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HomeMy WebLinkAboutSan Diego Gas & Electric Company; 2005-08-04;AERIAL TO UNDERGROUND CONVERSION AGREEMENT (APPLICANT TO CONSTRUCT USS) (RULE 32.A.2) BETWEEN CARLSBAD MUNICIPAL WATER DISTRICT 5950 El Camino Real CARLSBAD, CA 92008 and PACIFIC BELL TELEPHONE COMPANY DBA SBC CALIFORNIA RE BLACK RAIL ROAD PROJECT NO 3904 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement TABLE OF CONTENTS I. DEF II. REC III. SPEi A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. IV. GE1N 1NITIONS TTALS CIFIC PROVISIONS Tariff Construction Term Title Tax Liability Payment Cancellation, Modification or Deferment Indemnity, Limitation of Liability Insurance Warranty Liens Licenses and Easements Performance Damage to Facilities Schedule of Work Force Majeure Compliance With Laws [ERAL PROVISIONS 1 1 1 2 2 3 3 3 4 4 4 5 6 6 6 7 7 7 7 7 8 A. Assignment 8 B. Binding Effect 8 C. Termination 8 D. Attorneys' Fees 8 E. Entire Agreement 8 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement 33 F. Independent Contractor 9 G. Jurisdiction 9 H. Notices 9 I. Waiver and Amendment 9 Exhibit A Executive Orders and Associated Regulations 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Carlsbad Municipal Water District THIS AGREEMENT ("Agreement") is between (Si^S?€Sl*SB*l, a California corporation ("Applicant"), and PACIFIC BELL TELEPHONE COMPANY, a California corporation doing business as SBC CALIFORNIA ("SBC") (collectively the "Parties"). I. n. DEFINITIONS. As used in this Agreement, the following terms apply: A. The term 'Tariff" refers to Schedule Cal. P.U.C. No. A2, Rule 32.A.2. B. The terms "Underground Supporting Structure" and "USS" include, but are not limited to, conduit, manholes, service boxes, and related equipment. C. The terms "Trench" and 'Trenching" include, but are not limited to, excavating, backfilling, compacting, and, as necessary, breaking and replacing pavement, sidewalks, driveways, curbs and gutters, and restoring all other surface features disturbed by underground construction including landscaping, plus the cost of performing such work. D. The term "Hazardous Substance" refers to any substance, material or chemical that is or becomes regulated under applicable local, state, or federal law, regulation, or ordinance. E. The term "District" refers to the area in/on/along Black Rail Road where the undergrounding of existing aerial facilities is to take place. F. The term "Project" means all of the work required to underground existing aerial facilities within the District. G. The term "CPUC" refers to the California Public Utilities Commission. RECITALS. A. B. Applicant has asked SBC to replace its existing aerial communication facilities with underground communication facilities within the District. SBC is willing to underground its existing aerial communication facilities within the District, subject to the terms and conditions of this Agreement. In consideration of the above, the Parties agree as follows: III. SPECIFIC PROVISIONS. 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 1 of9 • tr A. Tariff. The Project will be conducted in accordance with the Tariff. B. Construction. 1. Upon receipt of a copy of this Agreement that has been executed by Applicant and the advance payment described in Section HLG, SBC will engineer and perform the work required to convert its existing aerial facilities to underground facilities in the area in the District shown on Applicants' plans, which are attached hereto as Exhibit A. 2. If, during the installation or construction of communications facilities, SBC employees, subcontractors, or agents encounter any Hazardous Substance(s) that may be disturbed by SBC's activities: a. SBC shall give prompt written notice of the discovery of the Hazardous Substance(s) to Applicant; b. SBC shall suspend performance under this Agreement until (1) containment and removal of the Hazardous Substance(s) has been completed and approved by the appropriate governmental agency(ies), if such approval is required, or approved by SBC if governmental agency(ies) approval is not required, or (2) Applicant reasonably demonstrates that the Hazardous Substance(s) will not be disturbed by SBC's activities; c. SBC's performance of its obligations under this Agreement is extended for the amount of time which it takes to complete containment/removal of the Hazardous Substance(s); and, d. If Applicant elects not to remove/contain the Hazardous Substance(s), SBC may terminate this Agreement without further liability by giving advance notice to Applicant no later than ten (10) days after the date the Applicant notifies SBC of its decision not to remove/contain the Hazardous Substance(s). In this case, Applicant shall reimburse SBC for SBC's share of the USS cost paid by SBC and for the costs incurred by SBC for the placement of cables and wiring on the Project and the wrecking associated with that placement up to the effective date of the termination. Upon such payment, Applicant shall become the owner of said wire and cables. 3. Applicant shall be responsible for the construction and installation of the necessary USS along the public way and utility rights of way in the District and shall prepare all documents necessary to coordinate and implement the Project plans. The documents shall include, but shall not be limited to: (a) Project Plans and Specifications, which shall be prepared 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 2 of9 in accordance with specifications and drawings furnished to Applicant by SBC; (b) documents that delineate all USS to be constructed and installed within the District; (c) a Bid Package covering the construction and installation of the USS for which Applicant is responsible; (d) separate agreements with Participants pertaining to the construction of facilities for the Project; and (e) a contract ("Contract") with an independent contractor for the construction and installation of USS for which Applicant is responsible under the Project. APPLICANT SHALL NOT DEVIATE FROM SBC'S TRENCH SPECIFICATIONS WITHOUT SBC'S PRIOR WRITTEN CONSENT. 2. Applicant shall award the Contract to a qualified bidder. The terms and conditions of the Contract shall oblige the Contractor to furnish all materials, adhere to the Project Plans and Specifications, and install the USS at the locations designated on the map attached to this Agreement as Exhibit A. Applicant shall have full supervision of and control over the independent contractor's construction and installation of the USS. However, SBC shall be given the opportunity to inspect the construction and installation of the USS and to coordinate with Applicant to ensure that the construction and installation are completed in accordance with the Project plans and specifications. Applicant shall require all property owners who are served by the aerial facilities to be replaced within the District to provide and maintain the USS on their property. C. Term. This Agreement is effective upon execution and shall continue in effect until terminated or canceled as provided by law or this Agreement. D. Title Upon inspection and acceptance in writing of the USS by SBC, title to the USS and all associated communications facilities placed by or for SBC, except the underground service connections, shall vest in SBC, provided that such is free of all liens and encumbrances. E. Tax Liability Applicant shall pay, and hold SBC harmless from and against, all penalties, interest, taxes or other charges that are levied or assessed against Applicant. F. Payment. 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 3 of9 ;i If applicable, Applicant shall pay to SBC a tax component of Sixteen Thousand Nine Hundred Twenty Nine Dollars and Seventy Six Cents/$ 16,929.76 for Federal and State Income Tax in accordance with CPUC decision 87-09-026. G. Cancellation, Modification or Deferment. If Applicant cancels, modifies or defers its request for conversion of the aerial facilities to underground facilities within the District, Applicant shall pay all charges incurred by SBC, in accordance with the Tariff. H. Indemnity; Limitation of Liability. 1. Applicant shall indemnify, defend at SBC's request and at no cost or expense to SBC, and hold harmless SBC and its officers, agents and employees, as well as its associated and affiliated companies and their respective officers, agents, and employees ("Indemnitees"), from and against any and all losses, damages, expenses, costs, penalties, fines, fees (including reasonable attorney's and consultant's fees), or liabilities (collectively "Liabilities"), incurred as a result of any injury to or death of any person(s) or damage to any property(ies) arising out of or in connection with the materials used or the work performed by Applicant under this Agreement or the condition of the Project's property, including environmental contamination, except where such Liabilities are caused by the sole negligence or willful misconduct of Indemnitees. 2. SBC shall notify Applicant within a reasonable time of any written claim or demand against SBC for which Applicant is responsible under this section. Applicant shall also (a) keep SBC fully informed as to the progress of such defense, and (b) afford SBC, at its own expense, an opportunity to participate with Applicant in the defense or settlement of such claims, demand, lawsuits or other legal proceedings. 3. These indemnities shall survive the termination or cancellation of this Agreement or any provision to the contrary herein. 4. IN NO EVENT WILL SBC BE LIABLE TO APPLICANT FOR INCIDENTAL, SPECIAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL DAMAGES, WHETHER BY TORT OR CONTRACT, INCLUDING LOST REVENUES, LOSS OF PROFITS OR OTHER COMMERCIAL OR ECONOMIC LOSS ARISING OUT OF THE PERFORMANCE OF THIS CONTRACT, INCLUDING, WITHOUT LIMITATION, NEGLIGENT PERFORMANCE OR FAILURE TO PERFORM, OR A DEFECT OR FAILURE TO PERFORM OR DEFECT OF CABLE OR WIRING, REGARDLESS OF THE FORESEEABILITY THEREOF. I. Insurance. 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 4 of 9 With respect to performance hereunder, and in addition to Applicant's obligation to indemnify, Applicant agrees to maintain, at all times during the term of this Agreement, the following minimum insurance coverages and limits and any additional insurance and/or bonds required by law: 1. Worker's Compensation insurance covering Applicant's full liability under the worker's compensation laws of California and Employers Liability insurance with minimum limits of $100,000 for Bodily Injury- each accident, $500,000 for Bodily Injury by disease-policy limits and $100,000 for Bodily Injury by disease-each employee. 2. Commercial General Liability insurance with minimum limits of: $2,000,000 general aggregate limit; $1,000,000 each occurrence sub-limit for all bodily injury or property damage incurred in any one occurrence; $1,000,000 each occurrence sub-limit for Personal Injury and Advertising; $2,000,000 Products/Completed Operations aggregate limit, with a $1,000,000 each occurrence sub-limit for Products/Completed Operations. SBC will be named as an additional insured on the Commercial General Liability policy. 3. If use of a motor vehicle is required, Automobile Liability insurance with minimum limits of $1,000,000 combined single limits per occurrence for bodily injury and property damage, which coverage shall extend to all owned, hired and non-owned vehicles. 4. SBC requires that companies affording insurance coverage have a rating of B+ or better and a Financial Size Category rating of VII or better, as rated in the A.M. Best Key Rating Guide for Property and Casualty Insurance Companies. 5. A certificate of insurance stating the types of insurance and policy limits provided the Applicant must be received prior to commencement of any work. The cancellation clause on the certificate of insurance will be amended to read as follows: "THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER PRIOR TO CANCELLATION OR A MATERIAL CHANGE TO POLICY DESCRIBED ABOVE." 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 5 of 9 6. Applicant shall also require all subcontractors performing work on the Project or who may enter upon the work site to maintain the same insurance requirements listed above. J. Warranty. 1. Applicant warrants that that for a period of two (2) years following acceptance of the USS by SBC, all work and materials to be furnished under this Agreement: a. shall conform in all respects to the requirements of this Agreement; b. are adequate for the purposes for which they are intended; c. are free from any defects in design, materials, workmanship and title including, but not limited to, defects that will cause caving or sinking of the Trench, the USS, paving, or other materials. 2. Applicant warrants that qualified personnel will perform all work promptly and with diligence, to SBC's reasonable satisfaction, and that all work and materials shall be subject to all statutory and express or implied warranties. This warranty shall survive inspection, acceptance, termination and payment. 3. Except as disclosed to and acknowledged by SBC in writing, Applicant is not aware of the presence of any Hazardous Substance at the locations on the Project where SBC will be installing cable and wiring and performing wrecking in association with such installations. K. Liens. Applicant and its agents and contractors shall keep the USS free from any statutory or common law lien arising out of any work performed, materials furnished or obligations incurred by Applicant, its agents or contractors, hi the event a lien is recorded against the USS and it is not removed from the record within ten (10) days after notice is given by SBC to Applicant to do so, SBC shall have the right to pay and discharge the lien without regard to whether the lien shall be lawful, valid or correct. Applicant shall, within thirty (30) days after receiving written notice from SBC, reimburse SBC for any such claim paid by it. L. Licenses and Easements. Prior to construction of the Project, Applicant shall, at no cost to SBC, furnish SBC with any and all licenses or grants of easements that are necessary to accommodate the Project, including the construction and maintenance of SBC's facilities. 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 6 of9 M. Performance. If Applicant should default in the performance of any work that it is obligated to perform under this Agreement within the time allowed for such work, SBC may elect, by written notice to Applicant, to perform the work at Applicant's sole risk and expense and Applicant shall pay to SBC upon demand SBC's actual costs for performing the work. N. Damage to Facilities. Applicant and its employees, agents and contractors shall exercise special precaution and care to avoid causing damage to SBC's facilities in performing work under the Project. Applicant shall assume responsibility for any and all losses, costs and expenses arising out of, caused by, or in any way connected with such damages, including consequential damages. Applicant shall immediately report in writing the occurrence of any such damage to SBC. Applicant shall, on demand, reimburse SBC for the entire expense incurred in replacing or repairing the damage. O. Schedule of Work. SBC shall not commence detailed engineering of the Project prior to receiving a copy of this Agreement that has been executed by Applicant. SBC shall have its facilities converted contingent upon mutually acceptable schedules, timely obtaining of permits, licenses and other documents, and not being delayed by those uncontrollable forces described in Section ni.Q below. P. Force Majeure. SBC shall not be held liable to Applicant for any delay in performance under this Agreement from any cause beyond its control and without its fault or negligence, such as acts of God, acts of civil or military authority, government regulations, the presence of archeological or historical artifacts or Hazardous Substances on, in, or near the Project, embargoes, epidemics, war, terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, strikes, power blackouts, volcanic action, other major environmental disturbances, unusually severe weather conditions, inability to secure products or services of other persons or transportation facilities, or acts or omissions of carriers. If any of the foregoing events occur, SBC agrees, if requested by Applicant, to accelerate its efforts hereunder if reasonably feasible in order to regain lost time, so long as Applicant agrees to reimburse SBC for the incremental actual costs of such efforts. Q. Compliance With Laws. Applicant shall comply with all applicable federal, state, county, and local statutes, laws, ordinances, regulations, and codes. Applicant further agrees to comply with all applicable Executive Orders and regulations, including, but not 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 7 of9 limited to, those that are attached to this Agreement as Exhibit C. As used in Exhibit C, "Contractor" means Applicant. IV. GENERAL PROVISIONS. A. Assignment. Applicant shall not wholly or partially assign this Agreement without the prior written consent of SBC. B. Binding Effect. This Agreement shall be for the benefit of and is binding upon the respective successors and assigns of the parties hereto. C. Termination. This Agreement automatically terminates upon completion and acceptance of the USS by SBC. In the event of any material default or breach of this Agreement by Applicant, in addition to all other rights and remedies which SBC may have at law or in equity, SBC shall have the immediate right to terminate this Agreement by giving ten (10) days prior written notice of termination. The notice shall specify the cause of termination and shall give Applicant a reasonable opportunity to cure and correct any such cause, hi the event this Agreement is terminated or suspended as provided herein, SBC shall not be liable to Applicant or any other person or entity for any losses, damages or claims that arise as a result of termination. Applicant shall pay to SBC all costs and expenses incurred by SBC prior to termination of this Agreement. Any termination of this Agreement in whole or in part shall not release Applicant from any liability or obligation under this Agreement, whether of indemnity or otherwise, that accrued or that may be accruing or that arises out of any claim that may have accrued or may be accruing at the time of termination. D. Attorneys' Fees. If any action is brought to adjudicate the rights granted in this Agreement or to enforce any of the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees in an amount to be determined by a court or a tribunal of competent jurisdiction. E. Entire Agreement. This Agreement and the Exhibits attached hereto that are incorporated herein by this reference constitute the entire Agreement between the parties with respect to the subject matter hereof. All prior agreements, representations, statements, negotiations and understandings are superseded. 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 8 of9 F. Independent Contractor. Applicant and its agents, employees and contractors shall perform all work under this Agreement as independent contractors and not as affiliates, partners, joint ventures, agents, employees, servants or assigns of SBC. G. Jurisdiction. This Agreement shall be governed by the laws of the State of California and is subject to the applicable rules, regulations and tariffs on file with the CPUC. H. Notices. All notices and other communications hereunder shall be in writing addressed as follows and shall be deemed given when: delivered in person, delivered to an agent, such as an overnight or similar delivery service, or three days after being deposited in the United States mail, postage prepaid: APPLICANT 1635 Faraday Avenue Carlsbad, CA 92008 SBC California 4220 Arizona Street, Room 200 San Diego, CA 92104 I. Waiver and Amendment. The provisions of this Agreement shall not be waived, altered, or amended by any representations or promises of any party unless consented to in writing by all parties hereto. The duly authorized representatives of Applicant and SBC have executed this Agreement by affixing their signatures on the dates indicated below. CITY OF CARLSBAD Title: PrintedName:(^L/3aOg Date Signed: f" */- PACIFIC BELL TELEPHONE COMPANY By: Title: Printed Name: AAAftY G. Date Signed: 1-J4-Q5 324596 (Rev. 3/24/04) Aerial to Underground Conversion Construction Agreement Page 9 of9 Exhibit A Executive Orders and Associated Regulations SBC California and SBC Nevada, as common carriers of telecommunications services, engage in work as contractors for various departments and agencies of the United States Government Also, certain facilities may be constructed pursuant to federally assisted construction programs. Because of the foregoing, work under this contract may be subject to the provisions of certain Executive Orders, federal laws and associated regulations. To the extent that such Executive Orders, federal laws and associated regulations apply to the work under this contract, and only to that extent, Contractor agrees to comply with the provisions of aU such Executive Orders, federal laws and associated regulations as no in force or as may be amended in the future, including, but not limited to the following: 1. EQUAL EMPLOYMENT OPPORTUNITY PROVISIONS. In accordance with Executive Order 11246, dated September24, 1965, and 41 C.F.R. § 60-1.4, the parties incorporate herein by this reference the regulations and contract clauses required by those provisions to be made a part of nonexempt contracts and subcontracts. 2. CERTIFICATION OF NONSEGREGATED FACILITIES. In accordance with Executive Order 11246, dated September 24, 1965, and 41 C.F.R. § 60-1.8, Contractor certifies that it does not and will not maintain or provide for its employees any facilities segregated on the basis of race, color, religion, sex, or national origin at any of its establishments, and that it does not and will not permit its employees to perform their services at any location under its control, where such segregated facilities are maintained. The term "facilities" as used herein means waiting rooms, work areas, restaurants and other eating areas, time clocks, restrooms, wash rooms, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees, provided that separate or single-user toilet and necessary changing facilities shall be provided to assure privacy between the sexes. Contractor will obtain similar certifications from proposed subcontractors prior to the award of any nonexempt subcontract. 3. CERTIFICATION OF AFFIRMATIVE ACTION PROGRAM. Contractor certified that it has developed and is maintaining an Affirmative Action Plan as required by 41 C.F.R. § 60-1.40. 4. CERTIFICATION OF FILING. Contractor certifies that it will file annually, on or before the 31" of March, complete and accurate reports on Standard Form 100 (EEO-1) or such forms as may be promulgated in its place as required by 41 C.F.R. § 60-1.7. 5. AFFIRMATIVE ACTION FOR DISABLED VETERANS AND VETERANS OF THE VIETNAM ERA. In accordance with Executive Order 11701, dated January 24, 1973, and 41 C.F.R. 60-250.20, the parties incorporate herein by this reference the regulations and contract clauses required by those provisions to be made a part of Government contracts and subcontracts. 6. AFFIRMATIVE ACTION FOR HANDICAPPED PERSONS. In accordance with Executive Order 11758, dated January 15,1974, and 41 C.F.R. § 60-741.20, the parties incorporate herein by this reference the regulations and contract clauses required by those provisions to be made a part of Government contracts and subcontracts. 7. UTILIZATION OF SMALL BUSINESS CONCERNS AND SMALL DISADVANTAGED BUSINESS CONCERNS. 48 C.F.R., Ch. 1,§ 19.740(4) and 19.708(a) require that the following clause is included: Utilization of Small Business concerns and Small Disadvantaged Business Concerns (June, 1985) (a) It is the policy of the United States that small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in performing contracts let by and Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals. (b) The Contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with efficient contract performance. The Contractor further agrees to cooperate in any studies or surveys as may be conducted by the United States Small Business Administration or the awarding agency of the United States as may be necessary to determine the extent of the Contractor's compliance with this clause. (c) As used in this contract, the term "small business concern" shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term "small business concern owned and controlled by socially and economically disadvantaged individuals" shall mean a small business concern: (1) Which is at least 51 percent owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned businesses, at least 51 percent of the stock of which is owned by one or more socially and economically disadvantaged individuals; and (2) Whose management and daily business operations are controlled by one or more of such individuals. The Contractor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Asian-Indian Americans and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small Business Act. (d) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as either a small business concern or a small business concert owned and controlled by socially and economically disadvantaged individuals. Small Business and Small Disadvantaged Business Subcontracting Plan. Contractor, unless it is a small business concern, as defined in section 3 of the Small Business Act agrees to adopt and comply with a small business and small disadvantaged business subcontractin; plan, which shall be included in and made a part of this contract. The parties incorporate herein b] this reference the regulations and contract clauses required by 48 C.F.R., Ch. 1, §§ 19.704(4) and 19.708(b) to be made a part of Government contracts and subcontracts. 8. WOMEN-OWNED SMALL BUSINESSES. As prescribed in 48 C.F.R., Ch. 1, § 19.902, the following clause is included in solicitations and contracts when the contract amount is expected to be over the small purchase threshold, unless (a) the contract is to be performed entirely outside the United States, its possessions, Puerto Rico, am the Trust Territory of the Pacific Islands, or (b) a personal services contract is contemplate: (a) "Woman-owned small businesses," as used in this clause, means businesses that are at least 51 percent owned by women who are United States citizens and who also control and operate the business. "Control," as used in this clause, means exercising the power to make policy decisions. "Operate," as used in this clause, means being actively involved in the day-to-day management of the business. (b) Policy. It is the policy of the Government to award contracts to concerns that agree to perform substantially in labor surplus areas (LSA's) when this can be done consistent with the efficient performance of the contract and at prices no higher than are obtainable elsewhere. The Contractor agrees to use its best efforts to place subcontracts in accordance with this policy. (c) Order of Preference. In complying with paragraph (b) above and with paragraph (c) of the clause of this contract entitled Utilization of Small Business Concerns and Small Disadvantaged Business Concerns, the Contractor shall observe the following order of preference in awarding subcontracts: (1) small business concerns that are LSA concerns, (2) other small business concerns, and (3) other LSA concerns. (d) Definitions. "Labor surplus area," as used in this clause, means a geographical area identified by the Department of Labor in accordance with 20 C.F.R. § 654, Subpart A, as an area of concentrated unemployment or underemployment or an area of labor surplus. "Labor surplus area concern," as used in this clause, means a concern that together with its first-tier subcontractors will perform substantially in labor surplus areas. Performance is substantially in labor surplus area if the costs incurred under the contract on account of manufacturing, production, or performance of appropriate services in labor surplus areas exceed 50 percent of the contract price. Labor Surplus Area Subcontract Program. (a) See the Utilization of Labor Surplus Area Concerns clause of this contract for applicable definitions. (b) The Contractor agrees to establish and conduct a program to encourage labor surplus area (LSA) concerns to compete for subcontracts within their capabilities at prices no higher than obtainable elsewhere. The contractor shall — (1) Designate a liaison officer who will (i) maintain liaison with authorized representatives of the Government on LSA matters, (ii) supervise compliance with the Utilization of Labor Surplus Area Concerns clause, and (iii) administer the Contractor's labor surplus area subcontracting program; (2) Provide adequate and timely consideration of the potentialities of LSA concerns in all make-or-buy decisions; (3) Ensure that LSA concerns have an equitable opportunity to compete for subcontracts, particularly by arranging solicitations, time for the preparation of offers, quantities, specifications, and delivery schedules so as to facilitate the participation of LSA concerns; (4) include the Utilization of Labor Surplus Area Concerns clause in subcontracts that offer substantial LSA subcontracting opportunities; and (5) Maintain records showing (i) the procedures adopted and (ii) the Contractor's performance, to comply with this clause. The records will be kept available for review by the Government until the expiration of 1 year after the award of this contract, or for such longer perioc as may be required by any other clause of this contract or by applicable law or regulations. (c) The Contractor further agrees to insert in any related subcontract that may exceed $500,000 and that contains the Utilization of Labor Surplus Area Concerns clause, terms that conform substantially to the language of this clause, including this paragraph (c), and to notify the Contracting Officer of the names of subcontractors. 324596 Order# 5395637 4220 Arizona St. San Diego, CA 92104 APPLICATION and LETTER OF AGENCY FOR CUSTOM WORK 06/24/05 Order Number: 5395637 Customer Billing Telephone Number: (760)602-2736 BILL TO: City of Carlsbad, Attn: Chris Muehlbacher, 1635 Faraday Avenue, Carlsbad, CA 92008. DESCRIPTION OF CUSTOM WORK: Convert telephone facilities from aerial to underground on Black Rail Road for City Project No 3904 CHARGE FOR CUSTOM WORK CONTRACT PRICE: $86,583.14 Applicant requests that SBC act as its agent in performing the above-described custom work on Applicant's behalf. Applicant agrees to pay the charge(s) indicated above for such work. The charge(s) will be computed in accordance with SBC's ordinary accounting practices under the Uniform System of Accounts for Class A telephone companies and will include allocated costs for labor, engineering, materials, transportation, motor vehicles, tool and supply expenses and sundry billings from sub-contractors and suppliers for work and materials related to the job. Applicant agrees to make an advance payment of $86,583.14 prior to commencement of the work. Applicant agrees to pay the contract price as stated above. If the applicant cancels the work prior to completion, Applicant agrees to pay SBC for the costs it has incurred in starting performance under the contract and before being notified to cease only. The price is guaranteed for 60 days from 06/24/05. If the charges are not accepted within 60 days the order will be cancelled and a new order will need to be placed. The second estimate may be higher than the price that was originally quoted. ACCEPTED FOR SBC: or Title: ManagePEngineer Relationship to Company or Individual SBC Company: Claude A. Lewis, President Carlsbad Municipal Water District Date:Date: 06/24/05