ATTACHMENT C

SPECIAL PROVISIONS

1.1  PROJECT MANAGEMENT

1.1.1  PERFORMANCE OF WORK

The City's Project Manager will issue the Notice to Proceed for this Contract after this Contract has been fully executed by both parties. The Contractor shall proceed with performance of all design activities under this Contract immediately after receipt of the Notice to Proceed executed by the City. The Contractor shall continuously and diligently prosecute the work to completion on or before the time or times set forth in this Contract. "Work" means everything that the Contractor is required to do pursuant to this Contract.

1.1.2  Contractor's Project Manager

During performance of the Contract, the Contractor shall assign a competent Project Manager who shall have full authority to act on behalf of the Contractor and all of the Contractor's subcontractors at all tiers in all matters within the scope of the Contract. The Project Manager shall have experience acceptable to the City. The City Project Manager must be thoroughly familiar with all procedures involved in streetcar production. As part of the Proposal, the Proposer shall submit to the City the resume of its candidate for the position of Project Manager.

With Notice to Proceed the candidate submitted in the Proposal shall become the Contractor's Project Manager. If for any reason, and at any time, the candidate submitted by the Contractor is not acceptable to the City, or becomes unacceptable, the Contractor shall propose additional candidates. If the Contractor wishes to replace its Project Manager at any time during the performance of this Contract, it first shall submit the resume of its new candidate to the City for the City's approval and shall not make the substitution without the City's approval.

1.1.3  SUBCONTRACTORS AND SUPPLIERS

The Contractor shall be fully responsible and liable for the products and actions of all subcontractors and suppliers at any tier.

1.1.4  CITY PROJECT MANAGER

The City's Project Manager for this Contract shall be the formal contact between the City and the Contractor. The City's Project Manager shall be responsible for, on behalf of the City, all matters relating to this Contract, except changes to the Contract involving scope, cost, or time. Such changes shall be made with the approval of the City Project Manager, but must be executed by pursuant to Section 1.9 CONTRACT MODIFICATIONS as set forth in these SPECIAL PROVISIONS. The City Project Manager may assign certain responsibilities to others with notice to the Contractor.

The Contractor shall not rely on representations or orders of any other City representative, unless so authorized by the City Project Manager.

The City Project Manager’s primary functions are:

•  Conduct periodic meetings with the Contractor;

•  Interpret the technical requirements of the Contract and reject work of the Contractor that does not conform to the Contract;

•  Review the Contractor's submittals for conformance with the Contract requirements, approve submittals that are in conformance, or take other action upon review;

•  Review Contractor's invoices and approve payment or take other action upon review;

•  Prepare Change Orders for the City's and the Contractor's approval and execution, and evaluate the cost and benefit of any proposed changes;

•  Order changes in the work not involving adjustment of the Contract price or an extension of the Contract time. Those changes shall be consistent with the intent of the Contract;

•  Conduct inspections and tests required for streetcar shipment, delivery, and acceptance;

•  Authorize shipment, authorize delivery and issue delivery receipt, and grant conditional acceptance and acceptance of streetcars; and

•  Issue stop work orders in accordance with Section 1.10 STOP WORK ORDER, as set forth in these SPECIAL PROVISIONS.

With reference to Section 1.2 NOTICES AND COMMUNICATIONS of the GENERAL CONDITIONS, the City's Project Manager is hereby designated to be Vicky Diede, whose address is City of Portland, 1120 SW Fifth Avenue Room #800, Portland, Oregon 97204.

1.1.5  PROJECT MEETINGS

The City Project Manager or designee shall schedule and preside over pre-production, periodic, and special meetings throughout the progress of the work. Agendas for the meetings may include, but are not necessarily limited to, discussions of in-plant observations, problems, conflicts, production schedules, delivery schedules, supplier fabrication, quality standards, design review, Contract modifications, and any other topics that the City Project Manager determines to be relevant to the project. Refer to Section 17 PROGRAM CONTROL AND QUALITY ASSURANCE of the TECHNICAL SPECIFICATIONS for detailed requirements for project meetings.

1.1.6  PRODUCT OPTIONS, SUPPLIER APPROVAL AND SUBSTITUTIONS

For products specified by brand name or manufacturer, whether or not followed by the words "or approved equal", the Contractor shall select any product or manufacturer named, or shall submit a request to substitute an equal product or manufacturer. The Contractor may not make a substitution without the City's prior approval.

The City may, at its sole option, approve requests from the Contractor for substitution of products in place of those specified if the Contractor demonstrates satisfaction of at least one of the following criteria:

•  The substitution is required for compliance with a final interpretation of code requirements or insurance regulations that was not available or reasonably known to the Contractor prior to execution of Contract;

•  The substitution is due to the unavailability of the specified products, and the unavailability is not the Contractor's fault and was unknown to the Contractor prior to execution of Contract;

•  The specified product will not perform properly or fit into the designated space; or

•  The manufacturer or fabricator does not certify or warrant performance of the specified product as required for the intended purpose.

•  The substitution is, in the City's judgment, in the best interest of the City.

The Contractor shall submit a separate request for each substitution. Each request shall include: Complete data substantiating compliance of the proposed substitution with the Contract; product identification, including manu­facturer's name and address; manufacturer's literature, including product description, performance and test data, and reference standards; samples, if appropriate; name and address of similar streetcar deliveries on which the product was used and date of installation; itemized comparison of proposed substitution with product or method specified; and data relating to changes in production schedules.

In making a request for substitution, the Contractor shall represent that:

•  It has investigated the proposed product, and has determined, with the City's concurrence, that it is equal or superior in all respects to that specified;

•  It will provide the same or greater warranty for the substitution as for the product specified;

•  It will coordinate installation of the accepted substitution into the work, making changes as may be required for the work to be complete in all respects; and

•  It waives all claims for additional costs and changes to schedule related to the substitution that subsequently becomes apparent.

The City shall approve or disapprove the Contractor's requests for substitution of suppliers or products within fifteen (15) days of the City's receipt of all information required by the City for such determination according to the provisions set forth in this Section. In the event of City disapproval of the Contractor's request for substitution of a supplier or product, the Contractor shall utilize the supplier or product specified in the Technical Specifications and/or in the Contractor's Proposal, or may request substitution of another supplier or product.

The City may not approve substitutions if they are indicated or implied on Shop Drawings or product data submittals without a request submitted in accordance with this Section, or if approval will result in significant non-conformance of the streetcar with the Technical Specifications, or if approval will require extensive revision of the Contract, or if approval is not in the best interest of the City.

1.1.7  PROJECT RECORDS AND COST AND PRICING DATA

Comprehensive records and documentation relating to this project shall be kept by the Contractor. The records shall include, but are not limited to Contract Documents, Drawings, Specifications, Addenda, Shop Drawings and Submittals, Change Orders, Modifications, Field Test Records, and As-Built Drawings and Records.

The Contractor shall keep and maintain complete and reliably detailed records of costs incurred in performing the Contract, including records of initial entry for every item for which payment is sought, sufficient to evaluate the accuracy, completeness, and currency of the costs or prices.

1.1.8  POST DELIVERY BUY AMERICAN CERTIFICATION

The City is required by 49 CFR 663 to certify to FTA that a post-delivery audit has been performed and that compliance with Buy America requirements has been verified.

Before shipment of the car, the Contractor shall provide cost information of sufficient detail to allow an auditor to determine that federal Buy America requirements are met. A post-delivery review must be completed before title is transferred to the recipient, or before a vehicle is placed into revenue service, whichever is first. The cost information shall be submitted by the Contractor and by the Contractor's sub-contractors directly to an auditor selected and engaged by the City. To assure confidentiality, the auditor will submit to the City only summary data, but not cost and pricing data of individual components.

1.1.9  OWNERSHIP AND USE OF DOCUMENTS AND MATERIALS

All drawings, specifications, and copies thereof furnished by the City shall remain the property of the City. They are to be used only with respect to this Contract. With the exception of one contract set for each party to the Contract, those documents are to be returned (or suitably accounted for) to the City upon request at the completion of the work.

All drawings, product samples, parts and materials created or in progress, or purchased by the Contractor for the execution of work under this contract and for which progress payments have been made, are the property of the City. All streetcar drawings created for this contract shall bear the City name in the title block. The Contractor retains all risk of loss for these drawings, product samples, parts and materials until title transfer as defined in Section 1.4.5 TRANSFER OF TITLE AND RISK OF LOSS, as set forth in these SPECIAL PROVISIONS.

The City may obtain a priority lien secured pursuant to Article 9 of the Uniform Commercial Code and other applicable state laws or local ordinances to secure its title rights.

1.1.10  SHOP DRAWINGS, PRODUCT DATA, AND SAMPLES

Shop drawings are drawings, diagrams, schedules, or other data prepared for the work by the Contractor or any subcontractor of any tier, manufacturer, supplier, or distributor to illustrate or detail some portion of the work.

Product data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams, or other information furnished by the Contractor to illustrate materials, products, systems, or equipment for some portion of the work.

Samples are physical examples that illustrate materials, equipment, or workmanship, and establish standards by which the work shall be judged.

Shop drawings, product data, samples, and similar submittals shall not modify any Contract requirement, except as expressly allowed by this Contract. The purpose of their submittal is to demonstrate for those portions of the work for which submittals are required the way the Contractor proposes to conform to the information given and the Technical Specifications expressed in this Contract.

The Contractor shall review, approve, and submit to the Project Manager with reasonable promptness and in a sequence that causes no delay in the work, or in the work of the City or any other City contractor, all shop drawings, product data, samples, or similar submittals required by this Contract, or that are necessary for its proper completion.

By approving and submitting shop drawings, product data, samples, or similar submittals, the Contractor represents that it has determined and verified all related materials, measurements, and construction criteria, and that it has checked and coordinated the information contained within its submittals with the requirements of the work and this Contract.

The Contractor shall not be relieved of responsibility for any deviation from the requirements of this Contract by the City's approval of shop drawings, product data, samples, or similar submittals unless the Contractor has specifically informed the City at the time of submission in writing of the deviation and the City has given written approval of the specific deviation. The Contractor shall not be relieved of responsibility for errors or omissions in shop drawings, product data, samples, or similar submittals by the City's approval of the submittal. The Contractor shall not deviate from approved shop drawings, product data, samples, or similar submittals without the City's prior written approval.

The Contractor shall not commence any portion of the work requiring submission of shop drawings, product data, samples, or similar submittals until the City has approved the required submittal.

The Contractor shall direct specific attention, in writing or on resubmitted shop drawings, product data, samples, or similar submittals, to revisions other than those required by the Project Manager on previous submittals.

1.1.11  INTERPRETATION OF DRAWINGS AND SPECIFICATIONS

Omissions from the Contract specifications, or incorrect description of details of work that are manifestly necessary to carry out the intent of the Contract specifications, or that are customarily performed, shall not relieve the Contractor from performing such omitted work or incorrectly described details of the work, and they shall be performed as if fully and correctly set forth and described.

In the event of differences between small- and large-scale drawings, the large-scale drawings shall govern. In the event of discrepancies between any drawing and a dimension written on it the written dimension shall govern over scaled dimensions.

In the event of discrepancies between information on any drawing and the written specifications, the discrepancy shall be resolved in favor of the written specifications.

1.1.12  DISCIPLINE AND ORDER

The Contractor shall enforce strict discipline and good order among its employees at all times and shall not employ on the work any unfit person or anyone not skilled in the task assigned to him or her. Any person employed on the project by the Contractor or any of its subcontractors who, in the opinion of the City, does not perform his or her work in a proper and skillful manner or is intemperate or disorderly shall, at the written request of the City, be removed forthwith by his or her employer, and shall not again be employed on this project without the prior approval of the City.

1.1.13  NOISE CONTROL

The Contractor shall comply with all applicable federal, state, and local laws, ordinances and regulations regarding noise control. All equipment shall comply with pertinent equipment noise standards of the U.S. Environmental Protection Agency.

1.1.14  PERMITS, FEES, AND NOTIES

Prior to commencing any work requiring a permit or similar authorization, the Contractor shall secure and pay for all necessary licenses, fees, inspections, permits, and similar authorizations from governmental authorities required to fulfill the Contract requirements and the Contractor's obligations. All such fees and charges shall be paid for by the Contractor.

1.1.15  TAXES

Unless otherwise provided in this Contract, the Contractor shall pay all sales, use, other similar taxes, and import duties (if any), except as noted below.

An adjustment shall be made in the Contract price in the event the State of Oregon (including municipal corporations of the State of Oregon) implements a sales tax, if such a sales tax is applicable to these cars.

1.1.16  INSURANCE

Insurance requirements set forth below do not in any way limit the amount or scope of liability of Contractor under this Contract. The amounts listed indicate only the minimum amounts of insurance coverage the City is willing to accept to help insure full performance of all terms and conditions of this Contract. All insurance required by Contractor under this Contract shall meet the following minimum requirements:

1.1.16.1  CERTIFICATES; NOTICE OF CANCELLATION

On or before the Effective Date and thereafter during the Contract Term, Contractor shall provide the City with current certificates of insurance, executed by a duly authorized representative of each insurer, as evidence of all insurance policies required under this Section. No insurance policy may be canceled, materially revised, or non-renewed without at least thirty (30) days prior written notice being given to the City. Insurance must be maintained without any lapse in coverage during the Contract Term. Insurance allowed to lapse without the City consent shall be deemed an immediate Event of Default under this Contract. The City shall also be given certified copies of Contractor’s policies of insurance, upon request. Failure of the City to demand such certificates or other evidence of full compliance with these insurance requirements, or failure of the City to identify a deficiency from evidence that is provided, shall not be construed as a waiver of Contractor’s obligation to maintain the insurance required by this Contract.

1.1.16.2  ADDITIONAL INSURED; SEPARATION OF INSUREDS

The City, TriMet and the Federal Transit Administration and each of their respective directors, officers, agents and employees shall be named as an additional insured in each general liability policy and as an additional insured and loss payee in each property insurance policy. Such insurance shall provide cross-liability coverage equivalent to the standard Separation of Insureds clause published by the Insurance Services Office (“ISO”), or its successor organization.

1.1.16.3  PRIMARY COVERAGE

The required policies shall provide that the coverage is primary, and will not seek any contribution from any insurance or self-insurance carried by the City.

1.1.16.4  COMPANY RATINGS

All policies of insurance must be written by companies having an A.M. Best rating of “A-” or better, or equivalent. The City may, upon thirty (30) days written notice to Contractor, require Contractor to change any carrier whose rating drops below an “A-” rating.

1.1.16.5  DEDUCTIBLES AND RETENTIONS

Any deductible or self-insured retention exceeding fifteen percent (15%) of the per-occurrence or per-accident limit of a required policy is subject to approval by the City.

1.1.16.6  REQUIRED INSURANCE

At all times during this Contract, Contractor shall provide and maintain the following types of coverage:

•  General Liability Insurance

Contractor shall maintain an occurrence form commercial general liability policy or policies insuring against liability arising from premises (including loss of use thereof), operations, independent contractors, products-completed operations, personal injury and advertising injury, and liability insured under an insured contract (including the tort liability of another assumed in a business contract) occurring on or in any way related to the Premises or occasioned by reason of the operations of Contractor. Such coverage shall be written on an ISO occurrence form CG-00-01-01-2002 (or a substitute form providing equivalent coverage) in an amount of not less than ten million dollars ($10,000,000) per occurrence.

Contractor shall maintain in force completed operations coverage for a period of not less than three years following car acceptance.

•  Property Insurance

Contractor shall maintain, in full force and effect during the Contract Term, “all risk” property insurance (including the perils of flood and earthquake/earth movement) or equivalent, covering property damage liability coverage of Streetcars and all other Contract deliverables, at 100% of the Contract amount or at replacement cost at the time of loss, whichever is greater. Such insurance shall include the insurer’s waiver of subrogation.

•  Workers’ Compensation Insurance

Contractor shall maintain in force workers’ compensation and employers liability insurance for all of Contractor’s employees in accordance with all requirements of Oregon law or state of Contractor’s domicile.

1.1.16.7  CONTRACTOR’S RISKS

Contractor shall be responsible for obtaining any insurance it deems necessary to cover its own risks, including without limitation: (i) business interruption, such as gross earnings, extra expense, or similar coverage; (ii) personal property; and/or (iii) automobile physical damage and/or theft.

1.1.16.8  PERIODIC REVIEW

The City shall have the right to periodically review the types, limits and terms of insurance coverage. In the event the City reasonably determines that such types, limits and/or terms should be changed, the City will give Contractor a minimum of thirty (30) days notice of such determination and Contractor shall modify its coverage to comply with the new insurance requirements of the City. Contractor shall also provide the City with proof of such compliance by giving the City an updated certificate of insurance within fifteen (15) days.

1.1.17  CONSULTANT CONFLICT OF INTEREST

Unless specifically approved by the City, the Contractor shall not use any consultant who concurrently is employed by the City or by the City's consultants, including, but not limited to, engineers and testing laboratories.

1.2  SCHEDULE

1.2.1  PROGRESS SCHEDULE

A progress schedule shall be produced and maintained, and delivered to the City no less than monthly.

1.2.2  DELIVERY SCHEDULE

The Contractor shall deliver all cars and materials in accordance with the following schedule, no later than the dates specified:

1.2.3  LIQUIDATED DAMAGES

The Contractor agrees that its failure to deliver Streetcars and other materials on or prior to the due dates for delivery called out in the Contractor’s Proposal, as revised by change order, will result in additional expense and tangible and intangible damage to the City. Because of the difficulty of determining the actual loss to the City, the parties agree that the Contractor shall pay to the City liquidated damages at the rate of $100 per day. This rate shall be paid for each calendar day after the date specified for delivery and until delivery is complete. This payment is not a penalty, but is a reasonable forecast of the actual damages that the City would suffer.

1.2.4  EXCUSABLE DELAYS

Except with respect to defaults of Subcontractors, the Contractor shall not be considered in default by reason of any failure to perform in accordance with the Contract delivery schedule if such failure arises out of causes beyond the control and without the fault or negligence of the Contractor. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of the government in its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes or other labor disputes, freight embargoes, and unusually severe weather, but in every case the failure to perform must be beyond the control and without the fault or negligence of the Contractor. If the failure to perform is caused by the default of a Subcontractor, and if such default arises out of causes beyond the control of both the Contractor and the Subcontractor, and without the fault or negligence of either of them, the Contractor shall not be in default by reason of any failure to perform. As used herein, the terms "Subcontractor" and "Subcontractors" mean Subcontractor(s) or Supplier(s) at any tier.

Should the Contractor anticipate or suffer delay because of cause(s) as described in this guideline, the City shall make an equitable revision in the delivery schedule, upon the Contractor's fully documented and supported written request timely made, unless the City should decide instead to terminate the Contract.

1.3  CITY INSPECTION AND TESTING

1.3.1  GENERAL

The City may test and inspect all streetcar components, subsystems or workmanship prior to assembly of such components or work into the streetcar production and prior to acceptance of the cars by the City. The City may either reject or require correction of defective material, workmanship, or nonconformity to this Contract. The Contractor shall make available tools, pits, hoists, scaffolds, platforms, other equipment, and assistance as may be necessary for inspections or tests. The City Project Manager or his or her designee(s) shall at all times have access to the work wherever it is in preparation or progress.

1.3.2  INSPECTORS

The City may employ inspectors, who shall be representatives of the City Project Manager. They shall have access to the design, fabrication, assembly, and testing of the cars at all times, wherever in progress at the Contractor's, Contractor's subcontractors', or the City's facilities. Inspectors are employed solely for the City's benefit, and are not intended as a source of advice for the Contractor's employees, subcontractors, or suppliers. The Contractor shall provide any reasonable facilities including a private office that the inspectors may require for the performance of their duties. The inspectors shall observe and may inspect the work, and shall report their observations to the City Project Manager. Except as expressly authorized by the City Project Manager in writing, the inspectors shall have no authority to accept, reject, or approve the work, to stop the work, to authorize any changes in the work, or to direct any extra work.

1.3.3  TESTING

The Contractor shall pay the costs of any inspection or test required of the Contractor by the Technical Specifications or which it requests for its own convenience. The City shall pay the costs of any testing it requests in addition to that required by the Technical Specifications, except that the Contractor shall pay the cost of any of those tests that are performed to evaluate non-conforming work or that demonstrate the Contractor's failure to meet the requirements of the Contract. The Contractor shall cooperate with and assist the City and any testing representatives in conducting any tests or inspections requested or approved by the City. Tests performed by the City shall not relieve the Contractor of the responsibility for conformance to the Contract.

1.4  SHIPMENT AND DELIVERY

1.4.1  SHIPMENT AUTHORIZATION

Each car shipped from the Contractor's plant to the City shall be complete, ready to run, and in compliance with all provisions of the specification, except as noted below. Prior to shipment of each car, the Contractor shall obtain a shipping release signed by the City's Project Manager or his or her designee. The shipping release shall certify that the car is complete, has passed all pre-shipment tests, complies with approved Contractor's drawings and samples, is accompanied by an up-to-date car history book, and other agreed upon conditions for shipping. Refer to ATTACHMENT B TECHNICAL SPECIFICATIONS. The City Project Manager, at his or her sole discretion, may permit shipment of a car with minor defects that will not affect testing and can easily be corrected after shipment. All known defects shall be submitted by the Contractor with the request for shipping release. The shipping release shall not be construed nor inferred to constitute to any degree car acceptance by the City.

1.4.2  SHIPMENT

If shipped by sea, all cars or car components shall be below deck and shall be enclosed to protect against damage from handling and from exposure to the marine environment.

Shipment over land to the City’s facility shall be by truck. The City will not accept shipment of streetcars by rail, due to the higher cost to the City for unloading and handling and to the loss of time in the schedule.

The Contractor shall arrange for shipment of cars and car components to be controlled so as to prevent damage to cars and car components. All sub-systems shall be protected from damage during shipment. All rotating equipment shall be shipped with brushes removed from commutators and with moving parts blocked to prevent bearing damage. All parts removed for shipment shall be boxed securely and shipped with the car to which they belong.

During shipment, each car shall be equipped with an impact recorder provided by the Contractor and approved by the City. The recorder shall record all handling impacts. All records shall become the property of the City and shall be included in the Car History Book.

The Contractor shall require shippers to log and record any incidents of damage or potential damage to the cars and car components, and of interruption of shipments. The Contractor shall report such shipment incidents to the City promptly upon the Contractor's receipt of such information, describing the nature of the shipment damage, potential damage or interruption, and the actions taken and to be taken to complete the shipment and repair any damage.

The Contractor shall be responsible for safely and efficiently maintaining traffic in all areas affected by its shipment of cars on public roadways or by any other activities of the Contractor affecting roadway traffic, and shall comply with all requirements of any authority having jurisdiction over the roadway.

1.4.3  SHIPPING DESTINATION

All cars shall be shipped to the City's Streetcar Maintenance Facility, on NW Northrup Street at NW 16th Street in Portland, Oregon. The Contractor shall be responsible for all work and all costs associate with the placing of cars in a ready to run condition on the rails of the City's Streetcar System.

1.4.4  UNLOADING

After arrival at the City's Streetcar Maintenance Facility, each car shall be examined jointly by representatives of the City and the Contractor. The City then will issue a receiving notice to the Contractor, which will acknowledge receipt of the car and describe any missing parts or visible damage that may have occurred during shipment.

1.4.5  TRANSFER OF TITLE AND RISK OF LOSS

Title to each streetcar shall pass to the City upon final acceptance and final payment, and the Contractor shall furnish and execute all necessary documentation of title at that time. Passage of title to the City shall not relieve the Contractor of any of its obligations under the Contract. Following delivery of the streetcar for acceptance testing, the City shall bear the risk of any loss or damage to the car, except for losses or damages arising from equipment failure, design or workmanship deficiencies, the contractor’s pre-delivery operations, or the contractor’s post-shipment acceptance testing of the streetcar.

1.4.6  DELIVERY

Delivery of a car is defined as the completely assembled car on the yard track of the City's streetcar maintenance facility, with all post-shipment acceptance testing completed and approved by the City, and ready-to-run for “burn-in” testing. The Contractor shall deliver each car in excellent condition in all details, and shall assume all liability and risk of loss incidental to delivery of cars.

Delivery of each car shall require written authorization by the City's Project Manager or his or her representative. An executed copy of such delivery receipt shall be furnished by the City upon the Contractor's presentation of each car for delivery. Authorization for car delivery shall be issued to the Contractor promptly following each such satisfactory car post-shipment acceptance testing performance, provided the car is completely assembled. The City may issue delivery receipts for a streetcar that has identified deficiencies, at its sole discretion.

1.4.7  DELIVERY OF SPARE PARTS, SPECIAL TOOLS, TEST EQUPMENT, AND MANUALS

The Contractor shall notify the City's Project Manager at least ten (10) days in advance of delivery of all spare parts, special tools and test equipment, and manuals. All such materials shall be delivered to the City's Streetcar Maintenance Facility. Shipping documents shall accompany delivery of all materials. The shipping documents shall identify all parts by part number, the City’s symbol number, serial number (where applicable), and purchase order item number.

A parts list shall be submitted for approval at least 30 days before notice of shipping. Upon approval of the parts lists, the City will issue a no-cost purchase order under which the materials will be shipped. No deliveries shall be made without prior approval of the spare parts purchase order. The City will inspect all materials to confirm the accuracy of the shipping documents and to check for damage to the materials.

1.5  USE OF THE CITY FACILITIES

1.5.1  WORK POSITIONS AND OFFICE SPACE

For the Contractor's preparation and testing of cars for delivery to the City, the City shall make available appropriate facilities within the maintenance facility. The City shall make available to the Contractor, to the extent possible as determined in the sole discretion of the City, electric power, storage for car components, and use of employee facilities at the Maintenance Facility. The Contractor shall furnish all personnel, supplies, and tools for car pre-delivery work at the City's facilities, and shall furnish all equipment and other requirements for the car pre-delivery work position not made available to the Contractor by the City.

1.5.2  CARE OF PREMISES

The Contractor shall maintain its premises on the City property in a neat and orderly condition, equal or better than the general maintenance facility condition. Upon completion of the entire project, the Contractor shall remove all temporary buildings, structures, fences, scaffolding, surplus materials, and rubbish of every kind from the site of the Contractor's work on the City property.

1.5.3  USE OF THE CITY TRACK FOR TESTING

The Contractor shall conduct post-shipment acceptance testing on the car on the City's streetcar system as described in Section 14 TESTING and elsewhere in the TECHNICAL SPECIFICATIONS. The City shall make available to the Contractor car operating personnel and access to yard and mainline tracks of the City's streetcar system for the Contractor's post-shipment car testing, to the extent and at such times possible for non-interference with and safety of City operations, as determined by the sole discretion of the City. Operation or movement of cars on the City's system at any location other than at the car work position made available to the Contractor within the car shop shall be by the City operating personnel only. The City shall exercise reasonable care in operation of cars for the Contractor's post-shipment acceptance testing. The City shall be liable for any damage to the cars resulting from the acts or omissions of the City, unless the damage is attributable to a fault of the Contractor. Any other such post-shipment car operations shall be at the Contractor's sole risk and liability. The Contractor shall furnish all personnel, supplies, tools, equipment and other requirements for the car post-shipment tests, except as provided in this paragraph. The Contractor shall provide the City's Project Manager three (3) days notice of the scheduled date and time of each car post-shipment test, so that the City’s Project Manager or designee may witness each such test.

1.5.4  COOPERATION

The Contractor shall cooperate with the City in scheduling and coordinating the Contractor's work on the City property with the work and operations of the City.

1.6  ACCEPTANCE

The City may, at its expense, conduct acceptance tests on each delivered car to determine if the car conforms in all respects to the Contract requirements. Acceptance of a car shall not relieve the Contractor from responsibility for errors, improper fabrication, non-conformance to a requirement, or for deficiencies within the Contractor's control.

If the car fails to pass the acceptance tests it shall be rejected. Any car rejected by the City shall become the responsibility of the Contractor at its location at the time. Contractor shall bear all risk of loss. The Contractor shall make arrangements at its expense to correct all recorded defects or damage, and may thereupon re-deliver the corrected car to the City. All acceptance testing of cars that have been rejected previously shall be at the Contractor's expense and costs incurred by the City to perform such tests shall be deducted and withheld by the City from payments otherwise due to the Contractor.

Notwithstanding the foregoing, Acceptance will not occur until the prototype streetcar has operated on the Portland Streetcar system for a minimum of twelve (12) months.

1.6.1  CONDITIONAL ACCEPTANCE

The City may conditionally accept a car if the City determines after inspection, post-shipment and burn-in testing that the car is suitable for operation in revenue service. Conditionally accepted cars shall be available to the City for revenue service and/or further on-track testing. The warranty period shall begin with conditional acceptance except for parts and systems that require corrective action. Any conditional acceptance for revenue service does not relieve the Contractor of the liability to correct defects as required by the Contract.

1.7  PAYMENT PROVISIONS

1.7.1  PAYMENT PROCEDURES

The City shall pay to the Contractor, at the times and in the manner hereinafter provided, the amounts set forth in the Contract for the car and other work furnished pursuant to the Contract. The Contractor agrees to accept such amounts as full and final payment for all labor, materials, supplies, equipment, overhead, profit, taxes, duties, and charges of whatever nature incurred by the Contractor in performing its obligations under the Contract.

The Contractor shall submit invoices to the City detailing the payment milestones completed in the payment period. The Contractor may submit no more than one invoice per month. The invoice shall be accompanied by all documentation that supports the amount of the payment being requested. The City reserves the right to inspect any and all items relating to payment verification, on the Contractor’s premises. The Contractor must submit the monthly progress report and schedule update with the invoice in order to receive payment.

Progress payments are specified percentages for each milestone listed.

The Contractor's invoices shall account the work events described in the progress payment schedule below. Progress payment invoices shall not exceed the following stated percentages of the Contract price at the time of the following stated work events. The Estimated Payment Schedule is based on an assumed flow of funds to TriMet and the City in four federal fiscal years, and the anticipated timing of payments to the TriMet and the City through the federal grant. The timing and amount of progress payments is limited by the availability of federal funds as further described in Section 1.7.2 PAYMENT CONDITIONS below.

Subject to immediate availability of federal funds, within thirty (30) days after receipt of an invoice by the City, the City shall pay 100% of the invoice, or alternatively the amount the City determines is properly due, and inform the Contractor in writing of the reason for withholding any amounts not paid.

The City may withhold all or part of a payment to the extent deemed necessary by the City to protect the City from loss because of:

•  Defective work not remedied;

•  Third party claims filed, or evidence reasonably indicating that a third party claim will be filed;

•  Failure of the Contractor to make payments properly to subcontractors or suppliers, or for labor, materials, or equipment;

•  Reasonable evidence that the work cannot be completed for unpaid balance of the Contract sum;

•  Damage to the City;

•  Reasonable evidence that the work or any portion of work will not be completed in accordance with the approved progress schedule;

•  The Contractor's failure to carry out the work in accordance with the Contract; or

•  The Contractor's failure to comply with any provision or requirement of the Contract.

The City may withhold accrued liquidated damages from payments due to the Contractor.

No approval for payment, nor any payment by the City, shall constitute an acceptance of a car or other Contract deliverables that are not in accordance with the Contract.

1.7.2  PAYMENT CONDITIONS  

Notwithstanding any other terms of the Contract, the timing and amount of payments under the contract shall be subject to federal appropriation and granting of funds to TriMet and the City by the Federal Transit Administration (FTA). The timing and amount of funding available to make payments under the contract will be determined each year by the City, as appropriations are approved by Congress and grants are approved by the federal government. The City shall notify the Contractor of its determination regarding the amount and timing of payments within 30 days of City’s receipt of confirmation from TriMet and the FTA of the amount of each annual appropriation. Payments to the Contractor will not exceed 80% of funds appropriated and granted to TriMet and the City in any given federal fiscal year.

Contractor has accepted the risk and financing responsibility (if any) associated with the timing and amount of payments and the uncertainty of the congressional appropriations. In the event any of the four years appropriations is not secured by the FTA, if the amount of any appropriation is less than $1 million, or if the FTA does not award the grant funds to TriMet and the City for any reason, the selected Proposer and the City shall negotiate in good faith to determine an equitable method for resolving ownership of the prototype vehicle and termination of the contract for convenience.

1.7.3  PAYMENT TO SUBCONTRACTORS OR SUPPLIERS

The Contractor shall pay promptly each sub-contractor (including supplier) the amount to which the subcontractor is entitled, reflecting the percentage actually retained, if any, from payments to the Contractor on account of the subcontractor's work. The Contractor shall, by an appropriate agreement in each subcontract, require each subcontractor to make payments to its subcontractors in a similar manner. This provision shall not be deemed to authorize the Contractor to withhold retainage from the final payment to a subcontractor or pending final payment or partial final payment by the City.

The City may, on request and at its discretion, furnish to any subcontractor, if practicable, information regarding the percentages of completion or the payments invoiced by the Contractor and the action taken on the invoices by the City on account of work done by the subcontractor.

1.7.4  FINAL COMPLETION AND FINAL PAYMENT

Before applying for final payment, the Contractor shall complete all work, and shall correct any deficiencies in the work and any work rejected by the City. Additionally, the prototype streetcar shall operate on the Portland Streetcar system for a minimum of twelve (12) months before Contractor can apply for final payment. Upon receipt of the Contractor's notice that all deliverables due under the Contract have been furnished and all testing is complete, the City shall make inspection, and when the City finds all such deliverables acceptable under the Contract and the Contract fully performed, the City shall make final payment to the Contractor. However, final payment is contingent upon the City’s receipt of federal funds.

The final payment shall not become due until the Contractor submits to the City (a) an affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the work have been paid or otherwise satisfied, (b) consent of surety, if any, to final payment, and (c) if required by the City, other data establishing payment or satisfaction of all obligations, such as receipts, releases, and waivers of liens arising out of the Contract, to the extent and in the form designated by the City. If any subcontractor refuses to furnish a release or waiver required by the City, the Contractor may furnish a bond satisfactory to the City to indemnify the City against the claim. If a claim remains unsatisfied after all payments are made, the Contractor shall reimburse the City for all moneys that the City may be compelled to pay in discharging the claim, including all costs and reasonable attorney's fees.

1.7.5  UNITS OF CURRENCY

All Contractor invoices for payment shall be accounted in U.S. dollars, and all the City payments to the Contractor shall be in U.S. dollars.

1.7.6  CURRENCY ADJUSTMENTS

There shall be no adjustments to Contract price due to currency fluctuations through the term of this Contract.

1.7.7  ESCALATION

Adjustments to the Contract Price to account for changes in labor and material costs shall be made as provided for in this Section. Escalation adjustments will be only for the following:

•  Any order of an Option Car.

An Escalation Factor will be calculated as detailed below:

•  80% of the escalation factor will be based on the Consumer Price Index – All Urban Consumers (CPI-U), U. S. city average, 1982-84 = 100, All Items, not seasonally adjusted, published monthly in the United States Department of Labor Bureau of Labor Statistics. The Base Index is the referenced index as of the NTP date.

•  20% of the Escalation Factor will be based on the Producer Price Index for Steel Mill Products, published monthly in the Producer Price Indexes by the United States Department of Labor Bureau of Labor Statistics. Its Series ID is WPU1017. The Base Index is the Four Month Revised Producer Price Index for Steel Mill Products as of the NTP date.

•  The escalation factor for each index is determined by dividing each Index as of the Adjustment Date by the respective Base Index. This is done for each of the indices described above, and the Escalation Factor is the weighted average of the two factors.

•  The Escalated Price is calculated by multiplying the Base Price times the Escalation Factor.

•  Since the Four Month Revised Index may not be available at the time of exercising an option, the price may be revised in an additional change order when the Four Month Revised Index becomes available.

If the Bureau of Labor Statistics discontinues either of these indexes, then the City and the Contractor shall mutually agree on an appropriate substitute index published by the Bureau of Labor Statistics. In the event that either index is rebased by the Bureau of Labor Statistics, the City and the Contractor agree to accept the rebased indexes. The amount of escalation is limited by the availability of federal funds as further described in Section 1.7.2 PAYMENT CONDITIONS.

1.8  OPTION FOR ADDITONAL CAR AND SPARE PARTS

All items purchased as options as defined in this Section shall be identical in every way to corresponding items purchased under this initial Contract. All conditions, technical specifications, and requirements of this Contract Document shall apply to items purchased as option, except as noted below.

1.8.1  OPTION FOR ADDITIONAL CAR

At the option of the City, the Contractor shall provide up to one (1) additional car at the Escalated Option Unit Price per additional streetcar as defined in this section. The City shall order the additional car by written notice to the Contractor.

An option to order an additional car may be exercised at any time of the City's choosing up to contract expiration. Delivery of additional cars shall be in accordance with a schedule agreed upon by the City and the Contractor.

1.8.1.1  PRICES OF OPTION CAR

Price of the option car shall reflect prior change orders and escalation in price.

First, the base price of the option car shall be calculated using the applicable Option Unit Price Before Escalation contained on the Form 7 - Price Proposal in response to the Request for Proposals. This price is revised to include any price increase or decrease adjustment due to executed change orders to the base contract accrued at the time of exercising the option.

Second, including the price adjustment described above for executed change orders, the option price on the Price Proposal shall be escalated as described in Section 1.7.7 ESCALATION, as set forth in these SPECIAL PROVISIONS. The Adjustment Date shall be the Option Execution Date. The Option Execution Date is the date that the City submits a written request to exercise its option to purchase the additional car. This escalation adjustment shall be the sole remedy for increases in the Contractor's costs for the option car due to inflation.

1.8.1.2  PAYMENT FOR OPTION CAR

Payment for the option shall be made in accordance with the progress payment schedule to be agreed upon by the City and the Contractor.

1.8.2  OPTION FOR SPARE PARTS, SPECIAL TOOLS AND TEST EQUIPMENT

At the option of the City, the Contractor shall provide spare parts, special tools, and test equipment at the prices set forth in the required attachment to Form 7 – Prices Proposal and submitted in response to the Request for Proposals. The City shall order spare parts, special tools or test equipment by written notice to the Contractor. The notice shall specify the quantity of materials being ordered. The City may place one or more such orders for materials, or none.

An option to order spare parts, special tools and test equipment may be exercised at any time of the City's choosing up to the date of final payment for the prototype streetcar.

Any order for additional spare parts, special tools and test equipment shall be escalated as described in Section 1.7.7 ESCALATION, as set for in these SPECIAL PROVISIONS. The Adjustment Date shall be the Option Execution Date. The Option Execution Date is the date that the City submits a written request to exercise its option to purchase additional spare parts, special tools, or test equipment beyond the original purchase. The base price shall be the price as shown in Schedule B of the Schedule of Prices,. This escalation adjustment shall be the sole remedy for increases in the Contractor's costs due to inflation and shall be applied independently for each option exercised.

Additional spare parts, special tools and test equipment ordered under this provision shall be delivered not more than eighteen (18) months after exercising of the option, except that no parts or equipment shall be delivered earlier than thirty-three (33) months after Notice to Proceed.

1.8.2.1  PAYMENTS FOR OPTIONAL SPARE PARTS, SPECIAL TOOLS AND TEST EQUIPMENT

Payments for optional spare parts, special tools and test equipment shall be made after all special tools, spare parts and test equipment in the option order has arrived on City property.

1.9  CONTRACT MODIFICATIONS

1.9.1  CHANGE ORDERS

A Change Order is a written document, executed by the City, that (1) changes the total Contract price as of the date this Contract is fully executed, including any previously executed Change Orders, or (2) alters the design of the cars as specified in the Technical Specifications, or (3) alters the schedule for delivery of the Contract deliverables as set forth in the currently approved delivery schedule, or (4) makes any other change to the Contract, or makes a combination of any of the aforementioned Contract changes.

Change Orders shall be prepared by the City's Project Manager. However, no Change Order resulting in an increase in compensation shall be binding unless approved by the Portland City Council.

The Contractor shall deliver a Request for Change Order to the City within fifteen (15) days of receipt of any order, direction, instruction, interpretation, or determination of the City that the Contractor believes will cause a change in the cost of the work or in the schedule for delivery of the Contract deliverables, as set forth in Section 1.2 SCHEDULE of these SPECIAL PROVISIONS or in the currently approved progress schedule, or in any other change in the Contract. Additionally, the Contractor may deliver a Request for Change Order to the City for any new or different work in the Contract or adjustments to the Contract that the Contractor believes should be implemented.

With any Request for Change Order, the Contractor shall provide to the City a detailed description of the proposed adjustment to the Contract price or currently approved progress schedule, or both, and describing any other provisions of the Contract that will require modification because of the change. If the Contractor's proposal is acceptable to the City, the City will issue a Contract Change Order consistent with such proposal.

In connection with any Request for Change Order including a proposed adjustment in the Contract price, the Contractor shall submit a complete breakdown costs associated with the Change Order work.

In addition to the change order procedure described above, the City may at any time unilaterally direct changes within the general scope of the Contract by a written order to the Contractor. If any such change causes an increase or decrease in the cost of, or the time required for, the performance of any part of the work under this Contract, the parties shall attempt to negotiate an equitable adjustment in Contract price or delivery schedule or both. In the event that the City and the Contractor are unable to agree on the equitable adjustment, the Contractor shall proceed with the City's directed change, and the disagreement shall be resolved in accordance with Section 1.11 DISPUTES AND CLAIMS, as set forth in these SPECIAL PROVISIONS. Notwithstanding this provision and notwithstanding any changes, in no event will the City pay more or be liable for more than the amount of federal funds provided to the City for this project.

1.10  STOP WORK ORDER

The City Project Manager has the authority to stop any work whenever he or she deems necessary.

In addition to the right to terminate work under any other provision of this Contract, the City may require the Contractor to stop all, or any part of, the work called for by this Contract at any time for up to ninety (90) days after a written stop work order is delivered to the Contractor, and for any further period to which the parties may agree. The order shall be specifically identified as a "Stop Work Order" issued pursuant to this Paragraph. As a minimum, a Stop Work Order shall include the following in writing:

•  A clear description of the work to be suspended;

•  Guidance as to the action to be taken on subcontracts; and

•  Other suggestions to the Contractor for minimizing costs.

Upon receipt of a Stop Work Order, the Contractor shall comply with its terms immediately and take all reasonable steps to minimize the incurrence of cost allocable to the work covered by the order during the period of work stoppage. Within the period specified by the order, or within any extension of that period to which the parties agreed, the City may:

•  Terminate the work covered by the order as set forth in Section 1.13 TERMINATION FOR DEFAULT and Section 1.14 TERMINATION FOR CONVENIENCE, as set forth in the GENERAL CONDITIONS;

•  Cancel the Stop Work Order; or

•  Allow the period of the Stop Work Order to expire.

1.10.1  COSTS OF STOP WORK

If a Stop Work Order is canceled or expires, the Contractor shall resume work. An equitable adjustment shall be made in the work scope, Contract price, or Contract time, as appropriate, and the Contract shall be modified in writing accordingly if:

•  The Stop Work Order results in an increase in the time required for, or in the Contractor’s cost properly allocable to, the performance of any part of this Contract; and

•  The Contractor asserts a claim for an adjustment within thirty (30) days after the end of the period of work stoppage; and

•  The Stop Work Order was not caused by the Contractor’s default or other act or omission within the control or responsibility of the Contractor.

1.10.2  MAINTENANCE DURING SUSPENSION

In preparation for and during suspensions of work, the Contractor shall take every reasonable precaution to prevent damage to or deterioration of the work. The Contractor shall repair or replace at no cost to the City work that is damaged or deteriorated during a work suspension due to the Contractor's failure to comply with this Paragraph. If the City finds that the Contractor is not taking a reasonable precaution and the Contractor fails to take the precaution within five (5) days after written notice from the City, the City may cause the precaution to be taken and recover the reasonable cost of taking the precaution from the Contractor.

1.11  DISPUTES AND CLAIMS

1.11.1  DISPUTES

If the Contractor and the City Project Manager are not able to resolve a dispute involving issues of fact arising from this Contract, the City Project Manager shall refer the dispute to the Director, Portland Office of Transportation. The written decision of the Director, Portland Office of Transportation, shall be the City's final agency action regarding the dispute, except that the parties shall follow a course of mediation per Section 1.22 MEDIATION of the GENERAL CONDITIONS.

Pending resolution of a dispute during the Contractor's pursuit of a remedy after the City's final agency action regarding the dispute, the Contractor shall proceed with the work as directed by the City Project Manager. The Contractor's actions pursuant to orders by the City Project Manager under this Paragraph shall not be deemed to prejudice its disputed claims.

Neither the City nor the Contractor may seek other legal or equitable remedies until all other remedies, including mediation, have been exhausted. However, the City’s total liability under this contract, no matter what the reason, can never exceed the amount of federal funds provided to it for this project.

1.11.2  CLAIMS

The Contractor must submit claims arising under this Contract in writing within fifteen (15) days after the Contractor learn of, or should learn of, the event giving rise to the claim. The claim must state in as much detail as possible the basis for the claim and the Contractor's best estimate of its right to additional compensation or extra time arising in connection with the claim. If the claim is silent regarding a claim for extra time, the Contractor shall be entitled to no extra time in connection with the claim. If the claim is silent regarding additional compensation, the Contractor shall be entitled to no additional compensation in connection with the claim. The Contractor must notify the City promptly in writing if its estimates of additional compensation or extra time change, and the notification must state the reasons for the changes.

The City shall respond to the Contractor's claim within thirty (30) days after the City's receipt of the claim by:

•  Approving the claim;

•  Denying the claim;

•  Requesting necessary information from the Contractor to enable the City to resolve the claim within thirty (30) days after its receipt of the requested information; or

•  Determining that the claim presents a disputed issue of fact that must be resolved in accordance with Section 1.11.1 DISPUTES as set forth in these SPECIAL PROVISIONS.

The Contractor agrees to consolidate any claim or dispute involving multiple parties involved in this project.

If the City approves a claim based upon delay or hindrance of Contract work for any reason whatsoever, including, but not limited to, avoidable or unavoidable delays, or delays due to acts or omissions by the City, the City, in its sole discretion, may adjust the schedule as the City deems appropriate to help mitigate the Contractor's damages, or may pay the Contractor damages and accelerate Contract work to ensure completion on schedule.. However, the City’s total liability under this contract, no matter what the reason, can never exceed the amount of federal funds provided to it for this project.

Notwithstanding any other provision of this Contract, the Contractor shall be absolutely barred from recovering extra costs or obtaining extra time within which to complete Contract work if the notice required under this Paragraph is delivered to the City later than one hundred eighty (180) days after the City's acceptance of the last car. However, the Contractor may raise counterclaims for additional compensation for work performed under the Contract in the event that the City asserts a claim against the Contractor later than one hundred eighty (180) days after the City's acceptance of the last car.

1.12  WARRANTY

1.12.1  SCOPE OF WARRANTY

All materials, components and parts furnished under this Contract shall be new and of high quality, and all car workmanship shall be of high quality, and in conformance with the Contract.

The Contractor warrants all materials, components, parts and workmanship of each car, each car spare part or assembly, and all special tools and diagnostic test equipment provided under this Contract to be free of defects and faults in material, design and workmanship. Such warranties by the Contractor shall apply to all car components, parts and workmanship, whether performed or provided by the Contractor, subcontractors, or suppliers at any tier. Such warranties shall not apply to cars or car components abused or neglected by the City, or damaged by some unusual and unforeseeable supervening cause occurring after acceptance. No implied warranties of merchantability or of fitness for purpose shall apply.

The Contractor shall furnish, at its own expense, all materials, parts, labor, shipping costs and other expenses to fulfill its car warranty obligations, except as otherwise provided by Section 1.11 DISPUTES AND CLAIMS, as set forth in these SPECIAL PROVISIONS.

1.12.2  WARRANTY PERIOD

The warranty periods shall be as set forth below:

•  Five (5) years after car acceptance or conditional acceptance for each car shell, including under frame, side walls, roof and support brackets, truck frame, axles, floor panels and structure and exterior panels and painting.

•  Two (2) years after car acceptance or conditional acceptance for each car for all other parts and components except spare parts.

•  Two (2) years after installation, but not more than three (3) years after delivery for spare parts.

•  Three (3) years after delivery for special tools and test equipment.

Any warranty from a subcontractor or supplier to the Contractor exceeding the periods described herein shall be extended to the City for the same period of time as given to the Contractor.

1.12.3  REPAIR AND REPLACEMENT

For each car component or workmanship failure during the warranty period, the City shall determine whether to correct the failure by repair or replacement of part(s) within an assembly, or by replacement of the entire assembly, based upon minimization of time for return of the affected car for operation, or consideration that the life of the assembly has or may have been adversely affected by the failure of one or more of its component parts.

The City shall perform removal of failed parts or assemblies and installation of repaired or replacement parts or assemblies for accepted cars under warranty, unless the City and the Contractor agree to other arrangements for such work. The Contractor may provide technical supervision for such removal or installation work by the City. The Contractor shall receive such removed failed car parts or assemblies at the City's Maintenance Facility, unless the Contractor requests shipment of such failed parts or assemblies to its facilities; in such case, the City will ship such failed parts or assemblies at the Contractor's expense. The Contractor shall deliver to the City a replacement or repaired car part or assembly for each such returned failed part or assembly within thirty (30) days of the Contractor's receipt of each failed part or assembly. In the event that a failed part or assembly is manufactured to order only and cannot be repaired or replaced within the thirty (30) day period, the Contractor and the City mutually shall consider whether the defective unit is to be repaired or replaced. The decision as to which alternative will be used shall be based on minimizing down time of the streetcar, and the Contractor shall return the repaired or replaced unit at the earliest possible date.

If the City and the Contractor arrange for the City to perform repair or replacement of failed car parts or assemblies, the Contractor shall retain full responsibility for warranty of such repaired parts or assemblies.

The Contractor shall pay the City within thirty (30) days of City invoicing any and all amounts billed by the City at its actual labor, material and shipping costs, plus applicable overhead costs, for its removal of failed car parts or assemblies and installation of replacement or repaired car parts or assemblies pursuant to the warranty program.

1.12.4  FAILURE ANALYSIS REPORT

All parts or material returned to the Contractor for repair or replacement shall be accompanied by a Failure Analysis Report Form, which will be provided by the City. The Contractor shall complete this form and shall deliver to the City a full and complete report of the exact nature and probable cause of each car component failure within ten (10) days of the Contractor's receipt of such failed component.

1.12.5  SYSTEMATIC FAILURES

In the event that, during the warranty period, component failures occur to an extent in excess of ten percent (10%) of the same components used for the same function in the same assembly or subsystem among all cars furnished under this Contract, the Contractor shall, within thirty (30) days of notification of such instance, commence a modification program to repair or replace all such components, including those that have passed beyond the warranty period, to correct the cause(s) of such failures. The design of the repair or replacement for the component(s) involved in each such modification program shall be developed by the Contractor to remedy the nature and probable cause of the component failures and shall be approved by the City. Repair and/or replacement of components pursuant to each modification program shall be according to the same provisions herein as if such components were failed components requiring warranty repair and/or replacement, whether or not actual failures for some or most of the involved components have occurred following notification of a requirement for a modification program.

In no case shall the correction of defects in design, material or workmanship result in an increase in maintenance requirement beyond that specified in the Contract Documents.

1.12.6  WARRANTY ON REPLACED PARTS

Any materials, parts or components which are used for replacement under the initial warranty period shall be warranted again for either half the total original warranty period of the replaced particular component, or for the remainder of the original warranty period of the replaced component, whichever is greater. The remainder of the original warranty period for each such particular component shall be computed from the date of failure of such component as recorded in the City's car maintenance records. In the case of components that are to be replaced pursuant to a modification program but have not yet failed, the remainder of the original warranty period shall be computed from the date of City notification to the Contractor of a requirement for the particular modification program.

If the Contractor fails to comply with the warranty/mod­ification provisions herein, or within the times specified for such performance, the City may have the component failures or defects corrected. The Contractor and the Contractor's surety shall be liable for all expense incurred. In case of emergency where, in the opinion of the Project Manager, correction of component failures or defects pursuant to the procedures and durations specified for the warranty/modification programs may cause serious loss or damage, repairs or corrections may be made without notice to the Contractor, and the Contractor shall pay the cost of the repairs or corrections.

1.13  WORKFORCE DIVERSITY

The City values diversity in its workforce and in the workforce of those who contract with the City. The City recognizes and appreciates that individuals are different, and that diversity is an advantage. The City encourages, supports and nurtures diversity, and encourages any firm contracting with the City to do the same. During the term of this contract, the Contractor shall support these values by encouraging and supporting diversity in the workplace.