Appendix C -ITS Standard Clauses april-2025.pdf

April 2025

APPENDIX C

STANDARD CLAUSES FOR

NEW YORK STATE

OFFICE OF INFORMATION TECHNOLOGY SERVICES

CONTRACTS

PLEASE RETAIN THIS DOCUMENT

FOR FUTURE REFERENCE

CONTRACTS APPENDIX C

Page 2 of 32 April 2025

TABLE OF CONTENTS Page

1. Headings and Captions 3

2. Modification Of Contract 3

3. Executory Provision/Contract Formation 3

4. Contractor Responsibilities, Qualifications, And Change In Status 3

5. Independent Contractor 3

6. Contractor Staff 3

7. Subcontractors, And Contractor Obligations 4

8. Background Checks / Onboarding 5

9. Cooperation With Third Parties 5

10. Cooperation With Investigations, Audits, And Legal Proceedings 5

11. Right To Inspect 5

12. Work Outside The Scope Of The Contract 6

13. Notice 6

14. Itemization, Electronic Payment, And Electronic Invoicing Requirements 6

15. Bid Protests 7

16. Warranties And Guarantees 7

17. Indemnification And Limitation Of Liability 9

18. Suspension Of Work 10

19. Termination 10

20. Default 11 21 Force Majeure 11

22. Dispute Resolution 11

23. General Provision As To Remedies 11

24. Insurance 11

25. Taxes 11

26. Outstanding Tax Liabilities 12

27. Encouraging Use Of New York State Businesses In Contract Performance 12

28. State Finance Law Section 139-I Requirement For Contracts Of $1,000,000 Or More 12

29. Ethics Compiance 13

30. Summary Of Policy And Prohibitions On Procurement Lobbying 13

31. Most Favorable Terms 14

32. Transfer Or Assignment Of Contract 14

33. Waiver Of Breach 14

34. Accessibility 14

35. Severability 14

36. Piggybacking 14

37. NYS Finance Law §163(4)(G) Compliance: Employee Information Required To Be Reported For Certain Consultant Contractors

And Service Contractors

38. Registration With NYS Department Of State 16

39. New York State Vendor File Registration With OSC 16

40. Extraneous Terms 16

41. Nondisclosure & Confidentiality 16

42. Information Releases 19

43. Breaches Of NYS Confidential Information 20

44. Federal Funding And Operating Clauses 21

45. Transition And Knowledge Transfer 24

46. Ownership of Technology 25

47. Data Transparency, Accessibility, Migration, And Destruction At End Of Contract 26

48. Audits of Licenesed Products 27

49. Prohibition On Contracting For Certain Telecommunications And Video Surveillance Services Or Equipment 27

50. Prevailing Wages For Public Works And Building Services Contracts 27

51. Compliance With HIPPA (Health Insurance Portability And Accountability Act Of 1996), Hi-Tech (Health Information

Technology For Economic And Clinical Health Act Of 2009), And Other Health Information Privacy And Security Laws

52. Safeguarding Federal Tax Information 30

53. Criminal Justice Information Services Access 31

Page 3 of 32 April 2025

1. HEADING AND CAPTIONS

The headings or captions contained within are intended solely for convenience and reference purposes and shall in no way be deemed to define, limit, or describe the scope or intent of the Contract or any provisions thereof.

2. MODIFICATION OF CONTRACT

The Contract may be amended only by mutual written consent of the Parties and approval by the NYS Office of the Attorney General (“OAG”) and NYS Office of the State Comptroller (“OSC”), if required.

3. EXECUTORY PROVISION/CONTRACT

FORMATION

Pursuant to State Finance Law, Section 112, as applicable, the Contract must first be approved by OSC before becoming effective.

4. CONTRACTOR RESPONSIBILITIES,

QUALIFICATIONS, AND CHANGE IN STATUS

Contractor must remain a "responsible" vendor, as defined by the State Finance Law, relevant case law and applicable guidelines, throughout the term of the Contract. Failure to do so may result in suspension or termination of the Contract.

Contractor must present evidence of its continuing legal authority to do business in NYS, its integrity, experience, ability, prior performance, and organizational and financial capacity, upon request by ITS.

ITS reserves the right to suspend any or all activities under the Contract at any time if it discovers information that calls into question the responsibility of the Contractor. In the event of such suspension, the Contractor will be given written notice outlining the particulars of such suspension and must comply with the terms of the suspension order. Contract activity may resume at such time as ITS issues a written notice lifting the suspension order.

In addition to the requirements of NYS Finance Law §138 (requiring the State’s approval of subcontractors and assignments, and/or conveyances), the Contractor shall notify ITS in writing of any substantial change in the ownership or financial viability of the Contractor, its Affiliates, subsidiaries or divisions, or partners, immediately upon occurrence.

“Substantial change” means: (i) sales, acquisitions, mergers or takeovers of the Contractor, its affiliates, subsidiaries, divisions, or partners that result in a change in the controlling ownership or assets of such entity after the submission of a response to this solicitation; (ii) entry of an order for relief under Title 11 of the United States Code; (iii) the making of a general assignment for the benefit of creditors; (iv) the appointment of a receiver of Contractor’s business or property or that of its Affiliates, subsidiaries or divisions, or partners; or action by Contractor, its Affiliates, subsidiaries or divisions, or partners under any State insolvency or similar law for the purposes of its bankruptcy, reorganization, or liquidation; or

(v) court ordered liquidation of Contractor, its Affiliates, subsidiaries or divisions, or partners.

In addition to any other remedies available at law or equity, ITS shall have the right to cancel the Contract, in whole or in part, for cause, if it finds, in its sole judgment, that such substantial change adversely affects the delivery of services or is otherwise not in the best interests of the State.

The Contractor shall immediately notify ITS upon learning of any situation that can reasonably be expected to adversely affect the delivery of services under the Contract. If such notification is verbal, the Contractor shall follow such initial verbal notice with a written notice to ITS which shall include a description of the situation and a recommendation of a resolution within three

(3) calendar days of Contractor’s becoming aware of the situation.

5. INDEPENDENT CONTRACTOR

Contractor is an independent contractor, and its Contractor Staff are not and shall not act as State employees in the performance of the Contract. Contractor and its Contractor Staff are not entitled to any of the benefits associated with employment by the State. The Contractor agrees, during the term of the Contract, to maintain at Contractor’s expense those benefits to which its employees would otherwise be entitled by law, including health benefits, and all necessary insurance for its Contractor Staff, including worker’s compensation, disability and unemployment insurance, and to provide ITS with certification of such insurance upon request. The Contractor remains responsible for all applicable federal, state, and local taxes, and all FICA contributions.

6. CONTRACTOR STAFF

“Contractor Staff” includes all agents, employees, officers, partners, and subcontractors of the Contractor who shall perform services under the Contract or have access to "NYS Confidential Information," as this term is defined.

All Contractor Staff performing work under the Contract must meet or exceed the technical and training qualifications set forth in the solicitation and resulting contract, must comply with all security and administrative requirements of ITS, must adhere to all applicable State policies and procedures communicated to the Contractor, must possess the necessary qualifications, training, licenses, and permits as may be required within the jurisdiction where the services specified are to be provided or performed, and shall be legally entitled to work in such jurisdiction. All persons, corporations, or other legal entities that perform services under the Contract on behalf of Contractor shall, in performing the services, comply with all applicable Federal and State laws concerning employment in the United States. Contractor Staff may be required to execute a nondisclosure agreement or series of nondisclosure agreements, either before or upon arrival for work at a NYS Facility, as this

Page 4 of 32 April 2025 term is defined herein, or, if in ITS’s sole discretion, the Contractor’s Staff will otherwise have access to critical State networks, equipment, data, or information.

ITS, in its sole discretion, may require the Contractor to remove from interaction with the State, or may refuse access to State systems and NYS Facilities or require removal from any NYS Facility any Contractor Staff performing work under the Contract that ITS determines poses a security risk, has a work performance that ITS finds inadequate or unacceptable, has provided false or misleading information about credentials or work history, or otherwise fails to meet ITS business requirements or expectations. The Contractor shall not assign the person to any aspect of the Contract or future work orders without ITS' consent. Such action by ITS shall not relieve the Contractor of the obligation to perform all work in compliance with the Contract terms.

For reasons of safety and public policy, the use of illegal drugs and/or alcoholic beverages by the Contractor or its agents, employees, partners or subcontractors is not permitted while performing any phase of the contractual services for ITS under the Contract.

The State shall not be liable for any expense incurred by the Contractor or its agents, employees, partners or subcontractors for any parking or towing fees.

Any Contractor staff or subcontractors (as allowable) providing services to ITS shall be legally authorized to work in the United States or the jurisdiction in which services are being rendered. If ITS determines Contractor or Subcontractor staff are not authorized to work in the United States or other jurisdiction, ITS reserves the right to deem such failure as a material breach. Contractor must immediately notify ITS if it become aware that an individual providing services to ITS is not authorized to work, and agrees to immediately remove from any project or services any individual not authorized to work.

7. SUBCONTRACTORS, AND CONTRACTOR

OBLIGATIONS

If allowed in the Solicitation, Bidders were permitted to submit proposals that included subcontractors (defined as contractors to the prime Contractor that is signing the Contract, who, pursuant to a written contract with Contractor, agree to perform a portion of the Contract's work upon written approval by ITS).

The successful Bidder receiving Contract award and signing the Contract is and remains the Prime Contractor and single point of contact for ITS for this engagement. The Contractor is responsible for meeting all Contract obligations set forth in the solicitation and Contract, including all appendices, attachments, and any subsequent amendments mutually agreed to in writing between the Parties. All subcontractors must be identified by Contractor and must be acceptable to ITS. The Contractor agrees not to subcontract any of its services without the prior written approval of ITS, which approval shall not be unreasonably withheld upon receipt of written request made by Contractor to ITS to subcontract. Contractor may identify a subcontractor proposed to perform certain Contract requirements, but such identification does not relieve the Contractor of any responsibility for performance under the Contract with ITS. Any subcontractor shall be clearly identified by Contractor and the nature and extent of its involvement in and/or proposed performance under the Contract shall be fully explained by the Contractor to ITS.

The Contractor shall provide to ITS a written copy of all subcontracts and third-party contracts related to the provision of services to ITS under the Contract upon request, including a certification that it has fully disclosed all terms and conditions of such contracts and will disclose any amendments which occur subsequent to the original submission. Failure to provide such information shall constitute a breach of the Contract. Any waiver of breach as a result of Contractor’s failure to furnish information required in this paragraph shall not be deemed a waiver of any subsequent breach. The Contractor may request ITS’ approval to submit redacted copies of such subcontracts and third-party contracts from which trade secrets or proprietary information has been removed pursuant to the trade secret provisions of the Contract. No subcontract entered into by the Contractor shall relieve the Contractor of any liabilities or obligations in the solicitation or the resultant Contract. The Contractor accepts full responsibility for the actions of any Contractor Staff who carry out any of the provisions of the Contract. The Contractor is required to retain the requisite amount of legal control over its subcontractors such that the Contractor can remain the single point of contact for ITS and retain ultimate responsibility for all services performed under the Contract.

All subcontracts shall be in writing and include, in such a manner that they will be binding upon each subcontractor with respect to work performed in connection with the Contract, provisions specifying:

• That the work performed by the subcontractor must be in accordance with the terms and conditions of the Contract including Appendix A – Standard Clauses for New York State Contracts and the solicitation;

• That nothing contained in such subcontract shall impair the rights of ITS or the State;

• That nothing contained in the subcontract shall create any contractual relationship between the subcontractor and ITS or the State;

• That the State and ITS shall have the same authority to audit the records of all subcontractors as it does those of the Contractor; and

• That subcontractor shall cooperate with any investigation, audit, litigation, or other inquiry related to the solicitation or the resulting Contract.

Page 5 of 32 April 2025

• That if at any time during performance under the Contract total compensation to a subcontractor exceeds or is expected to exceed $100,000, that subcontractor is required to submit and certify to ITS a Vendor Responsibility Questionnaire.

Unless waived in writing by ITS, all subcontracts between the Contractor and subcontractors shall expressly name New York State, acting through ITS, as the sole intended third-party beneficiary of such subcontract. ITS reserves the right to review and approve or reject any subcontract, as well as any amendment to said subcontract(s), and this right shall not make ITS or New York State a party to any subcontract or create any right, claim, or interest in the subcontractor or proposed subcontractor against ITS. ITS reserves the right, at any time during the term of the Contract, to verify that the written subcontract between the Contractor and subcontractors is in compliance with all of the provisions of this Section and any subcontract provisions contained in the Contract.

The Contractor shall give ITS immediate notice in writing of the initiation of any legal action or suit which relates in any way to a subcontract with a subcontractor or which may affect the performance of the Contractor’s duties under the Contract. Any subcontract shall not relieve the Contractor in any way of any responsibility, duty and/or obligation of the Contract.

ITS reserves the right to reject any proposed subcontractor or supplier if it determines that the company is not qualified or is not responsible.

8. BACKGROUND CHECKS / ONBOARDING

All Contractor Staff shall, prior to the commencement of any services, whether on or off-site, comply with all State onboarding and security clearance requirements, including training and signing certifications or agreements, required for access to NYS Confidential Information or Data or required for access to NYS Facilities or Data Centers, the preceding described, collectively, as ”onboarding.” This includes requirements related to the access to Regulated data, including any requirements of the State's public safety agencies, or those related to the Federal Bureau of Investigation Criminal Justice Information Services (CJIS) Security Policy (https://www.fbi.gov/services/cjis/cjis-security-policy-resource-center).

Contractor agrees that its Contractor Staff performing services on-site at NYS Facilities or Data Centers or those with logical access to NYS Confidential Information or Data (i.e., log-in access) shall be required to undergo the same security clearances as those required of ITS employees. If not physically or virtually escorted, each Contractor Staff providing services shall submit identifying information to the State and be fingerprinted. ITS shall arrange for the scheduling of fingerprinting. Such fingerprints shall be submitted to the NYS Division of Criminal Justice Services for a state criminal history record check and, at ITS' discretion, to the Federal Bureau of Investigation for a national criminal history record check.

Contractor also agrees that its Contractor Staff performing services on-site at NYS Facilities or Data Centers may be required to comply with those health checks which NYS requires of its own employees working on-site including for example providing proof of vaccination against, and/or testing for, infectious disease such as COVID-19.

All expenses, including travel and lodging, associated with the onboarding and security clearance process including fingerprinting of Contractor Staff are the responsibility of the Contractor and are not reimbursable.

ITS shall make all suitability determinations on Contractor Staff. For purposes of this Section, a “suitability determination” is a determination that there are reasonable grounds to believe that an individual will likely be able to perform all contractual requirements without undue risk to the interests of the State.

Failure of a security clearance or non-compliance with this Section will disqualify any Contractor Staff from performing any services. If any Contractor Staff are removed from providing services, they may be subject to all onboarding and security clearance requirements if they are later returned to performing services.

All Contractor Staff shall, at the termination of their providing services to ITS , comply with all State off-boarding and security procedures, including return to ITS of any physical or logical access badges or other credentials that were issued by the State and required for their access to NYS Confidential Information or Data or NYS Facilities or Data Centers.

9. COOPERATION WITH THIRD PARTIES

Upon request by the State, the Contractor shall fully cooperate with any third party designated by the State such as, but not limited to, other contractors or subcontractors, including successor Contractors, retained by the State.

10. COOPERATION WITH INVESTIGATIONS,

AUDITS, RISK ASSESSMENTS, AND LEGAL

PROCEEDINGS

Upon request by ITS, the Contractor shall reasonably, to the extent required by law and without waiving any of its legal rights or remedies, cooperate with the State, including with OSC, in any investigation, audit, risk assessment, or other inquiry related to the solicitation or the resulting Contract or any related litigation, at no cost to the State. This provision shall survive the termination of the Contract.

11. RIGHT TO INSPECT

The State, and any regulatory authority having jurisdiction over the State or ITS, has the right to review Contractor’s and, if applicable, any subcontractor’s procedures, practices and controls related to the security of NYS Confidential

Page 6 of 32 April 2025

Information and information assets. Upon request, Contractor will make available for review the policies, procedures, practices, and documentation related to the protection of NYS Confidential Information and information assets, including but not limited to those related to information security governance, network security, privacy, artificial intelligence, risk and compliance management policies and procedures, personnel security background screening/checks and vetting procedures, secure systems/software development protocols, change/release management, testing, quality assurance, vulnerability management, secure disposal/sanitization, and documentation.

Contractor may be asked to provide a recent independent audit report or artificial intelligence (AI) impact assessment as defined by NIST if solution incorporates AI. Contractor may be asked to provide information regarding the explainability of the artificial intelligence solutions. Contractor may also be asked to provide information on security, compliance, privacy or artificial intelligence controls prior to awarding of the Contract or at any time during the Contract term. The State, and any regulatory authority having jurisdiction over the State or ITS, shall have the right to send its officers and employees to inspect Contractor’s facilities and operations used to provide Contract services. On the basis of such inspection, the State may require Contractor to implement corrective measures where the Contractor is found to be noncompliant with Contract provisions. The State shall provide at least two (2) weeks’ notice of its intention to exercise this audit right and will not use an independent third-party that is a competitor of Contractor. Such audit shall be conducted to ensure compliance with the requirements of the Contract.

12. WORK OUTSIDE THE SCOPE OF THE

CONTRACT

The Contractor must not perform work outside the scope of the Contract unless such work is authorized by a properly executed written amendment to the Contract, and if applicable, approved by the OSC. Work not so authorized shall not be compensated.

13. NOTICE

All notices given pursuant to this Contract shall be in writing and shall be validly given when mailed by registered or certified mail, or hand delivered. In addition, a copy of the notice will be emailed to the recipient(s). Such notices shall be addressed as set forth below, or to such different addresses as the Parties may from time-to-time specify by written notice to the other Party.

The Parties agree to mutually designate individuals as their respective representatives for purposes of this Contract.

For the NYS Office of Information Technology Services:

NYS Office of Information Technology Services Vendor Sourcing and Management Organization Empire State Plaza, PO Box 2062 Albany, NY 12220-0062 vsmo@its.ny.gov

With a copy to:

NYS Office of Information Technology Services Division of Legal Affairs Empire State Plaza, PO Box 2062 Albany, NY 12220-0062 its.sm.dla@its.ny.gov

Additional individuals may be designated, in writing, by the Parties for purposes of communications related to administration/billing, problem resolution, and/or for dispute resolution.

14. ITEMIZATION, ELECTRONIC PAYMENT, AND

ELECTRONIC INVOICING REQUIREMENTS

a. Itemization. Contractor is apprised that its bills, documentation supporting charges in those bills, and all invoices paid under the Contract are subject to audit by auditors internal or external to ITS, and agrees to provide timely, complete, and accurate billing invoices to ITS in order to be eligible for payment. "Timely, complete, and accurate billing invoices" means invoices submitted to ITS in a timely manner as described below, containing all information and supporting documentation required by the Contract, ITS, and OSC with an itemization of each product or service. Contractor shall provide such itemization at a level of detail reasonably requested by ITS, including a breakdown with enough detail for ITS to be able to confirm that Contractor is abiding by the requirements of the Contract. Contractor shall cooperate with ITS' reasonable requests for greater detail as required.

b. Electronic Payment Process. Contractor is apprised that its bills, documentation supporting charges in those bills, and all invoices paid under this Contract are subject to audit by auditors internal or external to ITS, and Contractor agrees to provide complete and accurate billing invoices to ITS in order to be eligible for payment. "Complete and accurate billing invoices" means invoices submitted to ITS containing all information and supporting documentation required by the Contract, ITS, and OGS BSC with an itemization of each product or service. Contractor shall provide such itemization at a level of detail reasonably requested by ITS. Contractor shall co-operate with ITS' reasonable requests for greater detail as required. The vendor’s invoices are to be submitted individually in PDF file format sent to the following e-mail address administered by OGS BSC:

accountspayable@ogs.ny.gov.

i. Payment for invoices submitted by the Contractor shall be rendered electronically, unless payment by paper check is expressly authorized by ITS in its sole discretion, due to extenuating circumstances. Such electronic payment shall be made in accordance with ordinary State procedures and practices. The Contractor shall comply with BSC's procedures to authorize electronic payments. Contractor acknowledges that it will not be eligible for payment on any invoices submitted under this Contract if it does mailto:vsmo@its.ny.gov mailto:its.sm.dla@its.ny.gov mailto:accountspayable@ogs.ny.gov

Page 7 of 32 April 2025 not comply with BSC's electronic payment procedures, except where ITS has expressly authorized payment by paper checks as set forth above.

ii. The State’s payment obligations shall be governed by the provisions of the New York State Finance Law (SFL). Any late charges which accrue on any payments due under this Agreement shall be calculated in accordance with the provisions of Article XI-A of the SFL.

iii. Contractor shall submit to ITS the ITS request for payment, together with appropriate invoices with full supporting detail(s) to ITS’ reasonable satisfaction.

The invoice must include a reference to the current ITS Contract Number. Contractor shall remit invoices to ITS in accordance with the Section v. to b. Electronic Payment Process below, with any questions posed to e-mail its.sm.contracts@its.ny.gov or phone (518) 402-2459.

iv. Unless otherwise stated in the contract, contractor shall invoice ITS, monthly in arrears, for all Services rendered during the month for the benefit of ITS, with appropriate detailed invoices in a form agreed to and as directed by ITS. Invoices shall be due thirty (30) calendar days after the last day of the preceding month. Notwithstanding the foregoing, for any Services rendered during the State’s prior fiscal year (April 1 through March 31), any invoices for such Services must be submitted by May 15 of the State’s current fiscal year. Failure to submit such invoices by May 15 will result in forfeiture of payment due to Contractor unless ITS provided written notification detailing otherwise.

v. Contractor shall remit invoices to ITS in accordance with invoicing instructions published by the NYS OGS Business Services Center on their website online via: https://bsc.ogs.ny.gov/nys-vendors. Contractor must submit complete and accurate invoices via email to: AccountsPayable@ogs.ny.gov. The subject field should include agency name (ITS), invoice number, and Routing ID (if any) being billed. Invoices must be submitted in a non-editable file format, preferably a PDF. Excel and Word files should be converted to PDF to ensure data presentation, integrity, and to expedite processing time.

c. Electronic Invoicing. Vendors must follow New York State electronic invoicing requirements, which are subject to change at the direction of ITS Accounts Payable.

15. BID PROTESTS

The State of New York strives to assure a fair, open and competitive process to all vendors qualified to respond to Solicitations. In the event that any vendor has a complaint or objection to Solictation requirements, the procurement process or any matter affecting the submission of a vendor’s Proposal, the vendor is encouraged to informally contact the ITS Designated Contact for this procurement immediately to resolve the matter. If the vendor believes that the objection affects the outcome or nature of the proposed award for this Procurement, the vendor must follow the procedures for timely filing a formal protest set forth in the ITS Bid Protest Policy.

Prior to Contract award, protests which may affect the outcome or nature of the award may only be considered by the State in the context of a formal written protest.

16. WARRANTIES AND GUARANTEES

a. Contract Deliverables. Contractor warrants and represents that the services required by the Contract shall be performed or provided in accordance with all the terms and conditions, covenants, statements, and representations contained in the Contract. The Contractor warrants that it will perform services in good faith, in a professional manner in accordance with applicable professional standards, and that the services will conform in all material respects to the description of such services set forth herein and in any applicable Statements of Work (SOW), Deliverable Expectation Documents (DED), or any other similar contractual document. The Contractor warrants that it will correct, at no charge to ITS or the State, services which fail to meet applicable professional standards and which result in obvious or patent errors in the progression of its work during the applicable warranty period. Contractor’s failure to meet pre-defined service levels may result in a credit or chargeback in an amount pre-determined by the Parties.

b. Workmanship Warranty. Contractor warrants and represents that all services and Deliverables shall meet the completion criteria set forth in the Contract or any relevant SOW, DED, or other similar contractual document, and that each of Contractor's services shall be performed in a professional and workmanlike manner in accordance with the highest applicable industry standards and according to its current description (including any completion criteria) contained in the Contract, an attachment, an SOW, a DED, or other similar contractual document. A claim that specific services provided by Contractor did not meet the “highest applicable professional standards” must be made by ITS within ninety (90) days after the date on which the breach occurred.

For purposes of the Contract, “highest applicable industry standards” shall be defined as the degree of care, skill, efficiency, and diligence that a prudent person possessing technical expertise in the subject area and acting in a like capacity would exercise in similar circumstances.

In the event that there has been a breach of the foregoing warranty and the SOW,DED, or other similar contractual mailto:its.sm.contracts@its.ny.gov https://bsc.ogs.ny.gov/nys-vendors mailto:AccountsPayable@ogs.ny.gov

Page 8 of 32 April 2025 document does not provide a specific remedy for the breach of that warranty, ITS’ remedies under this warranty will be: (1) cure by Contractor within a reasonable time, not to exceed thirty

(30) days, at no charge to ITS; and (2) if Contractor does not cure within the thirty (30) day period, ITS will be entitled to a refund of the amounts paid to Contractor for the service or part thereof that gave rise to the claim. This warranty is in addition to, and not in lieu of, any other warranty under the Contract or other remedies that may be provided in an SOW, a DED, other similar contractual document, or under the Contract. In addition, the foregoing does not limit ITS’ right to seek additional remedies against Contractor for any damage caused by Contractor to hardware or other products owned by the State (for example, damages incurred by ITS as a result of hardware being rendered unusable).

Additionally, for fixed price or not-to-exceed Deliverables, Contractor warrants that the Deliverable will be fit for use by ITS (“fitness for use warranty”) for a thirty (30) day period from Deliverable acceptance by ITS, as "Deliverable Acceptance" is defined below in the Contract. The remedies available to ITS in the event that Contractor breaches this additional fitness for use warranty will be: (1) ITS will be entitled to return the fixed price Deliverable at no charge, including shipping, to Contractor; and (2) ITS will be entitled to a refund of all amounts paid to Contractor for the fixed price Deliverable. The Parties agree that custom programming may be provided to ITS pursuant to the terms of the Contract only if it is identified as a fixed price Deliverable.

The warranties stated above will not apply to the extent that there has been misuse, accident, modification, unsuitable physical or operating environment, operation in other than the specified operating environment, improper maintenance by ITS, or failure caused by a Deliverable for which Contractor is not responsible.

c. Software Warranty; Conformance with Specifications.

Contractor warrants that each warranted software product, when used in the specified operating environment, will conform to its specifications. During the warranty period, Contractor shall provide defect-related program services without charge, for at least one year following the software's general availability.

If a software product does not function as warranted during the first year after ITS obtains its license and Contractor is unable to make it do so, ITS may return the software product and ITS’ money will be refunded. To be eligible, ITS must have obtained its license while program services (regardless of the remaining duration) were available for it.

These warranties give ITS specific legal rights and ITS may also have other rights which vary from jurisdiction to jurisdiction. Some jurisdictions do not allow the exclusion or limitation of implied warranties, so the above exclusion or limitation may not apply to ITS. In that event such warranties are limited in duration to the warranty period, no warranties apply after that period. Nothing in the Contract affects any statutory rights of consumers that cannot be waived or limited by contract

d. Software Virus Warranty. Contractor warrants that it has no knowledge of any viruses or other malware in the software product(s). If a virus or such other malware is discovered therein, Contractor shall replace such software with the same software not containing any known malware. Virus or malware are defined as any computer code, whether or not written or conceived by Contractor, which disrupts, disables, harms, or otherwise impedes in any manner the operation of the software product, or any other associated software, firmware, hardware, or computer system (such as local area or wide-area networks), including aesthetic disruptions or distortions, but does not include security keys or other such devices installed by Contractor.

e. Date/Time Warranty: Contractor warrants that Products or Services furnished pursuant to this Contract shall, when used in accordance with the terms of the Contract or any appliable Product Documentation, be able to accurately process date/time data (including, but not limited to, calculating, comparing, and sequencing) transitions, including leap year calculations.

Where a Contractor proposes or the Contract or Solicitation requires that specific Products or Services must perform as a package or system, this warranty shall apply to the Products as a system. Where Contractor is providing ongoing services, including but not limited to: (i) consulting, integration, code or data conversion, (ii) maintenance or support services, (iii) data entry or processing, or (iv) contract administration services (e.g., billing, invoicing, claim processing), Contractor warrants that services shall be provided in an accurate and timely manner without interruption, failure or error due to the inaccuracy of Contractor’s business operations in processing date/time data (including, but not limited to, calculating, comparing, and sequencing) various date/time transitions, including leap year calculations. Contractor shall be responsible for damages resulting from any delays, errors or untimely performance resulting therefrom, including but not limited to the failure or untimely performance of such services.

f. Personnel Eligible for Employment. Not withstanding Appendix C, Section 6, Contractor warrants and represents that all personnel performing services under the Contract are qualified to provide services and eligible for employment in the United States or applicable jurisdictoin and shall remain so throughout the term of the Contract. Contractor shall provide such proof of compliance as is required by ITS.

g. Service Guarantee. Contractor’s failure to satisfy performance standards or requirements set forth in the Contract or solicitation may result in a credit or chargeback in an amount as specified in the solicitation or Contract.

Page 9 of 32 April 2025

h. Compliance with Laws. Contractor warrants and represents that, throughout the term of the Contract and any extensions, Contractor shall meet or exceed all requirements of the Contract and any applicable laws, including but not limited to those related to insurance, and agrees to provide such proof as required by ITS.

Contractor warrants and represents that, throughout the term of the Contract and any extensions, and in the performance of obligations under the Contract, it will: (i) comply with all applicable laws, ordinances, rules, and regulations of any governmental entity; (ii) pay, at its sole expense, all applicable permits, licenses, tariffs, tolls, and fees; and (iii) give all notices required by any laws, ordinances, rules, and regulations of any governmental entity. Failure to do so may constitute grounds for ITS to terminate or suspend the Contract, in whole or in part, or to take any other action deemed necessary by ITS.

i. Additional Warranties. Where Contractor generally offers additional or more advantageous warranties than those set forth herein, Contractor shall offer or pass through any such warranties to the State.

j. No Limitation of Rights. The rights and remedies of the State provided in this clause are in addition to and do not limit any rights afforded to the State by any other clause of the Contract.

k. Survival of Warranties. All warranties contained in the Contract shall survive termination of the Contract.

l. No Implied Warranties. To the extent permitted by law, these warranties are exclusive and there are no other express or implied warranties or conditions, including warranties or conditions of merchantability and fitness for a particular purpose.

17. INDEMNIFICATION and LIMITATION OF

LIABILITY

a. Indemnification. Contractor shall be fully liable for the actions of its agents, officers, employees, partners, and subcontractors, and shall fully indemnify and save harmless the State from suits, actions, damages, and costs of every name and description relating to personal injury and damage to real or personal property caused by Contractor, its agents, officers, employees, partners, or subcontractors, without limitation;

provided however, that the Contractor shall not indemnify for that portion of any claim, loss, or damage arising hereunder due to the negligent act or negligent failure to act of the State.

Contractor shall indemnify and hold the State harmless from any loss or damage to the State resulting from the violation by the Contractor, its agents, officers, employees, partners and subcontractors of State and ITS security procedures or policies or resulting from any criminal acts committed by Contractor’s officers, agents, employees, partners, and subcontractors while providing services under the Contract.

This section is not subject to the limitation of liability provisions of the Contract.

b. Indemnification for Intellectual Property Infringement.

Contractor shall indemnify, defend, and hold the State harmless, without limitation, from and against any and all damages, expenses (including reasonable attorneys’ fees and legal fees), claims, judgments, liabilities, and costs which may be assessed against the State in any action for infringement of a United States Letter Patent, or of any copyright, trademark, trade secret, or other third-party proprietary right in relation to the services, products, documentation, or Deliverables furnished or utilized by Contractor under the Contract, provided that the State shall give Contractor:

i. prompt written notice of any action, claim, or threat of infringement suit, or other suit;

ii. the opportunity to take over, settle or defend such action, claim, or suit at Contractor’s sole expense; and

iii. assistance in the defense of any such action at the expense of Contractor.

Where a dispute or claim arises relative to a real or anticipated infringement, the State may require Contractor, at is sole expense, to submit such information and documentation, including formal patent attorney opinions, as the State shall require. This paragraph shall not apply to that portion of any infringement claim which results from a material modification by the State, without Contractor’s approval, of any products, documentation, or Deliverables furnished or utilized by Contractor pursuant to the Contract.

If any products, documentation, or Deliverables are determined to be infringing, or Contractor suspects a product, documentation, or Deliverables may be infringing, Contractor will, at its expense, and with the State’s prior written approval, either: (i) procure the right for the State to continue using the products, documentation, or Deliverables; (ii) replace the products, documentation, or Deliverables with a non-infringing equivalent; (iii) modify the products, documentation, or Deliverables to make it non-infringing; or (iv) direct the return of the products, documentation, or Deliverables and refund any monies paid by the State for the products, documentation, or Deliverables. These remedies shall be in additional to, not exclusive, of any other rights or remedies the State may have at law or equity.

Notwithstanding the foregoing, the State reserves the right to join such action, at its sole expense, when it determines that there is an issue involving a significant public interest. This section is not subject to the limitation of liability provisions of the Contract.

Page 10 of 32 April 2025

c. Limitation of Liability. For all other claims against the Contractor where liability is not otherwise set forth in the Contract as being “without limitation,” and regardless of the basis on which the claim is made, Contractor’s liability under the Contract for direct damages shall be limited to the greater of the following: (i) $2,000,000 (Two Million Dollars); or (ii) two (2) times the amounts paid to the Contractor under the Contract during the twelve (12) months of the Contract term which precedes the giving of notice of the claim by the State;

or (iii) the amount for which the applicable insurance is stated in the "Contractor's Insurance Requirements" appendix to the Contract. For this purpose, amounts paid shall include, but not be limited to, payments made electronically, by check, by offset, or by the application of credits from the Contractor to the State.

Unless otherwise specifically enumerated herein, neither Party shall be liable for any incidental, punitive, consequential, indirect or special damages of any kind which may result directly or indirectly from the performance of the Contract, including, without limitation, damages resulting from loss of use or loss of profit by the State, the Contractor, or by others, however caused and regardless of the theory of liability even if such Party has been informed of the possibility of such damages.

The limitations of liabilities, disclaimers of warranties, exclusivity of remedies, and other limitations are an essential element of the bargain between the Parties (without which the transactions contemplated by the Contract would not occur) and will apply even if a remedy fails in its essential purpose.

d. No Indemnification by the State. The State does not agree to any indemnification provisions that require the State to indemnify or save harmless Contractor or third parties.

18. SUSPENSION OF WORK

The State reserves the right to suspend any or all activities under the Contract, at any time, in the best interests of the State. In the event of such suspension, the Contractor will be given a formal written notice outlining the particulars of such suspension. Examples of the reasons for such suspension include but are not limited to, a budget freeze on State spending or declaration of emergency. Upon issuance of such notice, the Contractor shall comply with the suspension order. Contractor shall be paid for services performed prior to suspension in accordance with the Contract. Such suspension will be lifted upon written notice to Contractor.

Nothing in this paragraph shall diminish the State’s right to terminate the Contract as provided in the Contract.

19. TERMINATION

a. For Convenience. By written notice, the Contract may be terminated at any time by the State for convenience upon sixty

(60) days written notice without penalty or other early termination charges due. Such termination of the Contract shall not affect any project or purchase order that has been issued under the Contract prior to the date of such termination. If the Contract is terminated pursuant to this paragraph, the State shall remain liable for all accrued but unpaid charges for hourly-based services incurred through the date of the termination. The State shall not be liable for any accrued but unpaid charges for Deliverables that have not been accepted by the State.

b. For Cause. For a material breach that remains uncured for more than thirty (30) days from the date of written notice to the Contractor, the Contract may be terminated by the State at the Contractor’s expense where Contractor becomes unable or incapable of performing, or meeting any requirements or qualifications set forth in the Contract, or for non-performance, or upon a determination that Contractor is non-responsible or for any of the other reasons stated in this section with the exception of termination for convenience. Such termination shall be upon written notice to the Contractor. In such event, the State may complete the contractual requirements in any manner it may deem advisable and pursue available legal or equitable remedies for breach.

c. For Suspension or Delisting of Contractor’s Securities.

If the Contractor’s securities are suspended or delisted by the New York Stock Exchange or the NASDAQ, as applicable, if the Contractor ceases conducting business in the normal course, becomes insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets or avails itself of or becomes subject to any proceeding under the Federal Bankruptcy Act or any statute of any state relating to insolvency or the protection of rights of creditors, the State, in its sole discretion, may terminate the Contract or exercise such other remedies as shall be available under the Contract, at law and/or equity.

d. For Vendor Responsibility Related Findings. ITS may, in its sole discretion, terminate the Contract if it finds at any time during the term of the Contract that the Contractor is non-responsible, or that any information provided in the Vendor Responsibility Questionnaire submitted with Contractor’s response was materially false or incomplete, or if the Contractor fails to timely or truthfully comply with ITS' request to update its Vendor Responsibility Questionnaire.

e. Mitigation of Costs. The Contractor shall not undertake any additional or new contractual obligations on or after the receipt of notice of termination without the prior written approval of the State. On or after the receipt of a notice of termination and during the termination notice period, as applicable, the Contractor shall take all commercially reasonable and prudent actions to close out unnecessary outstanding, existing obligations as economically as possible for the State.

Page 11 of 32 April 2025

20. DEFAULT

a. If either Party breaches a material provision of the Contract, which breach remains uncured for a period of thirty (30) days after written notice thereof from the other Party specifying the breach (or if such breach cannot be completely cured within the thirty (30) day period, such longer period of time provided that the breaching Party proceeds with reasonable diligence to completely cure the breach) or if Contractor shall cease conducting business in the normal course, become insolvent, make a general assignment for the benefit of creditors, suffer or permit the appointment of a receiver for its business or assets or shall avail itself of or become subject to any proceeding under the Federal Bankruptcy Act or any statute of any state relating to insolvency or the protection of rights of creditors, then and in any such event, the other Party may, at its option, terminate the Contract upon ten (10) days written notice and exercise such other remedies as shall be available under the Contract, at law and/or equity.

b. No delay or omission to exercise any right, power or remedy accruing to either Party upon breach or default by the other under the Contract shall impair any such right, power or remedy, or shall be construed as a waiver of any such breach or default, or any similar breach or default thereafter occurring, nor shall any waiver of a single breach or default be deemed a waiver of any subsequent breach or default. All waivers must be in writing.

c. If, due to default that remains uncured for the period provided herein, a third-party shall commence to perform Contractor's obligations under the Contract, the State shall thereafter be released from all obligations to Contractor hereunder, including any obligation to make payment to Contractor, provided however that the State shall continue to be obliged to pay for any and all services…