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CINCINNATI
Interdepartment Correspondence Sheet

Date: September 15, 2015

FOR YOUR IN FORMATION MEMO
To:

Mayor and Members of City Council

From:

Harry Black, City Manager

Subject:

Streetcar Damages

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CAFUSA Letter

On Aug. 28, CAFUSA (CAF) informed the City that the delivery of the first streetcar is expected
to occur at the end of October, later than the contractual date of Sept.17.
In anticipation of this delay, the Citys Purchasing Department sent the attached letter to CAF
clarifying the Citys expectations and informing CAF that the City will be withholding liquidated
damages in accordance with the contract. Per the contract, this amounts to $1000 per day late
for the first car and $500 per day late for each additional car.
The Administration will continue to monitor CAF contract performance to ensure the Streetcar
project comes in on time, and budget, and that the City receives any entitled damages.
Attachment

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CINCINNATI ~
Department of Finance
Purchasing Division

Two Centennial Pla7a

805 Central Avenue, Suite 234
Cincinnati, Ohio 45202-1947

Patrick A. Duhancy
chief P,-ocuremcn! 0/f1 er

September 15, 2015

Virginia Verdeja
Vice President, Sales
CAF USA, Inc.
1401 K Street NW, Suite 1003
Washington, DC 20005
Dear Ms. Verdeja,
In my previous correspondence to you I underscored the seriousness of the situation and the
ramifications associated with the delay of vehicle delivery. This letter is in response to your
August 28th letter which indicated that streetcar vehicle delivery will be delayed from the
Contract milestone for delivery, which is September 17, to the end of October. As it appears as
though CAF will not meet its Contract milestone of delivering the streetcar vehicle, it is the Citys
intent to exercise the full extent of its remedies under the Contract to force compliance with
Contract terms and hold CAF accountable for the costs of such delay.
Per Section SP-03 of the Contract, the City may withhold all or part of a payment to the extent
deemed necessary by the City to protect the City from loss. If the delivery of the streetcar
vehicle is delayed beyond the Contract milestone, the City will withhold accrued liquidated
damages-from-any-forthcoming-progress payments.
On behalf of the City, I am hopeful that we can continue a productive working relationship.
However, it is disheartening that CAF may potentially miss such a major Contract milestone.
Si

erely,

Patrick A. Duhaney
Chief Procurement Officer

CC:

I~i~;i~.i

Harry Black, City Manager

Sheila Hill Christian, Assistant City Manager
John Juech, Assistant City Manager
John Deatrick, Cincinnati Streetcar Project Executive
Paula Boggs-Muething, City Solicitor
Andrew Garth, Chief Counsel

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