HomeMy WebLinkAbout06 - Amendment to On-Call PSA for Pipe Lining ServicesQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
January 13, 2026
Agenda Item No. 6
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Mark Vukojevic, Utilities Director - 949-644-3011,
mvukojevic@newportbeachca.gov
PREPARED BY: Joshua Rosenbaum, Senior Management Analyst - 949-644-3057
josenbaum@newportbeachca.gov
TITLE: Amendment to On -Call Services Agreement with Vortex Services,
LLC, for Pipe Lining Services
ABSTRACT:
The Utilities Department operates, maintains and repairs the City of Newport Beach's
sewer and storm drain systems and a specialty contractor is retained on an as -needed
basis for trenchless pipe lining services. Vortex Services, LLC was selected as the service
contractor through a competitive process for a five-year term. Over the last two and a half
years, most of agreement compensation has been utilized and staff is requesting City
Council approval for a $750,000 increase to the existing agreement.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve Amendment No. One to the On -Call Maintenance/Repair Services
Agreement with Vortex Services, LLC, for On -Call Pipe Lining Services, and increase
the contract amount by $750,000, and authorize the Mayor and City Clerk to execute
the Agreement.
DISCUSSION:
The City maintains hundreds of miles of wastewater and storm drain pipelines and
laterals. As part of the Utilities Department's routine cleaning and video inspection
process, certain pipes require repairs or minor rehabilitation short of complete
replacement. Inspections may reveal sea water infiltration, joint separation, root intrusion
and pipe corrosion in one or more locations within an aging pipe segment.
One of the most cost-effective repair methods for pipelines is using a trenchless
rehabilitation method known as Cured -In Place Pipe (CIPP). A fiberglass and polyester,
cloth -like material is pulled through a damaged pipe and then expanded into a rigid
plastic -like inner pipe. These liners last for decades, provide minimal disruption to
residents in the area, and bring the best value to the City by avoiding open trenching to
replace pipelines. Not all pipelines can be lined but, when possible, this method has been
Amendment to On -Call Services Agreement with Vortex Services, LLC, for Pipe Lining
Services
January 13, 2026
Page 2
found to be a cost-effective and reliable alternative to a full pipeline replacement. This
method of repair is especially effective for work in easements where digging is difficult
and disruptive to residents. This contractor is utilized as -needed by both the Utilities and
Public Works Departments. Recently, the contractor also performed a custom installation
on a water main running in between homes.
On June 13, 2023, the City Council approved a five-year agreement for on -call pipe lining
services with Sancon Technologies, which has been subsequently acquired by Vortex
Services, LLC. The original agreement was then assigned to Vortex Services, LLC in April
2025. This selection was based a competitive request for proposals (RFP) process.
Over the last two and a half years, various pipe lining projects have exhausted a majority
of the authorized agreement compensation. Staff is requesting an amendment to increase
Vortex's agreement by $750,000. The total 5-year as -needed agreement amount will
increase from $750,000 to $1.5 million. The additional amount will allow future pipe lining
projects and needed contingencies to continue as -needed over the next 30 months.
Lower priority repairs and larger -scale lining projects are assembled and bid separately
by the Public Works Department under the Capital Improvement Program. On -call
agreements do not guarantee any specific amount of business for the contracted
company.
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The adopted budget includes sufficient funding for pipe lining services. These services
are funded from annual maintenance and repair accounts from the wastewater and storm
drain programs as well as the Public Works Department's Capital Improvement accounts.
Actual expenses vary from year to year. A typical lining repair project is approximately
$30,000 and approximately $600,000 has been spent to date over the last two and a half
years.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Amendment No. One to the Services Agreement with Vortex Services,
LLC, for On -Call Pipe Lining Services
Attachment A
AMENDMENT NO. ONE TO
ON -CALL MAINTENANCE/REPAIR SERVICES AGREEMENT
WITH VORTEX SERVICES, LLC FOR
ON -CALL PIPE LINING SERVICES
THIS AMENDMENT NO. ONE TO ON -CALL MAINTENANCE/REPAIR
SERVICES AGREEMENT ("Amendment No. One") is made and entered into as of this
13th day of January, 2026 ("Effective Date"), by and between the CITY OF NEWPORT
BEACH, a California municipal corporation and charter city ("City"), and VORTEX
SERVICES, LLC, a Delaware limited liability company ("Contractor"), whose address is
18150 Imperial Valley Drive, Houston, Texas 77060, and is made with reference to the
following:
RECITALS
A. On June 13, 2023, City and Sancon Technologies, Inc. entered into an On -Call
Maintenance/Repair Services Agreement (Contract No. C-8558-2) ("Agreement")
to perform on -call maintenance and/or repair services for City ("Project").
B. On April 8, 2025, City, Sancon Technologies, Inc., and Contractor entered into an
Assignment Agreement (Contract No.C-8558-3) to assign the rights under the
Agreementfrom Sancon Technologies, Inc. to Contractorto perform all obligations
as of the effective date. The Agreement continued with the City and Contractor as
the new parties.
C. Since entering into the Agreement, Contractor was asked to perform a higher
volume of Work than was originally anticipated.
D. The parties desire to enter into this Amendment No. One to increase the total
compensation, update the Notices section, and update the insurance
requirements.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. COMPENSATION TO CONTRACTOR
Section 4.1 of the Agreement is amended in its entirety and replaced with the
following: "City shall pay Contractor for the Services on a time and expense not -to -exceed
basis in accordance with the provisions of this Section and the Letter Proposal and the
Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein by
reference. Except as otherwise provided herein, no rate changes shall be made during
the term of this Agreement without the prior written approval of City. Contractor's
compensation for all Services performed in accordance with this Agreement, including all
reimbursable items, shall not exceed One Million Five Hundred Thousand Dollars and
00/100 ($1,500,000), without prior written authorization from City."
The total amended compensation reflects Consultant's additional compensation
for additional Services to be performed in accordance with this Amendment No. One,
VORTEX SERVICES, LLC Page 1
including all reimbursable items and subconsultant fees, in an amount not to exceed
Seven Hundred Fifty Thousand Dollars and 001100 ($750,000).
2. NOTICES
Section 25.3 of the Agreement is amended in its entirety and replaced with the
following:
"25.3 All notices, demands, requests or approvals from City to Contractor shall be
addressed to Contractor at:
Attn: Ryan Helmuth
Vortex Services, LLC
18150 Imperial Valley Drive
Houston, TX 77060"
3. INSURANCE
As of the Effective Date of this Amendment No. One, Exhibit C of the Agreement
shall be deleted in its entirety and replaced with Exhibit C, attached hereto and
incorporated herein by reference. Any reference to Exhibit C in the Agreement shall
hereafter refer to Exhibit C attached hereto.
4. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
VORTEX SERVICES, LLC Page 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date: 17
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By: By:
A on C. Harp y- I I g S Lauren Kleinman
City Attorney Mayor
ATTEST:
Date:
-31
Lena Shumway
City Clerk
Attachments:
CONTRACTOR: VORTEX SERVICES,
LLC, a Delaware limited liability company
Date:
By:
Michael Vellano
President and Chief Executive Officer
[END OF SIGNATURES]
Exhibit C — Insurance Requirements
VORTEX SERVICES, LLC Page 3
EXHIBIT C
INSURANCE REQUIREMENTS — MAINTENANCEIREPAIRIJANITORIAL SERVICES
1. Provision of Insurance. Without limiting Contractor's indemnification of City,
and prior to commencement of Work, Contractor shall obtain, provide and
maintain at its own expense during the term of this Agreement, policies of
insurance of the type and amounts described below and in a form satisfactory
to City. Contractor agrees to provide insurance in accordance with
requirements set forth here. If Contractor uses existing coverage to comply
and that coverage does not meet these requirements, Contractor agrees to
amend, supplement or endorse the existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Contractor shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury
by disease in accordance with the laws of the State of California, Section
3700 of the Labor Code.
Contractor shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council,
boards and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Contractor shall maintain commercial
general liability insurance and, if necessary, umbrella liability insurance,
with coverage at least as broad as provided by Insurance Services Office
form CG 00 01, in an amount not less than two million dollars
($2,000,000) per occurrence, four million dollars ($4,000,000) general
aggregate. The policy shall cover liability arising from premises,
operations, products -completed operations, personal and advertising
injury, and liability assumed under an insured contract (including the tort
liability of another assumed in a business contract).
C. Automobile Liability insurance. Contractor shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Contractor
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or
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rented vehicles, in an amount not less than one million dollars
($1,000,000) combined single limit each accident.
D. Umbrella or Excess Liability Insurance. Contractor shall obtain and
maintain an umbrella or excess liability insurance policy with limits of not
less than one million dollars ($1,000,000) that will provide bodily injury,
personal injury and property damage liability coverage at least as broad
as the primary coverages set forth above. Such policy or policies shall
include the following terms and conditions:
• A drop down feature requiring the policy to respond in the event that
any primary insurance limits are exhausted by paid claims;
• Pay on behalf of wording as opposed to reimbursement;
• Concurrency of effective dates with primary policies,
Policies shall "follow form" to the underlying primary policies; and
• Insureds under primary policies shall also be insureds under the
umbrella or excess policies.
E. Pollution Liability Insurance. If required, Contractor shall maintain a
policy providing contractor's pollution liability ("CPL") coverage with a
total limit of liability of no less than one million dollars ($1,000,000) per
loss and two million dollars ($2,000,000) in the aggregate per policy
period. Claims -made policies require a 5-year extended reporting
period. The CPL policy shall include coverage for cleanup costs, third -
party bodily injury and property damage, including loss of use of
damaged property or of property that has not been physically injured or
destroyed, resulting from pollution conditions caused by contracting
operations. Coverage as required in this paragraph shall apply to
sudden and non -sudden pollution conditions resulting from the escape
or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals,
liquids, or gases, waste materials, or other irritants, contaminants, or
pollutants. The CPL shall also provide coverage for transportation and
off -Site disposal of materials. The policy shall not contain any provision
or exclusion (including any so-called "insured versus insured" exclusion
or "cross -liability" exclusion) the effect of which would be to prevent, bar,
or otherwise preclude any insured or additional insured under the policy
from making a claim which would otherwise be covered by such policy
on the grounds that the claim is brought by an insured or additional
insured against an insured or additional insured under the policy.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation
VORTEX SERVICES, LLC Page 5
against City, its City Council, boards and commissions, officers, agents,
volunteers and employees or shall specifically allow Contractor or others
providing insurance evidence in compliance with these requirements to
waive their right of recovery prior to a loss. Contractor hereby waives
its own right of recovery against City, and shall require similar written
express waivers from each of its subcontractors.
B. Additional Insured Status. All liability policies including general liability,
products and completed operations, excess liability, pollution liability,
and automobile liability, if required, shall provide or be endorsed to
provide that City, its City Council, boards and commissions, officers,
agents, volunteers and employees shall be included as insureds under
such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a
primary basis and shall not require contribution from any insurance or
self-insurance maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days notice of cancellation (except for nonpayment for which
ten (10) calendar days notice is required) or nonrenewal of coverage for
each required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Contractor shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along
with a waiver of subrogation endorsement for workers' compensation
and other endorsements as specified herein for each coverage.
Insurance certificates and endorsement must be approved by City's Risk
Manager prior to commencement of performance. Current certification
of insurance shall be kept on file with City at all times during the term of
this Agreement. The certificates and endorsements for each insurance
policy shall be signed by a person authorized by that insurer to bind
coverage on its behalf. At least fifteen (15) days prior to the expiration
of any such policy, evidence of insurance showing that such insurance
coverage has been renewed or extended shall be filed with the City. If
such coverage is cancelled or reduced, Contractor shall, within ten (10)
days after receipt of written notice of such cancellation or reduction of
coverage, file with the City evidence of insurance showing that the
required insurance has been reinstated or has been provided through
another insurance company or companies. City reserves the right to
require complete, certified copies of all required insurance policies, at
any time.
B. Cit s Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Contractor sixty (60) calendar days
VORTEX SERVICES, LLC Page 6
advance written notice of such change. If such change results in
substantial additional cost to Contractor, City and Contractor may
renegotiate Contractor's compensation.
C. Right to Review Subcontracts. Contractor agrees that upon request, all
agreements with subcontractors or others with whom Contractor enters
into contracts with on behalf of City will be submitted to City for review.
Failure of City to request copies of such agreements will not impose any
liability on City, or its employees. Contractor shall require and verify that
all subcontractors maintain insurance meeting all the requirements
stated herein, and Contractor shall ensure that City is an additional
insured on insurance required from subcontractors. For CGL coverage,
subcontractors shall provide coverage with a format at least as broad as
CG 20 38 04 13.
D. Enforcement of Agreement Provisions. Contractor acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Contractor of non-compliance with any requirement imposes no
additional obligations on City nor does it waive any rights hereunder.
E. Requirements not Limiting. Requirements of specific coverage features
or limits contained in this Section are not intended as a limitation on
coverage, limits or other requirements, or a waiver of any coverage
normally provided by any insurance. Specific reference to a given
coverage feature is for purposes of clarification only as it pertains to a
given issue and is not intended by any party or insured to be all inclusive,
or to the exclusion of other coverage, or a waiver of any type. If the
Contractor maintains higher limits than the minimums shown above, the
City requires and shall be entitled to coverage for higher limits
maintained by the Contractor. Any available insurance proceeds in
excess of the specified minimum limits of insurance and coverage shall
be available to the City.
F. Self -insured Retentions. Any self -insured retentions must be declared
to and approved by City. City reserves the right to require that self -
insured retentions be eliminated, lowered, or replaced by a deductible.
Self-insurance will not be considered to comply with these requirements
unless approved by City.
G. City Remedies for Non -Compliance. If Contractor or any subcontractor
fails to provide and maintain insurance as required herein, then City shall
have the right but not the obligation, to purchase such insurance, to
terminate this Agreement, or to suspend Contractor's right to proceed
until proper evidence of insurance is provided. Any amounts paid by
City shall, at City's sole option, be deducted from amounts payable to
Contractor or reimbursed by Contractor upon demand.
H. Timely Notice of Claims. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
VORTEX SERVICES, LLC Page 7
Contractor's performance under this Agreement, and that involve or may
involve coverage under any of the required liability policies. City
assumes no obligation or liability by such notice, but has the right (but
not the duty) to monitor the handling of any such claim or claims if they
are likely to involve City.
Contractor's Insurance. Contractor shall also procure and maintain, at
its own cost and expense, any additional kinds of insurance, which in its
own judgment may be necessary for its proper protection and
prosecution of the Work.
VORTEX SERVICES, LLC Page 8