HomeMy WebLinkAboutAgenda 06-18-19 Item 8-p - Approval of Contract with Sonoco Recycling, LLC for Recycling Processing
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 18, 2019
Action Agenda
Item No. 8-p
SUBJECT: Approval of Contract with Sonoco Recycling, LLC for Recycling Processing
DEPARTMENT: Solid Waste Management
ATTACHMENT(S):
Draft Contract
INFORMATION CONTACT:
Robert Williams, 919-918-4904
PURPOSE: To approve and authorize the County Manager to sign a two year contract with Sonoco
Recycling, LLC, for the Processing, Marketing and Sale of Recyclable Material.
BACKGROUND: Traditionally, Orange County has had recycling processed by a recycling
processor at fluctuating rates for both the processing cost and the resulting commodity value. In
addition, the commodity value was determined by the composition of material delivered by all
entities to the processors’ facilities. With the recent change in recycling markets, the cost has
escalated and the offsetting value of the commodities has declined. Seeking to stabilize costs,
Orange County issued a Request for Proposals on March 6, 2019 for a Recycling Processor.
Three firms responded to the request and after review and a request for each respondent to
provide their best and final offer, Sonoco Recycling, LLC is recommended as the Recycling
Processor. The contract provides for the processing, marketing and sale of Recyclable Material
at their Material Recovery Facility (MRF) located in Raleigh, NC. The contract establishes a
processing cost not subject to huge fluctuations. In addition, the contract uses the composition
of material delivered by Orange County to the processor as the basis for establishing the
commodity value. This allows Orange County to receive a fair value for its material and not be
part of a facility composite number. A draft contract is attached. Final terms, including certain
pricing components, are still under negotiation. The maximum amount of the contract is set
forth and will not be modified.
FINANCIAL IMPACT: Because of the downward trend in the commodity markets, costs to
process and market recycling material has increased significantly. The estimated cost of the
processing contract for two years is $1,600,000. However, there is an estimated cost savings of
$176,000 as a result of Orange County staff backhauling residual material for disposal.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to
this item:
• GOAL: ESTABLISH SUSTAINABLE AND EQUITABLE LAND-USE AND
ENVIRONMENTAL POLICIES
The fair treatment and meaningful involvement of people of all races, cultures, incomes and
educational levels with respect to the development and enforcement of environmental laws,
regulations, policies, and decisions. Fair treatment means that no group of people should
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bear a disproportionate share of the negative environmental consequences resulting from
industrial, governmental and commercial operations or policies.
Orange County seeks to create, preserve, and protect a natural environment that includes clean
water, clean air, wildlife, important natural lands, and sustainable energy for present and future
generations.
RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the
Manager to sign a Contract with Sonoco Recycling, LLC for the processing of recycling, after
review and approval by staff and the County Attorney, in an amount not to exceed $1,600,000
for the initial two year term and to sign future renewals and amendments.
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[Departmental Use Only]
TITLE
FY
NORTH CAROLINA
SERVICES AGREEMENT OVER $90,000.00
RFP/RFQ - SONOCO
ORANGE COUNTY
This Services Agreement (hereinafter “Agreement”), made and entered into this day
of , 2019, (“Effective Date”) by and between Orange County, North Carolina a political
subdivision of the State of North Carolina (hereinafter, the "County") and Sonoco Recycling,
LLC, (hereinafter, the "Provider").
WITNESSETH:
That the County and Provider, for the consideration herein named, do hereby agree as
follows:
1. Services
a. Scope of Work.
i) This Services Agreement (“Agreement”) is for professional services to be
rendered by Provider to County with respect to (insert type of project): Processing
Recycling.
ii) By executing this Agreement, the Provider represents and agrees that Provider is
qualified to perform and fully capable of performing and providing the services
required or necessary under this Agreement in a fully competent, professional and
timely manner.
iii) Time is of the essence with respect to this Agreement.
iv) The services to be performed under this Agreement consist of Basic Services, as
described and designated in Section 3 hereof. Compensation to the Provider for
Basic Services under this Agreement shall be as set forth herein.
2. Responsibilities of the Provider
a. Services to be provided. The Provider shall provide the County with all services
required in Section 3 to satisfactorily complete the Project within the time limitations set
forth herein and in accordance with the highest professional standards.
b. Standard of Care.
i) The Provider shall exercise reasonable care and diligence in performing services
under this Agreement in accordance with the highest generally accepted standards
of this type of Provider practice throughout the United States and in accordance
with applicable federal, state and local laws and regulations applicable to the
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performance of these services. Provider is solely responsible for the professional
quality, accuracy and timely completion and/or submission of all work related to
the Basic Services.
ii) Provider shall be responsible for all errors or omissions of its agents, contractors,
employees, or assigns in the performance of the Agreement. Provider shall
correct any and all errors, omissions, discrepancies, ambiguities, mistakes or
conflicts at no additional cost to the County.
iii) The Provider shall not, except as otherwise provided for in this Agreement,
subcontract the performance of any work under this Agreement without prior
written permission of the County. No permission for subcontracting shall create,
between the County and the subcontractor, any contract or any other relationship.
iv) Provider is an independent contractor of County. Any and all employees of the
Provider engaged by the Provider in the performance of any work or services
required of the Provider under this Agreement, shall be considered employees or
agents of the Provider only and not of the County, and any and all claims that may
or might arise under any workers compensation or other law or contract on behalf
of said employees while so engaged shall be the sole obligation and responsibility
of the Provider.
v) If activities related to the performance of this Agreement require specific licenses,
certifications, or related credentials Provider represents that it and/or its
employees, agents and subcontractors engaged in such activities possess such
licenses, certifications, or credentials and that such licenses certifications, or
credentials are current, active, and not in a state of suspension or revocation.
3. Basic Services
a. Basic Services.
i) The Provider shall perform as Basic Services the work and services described
herein and as specified in the County’s Request for Proposals or Request for
Qualifications (the “RFP”) “RFP Number 5259 for “Recycling Processor” issued
March 6, 2019, and the Provider’s proposal, which are fully incorporated and
integrated herein by reference together with Attachments A (designate all
attachments). In the event a term or condition in any document or attachment
conflicts with a term or condition of this Agreement the term or condition in this
Agreement shall control. Should such conflict arise the priority of documents shall
be as follows: This Agreement, the County’s RFP together with attachments,
Attachment A to Provider’s Proposal, Provider’s Proposal together with remaining
attachments.
ii) The Basic Services will be performed by the Provider in accordance with the
following schedule: (Insert task list and milestone dates)
Task Milestone Date
1. Process Recycling As set Forth in RFP and Attachments
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2.
3.
4.
5.
6.
7.
8.
9.
10.
iii) Should County reasonably determine that Provider has not met the Milestone
Dates established in Section 3(a)(ii), County shall notify Provider of the failure to
meet the Milestone Date. The County, at its discretion may provide the Provider
seven (7) days to cure the breach. County may withhold the accompanying
payment without penalty until such time as Provider cures the breach. In the
alternative, upon Provider’s failure to meet any Milestone Date the County may
modify the Milestone Date schedule. Should Provider or its representatives fail to
cure the breach within seven (7) days , or fail to reasonably agree to such modified
schedule, County may immediately terminate this Agreement in writing, without
penalty or incurring further obligation to Provider. This section shall not be
interpreted to limit the definition of breach to the failure to meet Milestone Dates.
4. Duration of Services
a. Term. The term of this Agreement shall be from July 1, 2019 to June 30, 2021. This
Agreement may be renewed for four (4) additional one (1) year terms upon mutual
written agreement of both parties. Notice of intent to not renew must be given no less
than ninety (90) days prior to the end of each term.
b. Scheduling of Services
i) The Provider shall schedule and perform its activities in a timely manner so as to
meet the Milestone Dates listed in Section 3.
ii) Should the County determine that the Provider is behind schedule, it may require
the Provider to expedite and accelerate its efforts, including providing additional
resources and working overtime, as necessary, to perform its services in
accordance with the approved project schedule at no additional cost to the
County.
iii) The Commencement Date for the Provider's Basic Services shall be July 1, 2019.
5. Compensation
a. Compensation for Basic Services. Compensation for Basic Services shall include all
compensation due the Provider from the County for all services under this Agreement.
The maximum amount payable for Basic Services is to be calculated as set forth on
Attachment A, not to exceed, over the initial two year term, One Million Six Hundred
Thousand Dollars ($1,600,000). In the event the amount stated on an invoice is disputed
by the County, the County may withhold payment of all or a portion of the amount stated
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on an invoice until the parties resolve the dispute. Payment for Basic Services shall
become due and payable in direct proportion to satisfactory services performed and work
accomplished. Payments will be made as percentages of the whole as Project milestones
as set out in Section 3(a)(ii) are achieved. (For example, if there are 10 Project Tasks
with Milestone Dates then Provider may invoice for the first 10% of the whole upon
County’s acknowledgement of the satisfactory completion of Task one. Upon the
County’s acknowledgement that the second Task has been satisfactorily completed
Provider may invoice for the next 10% of the whole.)
b. Additional Services. County shall not be responsible for costs related to any services in
addition to the Basic Services performed by Provider unless County requests such
additional services in writing and such additional services are evidenced by a written
amendment to this Agreement.
6. Responsibilities of the County
a. Cooperation and Coordination. The County has designated (Evan Brown) to act as the
County's representative with respect to the Project and shall have the authority to render
decisions within guidelines established by the County Manager and/or the County Board
of Commissioners and shall be available during working hours as often as may be
reasonably required to render decisions and to furnish information.
7. Insurance
a. General Requirements. Provider shall obtain, at its sole expense, Commercial General
Liability Insurance, Automobile Insurance, Workers’ Compensation Insurance, and any
additional insurance as may be required by County’s Risk Manager as such insurance
requirements are described in the Orange County Risk Transfer Policy and Orange
County Minimum Insurance Coverage Requirements (each document is incorporated
herein by reference and may be viewed at
http://www.orangecountync.gov/departments/purchasing_division/contracts.php.) If
County’s Risk Manager determines additional insurance coverage is required such
additional insurance shall consist of (if no additional insurance required mark
N/A as being not applicable). Provider shall not commence work until such insurance is
in effect and certification thereof has been received by the County's Risk Manager.
8. Indemnity
a. Indemnity. The Provider agrees, without limitation, to defend, indemnify and hold
harmless the County from all loss, liability, claims or expense, including attorney's fees,
arising out of or related to the Project and arising from property damage or bodily injury
including death to any person or persons caused in whole or in part by the negligence or
misconduct of the Provider except to the extent same are caused by the negligence or
willful misconduct of the County. It is the intent of this provision to require the Provider
to indemnify the County to the fullest extent permitted under North Carolina law.
9. Amendments to the Agreement
a. Changes in Basic Services. Changes in the Basic Services and entitlement to additional
compensation or a change in duration of this Agreement shall be made by a written
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Amendment to this Agreement executed by the County and the Provider. The Provider
shall proceed to perform the Services required by the Amendment only after receiving a
fully executed Amendment from the County.
10. Termination
a. Termination for Convenience of the County. This Agreement may be terminated without
cause by the County and for its convenience upon seven (7) days prior written notice to
the Provider.
b. Other Termination. The Provider may terminate this Agreement based upon the County's
material breach of this Agreement; provided, the County has not taken all reasonable
actions to remedy the breach. The Provider shall give the County ninety (90) days' prior
written notice of its intent to terminate this Agreement for cause.
c. Compensation After Termination.
i) In the event of termination, the Provider shall be paid that portion of the fees and
expenses that it has earned to the date of termination, less any costs or expenses
incurred or anticipated to be incurred by the County due to errors or omissions of
the Provider.
ii) Should this Agreement be terminated, the Provider shall deliver to the County
within seven (7) days, at no additional cost, all deliverables including any
electronic data or files relating to the Project.
d. Waiver. The payment of any sums by the County under this Agreement or the failure of
the County to require compliance by the Provider with any provisions of this Agreement
or the waiver by the County of any breach of this Agreement shall not constitute a
waiver of any claim for damages by the County for any breach of this Agreement or a
waiver of any other required compliance with this Agreement.
e. Suspension. County may suspend the Basic Services and this Agreement at any time for
County’s convenience and without penalty to County upon three (3) days’ notice to
Provider. Upon any suspension by County, Provider shall discontinue the Basic
Services and shall not resume the Basic Services until notified to proceed by County.
f. Force Majeure Event. If the performance by either Party of its obligations under this
Agreement is made impossible or largely impossible due to strike, fire, riot, war, weather
conditions, Act of God, or any other cause beyond the reasonable control of such Party
(a "Force Majeure Event"), the obligations of the Party so affected shall be suspended
until such time as the affected Party is able, using its good faith efforts, to cure or
remedy the consequences resulting from such Force Majeure Event and/or pursue
alternative means to fulfill its obligations under this Agreement. Such period of
suspension shall not in any way invalidate this Agreement. Economic hardship shall not
be considered a Force Majeure Event. Each Party agrees to provide immediate written
notice of a Force Majeure Event affecting its performance under this Agreement. Either
Party has the right to terminate this Agreement if a Force Majeure Event suspends
performance of Basic Services for a period of ninety (90) days or more.
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11. Additional Provisions
a. Limitation and Assignment. The County and the Provider each bind themselves, their
successors, assigns and legal representatives to the terms of this Agreement. Neither the
County nor the Provider shall assign or transfer its interest in this Agreement without the
written consent of the other.
b. Governing Law. This Agreement and the duties, responsibilities, obligations and rights
of respective parties hereunder shall be governed by the laws of the State of North
Carolina.
c. Compliance with Laws. Provider shall at all times remain in compliance with all
applicable local, state, and federal laws, rules, and regulations including but not limited
to all state and federal anti-discrimination laws, policies, rules, and regulations and the
Orange County Non-Discrimination Policy and Orange County Living Wage Policy
(each policy is incorporated herein by reference and may be viewed at
http://www.orangecountync.gov/departments/purchasing_division/contracts.php.) Any
violation of this requirement is a breach of this Agreement and County may immediately
terminate this Agreement without further obligation on the part of the County. This
paragraph is not intended to limit and does not limit the definition of breach to
discrimination. By executing this Agreement Provider affirms that Provider and any
subcontractors of Provider are and shall remain in compliance with Article 2 of Chapter
64 of the North Carolina General Statutes. By executing this Agreement Provider
certifies that Provider has not been identified, and has not utilized the services of any
agent or subcontractor identified, on the list created by the State Treasurer pursuant to
G.S. 147-86.58. By executing this Agreement Provider certifies that Provider has not
been identified, and has not utilized the services of any agent or subcontractor identified,
on the list created by the State Treasurer pursuant to G.S. 147-86.81.
d. Dispute Resolution. Any and all suits or actions to enforce, interpret or seek damages
with respect to any provision of, or the performance or non-performance of, this
Agreement shall be brought in the General Court of Justice of North Carolina sitting in
Orange County, North Carolina. It is agreed by the parties that no other court shall have
jurisdiction or venue with respect to such suits or actions. Binding arbitration may not
be initiated by either Party, however, the Parties may agree to nonbinding mediation of
any dispute prior to the bringing of a suit or action.
e. Entire Agreement. This Agreement, together with the RFP and its attachments and the
Proposal and its attachments, represents the entire and integrated agreement between the
County and the Provider and supersedes all prior negotiations, representations or
agreements, either written or oral. This Agreement may be amended only by written
instrument signed by both parties. Modifications may be evidenced by facsimile
signatures.
f. Severability. If any provision of this Agreement is held as a matter of law to be
unenforceable, the remainder of this Agreement shall be valid and binding upon the
Parties.
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g. Ownership of Work Product. Should Provider’s performance of this Agreement generate
documents, items or things that are specific to this Project such documents, items or
things shall become the property of the County and may be used on any other project
without additional compensation to the Provider. The use of the documents, items or
things by the County or by any person or entity for any purpose other than the Project as
set forth in this Agreement shall be at the full risk of the County.
h. Non-Appropriation. Provider acknowledges that County is a governmental entity, and
the validity of this Agreement is based upon the availability of public funding under the
authority of its statutory mandate.
In the event that public funds are unavailable and not appropriated for the performance of
County’s obligations under this Agreement, then this Agreement shall automatically
expire without penalty to County immediately upon written notice to Provider of the
unavailability and non-appropriation of public funds. It is expressly agreed that County
shall not activate this non-appropriation provision for its convenience or to circumvent
the requirements of this Agreement, but only as an emergency fiscal measure during a
substantial fiscal crisis.
In the event of a change in the County’s statutory authority, mandate and/or mandated
functions, by state and/or federal legislative or regulatory action, which adversely affects
County’s authority to continue its obligations under this Agreement, then this Agreement
shall automatically terminate without penalty to County upon written notice to Provider
of such limitation or change in County’s legal authority.
i. Signatures. This Agreement together with any amendments or modifications may be
executed electronically. All electronic signatures affixed hereto evidence the consent of
the Parties to utilize electronic signatures and the intent of the Parties to comply with
Article 11A and Article 40 of North Carolina General Statute Chapter 66.
j. Notices. Any notice required by this Agreement shall be in writing and delivered by
certified or registered mail, return receipt requested to the following:
Orange County Provider’s Name & Address
Attention: Solid Waste Director Sonoco Recycling, LLC
P.O. Box 8181 One North Second St.
Hillsborough, NC 27278 Hartville, SC
IN WITNESS WHEREOF, the Parties, by and through their authorized agents, have hereunder
set their hands and seal, all as of the day and year first above written.
ORANGE COUNTY: PROVIDER:
By: _________________________________
County Manager
By: __________________________________
Mike Pope, President and General Mgr.
Printed Name and Title
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Attachment A
1. Composition Clarification:
a. Provider will use the data from the Orange County Solid Waste recycling
composition study conducted by Kessler Consulting in April and May of 2019 (the
“Kessler Study”) to establish the composition of Orange County recycling for
calculating the revenue share, contamination percentage and processing fee the
first 90 days of the contract. Provider, at its sole cost and expense, will, during the
month of September 2019, conduct a composition study of Orange County recycling
material delivered to Provider and compare the resulting composition to the Kessler
Study. Both parties agree to review the results by 10-31-19, to determine the
composition to calculate the AMV through June 30th, 2020. If the parties cannot
agree on a composition moving forward, an average of the composition percentages
from each study shall be used to determine the composition to be used for
calculating the revenue share, contamination percentage and processing fee for
October 2019 through June 2019.
The methodology of auditing shall be objective and must be approved by the County. Such
approval shall not be unreasonably withheld.
b. Provider, at their sole cost and expense, will conduct an audit annually during April
or May of each year to establish the composition data that will be used for purposes
of calculating the processing fee, revenue share and contamination percentage for
the following contract year. The methodology of auditing shall be objective and
must be approved by the County. Such approval shall not be unreasonably
withheld.
c. The acceptable materials for recycling are set forth on Exhibit 1, attached hereto.
The acceptable items will not be changed by Provider without consultation and
agreement of the County.
d. County also agrees to take reasonable steps to ensure that the material provided to
Provider shall not include any “Hazardous Substances.” For purposes of this
Agreement, Hazardous Substances shall include, but not be limited to, any
hazardous or toxic substance, hazardous chemical, material, waste, or compound
including known carcinogens or other chemicals known to be a risk to human health
and the environment such as petroleum products and asbestos containing materials
and including those wastes, materials and substances regulated under state and
federal laws including the Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Toxic Substances Control Act.
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2. Final Pricing: Pricing applicable to the contract will be set as follows:
a. Processing Fee: There will be a variation of the processing fee based on any reduction in
the amount of glass in Orange County’s recycling stream as determined by the
composition determined pursuant to Section 1 of this Attachment A. The processing fee
will originally be $___ per ton and will adjust as set forth in the following chart:
b. Contamination Fee: There will be no fee for contamination in the County recycling delivered
to the Provider. The County will, however, at no cost to Provider, backhaul an amount of residue
equivalent to the tons of residual included in Orange County recycling. For July, August and
September of 2019, that amount shall be ------% of the total tons delivered to Provider by Orange
County Solid Waste for processing. Thereafter, the amount shall be the residual amount in the
County recycling as determined under Section 1 of this Attachment A.
c. Orange County will coordinate the removal of residue in an amount equivalent to the tons
allocated to the contamination percentage, for July, August and September of 2019 set at ------% of
the tonnage amount of material delivered by Orange County to the Provider, in a manner so as not
to negatively impact Orange County operations or the Providers operations. Subsequently, the
residual amount for backhaul at County expense shall be determined as set forth in Section 1 of this
Attachment A. Provider will load County walking floor trailers with baled residue for hauling.
Loading will be done in a manner that complies with the recommended loading method of the
walking floor trailer manufacturer and comply with all load limits set forth by the manufacturer and
North Carolina Department of Transportation.
d. County revenue Share shall be 100% of the AMV
e. The chart to determine AMV and example of the formula with percent as established by the
Kessler Study is set forth below. Price per ton for each listed item is to be the Southeast Regional
Average determined from the Prices Listed On Recyclingmarkets.net on June 1, 2019 and updated
Glass Processing
>15% $
>11%-15% $
>6%-11% $
0-6% $
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from data on the first issue of the month thereafter. The price for Residuals, however, will remain
Zero ($0.00) throughout the term of the Contract:
Material Type Allocation Percent Allocation Tons Price Per Ton Total Value
GLASS
ALUMINUM CANS
STEEL
HDPE COLOR
HDPE NATURAL
PET
Mixed Paper (PS 1)
Plastics 3-7
OCC (PS 11)
Residuals
Total Materials
AMV per ton
100
Formula: Processing fee-(100%x AMV Price per Ton) = fee/rebate
Per example: $----- (100% x ------) = $-------fee
Fee = Amount Orange County will pay to Sonoco recycling
Rebate= Amount Sonoco Recycling will pay Orange County
f. Any payment due by County to Provider shall be net 30 days and tonnages will be based upon
Provider’s scale weights. Upon the County’s request, the Provider will give the County written proof
of scale calibrations conducted by an independent third party.
3. Additional Residual Hauling
a. At the written request of Provider, County will back haul residue in addition to the residue
allocable to Orange County Recycling.
b. Provider will compensate County an amount equal to the disposal tipping fee charged by
the accepting transfer station plus 10% for any residue hauled in excess of the Orange
County Contamination percentage. The tipping fee for the Durham Transfer Station as of
July 1, 2019 is $47.50 per ton. Orange County will notify Provider thirty days prior to any
increase to the tipping fee. Orange County will provide Provider a monthly accounting of
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the tons backhauled that exceed the Orange County Contamination and tipping fee
charged by the accepting transfer station.
4. Old Corrugated Cardboard
a. County shall deliver segregated Old Corrugated Cardboard (OCC) to the Provider at their
Durham facility located at 4619 Industry Ln, Durham, NC 27713. Any OCC delivered to the
Durham facility will not be subject to the processing fee set forth in Section 2 of this Attachment
A.
b. The County will receive the price per ton for OCC as listed on Recyclingmarkets.net for
the Southeast Regional Average for the first issue of the month beginning June 1, 2019 less a $---
----- per ton processing fee. If the per ton cost for OCC is less than or equal to the $35.00 per
ton processing fee, the County will not be charged for OCC delivered to the Durham Facility.
c. County agrees that all Corrugated Cardboard sold hereunder shall meet the
specifications for Grade (11) Corrugated Containers as those specifications for corrugated are
outlined in the current circular of the Institute of the Scrap Recycling Industries, Inc., "Scrap
Specifications Circular.”
5. Special Program Participation
a. Provider will contribute $1,000 dollars toward each special shredding event held by
Orange County Solid Waste up to three events per year.
b. Resulting paper will be the sole property and responsibility of the County.
6. Living Wage Policy
a. Provider acknowledges the Orange County Living Wage Policy.
b. Provider evaluates employee salaries on an annual basis and provides annual wage
increase amounts based on the following key factors:
i. Hourly Wage Surveys
ii. Inflation and Consumer Price Index Reports
iii. Cost of Benefit Changes
iv. Sonoco’s Competitiveness on Cost
Currently, Provider does not have any hourly employees that are paid less than $14.95 per hour that will
be working on the County contract but do use contractors who have employees that are paid less than
$14.95 per hour.
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c. County acknowledges that this complies with the County Living Wage Policy.
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