Silverliner-VI-RFP-Contract.pdf

CONTRACT DOCUMENTS AND

SPECIFICATIONS

FOR

SILVERLINER VI RAIL CARS

SEPTA REQUEST FOR PROPOSAL NO.: 25-00300-AMJP

CONTRACT

FOR SUPPLY OF EQUIPMENT

MANUFACTURED SPECIFICALLY FOR SEPTA

TABLE OF CONTENTS

PAGE

I. [Contractor's Obligation] SLVIRC-1

II. [SEPTA's Obligation] SLVIRC-1

III. The Contract SLVI RC-1

IV. Contract Standard SLVI RC-2

V. Time of Performance SLVI RC-2

VI. Liquidated Damages SLVI RC-3

VII. Delay in Completion Beyond Contractor's Control SLVI RC-5

VIII. Extension of Time, Not Waiver of Timely Performance SLVI RC-5

IX. Inspection SLVI RC-5

X. Delivery SLVI RC-7

XI. Risk of Loss SLVI RC-7

XII. Acceptance SLVI RC-8

XIII. Payment SLVI R-8

XIV. Assignment of Rights: Delegation of Duties SLVI RC-10

XV. Termination for Cause SLVI RC-10

XVI. Termination for Convenience SLVI RC-11

XVII. Warranties SLVI RC-12

XVIII. Subcontracts SLVI RC-17

XIX. Changes SLVI RC-18

XX. Contract Security SLVI RC-22

XXI. Indemnification SLVI RC-23

XXII. Insurance SLVI RC-24

XXIII. Federal and State Contract Requirements SLVI RC-26

XXIV. Compliance with Federal, State, and Local Laws SLVI RC-26

XXV. Taxes SLVI RC-27

XXVI. Notices SLVI RC-27

XXVII. Financing SLVI RC-28

XXVIII. Claim Against Member of SEPTA Board or SEPTA Employee SLVI RC-28

XXIX. Governing Law/Jurisdiction SLVI RC-28

XXX. SEPTA Audit Rights SLVI RC-28

XXXI. Prohibited Interest SLVI RC-28

XXXII. Disputes SLVI RC-29

XXXIII Labels SLVI RC-29

XXXIV Use of "SEPTA" Name in Contractor Advertising or Public Relations SLVI RC-29

XXXV. SEPTA’s Rights in Property SLVI RC-29

XXXVI. Software Warranty SLVI RC-33

XXXVII. Contractor's Office SLVI RC-34

XXXVIII. Contract Option for additional Rail Cars SLVI RC-34

XXXIX. Contract Option Price Adjustment and Payment Terms SLVI RC-34

XL. Documents and Spare Parts SLVI RC-35

XLI Integration SLVI RC-35

XLII. Severability SLVI RC-35

XLIII Joint and Severability SLVI RC-35

XLIV Seat Belt Use SLVI RC-35

XLV Distracted Driving, Including Text Messaging While Driving SLVI RC-35

XLVI Infrastructure Investment and Jobs Act SLVI RC-36

XLVII Availability of Funds SLVI RC-36

The following references:

Exhibit - I Pricing / BAFO

Exhibit - II Project Schedule

Exhibit – III Spare Parts

Exhibit - IV Final Silverliner VI Rail Cars Specification

Exhibit – A Federal Contract Requirements

Exhibit - B State & Local Contract Requirements

Exhibit - C SEPTA EEO/AA Equal Employment Opportunity Contractual Requirements

Exhibit - D Certifications

• Buy America Certificate

• DBE Approval Certification

• Certificate of Compliance With Immigration Reform and Control Act of 1986

• Certification regarding Lobbying Exhibit - E Forms - Samples

• Performance Bond

• Change Order Form

• Maintenance Bond

Exhibit F Technical Proposal Exhibit G Addenda Acknowledgement

Exhibit H Addenda

SEPTA Silverliner VI Rail Cars Page 1 of 37

CONTRACT

FOR SUPPLY OF EQUIPMENT

MANUFACTURED SPECIFICALLY FOR SEPTA

THIS AGREEMENT, entered into the day of, 20__, by and between the Southeastern Pennsylvania Transportation Authority (hereinafter called "SEPTA"), a body corporate and politic exercising the power of the Commonwealth of Pennsylvania as an agency and instrumentality thereof, with offices located at 1234 Market Street, Philadelphia, Pennsylvania, and (hereinafter called ("Contractor"), a organized under the laws of , with principal offices located at .

WITNESSETH:

WHEREAS, SEPTA needs to acquire, and, if required by the Specifications, have installed, certain equipment hereinafter more fully described and set forth in the Specifications attached hereto and incorporated herein, in connection with an undertaking known as SILVERLINER VI RAIL CARS as set forth in the SCHEDULE A (hereinafter called the "Project");

WHEREAS, the Contractor, pursuant to SEPTA's Request for Proposal, has submitted a Proposal to furnish all the Material and/or Equipment described in the Specification, as such term is hereinafter defined (hereinafter called “Cars” or “Material and/or Equipment”).

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

I. The Contractor shall furnish the Material and/or Equipment described in the Technical

Specifications for the Purchase of Silverliner VI Rail Cars Technical Specification (“Specification”) which is attached hereto and made a part of the Contract as Exhibit IV.

II. SEPTA shall pay to the Contractor, in consideration for furnishing the Material and/or Equipment in conformity with the Specification, the Firm Fixed Price(s) as set forth in the Best and Final Offer Pricing Schedule, attached hereto and made a part hereof as Exhibit I, in a total amount not to exceed $_______________, Base Order and Associated Equipment, Items 1A, 2, 3, 4, & 5 of Pricing Schedule (hereinafter called the "Contract Sum").

III. THE CONTRACT

A. The Contract Documents form the Contract and represent the entire and integrated Contract between the parties and, except for substantial representations made by the Contractor upon which SEPTA was entitled to rely in making the decision to award the Contract to the Contractor, supersede all prior negotiations, representations, or Contracts, either written or oral. The Contract Documents which form the Contract consist of the following:

1. This Contract, including any amendment, modification or change order (as defined in Section XIX) to this Contract mutually agreed to in writing and signed by proper officials of both parties;

2. Section 1 – Instructions and Information for Proposers RFP 25-00300-AMJP

3. Performance Bond, and Maintenance (or Guarantee) Bond;

4. Technical Specification, including any drawings (collectively referred to as the

"Specification");

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5. Any other attachment or exhibit attached hereto, including but not limited to:

Exhibit A – Federal Contract Requirements; Exhibit B – State and Local Contract Requirements; Exhibit C – SEPTA EEO/AA Equal Employment Opportunity Contractual Requirements; and Exhibit D – Buy America;

Proposal Documents as follows:

a. Addenda

b. Technical Proposal

B. Order of Precedence: In the event of any conflicts among the Contract Documents listed in Paragraph III. A. above, the terms and requirements of the document which appears earliest in the listing shall govern.

C. Responsibility for Those Performing Work: The Contractor agrees that all personnel used in performance of the Contract shall be considered employees of the Contractor or its subcontractors, and in no event shall any of the personnel employed in the performance of the Contract be considered employees of SEPTA.

D. The Contractor shall cooperate with SEPTA's Project Representatives, namely the Project

Manager of SEPTA, or his/her representative(s) designated in writing (hereinafter called the "Project Manager"), who shall be responsible for technical direction provided by SEPTA, and the Contract Administrator of SEPTA, or his/her representative(s) designated in writing (hereinafter called the "Contract Administrator"), who shall be responsible for the administration of the Contract on SEPTA's behalf.

IV. CONTRACT STANDARD

The Specification, and Technical Proposal including any addenda and modifications issued thereto, shall provide the standard for determining whether the Material and/or Equipment meets the Contract requirements.

Viewed individually and as a finished product, all material, components and parts installed in or on the Rail Cars during its manufacture shall be newly made of the current model year under standard production by the manufacturer. Used, reconditioned or obsolete parts or components are not to be used in the assembly of the Rail Cars or to be installed in or on it under any circumstances.

Components or parts damaged prior to or during delivery are not acceptable and shall be replaced at the Contractor's own expense with a new component or part. The Rail Cars and all its components and parts shall be designed to permit ready accessibility for maintenance purposes with minimal disturbances of other components or parts. The term "heavy duty" where used in the Specification to describe a part or component shall be defined to mean "in excess of the usual or normal quantity, quality, or capacity that is supplied or manufactured."

V. TIME OF PERFORMANCE

The Contractor shall commence performance under the Contract within five (5) working days of issuance of SEPTA's Notice to Proceed and shall fully complete performance of the Contract within the time specified in Exhibit II. All time limits contained in the Contract Documents are of the essence.

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VI. LIQUIDATED DAMAGES

A. Delay

In the event that the Cars to be furnished under the Contract are not furnished and delivered in accordance with the Specifications, on the dates as set forth in the attached Exhibit II, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for every day or part thereof that the performance of the Contract shall remain uncompleted in accordance with the delivery requirements (delivery schedule) as set forth in Exhibit II. The total amount of liquidated damages due to time delay only payable under Articles VI.A and XVII shall not exceed 10% of the Contract Sum (“Delay LD Cap”).

Liquidated Damages Daily Damages (Calendar Day)

SEPTA's written acceptance or conditional acceptance of the Pilot Married Pairs #1, #2, and #3 after Contractual date.

$6,980

SEPTA’s acceptance or conditional acceptance of the production cars (per married pair) after Contractual date

$270

SEPTA’s acceptance or conditional acceptance of the Last Production Married Pair after Contractual date

$7,722

Costs are incremental and additive, so that the last production pair has both “[…]production cars (per married pair)” and “[…]Last Production Married Pair” running simultaneously. As the pilot cars are not production cars, only the first line applies to them.

In the event of delays which are not subject to Paragraph VII, Delay in Completion Beyond Contractor's Control, in delivery of certain items other than the railcars, namely, both the approved drafts and the final completed versions of the Operator’s Manual, Running Maintenance Manual, Heavy Repair Manual, Engineering Data Book, Illustrated Parts Catalog, Maintenance Parts Price List, the completion of the Education Program (other than the overhaul modules), Spare Parts, and Portable Test Equipment, all Bench Test Equipment, the Air Brake Test Rack, and all computer Software and Special Test Equipment Manuals beyond the dates and schedule specified in the Contract Documents, SEPTA shall assess liquidated damages in the amount of $ 100.00 per calendar day for each of the above listed item or service not delivered or accomplished.

B. Weight accordance with the Specifications and are heavier than the Target Weights identified in Exhibit IV, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for excess weight.

Liquidated Damages Damages (per pound, per car) Married Pair Weight in excess of the AW0 target, 1-1000 lbs overweight

$13

Married Pair Weight in excess of the AW0 target, 1001+ lbs overweight, applied marginally (ex: the 1001st pound per car incurs $26, not $39)

$26

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C. Energy Efficiency accordance with the Specifications and consume more energy than identified in the table below, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for excess energy consumption.

Damages will be via one-time assessment using seasonally-adjusted analysis (e.g., accounting for all heating and cooling modes and averaging HVAC consumption) after completion of testing per Exhibit IV Section 15.8.8.8 Power and Energy Consumption. Contractor may elect to repeat testing for purposes of Liquidated Damages assessment after making approved changes to improve efficiency. Modifications to the cars after completion of testing that decrease energy efficiency shall result in a revised assessment.

Liquidated Damages Damages Net Wh consumed while operating in excess of 3.1125 kWh/mile averaged per car

$231.80/Wh/mile per car

Net kW consumed by auxiliary loads in excess of 45.895kW per car $33,311 per kW averaged per car

D. Reliability, Availability, and Maintainability accordance with the Specifications and fail to meet reliability, availability, and maintainability requirements identified in Exhibit IV, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for failure to meet reliability, availability, and maintainability requirements.

Liquidated Damages Assessment Period Damages

MDBD lower than requirement

Per Month, beginning with the first month One year after 10% of base order cars have entered the reliability demonstration period, until Reliability and Availability Test Completion

$7 per mile below requirement

Car Level MDBF- ALL lower than requirement

Per Month, beginning with the first month of the Reliability and Availability Test, until Reliability and Availability Test Completion

$7 per mile below requirement

Fleet availability lower than requirement

Per Peak Period, beginning with the first month of the Reliability and Availability Test, until Reliability and Availability Test Completion

$2,352 per pair below required level

MTTR above requirement via one-time assessment after completion of Fleet Maintainability Monitoring per Exhibit IV Section 21.7.2.3

Modeled over service life of cars using actual time to repair less requirement multiplied by craft hourly rate

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E. Limitation on Liquidated Damages

The total amount of liquidated damages payable under Articles VI subparagraphs B through D shall not exceed 10% of the Contract Sum (“Functional LD Cap”).

VII. DELAY IN COMPLETION BEYOND CONTRACTOR'S CONTROL

If the Contractor shall be delayed in the completion and performance under the Contract by reason of unforeseeable causes beyond its control and without its contribution, neglect, fault, or negligence, including but not restricted to acts of God, acts of neglect of SEPTA, acts of neglect of any other contractor, fires, floods, epidemics, quarantines, strikes, or freight embargoes, the time herein specified for completion of Contract performance may be extended, without penalty, at the reasonable discretion of SEPTA, by such time as shall be fixed by SEPTA in writing. The Contractor shall not be entitled to any damages, compensation, or adjustment from SEPTA on account of any delay or delays, including delays in payment to Contractor, resulting from any of the aforesaid causes, except for delays caused by the negligent acts of SEPTA and the negligent acts of any SEPTA contractor.

VIII. EXTENSION OF TIME, NOT WAIVER OF TIMELY PERFORMANCE

A. Any extension of time granted by SEPTA pursuant to Paragraph VII above shall operate only to mitigate liquidated damages contained in Paragraph VI, no such extension of time shall be deemed a waiver by SEPTA of its right to terminate the Contract for delay by the Contractor, nor shall such extension relieve the Contractor from full responsibility for performance of its obligations hereunder.

B. If the Contractor desires to apply for an extension of time pursuant to Paragraph VII above, the Contractor shall notify SEPTA in writing within fourteen (14) days after becoming aware of the possibility of delay and any reasons for the delay and its estimated duration.

IX. INSPECTION

A. Definition. “Material and/or Equipment” or “Cars” as used in this paragraph, includes but is not limited to raw materials, components, intermediate assemblies, end products and supplies.

B. The Contractor shall provide and maintain an inspection system acceptable to SEPTA covering Material and/or Equipment under the Contract and shall tender to SEPTA for acceptance only Material and/or Equipment that has been inspected in accordance with the inspection system and has been found by the Contractor to be in conformity with Contract requirements. As part of the system, the Contractor shall prepare records evidencing all inspections made under the system and the outcome. These records shall be kept complete and made available to SEPTA. SEPTA, or its agents, may perform reviews and evaluations as reasonably necessary to ascertain compliance with this paragraph. These reviews and evaluations shall be conducted in a manner that will not unduly delay the Contract work.

The right of review, whether exercised or not, does not relieve the Contractor of the obligations under the Contract.

C. SEPTA, or its agents, has the right to inspect and test all Material and/or Equipment called for by the Contract, to the extent practicable at all places and times, including the period of manufacture, and in any event before acceptance. SEPTA shall perform inspections and tests in a manner that will not unduly delay the work. SEPTA assumes no contractual obligation to perform any inspection and test for the benefit of the Contractor.

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D. In the event SEPTA, or its agents, performs inspection or tests on the premises of the Contractor or a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, without additional charge all necessary facilities and assistance for the safe and effective performance of these duties.

E. When Material and/or Equipment is not ready at the time specified by the Contractor for inspection or test, SEPTA may charge the Contractor for the additional cost of inspection or test. SEPTA may also charge the Contractor for any additional cost of inspection or test when prior rejection makes re-inspection or retest necessary.

F. SEPTA, or its agents, has the right either to reject or to require correction of nonconforming

Material and/or Equipment. Material and/or Equipment is nonconforming when it is defective in material or workmanship or is otherwise not in conformity with Contract requirements. SEPTA may reject nonconforming Material and/or Equipment with or without disposition instructions.

G. The Contractor shall remove Material and/or Equipment rejected or required to be corrected. However, SEPTA may require or permit correction in place, promptly after notice, by and at the expense of the Contractor. The Contractor shall not tender for acceptance any corrected or rejected Material and/or Equipment without disclosing the former rejection or requirement for correction, and, when required, shall disclose the corrective action taken.

H. In the event the Contractor fails to promptly remove, replace, or correct rejected Material and/or Equipment that is required to be removed or to be replaced or corrected, SEPTA may either (1) by contract or otherwise, remove, replace, or correct the Material and/or Equipment and charge the cost to the Contractor; or (2) terminate the Contract for default.

Unless the Contractor corrects or replaces the Material and/or Equipment within the delivery schedule SEPTA may require their delivery and make an equitable price reduction in accordance with Paragraph XIX, Changes.

I. In the event the Contract provides for the performance of SEPTA quality assurance at the source, and if requested by SEPTA, the Contractor shall furnish advance notification of the time (i) when Contractor inspection or tests will be performed in accordance with the terms and conditions of the Contract and (ii) when the Material and/or Equipment will be ready for SEPTA inspection. SEPTA's request shall specify the period and method of the advance notification and the SEPTA representative to whom it shall be furnished.

Requests shall not require more than two (2) workdays of advance notification if a SEPTA representative is in residence in the Contractor's plant, nor more than seven (7) workdays in other instances.

J. SEPTA shall accept or reject Material and/or Equipment as promptly as practicable after delivery. SEPTA's failure to inspect and accept or reject the Material and/or Equipment shall not relieve the Contractor from responsibility, nor impose liability on SEPTA for nonconforming Material and/or Equipment.

K. Approvals, inspections and tests by SEPTA do not relieve the Contractor of responsibility for defects or other failures to meet Contract requirements discovered before acceptance.

Acceptance shall be conclusive, except for latent defects, fraud, gross mistakes, or as otherwise provided in the Contract.

L. If acceptance is not conclusive for any of the reasons in Paragraph K above, SEPTA, in addition to any other rights and remedies provided by law, or under other provisions of the Contract, shall have the right to require the Contractor (1) at no increase in Contract Sum, to correct or replace the defective or nonconforming Material and/or Equipment at the original point of delivery or at the Contractor's plant at SEPTA's election, and in

SEPTA Silverliner VI Rail Cars Page 7 of 37 accordance with a reasonable delivery schedule as may be agreed upon between the Contractor and SEPTA; provided, that SEPTA may require a reduction in the contract price if the Contractor fails to meet such delivery schedule, or (2) within a reasonable time after receipt by the Contractor of notice of defects or nonconformance, to repay such portion of the Contract as is equitable under the circumstances if the Contract Administrator elects not to require correction or replacement.

When Material and/or Equipment is returned to the Contractor, the Contractor shall bear the transportation cost from the original point of delivery to the Contractor's plant and return to the original point of delivery. If the Contractor fails to perform or act as required in (1) or (2) above and does not provide a plan to cure such failure to SEPTA’s satisfaction within a period of ten (10) calendar days (or such longer period as SEPTA may authorize in writing) after receipt of notice from SEPTA specifying such failure, SEPTA shall have the right by contract or otherwise to replace or correct such Material and/or Equipment and charge to the Contractor the cost occasioned SEPTA thereby.

X. DELIVERY

A. Delivery shall be as required as set forth in Exhibit II. All Cars are to be delivered in good condition, complete, ready for operation or use as specified, and in conformity with the Specifications and all other terms and conditions of the Contract.

B. Delivery shall not be construed to have occurred until SEPTA has been furnished with acceptable documentation demonstrating the car’s delivery and readiness, including but not limited to:

i. Contractor Certification that it has found the car to be in conformity with Contract requirements except:

1. Requirements evaluated by testing after Delivery

2. Specific open items identified on the Certificate of In-Plant Inspection and

Release for Shipment

3. Specific open items identified through Inspection and recorded via the system maintained by the Contractor as described in Paragraph IX

ii. Contractor’s plan for remedying open items that prevent acceptance testing within the time limit for beginning testing identified in Paragraph XII

iii. Car History Book travelling with the car as required by Exhibit IV TS 25.18

C. The number of Cars on SEPTA property, whether Delivered or not, that have not achieved

Acceptance or Conditional Acceptance shall not exceed ten (10) cars. SEPTA may choose to waive this and allow more cars to be delivered at SEPTA’s sole discretion. SEPTA allowance of this limit from time to time to be exceeded does not waive SEPTA’s right to halt further shipments to enforce this limit.

D. Cars in excess of the rejection weight as detailed in Exhibit IV will not be permitted onto SEPTA property.

XI. RISK OF LOSS

A. All risk of loss or damage to the Cars or any part thereof, prior to delivery and acceptance by SEPTA shall be borne by the Contractor. The Contractor shall pay all transportation and unloading costs to the designated delivery site and shall provide and pay for all insurance as outlined in Paragraph XXII "Insurance" of the Contract. Risk of loss will be passed to SEPTA at the time of delivery and acceptance of each Rail Car by SEPTA.

B. Any loss or damage to the Material and/or Equipment prior to delivery to SEPTA shall be made good by the Contractor at its own cost and the performance of the Contract shall be

SEPTA Silverliner VI Rail Cars Page 8 of 37 carried forward in accordance with its terms and conditions at no additional cost to SEPTA.

SEPTA may, however, grant reasonable extensions to the completion date where loss or damage is not the result of the negligence of the Contractor, its employees or agents.

XII. ACCEPTANCE

A. Within fifteen (15) calendar days after arrival at the designated point of delivery and being placed by the Contractor in a ready-to-run condition, the Cars shall undergo tests as defined in the Specifications. If a Car passes these tests, the Car shall receive final written acceptance by SEPTA on the fifteenth calendar day after completion of testing, except that SEPTA reserves the right to accept the Car earlier if SEPTA notifies the Contractor in writing of early acceptance or places the Car in revenue service. If a Car fails these tests, SEPTA shall notify the Contractor that the Car shall not be accepted until the repair procedures defined in Paragraph XII B. have been carried out and the Car has been retested and subsequently passes all required tests to SEPTA's satisfaction. Similar procedures shall be followed for items of non-acceptance for Material and/or Equipment other than the Cars.

Subject to SEPTA's sole discretion and terms, SEPTA may conditionally accept a Car.

SEPTA will not unreasonably withhold the consent to conditionally accept a Car that has been delivered with minor defects which, in SEPTA’s sole opinion, does not render the Car unfit for revenue service.

Acceptance of all or part of the Material and/or Equipment delivered to SEPTA is conditioned upon SEPTA's final determination that said Material and/or Equipment, as installed if required by the Contract Documents, conforms to the requirements of the Contract.

B. In the event that SEPTA does not accept a Car, the Contractor must begin work to repair all items of non-acceptance within two (2) working days after receiving notification from SEPTA of the Car having failed to pass the acceptance tests. SEPTA shall make the Car available to the Contractor for repairs. The Contractor shall provide, at its sole expense, all spare parts, tools, personnel and space required to complete the repairs. At SEPTA's sole option, the Contractor may be required to remove the Car from SEPTA property for repair work. Repair procedures must be diligently pursued by the Contractor, and the Contractor shall continue to have all risk of loss until SEPTA's written conditional or final acceptance of the Rail Car. Similar procedures shall be followed for items of non-acceptance for Material and/or Equipment other than the Cars. The Contractor shall be liable for all costs associated with the required repairs.

XIII. PAYMENT

A. SEPTA shall pay invoices submitted by the Contractor within thirty (30) days after approval of an invoice by the Project Manager. SEPTA shall make progress payments for the discrete deliverables for which payment is requested and the associated payment amount as shown in Exhibit II.

B.

Unless otherwise agreed, the Contractor shall submit only one invoice per month, excluding any corrected invoices. All payments require written approval of the Project Manager, and in addition any progress payments involving Car assembly at the Contractor’s plant require written approval by the SEPTA Resident Inspector. All invoices shall be accompanied with appropriate back-up material to document the discrete deliverables and to substantiate the work for which progress payment is requested have been achieved and document that costs have been incurred. The Contractor shall submit invoices within 30 days of the completion of the deliverable associated with the progress

SEPTA Silverliner VI Rail Cars Page 9 of 37 payment. In the event that an invoice is submitted late, SEPTA reserves the right to consider the invoice date as the date of deliverable completion with respect to Economic Price Adjustment in XIII.B.

The unit price for the base order married pair purchased, as set forth in Exhibit I, shall be adjusted as outlined in XIII.B.

Refer to XX.C regarding additional payment security, if required, and XXX.B regarding SEPTA Audit Rights.

B. Economic Price Adjustment

I. Definitions:

i. Base Month as used in this section means the month prior to the submission of the later of Contractor’s Proposal or Contractor’s BAFO.

ii. Escalated Month used in this section means:

1. For progress payments related to release of shipment of each production car/pair, the month three months prior to the release for shipment of each production cars/pair.

2. For all other progress payments, the month three months prior to the invoice date.

iii. Base Price as used in this section means payment in the progress payment schedule, specifically the amount as of Notice to Proceed.

iv. Adjusted Price as used in this section means Base Price with the Economic Adjustment included via addition or subtraction.

II. The Base Price for each progress payment related to line 1A through 1C of the price form shall be escalated or deescalated as follows:

i. Only progress payments associated with material delivery to SEPTA are subject to Economic Price Adjustment. As identified in Exhibit II, the following progress payments are applicable: 8.1, 9.1, 9.2, 19.3, and all progress payments beginning with 10, 11, 13, and 16.

ii. Change Orders are not subject to Economic Price Adjustment.

iii. Adjustments in the Base Price shall be computed as:

a. 100% of the Base Price shall be deemed to be subject to adjustment.

b. The total accumulated economic adjustment of the base price shall not exceed 20% of the Base Price (additive or reductive).

iv. The adjustment is based on indices determined and reported monthly by the Bureau of Labor Statistics of the U.S. Department of Labor in the monthly Producer Prices and Price Indexes; PCU3365103365108.

v. The Contractor will submit invoices detailing the Base Price, Economic Adjustment, and Adjusted Price when invoicing for production car/trainset items.

vi. The calculation for the Economic Adjustment can only be made when the final indices for the escalated month have been published. If invoices have been submitted prior to the finalization of indices, then the Contractor shall separately invoice for the Economic Adjustment appropriate to the previous invoices, including the relevant calculation detail.

vii. In the event the US Department of Labor discontinues an index or indices cited in this Contract or alters its method of calculating an index or indices cited in this Contract (including a change in the base period), SEPTA, at its sole discretion, shall determine the appropriate substitute index or indices or adjustment for use in determining the price adjustments described in this Contract.

viii. A true up of the PPI adjustments costs (additive or deductive) shall occur no more than on a quarterly basis or no less than on a yearly basis. The calculation of the Economic Adjustment is as follows:

SEPTA Silverliner VI Rail Cars Page 10 of 37

Economic Adjustment = � (Index for Escalated Month) − (Index for Base Month)

(Index for Base Month) × (Base Price)�

C. SEPTA shall have the right, to require the Contractor to furnish proof that all suppliers and workmen employed in connection with the performance of the Contract or any part thereof have been fully compensated by the Contractor.

D. SEPTA shall have the right to take advantage of any discounts offered by the Contractor for prompt payment, less retainage, of full invoiced amounts.

E. The Contractor agrees that as of Contract Award, any negotiated Progress Payment Schedule is not anticipated to result in a payment which exceeds its actual contract costs incurred since award, inclusive of overhead and profit, as of the invoice date.

F. SEPTA shall have the right to withhold all or part of a payment to the extent deemed necessary by SEPTA to protect SEPTA from loss because of:

1. Nonconforming Material and/or Equipment not corrected as required by Paragraph IX;

2. Inconclusive Acceptance as stated in Paragraph IX.

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

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

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

6. Damage to SEPTA;

7. Reasonable evidence that the work or any portion of work will not be completed in accordance with Exhibit II;

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

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

G. SEPTA shall have the right to withhold all or part of a payment to the extent deemed necessary by SEPTA due to failure of the Contractor to comply with the requirements of Exhibit II TS 25.5.2, Master Program Schedule. Failure to provide baseline, monthly updates, or revised schedules in accordance with that section shall be sufficient cause to withhold payments until such delinquent submittal is made and accepted by SEPTA.

XIV. ASSIGNMENT OF RIGHTS: DELEGATION OF DUTIES

A. The Contractor shall not sell, assign, transfer, or dispose of any interest in the Contract without the prior written consent of SEPTA thereto. SEPTA shall not be obligated to give such consent.

B. The Contractor shall not delegate its duties to be performed under the Contract as the prime contractor without prior written consent of SEPTA thereto. SEPTA shall not be obligated to give such consent.

C Any attempt by the Contractor to make such assignment or delegation prior to obtaining

SEPTA's written consent shall give SEPTA the right to terminate the Contract with no further obligation to the Contractor or to anyone to whom the Contractor has attempted to assign, transfer, or delegate rights or obligations under the Contract.

Notwithstanding the above, SEPTA hereby authorizes the assignment by the Contractor of any Contractor’s receivables and/or credit rights to any money due or which may become due and/or entitlements under this Contract to a bank or financial institution. For avoidance of doubt, this authorization

SEPTA Silverliner VI Rail Cars Page 11 of 37 includes the delivery by the Contractor of the contractual documentation reasonably requested by the bank or financial institution exclusively for such assignment (as part of a factoring agreement or otherwise).

D. For purposes of Paragraph XIV, a change in control of Contractor, however effected, including by operation of law, shall be deemed to be a transfer or delegation of this Contract. For the purposes of this Paragraph, the term “control” shall mean the possession of the power to direct or cause the direction of the management and policies of Contractor, whether through ownership of voting securities, by contract or otherwise. The change in control provisions of this Paragraph, however, shall not apply if the Contractor is a corporation, the outstanding voting stock of which is listed on a national securities exchange or actively over-the-counter.

XV. TERMINATION FOR CAUSE

A. If the Contractor fails to make delivery of acceptable Material and/or Equipment or to perform the services within the time specified or any extension thereof and/or fails to remedy or does not take reasonable diligent steps towards remedy, to SEPTA’s satisfaction, the material breach or default of any of the terms, covenants, or conditions of this Contract within thirty (30) calendar days after receipt by Contractor of written notice from SEPTA setting forth the nature of said material breach or default, SEPTA shall have the right to terminate the Contract without any further obligation to Contractor other than payment for work satisfactorily performed. Any termination for cause shall not in any way operate to preclude SEPTA from also pursuing all available remedies against Contractor and its guarantors and/or sureties for said material breach or default, including recovery of any additional costs incurred by SEPTA in obtaining replacement Material and/or Equipment and services.

B. In the event that SEPTA elects to waive its remedies for any breach by the Contractor of any covenant, term or condition of the Contract, such waiver by SEPTA shall not limit SEPTA's remedies for any succeeding breach of that or of any other term, covenant, or condition of the Contract.

XVI. TERMINATION FOR CONVENIENCE

In addition to any other rights of termination which may exist, SEPTA shall have the right to terminate the Contract for SEPTA's convenience. The termination notice shall specify the effective date of termination. Termination for convenience shall create no obligations on the part of SEPTA other than the following:

A. Payment to the Contractor for Material and/or Equipment delivered, and if required by the

Specification, installed, in conformity with the Specification, prior to the effective date of termination.

B. Payment to the Contractor for Material and/or Equipment which conforms to the

Specification and is completed or in at the time the Contractor receives SEPTA's notice of termination for convenience, such payment being contingent upon inspection, acceptance and audit by SEPTA or its designated representatives.

C. Payment to the Contractor for labor, material and engineering costs identified solely to the

Contract and incurred by the Contractor prior to the receipt of SEPTA's notice of termination, subject to audit by SEPTA or its representatives.

D. Payment to the Contractor for reasonable costs for termination of its subcontracts for the

Project subject to audit by SEPTA or its representatives.

E. Payment to the Contractor for reasonable profit for Items A thru C above, subject to audit by SEPTA or its representatives.

SEPTA Silverliner VI Rail Cars Page 12 of 37

XVII. WARRANTIES

A. Definitions:

1. "Acceptance" as used in this Paragraph XVII, means the act of an authorized representative of SEPTA by which SEPTA assumes ownership of existing and identified Material and/or Equipment, or approves specific services rendered, as partial or complete performance of the Contract.

2. "Correction" as used in this paragraph, means the elimination of a defect.

3. "Defect" as used in this paragraph, means any condition or characteristic in any

Material and/or Equipment or services furnished by the Contractor under the Contract that is not in compliance with the requirements of the Contract.

B. Title: The Contractor covenants and warrants that good title to all the Material and/or

Equipment furnished under the Contract shall vest in SEPTA immediately upon final acceptance or conditional acceptance by SEPTA of the Material and/or Equipment, whichever comes first.

C. General: The Contractor warrants that all Material and/or Equipment, and installation thereof, meets all requirements and standards set by the Specifications. All Material and/or Equipment shall be new, the best of its kind or quality, fit for its intended use as set forth in the Specification, and of safe, substantial, and durable construction.

All installation shall be done in a good and workmanlike manner and shall be safe and operate in the manner intended in the Specification. The Contractor further warrants that any Material and/or Equipment, and installation thereof, shall conform to representations and descriptions, or written, made by the Contractor and any literature, sample, or other vehicle of information supplied by the Contractor in its Technical Proposal prior to the time set for opening of Proposals for the Contract. The Contractor further warrants that any sample provided represents a minimum standard of quality for the Material and/or Equipment, and installation thereof, furnished hereunder.

D. Payment of Suppliers and Subcontractors: The Contractor warrants that payment to all workmen, subcontractors and suppliers will be satisfied by the Contractor, in accordance with Paragraph XVIII.C so that, at the time SEPTA makes final payment to the Contractor, no part of the performance under the Contract shall be subject to any claim or lien.

E. Material and/or Workmanship: In addition to all warranties implied by law or required by the Specifications, the Contractor expressly warrants all Material and/or Equipment, and installation thereof, against any defect in design, material or workmanship which may be discovered by SEPTA within the periods specified below from the date of the Certificate of Acceptance, or Conditional Acceptance for each individual Car or item of Material and/or Equipment. The Contractor shall make any necessary repairs to and any replacements of all or parts of the Cars, and installation thereof, including the cost of all labor and materials, during the periods specified below, and in the Specification at no additional cost to SEPTA. Acceptance of repair or replacement is conditioned upon SEPTA’s final determination that said Material and/or Equipment, as installed if required by the Contract Documents, conforms to the requirements of the Contract and Contractor’s submittals and designs.

Refer to Paragraph XX Contract Security for requirements for furnishing the Maintenance (or Warranty) Bond. The warranty periods shall be as follows:

Fifteen (15) Years Warranted Items The following items shall be warranted for a period of fifteen (15) years of operation:

- Carbody

- Truck frame and bolster

SEPTA Silverliner VI Rail Cars Page 13 of 37

Ten (10) Years Warranted Items The following items shall be warranted for a period of ten (10) years:

- Floor panels and attachments, leveling compound, floor sheeting and adhesive

- Storage battery

- Filter capacitors

Seven (7) YearsWarranted Items The following items shall be warranted for a period of seven (7) years:

- Journal bearings

Five (5) Years Warranted Items The following items shall be warranted for a period of five (5) years:

- Elastomeric parts and bonding

- Axles

- Truck primary and secondary suspension

- Seats and seat covering

- Low Voltage Power Supply/Battery Charger components and controls

- All printed circuit board cards

- All power conversion devices, transformers and capacitors, other than filter capacitors

- All TWDT Components

Three (3) Years Warranted Items The following items shall be warranted for a period of three (3) years:

- The Cars and all other items of Material and/or Equipment delivered as part of this Contract (other than Spare Parts), either on the Cars or installed on the wayside, which is not listed above.

Spare Parts Spare parts supplied under this Contract shall be warranted from the date of delivery to SEPTA in accordance with the applicable time periods for items stated above except for items that are warranted for 3 years. For spare parts supplied for those items warranted for 3 years, those spare parts shall be warranted for 5 years from date of delivery to SEPTA or for a three year period respectively from the date of initial service, whichever occurs first.

Consumable Items No consumable item, excluding air filters, shall require replacement more frequently than every 6 months.

Reliability Certain rail vehicle components have reliability requirements which must be achieved, or component redesign is required, in accordance with Specification Section 21 However, in no case shall the warranty expire for any subsystem of the Cars prior to the successful completion of Reliability Demonstration Testing for that major subsystem, as described in the Specification.

F. Exclusions: Warranty for items of Material and/or Workmanship shall not cover defects or failures due to accident, vandalism, improper repairs by SEPTA or its agents, neglect and improper or lack of proper maintenance or storage by SEPTA. Defects or failures due to foreign object damage are also excluded from warranty unless the Specification design requirement was to prevent such damage. The same applies to weather-related failures during extreme conditions beyond those identified in the Specification.

These warranty requirements, other than a minimum useful life, do not apply to consumable or expendable items of material, as identified by part number and description by the Contractor and agreed to by SEPTA, such as brake shoes, light bulbs, windshield

SEPTA Silverliner VI Rail Cars Page 14 of 37 wiper blades, etc., unless it is determined by SEPTA that the failure was caused by defective manufacture or design rather than normal wear and tear expected for such consumable items.

G. Excessive Numbers of Operational Failures (Fleet Defects): In the event that, after 10

Married Pairs are accepted, during the warranty period specific repairs, replacements or modifications necessitated by defects in design, material or workmanship of the same kind or type are required, SEPTA may declare a fleet defect if any of the following occur: (a) failures of the same component in the same application exceeds a failure rate of twenty

(20) percent during any period of twelve (12) consecutive months based on the average number of such components in service during such twelve month period or (b) major systems of the Cars have failed the Reliability requirements of Specification Section 21, or

(c) a failure analysis of a component, system or subsystem defines a systemic and/or manufacturing problem, the Contractor shall develop a plan to rectify regardless of the failure rate percentage or Reliability Requirements of Specification Section 21, except if the failure is caused by acts of neglect by SEPTA or any third party subcontractor by SEPTA. The Contractor shall promptly institute an approved modification program for all Cars, regardless if the warranty period has expired for an individual Car. In the event that such defects or failures require the removal of major components or assemblies for the purpose of repairs or modifications, and such removals render the Cars inoperable or unfit for safe and efficient operation in regular service, the Contractor shall promptly furnish an adequate number of spare components or assemblies for the temporary use by SEPTA so as to minimize downtime of the affected Cars while repairs or modifications are being done. On a case-by-case basis, SEPTA may authorize the Contractor to utilize SEPTA-owned spare parts for correction purposes. The Contractor shall replace each borrowed spare part with a new part with a renewed warranty within thirty (30) calendar days, or such other time as may be agreed to by the Parties. If Contractor fails to replace the spare part within thirty (30) calendar days, SEPTA may replace such spare part at Contractor’s expense. All costs associated with replacing the borrowed spare parts shall be borne by the Contractor. SEPTA decision not to authorize utilization of SEPTA-owned spare parts shall not operate as an excusable delay for the imposition of Liquidated Damages.

Any accepted Cars which during the warranty period (including any extensions) SEPTA has found to be unavailable for service due to the unavailability of these above mentioned spare components shall be treated as a delayed delivery and subject to the conditions of liquidated damages, $1,390 per day per Married Pair, for each day of delay beginning 14 days after a Car (before 10 Married Pairs have been accepted) or 20% of the fleet (after 10 or more of the Married Pairs have been accepted) is unavailable for service. This requirement shall also apply to items of Material and/or Equipment other than the Cars which are delivered under this Contract.

After 10 or more of the Married Pairs have been accepted, in the event during the warranty period that 20 percent or more of the Cars are simultaneously inoperable, or unfit for safe and efficient operation in regular service even though operable, due to defects in design, materials or workmanship whether or not of the same type or kind, as determined by SEPTA, SEPTA may require the Contractor, within a reasonable time after receipt of written notice, to submit a Contractor's proposal for a "Remanufacturing Program" or "Campaign" to affect the necessary repairs, replacements or modifications, at no additional cost to SEPTA, in the shortest time possible and with the least disruption to or interference with regular service. This shall also apply to any individual Cars in which the warranty period has elapsed.

H. Warranty Extension: In the event during the warranty period that repairs and/or modifications on all or any Car, made necessary by defective design, material or workmanship, are not permanent or completed due to lack of material or inability to provide the proper repair by the Contractor, the warranty period for all parts and materials on such Car or Material and/or Equipment will be extended by the amount of time the Cars

SEPTA Silverliner VI Rail Cars Page 15 of 37 or Material and/or Equipment are not in operation in regular service due to lack of Contractor material or inability to provide the proper repair, as determined by SEPTA.

In the event a fleet wide retrofit is required due to defects in design, material or workmanship of a component or an assembly under warranty, or of failure to achieve the reliability requirements of Specification Section 21, the warranty on such a component or an assembly after completion of retrofit shall be extended a 1 year on a per unit or assembly basis beyond the limits specified in this Contract.

I. Performance of Warranty…