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Contract - Pipeline Inspection & Conditioning Analysis CorporationAGREEMENT FOR CONSULTANT SERVICES FOR CONDITION ASSESSMENT OF TWO FORCE MAINS Santa Ana Pumping Station Force Main 23rd Pumping Station Force Main PROJECT #191 THIS AGREEMENT is made and effective as of July 16, 2012 between the Costa Mesa Sanitary District, a sanitary district ( "District ") and PICA Pipeline Inspection and Condition. Analysis Corporation USA, a corporation ( "Consultant "). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on July 16, .2012, and shall remain and continue in effect until tasks described herein are completed, but in no event later than December 31, 2012, unless sooner terminated pursuant to the provisions of this Agreement. 2. SERVICES Consultant shall perform the tasks described and set forth in Exhibit "A ", attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit "A ". 3. PERFORMANCE Consultant shall at all times faithfully, competently and to the best of his /her /its ability, experience, and talent perform all tasks described herein. Consultant shall employ, at a minimum; generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Agreement. 4. DISTRICT MANAGEMENT District's Manager shall represent. District in all matters pertaining to the administration of this. Agreement, review and approval of all products submitted by Consultant, but not including the authority to enlarge the Tasks to be Performed or change the compensation due to Consultant. The District Manager shall be authorized to act on District's behalf and to execute all necessary documents which enlarge the Tasks to be Performed or change Consultant's compensation, subject to Section 5 hereof. 5. PAYMENT (a) The District agrees to pay Consultant monthly, in accordance with the payment rates, terms and. schedule of payment as set forth in Exhibit "A ", attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. This amount shall not exceed Seventy One Thousand Five Hundred Dollars ($71,500.00) for the total term of the Agreement unless additional payment is approved as provided in this Agreement. (b) Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the District Manager. Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by District Manager and Consultant at the time District's written authorization is given to Consultant for the performance of said services. The District Manager may approve additional work not to exceed the greater of fifteen - thousand dollars ($15,000.00) or two percent (2 %) of the total contract sum. Any additional work in excess of this amount shall be approved by the Board of Directors. (c) Consultant will submit invoices for actual services performed. Invoices shall be submitted on or about the first business day of each month, or as soon thereafter as practical, for services provided in the previous month. Payment shall be made within thirty (30) days of receipt of each invoice as- to all non - disputed fees. If the District disputes any of Consultant's fees it shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. 6. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE (a) The District may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten (10) days prior written notice. Upon receipt of said notice, the consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. If the District suspends or terminates a portion of this Agreement such suspension or termination shall not make void or invalidate the remainder of this Agreement. (b) In the event this Agreement is terminated pursuant to this Section, the District shall pay to Consultant the actual value of the work performed up to the time of termination. Upon termination of the Agreement pursuant to this Section, the Consultant will submit an invoice to the District pursuant to Section 5. 7. DEFAULT OF CONSULTANT (a) The Consultant's failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, District shall have no obligation or duty to continue compensating Consultant for any work .performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. If such failure by the Consultant to make progress in the performance of work hereunder arises out of causes beyond the Consultant's control, and without fault or negligence of the Consultant, it shall not be considered a default. (b) As an alternative to immediate termination provided for in 7(a), if the District Manager or his /her delegate determines that the Consultant is in default in the performance of any of the terms or conditions of this Agreement, he /she may cause to be served upon the Consultant a written notice of the default. The Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. 8. OWNERSHIP OF DOCUMENTS (a) Consultant shall maintain complete and accurate records with respect to the project and other such information required by District that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free .access to the representatives of District or its designees at reasonable times to such books and records; shall give District the right to examine and audit said books and records; shall permit District to make transcripts therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. (b) Upon completion, termination or suspension of this Agreement all other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of the District and may be used, reused or otherwise disposed of by the District without the permission of the Consultant. With respect to computer files, Consultant shall make available to the District, at the Consultant's office and upon reasonable written request by the District, the necessary computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 9. INDEMNIFICATION (a) Indemnification for Professional Liability. When the law establishes a professional standard of care for Consultant's Services, to the fullest extent permitted bylaw, Consultant shall indemnify, protect, defend and hold harmless District and any and all of its officials, employees and agents ( "Indemnified Parties ") from and against any and all losses, liabilities, damages, costs and expenses, including attorney's fees and costs to the extent same are caused in whole or in part by any negligent or wrongful act, error or omission of Consultant, its officers, agents, employees or subconsultants (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this Agreement. (b) Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, defend and hold harmless District, and any and all of its employees, officials and agents from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, loses, expenses or costs of any kind, whether actual, alleged or threatened, including attorneys fees and costs, court costs, interest, defense costs and_ expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or entity for which Consultant is legally liable, including but not limited to officers, agents, employees or subconsultants of Consultant. (c) General Indemnification Provisions. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this section from each and every subconsultant or any other person or entity involved by; for, with or on behalf of Consultant in the performance of this Agreement. In the event Consultant fails to obtain such indemnity obligations from others as required here, Consultant agrees to be fully responsible according to the terms of this section. Failure of District to monitor compliance with these requirements imposes no additional obligations on District and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend District as set forth here is binding on the successors, assigns or heirs of Consultant and shall survive the termination of this Agreement or this section. (d) Indemnity Provisions for Contracts related to Construction. Without affecting the rights of District under any provision of this Agreement, Consultant shall not be required to indemnify and hold harmless District for liability attributable to the active negligence of District, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In instances where District is shown to have been actively negligent and where District's active negligence accounts for only a percent of the liability involved, the obligation of Consultant will be for that entire portion or percentage of liability not attributable to the active negligence of District. 10. INSURANCE Consultant shall maintain prior to the beginning of and for the duration of this Agreement insurance coverage as specified in Exhibit "B" attached to and part of this Agreement. (A certificate of insurance should be attached.) 11. INDEPENDENT CONSULTANT (a) Consultant is and shall at all times remain as to the District a wholly independent Consultant. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither District nor any of its officers, employees, or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents, except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees, or agents are in any manner officers, employees, or agents of the District. Consultant shall not incur or have the power to incur any debt, obligation, or liability whatever against District, or bind District in any manner. (b) No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, District shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for District. District shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 12. LEGAL RESPONSIBILITIES The Consultant shall keep itself informed of State and Federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. The Consultant shall at all times observe and comply with all such laws and regulations. The District, and its officers and employees, shall not be liable at law or in equity occasioned by failure of the Consultant to comply with this Section. 13. UNDUE INFLUENCE Consultant declares and warrants that no undue influence or pressure is used against or in concert with any officer or employee of the Costa Mesa Sanitary District in connection with the award, terms or implementation of this Agreement, including any method of coercion, confidential financial arrangement or financial inducement. No officer or employee of the Costa Mesa Sanitary District will receive compensation, directly or indirectly, from Consultant, or from any officer, employee or agent of Consultant, in connection with the award of this Agreement or any work to be conducted as a result of this Agreement. Violation of this Section shall be a material breach of this Agreement entitling the District to any and all remedies at law or in equity. 14. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES No member, officer, or employee of District, or their designees or agents, and no public official who exercises authority over or responsibilities with respect to the Project during his /her tenure or for one year thereafter, shall have any interest, direct or indirect, in any agreement or sub - agreement, or the proceed thereof, for work to be performed in connection with the Project performed under this Agreement. 15. RELEASE OF INFORMATION / CONFLICTS OF INTEREST (a) All information gained by Consultant in performance of this Agreement shall consider confidential and shall not be released by Consultant without District's prior written authorization. Consultant, its officers, employees, agents or subconsultants, shall not without written authorization from the District Manager or unless requested by the District Counsel, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories, or other information concerning the work performed under this Agreement or relating to any project or property located within the District. Response to a subpoena or court order shall not be considered "voluntary" provided Consultant gives District notice of such court order or subpoena. (b) Consultant shall promptly notify District should Consultant, its officers, employees, agents or subconsultants be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, requests for admissions, or other discovery request, court order, or subpoena from any person or party regarding this Agreement and the work performed thereunder or with respect to any project or property located within the District. District retains the right, but has no obligation, to represent Consultant and /or be present at any deposition, hearing, or similar proceeding. Consultant agrees to cooperate fully with District and to provide the opportunity to review any response to discovery requests provided by Consultant. However, District's right to review any such response does not imply or mean the right by District to control, direct, or rewrite said response. 16. NOTICES Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, which provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by notice: To District: Costa Mesa Sanitary District 628 West 191h St Costa Mesa, CA 92627 USA. Attn: District Clerk To Consultant: PICA 350 South Miami Ave., #2410 Miami, FL, 33130 17. ASSIGNMENT The Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior written consent of the District. . Should Dave Russell leave Consultant's employ, the District shall have the option to immediately terminate this Agreement, within three (3) days of the close of said notice period. Upon termination of this agreement, Consultant's sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the Board of Directors and the Consultant. 18. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect, all licenses required of it by law for the performance of the services described in this Agreement. 19. GOVERNING LAW The District and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the municipal, superior or federal district court with jurisdiction over the Costa Mesa Sanitary District. 20. ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. 21. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he /she has the authority to execute this Agreement on behalf of the Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. 22. INTERPRETATION In the event of conflict or inconsistency between this Agreement and any other document, including any proposal or Exhibit hereto, this Agreement shall control unless a contrary intent is clearly stated. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. COSTA MESA SANITARY DISTRICT CONSULTANT District Manager ATTEST:. D APPROVEP{4k& i VFORM: District Counsel 8 Signature e-p .c k. sse 11 Typed Name I vres�A" Title WAA EXHIBIT A 40 PI CA pip`line Inspection and c ,wl;fiwnnnAys;.NSaKaP. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell PROPOSAL Direct Condition Assessment of 8" and 12" Force Mains for Costa Mesa Sanitary District (CMSD) Electromagnetic In -line Inspection Rev.000 Page I of 21 CMSD -PICA USA ��� �. 1 pipolndlnspdcdonwd C�ditinn Analysis (USA)Corp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell Contents Section # 1. Introduction 2. Method Statement and Specifications 3. Scope of Work 4. Time schedule 5. HSE & Q 6. Commercial Conditions: Offer and pre -job visit 7. General Terms and Conditions Rev. 000 Page 2 of 21 CMSD -PICA USA A 1 c� - Pipeline lnapec8on and Condition Andy%6 (USA)Co p. . Customer CMSD Project Title Various Force Mains Ref. nr. PICA- USA -DR561 Date - July 10, 2012 Document prepared by Dave Russell l Introduction PICA Pipeline Inspection and Condition Analysis USA Corporation, ( "PICA "), proposes the Direct Condition Analysis (DCA) services described in this document. This proposal is for proof pigging and DCA of the pipelines, using PICA's RFT In -Line Inspection (ILI) tool to detect graphitization, corrosion, cracks and other possible flaws in the pipes. The DCA will initially consist of 2 lengths of Force Main totaling approximately 1425 lineal feet. Section: From To Length ft Santa Ana Pumping Station, 12" FM 0 +00 3 +44 344 23`d Street Pumping Station 8" FM 0 +00 10 +80.9 1081 Based on the DCA results a full analysis report will be issued, which is included in the scope of this proposal. It is assumed, unless stated otherwise, that the pipeline has constant internal bore, all valves are full bore, all tees are barred and the pipeline is generally considered piggable. The customer will ensure that where applicable all safety provisions have been implemented and that any excavations or chambers are safe and safe to enter prior to commencement of the pigging activities. A preliminary engineering study /kick off meeting should be conducted to identify and map all pipeline features that may affect the inspection. This kick -off meeting is included and covered under the initial mobilization charge. A detailed procedure has been developed, but may be modified at the kick -off meeting based on actual field conditions. Rev. 000 Page 3 of 21 CMSD -PICA USA PICA Pipeunclnspecto"md Condition Analnd (USA)Ump. Customer CMSD Project Title Various Force Mains Ref. nr. PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 2. Method Statement and Specifications 2.1 Pipeline cleaning - Progressive pigging is recommended Progressive pigging starts with soft foam pigs being blown or pulled through the line. These are pigs that will shred and tear and eventually disintegrate if they encounter significant amounts of debris or internally disintegrated liner. If a soft foam pig comes out damaged, additional soft foam pig runs are run through. This is repeated until the condition of the pipe becomes clear. Once the soft foam pig comes through without damage and without pushing much loose debris in front of it, then progressively harder foam pigs (medium and high density) can be put through. Finally, more aggressive pigs with wire brushes should be run through to ensure that harder scale and deposits are removed. CMSD will supply the cleaning pigs and perform the pre - cleaning of the pipeline. PICA will closely monitor the condition of the pigs as they are retrieved from the pipeline, as well as the amount of debris that is received. If, in the opinion of the PICA field engineer, further cleaning of the pipeline is required, the customer will be asked to perform the additional cleaning. Rev. 000 Page 4 of -1 1 CMSD -PICA USA PI CA NpA- Impaction and Condition Anilwi. (USAKaorp. Customer CMSD Project Title Various Force Mains Ref nr PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 2.2 Pipeline gauging When the pipe is considered clean, a gauging or caliper pig is pulled through to verify the full internal bore of the pipe. Un- identified valves, dents, buckles or other possible obstructions /intrusions will then be detected. ef PICA, with help from CMSD contractor, will blow through a gauge pig fitted with a slotted aluminum gauge plate in order to check the minimal bore of the pipeline prior to launching the RFT intelligent pig. Should the run of the gauging pig show indications of geometrical deformation of the pipeline or other features that may damage the live tool, then the customer will be advised to conduct the necessary repairs to the pipeline prior to running the intelligent pig. The gauge pig will be used to pull a tow rope through the pipeline. Notes: No two pipelines are ever the same and therefore the greatest care must be taken for the safest and most cost effective method to conduct a pipeline survey. Any pipeline can contain a configuration that makes it impossible for a pig to pass, and PICA will take every precaution to avoid losing a pig. 2.3 Short length, tethered Pipeline inspections For lengths of pipeline which are less than 3km, and where it is desirable to run in a dry pipe, a tethered approach can be taken. In this approach, a steel or AmSteel rope is threaded through the section of pipeline using compressed air or pipeline flow. The rope is then attached to the Tool and a winch is used to pull it through the pipeline. Piping modifications to accommodate a PICA stuffing box, winch sheaves and anchor points have been made in advance by CMSD contractors. Rev.000 Page ; of 21 CMSD -PICA USA OPICA Pipckm Impcallon and ConditionArly.b(U K:wp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell Figure 1. 23rd street FMpiping modifications inside the pump station 2.4 DCA Inspection Process Inspection of the pipelines will be performed using PICA's 8" and 12" RFT Tools. The Tools contains detectors which are positioned around the circumference of the Tool, and which do not contact the pipe. The data that the sensors gather is from the wall thickness and pipe material quality. Generally, the Tool is designed to measure remaining wall thickness, and to locate corrosion and erosion thinning; however they can also detect through wall cracks and local areas of stress. All inspection results are analyzed in strip charts and C -scan color maps on Windows compatible software with screen captures used in the report. The RFT technique offers a comprehensive remaining wall- thickness analysis, with detailed mapping of the pipe wall condition - throughout the pipe. The data analysis requires a high level of skill and training; however, the results are reported in easily understandable tables for review by non - inspection personnel. Rev.000 Page (, of 21 CMSD -PICA USA P I CA Pipeline Inspection and Condition Anal.­sn NSAIC -p. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell YC� Fig -2: typical data capture showing section of pipe with local pit -type defects and two joints The tool is bi- directional and an odometer is used on the tether and /or on the Tool for the determination of distance travelled in the pipeline. The design and engineering of the RIFT ILI pig is in accordance with prevailing standards of workmanship, know -how, national and international standards. This covers, but is not limited to, the following: mechanical components are designed and pressure tested with respect to applicable safety factors all electronics are shock and vibration resistant batteries are Li -ion for long life and high current capacity, battery and electronics compartments are temperature monitored Before mobilization, the tool will usually have been tested and calibrated in a shop pull test for system certification and factory approval, using a section of pipe either provided by CMSD, or obtained by PICA, which will be used as a reference standard. Rev.000 Page 7 of 21 CMSD -PICA USA PICA Pipeline Inspection and Condition Amlysis (USA)Cmp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date- July 10, 2012 Document prepared by Dave Russell PICA will machine reference defects into the pipe sample and pull the Tool past them to optimize Tool settings for the pipeline inspection. This calibration reference will become part of the inspection record. 2.S Tool Specifications RFT ILI Technical Specifications for 8" Pipeline Tool Attribute Value Nom Tool OD 5.625" Min Hard Tool OD 5.625" Target Pipe Size 8" Length 10.5' Weight 228 lbs. Packaging Shipped as fully assembled Tool with pull pug attached Science High resolution Remote Field Number of sensors 80 Number of data channels 160 Measured quantities Wall thickness, pressure and temperature Data processing Data is processed on board and stored in segmented memory units. Max Wall Thickness 1" Min Depth Resolution (Localized Wall loss) 20% of wall thickness Min Volume Resolution (Localized Wall loss) Equal to or exceeding the volume of a 40% deep x 3/ < <" flat -bottom hole Min Circumferential Resolution (Localized Wall loss 1" in straight pipe sections. General Wall loss resolution 10% Depth Propulsion method Compressed air or water flow (insert) and wireline (retrieval). Interface USB cable and /or BlueTooth. Power 88 —185 VDC, <100 Watts Temperature Range 0 to 60° C External Pressure rating 500 PSI working pressure Inspection Speed 10 —15 ft/min Distance recording Winch based Odometer and /or Tool based odometer Range 2200 ft Free swimming or tethered operation Either Rev.000 Page 8 of 21 CMSD -PICA USA PICA p'F c""J;ti"" Malysis(uSA )Corp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 2.6 Reporting 2.6.1 Daily site report PICA will submit a daily site report which at least contains the following information: - Summary of work accomplished over the past 24 hours - Works scheduled for the next 24 hours, if any - Personnel on site - External factors which affect progress of the work - Results of pipeline preparatory works such as cleaning, gauging, and optional CCTV inspection of the pipeline. 2.6.2 Field report The field report will be submitted prior to demobilisation and will include a statement on the acceptability of the inspection data quality and the results of a quick data review. 2.6.3 Preliminary inspection report A preliminary inspection report, or field report, will be submitted prior demobilization from site. The preliminary report will contain the following data: A statement on the acceptability of the data quality - A statement about the inspection length achieved - A listing of those features which are considered vital to be reported without delay 2.6.4 Final inspection report A final inspection report is submitted to the customer within twenty {4A-} working days after receipt of the pipeline inspection tool (or data file) at base, the final inspection report will be submitted in hard copies or electronic format. For welded steel and seamless pipe, assessment of each defect can optionally be made using various methods such as ASME B 31 G (stand /modified), and R- Rev.000 Page 9 of 21 CMSD -PICA USA �CAProject 1 pipefine]..I ;oaana Condition Analysis (USA)Cmp. Customer CMSD Title Various Force Mains Ref. nr. PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell STRENG. Pipe tally, Feature list, pipeline histograms and dig sheets are generated in accordance with MACE and POF standards. 2.7 Verifications Verification of inspection results can be done by means of manual depth gauge (depth micrometre) or ultrasonic technique in verification digs. Radiography may also deliver valuable information about the cartography of any metal loss. Prior to verification, the surface of the pipeline must be cleaned and prepared by means of brushing, grinding, washing and /or sand - blasting. Feedback from verification digs to PICA will be appreciated as they help us to continuously improve on the level of services. Rev.000 Page 10 of 21 CMSD -PICA USA PT� A j A Pipeline rnspmdw and Cun&don Malysn (US A)Corp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 3 Scope of work PICA is to conduct inspection of the pipelines as per the below specifications Pipeline #1: Santa Ana Force Main Pipeline#2: 23rd street Force Main Pipeline medium: Sanitary sewer Pipeline flow rate: N/A (out of service during inspection) Design pressure: N/A Smallest bend radius: TBC Pipeline diameter #1: 12" O.D. Pipeline diameter #2: 8" O.D. Pipeline length #1: 344' Pipeline length #2: 1081' Pipeline wall thickness: TBC Type of Pipe Ductile Iron Type of Liner TBC Liner Wall Thickness TBC Pipe grade TBC Year of installation TBC Maximum Elevation: TBC Pressure at launch: N/A Pipeline temperature: N/A MAOP: N/A Max. branch diameter: TBC Guide bars in branch: TBC 1-12S [ %]: N /A: not in service H2O [ %]: 100% Wax [ %]: N/A (pigged clean) CO2 [ %]: N/A Valve type: N/A TBC = To Be Confirmed, N/A = Not Applicable to this project Rev. 000 Page 1 1 of 21 CMSD -PICA USA ���� Pipdin`Impection"d Co dition Analysis (USA)C -p. Customer CMSD Project Title Various Force Mains Ref. hr. PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 3.1. Operating procedures PICA will provide the RFT intelligent pig and will perform the gauging and RFT intelligent pigging from the access points, and will launch, run and receive these pigs from the pipeline. PICA will retrieve inspection data from the RFT pig upon successful completion of the inspection run in order to provide an initial field report. Deficiencies in the inspection data or inspection report due to technical failure or error shall be remedied by PICA by either a re- analysis of the data or by conducting a re- run. The tool shall be run within the following operating parameters: Temperature: Unless specified otherwise, the temperature of the pipeline medium shall be between (Y C and 66' C. Velocity: A constant velocity shall be maintained. The tethered approach proposed maintains good control over the inspection speed. 0 Rev. 000 Page 12 of 21 CMSD -PICA USA PICA pipch Insp=d=°"a Co"tion Ana lysis(USA)Cwp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July_10, 2012 Document prepared by Dave Russell 3.2. Materials and equipment The following gives an overview of the supply of materials and equipment. Item PICA CMSD Preparatory Site visit ✓ ✓ Preparation pigging procedures ✓ Mob to and from sites ✓ Winch or winches and AmSteel rope ✓ Stuffing Box ✓ Cleaning pigs (Maximum of two budgeted) ✓ One gauging pig ✓ Intelligent RFT Tool ✓ Spares and consumables ✓ Field engineers, 3 each Personal safety gear Daily site report Data analysis and formal Inspection report Modifications to pipelines for access as needed ✓ Lifting Equipment for pig handling, launching and receiving ✓ Large compressor (if needed) ✓ Site logistics ✓ Trailers or trucks for mounting heavy duty winches ✓ Disposal of soiled pigs ✓ Waste disposal ✓ Gauge and smart Pig launching and receiving Pig propulsion by wireline or rope ✓ Operating of pipeline valves, if required ✓ Mechanical work, preparation working area, excavations, if necessary ✓ Removal of plug or butterfly valves, if required Work permit Pipeline data, route maps, isometric drawings, P &ID Radio Communication ✓ `� Rev. 000 Page 13 of 21 CMSD -PICA USA #Tj CA r Pipdinc lnspcction and Condition Analysis (USA )Corp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA- USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 3.4 Manpower The PICA project team shall consist of: 1. Project manager, Senior pipeline pigging engineer with more than 5 years pipeline pigging experience. 2. Field engineer (x2), Pipeline field engineer, more than 3 years' experience in pipeline pigging and analyzing of inspection data. All personnel are provided by PICA with Personal Safety equipment. Rev. 000 Page 14 of 21 CMSD -PICA USA PICAProject r n Pipeline tnpection ana C."tinn Analysis NSAW"p. Customer CMSD Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 4. Time Schedule 1. Work starts within 1 weeks upon receipt of written order and payment of the mobilization fee; 2. Tool preparation, pre -mob, calibration, Factory Approval Test, Mobilization: dates are tentative (start July 16, 2012 on site) 3. Upon arrival of crew and equipment on site: 1. Site induction, preparation, site rigging 1 day 2. Gauging and run rope /wireline 0.5 day /line 3. RFT pig run, retrieval and initial review 0.5 day /line 4. De- rigging, reporting and demobilization: 1 day Total number of approx. personnel days on site: 3 - 4 working days. Preliminary Inspection report: Prior demobilization Final Inspection report: Within 40 working days from day of arrival of tools back at base Note 1: Days on site The project is based on adherence to the above time schedule, especially the number of days that crew and personnel will be on site. Deviations from this time schedule will have an impact on the final price of the contract. Note 2: Job acceptance PICA personnel keep records of the completion of the work in the daily site reports and the on -site report which the customer is requested to approve and sign. Should the customer waive the rights at the time of completion, PICA cannot accept any responsibility for any consideration of non - fulfillment of contract once the crew and equipment have left the site. Rev.000 Page 15 of 21 CMSD -PICA USA PICA pipcine l°speLtinn and Condition Analysis (USA)Cmp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 5.HSE &Q 5.1 Job safety Analysis A Job hazards risk analysis will be prepared in conjunction with the customer prior to work starting. Potential harms and hazards will be identified and rated and a risk analysis matrix with risk reducing measures, safety precautions worked out. PICA will ensure that all PICA personnel attend the site safety induction prior to commencing any operations. Toolbox meetings shall be held with all the relevant personnel. Barriers and warning signs will be erected where necessary and no unauthorized personnel are allowed within that area. All personnel will wear PPE protective clothing at all times when on site, in accordance with PICA Safety Manual and policies. PICA is an ISNetworld certified company. 5.2 Environment and waste disposal No specific hazards for environment are foreseen during the operation. All contaminated pigs are to be disposed of by CMSD using CMSD procedures All waste disposals will be as per local regulations by CMSD. Rev. 000 Page 16 of 21 CMSD -PICA USA T7 �� rl Plpclinc lntp -tim and C."don Amly.6 (USA )Cmp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 6. Commercial conditions: offer 6.1 Price: Offer PICA offers to conduct the services as per the specified scope of work, materials supply and time frame, against the following costs. Notice that all prices quoted are in U.S. dollars. The prices are net and are exclusive of any taxes. Pre -job visit by one PICA engineer to plan /view the excavation locations and job schedule: Prices includes travel time, work time, labour, equipment and consumables for up to 4 days on site: (excerpt from email quote of 0210712012) If the work can all be done on one shift, the price will be $ l Ok for mob plus $30k for the day less 10 %= $36,000. For two work days the price will be $ l Ok plus $60k less 15% = $59,500. Three days work will be $10k plus $60k plus $20k less 25 %= $67,500 Four days: $l Ok plus $60k plus $40k less 35 %= $71,500 (rounded to $40k discount in quote below) TOTAL COST ESTIMATE FOR ABOVE PROJECT 110 000 New customer discount: $ 40,000 Total_ estimate: $ 70.000 (Seventy thousand U.S. dollars) Note: ALL TIME AND COST ESTIMATES ARE BASED ON THE CLIENT PROVIDING ENGINEERING SUPPORT TO PROVIDE ACCESS TO THE PIPELINE, IN ADDITION TO MECHANICAL AND GENERAL LABOR ASSISTANCE, AS AND WHEN REQUIRED. Rev.000 Page 17 of 21 CMSD -PICA USA PICA 60.1pcUnC "° °°°d c°�"°°A -a - 6(USA)C"p. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell The above price is based on the information PICA has been provided with to date. Any direct costs encountered during the operation not known to date, will be reimbursed to PICA with 10% surcharge for order handling and administration. Any change in specifications, scope of work may lead to variation in the above mentioned price. 6.2 Standby rates Should the operation face delays for any reason beyond PICA's responsibility, and should the time schedule as per par. 4 not be met, the following standby rates shall be applicable. Personnel, expenses and equipment, per day $7,500 6.3 Re -run costs Should re -run of the tool be required for any reason that cannot be attributed to PICA, the following rates will be applicable. ILI Re -run rate: $8 /ft (8 "), $12/ft (12 ") 6.4 Cost of re- mobilization Should re- mobilization be required for any reason not attributable to PICA, the following rates will be applicable. Remobilization of personnel, and equipment: $10,000 Rev. 000 Page 18 of 21 CMSD -PICA USA i 1�+ PICA Pipeline ingmction and Condition Analysis (USA)Cmp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 6.5 Payment '- All prices are in U.S. dollars (based on PICA providing all services as listed). - 80% is billable on de -mob from field and payable net 30 days. - 20% is billable on presentation of final report and payable net 30 days Bank account details for EFT payments: PICA PIPELINE INSPECTION AND CONDITION ANALYSIS CORPORATION HSBC BANK OF CANADA 10250 — 101 STREET EDMONTON ALBERTA T5J 3P4 CANADA BANK # 016 TRANSIT # 349191001 SWIFT CODE HKBCCATT 6.6 Offer validity The offer is valid for a period of 90 days and at closed order only. 6.7 Costs for tool loss or damage CMSD will re- imburse PICA to cover any possible damage sustained to the PICA Tool while inside the CMSD pipeline or while in CMSD's care. 6.8 Order cancellation Cancellation within ,7 days of planned mob.: 100% of mob /prep fee Cancellation within 8 to 45 days of planned mob.: 50% of mob /prep fee Cancellation after P.O. issued, >45 days of planned mob: 25% of mob /prep fee Rev.000 Page 19 of 21 CMSD -PICA USA PICA Pipeline Inspection ma Condition Analysis (USA)Cmp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell 6.8 Fair wages PICA USA hereby confirms that the wages that it pays to its employees are equal to or exceed those required by California standards. 6.9 Equal Opportunity employer PICA USA hereby confirms that it is an equal opportunity employer. PICA has a Human Resources Handbook which gives details of its employment standards, and is available to all employees and customers on request. 7. General Terms and Conditions 1. ThEl PFiGiAg PFGVqdEld mG GPGA f0F aGG6PWAG9 fGF a period of 6dAy (60) day6 frem the date of tl;q6 Prope6al aAd Will bA'XA'*d 2. PayM9At6; aGGOrdiAg to Chapter 6-5 a f49FA is f4ass, aAd GlaaraAGE) Gharges. AAY OXG66e, 'EMas aF taxes; which PICA required to pay or GolleGt, WAder aAY eXi6ti% Or futupe 6. PICA PFiGiAg is based GA a GGFPGF;gtA Pt;aAd;;Fd wnrW'@9k Of MOAday through Fri I " . .. - . . 1tory holidays 7. Where the Pmpesal F9qUiF86 PICA to engage th9 Of F;'-'bGQAtFaGtGF f49F GAPOdGRB GOFApaA686 6"tG preparation aAd�Gr PFQV;6qgR Of p Rev. 000 Page 20 of 21 CMSD -PICA USA P�� pip 1 elin,].,q cdnnana Condition Malylia(USA)Corp. Customer CMSD Project Title Various Force Mains Ref. nr. PICA - USA -DR561 Date July 10, 2012 Document prepared by Dave Russell. Rev. 000 Page 21 of 21 CMSD -PICA USA Exhibit B COSTA WESA SA9UTART(DISTRICT Memorandum To: Contractors ... an Independent Specia( District From: Anna Sanchez, Administrative Service Manager Date: January 9, 2012 Subject: District Insurance Requirements General Liability $1,000,000 per occurrence for bodily injury, personal injury, and property damage._ General Liability insurance shall endorse the Costa Mesa Sanitary District as an additional insured party. Automobile Liability $1,000,000 per accident for bodily injury and property damage. Automobile Liability insurance shall cover "any" vehicle. Workers' Compensation and Employer's Liability Workers' Compensation limits as required by the Labor Code of the State of California. Employer's Liability limits of $1,000,000 per accident for bodily injury or disease. Acceptability of Insurers: All insurance must be placed with insurers with a current A.M. Best financial rating no less than A -:VII, licensed to do business in California, and satisfactory to the District. All insurance documents must be submitted and approved by the District's Risk Manager prior to execution of any Agreement with the Costa Mesa Sanitary District. Protecting our community's health 6y providing solid waste anal se wer collection services crosdca.gov MHK 12316 - 107 Avenue, Edmonton, Alberta INSURANCE T5M 1Z1 - Telephone: (780) 454 -9363 Fax: (780) 452 -6095 CERTIFICATE OF INSURANCE This is to certify that policies of insurance as herein described have been issued to the insured named below and are in force at this date. The insurance afforded is subject to the terms, conditions, and exclusions of the applicable policy. CERTIFICATE HOLDER: INSURED: COSTA MESA SANITARY DISTRICT Pipeline Inspection & Condition Analysis Corporation cn 628 W. 19 Street, 4909 — 75 Avenue Costa Mesa, CA 92627 Edmonton, Alberta T66 2S3 Attention: Leesa Husieff Ihusieff(cDrusselltech.com TYPEi r r },INSURER & POLICY}'',1�^ `: EXPIRY�DATE� # OVERAGE LIMIT OF -- .. yak r.�1 ts. t11 : ' is �1 f 4 '+ LIAIBILItTY Automobile- Owned & Continental Casualty Company June 22, 2013 Bodily Injury and $2,000,000. Leased Scheduled Policy No. CAE2903345 Property Damage Per Accident Vehicles Commercial General Continental Casualty Company June 22, 2013 Bodily Injury and $2,000,000. Liability Including Policy No. MPR2746245 Property Damage Per Occurrence Non -Owned Automobile, $5,000,000. Contractual Liability, Aggregate Contractor's Protective, Contingent Employer's Products and $2,000,000. Liability, Cross Liability, Completed Aggregate Employer's Liability Operations Umbrella Liability Continental Casualty Company June 22, 2013 Bodily Injury and $3,000,000 Policy No. MPR2746245 Property Damage Each Occurrence Excess of Automobile and Commercial General Liability limits Forest Fire Continental Casualty Company June 22, 2013 $500,000. Limit Fighting Expense Policy No. MPR2746245 Workers' (CNA Solution Inc.) June 18, 2013 Bodily Injury by $1,000,000. Compensation USA National Fire Insurance Accident Each Accident Company of Hartford Policy No. WC418493636 Commercial General Liability Policy No. MPR2746245: It is hereby understood and agreed that Costa Mesa Sanitary Department is added to the policy as Additional Insured, but only with respect to liability arising out of the insured's operations. It is further understood and agreed that the Insurer will endeavour to mail to the certificate holder 30 (thirty) days written notice of cancellation of this policy, but assumes no responsibility for failure to do so. MHK Insurance Inc. Date: July 16, 2012 \ Per: This, certificate is Issued by MHK Insurance Inc. on behalf of CNA Solutions, Inc., with their permission. Anna Sanchez From: Saby,Jason <Jason.Saby @cna.com> Sent: Monday, July 16, 2012 1:51 PM To: La Verne Walsh Cc: Doug Ries; Vlahakis, Natalie Subject: RE: PICA - Russell NDT. URGENT Attachments: 20120622_MCE_001_2746245_BC.pdf Hi La Verne, Attached is the endorsement for the insured Regards, Jason Jason Saby, BA, CIP I Associate Underwriter I CNA Canada - Calgary Branch I Continental Casualty Company Suite 2450 - 700 - 2nd Street SW, Calgary, AB T2P 2W2 I Tel: 403 - 218 -4867 1 Toll Free: 1 -888- 267 -1124 ext. 4867 From: La Verne Walsh [ mailto:lwalsh @mhkinsurance.com] Sent: Monday, July 16, 2012 12:52 PM To: O'Neill, Maureen; Saby,Jason Cc: drussell @russelltech.com; Leesa Husieff; Doug Ries Subject: PICA - Russell NDT. URGENT Importance: High Good morning Maureen, URGENT I am sorry to bother you again however, please see the email I received. Costa Mesa Water will not accept a certificate issued by the broker. They are demanding an endorsement be issued by you, the insurer, with respect to the Additional Insured. Would you please issue and forward immediately (I am sorry for sounding demanding) so our client is not held up any further or has any more problems. If you need to contact Costa Mesa see the details below: Anna Sanchez Costa Mesa Sanitary District Administrative Service Manager Ph: 949 - 645 -8400 Fx: 949 - 650 -2253 Thank you so much for your help. r .',.. �, ice` � ' i .j oneworld, Commercial; Gener al Lf- I ity.,i. t J���� .. Encia�sem� t' . -�- ^- r ! t Policy Number: Named Insured: Russell NDT Holdings Ltd. NVIPR 2746245 Effective Date: July 16, 2012 Policy Period: June 22, 2012 -June 22, 2013 Change Endorsement THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY. It is agreed that the following Additional Insured, forming part of the Commercial General Liability Declarations, is added to the policy as outlined below: 1. Costa Mesa Sanitary District 628 W. 19th Street, Costa Mesa, CA 92627 But only with respect to liability arising out of the operations performed by or on behalf of the Named Insured. Subject to 30 days Notice of Cancellation. All other terms and conditions remain unchanged. Issued onJuly 16, 2012 Page 1 of 1 Anna Sanchez From: Doug Ries <DRies @mhkinsurance.com> Sent: Monday, July 16, 2012 2:20 PM To: Anna Sanchez Subject: RE: CMSD Contract #191 Both companies are co -owned by the same owner and both companies are insured under the General Liability on our policy. From: Anna Sanchez [mailto:asanchez @crosdca:govl Sent: Monday, July 16, 2012 3:14 PM To: Doug Ries Subject: RE: CMSD Contract #191 Thank you. Can you help me understand the relationship between Pipeline Inspection Et Condition Analysis Corporation (which is named on the certificate as the insured) and Russell NDT Holdings Ltd (which is named on the endorsement as the insured). From: Doug Ries Imailto :DRies(a)mhkinsurance.coml Sent: Monday, July 16, 2012 2:06 PM To: Anna Sanchez Subject: RE: CMSD Contract #191 Attached is the endorsement you require. From: Anna Sanchez [mailto:asanchez@crosdca.govl Sent: Monday, July 16, 2012 12:20 PM To: Doug Ries Cc: drussell0)russelltech.com Subject: CMSD Contract #191 Importance: High Good morning Doug, I tried leaving you a voicemail but your voicemail box is full. I serve as the Risk Manager for the Costa Mesa Sanitary District and am responsible for reviewing all contractors and insurance documents provided as part of their agreements with the District. After reviewing the most recently submitted insurance documents, we do not find them to be in compliance with District requirements. As a reminder, please see the attachment outlining the District's insurance requirement minimums. As a minimum standard, the General Liability insurance carrier shall endorse the Costa Mesa Sanitary District as an additional insured party. A separate endorsement proving the policy has changed must accompany the certificate of insurance for these documents to be complete and acceptable to the District. Please be advised, if these documents are not submitted and approved, the project with Pipeline Inspection Et Condition Analysis Corporation will not commence. Anna Sanchez Costa Mesa Sanitary District