'd instrumentation shall be protected against moisture
or water damage. Space heaters provided in the equipment will be connected by the
Installation Contractor as noted by the MFEM and operated at all times until equipment
is placed in operation.
Membrane Filtration Units shall be delivered to the site as assembled units to the fullest
degree possible.
Notice of Enclosed Instructions
1. All delivered packages containing Goods shall have notices clearly visible on the
exterior of the package indicating that maintenance instructions are enclosed.
Panel and Instrumentation Storage
1. All packages containing panels, electronic devices, and other microprocessor-
based equipment shall contain a desiccant, volatile corrosion inhibitor (VCI)
blocks, a moisture indicator, and maximum-minimum indicating thermometer.
The MFEM shall provide a spare set of such protection equipment including a
OI611.PROTECTIONOFGOODS.DOC 01611-2 APRIL 27,2001
City of Carlsbad Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
desiccant, a moisture indicator, and VCI blocks for each package containing
panels, electronic devices, and other microprocessor-based equipment for
replacement by the Installation Contractor during the storage period.
2. The panels and instrumentation equipment shall not be shipped to the Point of
Delivery until field conditions are ready for installation, including all slabs, walls,
roofs, and environmental controls.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION (NOT USED)
+ + END OF SECTION + +
01611.PROTECTIONOFGOODS.DOC 01611-3 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
SECTION 01620
INSTALLATION OF MEMBRANE EQUIPMENT
PART 1 - GENERAL
1.01 DESCRIPTION
A. The MFEM shall coordinate all services and activities required by this Section with the
Installation Contractor and the Engineer.
1.02 QUALITY CONTROL / QUALITY ASSURANCE (QNQC) -NOT USED
1.03 SUBMITTALS
A. The h4FEM shall provide to the Installation Contractor a listing of Goods in accordance
with Section 01610, Transportation of Goods.
B. In accordance with Section 01611, the MFEM shall provide to the Installation
Contractor a listing of Goods that require protection.
C. The MFEM shall provide to the Installation Contractor five copies of the approved shop
drawings to be used during the Installation of the Goods.
D. The MFEM shall prepare detailed installation instructions for the Installation of the
Goods by the Installation Contractor. Written instructions shall be provided to the
Installation Contractor at least 14 days prior to the scheduled delivery of equipment.
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION
3.01 INSTALLATION
A. The MFEM shall instruct the Installation Contractor in the proper installation
procedures for the membrane filtration equipment including all associated ancillary
components. The training shall be conducted on-site by an authorized, experienced,
employee of the MFEM.
B. An employee of the MFEM shall be present on site to witness and supervise the proper
placement and positioning of not less than one membrane unit and all significant
ancillary equipment, including but not limited to tanks, pumps, compressors, blowers,
and VFD’s. The representative of the MFEM shall also be present to supervise the
assembly installation of the associated anchor bolts.
01620.MSTALLATIONOFMEMBRANEEQUIPMEN7.WC 01620-1 APRIL 27,2001
City of Carlsbad
Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
C. The MFEM shall supervise the installation the membrane modules by the Installation
Contractor. The MFEM shall be responsible for the cost of removal and proper
disposal of any hazardous storage solutions (e.g. - glycerin, ethanol, formaldehyde,
etc.) that are contained in the membrane modules prior to start-up for preservation,
disinfection, or any other purpose.
D. The Installation Contractor shall be responsible for making any adjustments and / or
modifications to the installation process that may become necessary to ensure that all
equipment is properly installed.
E. After the installation is complete, the MFEM, Installation Contractor, and Engineer
shall jointly inspect the System and list any equipment that has not been properly
installed, detailing the outstanding installation issues on a “punch list” and noting the
party who shall be responsible for each correction.
+ + END OF SECTION + +
01620,MSTALLATION OFMEMBRANE EQUIPMENT.DX 01620-2 APRIL 27,2001
City of Carlsbad Carlsbad Recycling Facility
MF EQUIPMENT PROCUREMENT
SECTION 01660
COMMISSIONING OF MEMBRANE EQUIPMENT
PART 1 - GENERAL
1.01 DESCRIPTION
A. The MFEM shall coordinate all services and activities required by this Section with the
Installation Contractor, the Engineer and the District.
B. In addition to testing required by this Section, the MFEM shall perform all other tests
required by the Specifications.
1.02 QUALITY CONTROL / QUALITY ASSURANCE (QNQC) -NOT USED
1.03 SUBMITTALS
A. The MFEM shall prepare a “Detailed Plan of Commissioning Activities” that will be
used as a guideline for commissioning of the Goods provided by the MFEM. The
Detailed Plan of Commissioning Activities shall be used to coordinate the activities of
the MFEM’s personnel. The “Detailed Plan of Commissioning Activities” will identify
the commissioning requirements for all tagged components that have been supplied by
the MFEM. The guidelines shall include the following minimum check items:
1. Pump(s), Metering Pumps, Blowers, Compressors and Other Rotating Equipment
a. Filled with Oil
b. Rotation is Proper
c. Aligned Properly (Mechanical Seal has been set)
d. Receives and responds to Process Control Cornmid Signals (Discrete
andor Analog)
2. Instruments (Flow Pressure Level, Temperature and Analytical)
a. Electrical supply is Connected
b. Software is Configured
c. Responds to Position and Sends Discrete and Analog Signals
d. Control Alarm Set Point has been established.
OI~.COMMISSIONMGOFMfMBRANEfQUIPMENTDOC 01660-1 APRIL 27,2001
City of Carlsbad
MF EQUIPMENT PROCUREMENT
Carlsbad Recycling Facility
e. Instrument is calibrated
3. Switches (Flow, Pressure, Level and Temperature)
a. Electrical Supply is Connected
b. Sends Signal Upon Transition of State
c. Are Calibrated
4. Automated Modulating Valves
a. Air and/or Electrical Supply is Connected
b. Responds to Position and Sends Feedback Signals
c. Control Alarm Set Point has been established.
5. Manual and Automatic Valves
a. Air and/or Electrical Supply is Connected
b. Responds to and sends Feedback (Limit Switch) Signals
B. The “Detailed Plan of Commissioning Activities” that will be used as a guideline for
placing the system into operation The “Detailed Plan of Commissioning Activities”
shall be coordinated with the activities of the Installation Contractor, the Engineer and
the District. The guidelines shall include the following minimum check items:
1. Field Verification of Installed Equipment including
a. Pumps, Compressors, Blowers, Tankage
b. Piping Systems and Temporary Connections
c. Electrical Control and Operator Interface Systems
2. Commissioning of Equipment
a. Feed Pumps, Filtrate Pumps (vacuum system), Vacuum Pumps, Metering
Pumps, Compressors, Blowers
b. Switches, Transmitters, Analyzers
c. Modulating Manual and Automated Valves
3. Start-up Activities
016MI.COMMISSIONMG OFMEMBRANE EQUWMENTDoC 01 660-2 APRIL 27,2001
City of Carlsbad
IviF EQUPMENT PROCUREMENT
Carlsbad Recycling Facility
a. Feed, Filtered Water and Backwash Flow Pressure and Level Control
Sequences.
b. Membrane Treatment Unit Operations including filtration, backwashing
clean in place and membrane integrity testing.
c. Normal and Emergency Start Up and Shut Down Sequences.
d. Process Interlocks.
C. After the equipment installation is verified by the Engineer to be complete, the MFEM
shall submit to the Engineer a “notice of substantial completion” that the equipment is
properly installed and operating as intended
PART 2 - PRODUCTS (NOT USED)
PART 3 - EXECUTION
3.01 COMMISSIONING
A. No system or subsystem shall be started-up for continuous operation unless all Goods,
including instrumentation and monitoring systems, of that system or subsystem have
been tested and proven to be operable as intended by the Procurement Documents.
B. The MFEM shall place the Goods into operation and perform tests to determine if
equipment is operating properly. The purpose of these tests is to verify that both the
System and each Unit are:
1. Properly installed.
2. Operational.
3. Capable of completing all operating cycles free of problems.
4. Free from pump or valve cavitation, overheating, overloading, vibration, or other
operating problems.
C. The h4FEM shall coordinate all activities with the Installation Contractor, District and
Engineer. The types of activities to be performed by the MFEM will be detailed in the
“Detailed Plan of Commissioning Activities” include but not necessarily limited to the
following items:
1. Initial Start Up Activities
a. Verify Unit and Piping Installation
Ol66C.COMMISSIONlNG 0FMEMBFANEEQUU”ENT.DOC 01660-3 APRIL 27,2001