HomeMy WebLinkAbout2012-09-25; Municipal Water District; 755; Approve Agreement Itron Co Purchase AMR EquipmentCARLSBAD MUNICIPAL WATER DISTRICT - AGENDAfili.L 10
AB# 755 APPROVE AGREEMENT WITH ITRON
CO. FOR PURCHASES OF AMR
EQUIPMENT
DEPT. DIRECTOR^ ^y^-^
MTG. 9/25/12
APPROVE AGREEMENT WITH ITRON
CO. FOR PURCHASES OF AMR
EQUIPMENT GENCXXJNSEL f?^
DEPT. UTIL
APPROVE AGREEMENT WITH ITRON
CO. FOR PURCHASES OF AMR
EQUIPMENT EXEC DIR.
RECOMMENDED ACTION:
Adopt Resolution No. 1446 _ approving an agreement with Itron Co. (Itron) for
purchases of Automatic Meter Reading (AMR) equipment.
ITEM EXPLANATION:
In FY 2009/10, to ensure accurate water accounting and revenue collection, the Carlsbad
Municipal Water District (CMWD) implemented a water meter replacement program and
installation of automatic meter reading (AMR) components (endpoints). Currently, 8,500 of the
District's approximately 28,000 water meters have been replaced and 5,842 AMR endpoints
have been purchased and installed. After completion of the first phase of the replacement
program, CMWD staff performed a thorough evaluation and determined that the cost of water
meters and AMR components would be reduced if purchased direct from the manufacturer.
Based on staff's recommendation, on March 13, 2011, the CMWD Board terminated the original
water meter replacement agreement with Atlas-Allied, a third party meter installation company.
Subsequently, on June 5, 2011, the Board entered into an agreement with Badger Meter Inc.
for purchase of domestic cold water meters. Staff is now requesting approval to enter into an
agreement to purchase AMR components direct from Itron, the manufacturer.
CMWD has been working with Itron on a fixed network meter reading system since 2008. After
the initial system was partially installed, staff realized that resultant of the city's topography,
100% meter read rates were not possible. In order to achieve 100% meter reads using a fixed
network reading system, CMWD would need to install additional infrastructure throughout the
city which would result in additional project costs and annual fees. In addition, the reading
technology would be obsolete upon completion of the 15-year program. Working cooperatively
with Itron, staff determined that implementing a next generation AMR mobile (drive-by) reading
system was a preferable alternative solution. This newer technology would give the District
greater flexibility for reading meters and reduce program costs. To ensure success, a pilot
program was performed and 100% meter read rates were attained.
DEPARTMENT CONTACT: Mario Remillard, 760-438-2722 mario.remillard@carlsbadca.qov
FOR SECRETARY'S USE ONLY.
BOARD ACTION: APPROVED X CONTINUED TO DATE SPECIFIC •
DENIED CONTINUED TO DATE UNKNOWN •
WITHDRAWN • RETURNED TO STAFF •
AMENDED • BOARD RECEIVED THE •
REPORT/PRESENTATION
OTHER - SEE MINUTES •
Page Two
Itron has offered to replace the 5,842 AMR endpoints previously deployed, including installation
and reading collection equipment, and provide project management services at no charge. In
return, the District would be required to purchase a minimum of 8,000 additional endpoints. Due
to the reduced cost of purchasing the water meters and AMR endpoint equipment directly from
the manufacturers, the District would be able to accelerate the remaining implementation of the
replacement program and provide a seamless transition to the improved technology, without
increasing the overall cost of the program.
In the best interest of CMWD and the City of Carlsbad, staff is recommending foregoing the
solicitation process and entering into a direct-purchase agreement with Itron, the manufacturer
of AMR components and equipment. Section 3.28.110 - Exemptions, item number 14 of the
City Municipal Code states; "in situations where solicitations of bids or proposal for, goods,
services and/or professional services would be, in the discretion of the awarding authority,
impractical, unavailing, impossible, or not in the best interest of the city supports this
recommendation.
FISCAL IMPACT:
In FY 10/11, upon completion of the first phase of the meter replacement AMR program, an
audit was conducted. Within the original program, water meters and AMR equipment were
purchased and installed by third-party vendors. After the thorough evaluation, staff determined
that program costs would be reduced substantially by purchasing equipment direct from the
manufacturers by eliminating vendor mark-up. In FY 11/12, the water meter purchase and
installation contract with Atlas-Allied was terminated and a purchase contract with Badger
Meter, Inc. was executed.
Concurrently, discussions with the AMR vendor, Itron, commenced. In an effort to retain the
District as a customer and protect their reputation as a leader in the industry, Itron has agreed to
replace all AMR equipment that has been installed with a newer drive-by technology. Itron will
also provide reading equipment at no charge and will sell future AMR equipment to the District
at manufacturer prices.
By purchasing meters and AMR equipment direct from the manufacturers, the meter
replacement/AMR program that had been scheduled to be completed in FY 23/24 can be
completed by FY 14/15, nine years ahead of schedule. Based on meter purchase contracts
already executed and the AMR endpoint prices contained in the proposed agreement, staff
estimates that the AMR program hardware costs can be reduced by nearly $9 million. Staff
calculates that the revised program can be completed with the funding already programmed
through FY 14/15.
Additionally, salary savings of approximately $700,000 will result as the accelerated program
will reduce staffing requirements several years earlier than forecast in the original 15-yr
program. A summary of the fiscal impact follows:
Page Three
New Meter Replacement/AMR Program Estimated Savings
15-yr Program Equipment Cost Estimate: $15,258,000
15-yr Program Staffing Cost Estimate: $3,062,400
Total 15-yr Program Estimate: $18,320,400
New Program Equipment Cost Estimate: $6,323,300
New Program Staffing Cost Estimate: $2,317,500
Total New Program Cost Estimate: $8,640,800
Total New Program Savings Estimate: $9,679,600
The cost to purchase AMR endpoints during FY 2012-2013 is $816,456. A total of 11,657
endpoints would be purchased, fulfilling the requirement to purchase a minimum of 8,000
endpoints considered as part of the negotiation. Sufficient funds have been appropriated for this
purchase. The agreement with Itron will extend for three years with an option for a fourth;
however, the District would be under no obligation to purchase additional endpoints if funding in
subsequent years is not available.
Item Quantity Cost Total
Endpoints replaced by Itron
5,842 No Charge $0
Endpoints Required per
agreement 8,000 $70.04 $560,320
Endpoints to complete
balance of meters
installed/purchased
3,657 $70.04 $256,136
Total 17,499 $816,456
ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code Section 21065, this action does not constitute a "project"
within the meaning of CEQA in that it has no potential to cause either a direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment, and therefore does not require environmental review.
EXHIBITS:
1. Resolution No. 1446
2.
of AMR equipment.
Itron Sales Agreement
approving an agreement with Itron for the purchase
EXHIBIT 1
1 RESOLUTION NO. 1446
2 A RESOLUTION OF THE CARLSBAD MUNICIPAL WATER
DISTRICT (CMWD) BOARD OF DIRECTORS OF CARLSBAD,
3 CALIFORNIA, TO APPROVE AGREEMENT WITH ITRON CO.
FOR THE PURCHASE OF AMR EQUIPMENT
4 •'
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6 WHEREAS, in FY 2009/10, to ensure accurate water accounting and revenue
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collection, the CMWD implemented a water meter replacement program and installation
of automatic meter reading (AMR) components (endpoints); and
WHEREAS, currently, 8,500 of the District's 28,000 water meters have been
replaced and 5,842 AMR endpoints have been purchased and installed; and
WHEREAS, staff performed a thorough evaluation and determined that the cost
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^2 of water meters and AMR components would be reduced if purchased directly from the
14 manufacturer; and
15 WHEREAS, working cooperatively with Itron, staff determined that implementing
16 a next generation AMR mobile (drive-by) reading system was a good alternative that
"•^ would give the District greater flexibility for reading meters remotely and reduce
program costs; and
WHEREAS, to ensure success, a pilot program was performed and 100% meter
read rates were attained; and
WHEREAS, the District is able to accelerate the remaining phases of the
replacement program and provide a seamless transition to the improved technology,
24 without increasing the overall cost of the program; and
25 WHEREAS, it is recommended that the Board enter into a direct-purchase
26 agreement with Itron, the manufacturer of AMR components and equipment.
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1 WHEREAS, staff recommends foregoing the solicitation process and entering
2 into a direct-purchase agreement with Itron, the manufacturer of AMR components and
^ equipment. Section 3.28.110 - Exemptions, item number 14 of the City Municipal Code
states: "in situations where solicitations of bids or proposal for goods, services and/or
professional services would be, in the discretion of the awarding authority, impractical,
unavailing, impossible, or not in the best interest of the city."
NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Municipal Water
District Board of Directors of the City of Carlsbad, California as follows:
1. That the above recitations are true and correct.
11 2. That it is in the best interest of the Carlsbad Municipal Water District to
12 enter into an agreement with Itron for AMR components and equipment.
13 3. That the Carlsbad Municipal Water District Board of Directors approves
entering into an agreement with Itron for AMR components and equipment.
4. That the President of the Carlsbad Municipal Water District is hereby
authorized to execute the agreement with Itron once the agreement has been approved
as to form by General Counsel.
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1 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Board of
2 Directors of the Carlsbad Municipal Water District of the City of Carlsbad on the 25th
3 day of September 2012, by the following vote to wit:
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AYES: Board Members Hall, Kulchin, Blackburn, Douglas and Packard.
NOES: None.
ABSENT: None.
MATTIHALL, President
ATTEST:
16 V_-^ORRAl(slE M. WOOD, Secretary
(SEAL)
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ITRON SALES AGREEMENT
This Itron Sales Agreement (the "Agreement') is entered into as of the last date of execution on the signature
page hereto (the "Effective Date") by and between Itron, Inc. {"Itron") and Carlsbad Municipal Water District, a
Public Agency organized under the Municipal Water Act of 1911 and a Subsidiary District of the City of
Carlsbad {"Customer"). Itron and Customer may each be referred to as a "Party" and together as the
"Parties."
The Parties agree as follows:
1. Equipment Terms
a. Equipment Purchase.
Customer agrees to purchase the equipment, if any, identified on Attachment A (the "Equipment') from Itron
at the price(s) and in the quantities set forth thereon pursuant to the terms of this Agreement. Prices set forth
on Attachment A are valid for one year from the date of this Agreement and are contingent upon Customer
purchasing the quantities set forth on Attachment A.
b. Ordering
During the term of this Agreement, Customer shall order quantities of Equipment by issuing a purchase order,
change order or release (each an "Order") to Itron, in each case specifying the type and quantity of
Equipment, the shipment destination and the requested delivery date. Unless otherwise agreed in a separate
writing signed by an authorized representative of each Party, the requested delivery date in an Order must be no
earlier than ninety days following Itron's receipt of such Order.
c. Firmware
The purchase of Equipment manufactured by Itron will include a perpetual, irrevocable license to use and
execute any software embedded in the Equipment. The license to any software embedded in third party
Equipment provided by Itron shall be between Customer and the manufacturer of such third party Equipment.
d. Invoicing.
Itron will invoice Customer for the Equipment upon shipment.
e. Delivery, Title and Risk of Loss.
Unless otherwise agreed by the Parties, Itron will make arrangements with its carrier to deliver Equipment to
Customer's location at Customer's expense. Title to the Equipment and risk of loss shall pass to Customer
upon delivery to the Customer.
f. Limited Equipment Warranty
i. Warranty and Remedy.
Except to the extent otherwise provided in Attachment A, Itron warrants to Customer that the Equipment that is
manufactured by Itron will be free from defects In materials and workmanship and will conform to the
applicable published Itron specifications for a period of one year from the date of shipment. Except to the
extent otherwise provided in Attachment A, Itron's sole obligation and Customer's exclusive remedy in
connection with the breach of a warranty provided under this Section or under Attachment A shall be for Itron
to repair non-conforming Equipment or provide Customer with replacement Equipment after Customer has
returned non-conforming Equipment properly packaged and prepaid to a repair facility designated by Itron in
accordance with Itron's then-current RMA procedures. If Itron, In its sole discretion, determines that It is
unable to repair or replace such non-conforming Equipment, Itron will refund to Customer the amount paid for
such Equipment. Equipment that is repaired or replaced pursuant to this Section will be warranted for the
remainder of the original warranty period or 30 days, whichever is longer. Customer will pay the cost of
returning non-conforming Equipment to the place of repair designated by Itron and Itron will pay the cost of
delivering repaired or replacement Equipment to Customer.
ii. Exclusions.
The warranty provided herein does not cover damage due to external causes, including accident, abuse,
misuse, inadequate maintenance, problems with electrical power, acts of God; service (Including Installation or
de-installation) not performed or authorized by Itron; usage not in accordance with product instructions or in a
configuration not approved by Itron; normal wear and tear; and problems caused by use of parts and
components not supplied by Itron. The warranty provided herein shall be void if the Equipment is modified in a
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way not authorized in writing by Itron. The above warranty does not cover any third party equipment provided
by Itron. Any warranty for such equipment will be between Customer and the third party manufacturer.
2. Software Terms
a. Definitions.
"Deliver^' with respect to Software, means that Itron has either made the Software available to Customer via
electronic means or has provided the Software to a carrier on physical media for delivery to Customer.
"Documentation" means all printed or electronic materials published or otherwise that are provided to
Customer and that describe or relate to the functional, operational or performance capabilities of the Software.
"Endpoint' means (i) a physical device (e.g., a meter, encoder-transmitter-receiver or other measuring or
monitoring device) that is the source of data used in the Software application or (ii) a virtual device created in
the Software application to simulate the existence of a physical device. An example of a virtual device that is
an Endpoint would include a single electricity meter that serves 10 apartment units. If the consumption data
from that electricity meter was divided between the 10 units (e.g., on the basis of square footage) and used in
the Software application as if that single electricity meter was actually 10 electricity meters, it would count as
10 Endpoints. Further, each account, whether active or inactive, In the application that is associated with a
single physical device counts as a separate Endpoint.
"Object Code" means the binary, machine-readable version of the Software.
"Production Environment' means a single instance of the Software used in an environment other than a Test
Environment.
"Software" means software identified on Attachment A that is owned by Itron and any modifications,
corrections, improvements or enhancements thereto provided by Itron.
"Source Code" means human-readable computer programming code, associated procedural code and related
documentation.
"Specifications" means the applicable published Itron functional specifications for an item of Software.
"Test Environment' means a single instance of the Software used solely for test purposes. Such installation
can only be used to verify the correct installation, operation, and integration of the Software and/or
components.
"Third Party Software" means software that is not owned by Itron but is identified on Attachment A as being
provided by Itron.
"Use" means the ability to run, execute, display and, subject to the restrictions described below, duplicate and
distribute internally.
"Warranty Period" with respect to a particular item of Software, means the warranty term beginning on the
warranty start date, as set forth on Attachment A. If no such period is identified on Attachment A, the Warranty
Period shall be 90 days from the date of Delivery.
b. License Grant.
Subject to the terms of this Agreement and for the license fee set forth on Attachment A, Itron grants to
Customer a nonexclusive, nontransferable, perpetual Object Code license to Use the Software and
Documentation for its internal business purposes only in connection with the number of [Endpoints] set forth
in Attachment A.
c. Restrictions.
As a condition to the foregoing license grant, Customer shall not (i) violate any restriction set forth on
Attachment A, (ii) modify or create any derivative work from the Software, (IN) include the Software in any other
software, (iv) use the Software to provide processing services to third parties or on a service bureau basis, (v)
reverse assemble, decompile, reverse engineer or otherwise attempt to derive Source Code (of the underlying
ideas, algorithms, structure or organization) from Software, or (vi) use the Software to process business
information concerning customers derived through merger, asset acquisition or other entity combination.
Except as expressly permitted in this Agreement, (i) the Software may not be installed on a computer that is
not part of the Customer's computer network, (ii) Customer may not copy the Software other than to make one
machine readable copy for disaster recovery or archival purposes, and (ill) installation of the Software shall be
limited to one Production Environment and one Test Environment. Customer may only make copies of
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Documentation as reasonably necessary for the use contemplated herein. The Software and Documentation
shall be considered the confidential information of Itron and, as such, shall be subject to the confidentiality
provisions of this Agreement.
d. Invoicing.
Itron will invoice Customer for the Software and any Third Party Software upon Delivery.
e. Limited Software Warranty
i. Warranty and Remedy.
For the Warranty Period, Itron warrants to Customer that the Software will perform substantially in accordance
with the Specifications. Itron does not warrant that the Software will operate uninterrupted or error-free. Itron's
sole obligation and Customer's exclusive remedy In connection with the breach of a warranty provided under
this Section shall be for Itron to repair or replace the non-conforming Software. If Itron, in its sole discretion, is
unable to repair or replace non-conforming Software, Itron will refund to Customer the amount paid for such
Software. Software that is repaired or replaced pursuant to this Section will be warranted for the remainder of
the original warranty period or 30 days, whichever is longer. Customer's license to Software for which it has
received a refund hereunder shall terminate upon its receipt of a refund.
ii. Exclusions.
The warranty provided In this Section shall not apply to the extent that non-compliance relates to or is the
result of (i) use of the Software in combination with software, equipment or communications networks not
provided by Itron, (11) a change to the Software's operating environment not made or authorized by Itron, (iii)
Customer's failure to install any correction or enhancement provided by Itron, (iv) viruses introduced through
no fault of Itron, (v) any use of the Software not authorized by this Agreement. The warranty provided in this
Section is valid only if Customer has complied with the terms of this Agreement (including paying the
applicable Software license fees) and shall be void to the extent of any modification to the Software not
authorized by Itron.
f Third Party Software and Documentation.
Itron shall provide the Third Party Software, if any, identified on Attachment A and any related documentation.
Any Third Party Software and related documentation provided by Itron in connection with this Agreement shall
be subject to a separate license agreement between the Customer and the third party software provider and
will be subject to separate third party warranties, if any. Customer agrees that it will be bound by and will abide
by all such third party software licensing arrangements. Customer is solely responsible for acquiring any
software that is required to use the Software or Third Party Software.
g. Audit.
Customer will maintain accurate and detailed records as necessary to verify compliance with this Agreement.
Itron may audit these records to verify compliance at any time during Customer's regular business hours after
giving notice 5 business days in advance of the audit. Except as described below, Itron will bear all costs and
expenses associated with the exercise of its audit rights. Any errors in payments identified will be corrected by
Customer by appropriate adjustment. In the event of an underpayment of more than 5 percent. Customer will
reimburse Itron the amount of the underpayment, reasonable costs associated with the audit, and interest on
the overdue amount at the maximum allowable interest rate from the date the obligation accrued.
h. Obligations Upon Termination for Cause.
Upon a termination by Itron for cause, Customer's license to any Software and right to receive maintenance
and support for such Software shall Immediately terminate and Customer shall (I) delete any Software from all
of its computers, (ii) immediately deliver to Itron or destroy all copies of such Software and any related
Documentation and (iii) certify in writing to Itron within 10 days of any such termination that, to the best of
Customer's knowledge, Customer has complied with this Section.
/. Other Provisions.
Customer shall not, directly or indirectly, export or transmit the Software to any country to which such export or
transmission is prohibited by any applicable regulation or statute. The Parties agree that Software provided
under this Agreement shall be deemed to be "goods" within the meaning of Article 2 of the Uniform
Commercial Code, except when such a practice would cause an unreasonable result. The Parties agree that
the Uniform Computer Information Transaction Act (or a version thereof or substantially similar law) shall not
govern this Agreement.
3. Professional Services Terms
a. Definitions.
"Ciiange Order" means a written confirmation of a change In the Professional Services, Deliverables or cost
thereof that is executed by both Parties.
"Deliverable" means any software, reports, results, studies or other documentation identified as a
"Deliverable" to be provided by Itron in a SOW.
"Professional Services" means the services to be provided by Itron pursuant to a SOW.
"SOIV" means a written statement of work describing the activities, tasks and responsibilities of Itron and
Customer that, at the time of execution, is attached hereto as Attachment B or that, subsequent to execution,
references this Agreement and is executed by authorized representatives of the Parties.
b. Purchase of Professional Services; License.
During the term of this Agreement, Itron will make commercially reasonable efforts to provide to Customer the
Professional Services and Deliverables, if any, described in the applicable SOW within the time periods set
forth in such SOW. Changes to the Professional Services or Deliverables may only be made through a
Change Order. Itron hereby grants to Customer a non-exclusive, perpetual license to use the Deliverables
solely for Customer's internal purposes.
c. Fees and Expenses.
Customer agrees to pay for Professional Services in the manner set forth in the applicable SOW (e.g., on a
time and materials basis or on a fixed-fee basis) and at the rates set forth on Attachment A or in the applicable
SOW. Itron reserves the right to adjust rates for Professional Services performed on a time-and-materials
basis no more than once each year. Customer shall also reimburse Itron for reasonable and documented
travel, lodging and related expenses incurred in connection with the Professional Services, except as
otherwise set forth on Attachment A-1.
d. Invoicing.
Professional Services will be performed either on a time-and-materials basis or a fixed-fee basis, as set forth
on Attachment A or the applicable SOW, provided that Attachment A will supersede the SOW to the extent of
any conflict. Professional Services performed on a time and materials basis will be invoiced at the end of the
calendar month in which they are performed. Professional Services that are performed on a fixed fee basis will
be invoiced as set forth on the applicable SOW or, if not set forth on a SOW, upon completion.
e. Limited Professional Services Warranty.
Itron warrants to Customer that it shall perform the Professional Services with reasonable care and In a diligent
and competent manner. Itron's sole obligation and Customer's exclusive remedy in connection with a breach
of the foregoing warranty shall be to correct or re-perform the non-conforming Professional Services. If Itron,
in its sole discretion, is unable to correct or re-perform non-conforming Professional Services, its sole
obligation will be to refund to Customer the amount paid for such Professional Services. Customer must report
any deficiencies in the Professional Services to Itron in writing within 60 days of performance to receive the
warranty remedies described herein.
f Access to Facilities and Personnel.
Customer agrees to provide Itron with access to its facilities and personnel as reasonably required for Itron to
provide the Professional Services and Deliverables. All employees and representatives of Itron that perform
Professional Services on Customer's premises shall comply with reasonable guidelines pertaining to employee
conduct, including Customer safety procedures and policies, provided to Itron by Customer. Neither Party
shall require releases or waivers of any personal rights from representatives of the other in connection with
visits to its premises, and the Parties agree not to plead any such releases or waivers in any action or
proceeding.
g. Insurance.
Itron will obtain and maintain for the duration of the Agreement and any and all amendments, insurance
against claims for Injuries to persons or damage to property which may arise out of or in connection with
performance of the Professional Services by Itron or Itron's agents, representatives, employees. Itron will pass
through to its subcontractors the insurance requirements set forth herein. The insurance will be obtained from
an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is
required to have a current Best's Key Rating of not less than "A-:VM", OR with a surplus line Insurer on the
State of California's List of Eligible Surplus Line Insurers (LESLI) with a rating in the latest Best's Key Rating
Guide of at least "A:X".
i. Coverages and Limits.
Itron will maintain the types of coverages and minimum limits indicated below, unless Customer's Risk
Manager or Executive Manager approves a lower amount. Customer, its officers, agents and employees make
no representation that the limits of the insurance specified to be carried by Itron pursuant to this Agreement are
adequate to protect Itron. If Itron believes that any required Insurance coverage is inadequate, Itron will obtain
such additional insurance coverage, as Itron deems adequate, at Itron's sole expense.
i.a. Commercial General Liabilitv Insurance. $1,000,000 combined single-limit per occurrence
for bodily injury, personal Injury and property damage. If the submitted policies contain
aggregate limits, general aggregate limits will apply separately to the work under this Agreement
or the general aggregate will be twice the required per occurrence limit.
i.b. Automobile Liabilitv (if the use of an automobile is involved for Itron's work for
CUSTOMER). $1,000,000 combined single-limit per accident for bodily injury and property
damage.
i. e. Workers' Compensation and Employer's Liabilitv. Workers' Compensation limits as required
by the California Labor Code. Workers' Compensation will not be required if Itron has no
employees and provides, to Customer's satisfaction, a declaration stating this.
ii. Additional Provisions.
Itron will ensure that the policies of insurance required under this Agreement contain, or are endorsed to
contain, the following provisions:
ii. a. Customer will be named as an additional insured on Commercial General Liability which
shall provide primary coverage to Customer.
ii.b. Itron will obtain occurrence coverage.
iiL Providing Certificates of Insurance and Endorsements.
Prior to Customer's execution of this Agreement, Itron will furnish certificates of insurance and endorsements
to Customer.
iy^ Failure to Maintain Coverage.
If Itron fails to maintain any of these insurance coverages, then Customer will have the option to declare Itron
in breach or pay the premiums that are due on existing policies in order to maintain the required coverages.
Itron is responsible for any payments made by Customer to obtain or maintain insurance and Customer may
collect these payments from Itron or deduct the amount paid from any sums due Itron under this Agreement.
4. Payment Terms and Taxes.
For invoices not paid within 30 days of the invoice date, in addition to other remedies to which Itron may be
entitled, Itron may charge Customer a late fee of one percent per month applied against overdue amounts.
Customer shall also be responsible for collection costs associated with late payment, if any, including
reasonable attorneys' fees. No endorsement or statement on any check or payment or in any letter
accompanying a check or payment or elsewhere shall be construed as an accord or satisfaction. Unless
otherwise Indicated on Attachment A, Customer shall pay all amounts owing under this Agreement in U.S.
Dollars. The prices set forth on Attachment A do not include taxes. Customer will be responsible for and pay
all applicable sales, use, excise, value-added and other taxes associated with the provision of products or
services by Itron, excluding taxes on Itron's income generally. If Customer is a tax exempt entity, or pays
taxes directly to the state. Customer will provide Itron with a copy of its Tax Exemption Certificate or Direct Pay
Permit, as applicable, upon execution of this Agreement.
5. Changes.
Changes to the products or services ordered by Customer pursuant to this Agreement, including the purchase
of additional quantities or entirely new products or services, may be made at Itron's then-current pricing by
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purchase order or Change Order (In a form acceptable to Itron), provided that any such purchase order must
first be accepted by Itron.
6. Confidentiality.
With respect to any information supplied in connection with this Agreement and designated by either Party as
confidential, or which the recipient should reasonably believe to be confidential based on its subject matter or
the circumstances, the recipient agrees to protect the confidential information in a reasonable and appropriate
manner, and to use and reproduce the confidential information only as necessary to realize the benefits of or
perform Its obligations under this Agreement and for no other purpose. The obligations in this Section will not
apply to information that is: (i) publicly known; (ii) already known to the recipient; (iii) lawfully disclosed by a
third party; (iv) independently developed; or (v) disclosed pursuant to a legal requirement or order. The
recipient may disclose the confidential information on a need-to-know basis to its contractor's, agents and
affiliates who agree to confidentiality and non-use terms that are substantially similar to these terms. Itron
understands that Customer is a California public entity subject to the California Public Records Act and may
have the legal obligation to disclose information upon request by a third party. Customer will notify Itron before
disclosing any confidential information and give Itron the opportunity review the request. In the event Itron
requests that Customer not produce such records under the California Public Records Act, Itron agrees to
reimburse any costs incurred by Customer In defending the withholding of the records .
7. IP Ownership.
Between Itron and Customer, all patents, copyrights, mask works, trade secrets, trademarks and other
proprietary rights in or related to any product, software or deliverable provided by Itron pursuant to this
Agreement are and will remain the exclusive property of Itron. Any modification or improvement to an Itron
product or deliverable that is based on Customer's feedback shall be the exclusive property of Itron. Customer
will not take any action that jeopardizes Itron's proprietary rights nor will it acquire any right in any such
product, software or deliverable or Itron's confidential information other than rights granted in this Agreement.
8. Indemnification
a. General Indemnity.
Itron will defend Customer from any claim for (i) death of or bodily injury to a Customer employee or third party
to the extent caused by Itron's negligence or intentional torts, or (ii) physical damage to tangible personal
property owned by Customer or a third party to the extent caused by Itron's negligence or intentional torts and
will pay costs and damages awarded against Customer (or settled) in any such action that are specifically
attributable to Itron's negligence or intentional torts.
b. Infringement Indemnity.
Itron will, at its own expense, defend any claim or action brought against Customer by an unaffiliated third party
to the extent that the action is based upon a claim that any product manufactured, software licensed or service
provided by Itron hereunder directly infringes any U.S. patent (issued as of the Effective Date) or any copyright
or trademark and Itron will pay those costs and damages awarded against Customer (or settled) in any such
action that are specifically attributable to such claim. The foregoing indemnity does not apply to products not
manufactured by Itron or software licensed by third parties.
c. Conditions to Infringement Indemnity.
Itron's Infringement indemnity obligations under this Section are conditioned on Customer's agreement that if
the applicable product or service becomes, or in Itron's opinion is likely to become, the subject of such a claim.
Customer will permit Itron, at Itron's option and expense, either to procure the right for Customer to continue
using the affected product or service or to replace or modify the same so that It becomes non-infringing. Such
replacements or modifications will be functionally equivalent to the replaced product or service. If the foregoing
alternatives are not available on terms that are reasonable in Itron's judgment, Itron shall have the right to
require Customer to cease using the affected product or service in which case Itron will refund to Customer the
depreciated value of the affected product or service.
d. Exclusions.
Itron shall have no obligation under this Agreement to the extent any claim of infringement or misappropriation
results from: (i) use of a product or service, other than as permitted under this Agreement or as Intended by
Itron, if the infringement would not have occurred but for such use; (ii) use of any product or service in
combination with any other product, equipment, software or data, if the infringement would not have occurred
but for such combination; (III) any use of any release of a software or any firmware other than the most current
release made available to Customer, (iv) any claim based on Customer's use of a product after Itron has
Informed Customer of modifications or changes to the product required to avoid such claims and offered to
implement those modification or changes, if such claim would have been avoided or mitigated by the
Implementation of Itron's suggestions, (v) any modification to a product made by a person other than Itron or
an authorized representative of Itron, or (vi) compliance by Itron with specifications or instructions supplied by
Customer. Itron shall not be liable hereunder for enhanced or punitive damages that could have been avoided
or reduced by actions within the control of Customer.
e. Right to Defend.
As a condition to Itron's indemnity obligations under this Agreement, Customer will provide Itron with prompt
written notice of the claim, permit Itron to control the defense, settlement, adjustment or compromise of the
claim and provide Itron with reasonable assistance in connection with such defense. Customer may employ
counsel at its own expense to assist it with respect to any such claim.
f Indemnity Disclaimer
THIS SECTION CONSTITUTES ITRON'S SOLE AND EXCLUSIVE OBLIGATION WITH RESPECT TO THIRD
PARTY CLAIMS BROUGHT AGAINST CUSTOMER.
9. Warranty Disclaimer.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ITRON DISCLAIMS ALL EXPRESS OR
IMPLIED WARRANTIES, CONDITIONS OR REPRESENTATIONS INCLUDING, WITHOUT LIMITATION. (I)
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II)
WARRANTIES OF TITLE AND AGAINST INFRINGEMENT AND (III) WARRANTIES ARISING FROM A
COURSE OF DEALING, USAGE OR TRADE PRACTICE. TO THE EXTENT ANY IMPLIED WARRANTY
CANNOT BE EXCLUDED, SUCH WARRANTY IS LIMITED IN DURATION TO THE EXPRESS WARRANTY
PERIOD.
10. WAIVER OF CONSEQUENTIAL DAMAGES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT WILL EITHER
PARTY BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR COVER OR FOR INCIDENTAL, SPECIAL, CONSEQUENTIAL (INCLUDING
LOSS OR CORRUPTION OF DATA OR LOSS OF REVENUE, SAVINGS OR PROFITS) OR EXEMPLARY
DAMAGES, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
ITRON'S PRICING REFLECTS THIS ALLOCATION OF RISKS AND LIMITATION OF LIABILITY.
11. CAPON LIABILITY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT FOR A BREACH
BY CUSTOMER OF (I) ANY INTELLECTUAL PROPERTY RIGHT OF ITRON OR (II) ANY LICENSE
GRANTED BY ITRON HEREUNDER, THE AGGREGATE LIABILITY OF EACH PARTY AND ITS AFFILIATES
AND ITS AND THEIR OFFICERS, DIRECTORS, EMPLOYEES OR OTHER REPRESENTATIVES, ARISING
IN ANY WAY IN CONNECTION WITH THIS AGREEMENT—WHETHER UNDER CONTRACT LAW, TORT
LAW, WARRANTY OR OTHERWISE—SHALL NOT EXCEED THE TOTAL AMOUNT PAID AND PAYABLE
HEREUNDER. ITRON SHALL NOT BE LIABLE FOR ANY CLAIM MADE THE SUBJECT OF A LEGAL
PROCEEDING MORE THAN TWO (2) YEARS AFTER THE CAUSE OF ACTION ASSERTED IN SUCH
CLAIM AROSE. ITRON'S PRICING REFLECTS THIS ALLOCATION OF RISKS AND LIMITATION OF
LIABILITY.
12. Term and Termination
a. Term of Agreement.
Unless terminated earlier as provided herein, the term of this Agreement shall be from the Effective Date
through December 31st of the year in which any products or services to be provided hereunder have been
provided. The term of this Agreement shall thereafter automatically renew for successive one year periods
unless either Party provides the other with written notice of its intent not to renew at least 90 days prior to such
termination; provided, however, that Customer shall be obligated to purchase and Itron shall be obligated to
Z
provide any product or service that is the subject of an unfulfilled order accepted by Itron prior to the time of
any such termination. Notwithstanding the foregoing, the term of any license provided by Itron hereunder shall
be as set forth in the provision granting such license.
b. Termination for Cause.
Other than Customer's nonpayment which shall constitute a breach of this Agreement If full payment Is not
received within five (5) days of written notice, either Party may terminate this Agreement by providing the other
Party with written notice if the other Party (i) becomes insolvent, executes a general assignment for the benefit
of creditors or becomes subject to bankruptcy or receivership proceedings; (ii) breaches its obligations related
to the other Party's confidential information; or (iii) commits a material breach of this Agreement that remains
uncured for 30 days following delivery of written notice of such breach (including, but not necessarily limited to,
a statement of the facts relating to the breach or default, the provisions of this Agreement that are in breach or
default and the action required to cure the breach or default).
c. Survival.
Any provision of this Agreement that contemplates performance or observance subsequent to termination or
expiration of this Agreement shall survive termination or expiration and continue in full force and effect for the
period so contemplated including, but not limited to, provisions relating to warranties and warranty disclaimers,
intellectual property ownership, payment terms, confidentiality, waiver of consequential damages, and cap on
liability.
13. Miscellaneous
a. Entire Agreement.
This Agreement and any attachments hereto constitute the entire agreement between the Parties with respect
to the subject matter hereof and supersede all previous agreements pertaining to such subject matter. All prior
agreements, representations, warranties, statements, negotiations, understandings, and undertakings are
superseded hereby and Customer represents and acknowledges that it has not relied on any representation or
warranty other than those explicitly set forth in this Agreement in connection with its execution of this
Agreement. Neither Party shall be bound by terms and conditions Imprinted on or embedded in purchase
orders, order acknowledgments, statements of work not attached hereto or other communications between the
Parties subsequent to the execution of this Agreement.
b. Amendments and Waivers.
Any term of this Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or prospectively), only by a writing
signed by an authorized representative of each Party and declared to be an amendment hereto. No delay or
failure to require performance of any provision of this Agreement shall constitute a waiver of that provision. No
waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of
such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than
the actual performance specifically waived.
c. Governing Law; Jurisdiction; Venue; Jury Trial;.
This Agreement and performance hereunder will be governed by and construed in accordance with the laws of
the State of California without reference to California conflicts of law principles or the United Nations
Convention on Contracts for the Sale of Goods. THE PARTIES HEREBY UNCONDITIONALLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM ARISING IN ANY WAY IN CONNECTION WITH
THIS AGREEMENT.
d. Assignment.
Customer may not assign or transfer its interests, rights or obligations under this Agreement by written
agreement, merger, consolidation, operation of law or otherwise without the prior written consent of an
authorized executive officer of Itron. Any attempt to assign this Agreement by Customer shall be null and
void. For purposes of this Agreement, the acquisition of an equity interest in Customer of greater than 25
percent by any third party shall be considered an assignment.
e. Publicity.
Unless otherwise provided in a separate confidentiality agreement between the Parties, each Party may issue
a press release following the execution of this Agreement, subject to the other Party's written approval, which
8
3
shall not be unreasonably withheld. Each Party hereby consents to the other Party's use of its name, URL and
logo on its website and in its customer and partner lists for corporate and financial presentations.
f Force Majeure.
Neither Party will be responsible for any failure or delay in performing any obligation hereunder if such failure
or delay is due to a cause beyond the Party's reasonable control, including, but not limited to acts of God,
flood, fire, volcano, war, third-party suppliers, labor disputes or governmental acts. Notwithstanding the
foregoing, Itron shall have no obligation to deliver Equipment or provide Services to the extent that Customer is
unable to pay as a result of a force majeure event.
g. Notices.
Any notice required or permitted under this Agreement or required by law must be in writing and must be
delivered in person, by facsimile, by certified mail (return receipt requested), or by a nationally recognized
overnight service with all freight charges prepaid, to the address set forth below. Notices will be deemed to
have been given at the time of actual delivery. If in person, or upon receipt (as evidenced by facsimile
confirmation, return receipt or overnight delivery verification). Either Party may change its address for notices
by written notice to the other Party in accordance with this Section.
Itron: Attn: General Counsel Customer: Carlsbad Municipal Water
Itron, Inc. District
2111 North Molter Road
Liberty Lake, WA 99019
h. Miscellaneous.
Headings used in this Agreement are intended for convenience or reference only and will not control or affect
the meaning or construction of any provision of this Agreement. If any provision in this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will in no
way be affected or impaired thereby and such provision shall be interpreted so as to best accomplish the intent
of the Parties within the limits of applicable law. Any principle of construction or rule of law that provides that
an agreement shall be construed against the drafter of the agreement shall not apply to the terms and
conditions of this Agreement. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered will be deemed an original, and all of which together shall constitute one and
the same agreement. If available, maintenance and support for products will be provided pursuant to a
separate maintenance agreement. Itron shall perform all work to be performed in connection with this
Agreement as an Independent contractor and not as the agent or employee of Customer. All persons
furnished by Itron shall be for all purposes solely Itron's employees or agents and shall not be deemed to be
employees of Customer for any purpose whatsoever. This Agreement is entered into only for the benefit of
Customer and Itron. No other person or entity shall have the right to make any claim or assert any right
hereunder, and no other person or entity shall be deemed a beneficiary of this Agreement.
[Signature Page Follows]
Agreed to and accepted:
Itron, Inc. / Customer
Signature: Co^tvL-^Signature:
Print Name: Print Name: Matt Hall
We president-Finance
Title: twrinc^ Title: Mayor
Date: ${^(^'^ Date: September 25, 2012
Tax Exempt: Yes / No (if yes, attach copy of Tax Exemption Certificate)
APPROVED AS TO FORM:
RONALD R. BALL, CITY ATTORNEY
Ronald Kemp, Assistant City Attorney
[Signature Page to Sales Agreement]
h
Attachment A-1
Pricing Summary
Electric / Gas / Water
Information collection, analysis and application
2111 N. Molter Rd.
Liberty Lake, WA 99019
fax; 866-787-6910
www.ilron.com
ATTACHMENT A-1
Pricing Summary for
Upgrade Offer to City of Carlsbad, CA
Based upon BMR# 1552-12 Ver2May
Dated May 23,2012
Item Part Number Description Qty
City of Carlsbad
Unit Price Extended Price Price Notes
Equipment
ERW-1300-202
MC3M
OEM-0476-001
PWR-0033-001
SWK-0080-011
DCU-5310-011
DCU-5302-511
100W ERT, Encoder with Integral Connector and Antenna Connector 5,842
Mobile Collection 3 w/ 3-Year Warranty (Laptop) 2
Includes:
Toughbook CF-53 Laptop w/DVD (3-year warranty) 2
Power Adapter, DC Automotive, CF-31 2
MC Software version 3.4.1 (Laptop Independent Install)
MC3 RF Unit (3-year warranty) 2
MC3, Portable Wiring, no mounting kit 2
$65.00
$9,999.00
$379,730.00
$19,998.00
No Charge (1)
No Charge (2-4)
ERW-1300-202
ERW-1300-202
100W ERT, Encoder with Integral Connector and Antenna Connector
100W ERT, Encoder with Integral Connector and Antenna Connector
8,000
14,000
$65.00 $520,000.00
$65.00 $910,000.00
$520,000.00 (1)
$910,000.00 (1)
Professional Services
5 Project management
Travel and Expenses
232 $190.00 $44,080.00
$3,150.00
No Charge (5)
No Charge (5)
Installation Services- Retrofit up to 7,000 Meters
Equipment and Professional Services Total
7,000 No Charge (1)
$1,430,000.00
Notes and Assumptions
(1) This pricing offer is for the replacement of the current Water SaveSource/200W Installed system.
8,000 of the 22,000 ERT's must be purchased by June 30, 2013 with remainder to follow. Itron will provide 5,842 - 100W ERT's and labor to install 7,000 ERT's upon receipt of non-
cancelable Purchase Orders totaling 8,000 ERTs.
Any interface work required to process radio reads thru MVRS to billing is the responsibility of Customer or their billing vendor.
(2) Annual Maintenance for the RF unit and MC Software is available after the warranty period, starting at $2520/yr and $996/yr, respectively, based on Itron's current
pricing.
(3) The Panasonic Toughbook Laptop comes with a 5 year warranty. Panasonic does not offer Annual Maintenance after the warranty period so all Laptop hardware
support will be handled under Panasonic Time and Materials process.
(4) To pedestal mount the MC3's Laptop Customer must separately purchase a vehicle mount kit that is specific to Customer's vehicle.
Camber Johnson and Ram Mount both manufacture pedestals and other mounts for various vehicle types.
www.qamberiohnson.com
www.ram-mount.com
(5) Professional Services are based on an 4 month project duration and assumptions that may require confirmation with Customer. A detailed discussion of project requirements will
(6) Freight, taxes, duties, and tariffs are not included. Prices are in US dollars. Prices are valid until June 30, 2015.
Paget
Attachment A-2
Warranty Terms
Product Warranty Terms
Mobile Collector 3 years from shipment
100W series water endpoints
(including battery)
Full warranty consistent with the warranty terms in the
Agreement for the first 10 years from shipment.
For warranty claims in years 11 through 15, Itron's sole
obligation will be to provide Customer with a discount on
replacement product equal to 50 percent of its then-current list
price for the replacement product.
For warranty claims in years 16 through 20, Itron's sole
obligation will be to provide Customer with a discount on
replacement product equal to 25 percent of its then-current list
price for the replacement product.
The warranty on Itron water endpoints shall be void if the
endpoint is used in connection with a third party reading
system that is not approved by Itron.
For the first 10 years from the Effective Date of this Agreement
and subject to the conditions set forth below, if during any
calendar year more than 2 percent of Covered Endpoints, as
defined below, fail to satisfy the warranties set forth in Section
1.f, then in addition to the remedies set forth in that Section,
Itron shall provide Customer with a credit of $10 dollars for
each Covered Endpoint that fails to satisfy the warranties set
forth in Section 1.f. in excess of the aforementioned 2 percent
threshold. If during any calendar year more than 4 percent of
the Covered Endpoints fail to satisfy the warranties set forth in
Section 1.f., then in addition to the remedies set forth in that
Section, Itron shall at its expense, remove each Covered
Endpoint that fails to satisfy the warranties set forth in Section
1.f. in excess of the aforementioned 4 percent threshold and
install repaired or replacement Endpoints. The term "Covered
Endpoints" means Endpoints that are identified on
Attachment A-1 and are (i) covered by the warranties provided
Section 1.f. and (ii) installed within Customer's service
territory. The foregoing remedies will only be available if
Customer promptly (i) investigates all potentially defective
Endpoints identified on Customer's most recent system
performance and maintenance reports, (ii) timely returns to
Itron all known Covered Endpoints that fail to satisfy the
warranties set forth in Section 1.f. below the aforementioned 2
percent threshold in accordance with Itron's then-current
return materials authorization procedures, (iii) notifies Itron in
writing once more than 2 percent of the Covered Endpoints fail
to satisfy the warranties set forth in Section 1.f, (iv) maintains
all system performance and maintenance reports for a period
of no less than 24 months, and (v) provides Itron with access
to such reports and other Customer records as reasonably
necessary for Itron to confirm Customer's compliance with the
investigation, return and reporting requirements of this
Section.
Attachment B
Statement of Work
ITRON, INC
Officer Certificate
The undersigned, being the duly elected and qualified Assistant Corporate
Secretary of Itron, Inc., a corporation organized under the laws of the state of
Washington, USA (the "Company"), does hereby certify on behalf of the Company, the
following:
1) Craig Hiteshew is the duly elected, qualified, and acting Vice President of
Finance for the Company, who is authorized and qualified to enter into contracts,
agreements, and other documents in the name of, and on behalf of, the Company.
2) Attached are the resolutions of the Board of Directors of the Company authorizing
the Company's officers to execute and enter into contracts on behalf of the
Company, which were duly adopted on February 14, 2008, and are current and in
effect as of the date hereof
nsr WITNESS WHEREOF, the undersigned has executed this Certificate as of
the<^%y of September, 2012.
^Hill
Assistant Corporate Secretary
Acknowledgement
I, C/hidd'd^^kna^.t Notary Public in and for the State of Washington, U.S.A.,
hereby certify that I know the person appearing before me as MariLyn R. Hill, who I
know to be the Assistant Corporate Secretary of the Company and who I believe is
legally qualified to perform this act.
Subscribed to and sworn before me this^'^ay of September, 2012.
Signati
Name: C/Mc . (^fwe^tdnJ Notary Public residi^
county of Spokane.
[Seal of the Notary Public]
ngton.
Ob