sri cuantía: $1,195,515.64 núm. de cuenta: 01-1071-35201 ... › es-pr › quienessomos ›...

SECTION B

Digital Control System for San Juan GIS Agreement

P U E R T O R I C O E L E C T R I C P O W E R A U T H O R I T Y

T R A N S M I S I O N A N D D I S T R I B U T I O N D I R E C T O R A T E

A P P E A R

AS FIRST PARTY: The Puerto Rico Electric Power Authority, hereinafter

referred to as PREPA, a public corporation and government instrumentality of the

Commonweal th of Puerto Rico, created by Act of May 2, 1941 , No. 83, as amended,

represented in this act by its Executive Director, mister Javier A. Quintana Mendez, of

legal age, married, engineer, and resident of Guaynabo, Puerto Rico.

AS SECOND PARTY: Open System International, Inc., hereinafter referred to as

"the Contractor", a corporation organized and existing under the laws of

Puerto Rico, authorized to do business in Puerto Rico, represented in this act by its

Director of Sales, mister Sergio Bajetti, of legal age, and resident of Minnesota, by

virtue of (document or Corporate Resolution), dated as January 26, 2016.

— I N CONSIDERATION of the mutual covenants hereinafter stated, the parties agree

themselves, their personal representatives, successors, and assignees, as fol lows:

— T h e Contractor shall furnish all work, materials, supervision, tools, necessary

equipment, and all work required for design, build, install, test, and commission

of a Digital Control System (DCS) for San Juan GIS, San Juan Steam Plant in

strict accordance with the provisions of this Contract, including the Special Condit ions,

Technical Specifications, Proposal Forms, and Contractor's Proposal, all of which are

hereby made a part hereof. Provided that, on or before the term of this Contract is

expired, as part of its obligations herein stated, the Contractor shall deliver to PREPA a

WITNESSETH

ARTICLE 1: Scope of Contract

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Cuantía: $1,195,515.64

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Núm. de Cuenta: 01-1071-35201-200-102-100000034558

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2016-P00079

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true and exact copy of all d iagrams, plans, sketches, maps, and other documents used

in the performance of contracted works and for which a third party copyright or patent

right would not be an impediment for such delivery

ARTICLE 2: Definitions

— W h e n e v e r the words defined in this article or pronouns used instead, are ment ioned

in this Contract, they shall have the meanings here given:

2 . 1 . "Engineer" - shall mean the Transmission and Distribution Director of PREPA,

acting directly or through his properly authorized representatives.

2.2. "Contracting Officer" - shall mean, the Executive Director of PREPA, acting directly

or through his properly authorized representatives.

2.3. "Contract" - shall mean collectively, all the covenants, terms, and stipulations in

these articles of Contract and in all supplementary documents hereto attached

which constitute essential parts of the Contract and are hereby made part thereof,

to wit:

Contract

Invitation to RFP

Instructions to Oferrors

Supplementary Instructions to Oferrors

Contractor's O f fe ro r Proposal Including Proposal Data and Schedules

Special Condit ions and Technical Specifications

Proposal Forms

Performance and Payment Bonds

Letter of Award

Appendix A - Milestone For Payment

Appendix B - Contractor Software License Agreement


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2.4 "Operation Center": shall mean the site designated by the Contractor to serve as

headquarters, storage area and were PREPA's offices will be located.

— A R T I C L E 3: Consideration

— I n accordance with the terms and condit ions contained herein, PREPA agrees to pay

and the Contractor accepts, as full payment for the complete performance of this

Contract, the firm price of (One million one hundred ninety five thousand five hundred

fifteen dollars with sixty four cents) ($1,195,515.64), plus any additional amount to be

paid due to extra work ordered and accepted by the Engineer and approved by the

Contracting Officer, according to ARTICLE 8. Changes and/or Extra Work, below. The

Contractor shall submit its invoices for work already done according to the payment

schedule approved by the Engineer, together with the technical support ing documents

of required tests.

— A l l payments made by PREPA for equipment and/or materials del ivered and

accepted and/or services rendered and work performed under this Contract will be

charged to construction estimate number 01-1071-35201-200-102-10000034588.

PREPA reserve the right to discount or retain any full payment under this Contract until

the "Contractor or Subcontractors" comply with any debts or liabilities as a result of poor

performance or negligence during the project construction. 1

— T h e Contractor shall immediately notify PREPA when the billing under the present

Contract amounts to 7 5 % of the max imum amount under the Contract. In addition, the

Contractor shall present an itemized list of the remaining billable work under the

Contract.


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—-As long as the products are available at the t ime the services will be provided, the

Contractor agrees to use products that are developed, extracted, assembled, packaged

or distributed in Puerto Rico by companies with operations in Puerto Rico distributed by

agents established in Puerto Rico.

— A l l invoices submitted by the Contractor shall be subject to the PREPA's approval

before being paid. Its payment shall be done within forty-five (45) calendar days after

the date of its approval by PREPA. Milestone payments have been selected to clearly

identify the actual status of the portion of the Work completed. Payments will be based

on actual completion of each milestone event, as approved by PREPA. Milestones shall

be invoiced when completed.

—All invoices submitted by the Contractor shall include the following Certification in

order to proceed with its payment. This is an essential requirement and those invoices

without this Certif ication, will not be processed for payment.

No Interest Certif ication:

Under penalty of absolute nullity, I hereby certify that no employee, official or

director of PREPA is a party or has any interest in the profits or benefits to be

obtained under this Contract, or if any employee, official or director of PREPA

has any interest in the profits or benefits under this Contract or a waiver has ^

been previously obtained. I, also certify that the only consideration to furnish the

goods and provide the services under this Contract is the payment agreed with

PREPA's authorized representative. The total amount of this invoice is fair and

correct. The works were completed, the products were delivered and the

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services were provided and no payment has been received for said concept.

Contractor's Signature

— U n l e s s otherwise provided in the specif ications, partial payment will be made as the

work progresses in accordance with the breakdown for payment on est imates made and

approved by the Engineer or the Contracting Officer in accordance with PREPA's

internal regulations. In preparing est imates the material delivered on the site may be

taken into consideration; provided that, the Contractor submits evidence that the

materials have been paid for by him and that said materials have been properly housed

or stored at the job site in a manner which will insure the preservation of their quality

and fitness for the work and that the Contractor shall not withdraw said material for any

purpose other than incorporation into the work. Upon completion and acceptance of all

work required hereunder, the amount due to the Contractor under this Contract will be

paid upon the presentation of a properly executed and duly certified voucher therefore,

after the Contractor shall have furnished PREPA with a release, if required, of all claims

against PREPA arising under and by virtue of this Contract, other than such claims, if

any, as may be specifically excepted by the Contractor from the operation of the release

in stated amounts to be set forth therein; provided that, the amount of such excepted

claims is not included in the voucher for final payment.

— P R E P A ' S Payments in accordance with the Milestone for Payments of the Appendix

A does not release the Contractor of any of the responsibilities under the Contract,

including but not limited to those establ ished in Article 52, Risk of Loss.

— T h e demand of the obligations of either party under this Contract will be subject to

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the filing of the Contract at the office of the Comptroller of the Commonweal th of

Puerto Rico, in compliance with Act of October 30,1975, No. 18, as amended.

ARTICLE 4: Commencement and Complet ion of Work

— All work shall be completed in three hundred and sixty five (365) consecutive days.

The rights and obligations of the parties shall be in force beginning on the date the

Contract has been signed by both parties.

—The Contractor wi th in twenty (20) days after receipt of the Order to Proceed shall

present, subject to PREPA's approval. The Breakdown for Payment shall be subject to

the Milestone for Payment (Appendix A) of this Contract. The breakdown shall detail all

i tems, quanti t ies, unit prices and total values of items to be invoiced. This breakdown

shall detail the same items, quantit ies, unit prices and total values of items detailed in

the Unit Cost Table presented for bid. I f said breakdown is not satisfactory to the

Engineer, it shall be revised by the Contractor. This information shall become a part of

this Contract after the Engineer has approved it in wr i t ing. The breakdown shall be

updated monthly, and submitted to the Engineer wi th each invoice. The Contractor will

be responsible to obtain all necessary permits for operations of electric power

generators, fuel and oil storage tanks, if applicable. All copies of approved permits must

be on the site project. The Contractor must submit a copy of the approved permits to

the Environmental Protection Quality Assurance Division (EPQAD). PREPA will be

responsible to submit and obtain approval of all the necessary Environmental Permits

for the project. All other permits, including municipalit ies' permits for Contractor's site

and operat ions will be responsibility of the Contractor. The Contractor must comply with

all the terms and condit ions established on the approvals of submitted plans, permits

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and endorsement from local, state and federal regulatory agencies. The Contractor

must obtain any other type of permits require for their operation such as, but not limited

to: fuel or wastewater storage tanks, storage of remain material of excavations or any

landfills required for the project, use and storage of chemicals. Furthermore, will take

immediate response or mitigate any environmental concern and deficiencies found by

PREPA personnel or regulatory agencies. The Contractor must located construction

and maintenance sign in a visible area of the project. This signs must comply with the

states and federal codes for regulatory, warnings and guides.

ARTICLE 5: Suspension of Work

— T h e Contracting Officer or the Engineer may, at any t ime, suspend the whole or any

portion of the work under this Contract, but this right to suspend the work shall not be

construed as denying the Contractor actual reasonable, and necessary expenses due to

delays, caused by such suspension, it being understood that expenses will not be

al lowed for such suspension when ordered by the Contracting Officer or the Engineer

on account of a Force Majeure Event, as defined in ARTICLE 13: Force Majeure,

herein. The cause of such suspension shall be put in writing by the Contracting Officer

or the Engineer within two (2) working days after the suspension or as soon as

practicable.

— P R E P A reserves the right to perform other work by force account and/or enter into

other contracts in connection with this project. The Contractor shall afford PREPA and

other Contractor 's reasonable opportunity for the introduction and storage of their

ARTICLE 6: Other Work at the Site

materials and the execution of their work and shall properly connect and coordinate his


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work with theirs. If any part of the Contractor's work depends for proper execution or

results upon the work of PREPA or of any other Contractor, the Contractor shall inspect

and promptly report to PREPA any defects in such work or any conflicts between such

work and that of the Contractor, PREPA to decide, if necessary, the course to be

fol lowed by each party.

— W h e r e v e r work being done by PREPA's own forces or by other contractors is

contiguous to work covered by this Contract, the respective rights of the various

interests involved shall be established by PREPA to secure the completion of the

various portions of the work in general harmony. Whenever, in the opinion of PREPA,

the orderly progress of the entire project requires the use by PREPA's own forces or by

other Contractors, of construction equipment installed and operated by the Contractor

for his own use, PREPA will arrange with the Contractor for such use, at t imes and in

locations which will not interfere with the work being done under this Contract.

ARTICLE 7: Specif ications and Drawings

— P R E P A reserves the right to review and approve all drawings, specif ications,

methods, and data. The Contractor shall obtain such reviews or approval in writ ing for

PREPA. The Contractor shall keep a copy of the Contract at the working area, its

supplementary documents, specifications and drawings and shall, at all t imes, give the

Engineer access thereto. Anything called for in the specif ications and not shown on the

drawings or shown on the drawings and not mentioned in the specifications shall be of

like effect as if called for or shown on both. In case of discrepancy in the specif ications

and drawings, the matter shall be immediately submitted to the Engineer, without whose

decision said discrepancy shall not be adjusted by the Contractor, and the Contractor


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shall not proceed with the work so affected until it has received written order f rom the

Engineer. The Engineer will furnish, f rom t ime to t ime, such additional detail drawings

and other information, as he may consider necessary for the conduction of the w o r k . —

ARTICLE 8: Changes and/or Extra Work

— P R E P A may, at any t ime, make changes or order extra work within the Scope of

Work contracted, subject to previous written acceptance by PREPA's Contract ing

Officer. If such changes or extra work require a price and/or schedule revision, such

revision(s) shall be negotiated and agree in writing by both parties before the

commencement .

ARTICLE 9: Inspection

9 .1 . The Contractor must meet all the condit ions and recommendat ions establ ished by

PREPA's Environmental, Health and Security Officers. All material and workmanship (if

not otherwise designated by the specif ications) shall be subject to inspection,

examinat ion, and test by PREPA inspectors, at all reasonable t imes, during

manufacture and/or construction. PREPA shall have the right to reject defective

material, equipment or workmanship or require its correction. Rejected workmanship

shall be satisfactorily corrected and rejected material and equipment furnished by the

Contractor shall be satisfactorily replaced with proper material and equipment, wi thout

charge to PREPA. The Contractor shall promptly remove rejected material f rom the

premises. The Contractor shall furnish promptly all reasonable facilities, labor,

materials, and equipment necessary for the safe and convenient inspection and tests

that may be performed in such manners as not to unnecessari ly delay the work.


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9.2. Final Inspection

A. Whenever all Contractor 's work has been performed, including final cleaning

up as contemplated by ARTICLE 43: Cleaning Up. below, all in accordance

with the drawings and specifications, the Contractor shall notify the Engineer

that said work is completed and ready for final inspection by PREPA. If all

installation work provided for and contemplated by the Contract is found

completed in accordance with the specif ications, this inspection shall

constitute the final inspection and the date of complet ion shall be established

as the date of receipt of the notice of the Contractor that the work was

completed and ready for final inspection. If, however, upon inspection by the

Engineer it is found that any work, in whole or in part, is unsatisfactory, the

Engineer shall give the Contractor the necessary instructions as to

replacement of material and performance of work necessary to final

completion and acceptance and the Contractor shall immediately comply with

and execute such instructions. Upon satisfactory replacement and

performance of such work, the Contractor shall notify the Engineer, and

another inspection shall be made which will constitute the final inspection if the

said material is found to have been acceptably replaced and the work

completed satisfactorily. In such event, the date of receipt of this last notice of p/^-^T^ the Contractor will be established as the date of complet ion of the work or any

separable part thereof under the Contract. The date of completion, thus

establ ished, shall be used in calculating the actual t ime of performance of the

work.

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B. Upon completion of the assigned work, the Contractor shall hand-in the work

area free of contaminants. Final inspection shall occur within a forty-five (45)

day period after the Engineer has received notice f rom the Contractor of the

satisfactory completion of the installation, testing and commissioning of the

equipment.

ARTICLE 10: Superintendence by the Contractor

— T h e Contractor shall have a competent foreman or superintendent, satisfactory to the

Engineer, on the work site at all t imes during progress of the work, with authority to act

for him. The Superintendent shall represent the Contractor on his absence and all

directions given to him by the Engineer shall be as binding as if given to the Contractor.

The Contractor shall, at all t imes, enforce strict discipline and good order among his

employees and shall not employ on the work any unfit person or anyone not skil led in

the work assigned to him. In addit ion, the Contractor shall be fully responsible for the

negligent or wrongful acts or omissions of subcontractors or of persons both directly or

indirectly employed by the Contractor, and shall be liable to PREPA and/or any affected

third parties for such acts or omissions.

ARTICLE 11 : Sanitary Facilities

—Intent iona l ly Deleted

ARTICLE 12: Access to Work

— T h e Contractor shall permit all persons appointed or authorized by PREPA to visit

and inspect the work, or any part thereof at all t imes, and places during the progress

of it

ARTICLE 13: Force Majeure

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-—The parties hereto shall be excused from performing hereunder and shall not be

liable in damages or otherwise, if and only to the extent that they shall be unable to

perform, or are prevented from performing by a Force Majeure event. For purposes of

this Contract, Force Majeure means any cause without the fault or negligence, and

beyond the reasonable control of, the party claiming the occurrence of a Force Majeure

event. Force Majeure may include, but not be limited to, the fol lowing: Acts of God,

industrial disturbances, acts of the public enemy, war, blockages, boycotts, riots,

insurrections, epidemics, earthquakes, hurricanes, storms, f loods, civil disturbances,

lockouts, f ires, explosions, interruptions of services due to the acts or failure to act of

any governmental authority, provided that these events, or any other claimed as a Force

Majeure event, and/or its effects, are beyond the reasonable control and without the

fault or negligence of the party claiming the Force Majeure, and that such party, within

ten (10) days after the occurrence of the alleged Force Majeure, gives the other party

written notice describing the particulars of the occurrence and its estimated duration.

The burden of proof as to whether a Force Majeure has occurred shall be on the party

claiming the Force Majeure. The Contractor is responsible under a predicated force

majeure event to take immediate action and employ emergency plans to avoid human

hazards and protect public and private properties within or adjacent project areas.

ARTICLE 14: Penalty for Delays

— I f the Contractor fails to complete the work, within the t ime established in

ARTICLE 4: Commencement and Complet ion of Work, the Contractor shall pay to

PREPA a penalty of two thousand dollars ($2,000) for each consecutives days of delay

in complet ing the work, up to a maximum of twenty five (25%) of the Contract price, and


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the Contractor and his sureties shall be joint and several liable for said amount. So long

as the system is ready for cutover and is commissioned and is in daily use no delay

penalty shall be applied for minor discrepancies. In the event that Contractor, due to his

delay, had pay the total amount of the penalty as above ment ioned, and has fai led to

complete the work or any part separable thereof, it could be considered a breach of

contract, and PREPA may terminate the Contract, execute the performance bond and

pursue any other remedies under this Contract, law or equity.

— I n case of delay, the Contractor shall within ten (10) days from the beginning of any

such delay notify the Engineer in writing of the causes of delay, who shall ascertain the

facts and the extent of the delay and extend the time for completing the work when , in

his judgment, the findings of facts justify such an extension, and his f indings of facts

thereon shall be final and conclusive on the parties hereto, subject only to appeal by the

Contractor as provided in ARTICLE 3 1 : Disputes, hereof; provided that, no claim shall

be made by the Contractor against PREPA, its agents, contractors, subcontractors,

employees, successors, assignees, for any cause whatsoever, during the progress of

any portion of the work embraced in the Contract. Any damages caused by delays or

hindrances exclusively by PREPA shall be considered as fully compensated for by the

extensions of t ime as provided above.

— I f PREPA does not terminate the right of the Contractor to proceed, the Contractor

shall cont inue the work, in which event shall pay to PREPA a penalty in the amount set

forth above for each calendar day of delay until the work is completed, and the

Contractor and his sureties shall be liable for the amount thereof; provided that, the right

of the Contractor to proceed shall not be terminated or the Contractor charged with a


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penalty because of any delays in the completion of the work due to Force Majeure

events or situations, or failures on the part of PREPA to carry out its obligations.

PREPA shall have the right to the payment or to the withholding of Contractor's

payments in case of Contractor's delay in completion of the work. The Contractor

agrees that the penalty shall not be subject to reduction, moderat ion or modif ication,

since this penalty is a pecuniary punishment for the delay, and not a liquidation of

damages.

ARTICLE 15: Liabilities

15 .1 . Civil Responsibil ity

— T h e appearing parties agree that their respective responsibilit ies for damages under

this Contract will be governed by the Puerto Rico Civil Code and its case law, as

dictated by the Supreme Court of Puerto Rico. However, the maximum amount of

liability under the Contract shall not exceed the Contract price. Neither party shall be

liable to the other for any indirect or consequential damage or loss.

15.2. Protection against the Occurrence of Damages

— T h e Contractor agrees to make, use, provide, and take all proper, reasonably

necessary and sufficient precautions, safeguards, and protection against the occurrence

or happenings of injuries, death and/or damages to any person or property during the

progress of the work.

— T h e Contractor agrees to save and hold harmless and to indemnify PREPA for all

expenses and costs of any nature (including attorneys' fees) incurred by PREPA arising

out of any claim made by any person for personal injuries, including death, or for

15.3. Save and Hold Harmless


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property damage, caused by Contractor, by act or omission, in the performance or non

performance of its obligations under the Contract.

15.4. Save Harmless for Operation of PREPA's Equipment

— T h e operation of PREPA's equipment by PREPA at its plant site is within the

exclusive control of PREPA. PREPA shall indemnify and save harmless the Contractor

from loss, expense or liability imposed upon the Contractor for any injury to a person,

including death resulting there from or damage to any property resulting f rom the

operation of such equipment by PREPA.

— I f the Contractor is al lowed to operate PREPA's equipment at the plant site, the

Contractor shall indemnify and save harmless PREPA from loss, expense or liability

imposed upon PREPA for any injury to a person, including death damage to any

ARTICLE 16: Independent Contractor

— T h e Contractor shall be considered as an Independent Contractor, for all material

purposes under this Contract, and all persons engaged or contracted by the Contractor

for the performance of its obligations herein, shall be considered as its employees or

agents or those of its subcontractors, and not as employees or agents of PREPA. In

consequence, the Contractor is not entitled to any fringe benefits, such as, but not

limited to: vacations, sick leave, and other.

— I f the Contractor refuses or fails to prosecute the work, or any separable part thereof,

with such dil igence as will insure its complet ion within the term specified in ARTICLE 4.

Commencement and Complet ion of Work, or any extension thereof, or does not

property resulting from the operation of such equipment by the Contractor.

ARTICLE 17: Termination

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complete the work within such terms; or incurs in negligence in the performance of its

obligations; or if he should persistently or repeatedly refuse or should fail to supply

enough properly skilled workmen or proper materials; or if he should fail to make prompt

payments to a subcontractor or for materials or labor; or persistently disregard laws,

ordinances or the instructions of the Engineer, or otherwise be guilty of a substantial

violation of any provision of the Contract, PREPA may, by written notice to the

Contractor, and without prejudice to any other right or remedy in law or in equity,

terminate the Contract and take possession of the work by whatever method it may

deem expedient. In such event, PREPA may take over the work and prosecute the

same to completion by contract or otherwise, and the Contractor and his sureties shall

be liable to PREPA for any excess cost incurred by PREPA. The expense incurred by

PREPA as herein provided, and the damage incurred through the Contractor's default

shall be certified by the Engineer.

— I f either party is adjudicated bankrupt under the Bankruptcy Laws of the United

States or if either party makes a general assignment for the benefit of creditors, the

other party may, by written notice, terminate this Contract, without prejudice to any of

such party's rights hereunder.

—Notw i ths tand ing anything to the contrary in this Contract regarding its term, PREPA

may, at any moment, terminate, cancel or accelerate its expiration, after giving the

Contractor a not less than thirty (30) consecutive days prior notice, when in PREPA's

judgment such action responds to PREPA's best interests. Provided that, in the event

the Contractor fails to comply with any of its obligations under the Contract, PREPA

may declare an immediate contract termination, cancellation or rescission, without prior

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notice to Contractor. The exercise of its right to terminate, cancel or rescind the

Contract shall not be understood as a waiver by PREPA to any other remedy it may

have under this Contract or under the law for delays or breach incurred by the

Contractor in the performance of its obligations under the Contract.

—Con t rac to r shall have the right to suspend work if PREPA fails to pay any invoice, for

any Milestone or other payments due to Contractor, in accordance with the terms and

conditions of Article 3. Prior to suspending work, Contractor shall provide written notice

demanding immediate payment of all overdue amounts within ten (10) days. If

Contractor suspends work, all deadlines and l iquidated damages accrual periods will be

extended for the period during which work is suspended. If Contractor suspends work,

PREPA must pay all amounts due Contractor and the parties must mutually agree upon

any condit ions for resumption of work, before work can resume.

— I f Contractor suspends work for more than thirty (30) consecutive days, or more than

two (2) t imes, Contractor may terminate the Contract for cause and recover all amounts

due for Contractor's performance.

ARTICLE 18: Insurance and Bonds

— R e f e r to Request for Proposal, Section 8, Page 15

ARTICLE 19: Permits and Licenses

— T h e Contractor shall obtain and maintain all the l icenses, permits, and authorizat ions

required to perform all services and tasks under this Contract, and shall send all

notices, pay all fees and related costs, and will comply and will have its subcontractors

and agents comply with all laws, ordinances, rules, and regulations applicable to the

work, in accordance with the drawings and specif ications. Should the Contractor f ind


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any discrepancy between the drawings and specifications and the permits, laws,

ordinances, rules, and regulations referred to herein, the Contractor shall proceed

immediately to notify PREPA of the discrepancy and shall not continue with the work

until PREPA issues and notifies an order informing the Contractor what changes are

necessary and when to proceed with the work as changed. If changes in the scope of

work are necessary, the Contractor shall notify the regulatory agencies involved and

obtain new licenses, permits or authorizations, or request amendment to the approved

l icenses, permits and authorizations, if necessary.

— P R E P A shall prepare the environmental assessment to comply with the Article 4B (e)

(law 416) Environmental Public Law of September 22, 2004 and will be responsible to

obtain all the necessary environmental permits and endorsements for the project, if

necessary. Copies of all the environmental permits will be provided to the Contractor.

All permits must be on site due to inspections from local and federal regulatory

agencies. All other permits will be responsibility of the Contractor. The Contractor will

be responsible to request PREPA obtain any extensions before the permit expires due

to delays. Otherwise the Contractor will assume the responsibil ity to pay any late fees

or f ines.

The Contractor and subcontractors will comply with all laws, ordinances, rules, and

regulations applicable to the work, in accordance with the drawings, specifications and

obtain permits. — —

ARTICLE 20: Minimum Wage Rates

— L a b o r e r s and other employees engaged under this Contract shall be paid not less

than the minimum wages rates prescribed by law. PREPA may withhold f rom any

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monies due to the Contractor any sum necessary to make up the full amount of wages

due under this Contract and may distribute it directly to those entitled thereto

hereunder.

ARTICLE 2 1 : Contingent Fees

— T h e Contractor guarantees that he has not employed any person to solicit or secure

this Contract upon any agreement for a commission percentage, brokerage or

contingent fee. Breach of this guarantee shall give PREPA the right to annul the

Contract or, at its discretion to deduct from the Contract price or consideration the

amount of such commission, percentage, brokerage or contingent fees. This warranty

shall not apply to commissions payable by Contractors upon Contract or sales secured

or made through bona fide established commercial or selling agencies maintained by

the Contractor for the purpose of securing business.

ARTICLE 22: Other Contracts

— P R E P A may award other contracts for addit ional work, and the Contractor shall fully

cooperate with such other Contractors, in accordance with ARTICLE 6: Other Work at

the Site, of this Contract, and carefully fit his own work to that provided under other

Contracts as may be directed by the Contracting Officer. The Contractor shall not

commit or permit any acts, which interfere with the performance of work by any other

Contractor.

ARTICLE 23: Official not to Benefit

— N o officer, employee neither agent of PREPA, nor of the Government of the

Commonweal th of Puerto Rico or Municipal Governments, shall be admitted to any

share or part of this Contract or to any benefit that may arise there from. In addit ion to


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the restrictions and limitations established under the provisions of Act of July 24, 1985,

No. 12, as amended, retired or former officers or employees of PREPA, whose work

was in any way related to the award or management of Contracts, shall in no way

benefit from any Contract with PREPA for a period of two (2) years after leaving

employment with or ceasing services to PREPA.

ARTICLE 24: Claims for Labor and Materials

— T h e Contractor shall, at his own expense, assume the defense of and save harmless

PREPA from claims for labor and materials and not suffer any mechanics or other liens

to remain outstanding against any of the property used in connection with the work; and

shall, on request, furnish satisfactory evidence that all persons who have done work or

furnished materials have been fully paid. If the Contractor fails to comply with his

obligations in this respect, PREPA may take such liens or claims and may withhold from

any monies due to the Contractor such amounts as may be necessary to satisfy and

discharge any such claims and any cost and expense incidental thereto.

ARTICLE 25: Unfair Labor Practice

— I n the event that the Contractor or any of his subcontractors or agents do not comply

with an order issued by the Puerto Rico Labor Relations Board and/or the National

Labor Relations Board upon their finding that the Contractor or any of his

subcontractors or agents have committed an unfair labor practice, no further payments

shall be made by PREPA to the Contractor after the date of the said order. In addit ion,

the Contract may be terminated by PREPA, in which case PREPA may take possession

of the materials, tools, and appl iances on the job site and finish the work by whatever

method it may deem expedient. Any declaration by the Puerto Rico Labor Relations

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Board and/or by the National Labor Relation Board that the Contractors or agents have

not complied with an order issued by the Board relating to any unfair labor practice,

shall be binding, f inal, and conclusive unless such order is reversed or set aside by a

Court of competent jurisdiction.

ARTICLE 26: Assignment

— T h i s Contract or any interest therein or any monies due or to become due there

under shall not be assigned, hypothecated or otherwise disposed of without the

previous consent in writ ing of the Contracting Officer.

ARTICLE 27: Subcontractors

— T h e Contractor shall not assign nor subcontract its rights and obligations under this

Contract, except in the event PREPA gives written authorization for such actions.

Provided that, no subcontract shall be considered for PREPA's approval, except when

the following requirements are met: (1) the Contractor delivers PREPA a copy of the

subcontract, not less than thirty (30) days prior to the effective date of the proposed

subcontract; (2) the subcontract includes, as a condit ion for its legal validity and

enforceability, a provision whereby PREPA has the right to substitute, subrogate or

assume Contractors' rights under the subcontract, in the event that PREPA declares the

Contractor in breach or default of any of the Contract terms and conditions; and (3) the

subcontract includes, as a condition for its validity and enforceabil ity, a provision

establishing for the subcontractor the obligation to comply with all Contractors'

obligations under the Contract (mirror image clause), except for such obligations, terms

and condit ions which exclusively related with works or services not included under the

subcontract.

it REV. FEB 2016 Page B-22

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ARTICLE 28: Novation

— T h e Contractor and PREPA expressly agree that no amendment or change order

which could be made to the Contract, during its term, shall be understood as a

contractual novation, unless both parties agree to it, specifically and in writ ing. The

previous provision shall be equally applicable in such other cases where PREPA gives

the Contractor a t ime extension for the compliance of any of its obligations under the

Contract or where PREPA dispenses the claim or demand of any of its credits or rights

under the Contract.

ARTICLE 29: Patents and Copyrights

— T h e Contractor, at its own expense, shall defend any suit or action brought against

PREPA based on a claim that any equipment or part thereof, copyright or un-

copyrighted composit ion, secret process, patented or un-patented invention, article, or

appl iance manufactured or used in the performance of this Contract, including their use

by PREPA, constitutes an infr ingement of any patents or copyrights of the United

States, if notified promptly in writ ing by PREPA, and given the authority, information,

and assistance for the defense of the same, and the Contractor shall pay all damages

and costs awarded therein against PREPA. If, in such suit, the equipment or any p a r X ^ f f ^ *

thereof, or the composit ion, secret process, invention, article or appliance, is held to

constitute infringement and its use is enjoined, the Contractor, at its option and

expense, shall either procure for PREPA the right to continue using the same. Also,

can replace it with non-infringing equipment, composit ion, secret process, invention,

article or appliance, modify it so it becomes non-infringing or remove it and refund the

purchase price.

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ARTICLE 30: Waivers

— N o waiver of any breach of this Contract shall be held to be a waiver of any other

subsequent breach. All remedies afforded by PREPA in this Contract shall be taken

and construed as cumulative, that is, in addition to every other remedy provided herein

or by law.

ARTICLE 3 1 : Disputes

— E x c e p t as otherwise specifically provided in this Contract, all disputes concerning

questions of fact arising under this Contract shall be decided by the Engineer, subject to

written appeal by the Contractor within thirty (30) days to the Contracting Officer. As

soon as practicable thereafter, the Contracting Officer shall inform each party hereto of

his decision regarding the dispute, which decision shall be final and conclusive upon the

parties hereto, unless such decision is chal lenged on the basis of being arbitrary,

malicious or capricious. If such challenge is made, either party may pursue its remedy

at law or equity. In the meant ime, the Contractor shall diligently proceed with the work

as directed.

ARTICLE 32: Correction of Work After Final Payment

— N e i t h e r the final certificate for payment nor any provision in the Contract documents

shall relieve the Contractor of responsibil ity for faulty materials or workmanship and,

unless otherwise specif ied, he shall remedy any defects due thereto and pay for any

damage to other work resulting there f rom, which shall appear within a period of

three (3) year after final acceptance. PREPA shall give notice of observed defects with

reasonable promptness. All questions arising under this Article shall be decided by the


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Engineer, subject to appeal by the Contractor, as provided in Article 3 1 , Disputes, of this

Contract.

ARTICLE 33: Laws to be observed

— T h e Contractor shall observe and comply with any and all Federal, Commonweal th ,

and Municipal Laws, by-laws, ordinances, and regulations in any manner affecting the

work, the equipment or the materials used in the proposed rehabilitation and/or

installation or construction, and those employed on the work or the conduct of the work,

and with all such orders and decrees as exist at present or may be enacted prior to the

complet ion of the work by bodies or courts having any jurisdiction or authority over the

work. The Contractor shall save harmless and indemnify PREPA and its

representatives officers, agents, and servants against any claim or liability arising from

or based on the violation of any such law, by-law, ordinance, regulation, order or

decree, whether by himself or his employees.

ARTICLE 34: Change in Law

— D u r i n g the term of this Contract, any change in law, including, but not limited to

changes in applicable tax law, which causes an increase in Contractor's costs when

supplying the products or services to be acquired by PREPA, shall be of Contractor's 4 / ^ > ^ ^ ~

responsibil i ty and PREPA shall not be obliged to make additional payments nor to pay

addit ional sums to the price or canon originally agreed for those products or se rv i ces .—

ARTICLE 35: Choice of Law

—This Contract shall be governed by and construed in accordance with the laws of the

Commonweal th of Puerto Rico. Also, the contracting parties expressly agree that only

the state courts of Puerto Rico will be the courts of competent and exclusive jurisdiction

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to decide over the judicial controversies that the appearing parties may have among

them regarding the terms and condit ions of this Contract.

ARTICLE 36: Separabil ity

— I f a court of competent jurisdiction declares any of the Contract provisions as null or

invalid, such holding will not affect the validity and effectiveness of the remaining

provisions of the Contract and the parties agree to comply their respective obligations

under such provisions not included by the judicial declaration.

ARTICLE 37: Warranty

— T h e Contractor warrants that all materials, parts, equipment used, and work

performed under this Contract comply in all respect with its terms and condit ions; that

they are free from any and all latent and patent defects in design, materials, and

workmanship; that they are suitable and adequate for the purposes for which they were

designed and for such other purposes, if any, as are specified in the Contract, and that

the services provided under this Contract will conform with the highest standards of care

and practice appropriate to their nature. The warranty period will begin the date on

which PREPA finally accepts the service and/or installation of the contracted product

and will continue for a period of three (3) years. The Contractor will, upon written notice

by PREPA, fully remedy, free of expense to PREPA, such defects as may develop on Jf^/^^ said services, materials, parts or equipment, provided that they have been properly

stored, installed, maintained, and operated within the specified parameters. The

Performance Bond shall cover and serve as guarantee for this warranty.

— F o r those materials, parts, equipment which prove defective or deficient during the

warranty period, the Contractor shall, at his own expense, repair or replace, transport- in,

REV. FEB 2016 Page B-26 l j

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f rom Contractor's facilities to PREPA's site, and transport-out, from PREPA's site to

Contractor's facilities, such materials, parts, and/or equipment. The Performance Bond

shall cover and serve as guarantee for the Contractor's failure, in whole or in part, to

properly perform his obligations under this Contract.

— F o r parts and equipment to be procured by Contractor f rom other suppliers, and

which will be furnished by Contractor to PREPA under this Contract, a written warranty

shall be obtained by the Contractor f rom each supplier and legally tended to PREPA

prior to the commencement of work.

ARTICLE 38: Correlation of Documents

— I n case of discrepancy or in the event of conflict among the different Contract

documents such as: Contract, Invitation to RFP, Special Condit ions, Contractor's

Technical Table of Compl iance, Contractor's System Configuration and List of

Deliverables, Technical Specif ications, Drawings and Proposal Forms, these shall take

precedence in the order given. The terms and conditions contained in the Contract

shall prevail over any conflictive terms and condit ions contained in the Contractor's

Proposal. Notwithstanding the above, Contractor's Software License Agreement shall

govern PREPA's operation and use of Contractor's proprietary Software..

ARTICLE 39: Certification of Income Tax Returns and Certification of Payments to the flA{¥^

Department of Labor and Human Resources of Puerto Rico

— P r i o r to the execution of this Contract, the Contractor will have to submit the following

documents or certification:

A. An Income Tax Return Filing Certif icate, issued by the Treasury Department of

Puerto Rico, Area of Internal Revenues, assuring that the Contractor has filed his

REV. FEB 2016 Page B-27 N^P^

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Income Tax Return for the last five (5) years. In addit ion, Contractor shall submit a

Certification of Debt issues by the Area of Internal Revenues.

B. Certif ication, issued by Department of Labor and Human Resources of Puerto Rico,

assuring that Contractor has paid to the Department of Labor and Human Resources

of Puerto Rico his employees' contribution, in accordance with the Puerto Rico

Employment Security Act (unemployment, temporary disability or sickness or social

security for chauffeurs); or is paying such contribution by an installment plan in full

compl iance with its terms.

C. Certification issued by Municipal Revenues Collection Center (MRCC), assuring that

the Firm does not owe any tax to such governmental agency. To request such

Certif ication, the Firm will use the form issued by MRCC.

D. Certif ication, issued by the child Support Administrat ion, assuring that the Firm is in

compl iance with the withholding required by law as an employer.

E. Certif ication, Merchant Registration and Exemption issued by the Treasury

Department.

— I t shall be Contractor's responsibility, also, to require all subcontracted third parties to

comply with all the previous Certif ications and agrees to notify PREPA of such

compliance within ten working days of subcontracting such third party.

— I f any of the previously required Certif ications shows a debt, and the Contractor has

requested a review or adjustment of this debt, Contractor will certify that it has made

such request at the t ime of the Contract execut ion. If the requested review or

adjustment is denied and such determination is f inal, Contractor will provide,

immediately, to PREPA a proof of payment of this debt; otherwise, Contractor accepts

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that the owed amount be offset by PREPA and retained at the origin, deducted f rom the

corresponding amount payments.

—Con t rac to r recognizes that submittal of the aforementioned certif ications and

documents is an essential condition of this Contract; and even in the case that they are

partially incorrect, there will be cause for PREPA to terminate, cancel or rescind the

Contract, and Contractor have to refund all payments received.

ARTICLE 40: Notice

— A n y notice to be given hereunder shall be in writing and will be sufficiently served

when delivered in person or properly mailed to the fol lowing addresses:

To PREPA: Puerto Rico Electric Power Authori ty PO Box 364267 San Juan, Puerto Rico 00936-4267

Attention: Faustino Gonzalez Quiles Transmission and Distribution Director

To Contractor Open Systems International, Inc. Address 4101 Arrowhead Drive, Medina, Minnesota 55340

Attention: Sergio Bajetti

Director of Sales

ARTICLE 4 1 : Discrimination

— T h e Contractor certifies that he is an employer with equal opportunity employment,

and we do not discriminate by race reason, color, religion, political ideas, sex,

nationality, age or mental or physical condit ion.

ARTICLE 42: Other Taxes y ^ K ^

— A l l unemployment, retirement, and other Social Security contributions and taxes; all

sales, use and excise, privilege, business and occupational taxes, and any other taxes

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S E C T I O N B


or fees payable by the Contractor are and shall be included as part of his prices.

ARTICLE 43: Cleaning Up

— T h e Contractor shall, f rom time to t ime, as directed by the Engineer, remove f rom

PREPA's property and from all public and private property all temporary structures no

longer required, rubbish, and waste materials resulting f rom his operations.

— U p o n completion of the work, the Contractor shall remove from the vicinity of the

work all remaining rubbish, unused materials, and other like material, belonging to him

or used under his direction during the installation of the equipment, and in the event of

his failure to do so the same may be removed by PREPA at the Contract's expense,

and his surety or sureties shall be liable therefore.

ARTICLE 44: Use of Completed Portions

— P R E P A shall have the right to take possession of and use any completed or partially

completed portions of the work, notwithstanding the fact that the t ime for completion of

the entire work may not have expired, but such taking possession and use shall not be

deemed an acceptance of the work so taken or used or any part thereof. PREPA may

require the Contractor to expedite the completion of any part of the work for provisional

use by PREPA and the Contractor shall comply with such request. If such order of

complet ion or prior use increases the cost of the work or delays the work, the Contractor

shall be entitled to such extra compensation or extension of t ime as agreed by the

parties. The Contractor shall perform any daily cleaning at the end of the work shift

applicable to Contractor's Work. The Contractor will not perform water washings, using

sleeves, without the coordination and approval of the Environmental Section Supervisor.


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ARTICLE 45: Quality Assurance

— T h e Contractor shall establish a written quality control program to satisfy all

applicable regulation and requirements specified in the procurement documents. The

program shall contain all those measures necessary to assure that all basic technical

requisites are fulfilled.

— P R E P A reserves the right to conduct audits and inspections to the facilit ies,

activities, and/or documents when estimated necessary and without previous

notification in order to assure that the quality control program is adequate and is being

properly implemented. The Contractor shall allow PREPA access to its facilit ies and

documents, so that PREPA, through audits and inspections can verify the quality of the

purchased products or services provided by the Contractor. In every case in which the

materials or services to be furnished to PREPA are subcontracted partially or totally by

the Contractor, the Contractor shall request the subcontractor to accept and comply with

all the requirements of this Quality Assurance Article.

—Con t rac to r and subcontractors shall be included in PREPA's Material Management

Division Suppliers Register as companies properly qualif ied and evaluated by PREPA's

Quality Assurance Department to perform this type of work.

ARTICLE 46: Safety Provisions

1. The Contractor shall comply with all applicable parts of this Safety Provisions

2. The Contractor shall have an Occupational Safety and Health Program. A copy of

this Program will be delivered to the Safety Division at PREPA for evaluation,

a. The Program shall comply with the following min imum requirements of a health

according to the scope of the project.


S E C T I O N B


and safety program, according with the scope of the project including, but not

limited to:

i. Personal Protective Equipment (29 CFR 1926 Subpart E)

ii. Hazard Communicat ion (29 CFR 1910.1200)

iii. Electrical work (29 CFR 1926 Subpart K)

iv. Tools, Hand and Powered (1926 Subpart I)

v. Any other regulation applicable regulation.

b. It shall include an accident or incident investigation procedure. This procedure

will always include the preparation of a report, which will be submitted within five

days after accident to the Safety Division of PREPA.

3. Before commencement of work, the Contractor shall take part in a coordination

meeting with a Safety Officer and the project manager on PREPA's behalf. During

this meeting the areas to be worked on will be toured, the site-specific work plan will

be discussed and reviewed, and amendments to it could be required.

4 . The Contractor shall submit, prior to commencement of the work, for evaluation by

the Safety Division the fol lowing:

a. A Site Specific Work Plan including: the scope of work, description of the

activities to be done, special safety and health considerat ions to be addressed

before commencement of the project, safety procedures to be applied and used

during the project. It shall also include any other regulation or guidelines related

to safety and health that could be applicable to the scope of work, contingency

procedures that include how to proceed in an emergency situation, such as fire or

chemical spill, among others.


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b. Copy of the Safety Data Sheets (SDS) of all chemical products to be used during

the project, for evaluation and approval by the Occupational Safety and Health

Office at PREPA (Hazard Communicat ion Section). This includes solvents,

degreasers, lubricants, etc.

5. Each Contractor/Subcontractor shall adhere to a 100% drug /alcohol free work zone.

6. The Contractor shall be responsible for maintaining good housekeeping in the work,

rest, lunch and toilet areas and under reasonably sanitary condit ions.

7. Services including activities inside buildings occupied by working personnel, that

could create a hazard to their safety or health, will be offered after PREPA'S working

hours. The exception will be if the contractor could take all the necessary

precautions to protect PREPA's employees and the public f rom any possible hazard

caused by the work. The Contractor will take all steps necessary to assure the area

will be free of nuisance odors or vapors before PREPA's personnel is to reoccupy.

All these will be done in coordination with the local supervisor of PREPA.

8. The Contractor shall assure that all wastes generated by Contractor as a part of the

Work are removed and properly disposed of, in accordance with all applicable laws

and regulations, at the end of every work shift and after the completion of the

project.

9. All products, that requires and SDS, expected to be used in the project shall be

classified as Approved or Conditionally Approved by PREPA's Hazard

Communicat ion Section. y / f a ^ ^ ^

10. The Contractor shall take all reasonable precautions for the safety of, and shall

provide all reasonable protection to prevent damage, injury or loss to all employees


S E C T I O N B


on the work site and all other persons who may be affected. This shall include

property, material and equipment on or off the site, under the care, custody or

control of the Contractor or any of the subcontractors.

1 1 . The Contractor shall comply with all applicable laws, ordinances, rules, regulations

and lawful orders of any public authority having jurisdiction for the safety of persons

or property or to protect them from damage, injury or loss. Shall erect and maintain,

as required by existing condit ions and progress of the work, all reasonable

safeguards for safety and protection, including posting danger signs and other

warnings against hazards, promulgating safety regulations and notifying owners and

users of adjacent utilities.

12. The Contractor shall designate an employee as their safety officer for the project.

The duties of the safety officer could be in addition to his/her normal duties. The

safety officer shall be in charge of the prevention of accidents and the

implementation of the Safety and Health Program Plan and the Site-specific Plan in

coordination with PREPA's Safety Officer, Project Manager and Resident Engineer.

13. Compl iance with all safety provisions by subcontractors shall be the responsibility of

the Contractor.

14. Contractor agrees that it shall perform all work in compl iance with federal, state and

local occupational safety and health regulations, as described in the Site Specific

Work Plan.

15. Contractor will not cause or permit any hazardous chemical or product containing a

hazardous chemical to be at, or in the vicinity of, any place where any employee,

agent, or contractor of Puerto Rico Electric Power Authority, or any employee of any


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such agent or Contractor, may be at risk or exposed to hazard as a result thereof

during normal use or any foreseeable emergency.

16. Contractor will defend, indemnify and hold harmless, Puerto Rico Electric Power

Authority, its employees, agents or assignees for any and all direct liabilities and

expenses arising out of Contractor noncompliance with these clauses, if applicable

to Contractor and Contractor's Work, irrespective of any other terms of this

agreement.

ARTICLE 47: Environmental Liabilities

— T h e Contractor shall dispose of all waste generated by Contractor in the project. The

use of PREPA's waste disposal equipment is not permitted.

— T h e Contractor agree to indemnify PREPA for all expenses and cost of any nature

arising out of any claim due to an environmental violation, caused by the agents,

employees, subcontractors or assigns during the performance or nonperformance of its

obligations under the contract. The Contractor shall coordinate with the Environmental

Protection and Quality Assurance Division any work to be done in order to avoid

environmental violations.

— T h e Contractor and subcontractor must comply with all the applicable term and

condit ions established on the approvals of submitted plans, permits an endorsement

f rom local, state, and federal regulatory agencies. If any finding of discrepancy of the

ment ioned matter, the Contractor shall proceed immediately to notify PREPA and shall

not continue with the work until PREPA issues and notifies an order informing the

Contractor what changes are necessary and when to proceed with the work as


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changed. All applicable permits must be on site due to inspections from local and

federal regulatory agencies.

ARTICLE 48: Code of Ethics

—Con t rac to r agrees to comply with the provisions of Act of June 18, 2002, No. 84, as

amended which Establishes a Code of Ethics for the Contractors, Suppliers, and

Economic Incentive Applicants of the Executive Agencies of the Commonweal th of

Puerto Rico.

ARTICLE 49: Sworn Statement

— P r e v i o u s to the signing of this Contract, the Contractor will have to submit a sworn

statement that neither Contractor nor any of its partners have been convicted, nor have

they plead guilty of any felony or misdemeanor involving fraud, misuse or illegal

appropriation of public funds as enumerated in Article 3 of Act 428 -2004, as amended.-

ARTICLE 50: Transfer of Funds

— I f Seller assigns the amount, due or payable, to which he is entitled for services

rendered or goods provided during the term of this Contract, Seller shall notify such

assignment of funds to PREPA in accordance with Act 21-2012, as amended. Said

notice shall clearly indicate the rights granted, including a copy of the contract under

which the assignment of funds is being made, the exact amount of the funds to be

assigned, and specific identification of the assignee (full name of the person oxy^)^^' company) , address and any other contact information.

— S e l l e r acknowledges and agrees that PREPA may deduct any amount, due or

payable under this Contract that Seller owes; PREPA may retain any said amount if

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Seller fails to fulfill its obligations and responsibilit ies under this Contract, or a claim

arises for warranty or defects regarding the services rendered or goods provided under

this Contract. Seller also acknowledges and agrees that PREPA's payment obligation

under any assignment of funds will cease upon payment of the outstanding amounts

under this Contract. PREPA shall not be required to make payments or transfer any

funds for an amount that exceeds the payment to which Seller is entitled to under this

Contract.

—Se l l e r ' s aforementioned notice of assignment of funds shall be accompanied by a

cashier's check or money order payment of two hundred dollars ($200), payable to

"Puerto Rico Electric Power Authority", for administrative costs for processing said

assignment.

ARTICLE 5 1 : Income Tax Withholding

Bidder shall include in the price all foreseen expenses. To avoid unnecessary

deduct ions for invoicing purposes suppliers in addition to establish the lump sum will

include a breakdown by concept of services, materials, etc. in order to determine the

withholding of the special contribution for 1.5% under Act. 48 - 2013, as amended the

withholding of Article 5 1 , or any other applicable law. It is the Contractor 's sole

responsibil i ty to render it to PREPA, since its invoice will be subject to applicable

withholding by law and Puerto Rico's Internal Revenue Code.

PREPA will deduct and withhold at source to the Contractor the equivalent of seven

per cent (7%) from payment for services rendered under this Contract, in compl iance

with the Law 1-2011, section 1062.03, as amended. Notwithstanding, the withholding to

be done by PREPA as herein stated could be increased to: twenty per cent (20%) in

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the event that the Contractor is a non-resident individual, which is a U.S. cit izen, as

provided by the 1994 Puerto Rico Internal Revenue Code, section 1062.08; or twenty-

nine per cent (29%) in the event that the Contractor is a non-resident and non U.S.

citizen individual; or a foreign corporation or partnership which is not dedicated to

industry or business in Puerto Rico, as provided by the New Puerto Rico Internal

Revenue Code, sections 1062.08

If a Release Letter has been issued to the Contractor by the Treasury Department,

the Contractor shall be responsible to submit a copy of said Release Letter to PREPA

for every calendar year; otherwise, payments under the Contract shall remain subject to

withholding at source. All invoices shall be segregated by concepts (services,

materials, equipment, etc.), to identify the amounts subject to withholding and avoid

undue deductions.

ARTICLE 52.Risk of Loss

52.1 Contractor will deliver to PREPA, within ten (10) business days prior to delivery

of each Project Equipment, a written notice of delivery of Project Equipment

pursuant to which Contractor delivers such Project Equipment to PREPA, which

will be accepted by PREPA (the "Notice of Delivery of Project Equipment").

PREPA will acknowledge and accept each delivery of the Project Equipment 's,

after a physical inspection of the materials or equipment by authorized

representatives of the Parties to confirm that there is no visible physical damage.

A form of the Notice of Delivery of Project Equipment is attached as Exhibit C,

attached hereto.


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52.2 PREPA shall be responsible for providing a safe job site for the storage of the

equipment and materials and for the safety of equipment and materials within the

care, custody, or control of PREPA, and Contractor retains the ownership of the

equipment 's. PREPA shall be responsible in case of loss or damage to these

materials under its custody. This responsibil ity does not include manufacture or

non-apparent defects of the equipment that will be found during commissioning

tests, in which Contractor personnel will be present. Contractor has the

responsibil ity to claim any defect warranty to the manufacturer of the equipment.

PREPA will accept the equipment after the commissioning tests are performed

and approved by both parties.

52.3 The risk of loss or damage due to fault of Contractor, shall be and remain with

Contractor until PREPA'S final acceptance of the complete project. Af ter any

such loss or damage, Contractor shall with due dil igence and dispatch replace

the Work lost or damaged at its sole expense.

ARTICLE 53.Confidential i ty

53.1 The Parties shall not release any information concerning this engagement or any

part thereof in any form, including advert ising, news releases, or professional

articles, without written permission of the other Party which will not be ^ Q ^ ^

unreasonably withheld.

53.2 T h e Par t ies a g r e e tha t all i n fo rmat ion p rov ided by e a c h Par ty is of a

con f iden t ia l na tu re a n d it wi l l t ake all c o m m e r c i a l l y reasonab le m e a s u r e s to

e n s u r e tha t s u c h in fo rmat ion is not d i sc losed or d is t r ibu ted b y its

e m p l o y e e s or a g e n t s in v io la t ion of the t e r m s of th is Con t rac t

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53.3 P R E P A shal l h a v e the r ight, sub jec t to any so f twa re l icense rest r ic t ions, to

rep roduce a n y a n d all d o c u m e n t s rece ived f r o m Con t rac to r u n d e r t he

Cont rac t for P R E P A ' s use in connec t i on w i th t he W o r k , no tw i ths tand ing

any not ice to t he con t ra ry appea r i ng on the d o c u m e n t s .

53 .4 T h e Conf iden t ia l In fo rmat ion shal l be used by the Par t ies so le ly fo r t he

d e v e l o p m e n t o f t h e Pro ject . T h e Par t ies a g r e e to : (i) p ro tec t t h e

conf ident ia l i n fo rma t ion in a reasonab le a n d app rop r i a te m a n n e r or in

a c c o r d a n c e w i th app l i cab le p ro fess iona l s t a n d a r d s ; (ii) use con f iden t ia l

in format ion on l y to pe r fo rm its ob l iga t ions unde r th is Cont rac t ; a n d (iii)

r ep roduce con f iden t ia l in fo rmat ion on ly as requ i red to pe r f o rm its

ob l iga t ions unde r th is Cont rac t , under the s a m e conf ident ia l i ty cond i t i ons

as s ta ted he re in .

53.5 For pu rposes o f th is Con t rac t , Con f iden t ia l In fo rmat ion shal l inc lude, bu t

not be l imi ted to : all i n fo rmat ion p rov ided to t he Rec ip ien t Par ty b y t he

D isc los ing Par ty , regard ing its faci l i t ies or ope ra t i ons , and any a n d all

in format ion g a t h e r e d or d e v e l o p e d by t he Par t ies regard ing the s a m e ,

necessa ry a n d re la ted to the s c o p e unde r th is Con t rac t . Con f iden t ia l

In fo rmat ion sha l l i nc lude , but not be l imi ted to : wr i t ten in fo rmat ion a n d

in fo rmat ion w h i c h has been t rans fe r red ora l ly , v isua l ly , e lec t ron ica l ly , or by

any o ther m e a n s , a n d shal l be e x t e n d e d to a n y Conf iden t ia l I n fo rmat ion

de l i ve red by a n y af f i l ia te of the Par t ies . In tha t s e n s e aff i l iate m e a n s in

S E C T I O N B


respec t o f a n y Par ty , a n y ent i ty w h i c h , d i rect ly or indirect ly, con t ro ls , is

cont ro l led by, o r is unde r c o m m o n cont ro l w i th , such Par ty , w h e r e "con t ro l "

m e a n s the abi l i ty to e lec t a major i ty of d i rec to rs to t he boa rd of an en t i t y or

o the rw ise to d i rec t t he m a n a g e m e n t of the ent i ty t h rough s h a r e h o l d i n g ,

con t rac t or o t he rw i se .

53.6 Conf iden t ia l In fo rmat ion shal l not inc lude a n y in fo rmat ion that : (a) w a s in

the publ ic d o m a i n at the t ime of d i sc losure , (b) w a s d isc losed to a th i rd

Par ty w i thou t rest r ic t ion; (c) a Par ty is ob l i ga ted to d isc losed unde r

app l i cab le law a n d regu la t ions , cou r t o rder , s u b p o e n a or g o v e r n m e n t a l

d i rec t ives , in w h i c h c a s e the Par ty ob l i ga ted to D isc lose such Con f iden t ia l

In fo rmat ion wi l l p rov ide the o ther Par ty a r easonab le oppor tun i t y to o p p o s e

to such d i sc losu re ; a n d (d) w h i c h is lawfu l ly in the possess ion o f the

Rec ip ien t Par ty pr ior to d i sc losu re by t he D isc los ing Par ty a n d w a s not

acqu i red by t he Rec ip ien t Par ty or its e m p l o y e e s d i rec t ly or ind i rect ly f r o m

the o ther Par ty or a n y o n e ac t ing d i rec t ly or ind i rec t ly for or on beha l f o f t he

Par ty . T h e Rec ip ien t Par ty ag rees to exped i t i ous l y not i fy and subm i t to t he

o the r Par ty a c o p y o f a n y record reques t , cour t o rde r or s u b p o e n a a n d to

the ex ten t poss ib le p rov ide any ass i s tance to the Par ty (in the f o r m of

d o c u m e n t s ) rega rd ing the s u b m i s s i o n of s u c h in fo rmat ion .

53.7 Trade secret and critical cyber asset information shall remain confidential for so

long as such item remains a trade secret or critical cyber information under

applicable laws.


S E C T I O N B


ARTICLE 54. Right to Use and Adapt

There shall be no restrictions on PREPA's rights to use, modify, expand, add to, or in

any way adapt the Work or any portion of it to best suit PREPA's needs as determined

by PREPA at any t ime fol lowing the end of the warranty period. If PREPA elects to

make changes to the work during the warranty period with prior written notice to the

Contractor before the work execut ion. The modification, expansion or adaptation of the

work part of this Contract must respect the conditions of the l icenses provided with the

work. The warranty for such work shall be null and void for any defects arising from

PREPA's changes to the work.

— PREPA's rights include adding hardware or software from suppliers whether or not

they were previously involved in the work as long as they are within the provided

l icenses, providing those suppliers with documents of the work as needed for proper

interfacing of the additions to the work, modifying the work to permit the addit ions, and

continuing to use the work and all portions of it, whether modif ied or not, with the

addit ions. PREPA has the further right to use the work, with or without addit ions, for

purposes not envisioned at the execution of the Contract and not described therein.

Where Contractor's Proprietary l icenses for software, f i rmware or other elements of the

work are required they shall be furnished to PREPA by Contractor on a paid-up and

perpetual basis, nonexclusive and non-transferable. However, PREPA may transfer the

l icense to affiliate(s) upon written notice to Contractor. They shall be in accord with the

requirements of the Specif ication and shall allow for operation of software on back-up

processors. These l icenses shall survive adaptation of the work.

ARTICLE 55. Licenses


S E C T I O N B


ARTICLE 56. Intellectual Property Ownership

All of Contractor's products and services are standard and preexisting products,

technics or methods and no intellectual property rights will be transferred to PREPA.

PREPA's use of the software shall be pursuant to owner's Software License Agreement,

include in this Contract as Appendix B. The terms and conditions of the Software

License Agreement only govern the use of the software and does not apply nor

amended the provisions of the Contract.

ARTICLE 57: Complete Contract

— T h i s document, together with all attachments referenced herein, constitutes the

complete agreement between the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Contract this 20 day

of M Y of the year 2016, in San Juan, Puerto Rico

Sergio Bajetti Director of Sales Open Systems International, Inc.

660-43-3747 TIN 41-1722211 Social Security Number Tax Identification Number
