AG 08-059 - QUADRANT CORPORATION
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RETURN TO:
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CITY OF FEDERAL WAY LAW DEPARTMENT
REQUEST FOR CONTRACT PREPARATION/DOCUMENT REVIEW/SIGNATURE ROUTING SLIP
ORIGINATING DEPT./DIVQJ / S\~~n\ v \~ ,<:)'--"
ORIGINATING STAFF PERSON, ci'^-~ ""'-oJ. IL...,., EXT,'Zl'Z.'<- 3. DATE REQ. By,AStJl'
TYPE OF DOCUMENT REQUESTED (CHECK ONE) \ ~
o PROFESSIONAL SERVICE AGREEMENT 0 SECURITY DOCUMENT (E.G. AGREEMENT &
o MAINTENANCE/LABOR AGREEMENT PERF/MAIN BOND; ASSIGNMENT OF FUNDS IN LIEU OF BOND)
o PUBLIC WORKS CONTRACT 0 CONTRACTOR SELECTION DOCUMENT
o SMALL PUBLIC WORKS CONTRACT
(LESS THAN $200,000)
o PURCHASE AGREEMENT)
(E.G., RFB, RFP, RFQ) Q
o CONTRACT AMENDMENT AG#: ag -~ I
o CDBG ......... ()\ 1---
(')(OTHER (2.e.,\",,^~(S4-II./,.O_J ~111lLC J
PROJECT NAME:
~
)( ALL EXHIBITS REFERENCED IN DOCUMENT
TERM: COMMENCEMENT DATE: lJrp~ ~"l? (. v \..:.-- tJ.- COMPLETION DATE: U V\\..: \ ('0....., Id+o"'"
Q"'oL..d....l~ h pI><-) c:al., 4."'~
TOTAL COMPENSATION $ ~ "ell c-ruJ... U4 k g...._ r~,t ~,). 71( ~, (INCLUDE EXPENSES AND SALES TAX, IF ANY) -
(IF CALCULATED ON HOURLY LABOR CHARGE - ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES)
REIMBURSABLE EXPENSE: 0 YES 0 NO IF YES, MAXIMUM DOLLAR AMOUNT: $
IS SALES TAX OWED 0 YES 0 NO IF YES, $ PAID BY: 0 CONTRACTOR 0 CITY
o PURCHASING: PLEASE CHARGE TO:
INITIAL/DATE APPROVED
C~TRACT REVIEW
M~OJECTMANAGER \
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CONTRACT SIGNATURE ROUTING 7 INITIAL/DATE APPROVED INITIAL/DATE APPROVED
IQ"LAWDEPARTMENT {..;).3.0'\\
IYCITYMANAGER 4- '14' D'i(
Itl""'CITYCLERK ",j ;aDlo6
ibo"'SIGN COPY BACK TO ORGINATING DEPT.
~SSIGNEDAG# OF;- CJS9
07/05
CONTRACT
FOR
SOUTH 320TH UNDERGROUNDING REIMBURSEMENT
THIS CONTRACT ("Contract") is dated effective this XJ day of ~ t , 200K
and is made by and between the City of Federal Way, a Washington municipal corporation
("City''), and The Quadrant Corporation, a Washington corporation ("Quadrant'').
A. Quadrant is in the process of developing a Small Lot Demonstration project
("Quadrant's Project'') that abuts the South 320th Street Right of Way between 32nd Avenue
South and the West property line of the South King Fire and Rescue Station #64 in Federal
Way, Washington ("Property''). Quadrant's Project is a demonstration project that takes
advantage of a new type of zoning regulation in the City of Federal Way (Small Lot Detached
Dwelling Units). Quadrant's Project would normally be required to underground the 12.5 KV
local power distribution line along the north margin of South 320th Street fronting the Property
("Quadrant Segment''). The cost of this requirement could potentially mean that Quadrant's
Project would not be able to proceed or be completed as planned.
B. The City of Federal Way has identified the undergrounding of the local power
distribution line along South 320th Street as part of the South 320th Street HOV Project (1-5 to
Peasley Canyon Road) on the City's Capital Improvement Plan, to be implemented upon
designation of funding. It is in the City's and the public interest to underground the local power
distribution line in this area. It is also in the City's interest for the Small Lot Demonstration
project to proceed in order to demonstrate the value and utility of the new zoning regulations,
which are designed to encourage more affordable housing and provide more residential options
in higher density zones to help meet the City's density requirements.
C. puget Sound Energy ("PSE'') has a Franchise to operate an electrical power
distribution system within the City of Federal Way. The City has the authority to enter into a
Schedule 74 Agreement with PSE under PSE's Electric Tariff G, through which PSE would bear
some of the cost of undergrounding its local power distribution line.
D. Quadrant desires that the City enter into a Schedule 74 Agreement for the Quadrant
Segment with assurances that Quadrant will reimburse the City for any City incurred costs
resulting or associated with that agreement or the project that results from it, in order to
reduce the costs associated with Quadrant's Project and ensure its viability. The City desires to
enter into the Schedule 74 Agreement with Quadrant's assurances of this reimbursement to
ensure that the power distribution line is undergrounded and that the Small Lot Demonstration
project succeeds.
NOW, THEREFORE, the City and Quadrant ("Parties'') agree to the following terms and
conditions:
1. CITY'S OBLIGATIONS
The City agrees within 14 days after the mutual execution of this Contract to notify PSE
that an underground distribution system is required on the Quadrant Segment under Schedule
74 of PSE's Electric Tariff G. The City further agrees to initiate at that time the process that will
expeditiously lead to entering into a Project Design Agreement and a Project Construction
Agreement under Schedule 74 of PSE's Electric Tariff G (collectively, "Schedule 74 Agreement'')
with PSE to underground the 12.5 KV local power distribution line on the Quadrant Segment.
The Schedule 74 Agreement will be substantially in the forms attached to this Contract as
Exhibit A with Attachments A and B.
2. QUADRANT'S OBLIGATIONS
2.1 Quadrant agrees to reimburse the City for all of the costs actually incurred by the
City as a result of the City entering into the Schedule 74 Agreement ("Costs''). Costs include,
but are not limited to, costs of design, construction, legal services, engineering, planning,
administrative, and associated costs incurred by the City of Federal Way resulting from the City
entering into the Schedule 74 Agreement, including City staff costs or work performed by the
City including any such costs not covered by the Schedule 74 Agreement. Costs also include,
but are not limited to, costs associated with Schedule 74 Section 2.b, including costs associated
with power distribution lines located outside a public thoroughfare or located pursuant to rights
not derived from a franchise or pursuant to rights not otherwise granted by the City, less any
portion paid by PSE; costs associated with any cancellation of the Schedule 74 Agreement;
costs associated with any installation or removal of facilities installed to provide temporary
service; costs associated with obtaining rights to underground or install facilities required to be
installed outside the public thoroughfare; costs associated with any trenching and restoration
and job coordination required for installation of the underground distribution system; costs
associated with any surveying for alignment and grades of vaults and ducts. It is contemplated
that a portion of the work covered by the Schedule 74 Agreement will be performed by
Quadrant; costs under this Contract shall include costs, within the categories described in this
Section 2, of such work by Quadrant.
2.2 Quadrant will also pay all costs of undergrounding all other franchise utilities
currently collocated with the PSE power distribution line, including, but not limited to, design,
construction, and any associated costs. These other costs will be paid directly by Quadrant and
will not be incurred by the City.
3. PROCEDURE FOR REIMBURSEMENT
3.1 Phase 1 Estimated Costs. The City and Quadrant have agreed on an estimate of
design and engineering Costs, together with related City administrative Costs (collectively,
"Phase 1 Costs''). The estimated amount of Phase 1 Costs ("Phase 1 Estimated Costs'') is
$80,000. Within 5 business days after the mutual execution of this Contract, Quadrant shall
deposit such amount into an account designated by the City.
3.2 Phase 2 Estimated Costs. Construction Costs and any other Costs not included
within the categories of Phase 1 Costs, including related City administrative Costs, are referred
to collectively as "Phase 2 Costs." On the date of this Contract, the Parties anticipate that Phase
2 Costs will total around $240,000, but both Parties acknowledge that that amount will change
as planning proceeds. The City and Quadrant, both acting reasonably, shall use diligent efforts
to reach an agreement on estimated Phase 2 Costs ("Phase 2 Estimated Costs'') no later than
the execution of the Schedule 74 Construction Agreement, as described in Section 1. Within 20
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Reimbursement Contract
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days after their agreement on Phase 2 Estimated Costs, Quadrant shall deposit into an account
designated by the City the amount of the Phase 2 Estimated Costs.
3.3 Actual vs. Estimated Costs. The City agrees to keep accurate records concerning
Costs, incurred under the Schedule 74 Agreement and otherwise. If the actual Costs exceed
the estimate, Quadrant agrees to deposit the amount of the excess on a monthly basis, within
30 days of receipt of a voucher or invoice from the City, itemizing the costs incurred in
reasonable detail against the relevant agreed estimate. To the extent the actual Phase 1 Costs
are less than Phase 1 Estimated Costs, the excess shall be held by the City and applied to any
overruns of Phase 2 Costs. To the extent that Phase 1 Costs and Phase 2 Costs in the
aggregate are less than Phase 1 and Phase 2 Estimated Costs, the City will reimburse Quadrant
upon the conclusion of. the undergrounding project, no later than when the final payment is
required to be made under Section 7(e) of the Schedule 74 Project Construction Agreement.
The City and Quadrant will each be entitled to receive all information concerning the
undergrounding project and Schedule 74 Agreement that is received by either of them. In
addition, the City shall from time to time on request of Quadrant provide a reasonable detailed
accounting of all Costs incurred to date, reconciled against the relevant agreed estimate.
4. INDEMNIFICATION
4.1 Quadrant Indemnification. Quadrant agrees to indemnify, defend, and hold the
City, its elected officials, officers, employees, agents, and volunteers harmless from any and all
claims, demands, losses, actions and liabilities (including costs and all attorney fees) to or by
any and all persons or entities, including, without limitation, their respective employees, agents,
licensees, or representatives, arising from, resulting from, or connected with this Contract to
the extent caused by the negligent acts, errors or omissions of Quadrant, its partners,
shareholders, agents, or employees, or by Quadrant's breach of this Contract. For the sole
purpose of giving effect to the foregoing indemnity, and only to the extent necessary for that
purpose, Quadrant waives any immunity that may be granted to it under the Washington State
Industrial Insurance Act, Title 51 ROO. Quadrant's indemnification shall not be limited in any
way by any limitation on the amount of damages, compensation or benefits payable to or by
any third party under workers' compensation acts, disability benefit acts or any other benefits
acts or programs.
4.2 City Indemnification. The City agrees to indemnify, defend, and hold Quadrant,
its officers, directors, shareholders, partners, employees, and agents harmless from any and all
claims, demands, losses, actions and liabilities (including costs and attorney fees) to or by any
and all persons or entities, including without limitation, their respective employees, agents,
licenses, or representatives, arising from, resulting from or connected with this Contract to the
extent caused by the negligent acts, errors, or omissions of the City, its employees or agents.
The City's indemnification shall not be limited in any way by any limitation on the amount of
damages, compensation or benefits payable to or by any third party under workers'
compensation acts, disability benefit acts or any other benefits acts or programs.
4.3 Survival. The provisions of this Section shall survive the expiration or
termination of this Contract with respect to any event occurring prior to such expiration or
termination.
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Reimbursement Contract
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5. INDEPENDENCE
It is the intention and understanding of the Parties that each shall be independent of the
other and not agents of the other, and that neither is liable nor obligated to pay the other or
the other's employee's sick leave, vacation payor any other benefit of employment, nor to pay
any social security or other tax which may arise as an incident of employment. No joint venture
is intended to be created. PSE is likewise an independent third party entity and not an agent of
either Party. The City does not warrantee, guarantee, or indemnify against any act or omission
of PSE.
6. GENERAL PROVISIONS
6.1 Entire Contract. This Contract, including the Exhibit, contains all of the
agreements of the Parties with respect to any matter covered or mentioned in this Contract and
no prior agreements or understandings pertaining to any such matters shall be effective for any
purpose.
6.2 Modification. No provisions of this Contract, including this provision, may be
amended or added to except by agreement in writing signed by the Parties or their respective
successors in interest.
6.3 Full Force and Effect. Any provision of this Contract, which is declared invalid,
void or illegal, shall in no way affect, impair, or invalidate any other provision hereof and such
other provisions shall remain in full force and effect.
6.4 Assignment. Quadrant shall not transfer or assign, in whole or in part, any or all
of its obligations and rights hereunder without the prior written consent of the City. In the
event the City consents to any such assignment or transfer, such consent shall in no way
release Quadrant from any of its obligations or liabilities under this Contract.
6.5 Successors In Interest. Subject to the preceding Subsection, this Contract shall
be binding upon and inure to the benefit of the Parties' successors in interest, heirs and
assigns.
6.6 Attorney Fees. In the event of any litigation, arbitration or other proceeding
arising out of or brought to enforce or interpret this Contract, the substantially prevailing party
therein shall be entitled to an award of its reasonable attorneys' fees incurred therein, in the
preparation therefore, and on any appeal or rehearing thereof. The venue for any dispute
related to this Contract shall be King County, Washington.
6.7 No Waiver. Failure of either Party to declare any breach or default immediately
upon occurrence thereof, or delay in taking any action in connection with, shall not waive such
breach or default. Failure of either Party to declare one breach or default does not act as a
waiver of that Party's right to declare another breach or default.
6.8 Governing Law. This Contract is made in and shall be governed by and
interpreted in accordance with the laws of the State of Washington.
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Reimbursement Contract
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6.9 Authority. Each individual executing this Contract on behalf of the City or
Quadrant represents and warrants that such individual is duly authorized to execute and deliver
this Contract on behalf of such Party.
6.10 Notices. Any notices required to be given by the City to Quadrant or by
Quadrant to the City shall be delivered to the Parties at the addresses set forth below. Any
notices may be (i) delivered personally to the addressee of the notice (ii) deposited in the
United States mail, postage prepaid, to the address set forth herein, or (Hi) sent by Fedex or
other recognized overnight courier service to the address set forth herein. Any notice so posted
in the United States mail shall be deemed received three (3) days after the date of mailing. Any
notice so sent by overnight courier shall be effective on the business day following receipt by
the courier.
6.11 Captions. The respective captions of the Sections of this Contract are inserted
for convenience of reference only and shall not be deemed to modify or otherwise affect in any
respect any of the provisions of this Contract.
6.12 Performance. Time is of the essence of this Contract and each and all of its
provisions in which performance is a factor.
6.13 Compliance with Ethics Code. If a violation of the City's Ethics Resolution No.
91-54, as amended, occurs as a result of the formation and/or performance .of this Contract,
this Contract may be rendered null and void, at the City's option.
6.14 Counterparts. This Contract may be executed in any number of identical
counterparts, which counterparts shall collectively constitute the entire Contract.
6.15 Equal Opportunity to Draft. The parties have participated and had an equal
opportunity to participate in the drafting of this Contract, and the Exhibits, if any, attached. No
ambiguity shall be construed against any party upon a claim that that party drafted the
ambiguous language.
[signatures next page]
South 320th Undergrounding
Reimbursement Contract
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DATED the day and year set forth above.
ATrEST:
APPROVED AS TO FORM:
~~rnson
[signatures continue on next page]
South 320th Undergrounding
Reimbursement Contract
CITY OF FEDERAL WAY
By: ca~::) ft1 rrt-
Assistant City Manager/Chief Operating Officer
Emergency Manager
33325 8th Avenue South
PO Box 9718
Federal Way, WA 98063-9718
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THE QUADRANT CORPORATION
By: Ct/~..a ~~-
(Signature)
~v ,4L l' k,2 (' (. c.-."\i '::'L../.... C
(Name)
Quadrant Homes
Attn: George Cook
14725 SE 36th Street, Suite 200
Bellevue WA 98006
Mailing address:
PO Box 130
Bellevue WA 98009
425.455.2900
STATE OF WASHINGTON
COUNTY OF K''''-'G
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On this day personally appeared before me 1..l),AL--7i:.YZ P Lt-..-s.'f ~L~ ,
to me known to be the <)'to,,,Q v\()?" P(L,=,S,OoS1 of I~ Q\A..AD~A"')1 Ci.qtflJ{l.,4-r,ho"'that
executed the foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he/she was authorized to execute said instrument an9 that the seal affixed,
if any, is the corporate seal of said corporation.
GIVEN my hand and official seal..this ,:l31,Ju day of
Ju.L~~~"-
'(. /I. \
. A I L.- it'. /''It.-/..vl: -t;v",-",
(typed/printed name of notary)
Notary Public in and for the State of Washington.
My commission expires q I (')I~ I
AD fZ.1 '-
, 200 f?
Exhibits
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Attachment A - Project Design Agreement
Attachment B - Project Construction Agreement
A
South 320th Undergrounding
Reimbursement Contract
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I
SCHEDULE 74 UNDERGROUND CONVERSION
Project Design Agreement
Project Name:
Project Number:
THIS Agreement, dated as of this _ day of , 200_. is made by and
between , a (the "Government
Entity"), and PUGETSOUND ENERGY, Inc., a Washington Corporation (the "Company").
RECITALS
A. The Company is a public service company engaged in the sale and distribution of electric
energy and, pursuant to its franchise or other rights from the Government Entity, currently locates its
electric distribution facilities within the jurisdictional boundaries of the Government Entity.
B. The Government Entity is considering conversion of the Company's existing overhead electric
distribution system to a comparable underground electric distribution, as more specifically described in the
Scope of Work (as defined in paragraph 2, below) furnished to the Company by the Government Entity
(the "Conversion Project").
C. The Government Entity has requested that the Company perform certain engineering design
services and otherwise work cooperatively with the Government Entity to develop a mutually acceptable
Project Plan (as defined in paragraph 6. below) for the Conversion Project, in accordance with and subject
to the terms and conditions of this Agreement (the "Design Work").
D. The Government Entity and the Company wish to execute this written contract in accordance
with Schedule 74 ot the Company's Electric Tariff G ("Schedule 74") to govern the Design Work for the
Conversion Project.
AGREEMENT
The Government Entity and the Company therefore agree as follows:
1. Unless specifically defined otherwise herein, all terms defined in Schedule 74 shall have the same
meanings when used in this Agreement.
2. The Government Entity shall, within ten (10) business days after the date ot this Agreement, provide
the Company with a written scope of work for the Conversion Project which includes, among other
things, (a) a reasonably detailed description of the scope of the work required for the Conversion
Project, (b) a list of the key milestone dates for the Conversion Project, (c) reasonably detailed
drawings showing any associated planned improvements to the Public Thoroughfare, and (d) a
statement as to whether the Government Entity desires to install the ducts and vaults for the
Conversion Project (the "Scope of Work"). The Government Entity shall provide the Company two (2)
hard copies of the Scope of Work and a copy of the relevant electronic file(s) in a mutually agreed
electronic format.
3. Within ten (10) business days of its receipt of the Scope of Work, the Company shall prepare and
submit to the Government Entity (a) a reasonably detailed, good faith estimate of the cost to perform
the Design Work (the "Design Cost Estimate"), and (b) a proposed schedule for completion of the
Design Work which, to the extent reasonably practicable, reflects the apglicable key milestone dates
Design Agreement, Attachment "An to Schedule 74, Page 1
[insert project name here]
., J
., .
\
\
specified in the Scope of Work and provides for completion of the Design Work within ninety (90)
business days from the date the Company receives the Government Entity's notice to proceed under
paragraph 5, below (the ADesign Schedule A). The proposed Design Cost Estimate and the proposed
Design Schedule shall be based upon the then-current Scope of Work. Unless otherwise specified in
the Scope of Work, the Design Work shall not include negotiation or acquisition of third party property
rights but shall include preliminary planning between the Company and the Government Entity
regarding their respective obligations for negotiating and acquiring third party property rights.
4. Within ten (10) business days after the Government Entity's receipt of the proposed Design Cost
Estimate and the proposed Design Schedule from the Company, the Government Entity and the
Company shall meet in order to (a) review the proposed Design Cost Estimate, (b) review the
proposed Design Schedule; (c) review the Scope of Work, and (d) make any changes necessary to
create a final Scope of Work, final Design Cost Estimate, and final Design Schedule that are
reasonably acceptable to both parties. If the parties are unable to agree upon a final version of the
Scope of Work, Design Cost Estimate, and/or Design Schedule, then either party may, by written
notice to the other party, submit the matter for resolution pursuant to the dispute resolution procedures
in paragraph 16, below. The final Scope of Work, Design Cost Estimate and Design Schedule, once
determined in accordance with this paragraph 4, may thereafter be changed or amended only in
accordance with the change procedures set forth in paragraph 13, below.
5. The Government Entity shall, within ten (10) business days after determination of the final of the
Scope of Work, Design Cost Estimate, and Design Schedule, issue (a) a written notice to proceed
which shall delineate the final Scope of Work, Design Cost Estimate, and Design Schedule, or (b) a
written notice to terminate this Agreement without cost to the Government Entity. If the Government
Entity terminates this Agreement, the costs incurred by the Company in preparing and submitting the
Design Cost Estimate and the Design Schedule shall not be reimbursable to the Company, and the
rights and obligations of the parties under this Agreement shall be terminated in their entirety and
without liability to either party.
6. Following the Company's receipt of the notice to proceed, and within the applicable time period
specified in the Design Schedule, the Company shall, with the cooperation and assistance of the
Government Entity as outlined in this Agreement, prepare a project plan for the Conversion Project
(the "Project Plan") which shall include, among other things, the following: (a) a detailed description of
the work that is required to be performed by each party and any third party in connection with the
Conversion Project (the AConstruction Work"), (b) the applicable requirements, drawings, and
specifications for the Construction Work, (c) a description of any operating and other property rights
that are required to be obtained by each party for the Conversion Project (and the requirements and
specifications with respect thereto), (d) a detailed estimate of the costs to be incurred by each party in
its performance of the Construction Work, and (e) a detailed schedule for completing the Construction
Work (including, without limitation, the dates for delivery of the ducts and vaults and other materials
for use at the site of the Construction Work).
7. The Government Entity shall be responsible for coordinating the Design Work with all other design
work to be performed in connection with the Conversion Project and any associated planned
improvements to the Public Thoroughfare. The parties shall work together in an effort to mitigate the
costs of the Conversion Project to each party, including, without limitation, identifying ways to
accommodate the facilities of the Company to be installed as part of the Conversion Project within the
Public Thoroughfare.
8. Within the applicable time period specified in the Oesign Schedule, the Company shall prepare and
submit to the Government Entity a proposed initial draft of the Project Plan. The parties understand
and acknowledge that the proposed Project Plan submitted by the Company shall be preliminary in
nature and shall not include, without limitation, information required to be supplied by the Government
Entity (e.g., scope and estimate of the cost of the Construction Work to be performed by the
Government Entity).
Design Agreement, Attachment "A" to Schedule 74, Page 2
[insert project name here]
.;
9. Within the applicable time period specified in the Design Schedule, the Government Entity shall
(a) review the proposed Project Plan submitted by the Company, (b) complete any information
required to be supplied by the Government Entity, (c) make any changes required to conform the
proposed Project Plan to the Scope of Work and this Agreement, and (d) return the amended Project
Plan to the Company_
10. Within the applicable time period specified in the Design Schedule, the Company shall review the
amended Project Plan submitted by the Government Entity and notify the Government Entity in writing
of either the Company's acceptance of, or the Company's specific objections to, the amended Project
Plan. If the Company makes any objection to the amended Project Plan, and the parties are unable to
resolve the objections and mutually agree upon the Project Plan prior to the final design date specified
in the Design Schedule, then either party may, by written notice to the other party, submit the matter
for resolution pursuant to the dispute resolution procedures in paragraph 16, below. The Project PJan,
as mutually agreed upon by the parties or established through the dispute resolution process, shall be
attached to and incorporated in a Project Construction Agreement substantially in the form attached
hereto as Exhibit A (the 'Construction Agreement") which is to be signed by the parties prior to
commencement of the Construction Work.
11. The parties intend and agree that the Design Work and the Project Plan in its final form shall conform
to the following requirements:
(a) The Project Plan shall, if requested by the Government Entity in its initial Scope of Work, specify
that the Government Entity shall install the ducts and vaults for the Conversion Project; provided
that (i) the parties mutually agree upon and set forth in the Project Plan (A) the costs of such
installation work to be included in the Cost of Conversion, and (8) the specifications and
standards applicable to such installation work, and (ii) such installation work is accomplished by
the Government Entity in accordance with the applicable design and construction specifications
provided by the Company and set forth in the Project Plan.
(b) Each estimate of the costs to be incurred by a party shall, at a minimum, be broken down by
(i) the design and engineering costs, (ii) property and related costs, including any costs of
obtaining operating rights, and (iii) construction costs, including and listing separately inspection,
labor, materials, and equipment.
(c) All facilities of the Company installed as part of the Conversion Project shall be located, and all
related property and operating rights shall be obtained, in the manner set forth in the applicable
provisions of Schedule 74. The Project Plan shall describe in detail the location of such facilities,
any related property and operating rights required to be obtained, and the relative responsibilities
of the parties with respect thereto.
(d) The schedule set forth in the Project Plan for completing the Construction Work shall include, at a
minimum, milestone time periods for completion of the Trenching, installation of ducts and vaults,
the construction and removal of any Temporary Service, and the removal of overhead facilities.
(e) The Project Plan may include the specification of work and requirements for Government-
Requested Upgrades and Company-Initiated Upgrades; provided, however, that the costs
incurred by the Company with respect to the design and engineering of. Company-Initiated
Upgrades shall not be included in the costs reimbursable to the Company under this Agreement
or the Construction Agreement. For purposes of the foregoing, (i) the term 'Government-
Requested Upgrade" shall mean any feature of the Underground Distribution System which is
requested by the Government Entity and is not reasonably required to make the Underground
Distribution System comparable to the overhead distribution system being replaced, and (ii) the
term .Company-Initiated Upgrade. shall mean any feature of the Underground Distribution System
which is required by the Company and is not reasonably required to make the Underground
Distribution System comparable to the overhead distribution system being replaced. For
Design Agreement, Attachment "A" to Schedule 74, Page 3
[insert project name here]
purposes of subparagraph (ii), above, a "comparable" system shall include, unless the parties
otherwise agree, the number of empty ducts (not to exceed two (2), typically having a diameter of
6" or less) of such diameter and number as may be specified and agreed upon in the final Scope
of Work necessary to replicate the load-carrying capacity (system amperage class) of the
overhead system being replaced. For purposes of subparagraph (i), above, any empty ducts
installed at the request of the Government Entity shall be a Government-Requested Upgrade.
(f) The Project Plan shall set forth all specifications, design standards and other requirements for the
Construction Work and the Conversion Project, including, but not limited to, the following:
(i) applicable federal and state safety and electric codes and standards, (ii) applicable construction
and other standards of the Company, and (iii) applicable street design and other standards of the
Government Entity which are in effect as of the commencement of the Conversion Project.
12. Upon request of the Government Entity, and in any event at the times specified in the Design
Schedule, the Company shall provide periodic reports which compare the actual costs of the Design
Work incurred to that point in time to the Design Cost Estimate, as changed or amended in
accordance with paragraph 13, below. Further, if at any time the Company reasonably expects that
the actual cost of the Design Work will exceed the Design Cost Estimate, as changed or amended in
accordance with paragraph 13, below, the Company shall notify the Government Entity immediately.
Upon receipt of the Company's notice, the Government Entity may, at its option,
(a) notify the Company in writing that this Agreement is terminated; or
(b) request a reasonably detailed explanation supported by documentation (reasonably satisfactory to
the Government Entity) to establish that the actual costs in excess of the Design Cost Estimate
are:
(i) reasonable,
(ii) consistent with the Scope of Work, and
(iii) consistent with sound engineering practices.
If the Government Entity requests an explanation, the Government Entity shall, within ten (10)
business days after receipt of the explanation,
(a) change the Scope of Work in accordance with paragraph 13, below, or
(b) direct the Company to continue with the Design Work without a change in the Scope of Work, but
reserving to the Government Entity the right to dispute the reasonableness of the costs to be paid
the Company under paragraph 14, below, in accordance with the dispute resolution procedures in
paragraph 16, below, or
(c) direct the Company to discontinue performing the Design Work pending resolution, pursuant to
paragraph 16, below, of any dispute regarding the reasonableness of the costs, in which event the
Design Schedule will be adjusted to reflect the delay, or
(d) notify the Company in writing that this Agreement is terminated.
In the event the Government Entity terminates this Agreement or discontinues the performance of the
Design Work under subparagraph (c), above, for more than ninety (90) days, the Government Entity
shall pay the Company for all costs incurred by the Company in its performance of the Design Work
prior to the date the Company receives the Government Entity's notice of termination, plus any costs
incurred by the Company for materials and other items ordered or procured by the Company with the
prior authorization of the Government Entity in order to meet the schedule for the Conversion Project.
The foregoing payment obligation shall survive any termination of this Agreement.
Design Agreement, Attachment "A" to Schedule 74, Page 4
[insert project name here]
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13. (a) Either party may, at any time, by written notice thereof to the other party, request changes to the
Scope of Work (a "Request for Change"). No Request for Change shall be effective and binding
upon the parties unless signed by an authorized representative of each party. If any approved
Request for Change would cause an increase in the cost of, or the time required for, the
performance of any part of the Design Work, an equitable adjustment in the Design Cost Estimate
and the Design Schedule shall be made to reflect such increase. The parties shall negotiate in
good faith with the objective of agreeing in writing on a mutually acceptable equitable adjustment
If the parties are unable to agree upon the terms of the equitable adjustment, either party may
submit the matter for resolution pursuant to the dispute resolution procedures in paragraph 16,
below. Notwithstanding any dispute or delay in reaching agreement or arriving at a mutually
acceptable equitable adjustment, each party shall, if requested by the other party, proceed with
the Design Work in accordance with the Request for Change. Any such request to proceed must
be accompanied by a written statement setting forth the requesting party's reasons for rejecting
the proposed equitable adjustment of the other party.
(b) The Design Cost Estimate and/or the Design Schedule shall be equitably adjusted from time to
time to reflect any change in the costs or time required to perform the Design Work to the extent
such change is caused by: (i) any Force Majeure Event under paragraph 17, below, (ii) the
discovery of any condition within the Conversion Area which affects the scope, cost, schedule or
other aspect of the Design Work and was not known by or disclosed to the affected party prior to
the date of this Agreement, or (iii) any change or inaccuracy in any assumptions regarding the
scope, cost, schedule or other aspect of the Design Work which are expressly identified by the
parties in the final Scope of Work. Upon the request of either party, the parties will negotiate in
good faith with the objective of agreeing in writing on a mutually acceptable equitable adjustment
If, at any time thereafter, the parties are unable to agree upon the terms of the equitable
adjustment, either party may submit the matter for resolution pursuant to the dispute resolution
provisions in paragraph 16, below.
14. Upon completion of the Design Work (i.e., the date on which the Project Plan is final under
paragraph 10, above, either by mutual agreement of the parties or as established through the dispute
resolution procedures), the Government Entity shall pay the Company all actual, reasonable costs to
the Company for the Design Work (which, if disputed in good faith by the Government Entity, may be
submitted by either party for resolution pursuant to the dispute resolution provisions in paragraph 16,
below), plus any costs incurred by the Company for materials and other items ordered by the
Company with the prior authorization of the Government Entity in order to meet the schedule for the
Conversion Project. If, thereafter, the Construction Agreement is executed by the parties and the
Conversion Project is completed within five (5) years from the date of this Agreement, the full amount
of the costs incurred by the Company in its performance of the Design Work shall be included in the
"Shared Company Costs" under the Construction Agreement and any payment of such amounts
under this Agreement shall be credited to the Government Entity in calculating the "Net Amount"
payable under the Construction Agreement.
15. Within sixty (60) business days after completion of the Design Work, the Company shall issue to the
Government Entity an itemized invoice for the amounts payable under this Agreement. Such invoice
shall be in a form mutually agreed upon by the Company and the Government Entity and shall, at a
minimum, itemize the design and engineering costs, including and listing separately inspection, labor,
materials and equipment. In the event the Government Entity does not verify such invoice within ten
(10) business days of receipt, the Government Entity shall provide a written request to the Company
specifying the additional information needed to verify the invoice. The Company will provide, within a
reasonable period after receipt of any request, such documentation and information as the .
Government Entity may reasonably request to verify such invoice. The Government Entity shall pay
the Company all amounts payable under this Agreement within thirty (30) days after receipt of the
Company's invoice. Payment as provided in this Agreement shall be full compensation for the
Company's performance of the Design Work, including without limitation all services rendered and all
materials, supplies, equipment, and incidentals necessary to complete t~e Design Work.
Design Agreement. Attachment "An to Schedule 74, Page 5
[insert project name here]
16. Dispute Resolution Procedures:
(a) Any dispute, disagreement or claim arising out of or concerning this Agreement must first be
presented to and considered by the parties. A party who wishes dispute resolution shall notify the
other party in writing as to the nature of the dispute. Each party shall appoint a representative
who shall be responsible for representing the party's interests. The representatives shall
exercise good faith efforts to resolve the dispute. Any dispute that is not resolved within ten (10)
business days of the date the disagreement was first raised by written notice shall be referred by
the parties' representatives in writing to the senior management of the parties for resolution. In
the event the senior management are unable to resolve the dispute within twenty (20) business
days (or such other period as the parties may agree upon), each party may pursue resolution of
the dispute through other legal means consistent with the terms of this Agreement. All
negotiations pursuant to these procedures for the resolution of disputes shall be confidential and
shall be treated as compromise and settlement negotiations for purposes of the state and federal
rules of evidence.
(b) Any claim or dispute arising hereunder which relates to the Scope of Work, Design Cost
Estimate, and Design Schedule under paragraph 4, above; the Project Plan under paragraph 10,
above; or any Request for Change (including, without limitation, any associated equitable
adjustment) under paragraph 13, above; and is not resolved by senior management within the
time permitted under paragraph 16(a), above, shall be resolved by arbitration in Seattle,
Washington, under the Construction Industry Arbitration Rules of the American Arbitration
Association then in effect. The decision(s) of the arbitrator(s) shall be final, conclusive and
binding upon the Parties. All other disputes shall be resolved by litigation in any court or
governmental agency, as applicable, having jurisdiction over the Parties and the dispute.
(c) In connection with any arbitration under this paragraph 16, costs of the arbitrator(s), hearing
rooms and other common costs shall be divided equally among the parties. Each party shall
bear the cost and expense of preparing and presenting its own case (including, but not limited to,
its own attorneys' fees); provided,that, in any arbitration, the arbitrator(s) may require, as part of
his or her decision, reimbursement of all or a portion of the prevailing party's costs and expenses
by the other party.
(d) Unless otherwise agreed by the parties in writing, the parties shall continue to perform their
respective obligations under this Agreement during the pendency of any dispute.
17. In the event that either party is prevented or delayed in the performance of any of its obligations under
this Agreement by reason beyond its reasonable control (a "Force Majeure Event"), then that party's
performance shall be excused during the Force Majeure Event. Force Majeure Events shall include,
without limitation, war; civil disturbance; flood, earthquake or other Act of God; storm, earthquake or
other condition which necessitates the mobilization of the personnel of a party or its contractors to
restore utility service to customers; laws, regulations. rules or orders of any governmental agency;
sabotage; strikes or similar labor disputes involving personnel of a party, its contractors or a third
party; or any failure or delay in the performance by the other party, or a third party who is not an
employee, agent or contractor of the party claiming a Force Majeure Event, in connection with the
Work or this Agreement. Upon removal or termination of the Force Majeure Event, the party claiming
a Force Majeure Event shall promptly perform the affected obligations in an orderly and expedited
manner under this Agreement or procure a substitute for such obligation. The parties shall use all
commercially reasonable efforts to eliminate or minimize any delay caused by a Force Majeure Event.
18. This Agreement is subject to the General Rules and Provisions set forth in Tariff Schedule 80 of the
Company's electric Tariff G and to Schedule 74 of such Tariff as approved by the Washington Utilities
and Transportation Commission and in effect as of the date of this Agreement.
Design Agreement, Attachment "A" to Schedule 74, Page 6
[insert project name here]
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19. Any notice under this Agreement shall be in writing and shall be faxed (with a copy followed by mail or
hand delivery), delivered in person, or mailed, properly addressed and stamped with the required
postage, to the intended recipient as follows:
If to the Government Entity:
Altn:
Fax:
If to the Company:
Puget Sound Energy, Inc.
Altn:
Fax:
Either party may change its address specified in this paragraph by giving the other party notice of such
change in accordance with this paragraph.
20. This Agreement shall in all respects be interpreted, construed and enforced in accordance with the
laws of the State of Washington (without reference to rules governing conflict of laws), except to the
extent such laws may be preempted by the laws of the United States of America.
21. This Agreement constitutes the entire agreement of the parties with respect to the subject matter
hereof and all other agreements and understandings of the Parties, whether written or oral, with
respect to the subject matter of this Agreement are hereby superseded in their entireties.
22. This Agreement shall be binding upon and inure to the benefit of the respective successors, assigns,
purchasers, and transferees of the parties, including but not limited to, any entity to which the rights or
obligations of a party are assigned, delegated, or transferred in any corporate reorganization, change
of organization, or purchase or transfer of assets by or to another corporation, partnership,
association, or other business organization or division thereof.
Government Entity:
Company:
PUGET SOUND ENERGY, INC.
BY
ITS
BY
ITS
Date Signed
Date Signed
ApprOVed as to form:
Design Agreement, Attachment "A" to Schedule 74, Page 7
(insert project name here)
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SCHEDULE 74 UNDERGROUND CONVERSION
Project Construction Agreement
Project Name:
Project Number:
THIS Agreement, dated as of this _ day of , 200_, is made by and
between , a (the
"Government Entity"), and PUGET SOUND ENERGY, Inc., a Washington Corporation (the "Company").
RECITALS
A. The Company is a public service company engaged in the sale and distribution of electric
energy, and pursuant to its franchise or other rights from the Government Entity, currently locates its
electric distribution facilities within the jurisdictional boundaries of the Government Entity.
B. The Government Entity has determined that it is necessary to replace the existing overhead
electric distribution system within the area specified in the Project Plan (as defined below) (the
"Conversion Area") with a comparable underground electric distribution system, all as more specifically
described in the Project Plan (the "Conversion Project").
C. The Government Entity and the Company have previously entered into a Project Design
Agreement dated as of (the "Design Agreement"), pursuant to which the parties completed
certain engineering design, cost assessment, operating rights planning and other preliminary work relating
to the Conversion Project and, in connection with that effort, developed the Project Plan.
D. The Government Entity and the Company wish to execute this written contract in accordance
with Schedule 74 of the Company's Electric Tariff G ("Schedule 74") to govern the completion of the
Conversion Project, which both parties intend shall qualify as an underground conversion under the terms
of Schedule 74. ,
AGREEMENT
The Government Entity and the Company therefore agree as follows:
1. Definitions.
(a) Unless specifically defined otherwise herein, all terms defined in Schedule 74 shall have the same
meanings when used in this Agreement, including, without limitation, the following:
i) Cost of Conversion;
ii) Public Thoroughfare;
iii) Temporary Service;
iv) Trenching and Restoration;
v) Underground Distribution System; and
vi) Underground Service Lines.
(b) "Company-Initiated Upgrade" shall mean any feature of the Underground Distribution System
which is required by the Company and is not reasonably required to make the Underground
Distribution System comparable to the overhead distribution system being replaced. For
purposes of the foregoing, a "comparable" system shall include, unless the Parties otherwise
agree, the number of empty ducts (not to exceed two (2), typically hpving a diameter of 6" or less)
Construction Agreement, Attachment "B" to Schedule 74, Page 1
[insert project name here}
of such diameter and number as may be specified and agreed upon in the Project Plan necessary
to replicate the load-carrying capacity (system amperage class) of the overhead system being
replaced.
(c) "Estimated Reimbursable Private Conversion Costs" shall mean the Company's good faith
estimate of the Reimbursable Private Conversion Costs, as specified in the Project Plan and as
changed and adjusted from time to time in accordance with Section 6, below.
(d) "Estimated Reimbursable Temporary Service Costs" shall mean the Company's good faith
estimate of the Reimbursable Temporary Service Costs, as specified in the Project Plan and as
changed and adjusted from time to time in accordance with Section 6, below.
(e) "Estimated Reimbursable Upgrade Costs" shall mean the Company's good faith estimate of the
Reimbursable Upgrade Costs, as specified in the Project Plan and as changed and adjusted from
time to time in accordance with Section 6. below.
(f) "Estimated Shared Company Costs" shall mean the Company's good faith estimate of the Shared
Company Costs, as specified in the Project Plan and as changed and adjusted from time to time
in accordance with Section 6, below.
(g) "Estimated Shared Government Costs" shall mean the Government Entity's good faith estimate of
the Shared Government Costs, as specified in the Project Plan and as changed and adjusted
from time to time in accordance with Section 6, below.
(h) "Government-Requested Upgrade" shall mean any feature of the Underground Distribution
System which is requested by the Government Entity and is not reasonably required to make the
Underground Distribution System comparable to the overhead distribution system being replaced.
For purposes of the foregoing, any empty ducts installed at the request of the Government Entity
shall be a Government-Requested Upgrade.
(i) "Party" shall mean either the Company, the Government Entity, or both.
(j) "Private Property Conversion" shall mean that portion, if any, of the Conversion Project for which
the existing overhead electric distribution system is located, as of the date determined in '
accordance with Schedule 74, (i) outside of the Public Thoroughfare. or (ii) pursuant to rights not
derived from a franchise previously granted by the Government Entity or pursuant to rights not
otherwise previously granted by the Government Entity.
(k) "Project Plan" shall mean the project plan developed by the Parties under the Design Agreement
and attached hereto as Exhibit A. as the same may be changed and amended from time to time in
accordance with Section 6, below. The Project Plan includes, among other things, (i) a detailed
description of the Work that is required to be performed by each Party and any third party, (ii) the
applicable requirements and specifications for the Work, (iii) a description of the Operating Rights
that are required to be obtained by each Party for the Conversion Project (and the requirements
and specifications with respect thereto). (iv) an itemization and summary of the Estimated Shared
Company Costs, Estimated Shared Government Costs. Estimated Reimbursable Private
Conversion Costs (if any), Estimated Reimbursable Temporary Service Costs (if any) and
Estimated Reimbursable Upgrade Costs (if any), and (v) the Work Schedule.
(I) "Operating Rights" shall mean sufficient space and legal rights for the construction, operation,
repair, and maintenance of the Underground Distribution System.
(m) "Reimbursable Private Conversion Costs" shall mean (i) all Costs of Conversion, if any, incurred
by the Company which are attributable to a Private Property Conversion, less (ii) the distribution
pole replacement costs (if any) that would be avoided by the Company on account of such Private
Property Conversion, as determined consistent with the applicable 9<>mpany distribution facilities
Construction Agreement. Attachment "8" to Schedule 74. Page 2
[insert project name here]
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replacement program, plus (iii) just compensation as provided by law for the Company's interests
in real property on which such existing overhead distribution system was located prior to
conversion; provided that the portion of the Reimbursable Private Conversion Costs attributable to
the Costs of Conversion under subparagraph (i) of this paragraph shall not exceed the Estimated
Reimbursable Private Conversion Costs without the prior written authorization of the Government
Entity.
(n) "Reimbursable Temporary Service Costs" shall mean all costs incurred by the Company which
are attributable to (i) any facilities installed as part of the Conversion Project to provide Temporary
Service, as provided for in Schedule 74, and (ii) the removal of any facilities installed to provide
Temporary Service (less salvage value of removed equipment); provided that the Reimbursable
Temporary Service Costs shall not exceed the Estimated Reimbursable Temporary Service Costs
without the prior written authorization of the Government Entity.
(0) "Reimbursable Upgrade Costs" shall mean all Costs of Conversion incurred by the Company
which are attributable to any Government-Requested Upgrade; provided that the Reimbursable
Upgrade Costs shall not exceed the Estimated Reimbursable Upgrade Costs without the prior
written authorization 01 the Government Entity.
(p) "Shared Company Costs" shall mean all Costs of Conversion (other than Reimbursable Upgrade
Costs, Reimbursable Private Conversion Costs and Reimbursable Temporary Service Costs)
incurred by the Company in connection with the Conversion Project; provided, however, that the
Shared Company Costs shall not exceed the Estimated Shared Company Costs without the prior
written authorization of the Government Entity. For the avoidance of doubt, the "Shared Company
Costs. shall, as and to the extent specified in the Design Agreement, include the actual,
reasonable costs to the Company for the "Design Work" performed by the Company under the
Design Agreement.
(q) . "Shared Government Costs" shall mean all Costs of Conversion incurred by the Government
Entity in connection with (i) any duct and vault installation Work which the Parties have specified
in the Project Plan is to be performed by the Government Entity as part of the Government Work,
and (ii) the acquisition of any Operating Rights which the Parties have, by mutual agreement,
specified in the Project Plan are to be obtained by the Government Entity for the Conversion
Project, but only to the extent attributable to that portion of such Operating Rights which is
necessary to accommodate the facilities of the Company; provided, however, that the Shared
Government Costs shall not exceed the Estimated Shared Government Costs without the prior
written authorization of the Company.
,
(r) "Total Shared Costs" shall mean the sum of the Shared Company Costs and the Shared
Government Costs. For the avoidance of doubt, the Total Shared Costs shall not incJude, without
limitation, (i) costs to the Government Entity for Trenching and Restoration, or (ii) costs associated
with any joint use of trenches by other utilities as permitted under Section 3(b).
(s) "Work" shall mean all work to be performed in connection with the Conversion Project, as more
specifically described in the Project Plan, including, without limitation, the Company Work (as
defined in Section 2(a), below) and the Government Work (as defined in Section 3(a), below).
(t) "Work Schedule" shall mean the schedule specified in the Project Plan which sets forth the
milestones for completing the Work, as the same may be changed and amended from time to
time in accordance with Section 6, below.
2. Obligations of the Company.
(a) Subject to the terms and conditions of this Agreement, the Company shall do the following as
specified in, and in accordance with the design and construction specifications and other
requirements set forth in, the Project Plan (the "Company Work"):
Construction Agreement, Attachment "8" to Schedule 74, Page 3
[insert project name here)
"
i) furnish and install an Underground Distribution System within the Conversion Area
(excluding any duct and vault installation or other Work which the Parties have
specified in the Project Plan is to be performed by the Government Entity);
ii) provide a Company inspector on-site at the times specified in the Work Schedule to
in!=:pect the pei10rmance of any duct and vault installation Work which the Parties
have specified in the Project Plan is to be performed by the Government Entity; and
iii) upon connection of those persons or entities to be served by the Underground
Distribution System and removal of facilities of any other utilities that are connected to
the poles of the overhead system, remove the existing overhead system (including
associated wires and Company-owned poles) of 15,000 volts or less within the
Conversion Area except for Temporary Services,
(b) Upon request of the Government Entity, the Company shall provide periodic reports of the
progress of the Company Work identifying (i) the Company Work completed to date, (ii) the
Company Work yet to be completed, and (iii) an estimate regarding whether the Conversion
Project is on target with respect to the Estimated Shared Company Costs, the Estimated
Reimbursable Private Conversion Costs (if any), the Estimated Reimbursable Temporary Service
Costs (if any), the Estimated Reimbursable Upgrade Costs (if any) and the Work Schedule.
(c) Except as otherwise provided in the Company's Electric Tariff G, the Company shall own, operate
and maintain all electrical facilities installed pursuant to this Agreement including, but not limited
to, the Underground Distribution System and Underground Service Lines.
(d) Subject to the terms and conditions of this Agreement, the Company shall perform all Company
Work in accordance with the Project Plan, the Work Schedule and this Agreement.
3. ObliQations of the Government Entitv.
(a) Subject to the terms and conditions of this Agreement, the Government Entity shall do the
following as specified in, and in acc.ordance with the design and construction specifications and
other requirements set forth in, the Project Plan (the "Government Work"):
i) provide the Trenching and Restoration;
ii) perform the surveying for alignment and grades for ducts and vaults; and
iii) perform any duct and vault installation and other Work which the Parties have
specified in the Project Plan is to be performed by the Government Entity.
(b) Other utilities may be permitted by the Government Entity to use the trenches provided by the
Government Entity for the installation of their facilities so long as such facilities or the installation
thereof do not interfere (as determined pursuant to the Company's electrical standards) with the
Underground Distribution System or the installation or maintenance thereof. Any such use of the
trenches by other utilities shall be done subject to and in accordance with the joint trench design
specifications and installation drawings set forth or otherwise identified in the Project Plan, and the
Government Entity shall be responsible for the coordination of the design and installation of the
facilities of the other utilities to ensure compliance with such specifications and drawings.
(c) Upon request of the Company, the Government Entity shall provide periodiC reports of the
progress of the Government Work identifying (i) the Government Work completed to date, (ii) the
Government Work yet to be completed, and (iii) an estimate regarding whether the Conversion
Project is on target with respect to the Estimated Shared Government Costs and the Work
Schedule.
(d) The Government Entity shall be responsible for coordinating all work to be performed in
connection with the street improvement program within the Conversion Area.
Construction Agreement. Atlachment "8" to Schedule 74, Page 4
(insert project name here)
(e) Subject to the terms and conditions of this Agreement, the Government Entity shall perform all
Government Work in accordance with the Project Plan, the Work Schedule and this Agreement.
4. Work Schedule.
(a) The Government Entity and the Company have agreed upon the Work Schedule as set forth in
the Project Plan. Changes to the Work Schedule shall be made only in accordance with
Section 6, below.
(b) Promptly following the execution of this Agreement, and upon completion by the Govemment
Entity of any necessary preliminary work, the Government Entity shall hold a pre-construction
meeting involving all participants in the Conversion Project to review project design, coordination
requirements, work sequencing and related pre-mobilization requirements. Following the pre-
construction meeting, the Government Entity shall give the Company written notice to proceed
with the Work at least ten (10) business days prior to the commencement date specified in the
Work Schedule.
(c) Subject to the terms and conditions of this Agreement, each Party shall perform the Work
assigned to it under this Agreement in accordance with the Work Schedule. So long as the
Company performs the Company Work in accordance with the Work Schedule, the Company
shall not be liable to the Government Entity (or its agents, servants, employees, contractors,
subcontractors, or representatives) for any claims, actions, damages, or liability asserted or
arising out of delays in the Work Schedule.
5. Location of Facilities.
All facilities of the Company installed within the Conversion Area pursuant to this Agreement shall be
located, and all related Operating Rights shall be obtained, in the manner set forth in the applicable
provisions of Schedule 74, as specified by the Parties in the Project Plan.
6. ChanQes.
(a) Either Party may, at any time, by written notice thereof to the other Party, request changes in the
Work within the general scope of this Agreement (a hRequest for Change"), including, but not
limited to: (i) changes in, substitutions for, additions to or deletions of any Work; (ii) changes in the
specifications, drawings and other requirements in the Project Plan, (iii) changes in the Work
Schedule, and (iv) changes in the location, alignment, dimensions or design of items included in
the Work. No Request for Change shall be effective and binding upon the Parties unless signed
by an authorized representative of each Party.
(b) If any change included in an approved Request for Change would cause a change in the cost of,
or the time required for, the performance of any part of the Work, an equitable adjustment shall be
made in the Estimated Shared Company Costs, the Estimated Shared Government Costs, the
Estimated Reimbursable Private Conversion Costs (if any), the Estimated Reimbursable
Temporary Service Costs (if any), the Estimated Reimbursable Upgrade Costs (if any) and/or the
Work Schedule to reflect such change.. The Parties shall negotiate in good faith with the objective
of agreeing in writing on a mutually acceptable equitable adjustment. If the Parties are unable to
agree upon the terms of the equitable adjustment, either Party may submit the matter for
resolution pursuant to the dispute resolution provisions in Section 10, below.
(c) The Work Schedule, the Estimated Shared Company Costs, the Estimated Shared Government
Costs, the Estimated Reimbursable Private Conversion Costs, the Estimated Reimbursable
Temporary Service Costs and/or the Estimated Reimbursable Upgrade Costs shall be further
equitably adjusted from time to time to reflect any change in the costs or time required to perform
the Work to the extent such change is caused by: (i) any Force Majeure Event under Section 11,
below, (ii) the discovery of any condition within the Conversion Area. which affects the scope, cost,
Construction Agreement, Attachment "8ft to Schedule 74, Page 5
(insert project name here]
"
schedule or other aspect of the Work and was not known by or disclosed to the affected Party
prior to the date of this Agreement, or (iii) any change or inaccuracy in any assumptions regarding
the scope, cost, schedule or other aspect of the Work which are expressly identified by the Parties
in the Project Plan. Upon the request of either Party, the Parties will negotiate in good faith with
the 0bjective of agreeing in writing on a mutually acceptable equitable adjustment. If, at any time
thereafter, the Parties are unable to agree upon the terms of the equitable adjustment, either
Party may submit the matter for resolution pursuant to the dispute resolution provisions in
Section 10, below.
(d) Notwithstanding any dispute or delay in reaching agree!T'ent or arriving at a mutually acceptable
equitable adjustment, each Party shall, if requested by the other Party, proceed with the Work in
accordance with any approved Request for Change. Any request to proceed hereunder must be
accompanied by a written statement setting forth the requesting Party's reasons for rejecting the
proposed equitable adjustment of the other Party.
7. Compensation and Payment.
(a) Subject to and in accordance with the terms and conditions of this Agreement (including, without
limitation, the payment procedures set forth in this Section 7), payment in connection with the
Conversion Project and this Agreement shall be as follows:
i) The Total Shared Costs shall be allocated to the Parties in the following percentages:
(A) sixty percent (60%) to the Company, and (8) forty percent (40%) to the
Government Entity.
ii) The Government Entity shall pay one hundred percent (100%) of all Reimbursable
Private Conversion Costs, if any.
iii) The Government Entity shall pay one hundred percent (100%) of all Reimbursable
Upgrade Costs, if any.
iv) The Government Entity shall pay one hundred percent (100%) of all Reimbursable
Temporary Service Costs, if any.
v) The Government Entity shall pay one hundred percent (100%) of the costs it incurs to
perform that portion of the Government Work specified in Section 3(a)(i) and (ii) (Le.,
Trenching and Restoration and surveying).
vi) The Company shall pay one hundred percent (100%) of the costs it incurs to design, jI
provide and construct any Company-Initiated Upgrade.
vii) The Company shall pay one hundred percent (100%) of the costs it incurs to obtain
Operating Rights outside the Public Thoroughfare.
(b) Based on the allocation of responsibilities set forth in Section 7(a), above, the Parties shall
determine the net amount payable by the Government Entity or the Company, as applicable, to
the other Party under this Agreement (the -Net Amount"). The Net Amount shall be determined
by using the amount of the Total Shared Costs allocated to the Government Entity under
Section 7(a)(i), and adjusting such amount as follows:
i) Subtracting (as a credit to the Government Entity) the amount of the Shared
Government Costs.
ii) Adding (as a credit to the Company) the amount of all Reimbursable Private
Conversion Costs, Reimbursable Upgrade Costs and Reimbursable Temporary
Service Costs.
iii) Subtracting (as a credit to the Government Entity) any payments previously made to
the Company by the Government Entity under the Design Agreement which, under
the terms of the Design Agreement, are to be credited to the Government Entity
under this Agreement.
The Net Amount, as so calculated, (A) will be an amount payable to the Company if it is a positive
number, and (8) shall be an amount payable to the Government Entity if it is a negative number.
Construction Agreement, Attachment "B" to Schedule 74, Page 6
(insert project name here}
(c) Within sixty (60) business days of completion of the Conversion Project, the Government Entity
shall provide the Company with an itemization of the Shared Government Costs (the "Government
Itemization"), together with such documentation and information as the Company may reasonably
request to verify the Government Itemization. The Government Itemization shall, at a minimum,
break down the Shared Government Costs by the following categories, as applicable: (i) property
and related costs incurred and/or paid by the Government Entity, including any costs of obtaining
Operating Rights, and (ii) construction costs incurred and/or paid by the Government Entity,
including and listing separately inspection, labor, materials and equipment, overhead and all costs
charged by any agent, contractor or subcontractor of the Government Entity.
(d) Within thirty (30) business days after the Company's receipt of the Government Itemization and
requested documentation and information, the Company shall provide the Government Entity a
written statement (the "Company Statement") showing (i) an itemization of the Shared Company
Costs, (ii) the Parties' relative share of the Total Shared Costs based on the Company's
itemization of the Shared Company Costs and the Government Entity's itemization of the Shared
Government Costs set forth in the Government Itemization, (iii) any Reimbursable Private
Conversion Costs. (iv) any Reimbursable Upgrade Costs, (v) any Reimbursable Temporary
Service Costs, (vi) any credits to the Government Entity for payments previously made to the
Company by the Government Entity under the Design Agreement which, under the terms of the
Design Agreement, are to be credited to the Government Entity under this Agreement, and
(vii) the Net Amount, as determined in accordance with Section 7(b), above, together with such
documentation and information as the Government Entity may reasonably request to verify the
Company Statement. The itemization of the Shared Company Costs included in the Company
Statement shall, at a minimum, break down the Shared Company Costs by the following
categories, as applicable: (i) design and engineering costs, and (ii) construction costs, including
and listing separately inspection, labor, materials and equipment, overhead and all costs charged
by any agent, contractor or subcontractor of the Company.
(e) Within thirty (30) business days after the Government Entity's receipt of the Company Statement
and requested documentation and information, the Net Amount shall be paid by the owing Party to
the other Party, as specified in the Company Statement.
8. Indemnification.
(a) The Government Entity releases and shall defend, indemnify and hold the Company harmless
from all claims, losses, harm, liabilities, damages, costs and expenses (including, but not limited
to, reasonable attorneys' fees) caused by or arising out of any negligent act or omission or willful
misconduct of the Government Entity in its performance under this Agreement. During the
performance of such activities the Government Entity's employees or contractors shall at all times
remain employees or contractors, respectively, of the Government Entity.
(b) The Company releases and shall defend, indemnify and hold the Government Entity harmless
from all claims, losses, harm, liabilities, damages, costs and expenses (including, but not limited
to, reasonable attorneys' fees) caused by or arising out of any negligent act or omission or willful
misconduct of the Company in its performance under this Agreement. During the performance of
such activities the Company's employees or contractors shall at all times remain employees or
contractors, respectively, of the Company.
(c) Solely for purposes of enforcing the indemnification obligations of a Party under this Section 8,
each Party expressly waives its immunity under Title 51 of the Revised Code of Washington, the
Industrial Insurance Act, and agrees that the obligation to indemnify, defend and hold harmless
provided for in this Section 8 extends to any such claim brought against the indemnified Party by
or on behalf of any employee of the indemnifying Party. The foregoing waiver shall not in any way
preclude the indemnifying Party from raising such immunity as a defense against any claim
brought against the indemnifying Party by any of its employees.
Construction Agreement, Attachment "8" to Schedule 74, Page 7
(insert project name here]
..,
9. Conversion of Service to Customers within Conversion Area.
(a) Upon commencement of the Work, the Government Entity shall notify all persons and entities
within the Conversion Area that service lines to such customers must be converted from overhead
to underground service within the applicable statutory period following written notice from the
Government Entity that service from underground facilities are available in accordance with RCW
35.96.050. Upon the request of any customer, other than a single family residential customer,
within the Conversion Area, the Company shall remove the overhead system and connect such
persons' and entities' Underground Service Lines to the Underground Distribution System.
(b) The Parties acknowledge that single family residences within the Conversion Area must (~
provide a service trench and conduit, in accordance with the Company's specifications, from the
underground meter base to the point of service provided during the conversion, and (ii) pay for the
secondary service conductors as defined in Schedule 85 of the Company's Electric Tariff G. The
Government Entity shall exercise its authority to order disconnection and removal of overhead
facilities with respect to owners failing to convert service lines from overhead to underground
within the timelines provided in RCW 35.96.050.
10. Dispute Resolution.
(a) Any dispute, disagreement or claim arising out of or concerning this Agreement must first be
presented to and considered by the Parties. A Party who wishes dispute resolution shall notify the
other Party in writing as to the nature of the dispute. Each Party shall appoint a representative
who shall be responsible for representing the Party's interests. The representatives shall exercise
good faith efforts to resolve the dispute. Any dispute that is not resolved within ten (10) business
days of the date the disagreement was first raised by written notice shall be referred by the
Parties' representatives in writing to the senior managemcllt of the Parties for resolution. In the
event the senior management are unable to resolve the dispute within twenty (20) business days
. (or such other period as the Parties may agree upon), each Party may pursue resolution of the
dispute through other legal means consistent with the terms of this Agreement. All negotiations
pursuant to these procedures for the resolution of disputes shall be confidential and shall be
treated as compromise and settlement negotiations for purposes of the state and federal rules of
evidence.
(b) Any claim or dispute arising hereunder which relates to any Request for Change or any equitable
adjustment under Section 6, above, or the compensation payable by or to either Party under
Section 7, above, and which is not resolved by senior management within the time permitted
under Section 1 O(a) , above, shall be resolved by arbitration in Seattle, Washington, under the
Construction Industry Arbitration Rules of the American Arbitration Association then in effect. The
decision(s) of the arbitrator(s) shall be final, conclusive and binding upon the Parties. All other
disputes shall be resolved by litigation in any court or governmental agency, as applicable, having
jurisdiction over the Parties and the dispute.
(c) In connection with any arbitration under this Section 10, costs of the arbitrator(s), hearing rooms
and other common costs shall be divided equally among the Parties. Each Party shall bear the
cost and expense of preparing and presenting its own case (including, but not limited to, its own
attorneys' fees); provided, that, in any arbitration, the arbitrator(s) may require, as part of his or
her decision, reimbursement of all or a portion of the prevailing Party's costs and expenses
(including, but not limited to, reasonable attorneys' fees) by the other Party.
(d) Unless otherwise agreed by the Parties in writing, the Parties shall continue to perform their
respective obligations under this Agreement during the pendency of any dispute.
Construction Agreement, Attachment "8" to Schedule 74, Page 8
[insert project name here)
11. Uncontrollable Forces.
In the event that either Party is prevented or delayed in the performance of any of its obligations under
this Agreement by reason beyond its reasonable control (a "Force Majeure Event"), then that Party's
performance shall be excused dur!!"g ihe Force Majeure Event. Force Majeure Events shall include,
without limitation, war; civil disturbance; flood, earthquake or other Act of God; storm, earthquake or
other condition which necessitates the mobilization of the personnel of a Party or its contractors to
restore utility service to customers; laws, regulations, rules or orders of any governmental agency;
sabotage; strikes or similar labor disputes involving personnel of a Party, its contractors or a third
party; or any failure or delay in the performance by the other Party, or a third party who is not an
employee, agent or contractor of the Party claiming a Force Majeure Event, in connection with the
Work or this Agreement. Upon removal or termination of the Force Majeure Event, the Party claiming
a Force Majeure Event shall promptly perform the affected obligations in an orderly and expedited
manner under this Agreement or procure a substitute for such obligation. The Parties shall use all
commercially reasonable efforts to eliminate or minimize any delay caused by a Force Majeure Event.
12. Insurance.
(a) PSE shall, and shall require each of its contractors to, secure and maintain in force throughout the
duration of the Conversion Project (or, jj sooner, until termination of this Agreement)
comprehensive general liability insurances, with a minimum coverage of $ per
occurrence and $ aggregate for personal injury; and $ per occurrence/
aggregate for property damages, and professional liability insurance in the amount of $
(b) The Government Entity shall ensure that each of its contractors performing any Government Work
secures and maintains in force throughout the duration of the Conversion Project (or, if sooner,
until termination of this Agreement) insurance policies having the same coverage, amounts and
limits as s!-JBcified Section 12(a), above.
(c) In lieu of the insurance requirements set forth in Section 12(a), above, the Company may self-
insure against such risks in such amounts as are consistent with good utility practice. Upon the
Government Entity's request, the Company shall provide the Government Entity with reasonable
written evidence that the Company is maintaining such self-insurance.
13. Other.
(a) Agreement Subiect To Tariff. This Agreement is subject to the General Rules and Provisions set
forth in Tariff Schedule 80 of the Company's electrical Tariff G and to Schedule 74 of such Tariff
as approved by the Washington Utilities and Transportation Commission and in effect as of the
date of this Agreement.
(b) Termination. The Government Entity reserves the right to terminate the Conversion Project and
this Agreement upon written notice to the Company. In the event that the Government Entity
terminates the Conversion Project and this Agreement, the Government Entity shall reimburse the
Company for all costs reasonably incurred by the Company in connection with the Work
performed prior to the effective date of termination. In such event, the costs reimbursable to the
Company (i) shall not be reduced by any Shared Government Costs or other costs incurred by the
Government Entity, and (ii) shall be paid within thirty (30) days after the receipt of the Company's
invoice therefor. Sections 1, 5, 7, 8, 9, 10, 11 and 13 shall survive any termination of the
Conversion Project and/or this Agreement.
(c) Facilities Greater Than 15,000 Volts. Nothing in this Agreement shall in any way affect the rights
or obligations of the Company under any previous agreements pertaining to the existing or future
facilities of greater than 15,000 Volts within the Conversion Area.
Construction Agreement, Attachmenl "B" to Schedule 74, Page 9
[insert project name here}
f
(d) Compliance With Law. The Parties shall, in performing the Work under this Agreement, comply
with all applicable federal, state, and local laws, ordinances, and regulations.
(e) No Discrimination. The Company, with regard to the Work performed by the Company under this
Agreement, shall comply with all applicable laws relating to discriminaiion on the basis race, color,
national origin, religion, creed, age, sex, or the presence of any physical or sensory handicap in
the selection and retention of employees or procurement of materials or supplies.
(f) Independent Contractor. The Company and the Government Entity agree that the Company is an
independent contractor with respect to the Work and this Agreement. The Company is acting to
preserve and protect its facilities and is not acting for the Government Entity in performing the-
Work. Nothing in this Agreement shall be considered to create the relationship of employer and
employee between the Parties. Neither the Company nor any employee of the Company shall be
entitled to any benefits accorded employees of the Government Entity by virtue of the Work or this
Agreement. The Government Entity shall not be responsible for withholding or otherwise
deducting federal income tax or social security or contributing to the State Industrial Insurance
Program, or otherwise assuming the duties of an employer with respect to the Company, or any
employee of the Company.
(g) Nonwaiver of Rights or Remedies. No failure or delay of either Pariy to insist upon or enforce
strict performance by the other Party of any provision of this Agreement or to exercise any other
right under this Agreement, and no course of dealing or performance with respect thereto, shall,
except to the extent provided in this Agreement, be construed as a waiver or, or choice of, or
relinquishment of any right under any provision of this Agreement or any right at law or equity not
otherwise provided for herein. The express waiver by either Party of any right or remedy under
this Agreement or at law or equity in a particular instance or circumstance shall not constitute a
waiver thereof in any other instance or circumstance.
(h) No Third Party Beneficiaries. There are no third-party beneficiaries of this Agreement. Nothing
contained in this Agreement is intended to confer any right or interest on anyone other than the
Parties, their respective successors, assigns and legal representatives.
(i) Governmental Authority. This Agreement is subject to the rules, regulations, orders and other
requirements, now or hereafter in effect, of all governmental regulatory authorities and courts
having jurisdiction over this Agreement, the Parties or either of them. All laws, ordinances, rules,
regulations, orders and other requirements, now or hereafter in effect, of governmental regulatory
authorities and courts that are required to be incorporated into agreements of this character are by
this reference incorporated in this Agreement.
(j) No Partnership. This Agreement shall not be interpreted or construed to create an association,
joint venture or partnership between the Parties or to impose any partnership obligations or liability
upon either Party. Further, neither Party shall have any right, power or authority to enter into any
agreement or undertaking for or on behalf of, to act as or be an agent or representative of, or to
otherwise bind the other Party.
(k) Severabilitv. In the event that any provision of this Agreement or the application of any such
provision shall be held invalid as to either Party or any circumstance by any court having
jurisdiction, such provision shall remain in force and effect to the maximum extent provided by
law, and all other provisions of this Agreement and their application shall not be affected thereby
but shall remain in force and effect unless a court or arbitrator holds they are not severable from
the invalid provisions.
Construction Agreement, Attachment UB" to Schedule 74, Page 10
[insert project name here]
(I) Notice. Any notice under this Agreement shall be in writing and shall be faxed (with a copy
followed by mail or hand delivery), delivered in person, or mailed, properly addressed and
stamped with the required postage, to the intended recipient as follows:
If to the Gove~nment Entity:
Attn:
Fax:
If to the ComDany:
Puget Sound Energy, Inc.
Attn:
Fax:
Any Party may change its address specified in this Section 13(1) by giving the other Party notice of
such change in accordance with this Section 13(1).
(m) ADDlicable Law. This Agreement shall in all respects be interpreted, construed and enforced in
accordance with the laws of the State of Washington (without reference to rules governing conflict
of laws), except to the extent such laws may be preempted by the laws of the United States of
America.
(n) Entire AQreement. This Agreement constitutes the entire agreement of the Parties with respect to
the subject matter hereof and all other agreements and understandings of the Parties, whether
written or oral, with respect to the subject matter of this Agreement are hereby superseded in their
entireties; provided, however, that except as expressly set forth in this Agreement, nothing herein
is intended to or shall alter, amend or supersede the Design Agreement and the same shall
remain in full force and effect in accordance with its terms.
(0) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the
respective successors, assigns, purchasers, and transferees of the Parties, including but not
limited to, any entity to which the rights or obligations of a Party are assigned, delegated, or
transferred in any corporate reorganization, change of organization, or purchase or transfer of
assets by or to another corporation, partnership, association, or other business organization or
division thereof.
Government Entity:
Company:
PUGET SOUND ENERGY, INC.
BY
BY
ITS
ITS
Date Signed
Date Signed
Approved as to form:
Construction Agreement, Attachment MB" to Schedule 74, Page 11
[insert project name here}
.,