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<br />City of San Marcos/Guadalupe-Blanco River Authority <br />Water Treatment Facilities <br /> <br />Service Contract <br />Article XN - Miscellaneous Provisions <br /> <br />of a 365-day year, counting the actual number of days elapsed, and such interest accrued at <br />any time shall, to the extent permitted by Applicable Law, be deemed added to the amount due <br />as accrued. <br /> <br />SECTION 14.6. NEGOTIATED FIXED PRICE WORK. (A) Base Fee Component <br />of the Service Fee. The Base Fee Component of the Service Fee has been initially fixed and <br />agreed to by the parties based on the Authority's proposal submitted in response to the RFP as <br />further changed during the negotiation of this Service Contract, and is not subject to Cost <br />Substantiation. <br />(B) Negotiated Pricing of Work for Which the City is Financially Responsible. <br />This Service Contract obligates the City to pay for certain costs resulting from Uncontrollable <br />Circumstances, Change in Law, City Breach and otherwise as more specifically provided <br />herein. It is the expectation of the parties, in general, that the City will pay for such costs on a <br />negotiated lump sum basis, or by an addition to the Base Fee, and that the price will be <br />negotiated in advance of the Authority's performance of the work in all instances where it is <br />practical to do so. For example, if a Change in Law occurs, as required under Section 12.2 the <br />parties will assess the impact of the Change in Law, take all appropriate mitigation steps, <br />determine any necessary Capital Modifications and operating changes, and agree upon pricing. <br />To facilitate such negotiations, the Authority shall fumish the City with all information <br />reasonably required by the City regarding the Authority's expected costs of performing the work <br />and its mark-up. Once the parties agree upon the price, the Authority's actual costs of <br />performance shall not be subject to Cost Substantiation unless after-the-fact Cost <br />Substantiation with respect to all or a portion of the Authority's actual costs was agreed to by <br />the parties in establishing the price. <br />SECTION 14.7. COST SUBSTANTIATION. (A) Cost Substantiation Generally. <br />The Authority shall provide Cost Substantiation for the costs for which the City is financially <br />responsible hereunder, other than the Base Fee and the Pass-Through Cost Components of the <br />Service Fee, and costs for which the parties have negotiated a lump sum price, all as provided <br />in Section 14.6. In incurring costs which are or may be subject to Cost Substantiation, the <br />Authority shall utilize competitive practices as required by Applicable Law. <br />(B) Costs Requiring Cost Substantiation. Cost Substantiation shall be <br />provided as soon as reasonably practicable after the costs which require substantiation have <br />been incurred by the Authority. Examples of costs which require substantiation could include, <br />but are not limited to: (1) work done on an emergency basis to respond to an Uncontrollable <br />Circumstance, where it is not reasonably practicable for the parties in advance to negotiate a <br />price for the work; and (2) work done as a Change Order authorized by the City. Cost <br />Substantiation shall also be required where the parties agree that the Authority shall perform <br />work on a cost-plus basis. <br /> <br />90 <br />