RESOLUTION No. 36380

Exempt East Side Combined Sewer Overflow Tunnel contract from full performance and payment bonds (Resolution)

WHEREAS, the City Council in Ordinance No. 178445 approved an alternative a contractor selection process for the East Side CSO Tunnel Project 5516; and

WHEREAS, the City Council in Ordinance No. 178445 stated that a construction contract would be authorized upon acceptance and approval of the Purchasing Agent’s report for that project; and

WHEREAS, the City Council previously accepted a partial performance bond and partial payment bond for the West Side CSO Tunnel Project together with bonds from certain subcontractors because of the cost of a single performance bond and a single payment bond would be unduly prohibitive and expensive for Portland ratepayers and would not provide any greater practical protection to the public or to the workers on the project; and

WHEREAS, the City has found that the bonding approach on the West Side CSO Tunnel Project proved to be sufficient to protect the public and the workers; and

WHEREAS, the City has found that a partial performance bond and partial payment bond for the East Side CSO Tunnel Project also would be unduly expensive and that an alternative bonding process, identical to the one used on the West Side project would be sufficient; and

WHEREAS, the East Side CSO Tunnel contractor has proposed obtaining a performance and payment bond in the amount of $250 million and will require its subcontractors to post bonds for nearly all the remainder of the contract price that will name the City as the obligee on the bonds and it is anticipated that at least $320 million, or approximately 84% of the project will be bonded.

WHEREAS, Oregon State law, ORS 279C.390 permits the City to exempt certain contracts of from all or a portion of the requirement that good and sufficient bonds be furnished to ensure performance of the contract and payment obligation incurred in the performance of the contract;

NOW, THEREFORE, BE IT RESOLVED that the Portland City Council hereby exempts the East Side CSO Tunnel contractor from the requirement of providing a full performance bond and a full payment bond and authorizes instead the alternative bonding program stated above.

BACKING SHEET INFORMATION

AGENDA NO. 224-2006

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 36380