Report to the BOARD OF AIRPORT COMMISSIONERS

Transcription

1 Pending ', Los Angeles W orld Airports Report to the BOARD OF AIRPORT COMMISSIONERS Meeting Date: Approved by: N/A March 17, 2016 Reviewed by: N/A CAO Review.' 1 A Completed N/A WO I City Atto` ney Debora lint - Chief Executive Officer Reviewed for Capital Budget Operating Budget CEQA Procurement Date 03/03/16 3/4/16 3/3/ /0016 Approval Status Y N NA Y N NA L Y N NA ' SY N E Cond By NE RW MV MT Guest Experience 3/4/16 Y N BY SUBJECT: Third Amendment to DA with Morrison & Foerster LLP Approve the Third Amendment to Contract No. DA with Morrison & Foerster LLP to add additional funds in the amount of $1,680,000 for the John Russo Industrial Sheetmetal, Inc. ( "JRI ") litigation and add additional funds in the amount of $2,645,000 to allow for the litigation regarding runway 25L at LAX. RECOMMENDATIONS: Management RECOMMENDS that the Board of Airport Commissioners: 1. ADOPT the Staff Report. 2. DETERMINE that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article II, Section 2.f of the Los Angeles City CEQA Guidelines. 3. FIND that, pursuant to Charter Section 371(e)(2), competitive bidding for these professional services would not be practicable or advantageous. 4. FIND that, pursuant to Charter Section 371(e)(10), competitive bidding for this work would be undesirable, impractical or impossible. 5. FIND that, pursuant to Charter Section 1022, this work can be performed more economically or feasibly by an independent contractor than by City employees. Paye 1

2 6. APPROVE the Third Amendment to Contract No. DA with Morrison & Foerster LLP, funding an additional $1,680,000 for the JRI litigation, and an additional $2,645,000 to allow for the litigation regarding runway 25L at LAX. The Third Amendment also amends the scope of the contract authority to allow for general litigation. 7. AUTHORIZE the Chief Executive Officer to execute the Third Amendment to Contract No. DA after approval as to form by the City Attorney. DISCUSSION: 1. Purpose The Third Amendment to Contract No. DA (Contract) will allow the law firm of Morrison & Foerster LLP (Firm) to continue to assist the City Attorney's Office in providing legal services to Los Angeles World Airports (LAWA) in connection with the City's pending litigation involving JRI and the runway 25L litigation. 2. Prior Related Actions September 17, Resolution No (DA -4859) The Board of Airport Commissioners (BOAC) authorized the Executive Director and the City Attorney's Office to enter into a three -year legal services agreement with the Firm. The initial Contract amount was for $400,000. The Contract called for work to be paid on an hourly basis. April 7, Resolution No (DA -4859) The BOAC approved a First Amendment adding funds in the amount of $500,000. December 18, Resolution No (DA -4859) The BOAC approved a Second Amendment adding funds in the amount of $875, Current Action JRI Litigation Under the Contract, the Firm is assisting the City Attorney with litigation currently pending in San Mateo County (City of Los Angeles Department of Airports v. JRI, Inc. and John Russo Industrial Sheetmetal, Inc. v. City of Los Angeles, San Mateo County Superior Court Case Number CIV Consolidated With CIV518872). The Firm is compensated on an hourly basis at a blended rate of $425. It is also entitled to reimbursement for certain expenses and costs incurred in connection with these services. This case centers around a contract with JRI to furnish four Aircraft Rescue and Firefighting vehicles. After contract amendment the total contract price was $5,540,277. A dispute subsequently arose regarding JRI's failure to perform under the contract. After learning more about the underlying facts, the Firm amended the City's complaint to bring unfair competition and false claims act causes of action. JRI filed a motion for summary adjudaction on these causes of action but the Judge denied the motion. JRI then proceeded to file its own amended complaint alleging that the City violated JRI's federal civil rights. The City filed its own motion for summary adjudication on these caseus of action but the Judge has not issued a ruling yet. Page 2

3 In addition to the unanticipated fight over the JRI pleadings, JRI has initiated what has proved to be an expensive battle regarding electronically stored information (ESI). Due to the time involved with the extensive discovery, the original trial date of September 2, 2015, was moved to April 5, In December 2015 the parties participated in a unsuccessful mediation session with the Hon. Edward A. Infante (ret.) but the parties were unable to reach a settlement. This case continues to be both time sensitive and time intensive, and the City is now preparing for trial. Accordingly, there is an immediate, continuing need for specialized legal services in connection therewith. Runway 25L Litigation LAWA filed a lawsuit against the contractor, Tutor -Saliba /O &G Industries JV, and others, who built Runway 25L several years ago at a cost of nearly $300 Million. The litigation stems from the deterioration to the concrete surface of Runway 25L. Meyers, Nave, Riback, Silver & Wilson has been assisting LAWA and the City Attorney's office with this major piece of litigation. There have been multiple court ordered mediation sessions in the 25L case. The Court ordered that all of the experts present their respective findings to each other sometime in the first two weeks of December The estimated amount of damages for the repair /replacement of 25L is approximately $250,000,000. The Firm has prepared a budget, and it estimates to take the lead position in the 25L trial, including finishing discovery and payment of experts, the Contract needs to be amended to add an additional $2,645,000. It is also recommended to amend the scope of the contract authority to allow for general litigation. Action Requested Given LAWA's continued need for legal services in connection with pending litigation involving JRI and Runway 25L, the City Attorney's Office requests the BOAC to approve the Third Amendment to Contract No. DA to add additional funds in the amount of $1,680,000 for the JRI litigation, add additional funds in the amount of $2,645,000 to allow for the firm to take the lead position in the litigation regarding runway 25L at LAX, and add additional scope to the contract authority to allow for general litigation. All other substantive terms and conditions of the Contract will remain the same. Fiscal Impact At present, there is approximately $175,127 remaining in authorized funds under the Contract. The Third Amendment to the Contract will increase Contract funding by $4,325,000 to a total of $6,100,000. These costs will be recovered through landing fees and terminal and building rates and charges, as well as through non -aeronautical revenues. 4. Alternatives Considered Perform the Work In -House The Firm brings a significant level of litigation depth and expertise with product liability litigation along with a strong northern California presence for the JRI matter. There is insufficient in -house City Attorney staff with this specialized expertise. Also, hiring additional in -house City Attorney staff for this work is impractical as it would not meet the immediate need for counsel with specialized expertise and experience on this matter. The City Attorney's Page 3

4 Office will continue to provide legal services as well as closely manage the Firm's services. Therefore, it would be in the best interests of LAWA to enter into the Third Amendment to Contract No. DA APPROPRIATIONS: Funds for this amendment are currently available in the Fiscal Year Los Angeles World Airports Operating Budget on Cost Center Legal Services Division, Commitment Item Contractual Services. Funds for subsequent periods will be requested as part of the annual budget process. STANDARD PROVISIONS: 1. This action, as a continuing administrative and personnel -related activity, is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article Il, Section 2.f of the Los Angeles City CEQA Guidelines. 2. The Third Amendment to Contract will be approved by the City Attorney as to form. 3. The Third Amendment to Contract will become final pursuant to the provisions of Los Angeles City Charter Sections Morrison & Foerster LLP will be required to comply with the provisions of City Charter Section 609(e) and related ordinances. 5. Morrison & Foerster LLP is required by contract to comply with the provisions of the Living Wage Ordinance. 6. This item is not subject to the provisions of the Small Business Enterprise Program. 7. Morrison & Foerster LLP is required by contract to comply with the provisions of the Affirmative Action Program. 8. Morrison & Foerster LLP has been assigned Business Tax Registration Certificate No Morrison & Foerster LLP is required by contract to comply with the provisions of the Child Support Obligations Ordinance. 10. Morrison & Foerster LLP has approved insurance documents, in the terms and amounts required, on file with the Los Angeles World Airports. 11. Pursuant to Charter Section 1022, it has been determined that the work specified in this contract can be performed more feasibly or economically by an Independent Contractor than by City employees. 12. Morrison & Foerster LLP must submit the Contractor Responsibility Program Pledge of Compliance and comply with the provisions of the Contractor Responsibility Ordinance prior to execution of Amendment. Page 4

5 13. Morrison & Foerster LLP must be determined by the Office of Contract Compliance to be in full compliance with the provisions of the Equal Benefits Ordinance prior to execution of Amendment. 14. Morrison & Foerster LLP will comply with the provisions of the First Source Hiring Program for all non -trade LAX Airport jobs. 15. Morrison & Foerster LLP must submit the Bidder Certification CEC Form 50 and Bidder Contributions CEC Form 55 and comply with its provisions prior to execution of Amendment. Page 5