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HomeMy WebLinkAboutAgenda Report - January 18, 2023 C-03s• CITY OF + � ow r a 2 CALIFORNIA AGENDA ITEM C-3 COUNCIL COMMUNICATION AGENDA TITLE: Adopt Resolution Authorizing City Manager to Waive Bid Process and Purchase Electric Substation Power Transformer from Delta Star Incorporated of San Carlos ($2,000,000) MEETING DATE: January 18, 2023 PREPARED BY: Electric Utility Director RECOMMENDED ACTION: Adopt a resolution authorizing the City Manager to waive the bid process and purchase an electric substation power transformer from Delta Star Incorporated of San Carlos in an amount not to exceed $2,000,000. BACKGROUND INFORMATION: Lodi Electric Utility (LEU) requires a substation power transformer for spare support in the event of failure of any of the existing eight substation power transformers in service. LEU currently owns and operates four separate electrical substations, each with two power transformers in service. Staff are proposing to purchase a spare transformer due to extremely long lead times for critical electrical infrastructure, currently being quoted in upwards of 150 weeks, or nearly 3 years. Since the substation power transformer is the backbone of LEU's electric infrastructure, having a spare would allow for what is termed an "N-1 contingency plan" which means the loss of an asset with a spare to deploy, thereby helping to ensure little to no interruption of service to LEU customers in the event of equipment failure. On October 27, 2022, LEU staff discussed with the Risk Oversight Committee meeting a need to amend LEU's existing reserve policy in order to accommodate this purchase. The proposed amendment included removing the Capital Reserve component from the LEU Reserve Policy and instead moving forward to purchase a spare transformer to ensure equipment is available and on hand should a catastrophic failure occur. By Resolution 2022-283, City Council approved this change to the LEU Reserve Policy at its November 16, 2022 meeting noting that staff would return to Council requesting approval to purchase the spare transformer. Lodi Municipal Code, Section 3.20.070 states that bidding shall be dispensed when technical requirements preclude competitive bidding and when the City Council determines that the purchase would be in the best interest of the City. Despite contacting four other vendors, Delta Star Incorporated was the only manufacturer to support LEU with an appropriate lead time of or around early 2024 with all required components conforming to LEU standards. Delta Star also builds and constructs substation power transformers out of the local San Carlos location, decreasing freight costs and time as well as overall freight complexity. FISCAL IMPACT: Procurement cost including taxes and contingency will not exceed $2,000,000. FUNDING AVAILABLE: LEU inventory account number 500.13496. A capital project and associated budget will be requested as part of the Fiscal Year 2023/24 budget process which corresponds with the anticipated delivery and actual payment for said equipment. APPROVED: Ojrvjj r Stephen Schwabauer, City Manager Adopt Resolution Authorizing City Manager to Walve Bid Process and Purchase Electrlc Substatlon Power Transformer from Delta Star Incorporated of San Carlos ($2,000,000) January 18, 2023 Page 2 Andrew Keys Andrew Keys Deputy City Manager/Internal Services Director Melissa Price (Jan 4, 202316:55 PST) Jeff Berkheimer Electric Utility Director Substation Transformer Bid Opening: December 2, 2022 Delta Star Quotation: Q011170—Rev City of Lodi, CA Delta Star Contacts Proposal Analyst Aaron Tilton ati Iton &deltastar.com (434)847-0043 Delta Star Quotation: Q011170 Revision: 5: January 12, 2023 Quotation Date: December 2, 2022 Regional Sales Director Sales Representative Chris Amend Keith Wallace - HighPoint chris.amendAdeltastar.com kwallace ri highpointpower.com (650) 508-2862 (209) 329-8566 Quote Summar -v Delta Star is pleased to extend our offer for the manufacture and supply of power transformer(s) as outlined below. Shipment Shipment is estimated by the end of Q1 2024 from California with receipt of PO by December 21, 2022, subject to plant availability at time of order. Pricing Prices are in US dollars and do not include taxes. See Commercial Clarifications & Escalation Policy. Quotation Validitv Quotation is valid �G days Porn id n,,enin,, through January 31, 2023. Payment Terms Net 30: 100094 Upon Delivery All milestone invoices to be on or after July 1, 2023: 30% at approval drawing acceptance; 30% upon receipt of major materials; 30% upon completion of Factory Acceptance testing; and 10% upon Delivery & Acceptance; due upon receipt. ��er�i�r��■r�ee�■�rrarr■�esnr���rn'r.. � � ■ Mr.92TIUMFIVIT". PI ...... MI Field Service See attached Field Service Policy and Scope of Work. Item QtY. Description (QO11170) Unit Price Total Price Price After P1 Power Transformer — 21/28/35 MVA, 60kV, 350kV BIL 30 Days $975 P2 Gasket Set $775 primary with DETC — 12Y/6.93kV, 110/110kV BIL secondary P3 HV Bushing $1,764 $2,056 with LTC. LVAO Bushing $1,528 $2,056 P5 Specification: Electric Standards — Technical Specification No. $5,753 $7,744 1 l 1 Rev. 0 — Specification for Furnishing and Delivering $1,648,635 $1,648,635 LTC Maintenance Free Breather $4,547 Substation Power Transformers — 10/25/2022 P8 I LTC PRD $710 $923 Unit Price includes the following: Three (3) days onsite Field required. For parts quotations and purchases made outside the initial purchase order submission, contact (800) 368-3017 or Service supervision. lead time of several weeks. Parts requiring immediate availability and shipment will incur an additional premium. 2 l Freight from California to Lodi, CA $7,320 $7,320 3 1 Offloading $7,401 $7,401 4 1 City of Lodi Sales Tax — 8.25% $137,226.87 $137,226.87 Grand Total —California $1,800,582.87 $1,800,582.87 Potential Item Recommended Spare Parts Unit Price Price After P1 Fan $750 30 Days $975 P2 Gasket Set $775 $1,008 P3 HV Bushing $1,764 $2,056 P4 LVAO Bushing $1,528 $2,056 P5 Radiator [Cooler] $5,753 $7,744 P6 LTC Door Gasket $914 $1,188 P7 LTC Maintenance Free Breather $4,547 $5,911 P8 I LTC PRD $710 $923 Recommend spare part prices are valid from the quote date to 30 days from transformer shipment. Transformer purchase required. For parts quotations and purchases made outside the initial purchase order submission, contact (800) 368-3017 or parts c ,deltastar.com . Potential price beyond 30 days from shipment is shown for reference with standard lead time of several weeks. Parts requiring immediate availability and shipment will incur an additional premium. Item Delta Star Options U nit Price 7O1 Short Circuit Testing $650,000 02 Five Year Limited Trantech Radiator Warranty (if applicable) $2,500 03 Winter/Weather Wrap (Transformer Ships Completely Wrapped) $4,000 Technical Clarifications The Transformer is a core form configuration with circular winding design and a step lap cruciform core. The windings will be disc or helical wound with thermally upgraded paper insulated copper conductor. 2. Design details can be found on the attached performance guarantee and preliminary outline drawing. Any design change requested by the Customer or the Customer's representative after the issuance of the Purchase Order that causes delay or ultimately affects the final delivery requirement will extend the contract's final delivery by an equal amount of days as the delay incurred. If additional component parts are required, delivery may also be delayed by component manufacturer lead times. All conditions of the late delivery will be based on the amended new final delivery date. A change order must be issued by the customer to cover any price increase or deduct and to confirm the agreed upon change in the delivery requirement. 4. The transformer will be designed, constructed, and tested in accordance with the latest manufacturing and testing standards of IEEE, ANSI, and NEMA. Additionally, the power transformer will meet the requirements of other standards as appropriate. 5. The Delta Star production schedule report will be submitted on a monthly basis until the unit is in production (approximately 90 days prior to shipment). Once production begins, a more detailed production schedule will be submitted on a bi-weekly basis showing weekly ranges for significant milestones. Customer requested additional milestone details and/or customization to milestone reports may result in a change order(s). 6. Where inspections are required, remote witnessing will be scheduled accordingly due to social distance requirements. On-site inspections must be approved in advance. 7. Drawings for approval (which consist of nameplate, outline, and controls drawings) will be submitted as required to meet the Customer's delivery date, as determined by Delta Star. The time period for the customer to review approval drawings sent shall be two weeks. 8. Instruction book(s) will be provided at the time of shipment and include final (as built) drawings. 9. Design review, if required, will be held at the Delta Star manufacturing location unless otherwise agreed upon. If customer requires Delta Star to travel to customer facility, additional charges may apply for travel expenses. During restricted periods, remote design reviews will be scheduled accordingly due to social distance requirements. On-site design reviews must be approved in advance. 10. Delta Star reserves the right to manufacture the transformer(s) at any of its locations. If Delta Star selects to adjust the manufacturing facility the customer will not incur any additional expenses. 11. Digital impact recorders will be supplied up to a maximum of two per shipment. 12. The on -load tap changer is manufactured by Reinhausen model RMV -II -2000-15. Q_ Page 5 13. Specification, Page 8, Item 2.6.1 — Due to the small core area of the Preventive Auto transformer, DSI is quoting rectangular core and circular coils for the Preventive Auto transformers which is utilized in the load tap changer circuit. 14. Specification, Page 34, Item 21 — Offered transformer meets the seismic requirements. Special seismic analysis is included in the Delta Star offer. These calculations do not include the transformer mounting on its foundation. 15. Exception: None Page 6 Shipment and Delivery 1. DDP Foundation (Incoterms 2010). Units ship by truck without oil; radiators, fans, arresters, and LV/HV bushings will be removed and shipped to the site by flatbed truck(s). If applicable, oil will be shipped to the site by tanker truck(s). Rail shipments (if applicable): Quoted lead time is the time to place the unit on a rail car at our plant. Neither Delta Star nor the rail lines can predict the actual time from our plant to the rail siding nearest the delivery site. Delta Star will not be responsible for removal/reinstallation of any overhead or adjacent structures, building of roads, bridges, or other structures, nor for the costs associated with any delays resulting from obstruction of access. 4. Offloading price includes one pick and place via crane unless otherwise stated and is based on unobstructed access to the pad for both truck and crane. Price is based on requirements outlined in customer specification and communication prior to this quote. Customer is responsible for notifying Delta Star of difficult delivery or rigging situations, including, but not limited to, jack and slide, a boom radius of over thirty feet (30'), overhead obstructions, or nearby energized power lines (see OSHA minimum approach distance chart), which may render the quoted offloading price void. Modifications to placement and requests to change rigging vendor may result in additional charges. 5. If destination is changed, a price adder may apply for additional freight and offloading charges. Commercial Clarifications 1. This offer and the attached conditions of sale constitute an offer of sale. Acceptance of this offer is expressly limited to the terms and conditions set forth herein. Any terms or conditions proposed by Purchaser that are inconsistent with or in addition to the terms and conditions attached hereto are hereby expressly rejected and shall be of no force or effect whatsoever between the parties. 2. Business License. Delta Star acknowledges that Buyer requires Delta Star to have a City of Lodi business license and Delta Star agrees to secure such license and pay the appropriate fees prior to performing any work hereunder. 3. Insurance Requirements. Delta Star shall take out and maintain during the life of this Agreement, insurance coverage as set forth in Exhibit A attached hereto and incorporated by this reference. 4. In no event will Delta Star's total aggregate liability arising from or relating to these terms and conditions exceed the insurance limits set forth in Exhibit A for the applicable policy, and if the claim is non -insurable, Delta Star's liability will be limited to the highest insurance limit amount listed in Exhibit A for the applicable policy. This section supersedes Section 13 of the attached Delta Star Conditions of Sale. 5. Delta Star agrees to conform to the provisions of Chapter 1, Part 7, Division 2 of the Labor Code. Delta Star and any subcontractor will pay general prevailing wage rate and other employer payments for health and 0 Page 7 welfare, pension, vacation, travel time, and subsistence pay, apprenticeship or other training programs. The responsibility for compliance with these Labor Code requirements is on the prime contractor. 6. No contractor or subcontractor may be awarded a contract for public work on a public works project (awarded on or after April 1, 2015) unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5. This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. 7. This Agreement is governed by, and constructed in accordance with the laws of California where the goods and services are manufactured and services performed. Warranty will be in accordance with the attached Delta Star Five Year Warranty. 9. For deliveries beyond 12 months: Prices are subject to the Delta Star Escalation Policy, which lists method and sources for determining adjustment to price. The index values are updated to the most recently values published as of November 23, 2022. The values reflect the monthly average (see month of publication below). 10. For deliveries within 12 months: Delta Star quoted prices are firm for the delivery quoted provided market inflation on commodities such as copper, steel, aluminum, and oil does not exceed five percent (5%) based on commodity prices at date of quotation. Customer required delivery delays will subject to escalation/de- escalation provisions found in DSI quotation Material Base Index Value Publication Month: Copper 3.81 Oct -22 Crude Oil 2.08 Oct -22 Core Steel 249.085 Sep -22 Plate Steel 285.873 Oct -22 Labor 152 Sep -22 General Material 401.150 Oct -22 Quote Number Copper Weight Oil Weight 1.6% Core Steel Weight Plate Steel Weight Labor General Material QO11170 4.8% 10.7% 2.2% 6.0% 19.3% 1 l . Performance bonds (if provided): Surety companies no longer provide performance bonds that cover an entire five-year warranty period. Delta Star will provide a performance bond that covers the statutory period (one year). The additional four years of warranty will be covered by Delta Star per the attached Warranty. 12. Field Service prices are valid for (1) calendar year from manufacturing completion date; a 3% increase will be applied for each calendar year thereafter. Field Service is required to validate warranty coverage; see attached Field Service Scope for details. Service(s) must be completed within 120 days of shipment and storage must be in accordance with Delta Star Installation and Maintenance Instruction Manual (DS -100). Services will be performed in accordance with the attached Field Service Policy. 13. In the event the supply chain or costs to manufacture and supply equipment to the purchaser is impacted by an executive order, governmental directive, and/or abnormal market hyper -inflation, Delta Star reserves the right to pass related costs to the purchaser. 14. Purchase Orders or any other documents submitted by customer pursuant to this quotation will not result in a contract until accepted and acknowledged by Delta Star. 15. Delta Star reserves the right to correct errors on the quote and all related documents. 16. Delta Star is not a covered federal contractor or subcontractor and therefore the Executive Order mandating COVID-19 vaccines does not apply to our company. Additionally, we will continue to monitor federal guidance on vaccinations, including the emergency rules currently under review at the White House Office and Information and Regulatory Affairs (OIRA), and update our policies to ensure compliance with all applicable regulations. To ensure prompt processing when submitting a purchase order, please send to the email and/or address below and copy your Delta Star sales representative: orders(c,,deltastar.com Delta Star, Inc. 3550 Mayflower Drive Lynchburg, VA 24501 M Performances Guarantee and Preliminary Outline ® Customer Data Forms (if applicable) © Warranty ❑x Storage ❑x Delay/Cancellation © Field Service ® Escalation Policy ® Conditions of Sale © ISO 9001:2015 Certificate Page 10 Revised 11/1/2019 POWER - TRANSFORMER SPECIFICATION p� PERFORMANCE GUARANTEE INC Section 1.0 Limited Warranty Delta Star warrants to Buyer that for a period of sixty (60) months from the date of shipment of the transformer (the "Goods"), such Goods will materially conform to Buyer's specifications and will be free fi-om significant defects in workmanship and materials. Products manufactured by a third party ("Third Party Product") may constitute, contain, be contained in, incorporated into, attached to or packaged together with, the Goods. Third Party Products are warranted for one (1) year from shipment or the original equipment manufacturer's warranty, whichever is longer. After the first year of the component part warranty, labor and service costs are excluded. Should customer choose to use a non-Messko PRD with any Reinhausen LTC, the LTC warranty will be limited to 1 -year. DELTA STAR MAKES NO OTHER WARRANTY WHATSOEVER WITH RESPECT TO THE GOODS, INCLUDING ANY (a) WARRANTY OF MERCHANTABILITY; OR (b) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE. Section 2.0 Warranty Limitations This limited warranty does not apply where the Goods have: (a) been subjected to abuse, misuse, neglect, negligence, accident, improper testing, improper installation, improper storage, improper handling, improper maintenance, abnormal physical stress, abnormal environmental conditions, or use contrary to any instructions issued by Seller, including the Delta Star Instruction Manual (DS 100); (b) been reconstructed, repaired, or altered by Persons other than Seller or its authorized Representative; or (c) been used with any Third -Party Product, hardware, or product that has not been previously approved in writing by Seller. To receive warranty coverage, Purchaser must: (1) inspect the Goods within forty-eight (48) hours of delivery and notify Delta Star and of any observable damage or irregularity, (2) allow Delta Star Field Service to either perform the installation or provide a minimum of one (1) day of Field Service, and (3), allow Delta Field Service to supervise the move, in the event the transformer is relocated from the original destination after initial delivery. Section 3.0 Buyer's Exclusive Remedy for Defectivc Goods Delta Star shall not be liable for a breach of this limited warranty unless: (i) Buyer gives written notice of the defect, reasonably described, to Delta Star within sixty (60) days of the time when Buyer discovers or ought to have discovered the defect; (ii) Delta Star is given a reasonable opportunity after receiving the notice to examine such Goods; and (iii) Delta Star reasonably verifies Buyer's claim that the Goods are defective. Delta Star shall not be liable for a breach of this limited warranty if. (i) Buyer makes any further use of such Goods after giving such notice; (ii) the defect arises because Buyer failed to follow Delta Star's oral or written instructions as to the storage, installation, commissioning, use, or maintenance of the Goods; or (iii) Buyer or a third party alters or repairs such Goods without the prior written consent of Seller. Subject to Section 1.0 and 2.0 above, Delta Star shall either repair or replace such Goods (or the defective part), the method and extent of which rests in the sole discretion of Delta Star. Buyer shall provide clear access to the Goods for truck and cranes, and bear all costs resulting from moving structures and equipment. Section 4.0 Disclaimer PURCHASER'S EXCLUSIVE REMEDIES AND DELTA STAR'S ONLY OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH THE EQUIPMENT, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, SHALL BE THOSE STATED HEREIN. PURCHASER MAY NOT REJECT THE EQUIPMENT. DELTA STAR SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF ANY KIND INCLUDING LOST PROFITS. Page l l 0 Revised 11/1/2019 Delta Star is pleased to make available secure facilities for storage of new Transformers to its customers. In the event that delivery cannot be accepted upon completion of manufacture, Delta Star will store the unit free of charge for thirty (30) days from the acknowledged ship date. The storage facilities are intended for short term storage only and, therefore, tiered fees apply for storage exceeding thirty (30) days in length. Storage is contingent upon the availability of factory storage space at time of request. 2. The Transformer will be invoiced on the date the unit is ready to be shipped, regardless of being shipped or stored. It is required that Delta Star receives an official Request for Storage prior to placing any equipment into storage for any amount of time. An email is acceptable. 4. An initial one-time set up charge to prepare the Transformer for storage as well as for removal and preparation for shipment in the amount of twelve thousand five hundred dollars ($12,500) will apply for any unit stored beyond thirty (30) days. 5. A flat fee of five thousand dollars ($5,000) will be charged for each month, or portion of month, of storage. After four (4) months in storage, the monthly rate will increase to ten thousand dollars ($10,000). 6. Customer will be invoiced quarterly unless otherwise agreed. 7. Payment terms are Net 10 Days from the date of invoice. 8. Any rate increases in freight, offloading, and/or Field Services from the time the equipment is originally invoiced to the time it is actually shipped will be invoiced to the customer. 9. Delta Star requires four (4) weeks advance notification for shipping out of storage to insure shipping preparations are completed in time to meet the designated ship date. 10. Title passes to Purchaser at the time the equipment is placed into storage and payment is received. Delta Star will insure the equipment from damage until it is received and accepted at the destination. 11. Warranty starts upon shipment or six (6) months after completion of manufacture, whichever occurs first (unless otherwise agreed). Page 12 Revised 11/1/2019 Delay of shipment or cancellation of an order will be accepted only after WRITTEN NOTICE from the Purchaser has been received and accepted by the Seller. Cancellation — The cancellation charge shall be calculated as (a) the full price of the Purchaser's order multiplied by (b) the cancellation charge percentage specified below corresponding to the date on which Delta Star receives the Purchaser's written cancellation notice. Delta Star may add any extra ordinary charges, such as (but not limited to) material that cannot be cancelled, etc. Prior to Scheduled Ship Date* 30 — 59 Days 60 — 89 Days 90 — 119 Days 120 — 149 Days 150 — 179 Days 180 + Days Cancellation Charge Delay Charge 100% (Purchase Order) 1% 50% 2% 35% 2.5% 25% 3% 15% 3.5% 10% 4+% Delay — Production delays are subject to plant availability. Requests to delay shipment will result in a delay charge, which is calculated as (a) the full price of the Purchaser's order multiplied by (b) the delay charge percentage corresponding to the length of delay requested per the chart below. Storage fees may apply if delay is requested (see Storage Policy). Requests for delay of shipment will be considered the same as cancellation if market conditions prohibit filling the vacated production slot. *Ship date is the original date requested by the customer on the Purchase Order and acknowledged by Delta Star. Should these dates be different, Delta Star's acknowledged date will be the official Ship date. Cancellation will be based on original acknowledged ship date notwithstanding of any subsequent requests for delay. Page 13 Revised 11/1/2019 All field service work is performed in accordance with the following clarifications, unless otherwise mutually agreed upon: Customer Responsibilities The customer or others are expected to provide the following, unless otherwise noted in our quotation: 1. Free, clear, and unlimited access to substation site and areas around the equipment foundation. 2. Switch, lock out, and ground any equipment necessary to establish a safe work area. 3. Disconnect and reconnect all external bushing/bus terminations, protection controls, CTs, and relay wiring, as required. 4. Disassembly and reassembly of any deluge and/or iso -phase bus systems, as required, for free and clear access. 5. Disposal of excess/scrap oil, solid wastes, crates, and/or packaging material generated during the execution of work. 6. Temporary power source (120/240 VAC @ 30 amps) and a ladder to access the top of the equipment, as needed. 7. One person on-site during the execution of any work, for safety reasons, that also has the competency to provide clarifications on any energized or de -energized equipment within the substation. Additional Charges The following out -of -scope situations may occur during work execution, which additional charges will apply: 1. Initial customer site-specific safety training in excess of four (4) hours. 2. Spare parts that are NOT within fifty (50) feet of the transformer. 3. Safety equipment requirements beyond personal protective equipment (PPE) (safety glasses, hard hat, safety shoes, harness, & lanyard) or customer required site -access training for Delta Star personnel or subcontractors. 4. When temperatures are below 10°C (500F), it will be necessary to elevate the transformers (active part & insulation) temperature prior to starting the final vacuum / oil filling process. This additional work will be based on T&M rates. 5. If/when secondary oil containment may be required for compliance with any EPA or local site SPCC programs. 6. Customer requirements that exceed those listed in our DS -100 (DS Installation and Maintenance Instruction Manual) 7. Exception is taken to all items that are not outlined in the Scope of Work section. For any additional work performed, these tasks will be considered out -of -scope and will be invoiced in accordance with our FS Rate Schedule FS -1000A. 8. Purchaser accepts & assumes all responsibility for the resolution of any labor disputes regarding union representation, pricing, or work jurisdictions, including full liability for all costs incurred resulting from any such disputes. 9. Purchaser shall provide a recent PCB report / certification of each unit prior to the start of any scheduled work. a. If PCB concentration is higher than 49 PPM, DSI will be unable to complete the work. b. If PCB concentration is 1-49 PPM, additional decontamination charges will apply. The proper disposal of the PCB oil shall be the responsibility of the purchaser or others. Delays Pricing is based upon Delta Star crews working 7 -days a week, and 8-12 hours per day uninterrupted. Any standby time or delays that are beyond Delta Star's control, including those resulting from restricted or limited site access, will be considered out -of -scope work, and shall be billed in accordance with Delta Star's Field Service Rate Schedule FS -1000A. Cancellation In the event of project cancellation, customer may be liable for the amounts set forth and outlined below as compensation for reasonable costs incurred, unless otherwise approved by an authorized Delta Star Field Service representative. 0-7 days prior to scheduled on-site date = 25% of order value or 8-14 days prior to scheduled on-site date = 10% of order value. Page 14 0 Revised ]1/1/2019 A general description of services is provided below. Field Service Supervision Field Service technician will complete arrival check, provide installation guidance, complete internal connections, verify the installation meets our warranty requirements, and verify the transformer is ready for energization as time permits. o Arrival Check: Prior to installation, a Delta Star Field Service technician will check arrival conditions (check pressure, core insulation resistance, and insulation moisture content if applicable), review the transformer for damages/leaks and complete a loose part inventory inspection. Includes all-inclusive travel, per diem, and labor costs for a minimum of three (3) days on-site with two days (roundtrip) travel to the customer identified substation site location. A report is provided to the client with our checklist and photos to validate the inspection(s) performed. A customer representative must acknowledge the report. *Unless waived by Delta Star, Field service is required to validate warranty coverage. Field service must be completed within four months (or 120 days) of delivery date. If unit is placed in storage, full assembly of unit is required within four months of delivery per Delta Star Installation and Maintenance Instruction Manual (DS -100). Field Service Mobile Technical Assistance Delta Star Field Service will provide one field service mobile substation specialist at the request of our customer during the field installation or acceptance of the subject equipment. The field service specialist will technically assist customer on the proper set-up and deployment of the equipment and provide standard/basic instruction to qualified electrical personnel during the installation and acceptance of the equipment. Includes all-inclusive travel, per diem, and labor costs for a minimum of three (3) days on-site with two days (roundtrip) travel to the customer identified substation site location. Additional days can be purchased for $3,150 per day per specialist. Field Service Installation Services • Transformer Installation according to Delta Star Installation and Maintenance Instruction Manual (DS -100) unless otherwise approved. • Assembly of all ship loose parts. • Addition of make-up oil for radiators by means of a filter cart. • Standard testing includes: Core & Winding Insulation Resistance; Overall Power Factor & Capacitance; Bushing Power Factor (C1 & C2), if no test tap, perform Hot Collar; Surge Arrestor Power Factor; Single Phase Excitation (All HV DETC Taps to N, Rated HV DETC Tap to LTC Taps 1L, 1R, & 16R); Transformer Turns Ratio (All HV DETC Taps to N, Rated HV DETC Tap to LTC Taps 16L thru 16R); verify operation of all devices reinstalled in the field; verify operation of LTC, if equipped; and Oil Testing to include Moisture, DGA, IFT, Acid, Color/Visual, D1816-2mm, Power Factor 25/100, SG & PCB. • Vacuum oil fill as listed in DS -100 (if applicable) Clarifications Additional days as required or requested will be charged at $2,000 per day, per technician based on an 8 hour day, unless otherwise noted above. Overtime, weekend and holiday pay incurred will be additional charges. No provisions are included for Union labor requirements; an updated field service quotation will be provided upon request. Delta Star acknowledges this project is subject to the provisions of Chapter 1, Part 7, Division 2 of the California Labor Code. Page 15 Revised 11/1/2019 Due to unprecedented materials fluctuations and long lead times involved in the manufacturing of power transformers, material -based price adjustments apply to key commodities. The materials subject to (de-) escalation are copper, crude oil, core steel, plate steel, labor, and general electrical equipment. Price adjustments are tied to applicable indices and may swing in a positive or negative direction. Our goal is to provide a reasonable calculation of this adjustment based on readily available online sources, which are verifiable by our customers. Material Material Index London Metal Exchange: http://www.Ime.com/metals/non-ferrous/comer/ Copper • Metals Non -Ferrous — Copper Average Prices Cash Offer (free registration required) Crude Oil US Energy Information Administration: liMs://www.cia.gov/dna /pet/pet�ri snt s I d.litni • Crude Oil WTI Cushing, Oklahoma Monthly Average T&D Europe: hit s:i'/,.vww.tdeurn e.eu/ ublicationss/technical-informatioit.html Core Steel • Current Month GOES Conv. column U.S. BLS PPI: http://www.bis.gov/ppi/ppi dr.him Plate Steel . Select "Current edition of the PPI Detailed Report" Commodities (not seasonally adjusted) Primary products Cold rolled sheets and strip, carbon steel - Product Code: 331221-1 U.S. BLS Employment Cost Index (Quarterly): litWs://www.bls.govibls/news-release/eci.htm. • Click "Current Edition" Table 5. Compensation (not seasonally adjusted): Employment Cost Labor Index for total compensation, for private industry workers, by occupational group and industry a Find "Goods Producing Industries," "Production, transportation, and material moving" a Current month General General Electrical Equipment: the producer price index —Not Seasonally Adjusted Industry: Electrical Power/distribution/specialty transformer mfg (PCU33531133531 l P), published by the Bureau of Labor Priui ment Statistics and found at htt s://beta.bls, -pvidataV iewer/view/timeseries/PCU3353113353 ] IP The de/escalation amount for each unit will be determined in the following manner: 1. Calculate the percentage change from the Base Index Value to the Final Index Value for each material (Index Percentage Change). 2. Multiply the Index Percentage Change by the corresponding Material Weight (%) provided with the quotation to calculate the Percentage Change in Selling Price. 3. Multiply the Total Material Weight by the Unit Price to determine the amount subject to de/escalation. 4. Multiply the Total Percentage Change in Selling Price by the amount subject to de/escalation. 5. Add or subtract the de/escalation amount from the Unit Price. Adjustments will be applied to the final invoice. Should an index no longer be available at time of shipment, a mutually agreed upon replacement shall be chosen. Definitions: Base Index Value: The latest published value for the index as of one (1) month prior to quotation date. Final Index Value: The latest published value for the index one (1) week prior to the shipment date. Index Percentage Change: The percentage change in the material Base Index Value and the Final Index Value [(Final Index Value — Base Index Value) / Base Index Value]. Material: Key commodity pricing item used in the manufacture of transformers. Material Index: Published index used to determine market price for key commodity materials. Material Weight: The percentage of unit price for each specified commodity. Percentage Change in Selling Price: Calculated by multiplying the Material Weight by the corresponding Index Percentage Change. Total Change: The total percentage change in the selling price column. Unit Price: Unit purchase price. X-N 11r,yricI,in \ I n1 Ili,1,vIti.,I General Conditions of Sale and Service 1. Applicability. (a) These terms and conditions of sale and service ("Terms") are the only terms which govern the sale of the goods ("Goods") and services ("Services") by Delta Star, Inc. ("Delta Star") to the buyer (`Buyer"). Notwithstanding anything herein to the contrary, if a written contract signed by both parties is in existence covering the sale of the Goods and Services covered hereby, the terms and conditions of said contract shall prevail to the extent they are inconsistent with these Terms. (b) The accompanying quotation, order acknowledgment, or invoice and these Terms (collectively, this "Agreement") comprise the entire agreement between the parties, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. In no event shall any conflicting or additional terms set forth in Buyer's purchase order (or any other document) apply to Delta Star's sale of Goods or Services to Buyer, unless specifically agreed to by Delta Star in a signed writing. 2. Delivery of Goods and Perrnrmance or Services. (a) Delta Star's compliance with its delivery obligations is conditioned on Buyer's continued fulfillment of all its obligations, including without limitation, payment and cooperation obligations. (b) In addition to any other rights and remedies available, Delta Star shall have the right to extend the time for delivery for a reasonable time if: (i) the information required by Delta Star for performance is not received by an agreed to date, or if Buyer subsequently changes any such information; (ii) Delta Star is prevented or hindered from performing based on circumstances beyond its reasonable control, without its fault or negligence, including without limitation, acts of God, valid or invalid action by governmental authority, fires, floods, windstorms, explosions, riots, natural disasters, sabotage, labor problems, restraints or delays affecting carriers or inability or delay in obtaining supplies of adequate or suitable materials, inability to obtain electrical service, fuel or transportation, or court injunction or order; or (iii) Buyer fails to perform any of its obligations in a timely manner, including without limitation if the Buyer fails to make payment for the current or for previous orders in a timely manner. (c) Any failure of Delta Star to deliver the Goods or Services on a timely basis shall not constitute a breach of this Agreement and shall not entitle Buyer to any damages for such failure. 3. Schedule. (a) Delivery dates are estimated and not a guaranteed day of delivery and are based on Delta Star's prompt receipt of all necessary information from Buyer and Buyer's return of approval drawings within 2 weeks after submittal by Delta Star. (b) Quoted Service or on-site dates, if any, are subject to confinnation at the time of contract award. 4. Title and Risk of Loss. Delivery of the Goods shall be made DDP destination at Buyer's risk and expense unless stated otherwise in Delta Star's quote. Title to Goods will remain in Delta Star until fully paid for by Buyer. If shipment is delayed at the request of Buyer, at the fault of Buyer, or due to reasons beyond Delta Star's reasonable control, the risk of the loss shall pass to Buyer at the time originally agreed to for delivery. From and after such time, the Goods shall be stored and insured at the expense and risk of Buyer. 5. Buver's Acts or Omissions. If Delta Star's performance of its obligations is prevented or delayed by any act or omission of Buyer or its agents, subcontractors, consultants or employees, Delta Star shall not be deemed in breach of its obligations under this Agreement or otherwise Page 1 of 3 liable for any costs, charges, or losses sustained or incurred by Buyer, in each case, to the extent arising directly or indirectly from such prevention or delay. 6. ]nspe_ ion ui'Goods. (a) Buyer shall inspect the Goods and Services within 48 hours of receipt or completion of the Services, as applicable. Buyer shall immediately notify Delta Star in writing of any nonconformity. Buyer will be deemed to have accepted the Goods or Services if Buyer fails to provide such notice, or if Buyer commences use of the Goods or Services. (b) After having been notified of any such failures, Delta Star shall use commercially reasonable efforts to remedy within a reasonable period. If Delta Star is not able to remedy such failures, Delta Star shall replace the Goods at issue or re -perform the Services at issue, which shall be Delta Star's sole liability, and Buyer's sole remedy, for Delta Star's failure to remedy any such failures. 7. Price and Cancellation Policy - Goods. (a) Unless otherwise provided in Delta Star's quote, prices are firm for the delivery quoted provided market inflation on commodities such as copper, steel, aluminum, and oil does not exceed five percent (5%) based on commodity prices at date of quotation. Customer required delivery delays will subject contract to escalation/de-escalation provisions found in DSI quotation. If applicable, escalation pricing shall be determined according to the Delta Star Escalation Policy, which is incorporated herein. Buyer is responsible for any and all taxes, fees, levies, customs, duties, and the like which result from or in connection with the sale of Goods and Services by Delta Star. Buyer is also responsible for any and all additional charges, including, but not limited to, freight charges, special packaging requirements, insurance premiums, fees for export, transit, import and other permits, as well as for certifications. (b) Cancelled orders are subject to the Delta Star Delay & Cancellation Policy, which is incorporated by reference herein. 8. Price -and Cancellation Policy - Services. (a) Unless otherwise provided in Delta Star's quote, prices are based on normal business hours and are valid for 30 days from the date quoted. Should the decision to accept this offer be delayed to a later date, Delta Star would be pleased to either confirm or resubmit the offer. Overtime and Saturday hours will be billed at one and one-half (1.5) times the hourly rate, Sunday hours will be billed at two (2) times the hourly rate, and holiday hours will be billed at three (3) times the hourly rate. Rates are subject to change without notice. (b) Delta Star pricing assumes the use of non-union labor for all work quoted unless otherwise noted. If subcontracted union labor is required, Buyer is responsible for additional costs at the prevailing union wages for the required labor. (c) Cancelled orders are subject to the Field Service Delay & Cancellation Policy, which is incorporated by reference herein. 9. Payment Terms. (a) Buyer shall pay all invoiced amounts due to Delta Star within 30 days from the date of Delta Star's invoice. The due date for payment shall not be extended if transport, delivery, commissioning, or Buyer's possession of the Goods or Services is delayed or prevented due to reasons beyond Delta Star's control. (b) Buyer shall pay interest on all late payments at the lesser of 1.5% per month or the highest rate permissible under applicable law, calculated daily and compounded monthly. Buyer shall reimburse Delta Star for all costs incurred in collecting any late payments, including, without limitation, attorneys' fees. 10. Limited Warranty. (a) Delta Star warrants to Buyer that for a period of 60 months from the date of shipment the Goods will materially conform to Buyer's specifications and will be free from significant defects in workmanship fA Revised 9/19/2019 and materials. This warranty extends to Services performed by Delta Star for one (1) year from the date of performance. (b) Products manufactured by a third party ('-Third Party Product") may constitute, contain, be contained in, incorporated into, attached to or packaged together with, the Goods or Services. Third Party Products are warranted for one (1) year from shipment or the original equipment manufacturer's warranty, whichever is longer. After the first year of the component part warranty, labor and service costs are excluded. (c) DELTA STAR MAKES NO OTHER WARRANTY WHATSOEVER WITH RESPECT TO THE GOODS OR SERVICES, INCLUDING ANY (a) WARRANTY OF MERCHANTABILITY; OR (b) WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; WHETHER EXPRESS OR IMPLIED BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE. (d) To receive warranty coverage, Buyer must: (1) inspect the Goods or Services within 48 hours of delivery or performance and notify Delta Star of any observable damage or irregularity, and (2) allow Delta Star Field Service to either perform the installation or provide a minimum of 1 day of Field Service, if applicable. (e) Delta Star shall not be liable for a breach of this limited warranty unless: (I ) Buyer gives written notice of the defect, reasonably described, to Delta Star within 60 days of the time when Buyer discovers or ought to have discovered the defect; (2) Delta Star is given a reasonable opportunity after receiving the notice to examine such Goods or Services; and (3) Delta Star reasonably verifies Buyer's claim that the Goods or Services are defective. (f) Delta Star shall not be liable for a breach of this limited warranty if: (1) Buyer makes any further use of such Goods or Services after giving such notice; (2) the defect arises because Buyer failed to follow Delta Star's oral or written instructions, including the Delta Star Instruction Manual (DS100), as to the storage, installation, commissioning, use, or maintenance of the Goods or Services; (3) Buyer or a third party alters or repairs such Goods or Services, or combines with any Third -Party Product, hardware, or product, without the prior written consent of Delta Star. (g) Subject to this Article 10, Delta Star shall either repair or replace such Goods or nonconforming part, or re -perform the nonconforming Services, the method and extent of which rests in the sole discretion of Delta Star. Buyer shall provide clear access to the Goods for truck and cranes, and bear all costs resulting from moving structures and equipment. (h) BUYER'S EXCLUSIVE REMEDIES AND DELTA STAR'S ONLY OBLIGATIONS ARISING OUT OF OR IN CONNECTION WITH THE GOODS OR SERVICES, WHETHER BASED ON WARRANTY, CONTRACT, TORT, OR OTHERWISE, SHALL BE THOSE STATED HEREIN. It. Intellectual Proventy. (a) Buyer agrees that it does not have any property interest in Delta Star's intellectual property including, but not limited to, its trademarks, trade names, copyrights, trade secrets, patents, know how, or other proprietary rights of any nature whatsoever and will not attempt to reverse engineer or decompile any such products or disclose or use any such intellectual property. (b) Buyer acknowledges that all right, title, and interest in any inventions, developments, improvements, or modifications to equipment or services will remain with Delta Star. 12. Indeinnificatlon. Buyer assumes all responsibility and liability for injury or damages resulting from its handling, possession, use, or sale of Goods or Services supplied hereunder, including, but not limited to any injury or damage resulting from the use of Goods in Buyer's operations or in combination with other substances or goods, and agrees to hold harmless, defend and indemnify Delta Star from and against all claims, Page 2 of 3 losses, liabilities and expenses (including attorney's fees and other litigation or settlement costs) arising out of such handling, possession, use or sale. The foregoing duty of Buyer to hold harmless, defend and indemnify Delta Star shall not apply to the extent such claim, loss, liability, or expense results from the willful misconduct or gross negligence of Delta Star. 13. Limitation of [.lability. (a) IN NO EVENT SHALL DELTA STAR BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE GOODS OR SERVICES SUPPLIED HEREUNDER, NOR SHALL DELTA STAR'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT PAID TO DELTA STAR FOR THE GOODS AND SERVICES, REGARDLESS OF THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT OR OTHERWISE) UPON WHICH THE CLAIM IS BASED, AND NOTWITHSTANDING THE FAILURE OF ANY AGREED OR OTHER REMEDY OF ITS ESSENTIAL PURPOSE. BUYER'S EXCLUSIVE REMEDY IS THE REPAIR, REPLACEMENT, OR RE - PERFORMANCE OF THE GOODS OR SERVICES GIVING RISE TO SUCH CLAIM. 14. Compliance with Law. Buyer shall comply with all applicable laws, regulations, and ordinances. Buyer shall maintain in effect all the licenses, permissions, authorizations, consents and permits that it needs to carry out its obligations under this Agreement. 15. Confidential Inlbmiation. All non-public, confidential or proprietary information of Delta Star, including but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, customer lists, pricing, discounts or rebates, disclosed by Delta Star to Buyer, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as "confidential" in connection with this Agreement is confidential, solely for the use of performing this Agreement and may not be disclosed or copied unless authorized in advance by Delta Star in writing. Upon Delta Star's request, Buyer shall promptly return all documents and other materials received from Delta Star. Delta Star shall be entitled to injunctive relief for any violation of this Section. This Section does not apply to information that is: (a) in the public domain; (b) known to Buyer at the time of disclosure; or (c) rightfully obtained by Buyer on a non -confidential basis from a third party. 16. Relationship of the Parties. The relationship between the parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture, or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. 17. Amendment and Modificatio . This Agreement may only be amended or modified in a writing stating specifically that it amends this Agreement and is signed by an authorized representative of each party. 18. General. (a) This Agreement is governed by, and construed in accordance with, the laws of the state where the Goods are manufactured or Services performed, without regard to its principles of conflicts of laws. Buyer agrees to waive its rights to a trial by jury in any dispute under this Agreement. (b) These General Conditions are between Delta Star and Buyer only. There are no third -party beneficiaries of this Agreement and all Services provided hereunder are performed solely for the benefit of Buyer. (c) Buyer may not assign its rights or obligations hereunder without the prior written consent of Delta Star. go Revised 9/19/2019 (d) All controversies and claims arising out of or relating to any contract between Delta Star and Buyer, or the breach thereof must be instituted within one year after the occurrence giving rise to the controversy or claim. (e) The failure of Delta Star to enforce any provision of this Agreement shall in no way be construed as a waiver of such provisions or Page 3 of in any way affect the validity of this Agreement, in part or in full, or affect the right of Delta Star to enforce any other provisions of this Agreement. (f) If any provision contained in this Agreement or any application thereof shall for any reason be held invalid, illegal or unenforceable by a court of competent jurisdiction, the remainder of the Agreement shall not be affected thereby, and each term and provision shall be valid and enforceable to the fullest extent permitted by law. Approved as to Form: JANICE D. MAGDICH City Attorney 3 0 Revised 9/19/2019 ISO 9007:2015 CERTIFICATE 0. AI&B a A C C R E D I T E D EAGLE Registrations Inc. MANAGEMENTEMS t ElYIC 1 IM 1601, TT • VA,t YE CERTIFICATION BODY Certificate No. 4379 Recertified Janua 29 2020 - 3 Ca les February 23, 2020 through February 22, 2023 Certificate of Registration This is to certify that the Quality Management System of Delta Star Incorporated 3550 Mayflower Drive, Lynchburg, Virginia 24501 USA (a) (Central Function) Additional Addresses: 1018 Dillard Drive, Forest Virginia 24551 USA (b) 270 Industrial Road, San Carlos, California 94070 USA (c) 860 Lucien Beaudin, St -Jean -sur -Richelieu, Quebec J2X 5V5 Canada (d) Has been assessed by EAGLE Registrations Inc. and conforms to the following standard: ISO 9001:2015 Scope of Registration The Design, Manufacture, Delivery and Service of Power Transformers and Mobile Transformer Substations (a,c) Field Service of Power Transformers and Mobile Transformer Substations (b) The Design, Manufacture, Delivery and Service of Power Transformers (d) NQ�aL Director Certi cation 40 N. Main Street, Suite 1880 1 Dayton, OH 45423 1 USA 1937.293.2000 or 800.795.3641 www.eaglecertfficatlongroup.com Page 1 of 1 Version 6 —0— Revised ll/l/2019 L DELTA STAR RESOLUTION NO. 2023-09 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO WAIVE THE BID PROCESS AND PURCHASE ELECTRIC SUBSTATION POWER TRANSFORMER FROM DELTA STAR INCORPORATED, OF SAN CARLOS WHEREAS, Lodi Electric Utility (LEU) requires a substation power transformer for spare support in the event of failure of any of the existing eight substation power transformers in service; and WHEREAS, staff are proposing to purchase a spare transformer due to extremely long lead times for critical electrical infrastructure. Since the substation power transformer is the backbone of LEU's electric infrastructure, having a spare would allow for a contingency plan, thereby helping to ensure little to no interruption of service to LEU customers in the event of equipment failure; and WHEREAS, on October 27, 2022, LEU staff discussed with the Risk Oversight Committee the need to amend LEU's existing reserve policy in order to accommodate this purchase; and WHEREAS, the proposed amendment included removing the Capital Reserve component from the LEU Reserve Policy and instead moving forward to purchase a spare transformer to ensure equipment is available and on hand should a catastrophic failure occur; and WHEREAS, by Resolution No. 2022-283, City Council approved this change to the LEU Reserve Policy at its November 16, 2022 meeting, noting that staff would return to Council requesting approval to purchase the spare transformer; and WHEREAS, Lodi Municipal Code Section 3.20.070 states that bidding shall be dispensed when technical requirements preclude competitive bidding and when the City Council determines that the purchase would be in the best interest of the City; and WHEREAS, despite contacting four other vendors, Delta Star Incorporated was the only manufacturer to support LEU with an appropriate lead time with all required components conforming to LEU standards; and Delta Star also builds and constructs substation power transformers out of the San Carlos location, decreasing freight costs and time, as well as overall freight complexity. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager to waive the bid process and purchase an electric substation power transformer from Delta Star Incorporated, of San Carlos, California, in an amount not to exceed $2,000,000. Dated: January 18, 2023 I hereby certify that Resolution No. 2023-09 was passed and adopted by the City Council of the City of Lodi in a regular meeting held on January 18, 2023 by the following vote: AYES: COUNCIL MEMBERS — Craig, Khan, and Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Bregman and Mayor Hothi ABSTAIN: COUNCIL MEMBERS — None OLIVIA NASHED City Clerk 2023-09