5-Attachment - Supplement_Conformance Statements_Konica Minolta BAFO.docx

Request for Proposal

Solicitation No. BPM4656

Document Management Services Arizona Department of Administration State Procurement Office 100 N 15th Avenue Phoenix, AZ 85007

Conformance Statements – Supplement 3 Exceptions to Contract Terms & Conditions

Special Terms & Conditions

X Rationale: Where services are subject to acceptance criteria, then the criteria should be made known to the Contractor so that Contractor is able to comply.

State has the right to make acceptance of Services subject to acceptance criteria. State may apply acceptance criteria conformity to the Contract, accuracy, completeness, or other indicators of quality or other matter for which the Contract or law states a requirement, whether stated directly or by reference to another document, standard, reference specification, etc. State will not owe Contractor any payment for unaccepted Services; and State may, at its discretion, withhold or make partial payment for any rejected Services if Contractor is still in the process of re-performing or otherwise curing the grounds for State’s rejection.

X Rationale: The amount of liability is determined by weight risk (i.e., amount of liability one assumes) against reward (amount of revenue one expects to receive under the contract). Here, liability capped at 3x price of the material or service giving rise to the claim is the result of our balancing risk against reward.

13.7.1. LIMIT. Subject to the provisos that follow below and unless stated otherwise in the Special Terms and Conditions, State’s and Contractor’s respective first party liability arising from or related to the Contract is limited to the greater of $1,000,000 (one million dollars) or 3 (three) times the purchase price of the specific Materials or Services giving rise to the claim.

Uniform Terms & Conditions

X Rationale: Basic tenant of contract damages is that aggrieved party is not entitled to recoup all costs and expenses but only “reasonable” costs and expenses.

The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply.

7.2.1. Of a quality to pass without reasonable objection in the trade under the Contract description;

7.2.2. Fit for the intended purposes for which the materials are used as such use is described in the Contract;

X Rationale: 7.2.1 – where State has discretion to object, the exercise of such discretion should be reasonable so as to prevent arbitrary objection.

Unless otherwise modified elsewhere in these terms and conditions, the Contractor warrants that, for one year after acceptance by the State of the materials, they shall be:

7.2.1. Of a quality to pass without objection in the trade under the Contract description;

7.2.2. Fit for the intended purposes for which the materials are used;

X Rationale: Basic tenant of contract damages is that aggrieved party is not entitled to recoup all expenses and costs but only “reasonable” expenses and costs. Moreover, where State has discretion to offset damages, the exercise of such discretion should be reasonable so as to prevent arbitrary assessment of damages.

8.4. Right of Offset. The State shall be entitled to offset against any sums due the Contractor, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions.

Konica Minolta Business Solutions U.S.A., Inc.

Company Name

Signature of Person Authorized to Sign

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