Attachment_C_-_Auction_Services_Agreement.docx

SAMPLE AGREEMENT FOR SERVICES

ATTACHMENT C

AUCTION SERVICES AGREEMENT

This AGREEMENT is entered into on this ______ day of ________, 2018, by and between the City of Palo Alto, 250 Hamilton Ave., Palo Alto, Ca. 94303, hereinafter referred to as “CITY”, and ____________, a ______ qualified to do business in the state of California, with offices located at _________________, hereinafter referred to as “AUCTION COMPANY”, for the purpose of providing auction, appraisal and consulting services; marketing and advertising; and after sale administration for the sale of City-owned surplus personal property (earthmoving equipment, heavy duty trucks, lift equipment, generator sets, air compressors, asphalt pavers and trailers), hereinafter referred to as

“PROPERTY”.

1. SCHEDULE: In consideration of the compensation hereafter provided, AUCTION COMPANY agrees to conduct live, public and/or Internet-only auctions of PROPERTY within thirty (30) days of pickup (in the case of live auctions) or inspection (in the case of Internet only auctions) of the PROPERTY.

2. TERM: The term of this Agreement shall be from the date of its full execution by CITY, and shall expire three years from the commencement date, subject to CITY Council’s annual approval of each current year’s budget and appropriation of funds unless terminated earlier pursuant to Section 18 of this Agreement.

3. QUALIFICATIONS. AUCTION COMPANY represents and warrants that it has the expertise and qualifications to complete the Services and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on AUCTION COMPANY’S representations regarding its skills, knowledge, and certifications. AUCTION COMPANY warrants that it shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations.

4. SERVICES: In consideration of the receipt of commission and other fees as described in Section 12 of this agreement from the gross sale proceeds of each auction, AUCTION COMPANY shall perform the following services in connection with the conduct of said public auction:

a. AUCTION COMPANY will provide live, public and/or Internet auction services for City property in accordance with the terms and conditions of this Agreement. In the case of live auctions, CITY agrees that PROPERTY will be transported to AUCTION COMPANY facility, and in the case of Internet-only auctions, PROPERTY shall remain at CITY facility until removed by an AUCTION COMPANY buyer following release by AUCTION

COMPANY.

b. CITY will notify AUCTION COMPANY of what it wishes to sell via an electronic Excel spreadsheet that lists the item, serial numbers, location(s) and when the equipment will be available and point(s) of contact.

c. For Internet-only auctions, AUCTION COMPANY will physically inspect and prepare an inspection report for auction-ready PROPERTY not less than ten (10) days from the receipt of the Excel spreadsheet from a City representative. The inspection report shall be made available to the CITY two (2) days prior to posting on the AUCTION COMPANY’S publicly visible website.

The inspection report shall include, but not be limited to the following: at least ten (10) pictures of the item being sold, and, when appropriate; fluid analyses, year, make, model, hours/miles, attachment/configuration, engine make and model and serial/VIN number.

i. For live and Internet-only auctions, CITY shall ensure that all equipment is ready for public sale, including the removal of any CITY logos or trademarks that may be required.

ii. For live and Internet-only auctions, CITY acknowledges that it is suggested, but not required; that to-be-auctioned PROPERTY is cleaned, washed and functioning as intended prior to inspection by AUCTION COMPANY in order to enhance the auction proceeds accruing to the benefit of the CITY.

iii. For Internet-only auctions, CITY shall show PROPERTY to potential bidders by appointment only.

d. AUCTION COMPANY shall provide City’s Fleet Manager an inventory list of the items to be sold at each auction prior to each auction. Each inventory list shall become a part of this Agreement without need to amend.

e. Keep all records and provide CITY with copies of sales receipts, which shall include the description of CITY property, date sold, selling price and buyer’s name, address and phone number.

The receipts shall be provided in accordance with the requirements of subsection (h) below.

f. Collect and process all deposits, auction proceeds and applicable Department of Motor Vehicle forms, including Release of Liability forms for any licensed vehicles sold.

g. Provide a sales re-cap or summary sheet containing property description, lot number, bidder number, CITY’s vehicle number, complete vehicle identification number, sales price, AUCTION COMPANY commission and fees, and net proceeds to CITY.

Additionally, individual lot reports which document lot information, bidder information and new registered owner information (if different from that of bidder). Lot information will include an item description, auction date, lot number and sale price. Bidder information will include the name, address and phone number of the buyer.

h. Provide individual sales receipts, applicable Department of Motor Vehicle forms for vehicles (including verification that Release of Liability forms have been submitted), and the information specified in paragraph (g) above, accompanied by payment of those net proceeds of sale owed to CITY no later than ten (10) working days after auction completion.

i. AUCTION COMPANY shall advertise on-line all auctions during the fourteen (14) day period preceding the auctions. AUCTION COMPANY shall advertise to all registered users both within 100 miles of Palo Alto and globally. The advertising methods chosen shall be undertaken at a level sufficient to generate a viewing audience of not less than 3,000 registered users which shall be visible in real time on the AUCTION COMPANY’S website. AUCTION COMPANY shall allow the CITY to establish a link on the CITY’S website to the AUCTION COMPANY’S website for the purpose of informing parties interested in bidding upon CITY equipment coming to auction.

j. PROPERTY shall be rescheduled into the AUCTION COMPANY’S next scheduled auction at no cost to the CITY should abandonment or non-sale occur.

5. REQUIREMENTS: AUCTION COMPANY shall conduct said public auction of PROPERTY in accordance with the following requirements:

a. The sale will be open to the general public and there will be no fee to participate as a bidder.

b. Sale of such PROPERTY may be made only to the bidder with the highest or most favorable bid.

c. AUCTION COMPANY shall maintain active and prospective bidder lists and notify individuals and businesses with addresses within the CITY of any auctions that include property of the CITY.

d. AUCTION COMPANY will post an individual listing for each item of PROPERTY to be sold on its auction website. Following posting of an inspection report to the website of the AUCTION COMPANY, the CITY may request not later than close of business one week prior to the schedule auction date that changes be made for material (to the perceived value of the equipment) factual errors it discovered upon its review. Nothing is this section shall obligate City to review inspection reports or to inform AUCTION COMPANY of errors that are discovered. In addition, CITY assumes no responsibility for the accuracy of the inspection report or information provided to potential bidders.

e. AUCTION COMPANY acknowledges and understands that City Policy and Procedure 1-42 prohibits employees responsible for disposing of city property by auction or who participate in making decisions to do so from bidding on the PROPERTY at auction. AUCTION COMPANY shall endeavor to avoid selling PROPERTY to any employee who is subject to the policy and procedure.

f. AUCTION COMPANY shall auction CITY property with a minimum opening bid. Such opening bids shall be set by the AUCTION COMPANY in the approximate range of 50% to 70% of the AUCTION COMPANY’S sole determination of auction value.

Any change in practice must have the advance, written agreement of the CITY.

g. AUCTION COMPANY shall sell all items “AS IS, WHERE IS” with all faults and without any warranty by CITY as to condition, usability or merchantability or any matter whatsoever. AUCTION COMPANY shall inform buyer that buyer assumes entire risk as to quality, performance and cost of all necessary servicing or repair

h. AUCTION COMPANY shall, in the performance of this Agreement, comply will all applicable state, federal and local laws, including, without limitation, California Civil Code Section

1812.600 through 1812.609, pertinent provisions of the State sales tax laws, and State DMV rules and regulations. AUCTION COMPANY shall obtain all necessary licenses and permits, comply with all posting requirements, pay all taxes, fees and expenses applicable to or associated with conducting auctions of the PROPERTY.

6. TITLE: CITY represents that title to all PROPERTY shall be unencumbered at the time of sale.

7. INDEPENDENT CONTRACTOR: It is understood and agreed that in the performance of this Agreement, AUCTION COMPANY and any person employed by AUCTION COMPANY shall at all times be considered an independent AUCTION COMPANY and not an agent or employee of CITY. AUCTION COMPANY shall be responsible for employing or engaging all persons necessary to complete the work required under this

8. SUBCONTRACTORS. AUCTION COMPANY may not use subcontractors to perform any Services under this Agreement unless AUCTION COMPANY obtains prior written consent of CITY. AUCTION COMPANY shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors.

9. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. AUCTION

COMPANY shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with AUCTION COMPANY’s performance of the Services.

10. INSURANCE. AUCTION COMPANY, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described in this Section. Insurance must be provided by companies with a Best’s Key rating of A-:VII or higher and which are otherwise acceptable to the City’s Risk Manager. The City’s Risk Manager must approve deductibles and self-insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content.

AUCTION COMPANY shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. AUCTION COMPANY shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the City’s Risk Manager. AUCTION COMPANY shall provide certificates of such policies or other evidence of coverage satisfactory to CITY’s Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall, throughout the term of this Agreement, provide current certificates evidencing the required insurance coverages and endorsements to the CITY’s Risk Manager. AUCTION COMPANY shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit AUCTION COMPANY’s liability or obligation to indemnify CITY under this Agreement.

a. Commercial General Liability/Automobile Liability Insurance:

AUCTION COMPANY shall obtain Commercial General Liability Insurance and Automobile Liability Insurance in the amount of ONE MILLION DOLLARS (US$1,000,000) per occurrence. If a general aggregate limit is used, either the general aggregate limit shall apply separately to this contract or the general aggregate limit shall be twice the required occurrence limit.

b. Property Insurance: AUCTION COMPANY shall obtain Property Insurance in the amount of FIVE HUNDRED THOUSAND DOLLARS (US$500,000) and name the City of Palo Alto as a loss payee.

c. Workers’ Compensation Insurance: AUCTION COMPANY shall obtain statutory Workers’ Compensation Insurance and Employer’s Liability Insurance in the amount of One Million Dollars (US$1,000,000).

11. HOLD HARMLESS: To the fullest extent permitted by law and without limitation by the provisions of Section 10 relating to insurance, AUCTION COMPANY shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney’s fees, courts costs and costs of alternative dispute resolution), , arising out of, or resulting in any way from or in connection with the performance of this Agreement. The AUCTION COMPANY’s obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that the AUCTION COMPANY shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of the CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Contract. CITY shall cooperate reasonably in the defense of any action, and AUCTION COMPANY shall employ competent counsel, reasonably acceptable to the CITY ATTORNEY.

12. COMMISSION AND FEES: AUCTION COMPANY shall receive as commission SEVEN POINT FIVE PERCENT (7.5%) of gross auction proceeds from sale of CITY Property. In addition, the following fee is chargeable and deductible from auction proceeds:

a. Listing fee

Equipment Type Multi-Unit/Location Single Unit/Location

Un-inspected $75 $75

Small Equipment $175 $225

Medium Equipment $225 $350

Large Equipment $425 $500

The “Small Equipment” category would include air compressors, generators, scissor/man lifts, walk-behind compactors, trailers, electric forklifts and similar sized equipment.

“Medium Equipment” type would include on-highway trucks, water trucks, skid-steer loaders, telehandlers, 100+ kW generators, utility tractors and similar sized equipment.

“Large Equipment” would include backhoes, loaders, graders, dozers, scrapers, large compaction equipment, dump trucks, digger derricks, tough terrain cranes (<35 tons), pavers, sweep/vacuum trucks and similar sized equipment.

Un-inspected items would include attachments to the aforementioned equipment.

13. ASSIGNMENTS/AMENDMENTS. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement.

This Agreement shall not be assigned or transferred without the prior written consent of the CITY. No amendments, changes or variations of any kind are authorized without the written consent of the CITY.

14. AUDITS. AUCTION COMPANY agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, AUCTION COMPANY’s records pertaining to matters covered by this Agreement. AUCTION COMPANY agree to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) years following the terms of this Agreement.

15. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or Partial acceptance by CITY shall operate as a waiver on the part of City of any of its rights under this Agreement.

16. NON-DISCRIMINATION. In the performance of this contract, AUCTION COMPANY shall not discriminate against any employee or applicant for employment because of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR agrees to meet all requirements of Palo Alto Municipal Code, Chapter 2.30.510 pertaining to nondiscrimination in employment.

17. WORKERS’ COMPENSATION. AUCTION COMPANY, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of California which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services.

18. GOVERNING LAW. This contract shall be governed and interpreted by the laws of the State of California.

20. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. IN WITNESS THEREOF, the parties hereto have by their duly authorized representatives execute this Agreement on the date first above written.

CITY OF PALO ALTO CONTRACTOR

____ City Manager (Required for contracts over $85,000) ____ Purchasing Manager By:_____________________________ (Required for contracts over $25,000) ____ Contracts Administrator Name:__________________________ (Required for contracts under $25,000) Title:____________________________

APPROVED AS TO FROM:

Senior Asst. City Attorney

EXHIBIT “A”: INSURANCE REQUIREMENTS