220000001511.pdf

Mich igan.gov/MiProcure ment

SCHEDULE B - PRICING

Master Agreement (MA) No. 220000001511

Packaging Machinery, Shrink Wrap (Film), Maintenance, and Service

Preventive Maintenance (PM):

1) Arpac Shrink Tunnel VT122248 Serial

# 14973

2) Arpac Shrink Wrapper Model L-18

Serial # 15191

3) VORTEX 72 Single Chamber Shrink

Tunnel

4) Conflex CWM 160 Lap Seal Shrink

Wrapper

Year1-FY23 Year2-FY24 Year3-FY25 Year4-FY26 Year5-FY27

Semi-Annually (cost per PM visit) $1,160.00 $1,160.00 $1,240.00 $1,240.00 $1,240.00

Hourly Rate for Service $145.00 $145.00 $155.00 $155.00 $155.00

Shrink Wrap for Arpac (lead time 30 days)

16”X 6,250 FT CT303 (cost per roll) $169.00 $169.00 $183.00 $183.00 $183.00

Shrink Wrap for Conflex (lead time 30 days)

16"SW X 12,500 FT CT303 (cost per roll) $298.00 $298.00 $314.00 $314.00 $325.00

New Machine Charges

Conflex CWM-160 Lap Seal Shrink Wrapper, includes paper style side guides and thermal bottom lap seal $93,850

Streamfeeder, IT 1250 EX Servo Friction Feeder $35,200

Servo Operated Shingling Conveyor with programmable count logic $24,550

Vortex 72 Shrink Wrap Tunnel

$27,700

Start-up for above machinery $3,300

Crating $1,500

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SCHEDULE A – STATEMENT OF WORK

CONTRACT ACTIVITIES

Master Agreement (MA) No. 220000001511

Packaging Machinery, Shrink Wrap (Film), Maintenance, and Service

BACKGROUND

The Michigan Department of State (MDOS) provides license plates and registrations to Michigan residents every day. Approximately 700,000 per year must be packaged and sent in the mail to our customers. Currently, registrations are attached to the coordinating plate and the two pieces are shrink wrapped together before shipping. The department currently uses an Arpac shrink wrap machine and heat tunnel to accomplish this task, but the equipment is aging, and production needs have grown. To accomplish our mission of providing excellent customer service, it is important to have a quality shrink wrap machine that can handle our volume. Due to the time-sensitive nature of our business, it is also important to have timely repairs done when needed without unreasonable downtime.

SCOPE

The contractor will provide a new shrink wrap machine, shrink wrap, heat tunnel, preventive maintenance, and service per manufacturers requirements. A multi-year contract will be established to accommodate current and future State Agency needs.

1. Deliverables The Contractor must provide the following:

a) Shrink Wrap Machine

• Conflex CWM-160 Lap Seal Shrink Wrapper

Standard Features:

o Servo controlled vacuum belt for precise and easy to adjust bag length settings through a touchscreen.

o Heavy duty machine framework constructed with welded Steel tubing o Textured, Powder Coat Finish for dry environments.

o Narrow style flighted infeed sections allow ease of loading for operators.

o 5-pin arc-less static system.

o U.L. Approved Electrical enclosure.

o 16” coated, tooled steel sealing knife.

o Heavy duty casters and leveling legs- Included.

Version 2022-3 2 of 30 o Adjustable, Flip Down pin perforators, (3 heads), with brush back-up for air evacuation.

o Variable machine speeds up to 150’ of film per minute.

o Easy load powered film feed cradle with “shaft-less” film roll delivery system. Standard unit can handle double footage rolls.

o 1-horse-power DC main drive motor.

o No product detects photo eye on the Infeed*- Included.

o Small product transfer belt on the exit end- Included.

o Rotary hot knife seal system.

o Digital temperature control(s).

o High draw ring compressor vacuum belt for bag size and film feed.

o Remote emergency stop buttons located on infeed* - Included.

o Includes One (1) fixed width, fixed height film former.

o Would be made for placemat samples sent.

o Tool-less film former change feature for quick product changeover.

o Basic spare parts kit Included. Made in the USA.

Specifications:

o Electrical Requirements: 220V, 20 Amps, 1 Phase o Air Requirements: None o Film Requirements: 1 roll, 3” core, single wound o Seal Bar: 16”, 20” 24”, 28” o Maximum Film Width: 34”, 38”, 42”, 46” o Maximum Roll Diameter: 13” o Overall Machine Dimensions: 109”L x 52”W x 62”H (includes 5” infeed) o Gross Weight: 1,600 lbs. (includes 5” infeed) o Maximum Operating Speesds:100, 200 ppm o Deck Height on Casters: 36.5” o Package Dimensions: 3”L to 36”L, 2”W to 27”W, .125”H to 5”H

• Streamfeeder, IT 1250 EX Servo Friction Feeder

Features:

o HMI Touch screen o Miss detection

Version 2022-3 3 of 30 o I/O Interface o Job library o Maintenance schedules with alerts o Photo-sensor trigger o Programmable job size o Real time data display o Report output o Rubber feed belts o Self-triggering o Timeout stop o Trigger delay o Vacuum assist

Specifications:

o Batch size: 1-9,999 o Belt speed: 7,000 in/min (178 m/min) o Min/Max Product Thickness: .003” to 1.0” o Utilities 155/230vac, 50/60 Hz, 12/6A configured

• Servo Operated Shingling Conveyor with programmable count logic o 16” x 10” belt o Photo o Conveyor has lower deck height to create shingling o Side guides

b) Heat Tunnel

• Vortex 72 Shrink Wrap Tunnel

Features:

o Low power consumption o Viewing window o Cool to the touch o UL listed electrical panel o Variable speed conveyor o Independently adjustable air flow fans o Lighted chamber o Casters and leg levelers

Version 2022-3 4 of 30 o Low shrink temperatures o Durable stainless steel conveyor belt

Specifications:

o Electrical Requirements: 230 Volts, 50 Amps, 3 Phase o Air Requirements: None o Chamber Dimensions: 24”W x 13.5”H x 72”L o Conveyor Dimensions: 24”W x 103”L o Machine Dimensions: 105”L x 51”W x 60”H o Max Op. Speed: 100 feet per minute o Deck Height on Casters: 34” – 39”

c) Maintenance/Service Programs

• Contractor must service both shrink wrap machines and heat tunnels semiannually

• Obtain and install parts

• Trouble shoot issues

• Guarantee onsite service within 24 hours of request and respond to request via email within 4 hours

d) Shrink Wrap

• Material: Polyolefin

• Type: Centerfold

• Width: 16”

• Length: 6250’

• Thickness: 42 ga.

• Must have ability to provide up to 130 rolls per year.

• Must have good clarity so the parcel can be easily read

1.1. Warranty Summary

a) Initial 30-Day Period (available only when start-up is purchased)

• Contractor will provide labor to diagnose, remove and replace a defective component on a “no charge” basis during the initial 30-day period of the manufacturer’s warranty.

b) 12-Month Manufacturer Warranty

• Conflex Incorporated warrants all products to be free from defects in material and workmanship, excluding normal wear items, for a period of

Version 2022-3 5 of 30 twelve (12) months from the date of shipment. Warranty is contingent upon proper use of Conflex equipment throughout the warranty period. The manufacturer’s warranty covers the cost of the defective component only

(i.e. parts). The State is responsible for proper routine maintenance during the warranty period including, but not limited to: replacement of consumable items, lubrication, equipment changeovers, adjustments, etc.

NOTE: If, during a service call, the technician discovers evidence of abuse, misuse, neglect or maladjustment, the customer will be charged normal hourly service rates for the services rendered.

Streamfeeder, IT 1250 EX Servo Friction Feeder, will come with a 12-month limited warranty.

2. REQUIREMENTS

2.1. Recall Requirements and Procedures

If a recall occurs, the Contractor must immediately notify the MDOS Project Manager in writing of the problem and explain the replacement process. The replacement of materials and labor will be at the expense of the Contractor.

2.2. Service Requirements

2.2. Timeframes

a) Reference 1. (c) Maintenance/Service Programs

b) Reference 3.5. Technical Support and Repairs

The receipt of order date is pursuant to the Notices section of the Standard Contract Terms.

2.3. Delivery

Deliveries will be made to 7064 Crowner Dr, Lansing, MI 48980, on State business days between the hours of 8 am and 5 pm.

• Delivery dates of machinery and service must be mutually agreed upon with the Project Manager.

• For all commodities, shipping point must be FOB Destination: All quoted prices must include shipping. The State will not pay for separate shipping charges.

2.3. Packaging and Palletizing

Packaging must be optimized to permit the lowest freight rate. Shipments must be palletized whenever possible using manufacturer's standard 4-way shipping pallets.

2.4. Installation & Start-up

Delivery and install must be coordinated with, and pre-approved by the Project Manager. Installation will be considered complete when machines are running properly, and worksite is cleaned, and training is completed. Contractor must remove all trash, packaging and pallets from the site and leave workspace broom clean. Contractor should recycle as much of the removed packaging material as possible.

a) MDOS Responsibilities

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• Receive equipment and inspect for damage

• Uncrate, assemble, place and level the system

• Provide appropriate electrical and air services

• “Do not” power up system. NOTE: Customer may void warranty if machine is powered up before proper start-up by Veritiv technician

b) Contractor Responsibilities

• Review system

• Check incoming power

• Test system with actual product

• Train maintenance crew and operators on operation, film threading (if appropriate), troubleshooting, and preventative maintenance

• View operation and adjust the system until requirements are met

• Start-up will be performed during normal working hours, 8am – 5pm, Monday through Friday

2.5. Project Prevailing Wage Requirements, applicable only if construction or installation is required as part of Contract Activities

The Contractor (and its Subcontractors) must pay all mechanics and laborers employed directly on the site of the work, unconditionally and at least once a week, and without subsequent deduction or rebate on any account, the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised specifications as prevailing wages based on locality, regardless of any contractual relationship which may be alleged to exist between the Contractor or subcontractor and the laborers and mechanics.

Contractor must post the scale of wages to be paid in a prominent and easily accessible place at the site of the work.

2.6. Technical Support and Repairs

When providing technical support, the Call Center must resolve the caller’s issue within 60 minutes. If the caller’s issue cannot be resolved within 4hours, on-site service must be scheduled. The on-site service must be performed within 24 hours of the time the issue was scheduled for service.

• Contractor will provide 30 days of labor support on all machines

2.7. Preventive Maintenance (PM)

On-site maintenance must be performed according to the recommended manufacturer maintenance schedule. The Contractor will perform these services on a semi-annual basis.

These services include but not limited to the following:

• Overall performance review of equipment

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• Fluid changes

• Oiling

• Cleaning

• Proactive wearable parts replacement

2.8. Training

Contractor will provide complete training to MDOS operators and maintenance personnel during the initial start-up period. MDOS will ensure proper personnel are available. Normal service rates will be applied if training is rescheduled.

Training topics must include the operation and features of the shrink wrap machine, heat tunnel, any additional machine options, proper cleaning, and maintenance, how to address minor or major repairs, etc. The Training date(s) must be coordinated with and pre-approved by the Project Manager. The contractor must make copies of the training materials and machine documentation freely available to MDOS (via a URL, PDF .files, etc.)

2.9. Meetings

The Contractor must attend the following meetings:

• Kick-off meeting within 30 calendar days of effective date.

The State may request other meetings as it deems appropriate.

3. Staffing

3.1. Contractor Representative

The Contractor must appoint a Contractor Representative who will be specifically assigned to State of Michigan accounts. This Representative will respond to State inquiries regarding the Contract Activities, answer questions related to ordering and delivery, coordinate delivery, installation, acceptance testing training and be responsible to coordinate answers to any State questions.

• Tye Rod, tye.rod@veritivcorp.com, 734.812.5613

The Contractor must notify the Contract Administrator at least 5 calendar days before removing or assigning a new Contractor Representative.

3.2. Organizational Chart

o Tye Rod, Automatic Equipment Specialist o Tory Cruse, Regional Sales Director Corrugated and Equipment o Mark Kromer- Sales Representative – Packaging o Kevin Knuth- Sales Manager - Packaging

3.3. Customer Service, Technical Support, Repairs, and Maintenance Toll-Free Number(s)

• All NEW Parts, Orders, Quotes or Service requests, please email VeritivPartsandService3@veritivcorp.com. Additional inquires call 1-800-358-mailto:tye.rod@veritivcorp.com mailto:VeritivPartsandService3@veritivcorp.com

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Contractor Representative who must be available for calls during the hours of 8 am to 5 pm EST Monday through Friday, at a minimum.

3.4. Disclosure of Subcontractors

The Contractor will not utilize subcontractors.

3.5. Security

The Contractor will be subject the following security procedures:

The Contractor’s staff may be required to make deliveries to or enter State facilities. The State may require the Contractor’s personnel to wear State issued identification badges.

Contractor will require all staff be subjected to Background, Drug, and Driving Record checks.

4. Pricing

4.1. Price Term

Pricing is firm for the entire length of the Contract.

4.2. Price Changes

Adjustments will be based on changes in actual Contractor costs. Any request must be supported by written evidence documenting the change in costs. The State may consider sources, such as the Consumer Price Index; Producer Price Index; other pricing indices as needed; economic and industry data; manufacturer or supplier letters noting the increase in pricing; and any other data the State deems relevant.

Following the presentation of supporting documentation, both parties will have 30 days to review the information and prepare a written response. If the review reveals no need for modifications, pricing will remain unchanged unless mutually agreed to by the parties. If the review reveals that changes are needed, both parties will negotiate such changes, for no longer than 30 days, unless extended by mutual agreement.

The Contractor remains responsible for Contract Activities at the current price for all orders received before the mutual execution of a Change Notice indicating the start date of the new Pricing Period.

5. Ordering

5.1. Authorizing Document

The appropriate authorizing document for the Contract will be a Delivery Order (DO).

5.2. Order Verification

The Contractor must acknowledge receipt of the Delivery Order.

6. Acceptance

6.1. Acceptance, Inspection and Testing

The State will use the acceptance process defined in section 17, Acceptance, of the Standard Contract Terms.

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6.2. Final Acceptance

Payment will serve as final acceptance.

7. Invoice and Payment

7.1. Invoice Requirements

All invoices submitted to the State must include: (a) date; (b) purchase order; (c) quantity; (d) description of the Contract Activities; (e) itemized unit price; (f) shipping cost (if any); (g) vendor-generated invoice number; and (h) total price.

7.2. Payment Methods

The State will make payment for Contract Activities via Electronic Funds Transfer (EFT).

7.3. Procedure

Contractor must send invoices to MDOS-SOS-Paymentprocess@Michigan.gov once equipment/materials have been delivered. Payment will be made upon the Project Manager’s acceptance of the unit/materials.

8. Project Plan The Contractor will carry out this project under the direction and control of the Project Manager.

For this proposal: The contractor must provide a project plan.

Upon Contract Award: A final project plan must be submitted for final approval within 5-calendar days of the Effective Date. The plan must also include: (a) the Contractor's organizational chart with names and title of personnel assigned to the project, which must align with the staffing stated in accepted proposals; and (b) the project breakdown showing sub-projects, tasks, and resources required.

9. Licensing Agreement The Contractor must be an authorized distributor and provide a copy of their license.

Additional documentation may be requested by MDOS.

10. Additional Requirements

10.1. Environmental and Energy Efficiency Product Standards

The Contractor must identify any energy efficient, bio-based, or otherwise environmentally friendly products used in the products. Contractor must include any relevant third-party certification, including the verification of a United States Department of Agriculture certified bio-based product label. Contractor must describe how products that meet these requirements are identified or otherwise labelled.

10.2. Hazardous Chemical Identification

In accordance with the federal Emergency Planning and Community Right-to-Know Act, 42 USC 11001, et seq., as amended, the Contractor must provide a Material Safety Data Sheet listing any hazardous chemicals as defined in 40 CFR §370.2, to be delivered. Each hazardous chemical must be properly identified, including any applicable identification number, such as a National Stock Number or Special Item Number.

The Contractor must identify any hazardous chemicals that will be provided under any resulting contract.

mailto:MDOS-SOS-Paymentprocess@Michigan.gov

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10.3. Mercury Content

Pursuant to MCL 18.1261d, mercury-free products must be procured when possible.

The Contractor must explain if it intends to provide products containing mercury, the amount or concentration of mercury, and whether cost competitive alternatives exist. If a cost competitive alternative does exist, the Contractor must provide justification as to why the particular product is essential. All products containing mercury must be labeled as containing mercury.

10.4. Brominated Flame Retardants

The State prefers to purchase products that do not contain brominated flame retardants (BFRs) whenever possible. The Contractor must disclose whether the products contain BFRs. Contractor must describe how products that meet these requirements are identified or otherwise labelled.

12.5 Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)

The Contractor must confirm that the provided products do not intentionally contain PFAS. This consists of all components of the provided products, including product packaging.

11. Service-Level Agreements (SLAs)

A. The Contractor will be held accountable to meet the requirements and the service level requirements established in this Contract.

B. The State reserves the right to reconsider or amend SLA amounts for split awards should they occur.

C. Please Note: Should bidders require clarification or have any questions with regard to the SLAs, they should submit them during the Question and Answer Period of this solicitation; please see the Proposal Instructions for the timeline.

Service Level Agreements for this Contract will be as follows:

SLA Metric 1. Timely Deliveries

Definition and Purpose

The Contractor must ensure that items and quantities delivered are exactly the items, brands, and quantities on the Order Confirmation.

No substitutions will be allowed without prior written permission by Program Manager and a Change Notice executed by the Contract Administrator.

The entire order will be received on the same day unless a partial delivery has been approved in advance by the Program Manager.

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Acceptable Standard

1. All deliveries must occur in accordance with the approved delivery schedule for each Facility and Facility Receiving hours. See Section 2.2

2. Extenuating circumstances must be communicated by the Contractor to the Program Manager prior to the scheduled delivery date and time.

3. Items, brands, and quantities delivered will match the Order Confirmation exactly.

4. Signed and dated packing slips will be provided to MDOS at the time of delivery.

5. Orders not received in their entirety, as determined by a review of the Data Sources, will be considered inaccurate.

The acceptable standard is 100% compliance.

SLA Metric 2. Timely Maintenance/Service

Acceptable Standard

1. Guarantee onsite service within 24 hours of request and respond to request via email within 4 hours. See Section 1.1.

2. When providing technical support, the Call Center must resolve the caller’s issue within 60 minutes. If the caller’s issue cannot be resolved within 4hours, on-site service must be scheduled.

The on-site service must be performed within 24 hours of the time the issue was scheduled for service. See section 2.5.

The acceptable standard is 100% compliance.

Credit Due for Failing to Meet the Service Level Agreements

1. $100.00 may be assessed for each of the first five occurrences of non-compliance in a given calendar year.

2. $500.00 may be assessed beginning with the sixth occurrence of non-compliance and on each occurrence thereafter in a given calendar year.

Extenuating circumstances will be reviewed by the Program Manager before any Service Credits are assessed.

At the discretion of the State, these credits may be applied toward any payable due to the Contractor or be payable directly to the State.

Payments made directly to the state will be completed within 10 days of notice of assessment.

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SCHEDULE B - PRICING

Preventive Maintenance (PM):

1) Arpac Shrink Tunnel VT122248 Serial

# 14973

2) Arpac Shrink Wrapper Model L-18

Serial # 15191

3) VORTEX 72 Single Chamber Shrink

Tunnel

4) Conflex CWM 160 Lap Seal Shrink

Wrapper

Year1-FY23 Year2-FY24 Year3-FY25 Year4-FY26 Year5-FY27

Semi-Annually (cost per PM visit) $1,160.00 $1,160.00 $1,240.00 $1,240.00 $1,240.00

Hourly Rate for Service $145.00 $145.00 $155.00 155.00 155.00

Shrink Wrap for Arpac (lead time 30 days)

Year1 Year2 Year3 Year4 Year5

16”X 6,250 FT CT303 (cost per roll) $169.00 $169.00 $183.00 $183.00 $183.00

New Machine Charges

Conflex CWM-160 Lap Seal Shrink Wrapper, includes paper style side guides and thermal bottom lap seal $93,850

Streamfeeder, IT 1250 EX Servo Friction Feeder $35,200

Servo Operated Shingling Conveyor with programmable count logic $24,550

Vortex 72 Shrink Wrap Tunnel

$27,700

Start-up for above machinery $3,300

Crating $1,500

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SCHEDULE C – CURRENT MACHINES

Machines requiring disassembly:

1. ARPAC Hanagata Model L-18 Automatic L-Bar Sealer

2. Shanklin Shrink Tunnel – Model T7H

Machines needing maintenance:

1. Arpac Shrink tunnel: Model VT122248 Serial # 14973

2. Arpac Shrink Wrap machine: Model L-18 Serial # 15191

3. Conflex CWM-160 Lap Seal Shrink Wrapper

4. Vortex 72 Shrink Tunnel

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STANDARD CONTRACT TERMS

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Veritiv Operating Company (“Contractor”), a. This Contract is effective on September 1, 2022 (“Effective Date”), and unless terminated, will expire on August 31, 2027 (the “Term”.

This Contract may be renewed for up to five additional one-year period(s). Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract.

The State will document its exercise of renewal options via Contract Change Notice.]The parties agree as follows:

Duties of Contractor. Contractor must perform the services and provide the deliverables described in Schedule A – Statement of Work (the “Contract

Activities”). An obligation to provide delivery of any commodity is considered a service and is a Contract Activity.

Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of the Contract Activities unless otherwise specified in Schedule A.

Contractor must: (a) perform the Contract Activities in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry; (b) meet or exceed the performance and operational standards, and specifications of the Contract; (c) provide all Contract Activities in good quality, with no material defects; (d) not interfere with the State’s operations; (e) obtain and maintain all necessary licenses, permits or other authorizations necessary for the performance of the Contract; (f) cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of the Contract;

(g) return to the State any State-furnished equipment or other resources in the same condition as when provided when no longer required for the Contract; (h) assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of the Contract; and (i) comply with all State physical and IT security policies and standards which will be made available upon request. Any breach under this paragraph is considered a material breach.

Contractor must also be clearly identifiable while on State property by wearing identification issued by the State, and clearly identify themselves whenever making contact with the State.

Notices. All notices and other communications required or permitted under this

Contract must be in writing and will be considered given and received: (a) when verified by written receipt if sent by courier; (b) when actually received if sent by mail without verification of receipt; or (c) when verified by automated receipt or electronic logs if sent by facsimile or email.

If to State: If to Contractor:

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See Contract Administrator information shown below.

VP, Equipment Sales/Service 1000 Abernathy Road NE, Building 400, Suite 1700, Atlanta, GA 30328

Contract Administrator. The Contract Administrator, or the individual duly authorized for each party, is the only person authorized to modify any terms of this

Contract, and approve and execute any change under this Contract (each a

“Contract Administrator”):

State: Contractor:

Jonathon Khon 430 W. Allegan Lansing, MI, 48933 KhonJ@Michigan.gov 517.241.3886

VP, Equipment Sales/Service 1000 Abernathy Road NE, Building 400 Atlanta, GA 30328

Program Manager. The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract (each a “Program Manager”):

State: Contractor:

Amanda Bauer 7064 Crowner Drive Dimondale, MI 48821 BauerA2@Michigan.gov 517.335.6123

Tye Rod 28401 Schoolcraft Road Livonia, MI 48150 Tye.rod@veritivcorp.com 734-812-5613

Performance Guarantee. Contractor must at all times have financial resources sufficient, in the opinion of the State, to ensure performance of the Contract and must provide proof upon request.

Insurance Requirements.

Insurance Requirements. Contractor, at its sole expense, must maintain the insurance coverage identified below. All required insurance must: (a) protect the State from claims that may arise out of, are alleged to arise out of, or otherwise result from Contractor's or a subcontractor's performance; (b) be primary and non-contributing to any comparable liability insurance (including self-insurance) carried by the State; and (c) be provided by a company with an A.M. Best rating of "A-" or better, and a financial size of VII or better.

If any of the required policies provide claims-made coverage, the Contractor must:

(a) provide coverage with a retroactive date before the Effective Date of the Contract or the beginning of Contract Activities; (b) maintain coverage and provide evidence of coverage for at least 3 years after completion of the Contract Activities; and (c) if coverage is cancelled or not renewed, and not replaced with another claims-made policy form with a retroactive date prior to the Contract Effective Date, Contractor must purchase extended reporting coverage for a minimum of 3 years after completion of work.

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Contractor must: (a) provide insurance certificates to the Contract Administrator, containing the agreement or delivery order number, at Contract formation and within 20 calendar days of the expiration date of the applicable policies; (b) require that subcontractors maintain the required insurance contained in this Section; (c) notify the Contract Administrator within 5 business days if any insurance is cancelled; and

(d) waive all rights against the State for damages covered by insurance. Failure to maintain the required insurance does not limit this waiver.

This Section is not intended to and is not to be construed in any manner as waiving, restricting or limiting the liability of either party for any obligations under this Contract (including any provisions hereof requiring Contractor to indemnify, defend and hold harmless the State).

. TABLE 6.1

Required Limits Additional Requirements

Commercial General Liability Insurance

Minimum Limits:

$1,000,000 Each Occurrence

$1,000,000 Personal & Advertising Injury

$2,000,000 Products/Completed Operations

$2,000,000 General Aggregate

Contractor must have their policy endorsed to include “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds.

Automobile Liability Insurance

Minimum Limits:

$1,000,000 Per Accident

Contractor must have their policy: (1) endorsed to include “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds; and (2) include Hired and Non-Owned Automobile coverage.

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Required Limits Additional Requirements

Workers' Compensation Insurance

Minimum Limits:

Coverage according to applicable laws governing work activities.

Waiver of subrogation, except where waiver is prohibited by law.

Employers Liability Insurance

Minimum Limits:

$500,000 Each Accident

$500,000 Each Employee by Disease

$500,000 Aggregate Disease

Reserved

Relationship of the Parties. The relationship between the parties is that of independent contractors. Contractor, its employees, and agents will not be considered employees of the State. No partnership or joint venture relationship is created by virtue of this Contract. Contractor, and not the State, is responsible for the payment of wages, benefits and taxes of Contractor’s employees and any subcontractors. Prior performance does not modify Contractor’s status as an independent contractor. Neither party has authority to contract for nor bind the other party in any manner whatsoever.

Intellectual Property Rights. If Schedule A, Statement of Work, requires Contractor to create any intellectual property, Contractor hereby acknowledges that the State is and will be the sole and exclusive owner of all right, title, and interest in the Contract

Activities and all associated intellectual property rights, if any. Such Contract

Activities are works made for hire as defined in Section 101 of the Copyright Act of

1976. To the extent any Contract Activities and related intellectual property do not qualify as works made for hire under the Copyright Act, Contractor will, and hereby does, immediately on its creation, assign, transfer and otherwise convey to the

State, irrevocably and in perpetuity, throughout the universe, all right, title and interest in and to the Contract Activities, including all intellectual property rights therein.

Subcontracting. Contractor may not delegate any of its obligations under the

Contract without the prior written approval of the State. Contractor must notify the

State at least 90 calendar days before the proposed delegation and provide the State any information it requests to determine whether the delegation is in its best interest.

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If approved, Contractor must: (a) be the sole point of contact regarding all contractual matters, including payment and charges for all Contract Activities; (b) make all payments to the subcontractor; and (c) incorporate the terms and conditions contained in this Contract in any subcontract with a subcontractor. Contractor remains responsible for the completion of the Contract Activities, compliance with the terms of this Contract, and the acts and omissions of the subcontractor. The State, in its sole discretion, may require the replacement of any subcontractor.

Staffing. The State’s Contract Administrator may require Contractor to remove or reassign personnel providing services by providing a notice to Contractor.

Background Checks. Pursuant to Michigan law, all agencies subject to IRS Pub.

1075 are required to ask the Michigan State Police to perform fingerprint background checks on all employees, including Contractor and Subcontractor employees, who may have access to any database of information maintained by the federal government that contains confidential or personal information, including, but not limited to, federal tax information. Further, pursuant to Michigan law, any agency described above is prohibited from providing Contractors or Subcontractors with the result of such background check. For more information, please see Michigan Public

Act 427 of 2018. Upon request, or as may be specified in Schedule A, Contractor must perform background checks on all employees and subcontractors and its employees prior to their assignment. The scope is at the discretion of the State and documentation must be provided as requested. Contractor is responsible for all costs associated with the requested background checks. The State, in its sole discretion, may also perform background checks.

Assignment. Contractor may not assign this Contract to any other party without the prior approval of the State. Upon notice to Contractor, the State, in its sole discretion, may assign in whole or in part, its rights or responsibilities under this Contract to any other party. If the State determines that a novation of the Contract to a third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

Change of Control. Contractor will notify the State, within 30 days of any public announcement or otherwise once legally permitted to do so, of a change in control relating to Contractor’s organizational structure or ownership. For purposes of this

Contract, a change in control means any of the following: (a) a sale of more than 50% of Contractor’s stock; (b) a sale of substantially all of Contractor’s assets; (c) a change in a majority of Contractor’s board members; (d) reserved; (e) reserved; (f) or the board (or the stockholders) approves a plan of complete liquidation. A change of control does not include any consolidation or merger effected exclusively to change the domicile of Contractor, or any transaction or series of transactions principally for bona fide equity financing purposes.

In the event of a change of control, Contractor must require the successor to assume this Contract and all its obligations under this Contract.

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Ordering. Contractor is not authorized to begin performance until receipt of authorization as identified in Schedule A.

Acceptance. Contract Activities are subject to inspection and testing by the State within 30 calendar days of the State’s receipt of them (“State Review Period”), unless otherwise provided in Schedule A. If the Contract Activities are not fully accepted by the State, the State will notify Contractor by the end of the State Review

Period that either: (a) the Contract Activities are accepted but noted deficiencies must be corrected; or (b) the Contract Activities are rejected. If the State finds material deficiencies, it may: (i) reject the Contract Activities without performing any further inspections; (ii) demand performance at no additional cost; or (iii) terminate this

Contract in accordance with Section 24, Termination for Cause.

Within 10 business days from the date of Contractor’s receipt of notification of acceptance with deficiencies or rejection of any Contract Activities, Contractor must cure, at no additional cost, the deficiency and deliver unequivocally acceptable Contract Activities to the State. If acceptance with deficiencies or rejection of the Contract Activities impacts the content or delivery of other non-completed Contract Activities, the parties’ respective Program Managers must determine an agreed to number of days for re-submission that minimizes the overall impact to the Contract.

However, nothing herein affects, alters, or relieves Contractor of its obligations to correct deficiencies in accordance with the time response standards set forth in this Contract.

If Contractor is unable or refuses to correct the deficiency within the time response standards set forth in this Contract, the State may cancel the order in whole or in part. The State, or a third party identified by the State, may perform the Contract Activities and recover the difference between the cost to cure and the Contract price.

Delivery. Contractor must deliver all Contract Activities F.O.B. destination, within the

State premises with transportation and handling charges paid by Contractor, unless otherwise specified in Schedule A. All containers and packaging become the State’s exclusive property upon acceptance.

Risk of Loss and Title. Until final acceptance, title and risk of loss or damage to

Contract Activities remains with Contractor. Contractor is responsible for filing, processing, and collecting all damage claims. The State will record and report to

Contractor any evidence of visible damage. If the State rejects the Contract Activities, Contractor must remove them from the premises within 10 calendar days after notification of rejection. The risk of loss of rejected or non-conforming Contract

Activities remains with Contractor. Rejected Contract Activities not removed by

Contractor within 10 calendar days will be deemed abandoned by Contractor, and the State will have the right to dispose of it as its own property. Contractor must reimburse the State for costs and expenses incurred in storing or effecting removal or disposition of rejected Contract Activities.

Warranty Period. The warranty period, if applicable, for Contract Activities is a fixed period commencing on the date specified in Schedule A. If the Contract Activities do

Version 2022-3 21 of 30 not function as warranted during the warranty period, the State may return such non-conforming Contract Activities to the Contractor for a full refund.

Invoices and Payment. Invoices must conform to the requirements communicated from time-to-time by the State. All undisputed amounts are payable within 45 days of the State’s receipt. Contractor may only charge for Contract Activities provided as specified in Schedule A. Invoices must include an itemized statement of all charges.

The State is exempt from State sales tax for direct purchases and may be exempt from federal excise tax, if Services purchased under this Agreement are for the

State’s exclusive use. Notwithstanding the foregoing, all fees are exclusive of taxes, and Contractor is responsible for all sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any federal, state, or local governmental entity on any amounts payable by the State under this Contract.

The State has the right to withhold payment of any disputed amounts until the parties agree as to the validity of the disputed amount. The State will notify Contractor of any dispute within a reasonable time. Payment by the State will not constitute a waiver of any rights as to Contractor’s continuing obligations, including claims for deficiencies or substandard Contract Activities. Contractor’s acceptance of final payment by the State constitutes a waiver of all claims by Contractor against the State for payment under this Contract, other than those claims previously filed in writing on a timely basis and still disputed.

The State will only disburse payments under this Contract through Electronic Funds Transfer (EFT). Contractor must register with the State at http://www.michigan.gov/SIGMAVSS to receive electronic fund transfer payments. If Contractor does not register, the State is not liable for failure to provide payment.

Without prejudice to any other right or remedy it may have, the State reserves the right to set off at any time any amount then due and owing to it by Contractor against any amount payable by the State to Contractor under this Contract.

Excluding federal government charges and terms, Contractor warrants and agrees that each of the fees, economic or product terms or warranties granted pursuant to this Contract are comparable to or better than the equivalent fees, economic or product term or warranty being offered to any commercial or government customer

(including any public educational institution within the State of Michigan) of

Contractor. If Contractor enters into any arrangements with another customer of

Contractor to provide the products or services, available under this Contract, under more favorable prices, as the prices may be indicated on Contractor’s current U.S.

and International price list or comparable document, then this Contract will be deemed amended as of the date of such other arrangements to incorporate those more favorable prices, and Contractor will immediately notify the State of such fee and formally memorialize the new pricing in a change notice.

Reserved.

Stop Work Order. The State may suspend any or all activities under the Contract at any time. The State will provide Contractor a written stop work order detailing the http://www.michigan.gov/SIGMAVSS

Version 2022-3 22 of 30 suspension. Contractor must comply with the stop work order upon receipt. Within 90 calendar days, or any longer period agreed to by Contractor, the State will either: (a) issue a notice authorizing Contractor to resume work, or (b) terminate the Contract or delivery order. The State will not pay for Contract Activities, Contractor’s lost profits, or any additional compensation during a stop work period.

Termination for Cause. The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the State: (a) endangers the value, integrity, or security of any location, data, or personnel; (b) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; (c) engages in any conduct that may expose the State to liability; (d) breaches any of its material duties or obligations; or (e) fails to cure a breach within the time stated in a notice of breach. Any reference to specific breaches being material breaches within this Contract will not be construed to mean that other breaches are not material.

If the State terminates this Contract under this Section, the State will issue a termination notice specifying whether Contractor must: (a) cease performance immediately, or (b) continue to perform for a specified period. If it is later determined that Contractor was not in breach of the Contract, the termination will be deemed to have been a Termination for Convenience, effective as of the same date, and the rights and obligations of the parties will be limited to those provided in Section 25, Termination for Convenience.

The State will only pay for amounts due to Contractor for Contract Activities accepted by the State on or before the date of termination, subject to the State’s right to set off any amounts owed by the Contractor for the State’s reasonable costs in terminating this Contract. The Contractor must pay all reasonable costs incurred by the State in terminating this Contract for cause, including administrative costs, attorneys’ fees, court costs, transition costs, and any costs the State incurs to procure the Contract Activities from other sources.

Termination for Convenience. The State may immediately terminate this Contract in whole or in part without penalty and for any reason or no reason, including but not limited to, appropriation or budget shortfalls. The termination notice will specify whether Contractor must: (a) cease performance of the Contract Activities immediately, or (b) continue to perform the Contract Activities in accordance with

Section 26, Transition Responsibilities. If the State terminates this Contract for convenience, the State will pay all reasonable costs, as determined by the State, for

State approved Transition Responsibilities. Contractor may terminate this Contract without penalty and for any reason or no reason, upon 180 days’ prior written notice.

Transition Responsibilities. Upon termination or expiration of this Contract for any reason, Contractor must, for a period of time specified by the State (not to exceed 90 calendar days), provide all reasonable transition assistance requested by the State, to allow for the expired or terminated portion of the Contract Activities to continue without interruption or adverse effect, and to facilitate the orderly transfer of such

Contract Activities to the State or its designees. Such transition assistance may

Version 2022-3 23 of 30 include, but is not limited to: (a) continuing to perform the Contract Activities at the established Contract rates; (b) taking all reasonable and necessary measures to transition performance of the work, including all applicable Contract Activities, training, equipment, software, leases, reports and other documentation, to the State or the State’s designee; (c) taking all necessary and appropriate steps, or such other action as the State may direct, to preserve, maintain, protect, or return to the State all materials, data, property, and confidential information provided directly or indirectly to

Contractor by any entity, agent, vendor, or employee of the State; (d) transferring title in and delivering to the State, at the State’s discretion, all completed or partially completed deliverables prepared under this Contract as of the Contract termination date; and (e) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts (collectively, “Transition Responsibilities”).

This Contract will automatically be extended through the end of the transition period.

Indemnification. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and employees harmless, without limitation, from and against any and all actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to: (a) any breach by

Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable) of any of the promises, agreements, representations, warranties, or insurance requirements contained in this Contract; (b) any infringement, misappropriation, or other violation of any intellectual property right or other right of any third party; (c) any bodily injury, death, or damage to real or tangible personal property occurring wholly or in part due to action or inaction by

Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable); and (d) any acts or omissions of

Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable).

The State will notify Contractor in writing if indemnification is sought; however, failure to do so will not relieve Contractor, except to the extent that Contractor is materially prejudiced. Contractor must, to the satisfaction of the State, demonstrate its financial ability to carry out these obligations.

The State is entitled to: (i) regular updates on proceeding status; (ii) participate in the defense of the proceeding; (iii) employ its own counsel; and to (iv) retain control of the defense, at its own cost and expense, if the State deems necessary. Contractor will not, without the State’s prior written consent (not to be unreasonably withheld), settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any claim, action, or proceeding.

Any litigation activity on behalf of the State, or any of its subdivisions under this Section, must be coordinated with the Department of Attorney General. An attorney designated to represent the State may not do so until approved by the Michigan Attorney General and appointed as a Special Assistant Attorney General.

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The State is constitutionally prohibited from indemnifying Contractor or any third parties.

Infringement Remedies. If, in either party’s opinion, any piece of equipment, software, commodity, or service supplied by Contractor or its subcontractors, or its operation, use or reproduction, is likely to become the subject of a copyright, patent, trademark, or trade secret infringement claim, Contractor must, at its expense: (a) procure for the State the right to continue using the equipment, software, commodity, or service, or if this option is not reasonably available to Contractor, (b) replace or modify the same so that it becomes non-infringing; or (c) accept its return by the

State with appropriate credits to the State against Contractor’s charges and reimburse the State for any losses or costs incurred as a consequence of the State ceasing its use and returning it.

Limitation of Liability and Disclaimer of Damages. IN NO EVENT WILL EITHER

PARTY’S AGGREGATE LIABILITY TO THE OTHER PARTY UNDER THIS

CONTRACT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN

CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR BY STATUTE OR

OTHERWISE, FOR ANY CLAIM RELATED TO OR ARISING UNDER THIS

CONTRACT, EXCEED THE MAXIMUM AMOUNT OF FEES PAYABLE UNDER

THIS CONTRACT. Neither party is liable for consequential, incidental, indirect, or special damages, regardless of the nature of the action.

Disclosure of Litigation, or…