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W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: February 19, 2010 ITEM NO: 7 SUBJECT: BID SUB-718 BREACH OF CONTRACT AND AWARD TO NEXT LOWEST RESPONSIVE BID FOR CONTROL PANEL EQUIPMENT FOR THE RIVERSIDE ENERGY RESOURCE CENTER UNITS 3 AND 4 ISSUE: Board approval is requested to declare a breach of contract for the purchase of relay and control panels and equipment and spare parts from Harlo Corporation in the amount of$199,404 and award the bid to the next lowest responsive bidder Crown Technical Inc, in the amount of$216,084 including sales tax. RECOMMENDATIONS: That the Board of Public Utilities: 1. Declare Harlo Corporation in breach of contract for bid SUB-718 and terminate contract; 2. Approve award of bid SUB-718 to the next lowest responsive bidder for relay and control panels, equipment and spare parts to Crown Technical Inc., of Ontario, California, in the amount of $216,084 including sales tax; 3. Approve change order authority in the amount of$40,000 to include any costs associated with the expediting of delivery; and 4. Approve an increase in Work Order No. 0703511 by $56,680 — from $99,747,297.54 to $99,803,977.54, the difference between previous approval and the current approval. BACKGROUND: On December 18, 2009, at the request of staff the Board of Public Utilities(Board)approved the award of bid to Harlo Corporation (Harlo) in the amount of $199,404 for the purchase of relay and control panels and equipment necessary for the Riverside Energy Resource Center(RERC) Units 3 and 4 project. Specification SUB-718 paragraph C12 and D8, provide the following: "C12. Faithful Performance Bond Upon award of bid, Vendor shall immediately submit a faithful performance bond in the amount of 50 percent of the proposal price in a form satisfactory to the City and in complete compliance with State of California bond requirements. Each bond,which is written by an out-of-state bonding company, shall contain the name, address, and telephone number of an agent located in the State of California,who is authorized to act for the bonding company. Listing of the bonding companies in the U.S. Department of Treasury Circular 570 is not required, but the corporate surety must be authorized to issue the bonds in the State of California. Faithful performance bond shall be mailed to the City within two weeks of notification of award.