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<br />The City of San Marcos Facilities Service Contract <br /> <br />include long-term performance guarantees with respect to the Capital Modification. The third <br />party construction services element shall be a proposal by the Company to conduct, as allowed <br />by Applicable Law, a bidding process or a competitive proposal process for the construction <br />work or the design/build work involved in completing the Capital Modification. The bidding <br />process shall include an advertisement for bids and a construction contract award to the <br />lowest responsible bidder, and shall be conducted in accordance with the requirements of <br />Applicable Law which govern construction projects undertaken by the City. A competitive <br />proposal process shall include a request for proposals and a design/build contract award to <br />the proposer whose proposal offers the best value to the City. The City shall be a party to all <br />such construction contracts or design/build contracts unless the City determines otherwise as <br />permitted by Applicable Law. <br />(C) Negotiation and Finalization of Company Implementation Proposal. The <br />parties shall proceed, promptly following the City's review of the Company's submittal and <br />quotation, to negotiate to reach an agreement on price and any adjustment to the terms and <br />conditions of this Service Contract. Any fmal negotiated agreement for the implementation of a <br />Capital Modification by the Company under this Section shall address, as applicable, (1) design <br />requirements and reviews, (2) construction management services, (3) acceptance tests and <br />procedures, (4) a guarantee of completion and acceptance, (5) performance guarantees, (6) any <br />changes to the Performance Guarantees or other Contract Standards to take effect as a <br />consequence of the Capital Modification, (7) a payment schedule for the design and <br />construction management-related services, (8) provisions for City review, (9) any adjustments <br />to the Service Fee resulting from the Capital Modification, including any related operation, <br />maintenance, repair and replacement costs, (10) a financing plan, and (11) any other <br />appropriate amendments to this Service Contract. The Company shall not be obligated to <br />undertake any such Capital Modification except following agreement as to such negotiated <br />adjustments, unless otherwise required on an emergency basis. The City shall have no <br />obligation to reimburse the Company for any costs incurred pursuant to this Section C except <br />as part of a negotiated amendment to this Service Contract. <br />SECTION 10.7. FINANCING CAPITAL MODIFICATIONS. (A) City Financing. <br />The City shall provide financing for any Capital Modification for which it is financially <br />responsible under this Article, and, in the event the Company is selected to implement the <br />Capital Modification, shall make the proceeds of the fmancing available to the Company to pay <br />the negotiated price on the milestone schedule and subject to any retainage or other conditions <br />negotiated by the parties pursuant to this Section. <br />(B) Company Financing. The City may elect, notwithstanding the provisions <br />of subsection (A) of this Section, to request that the Company finance all or any portion of the <br />cost of any Capital Modification which the Company is implementing pursuant to this Article. <br /> <br />73 <br />