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HomeMy WebLinkAbout10 - Sampson Oil CompanyCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 10 January 26, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Utilities Department Cindy Asher, Administrative Manager 949 - 644 -3010 or casher(a)newportbeachca.gov SUBJECT: APPROVAL OF PROFESSIONAL SERVICES AGREEMENT WITH SAMPSON OIL COMPANY FOR CITY OIL FIELD FACILITY OPERATIONS AND MAINTENANCE SERVICES ISSUE: Should the City Council approve a Professional Services Agreement for the operation and maintenance of the City's. Oil Field Facility? RECOMMENDATION: Approve Professional Services Agreement (PSA) with Sampson Oil Company for the operation and maintenance of the City's Oil Field Facility and authorize the Mayor and City Clerk to execute the Agreement. BACKGROUND: Sampson Oil Company of Long Beach has operated the City's Oil Field Facility in West Newport since 1984. Services include the daily maintenance and operation of the City's 16 oil wells, the production tank facility and all production lines and coordination of all regulatory agency inspections. The present contract with the Sampson Oil Company expired on May 1, 2007. Since that time, they have been working on a month to month basis based on terms and pricing consistent with the prior agreement. The Office of the City Attorney has advised Utilities staff that a formal contract should be prepared. Staff took this opportunity to solicit proposals to make sure the City is getting the most qualified operator at the most economical cost. Staff prepared a Statement of Qualifications /Request for Proposals (SOQ /RFP) to select a qualified contractor to assist the City of Newport Beach in operating and maintaining the oil and gas production facilities. Operation & Maintenance of City's Oil Field Facility Professional Services Agreement January 26, 2010 Page 2 DISCUSSION: The SOQ /RFP was mailed to twenty-two (22) operators, whose names were obtained from the State Division of Oil, Gas and Geothermal Resources State website. Of the twenty -two (22), the City received a total of four (4) proposals with one of the four being non - responsive. In the SOQ /RFP the firms were asked to provide the following information as the basis for the City selection: • Describe successes in providing management services for oil facilities similar in size and nature. • Provide detailed information on at least one project of similar scope to the services requested. • Discuss their proposed management plan for this project. • Provide work schedules showing daily, weekly, biweekly, monthly, quarterly, semi - annual and annual work tasks. • Provide the required. personnel and labor hour's allocation. • Discuss both current. and potential projects the project team is contemplating as well as the current and potential project team time commitments. The selection process for this SOQ /RFP was a qualification -based selection process where price is considered, but is not the major evaluation criterion. In evaluating the proposals the following . criteria were used and were specified in the City's SOQ /RFP. 1. Firm Qualifications and Experience 35% 2. Management Plan 30% 3. Proposed Project Team 25% 4. Workload and Resources 10% Total 100% While the selection process was based on qualifications, the chart below lists the costs and ranking for the companies. Company Ranking Monthly Cost Annual Cost Imperial Occidental, Inc. 50 points $25,600 $307,200 Remin er and Lawrence 30 points $37,500 $450,000 Sampson Oil Company 80 points $8,700 $104,400 Operation & Maintenance of City's Oil Field Facility Professional Services Agreement January 26, 2010 Page 3 The Utilities Department recommends Sampson Oil Company be awarded the contract as the most qualified firm. Sampson Oil was ranked first due to their demonstrated experience as well as experience obtained at other fields they operate. Project Manager Renick Sampson, a mechanical engineer, has more than 44 years of experience in managing and operating oil well fields and his lead assistant has 33 years of oil field experience. Over the many years that Sampson Oil Company has operated the City's oil and gas production facilities; there no instances that required emergency responses due to mechanical failures and spills. The facilities have been well maintained in an efficient and economical manner. The State Division of Oil and Gas representatives responsible for inspecting these facilities gives the City and Sampson Oil Company, high ratings and is very complimentary of the operation. To provide flexibility in any future decisions regarding the operation and management of the oil and gas production facilities, staff is proposing that the initial agreement be for a one (1) year term with the option of four (4) one (1) year extensions, renewable on an annual basis at the City's sole discretion. To address the potential liability of the oil field operation, the new proposed agreement includes insurance coverage requirements of $5,000,000 for General Liability and $5,000,000 for Pollution Liability. Environmental Review: This project is exempt from environmental review under Section 15301 of the CEQA Guidelines, pertaining to the maintenance of existing facilities. Funding Availability: The 2008 -09 oil sales produced $1,872,713 in revenue. There are sufficient funds available in the current FY2009 -10 budget (account no. 5400 -8080) to cover the contract cost. Funds will be budgeted in FY2010 -11 to cover the contract cost of $104,400. Prepared by: Submitted by WiU Cindy Asher, F d inistrative Manager eo ge urdo , Utilities Director Attachments: Professional Services Agreement with Sampson Oil Company PROFESSIONAL SERVICES AGREEMENT WITH SAMPSON OIL COMPANY TO PROVIDE MANAGEMENT AND OPERATIONS SERVICES FOR THE CITY'S OIL FIELDS THIS AGREEMENT is made and entered into as of this 26th day of January, 2010, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and Renick Sampson, doing business as ( "DBA ") SAMPSON OIL COMPANY, a sole proprietorship, whose address is 301 Ultimo Ave., Long Beach, California, 90814 ( "Contractor "), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City desires to engage Contractor to provide management services for the City's Oil Well Fields ( "Project "). C. Contractor possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement. D. The principal member of Contractor for purposes of Project shall be Rennick Sampson. E. City. has solicited and received a proposal from Contractor, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Contractor to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM Unless terminated earlier in accordance with Section 24 of this Agreement, the Term of this Agreement shall be for a period of one (1) year. The term shall commence within ten (10) working days of City Council approval of this Agreement and upon the City's receipt and approval of all required certificates of insurance. The term of this Agreement shall automatically be extended for four (4) additional one (1) year terms (automatic extensions) with the extensions to automatically commence upon the expiration of the initial term or any extended term, unless the City notifies Contractor in writing at least thirty (30) days before the end of the initial term or any extended term, of its intent to terminate this Agreement. Time is of the essence in the performance of services under this Agreement. 2. SERVICES TO BE PERFORMED A. Contractor shall diligently perform ail the services described in the Request for Statement of Qualifications(Proposai attached hereto as Exhibit A and incorporated herein by reference. The City may elect to delete certain tasks of the Scope of Services at its sole discretion. B. As a material inducement to the City for entering into this Agreement, Contractor warrants that all work and services to be provided hereunder shall be performed in a competent, professional and satisfactory manner by an adequate level of staff with the appropriate level of training. Contractor covenants that it shall follow the highest professional standards in performing the work and services and that all equipment and supplies used will be of good quality, fit for the purpose intended. For purposes of this Agreement, the phrase "highest professional standards" shall mean those standards of practice recognized by one or more first - class firms performing similar work under similar circumstances. 3. PERSONNEL REQUIREMENTS A. All contract services shall be performed by competent and experienced employees. The Contractor shall comply with all state and federal legal requirements regulating the right to work in the United States of America to ensure that all members of the work force have the legal right to perform work under this Agreement. Contractor shall make any records related thereto available to the City within ten (10) days of receiving a written request for said records by the City. B. All supervisors and lead workers must be able to communicate effectively in English (both orally and in writing). Any order given to these supervisors or lead workers shall be deemed delivered to the Contractor. C. The City reserves the right to conduct a background investigation of any employee of Contractor and to require the Contactor to remove any employee whose performance is deemed unsatisfactory in the City's sole discretion. Persons employed by the Contractor who are found unsatisfactory by the City shall be discharged or reassigned by the Contractor on fifteen (15) days notice from the City. D. Contractor shall be responsible for compliance with all local, state, and federal laws and regulations regarding chemical usage. Contractor shall employ or retain, at its sole cost and expense, all professional and technical personnel necessary to properly perform contract services. E. The City will periodically inspect all work performed by the Contractor. F. Contractor shall ensure there is no lapse in services. N 4. LICENSES, FEES, PERMITS AND TAXES Contractor shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Contractor shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Contractor's performance of the services required by this Agreement, and shall indemnify, defend and hold harmless City against any such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder. 5. COMPLIANCE WITH ALL LAWS All work and services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statues, rules and regulations of the City and any Federal, State, or local governmental agency of competent jurisdiction. 6. COMPENSATION TO CONTRACTOR City shall pay Contractor the sum of Eight Thousand Seven Hundred Dollars and no /100. ($8,700) per month for a total of One Hundred Four Thousand Four "Hundred Dollars and no /100 ($104,400) per year ( "Contract Amouht") to perform all the work and services contemplated by and described in Exhibit A and the Schedule of Billing Rates attached hereto as Exhibit B. Payment for services shall be made to Contractor once a month upon submission of an invoice explaining in sufficient detail the services performed. City shall pay invoices within thirty (30) days after approval of the invoice by the City. Payment shall be deemed made when deposited in the United States mail, first -class postage pre -paid, and addressed to Contractor as specked in Section entitled "Notices." Upon the second anniversary of the Commencement Date and upon each anniversary of the Commencement Date thereafter, the Contract Amount shall be adjusted in proportion to changes in the Consumer Price Index, subject to the 2.5% maximum adjustment increase set forth below. Such adjustment shall be made by multiplying the original Contract Amount by a fraction, the numerator of which is the value of the Consumer Price Index for the calendar month three (3) months preceding the calendar month for which such adjustment is to be made and the denominator of which is the value of the Consumer Price Index for the same calendar month immediately prior to Commencement Date. For example, if the adjustment is to occur effective June 1, 2009, the index to be used for the denominator is the index for the month of March preceding the Commencement Date. The "Consumer Price Index" to be used in such calculation is the Consumer Price Index, All Urban Consumers (All Items), for the Los Angeles Anaheim Riverside Metropolitan Area, published by the United States Department of Labor, Bureau of Labor Statistics. If both an official index and one or more unofficial indices are published, the official index shall be used. If said Consumer Price Index is no longer published at the adjustment date, it shall be constructed by conversion tables included in such new index. In no event, 3 however, shall the amount payable under this Agreement be reduced below the Contract Amount in effect immediately preceding such adjustment. No adjustment shall be made on the first anniversary of the Commencement Date. The maximum increase to the Contract Amount, for any year where an adjustment is made in proportion to changes in the Consumer Price Index, shall not exceed 2.5% of the Contract Amount in effect immediately preceding such adjustment. 7. INDEPENDENT CONTRACTOR It is understood that City retains Contractor on an independent contractor basis and Contractor is not an agent or employee of City. The manner and means of conducting the work are under the control of Contractor, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Contractor or any of Contractor's employees or agents, to be the agents or employees of City. Contractor shall have the responsibility for and control over the means of performing the work, provided that Contractor is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Contractor as to the details of the performance or to exercise a measure of control over Contractor shall mean only that Contractor shall follow the desires of City with respect to the results of the services. 8. REPAIR/REPLACEMENT A. The Contractor shall adopt reasonable methods to furnish continuous protection to City property and equipment to prevent loss or damage, and shall be responsible for all such damages, to persons or property, except such loss or damage as may be caused by City's sole negligence or willful misconduct. B. Contractor shall advise the Utilities Operation Manager of any damage to City equipment or property immediately upon becoming aware of the damage. C. Contractor shall repair, at its sole cost and expense, any damage to City equipment or property caused by Contractor or its agents, employees, representatives or officers. 9. FAMILIARITY WITH WORK AND WORK SITE A. By executing this Agreement, Contractor warrants that Contractor. (a) has thoroughly investigated and considered the Scope of Services to performed, (b) has carefully considered how the services should be performed, and (c) fully understands the facilities, difficulties and restrictions attending performance of the services under this Agreement. Contractor warrants that Contractor has investigated the sites depicted in Exhibit B and is fully acquainted with the conditions there existing, prior to commencement of services hereunder. M B. City and Contractor agree that City has made no representation regarding the order or condition of any area or location for which Contractor is to provide services or that the site or location of work will be free from defects, apparent or hidden, at the commencement of, or at any time during the term of this Agreement. 10. HOLD HARMLESS To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers and employees (collectively, the "Indemnified Parties) from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any work performed or services provided under this Agreement (including, without limitation, defects in workmanship and /or materials) or Contractor's presence or activities conducted on the Project (including the negligent and /or willful acts, errors and /or omissions of Contractor, its principals, officers, agents, employee's; `vend.drs; suppliers, Contractors, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). . . . Notwithstanding the foregoing, nothing herein shall be construed to require Contractor to indemnify the Indemnified Parties from any Claim arising from the sole. negligence,; or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be.construed as authorizing any award of attorney's fees in any action on or to enforce the terns of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Contractor. 11. 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, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Contractor shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. 5 C. 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. D. Coverage Requirements. i. Workers' Compensation Coverage. Contractor shall maintain Workers' Compensation Insurance and Employers Liability Insurance for his or her employees in accordance with the laws of the State of California. In addition, Contractor shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non- payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Contractor for City. ii. General Liability Coverage. Contractor shall maintain commercial general liability insurance in an amount not less than five million dollars ($5,01)0,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. Automobile Liability Coverage. Contractor shall maintain automobile insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Pollution Liability Coverage. Contractor shall maintain pollution liability insurance with onsite and third party coverage in an amount not less than five million dollars ($5,000,000). E. Endorsements. Each general liability and automobile liability insurance policy shall be endorsed with the following specific language: A i. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Contractor. ii. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Contractor's operations or services provided to City. Any insurance maintained by City, including any self - insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. W. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. V. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. F. Timely Notice of Claims. Contractor shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Contractor's performance under this Agreement. G. Additional 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. 12. PROHIBITION AGAINST ASSIGNMENTS AND. TRANSFERS A. Contractor may not assign any right or obligation of this Agreement or any interest in this Agreement without the prior written consent of City. Any attempted or purported assignment without the consent of the City shall be null and void. Contractor acknowledges that these provisions relative to assignment are commercially reasonable and that Contractor does possess special skills, abilities and personnel uniquely suited to the performance of contract services and any assignment of this Agreement 7 to a third party, in whole or in part, could jeopardize the satisfactory performance of contract services. Contractor may not employ any Subcontractors unless specifically authorized by City B. The sale, assignment, transfer, or other disposition of any of the issued and outstanding capital stock of Contractor, or of the interest of any general partner or joint venture which shall result in changing the control of Contractor, shall be construed as an assignment of this Agreement. 13. RECORDS A. All Contractor's books and other business records, or such part as may be used in the performance of this Agreement, shall be subject to inspection and audit by any authorized City representative during regular business hours. B. Contractor shall keep records and invoices in connection with the work to be perfonned under this Agreement. Contractor shall maintain complete and accurate records with respect to the costs, including man hours, incurred under this Agreement. All such records shall be clearly identifiable. Contractor shall allow a representative of City during normal business hours to examine, audit, and- make transcripts or copies of such records. Contractor shall maintain and allow inspection of all work, data, documents, proceedings and activities related to this Agreement for a period of three (3) years from the date of final payment under this Agreement. 14. ADMINISTRATION This Agreement will be administered by the Utilities Department. The Utilities Operation Manager, Ed Burt, shall be considered the City's Administrator and shall have the authority to act for City under this Agreement. The Administrator or his /her authorized representative shall represent the City in all matters pertaining to the services to be rendered under this Agreement. 15. INCREASE OR DECREASE IN SCOPE OF SERVICES A. Contractor may be asked to perform additional oil well management services by the Administrator. The Administrator may give verbal authorization for additional services up to $500. Administrator shall provide Contractor with written authorization prior to the performance of any additional services that exceed $500. B. City reserves the right to withdraw certain oil wells or tasks from the work to be performed by Contractor pursuant to this Agreement. City shall notify Contractor in writing of its intent to do so at least thirty (30) days prior to the effective date of withdrawal of any oil well. In the event an oil well is withdrawn from the Scope of Services, compensation to Contractor shall be reduced in accordance with costs specified in Exhibit B. In the E event the oil well is withdrawn for a period of less than a full one (1) year term, Contractor's compensation shall be reduced on a prorated basis. 16. WORK DEFICIENCIES AND CORRECTIONS A. The Contractor's performance will be evaluated on a regular basis. When problems are identified, the City will notify Contractor. If issues are serious or go unresolved, a Notice of Deficiency will be issued to Contractor in writing. This notice will detail the issues and give a cure period to resolve them. B. Failure to correct the deficiencies listed in the Notice of Deficiency within the timeframe specified by the City, in the City's sole discretion, result in action being taken by the City, including, but not limited to, (a) withholding payment for the subject deficiency until the work is completed; (b) correcting the deficiency (using the City's own work force and/or by contracting out) and deducting any associated costs plus overhead incurred thereby from the total monthly compensation due the Contractor; (c) deletion of the site(s) from the Contract and reducing the corresponding compensation for that month; (d) contracting with another Vendor to perform the management and other services required for the remainder of the term of the Contract and deducting from the Contractor's total compensation under the contract any costs that City pays or incurs over and above the monthly billing rate by the Contractor for that site; (e) terminating the agreement; and /or (f) taking any other action and exercising any other legal remedy available to the City under law. C. The City reserves the right to make appropriate deductions in payments for unsatisfactory performance or failure to perform contract duties. Payment deductions shall be based upon the Prices outlined in Exhibit B. 17. DISPUTES PERTAINING TO PAYMENT FOR WORK Should any dispute arise respecting the value of the work done, or of any work omitted, or of any extra work which Contractor may be required to do, or respecting any payment to Contractor during the performance of the Agreement, such dispute shall be decided by the City Manager and his decision shall be final and binding upon Contractor and his sureties. 18. REIMBURSEMENT FOR EXPENSES Contractor shall not be reimbursed for any expenses unless the City approves the expense in advance in writing. 19. LABOR A. Contractor shall conform with all Federal law including, applicable Standards Act. N applicable provisions of State and provisions of the Federal Fair Labor B. Whenever Contractor has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this Agreement, Contractor shall immediately give notice to City, and provide all relevant information. C. Wages paid to Contractor for services provided hereunder shall be in accordance with Section 1770 of the California State Labor Code. The Director of Industrial Relations has ascertained the general prevailing rate of per diem wages in the locality in which the work is to be performed for each craft, classification, or type of workman or mechanic needed to execute the contract. A copy of said determination is available by calling the prevailing wage hotline number (415) 703 -4774, and requesting one from the Department of Industrial Relations. All parties to the contract shall be governed by all provisions of the California Labor Code Relating to prevailing wage rates (sections 1770 -7981 inclusive). 20. NONDISCRIMINATION BY CONTRACTOR Contractor represents and agrees that it does not, and will not, discriminate against any Subcontractor, Contractor, employee or applicant for employment because of race, religion, color, sex, handicap, national origin, or other basis that is violative of the federal or state constitution or federal or state law. Contractor's obligation not to discriminate shall apply, but not be limited to, the following: employment, upgrading, demotion, transfers, recruitment, recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. 21. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Contractors in connection with this Project. 22. CONFLICTS OF INTEREST A. The Contractor or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose financial interest that may foreseeable be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeable financially affect such interest. The Contractor will provide a completed disclosure form noting the above. Contractor will comply with the Act and relevant City Resolutions. B. If subject to the Act, Contractor shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by the City. The Contractor shall indemnify and hold harmless the City for any claims for damages resulting from the Contractor's violation of this Section. 10 23. NOTICES All notices, demands, requests or approvals to be given under this Agreement must be given in writing, and will be deemed served when delivered personally or on the second business day after the deposit thereof in the United States mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests or approvals from Contractor to City shall be addressed to City at: Attn: Mr. Ed Burt, Operations Manager Utilities Department City of Newport Beach P.O. Box 1768 Newport Beach, CA, 92658 -8915 Phone: 949 -718 -3432 Fax: 949 -646 -5204 All notices, demands, requests or approvals from City to Contractor shall be addressed to Consultant at: Attention: Mr. Renick Sampson Sampson Oil Company 301 Ultimo Ave. Long Beach, CA 90814 Phone: 562 - 598 -5027 Fax: 562 -493 -3130 24. TERMINATION /DEFAULT A. In the event Contractor fails or refuses to timely perform any of the provisions of this Agreement in the manner required or if Contractor violates any provisions of this Agreement, Contractor shall be deemed in default. If such default is not cured within a period of two (2) working days, or if more than two (2) working days are reasonably required to cure the default and the Contractor fails to give adequate assurance of due performance within two (2) working days after Contractor receives written notice of default from City, City may terminate the Agreement forthwith by giving written notice. City may, in addition to the other remedies provided in this or authorized by law, terminate this agreement by giving written notice of termination. B. This agreement may be terminated without cause by the City upon thirty (30) days written notice. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. The Contractor may only terminate the Agreement in the event of nonpayment by the City. In the event of nonpayment by the City, Contractor shall give the City thirty 11 (30) days written notice thereof and the City shall have fifteen (15) working days to cure the alleged breach. C. In addition to, or in lieu of, remedies provided in this Agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor's compensation for contract services if, in the judgment of the City Manager, the Contractor fails to satisfactorily perform contract services. City shall have the right to retain funds withheld until the City Manager determines that contract services are performed as well and as frequently as required by this Agreement. 25. COST OF LITIGATION If any legal action is necessary to enforce any provision of this Agreement or for damages by reason for an alleged breach of any provisions of this Agreement, the parties agree that attorneys' fees shall not be recoverable by the prevailing party. 26. WAIVER A waiver by City of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 27. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties and all preliminary negotiations and agreements of whatsoever kind or nature are merged in this Agreement. No verbal agreement or implied covenant shall be held to vary the provisions hereon. 28. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both Contractor and City and approved as to form by the City Attorney. 29. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 12 30. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 31. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 13 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY y: hi •to eonie Mulvihill, Assistant City Attorney ATTEST: Leilani Brown, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation L:A Keith D. Curry, Mayor CONTRACTOR: SAMPSON OIL COMPANY (Corporate Officer) Title: President Print Name: Renick Sampson Attachments: Exhibit A — Statement of Qualifications /Request for Proposals Exhibit B — Schedule of Billing Rates 14 El(IIIBIf'A" Q� t V City of Newport Beach L� FO REQUEST FOR STATEMENT OF QUALIFICATIONS and REQUEST FOR PROPOSALS to provide MANAGEMENT SERVICES FOR THE CITY'S OIL WELL FIELD Proposal Deadline: 3:00 p.m., Friday, June 5, 2009 CITY OF NEWPORT BEACH Statement of Qualifications and Request for Proposal I. INTRODUCTION The City owns one (1) injection well and fifteen (15) circa -1950s oil wells that produce a total of between 80 and 100 barrels of oil per day. The wells are operated under the supervision of the City's Utilities Department however, day - today management has historically been outsourced to a consultant firm. The City desires to seek competitive bids from qualified consultants to ensure the continued professional and cost effective management of the oil field. 11. SOQIRFP OBJECTIVES The purpose of this Statement of Qualifications ( "SOO ") /Request for Proposal ( "RFP ") is to select a qualified consultant firm, to assist the City of Newport Beach in managing, operating and maintaining one (1) injection well and fifteen (15) oil wells located along Coast Highway West in the City of Newport Beach. Ill. SELECTION PROCESS The City of Newport Beach is interested in receiving statements of qualifications and proposals from qualified contractors for Oil Well Field Management Services. After a careful review of each submitted proposal, the City will conduct an evaluation leading to the selection of a Contractor and the award of a contract. The resultant contract is intended as a four (4) year contract, with the possibility of up to two (2) one (1) year extensions, renewable on an annual basis at the City's sole discretion based on the contractor's performance. The contract will be re -bid no less than every six (6) years. Copies of this request for statement of qualifications and request for proposal may be obtained in person at the Administration office of the Utilities Department.located at 949 West 160' Street, Newport Beach. Please do not mail any correspondence to the 16`h Street address as it is not a valid mailing address. IV. SCHEDULE of EVENTS Mailing Date SOO/ RFQ Due Award of Contract Contractor In -Place V. CITY POINT OF CONTACT Thursday, May 14, 2009 Friday, June 5, 2009 by 3:00 p.m. To be determined To be determined The sole source of contact regarding this SOQ /RFP is Ed Burt, Utilities Operation Manager, (949) 718 -3432. Individuals or firms interested in submitting a proposal are Request for Qualifications/Proposals Page 2 asked not to contact other members of the City of Newport Beach staff in connection with the SOQ /RFP prior to the announcement of the selected contractor. All written inquires related to this SOQ /RFP are to be submitted in a sealed envelope to: Mr. Ed Burt Utilities Operations Manager Utilities Department City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Or in person, in a sealed envelope, to the Administration office of the Utilities Department located at: 949 West 16th Street Newport Beach, CA 92663 Please do not mail any correspondence to the 16tt' Street address as it is not a valid mailing address. Any inquiries must be labeled as follows: CONFIDENTIAL (INQUIRY REGARDING PROPOSAL FOR CITY OIL FIELD MANAGEMENT) VI. CITY OF NEWPORT BEACH BUSINESS LICENSE The Contractor must possess and maintain in effect a valid City of Newport Beach Business License prior to commencement of work and during the entire time that work is being performed under the contract. VII. PROFESSIONAL LICENSES, PERMITS, ETC. Contractor represents and warrants to the City that he /she has, and will keep in effect at all times during the term of a contract with the City, all licenses, permits, professional qualifications, and approvals of whatever nature that are legally required to practice his /her trade. Vehicles and equipment must meet all current federal, State, and AQMD regulations. VIII. PROPOSAL CLOSING DATE Contractor must submit one (1) original and two (2) complete copies of the statement of qualifications and proposal (copies must be marked "COPY "). All proposals and statements of qualifications are due no later than 3:00 p.m., Friday, June 5, 2009. All statement of qualifications and proposals must be mailed to: Request for Qualifications/Proposals Page 3 Mr. Ed Burt Utilities Operations Manager Utilities Department City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Or delivered, in person or by Courier to the Administration office of the Utilities Department at 949 West 16"' Street, Newport Beach, CA 92663. Please do not mail any correspondence to the 16"' Street address as it is not a valid mailing address. Statements of Qualifications and Proposals must be labeled as follows: CONFIDENTIAL (PROPOSAL FOR CITY OIL FIELD MANAGEMENT) Proposals will become a part of the official files of the City of Newport Beach and will not be returned. Late or incomplete proposals will not be considered. IX. INSTRUCTIONS AND CONDITIONS See Attachment A. X. DESCRIPTION. OF PROJECT AND INTENT (Scope of Work) See Attachment B. XI. DELIVERABLES The Contractor is responsible for the delivery of the Statement of Qualifications and Proposal in the format and content explained in Attachment A, in keeping with the schedule described in subsection IV. XII. ATTACHMENTS Attachment A: Instructions and Conditions Attachment B: Description of Project Intent (Scope of Work) 12 Attachment C: Map XX Attachment D: Statement of Compliance XX Attachment E: Draft Agreement XX Request for Qualifications/Proposals Page 4 ATTACHMENT A: INSTRUCTIONS AND CONDITIONS 1. STATEMENT OF QUALIFICATIONS A. Provide a cover letter with the firm's name, address, phone /fax numbers, email address and principal contact; B. Provide a description of the services your firm provides; C. Provide a local staffing list, including names and positions; D. Provide advance notice requirements; i.e. the ability of your firm to provide service on short notice; E. Provide the resumes of key personnel; F. Provide the list of public agency and/or private company work performed in the last five, ten and fifteen years; G. Provide job specific references, including specific contact names and phone numbers; and H. Provide a Fee Schedule for 2009 -2010. The respondent must include all of the information requested above to be considered responsive. II. PROPOSAL REQUIREMENTS Proposers are encouraged to submit proposals that exceed the minimum specifications stated herein: The proposal must contain: (1) a Technical section and (2) a not -to- exceed Time -Cost section. A. Technical Proposal In the Technical section, the respondent should include schedules showing daily, weekly, biweekly, monthly, bimonthly, quarterly, semi - annual and annual work schedules, projected required personnel, and labor hours allocation. Most duties and responsibilities are shown on Attachment 1, Scope of Work, however this list is not all - inclusive and respondents should add any tasks, duties and/or responsibilities they consider essential and /or valuable. Request for Qualifications/Proposals Page 5 B. Time -Cost In the Time -Cost section, the respondent must provide an estimate of the time and costs that will be required to complete the project. This is a not -to- exceed cost and should include an allowance for emergency services assistance. C. Contract A draft contract has been provided in Attachment E. Respondent shall thoroughly review the contract. Within two weeks of award of contract, respondent must provide evidence of insurance, complete with riders and additional insured, along with evidence of having obtained a City of Newport Beach business license, or contract will be nullified. III. SOQ/RFP FORMAT Contractor must submit one (1) original and two (2) complete copies of the statement of qualifications and proposal (copies must be marked "COPY "). The response must contain a statement of qualifications and a concise narrative which addresses, in the order presented, the evaluation criteria set forth in this solicitation. The narrative response shall not exceed twenty (20) pages in length, exclusive of appendix, cover page, letter of transmittal, and table of contents. Proposals should be organized according to the following outline: A. Letter of Transmittal A letter of transmittal shall include the following: 1. The proposer's name and address; 2. Statement that indicates the proposal is valid for at least 90 days from the proposal submission deadline; 3. Statement that indicates the proposer's willingness to perform the services described in this SOQ /RFP; 4. Description of experience with similar projects and discuss firm's ability to perform work. This should include a statement of experience covering the firm's background and that of the sub - consultants selected; 5. A statement that the project team and all other necessary resources which are required to perform the services described in this RFP will be made available by your organization over the life of the anticipated Request for Qualifications/Proposals Page 6 contract and any time limitations that may exist in being able to provide them within 24 hours; 6. Statement that the signatory has authority to bind the proposer; and 7. Signature of authorized individual(s). B. Time -Cost Provide an estimate of the time and cost for this consulting engagement that includes but is not limited to, incidental costs, travel, interview, and data gathering costs, analysis, reports, and meetings. C. Client References Respondents shall include the name, address and telephone number of all clients, for whom services similar to those described in this RFP, have been performed. References should be relevant to the personnel described in the Statement of Qualifications. Please provide a brief description of services provided with each reference, as well as the name(s) of team members that provided the service. The Consultant shall submit a list of all contracts that the Consultant has had with the City of Newport Beach from January 2004 through March 2009. The list shall include: short description of contract scope, the award date, date completed, and contract value. If the Consultant has had no contract with the City since January 2004, the Consultant shall so state. IV. SCHEDULE The selection of a firm for award of the contract will be by City staff who will evaluate the responses to this solicitation. Responsive firms will be ranked numerically. The recommendation of the top firm will be based on the results of reference checks, qualifications of the firm and scope of service provided. A final contract will be submitted to the City Council for approval and award. The selection process for this RFP will be a qualifications based selection process where price is considered, but is not a significant evaluation criterion. The top ranked firm will be selected for contract negotiations and changes to the Cost -Time proposal may be made. If contract negotiations fail to result in an agreement between proposer and the City, negotiations will be terminated with selected proposer and second proposer engaged in negotiations. Note: The City reserves the right to negotiate with the top selected firms, if needed. Request for Qualifications/Proposals V. RFP REVIEW CRITERIA A review committee of evaluators will review responsive proposals based on the following weighted scheme: Firm Qualifications and Experience 35% Management Plan 30% Proposed Project Team 25% Workload and Resources 10% Total 100% A. Firm Qualifications and Experience: Weight 35% Provide detailed information on at least one (1) project of similar scope to the services requested. 1. Description of your successes in providing management services for oil facilities similar in size and nature. 2. Discussion of other projects that your firm has completed that you believe would qualify your firm for this project. 3. Explain how your firm is prepared to address the unique environmental issues related to oil field operation in Newport Beach. 4. Description of why your firm may be particularly qualified to be selected for this project. 5. Provision of two (2) references for each project submitted B. Management Plan: Weight 30% 1. Discussion of your proposed management plan for this project. Provide a table or chart that shows organizational structure, chain of supervision, decision authority, and communications. 2. Provide work schedules for daily, weekly, bi- weekly, monthly, bimonthly, quarterly, semi - annual and annual work tasks. 3. Provide a quality assurance plan for this project. 4. Discussion of the philosophical approach to the project taken by your firm. The following are of particular interest. a. Purpose of the consulting relationship; Request for Quatifications✓Proposats Page 8 b. Approach to meeting client objectives; c. Description of your firm's approach to the project; and at a summary level, the steps seen as an integral part of successfully managing the oil field; and d. Description of the roles of the team members and your communication strategy with both the client and subconsultants (if any). C. Proposed Project Team; Weight 25% 1. Provision of the professional qualifications and experiences of the proposed project team members. Discussion of your demonstrated expertise in working as a team on recent projects. 2. A list of at least three (3) references (contact persons and telephone numbers) for each person proposed. D. Workload and Resources: Weight 10% 1. Discussion of both current and potential projects the project team is contemplating as well as the current and potential time commitments of your proposed project team. E, Interviews Selected proposers may be requested to interview with the evaluation committee. Proposers will be notified in writing of the interview requirements, date, time, location, and amount of time allowed for an interview /presentation and question and answer period. VI. ADMINISTRATIVE INFORMATION A. Contact Person: Any information required or questions regarding this RFP should be addressed to the project manager: Mr. Ed Burt, Utilities Operations Manager Utilities Department City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658 -8915 Ph: (949) 718 -3432 Fax: (949) 646 -5204 E -mail: eburt(a) city.newoort- beach.ca.us Request for Qualifications/Proposals Page 9 B. Deadline for Receipt of Proposals: Proposals may be mailed or hand delivered, as long as three (3) copies are physically received by the City no later than 3:00 p.m., Friday, June 5, 2009. Faxed proposals are not acceptable. Proposals received after the above proposal submission deadline will not be considered and will be returned. C. Proposers Review and Substantive Questions: Proposers should carefully review this RFP for errors, questionable or objectionable materials, and items requiring clarification. Proposers shall put these comments and /or questions in writing and submit them to the contact person noted above. Please submit questions at least five (5) days before the due date of proposals. This will allow time for an addendum to the RFP to be issued, if required, to all recipients of the initial RFP. D. Addendum to the RFP: The City reserves the right to issue written addenda to revise or clarify the RFP, respond to questions, and /or extend or shorten the due date of proposals. E. Cancellation of the RFP: The City retains the right to cancel the RFP process if it is in the City's best interest. The City shall not be responsible for costs incurred by proposers for proposal preparation. F. Proposal Withdrawal and Correction: A proposal may be corrected or withdrawn by a written request received prior to the deadline for receipt of proposals. G. Retention of Proposals: All proposals and other material submitted become City property and may be returned only at City's option. H. Cost of Proposal Preparation: Any and all costs incurred by proposers in preparing and submitting a proposal are the proposer's responsibility and shall not be charged to the City or reflected as an expense of the resulting contract. I. Delivery of Proposals: The City assumes no responsibility or liability for the transmission, delay, or delivery of proposals by either public or private carriers. J. Media Announcements: Any and all media announcements pertaining to this RFP require City's prior written approval. K. Binding Contract: This RFP does not obligate the City or the selected proposer until a contract is signed and approved by all parties. Request for Qualifications/Proposals Page 10 Attachment B: Description of Project Intent SCOPE OF WORK Management Tasks A. Perform all work necessary to manage, operate, produce, protect and maintain the City owned tideland wells, tank farm, pipelines and related oil production facilities in accordance with good oil field practice. B. Respond to all emergencies and provide for personnel to safely and continuously operate the oil facilities 24 hours a day, 7 days a week. C. Provide qualified, licensed and available staff to complete the Scope of Work D. Provide the City with detailed recommendations, estimates and technical advice to maintain and improve production, maintenance and security for the oil facilities: E. Recommend, schedule, coordinate and inspect the work of all oil field service contractors. F. Keep accurate, daily records of all production, treatment of oil, cut and temperature of oil, deliveries, shipments and field testing; and immediately make available to the City upon request. G. Schedule, supervise and coordinate the transfer of all oil and gas sold and properly gauge and measure the quantity of oil and gas produced, saved and shipped. Current oil production is approximately 85 -100 bbl oil per day; current water production is approximately 1,100 bbl per day. H. Keep detailed records and submit signed invoices for all materials, equipment and services that will be reimbursed by the City. I. Perform individual well tests at least every six months, indicating rate of production, quantity of oil, and water produced. J. Furnish all tools required for normal operations. K. Examples of duties include, but are not limited to the following: Request for Qualifications/Proposals Page 11 Operations Tasks 1. Take & record tank gauge readings daily 2. Plan tank management/shipping arrangements and prepare crude for shipping 3. Batch treat wells (approximately 40 treatments per week) for mineral buildup and saltwater corrosion 4. Perform production well tests to determine water /oil ratios for each well 5. Program and maintain pump off controllers 6. Manage the water treatment system including, but not limited to: a. Order chemicals b. Maintain chemical rates c. Fill day pots d. Keep chemical pumps pumping e. Maintain chemical lines and fittings f. Maintain the Wemco g. Change filter bags when necessary h. Skim the skim tank daily 7. Maintain all daily records including, but not limited to: a. Gage records b. Chemical usage c. Pump off controller daily runs times d. Injection well rates and volumes 8. Manage water injection system 9. Manage natural gas system and vapor recovery system 10. Check wells and tank farm a minimum of three times a day 11. Generate spreadsheet on a monthly basis that tracks production curve and depletion rate Supervision and Related Issues Supervise all production rig (repair) work including, but not limited to: a. Tubing, rod and pump repair b. Casing and liner repair c. Inner liner installation d. Well packer setting e. Cementing f. Fishing 2. Supervise all drilling rig work 3. Supervise all construction work 4. Prepare for and attend all meetings related to, but not limited to: a. Wells b. Tank farm c. Pipelines d. Natural gas i. Hoag hospital ii. Cogeneration Request for Qualifications/Proposals Page 12 e. Bitter Point sewage lift station (County Sanitation District of Orange County) f. Annual AQMD inspections g. DOGG (Department of Oil, Gas and Geothermal Resources) inspections h. Fire Department inspections 5. DOGG permitting and reporting including, but not limited to: a. Permit to drill new well b. Permit to redrill well c. Permit to abandon well d. Permit to alter casing Design and Engineering Duties Tank farm alteration including, but not limited to: a. Crude oil system b. Water injection system i. Wemco ii. Pump sizing iii. Pipe sizing c. Natural gas system i. Gas sales 1. Chart changing 2. Maintain gas odorant ii. Cogeneration d. Vapor recovery system 2. Design pump sizes.and rod strings 3. Design all electrical loads a. Motor sizes b. Disconnect sizes c. Starter sizes d. Wire sizes 4. Design and engineer any new wells including, but not limited to: a. Casing design b. Liner size c. Wellhead design d. Pumping unit size Request for Qualifications/Proposals Page 13 Attachment C: Map SRE NAP -South Flats oral rsnar�ays aerrrr.r Request for QuaVications/Proposals Page 14 Attachment C (Continued): Map s r Nth r d e..ar.w araas� wr.wr�r Request for Qualifications/Proposals Page 15 Attachment D: Statement of Compliance Each proposal must be accompanied by a signed Statement of Compliance. The Contractor must sign one of the declarations stated below. I. The person signing below declares that the proposal submitted by (Name of Firm) ,Sn ,nTa�mc�r*,I I jzA to perform Management and Operations Services for the City's Oil Well Fields as described in the SOQ/RFP dated u 2009 was prepared in strict compliance with the instructions, conditions, and terms of the SOQ, RFP, the Scope of Work, and Draft Agreement. Sigriature Printed Name and Title &s`1�-C2' Date II. By signing below, the Contractor states that the proposal submitted by (Name of Firm) has been prepared in consideration of and with exception to some of the terms of the RFP; Scope of Work; and Draft Agreement. The Contractor is advised that exceptions andlor a suggested change to any of the terms of the RFP, the Scope of Work, or Draft Agreement must be submitted in writing as an attachment to the proposal submittal. By signing below, the Contractor declares that the proposal includes a. statement that identifies each item to which the Contractor is taking exception or is recommending change, includes the suggested rewording of the contractual obligations or suggested change to the RFP, identifies the reasons for submitting the proposed exception or change, as well as, any impact the change or exception may have on contract costs, scheduling, or other considerations. The City reserves the right to reject any declarations that are not accompanied with the required documentation as described above. Signature Date Printed Name and Title Request for QualificationslProposals Page 16 Attachment E: Draft Contract "Intentionally Omitted" Request for Qualifications/Proposals Page 17 Fee Schedule Sampson Oil Company would like to present the following fee schedule to manage and operate the City of Newport Beach's oil field. This schedule is based on a 365 day work year. It also includes what it will cost to increase Sampson Oil Company's insurance to satisfy the City's new insurance requirement. This schedule also includes the additional work requested by the City (See Addendum on page 23). • Pumper $48,193 • Design and Engineering 3,301 • Rig Supervision 14,854 • Construction Supervision 14,854 • Addendum 9,612 • Special Insurance Charges 13,586 Total Annual Fee $104.400 Total Monthly Fee $,700 12 Addendum Sampson Oil Company will provide labor to perform light maintenance and repairs for the City of Newport Beach's 16 oil wells and production facility. The maintenance and repairs will include, but not limited to, the following: Scope of Work Maintenance • Inspect oil levels (weekly) Air balance pumping units Air compressors Vapor recovery compressor Injection pump • Grease Wemco (weekly) Plug valves (semi - annual) • Check high level switches on all tanks (monthly) Replace odorant (when needed) • Check pressure / vacuum relief valves on all tanks (monthly) • Maintain injection pump: replace packing when needed, add oil when needed, check belts and grease • Clean Wemco (when needed) • Maintain vapor recovery compressor • Maintain filter system • Maintain all air compressors • Perform minor pipefitting Repairs • Minor pipe fitting jobs • Repair minor leaks • Repair or replace rod rotator cables • Replace belts on small equipment 23