Addendum 2 – February 4, 2019 To post Commonwealth’s response to Vendor Questions received by January 22, 2019.

Refer To

50.6 D. 28

50.6 A. 5.

20.6

60.7 H. c.

50.6 D. 26.

Addendum 1 - January 31, 2019 to extend the date for the Commonwealth’s response to post the first (1st) set of Vendor Questions to 02-04-2019. See Section 10.9.

PROPOSAL SUBMISSION CHECKLIST

The vendor MUST include the following with the proposal submission.

If the items highlighted below are not submitted with the proposal submission, the Commonwealth MUST deem the proposal non-responsive and

SHALL NOT consider for award.

All other items MUST be submitted prior to award.

FACE OF SOLICITATION - SIGNED [see Section 60.4]

*PROPOSED TECHNICAL SOLUTION UNDER SEALED COVER AND BY

CLOSING DATE AND TIME [see Sections 60.5 – 60.7]

*PROPOSED COST SOLUTION UNDER SEALED COVER AND BY CLOSING

DATE AND TIME [see Section 60.8 & Attachment B]

*MANDATORY REQUIREMENTS CHECKLIST [Attachment K]

TRANSMITTAL LETTER [see Section 60.6(A)]

REVENUE FORM 10A100 KENTUCKY TAX REGISTRATION APPLICATION

(see Section 60.6 (C)]

CERTIFICATE OF AUTHORITY- REGISTRATION WITH SECRETARY OF STATE

BY A FOREIGN ENTITY [see Section 60.6 (D)]

REQUIRED ANNUAL AFFIDAVIT AND OTHER AFFIDAVIT(S) [see Attachment C]

EEO FORMS IF APPLICABLE [see Section 40.21]

*The Commonwealth defines SEALED as “a closure that must be broken to be opened and that thus reveals tampering”. (Merriam-Webster Dictionary, http://www.merriam-webster.com/dictionary/seal)

*Please see Attachment E - The Protection of Personal Information Security and Breach Investigation Procedures and Practice Act (KRS 61.931), et seq.

effective January 1, 2015.

ATTACHMENT A

Commonwealth of Kentucky Request for Proposal (RFP)

For Kentucky Transportation Cabinet (KYTC)

DIGITIZED FLAT LICENSE PLATE

PRODUCTION, DISTRIBUTION, AND INVENTORY SYSTEM

RFP 758 1900000201

Release Date: January 10, 2019 CLOSING DATE AND TIME: March 1, 2019 at 3:30pm EST

(See Section 10.9 of this RFP for the Estimated Schedule of RFP Activities)

Issued by

The Finance and Administration Cabinet On Behalf Of

KENTUCKY TRANSPORTATION CABINET

DIVISION OF MOTOR VEHICLE LICENSING (MVL)

Commonwealth Buyer:

Jay Dutta Statewide Procurement Analyst II

COMMONWEALTH OF KENTUCKY

FINANCE AND ADMINISTRATION CABINET

Office of Procurement Services New Capitol Annex

702 CAPITOL AVE RM 096

FRANKFORT KY 40601

(502) 564-0983 Fax: (502) 564-6013 jay.dutta@ky.gov

TABLE OF CONTENTS

Proposal Submission Checklist Section 10 – Introduction and Overview Section 20 – Background and Present System Summary Section 30 – Commonwealth Office of Technology Requirements Section 40 – Procurement Requirements Section 50 – Scope of Work Section 60 – Proposal Submission Section 70 – Proposal Evaluation Section 80 – Negotiations Section 90 – Attachments

SECTION 10 – INTRODUCTION AND OVERVIEW

10.1 Purpose

The purpose of this Request for Proposal (RFP) is to solicit proposals for competitive negotiations pursuant to 200 KAR 5:307. The Division of Motor Vehicle Licensing (MVL) in the Kentucky Transportation Cabinet (KYTC) is seeking to modernize its production, distribution, and inventory of license plates (including temporary license plates) for Kentucky. Currently, the Commonwealth manufactures all license plates at Kentucky Correctional Industries (KCI). The Commonwealth is looking to change the current production process. Vendors are encouraged to propose solutions that will provide efficiencies in the production, distribution, and inventory of Kentucky license plates.

With this solicitation, Kentucky will move to a digitized flat plate. The Commonwealth will also streamline its distribution of plates directly to county clerk Offices from the production facilities. The solution shall be configurable to allow county clerks the option to select which plates to inventory for their county and re-order thresholds for each plate. Also, the Commonwealth will utilize the vendor’s inventory system to account for plates currently in use, new plates manufactured, plate inventories at county clerk offices, and communication back to the Commonwealth’s Automated Vehicle Information System/Kentucky Automated Vehicle Information System (AVIS/KAVIS) that a plate has been issued. The new flat plates will be shipped to county clerk offices or to an individual as indicated by the county clerk. The new production, distribution, and inventory system will replace the current traditional embossed production system, the MVL warehouse, and the AVIS inventory system. The vendor’s inventory system will become the primary inventory solution for license plates, temporary license plates, and other miscellaneous inventory items.

The proposed solution shall be owned and managed by the vendor. The vendor will use Kentucky Correctional Industries to produce the plate. The vendor will establish a license plate distribution center to ship plates to county clerk offices, or to an individual as indicated by the county clerk. The vendor shall establish an inventory system that will interface with AVIS/KAVIS to manage plate inventory at the county level, track plates from order to owner, monitor and automatically reorder plates as needed for each county.

The Commonwealth does not wish to own, develop, or manage any system hardware or software related to the production, inventory, and distribution of license plates. The vendor shall charge the Commonwealth based on a transactional model. The Commonwealth shall not incur any capital investments to set up the new production, inventory, and distribution system. Kentucky Correctional Industries (KCI) shall house the system at one of its facilities and use inmate labor for the production of the license plates. Management, inventory, ordering, and distribution of the license plates shall be managed by the vendor.

10.2 Issuing Office

The Commonwealth of Kentucky, Finance and Administration Cabinet, Office of Procurement Services, is issuing this RFP on behalf of the Kentucky Transportation Cabinet (KYTC), Division of Motor Vehicle Licensing (MVL).

The Finance and Administration Cabinet is the only office authorized to change, modify, amend, alter, or clarify the specifications, terms and conditions of this RFP.

A contract, based on this RFP, may or may not be awarded. Any contract award from this RFP is invalid until properly approved and executed by the Finance and Administration Cabinet.

10.3 Access to Solicitation, RFP, and Addenda

The Commonwealth wants each prospective vendor to have full and complete information on which to base a proposal response. Only information presented or referred to in this RFP and any additional written information that is supplied by the Commonwealth Buyer shall be used by vendors in preparing the response.

The solicitation, addenda, and attachments shall be posted to the Kentucky Vendor Self Service site at https://emars.ky.gov/webapp/vssonline/AltSelfService It is not necessary to register to access the solicitation. Unregistered vendors can access solicitations by clicking on public access.

In the event of any conflict or variation between the solicitation or modification as issued by the Commonwealth and the vendor’s response, the version as issued shall prevail.

10.4 RFP Terminology

For the purpose of this RFP, the following terms may be used interchangeably:

https://emars.ky.gov/webapp/vssonline/AltSelfService o Proposer, Offeror, Contractor, Provider, or Vendor o Commonwealth Buyer, Buyer, Purchaser, or Contract Officer o RFP, Solicitation, or Procurement o Bid, Proposal, or Offer o Commonwealth of Kentucky, Commonwealth, or State, Agency, Kentucky

Transportation Cabinet (KYTC), Division of Motor Vehicle Licensing

(MVL)

o Fiscal Year will be defined as the Commonwealth fiscal year: July 1 through June 30 o Biennium will be defined as the Commonwealth biennium: July 1 of each even numbered year through June 30 of the next even numbered year o Requirements that include the words “Shall”, “Will”, “Must” indicate a mandatory requirement

10.5 Restrictions on Communications

The Commonwealth Buyer named on the Cover Sheet of this RFP shall be the sole point of contact throughout the procurement process. All communications, oral and written (regular, express, or electronic mail, or fax), concerning this procurement shall be addressed to the Buyer.

For violation of this provision, the Commonwealth shall reserve the right to disqualify the vendors’ proposal response.

10.6 Written Questions and Deviations Regarding this RFP

Vendors are encouraged to submit written questions pursuant to Section 10.9 of this RFP. Should a vendor object to any of the Commonwealth’s standard terms and conditions or provisions of the solicitation, that vendor must specifically identify the deviation and must propose specific alternative language that could be acceptable to the Commonwealth. Vendors must include a brief statement of the purpose and impact, if any, for each proposed change in addition to the specific proposed alternate wording. General references to the vendor’s terms and conditions or attempts at complete substitutions are not acceptable. Deviations shall not be in conflict with the basic nature of this solicitation. The Commonwealth reserves the right to reject any and/or all deviations in whole or in part. Vendors must submit deviations pursuant to the schedule in Section 10.9 of this RFP.

Written questions and deviations shall be submitted to the Commonwealth Buyer via email at jay.dutta@ky.gov or via fax at 502-564-6013. Vendors should submit questions on Attachment D-Vendors Question Form and deviations on Attachment L-Vendors Deviation Form. No questions or deviations shall be accepted after the date(s) listed in Section 10.9 unless the question(s) or deviation(s) is considered material to the procurement. The Commonwealth shall respond to salient questions in writing by issuing an addendum to the solicitation.

Any addendum will either incorporate acceptable deviations into solicitation, indicate the deviation is negotiable with the successful offeror or indicate the deviation is unacceptable. Offerors proposals that include any deviation deemed unacceptable pursuant to the addendum will result in disqualification of the offerors proposal. The addendum shall be posted to the Kentucky Vendor Self Service site.

10.7 Notification of Award of Contract

The procurement process will provide for the evaluation of proposals and selection of the successful proposal in accordance with State law and regulations. KRS Chapter 45A of the Kentucky Model Procurement Code provides the regulatory framework for the procurement of services by State agencies.

All applicable statutes, regulations, policies and requirements shall become a part of an award as well as the Information Technology requirements.

To view the award of contract(s) and the contractor(s) receiving the award(s) for this solicitation, access the Kentucky Vendor Self Service site at https://emars.ky.gov/webapp/vssonline/AltSelfService.

Vendors can search for the solicitation title or number in the keyword search field, or can filter their search for only awarded solicitations by clicking on Advanced Search and changing the status to “Awarded”. The award(s) information can be accessed by clicking on the details button of the solicitation and clicking the “Notice of Award” tab. It is the vendor’s responsibility to review this information in a timely fashion. No other notification of the results of an award of contract will be provided.

10.8 Protest

Pursuant to KRS 45A.285, the Secretary of the Finance and Administration Cabinet, or his designee, shall have authority to determine protests and other controversies of actual or prospective offerors in connection with the solicitations or selection for award of a contract.

Any actual or prospective offeror or contractor, who is aggrieved in connection with solicitation or selection for award of a contract, may a file protest with the Secretary of the Finance and Administration Cabinet. A protest or notice of other controversy must be filed promptly and in any event within two (2) calendar weeks after such aggrieved person knows or should have known of the facts giving rise thereto. All protests or notices of other controversies must be in writing and shall be addressed and mailed to:

William M. Landrum III, Secretary

COMMONWEALTH OF KENTUCKY

FINANCE AND ADMINISTRATION CABINET

New Capitol Annex

702 CAPITOL AVE RM 383

FRANKFORT KY 40601

https://emars.ky.gov/webapp/vssonline/AltSelfService

The Secretary of Finance and Administration Cabinet shall promptly issue a decision in writing. A copy of that decision shall be mailed or otherwise furnished to the aggrieved party and shall state the reasons for the action taken.

The decision by the Secretary of the Finance and Administration Cabinet shall be final and conclusive.

10.9 Estimated Schedule of RFP Activities

The following table presents the anticipated schedule for major activities associated with the RFP distribution, proposal submission, proposal evaluation process, and contract award. The Commonwealth reserves the right at its sole discretion to change the Schedule of Activities, including the associated dates and times.

Anticipated Schedule of Activities

Release of RFP

January 10, 2019, 1st Set Of Vendors’ Written Questions and Deviations due by 12:00 PM

EST

(SUBMIT QUESTIONS ON ATTACHMENT D-VENDORS’ QUESTION

FORM)

January 22, Commonwealth’s Response to 1st Set of Vendors’ Written Questions and Deviations

January 31, February 4, 2nd Set Of Vendors’ Written Questions and Deviations due by 12:00 PM

EST

(SUBMIT QUESTIONS ON ATTACHMENT D-VENDORS’ QUESTION

FORM)

February 11, Commonwealth’s Response to 2nd Set of Vendors’ Written Questions

February 20, Proposals due by 3:30 PM EST

March 1, 2019

All bidders are cautioned to be aware of security in the Capitol Annex in Frankfort. In-person or courier delivered bids/proposals in response to a Commonwealth solicitation should be delivered a minimum of thirty (30) minutes to one (1) hour earlier than the published closing date and time to allow for a security check-in. Delays due to building security checks shall not be justification for acceptance of a late bid or proposal. Vendor attention to this advisory is encouraged.

SECTION 20 – BACKGROUND AND PRESENT SYSTEM SUMMARY

20.1 Registration Requirement

Kentucky residents are required to properly title and register their vehicles in accordance with Kentucky Revised Statutes (KRS) 132, 138,186, 186A, 235 and

376 (http://www.lrc.ky.gov/statutes/) at the county clerk’s office in their county of residence. There are 120 county clerks and 155 county clerk offices in the Commonwealth (http://kentuckycountyclerks.com/index.html). There are over 4 million vehicles registered in the Commonwealth. Registration is evidence of compliance with state laws as well as payment of required fees and taxes.

20.2 Initial Registration

Kentucky residents must title and register their vehicles at the county clerk’s office in their county of residence. Upon completion of registration, the resident will receive a license plate, receipt of registration and a decal that indicates the registration expiration month and year. The decal is required to be affixed to the license plate.

20.3 Registration Renewal

Registration renewal is required annually for the majority of licensed vehicles.

Renewals can be conducted online, by mail or in person at the county clerk’s office in the county of residence. Upon completion of renewal, the resident will receive a receipt of registration renewal and a renewal decal that indicates the new registration expiration month and year. The renewal decal is required to be affixed to the license plate.

20.4 Current License Plate Production System

MVL has a contractual agreement with the Kentucky Correctional Industries (KCI) for the production of embossed license plates, registration decals and county designator strips. KCI is a corporation that was established in 1954 and uses inmate labor. KCI is comprised of 15 separate types of industries and employs over 700 inmates. KCI’s revenue is approximately $10 million of which almost half comes from KYTC and Department of Corrections (DOC).

One of the 15 types of industries of KCI is the License Plate Plant at the Kentucky State Reformatory (KSR) in La Grange Kentucky. KSR is a medium security facility with the largest inmate population in Kentucky. The Plant employs 57 inmates that produce license plates for the Commonwealth.

KCI is responsible for obtaining supplies and materials which they receive from third party vendors. KCI is also responsible for the maintenance of the machines in which they own. MVL is responsible for providing the graphics for the background of the plate. County clerks apply the county designator strips to the finished plate.

The current license plate production system uses the traditional embossed aluminum license plates with alphanumeric identifiers. The standard issued plates are 3 letters and 3 numbers. Other plates are a combination of letters and/or numbers.

http://www.lrc.ky.gov/statutes/ http://kentuckycountyclerks.com/index.html

KCI initiates the production of the license plate by ordering rolls of aluminum from its third party vendor. The roll is then put in a de-coiler, which unwinds it, straightens it, rolls it out and applies the graphic sheeting. The graphic sheeting is a roll of stickers that includes the license plate background. Once the graphic is applied to the aluminum it is blanked which cuts the sheeting into the individual license plates.

The license plates are then embossed by inserting into a press and clapper dyes stamp out the alphanumeric numbers onto the plate. The plate is then covered with a protective clear coat solution and thermal ink is used to apply color to the raised alphanumeric numbers. The final step is a curing process in which the plate is put in an oven to “bake” for approximately 45 minutes. The finished plate is checked for quality assurance and stored at KSR until picked up by MVL staff.

20.5 Kentucky Inventory System

Kentucky AVIS inventory subsystem was built 30 years ago and has served the Commonwealth well during that time, but as the number of new plates has continued to grow and technology has been improved, the Commonwealth has found the AVIS system to have limitations.

20.6 License Plate Processing and Distribution

MVL receives license plate orders from the county clerks through a COBOL mainframe system called AVIS. AVIS is in the process of being replaced by KAVIS, a modern .NET web-based application. MVL then places an order with KCI for the license plates requested from the county clerks. MVL picks up the order from KSR and returns the inventory to the MVL office. MVL staff then unload the license plates, puts them into inventory, includes county and military designator strips and boxes the license plates for shipment or delivery to the requesting county clerk’s office. Upon receipt, the county clerk accepts the license plates into inventory and stores the license plates until distributed through the registration process. License plates are not discarded if not sold through the registration process and remain at the county clerks’ offices until issued.

The Commonwealth has approximately 230 license plates (see Attachment X J), including plates that can be personalized. This number increases each year.

Physical inventory is valued at approximately $1 million and is kept at the MVL office and county clerks’ offices across the Commonwealth.

Not all license plates types are re-plated in the same year. For example, organizational, specialty plates, and personalized plates could have different re-plating schedules. The re-plating of regular plates occurs when needed, usually between a 5-10 year periods.

The current ordering process for plates is depicted below:

SECTION 30 – COMMONWEALTH OFFICE OF TECHNOLOGY (COT)

REQUIREMENTS

PROPOSALS THAT DO NOT MEET MANDATORY REQUIREMENTS WILL BE

DEEMED NON-RESPONSIVE AND WILL NOT BE CONSIDERED. REFER TO

ATTACHMENT K – MANDATORY REQUIREMENTS CHECKLIST. SEE SECTION

10.4 FOR THE DEFINITION OF MANDATORY REQUIREMENT.

30.1 Commonwealth Information Technology Policies and Standards

The vendor and any subcontractors shall be required to adhere to applicable Commonwealth policies and standards related to technology use and security.

30.2 Compliance with Kentucky Information Technology Standards (KITS)

A. The Kentucky Information Technology Standards (KITS) reflect a set of principles for information, technology, applications, and organization. These

County clerk orders license plates from MVL

MVL orders the requested license plates from

KCI

KCI produces the plate & MVL picks up the order from KCI in a leased box truck and returns to MVL to process the license plates

MVL fulfills the county clerk's order by shipping the license plates and county stickers to the county clerk's office

County clerk receives the license plates and applies the identifying county sticker to the license plates and accepts into inventory for distribution (sometimes the county clerk may mail the plate to the customer if online renewal) standards provide guidelines, policies, directional statements and sets of standards for information technology. It defines, for the Commonwealth, functional and information needs so that technology choices can be made based on business objectives and service delivery. The vendor shall stay knowledgeable and shall abide by these standards for all related work resulting from this RFP.

http://technology.ky.gov/Governance/Pages/KITS.aspx

B. The vendor and any subcontractors shall be required to submit a technology roadmap for any offered solution. Additional roadmaps will be submitted upon request of the Commonwealth. The Roadmap shall include, but is not limited to, planned, scheduled and projected product lifecycle dates and historical release/ patch or maintenance dates for the technology. In addition, any guidance on projected release/revision/patch/maintenance schedules would be preferred.

30.3 Compliance with Commonwealth Security Standards

The software deployment and all vendor services shall abide by security standards as outlined in the Commonwealth’s Enterprise Information Technology Policies.

Enterprise Security Policies http://technology.ky.gov/ciso/Pages/InformationSecurityPolicies,StandardsandProcedures.aspx

Enterprise Policies http://technology.ky.gov/policy/pages/policies.aspx

Finance and Administration Cabinet Commonwealth Office of Technology Enterprise IT Policies http://finance.ky.gov/services/policies/Pages/default.aspx

30.4 Compliance with Industry Accepted Reporting Standards Based on Trust Service Principles and Criteria The vendor must employ comprehensive risk and threat management controls based on defined industry standards for service organizations such as AICPA TSP section 100, Trust Services Principles and Criteria. The vendor must annually assert compliance and engage a third party to examine such assertions and controls to provide a Report, AT101 SOC 2 type 2 or equivalent, on Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, and Privacy, which contains an opinion on whether the operating controls effectively support the assertions. All such reports, including publicly available reports (i.e. AT 101 SOC 3) shall be made available to the Commonwealth for review.

30.5 System Vulnerability and Security Assessments

The Commonwealth reserves the right to conduct external non-invasive vulnerability and security assessments of the software and infrastructure used to http://technology.ky.gov/Governance/Pages/KITS.aspx http://technology.ky.gov/ciso/Pages/InformationSecurityPolicies%2CStandardsandProcedures.aspx http://technology.ky.gov/policy/pages/policies.aspx http://finance.ky.gov/services/policies/Pages/default.aspx provide services prior to implementation and periodically thereafter. Upon completion of these assessments, the Commonwealth will communicate any findings to the vendor for action. Any cost relating to the alleviation of the findings will be the responsibility of the vendor. Mitigations will be subject to re-evaluation after completion. In cases where direct mitigation cannot be achieved, the vendor shall communicate this and work closely with the Commonwealth to identify acceptable compensating controls that will reduce risk to an acceptable and agreed upon level. An accredited third party source may be selected by the vendor to address findings, provided they will acknowledge all cost and provide valid documentation of mitigation strategies in an agreed upon timeframe.

30.6 Privacy, Confidentiality and Ownership of Information

The Commonwealth is the designated owner of all data and shall approve all access to that data. The vendor shall not have ownership of Commonwealth data at any time. The vendor shall be in compliance with privacy policies established by governmental agencies or by state or federal law. Privacy policy statements may be developed and amended from time to time by the Commonwealth and will be appropriately displayed on the Commonwealth portal (Ky.gov). The vendor should provide sufficient security to protect the Commonwealth and COT data in network transit, storage, and cache. All data, including backups and archives, must be maintained at all times within the contiguous United States. All sensitive data, as defined in Enterprise Standards, must be encrypted in-transit and at rest.

30.7 Software Development

Source code for software developed or modified by the vendor specifically for the Commonwealth shall become property of the Commonwealth. This is not meant to include minor modifications to the vendor software to configure the software for Commonwealth use. This is meant to include software written to add functionality to the vendor product specifically to meet the requirements of the Commonwealth where the Commonwealth bears the entire cost of creating that functionality.

30.8 License Agreements

Software provided by the vendor to the Commonwealth should contain a provision for perpetual licensing with all upgrade options. License agreements should also contain a provision for the Commonwealth to maintain a version of the software in escrow in the event the vendor is unable to continue business for financial or other business reasons.

30.9 Software Version Requirements

All commercially supported and Commonwealth approved software components such as Operating system (OS), Database software, Application software, Web Server software, Middle Tier software, and other ancillary software must be kept current. In the event that a patch interferes with the solution, the vendor must present a plan for compliance to the Commonwealth outlining the constraints and an appropriate plan of action to bring the solution in to compliance to allow this patch to be applied in the shortest timeframe possible, not to exceed three months, unless otherwise negotiated with the Commonwealth.

The vendors shall keep software in compliance with industry standards to support third party dependencies such as Java, Adobe Flash, Internet Explorer, Mozilla Firefox, etc. at currently supported version, release, and patch levels. In the event that a third party dependency interferes with the solution, the vendor must present a plan for compliance to the Commonwealth outlining the constraints and an appropriate plan of action to bring the solution into compliance to allow this third party dependency to be updated in the shortest timeframe possible, not to exceed three months, unless otherwise negotiated with the Commonwealth.

30.10 Section 508 Compliance

All user interfaces to the solution(s) provided, shall be warranted by the vendor to comply with Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d) and the World Wide Web Consortium’s (W3C) Web Content Accessibility Guidelines (WCAG) 1.0, conformance level Double-A or greater.

30.11 No Surreptitious Code Warranty

The contractor represents and warrants that no copy of licensed Software provided to the Commonwealth contains or will contain any Self-Help Code or any Unauthorized Code as defined below. This warranty is referred to in this contract as the "No Surreptitious Code Warranty”.

As used in this contract, "Self-Help Code" means any back door, time bomb, drop dead device, or other software routine designed to disable a computer program automatically with the passage of time or under the positive control of a person other than the licensee of the software. Self-Help Code does not include Software routines in a computer program, if any, designed to permit an owner of the computer program (or other person acting by authority of the owner) to obtain access to a licensee's computer system(s) (e.g. remote access) for purposes of maintenance or technical support.

As used in this contract, "Unauthorized Code" means any virus, Trojan horse, spyware, worm or other Software routines or components designed to permit unauthorized access to disable, erase, or otherwise harm software, equipment, or data; or to perform any other such actions. The term Unauthorized Code does not include Self-Help Code.

In addition, contractor will use up-to-date commercial virus detection software to detect and remove any viruses from any software prior to delivering it to the Commonwealth.

The vendor shall defend the Commonwealth against any claim, and indemnify the Commonwealth against any loss or expense arising out of any breach of the No Surreptitious Code Warranty.

30.12 Applicable Security Control Framework Compliance

The vendor must have an awareness and understanding of the NIST Special Publication 800-53 Security Control Framework and employ safeguards that meet or exceed the moderate level controls as defined within the standard. These controls must provide sufficient safeguards to provide reasonable protections around the Commonwealth’s data to ensure that the confidentiality, integrity, and availability is maintained at an appropriate level. These include but are not limited to:

Access Control The vendor must employ policy and process that provide for stringent control to limit physical and logical access to systems that house Commonwealth data to a need to know basis and provide clear separation of duties.

Awareness and Training The vendor must provide the appropriate role specific training for staff to ensure that there is awareness and understanding of roles and responsibilities as they relate to the protections around the Commonwealth’s data.

Audit and Accountability There must be sufficient auditing capability to ensure that actions are tracked and there is individual accountability for all actions taken by vendor staff.

Configuration Management The vendor must work within established baselines that provide minimal functionality needed to ensure service delivery without exposing unnecessary risk. The vendor must also employ structured change control processes that provide a level of coordination with the client agreed upon in a Service Level Agreement (SLA).

Contingency Planning The vendor must employ contingent planning policy and procedures that ensure service delivery based on agreed SLA levels while maintaining all Commonwealth data within the continental Unites States.

Identification and Authorization The vendor must employ appropriate identity and access management policies and procedures to ensure that access is appropriately authorized and managed at a level to ensure that access is provisioned and de-provisioned in a timely and efficient manner.

Incident Response The vendor must employ policy and procedures to ensure that an appropriate response to all identified security incidents are addressed in a timely manner and are reported to the appropriate parties in an agreed upon SLA timeframe. The vendor must also ensure that all staff are sufficient trained to ensure that they can identify situations that are classified as security incidents.

Maintenance The vendor must employ policy and procedures that ensure that all maintenance activities are conducted only by authorized maintenance staff leveraging only authorized maintenance tools.

Media Protection The vendor must employ policy and procedure to ensure that sufficient protections exist to protect Commonwealth data on all storage media throughout the media lifecycle and maintain documentation from media creation through destruction.

Physical and Environmental Controls The vendor must employ physical and environmental policies and procedures that ensure that the service and delivery infrastructure are located in a physically secure and environmentally protected environment to ensure the confidentiality, integrity, and availability of Commonwealth data.

Personnel Security The vendor must employ policies and procedures to ensure that all staff that have access to systems that house, transmit, or process Commonwealth data have been appropriate vetted and have been through a background check at the time of hire and periodically thereafter.

System and Communications Protections The vendor must employ physical and logical protection that protect system communications and communication media from unauthorized access and to ensure adequate physical protections from damage.

SECTION 40 – PROCUREMENT REQUIREMENTS

40.1 Procurement Requirements

Procurement requirements are listed under “Procurement Laws, Preference, Regulations and Policies” and “Response to Solicitation” located on the eProcurement Web page at http://eprocurement.ky.gov and http://finance.ky.gov/services/eprocurement/Pages/VendorServices.aspx respectively. The vendor must comply with all applicable statutes, regulations and policies related to this procurement.

40.2 Contract Components and Order of Precedence

The Commonwealth’s acceptance of the contractor’s offer in response to the solicitation, indicated by the issuance of a contract award by the Office of Procurement Services, shall create a valid contract between the Parties consisting of the following:

1. Any written Agreement between the Parties;

2. Any Addenda to the Solicitation;

3. The Solicitation and all attachments

4. Procurement Statutes, Regulations and Policies

5. Any Best and Final Offer;

6. Any clarifications concerning the Contractor’s proposal in response to the

Solicitation;

7. The Contractor’s proposal in response to the Solicitation.

In the event of any conflict between or among the provisions contained in the contract, the order of precedence shall be as enumerated above.

40.3 Final Agreement

The contract represents the entire agreement between the parties with respect to the subject matter hereof. Prior negotiations, representations, or agreements, either written or oral, between the parties hereto relating to the subject matter hereof shall be of no effect upon this contract.

40.4 Contract Provisions

If any provision of this contract (including items incorporated by reference) is declared or found to be illegal, unenforceable, or void, then both the http://eprocurement.ky.gov/ http://finance.ky.gov/services/eprocurement/Pages/VendorServices.aspx

Commonwealth and the contractor shall be relieved of all obligations arising under such provision. If the remainder of this contract is capable of performance, it shall not be affected by such declaration or finding and shall be fully performed.

40.5 Type of Contract

The contract proposed in response to this solicitation shall be on the basis of a firm fixed unit price for the elements listed in this solicitation. This solicitation is specifically not intended to solicit proposals for contracts on the basis of cost-plus, open-ended rate schedule, nor any non-fixed price arrangement.

40.6 Contract Usage

As a result of this RFP, the contractual agreement with the selected vendor will in no way obligate the Commonwealth of Kentucky to purchase any services or equipment under this contract. The Commonwealth agrees, in entering into any contract, to purchase only such services in such quantities as necessary to meet the actual requirements as determined by the Commonwealth.

40.7 Addition or Deletion of Items or Services

The Office of Procurement Services reserves the right to add new and similar items, by issuing a contract modification, to this contract with the consent of the vendor. Until such time as the vendor receives a modification, the vendor shall not accept delivery orders from any agency referencing such items or services.

40.8 Changes and Modifications to the Contract

Pursuant to KRS 45A.210 (1) and 200 KAR 5:311, no modification or change of any provision in the contract shall be made, or construed to have been made, unless such modification is mutually agreed to in writing by the contractor and the Commonwealth, and incorporated as a written amendment to the contract and processed through the Office of Procurement Services and approved by the Finance and Administration Cabinet prior to the effective date of such modification or change pursuant to KRS 45A.210(1) and 200 KAR 5:311. Memorandum of understanding, written clarification, and/or correspondence shall not be construed as amendments to the contract.

If the contractor finds at any time that existing conditions made modification of the contract necessary, it shall promptly report such matters to the Commonwealth Buyer for consideration and decision.

40.9 Changes in Scope

The Commonwealth may, at any time by written order, make changes within the general scope of the contract. No changes in scope are to be conducted except at the approval of the Commonwealth.

40.10 Contract Conformance

If the Commonwealth Buyer determines that deliverables due under the contract are not in conformance with the terms and conditions of the contract and the mutually agreed-upon project plan, the Buyer may request the contractor to deliver assurances in the form of additional contractor resources and to demonstrate that other major schedules will not be affected. The Commonwealth shall determine the quantity and quality of such additional resources and failure to comply may constitute default by the contractor.

40.11 Assignment

The contract shall not be assigned in whole or in part without the prior written consent of the Commonwealth Buyer.

40.12 Payment

The Commonwealth will make payment within thirty (30) working days of receipt of contractor's invoice or of acceptance of goods and/or services in accordance with KRS 45.453 and KRS 45.454.

Payments are predicated upon successful completion and acceptance of the described work, services, supplies, or commodities, and delivery of the required documentation. Invoices for payment shall be submitted to the agency contact person or his representative.

40.13 Contractor Cooperation in Related Efforts

The Commonwealth of Kentucky may undertake or award other contracts for additional or related work, services, supplies, or commodities, and the contractor shall fully cooperate with such other contractors and Commonwealth employees.

The contractor shall not commit or permit any act that will interfere with the performance of work by any other contractor or by Commonwealth employees.

40.14 Contractor Affiliation

"Affiliate" shall mean a branch, division or subsidiary that is effectively controlled by another party. If any affiliate of the contractor shall take any action that, if done by the contractor, would constitute a breach of this agreement, the same shall be deemed a breach by such party with like legal effect.

40.15 Commonwealth Property

The contractor shall be responsible for the proper custody and care of any Commonwealth-owned property furnished for contractor's use in connections with the performance of this contract. The contractor shall reimburse the Commonwealth for its loss or damage, normal wear and tear excepted.

40.16 Confidentiality of Contract Terms

The contractor and the Commonwealth agree that all information communicated between them before the effective date of the contract shall be received in strict confidence and shall not be necessarily disclosed by the receiving party, its agents, or employees without prior written consent of the other party. Such material will be kept confidential subject to Commonwealth and Federal public information disclosure laws.

Upon signing of the contract by all parties, terms of the contract become available to the public, pursuant to the provisions of the Kentucky Revised Statutes.

The contractor shall have an appropriate agreement with its subcontractors extending these confidentiality requirements to all subcontractors’ employees.

40.17 Confidential Information

The contractor shall comply with the provisions of the Privacy Act of 1974 and instruct its employees to use the same degree of care as it uses with its own data to keep confidential information concerning client data, the business of the Commonwealth, its financial affairs, its relations with its citizens and its employees, as well as any other information which may be specifically classified as confidential by the Commonwealth in writing to the contractor. All Federal and State Regulations and Statutes related to confidentiality shall be applicable to the contractor. The contractor shall have an appropriate agreement with its employees, and any subcontractor employees, to that effect, provided however, that the foregoing will not apply to:

A. Information which the Commonwealth has released in writing from being maintained in confidence;

B. Information which at the time of disclosure is in the public domain by having been printed an published and available to the public in libraries or other public places where such data is usually collected;

or

C. Information, which, after disclosure, becomes part of the public domain as defined above, thorough no act of the contractor.

40.18 Advertising Award

The contractor shall not refer to the award of contract in commercial advertising in such a manner as to state or imply that the firm or its services are endorsed or preferred by the Commonwealth of Kentucky without the expressed written consent of the agency technical contact person. (see Section 50.4)

40.19 Patent or Copyright Infringement

The contractor shall report to the Commonwealth promptly and in reasonable written detail, each notice of claim of patent or copyright infringement based on the performance of this contract of which the contractor has knowledge.

The Commonwealth agrees to notify the contractor promptly, in writing, of any such claim, suit or proceeding, and at the contractor's expense give the contractor proper and full information needed to settle and/or defend any such claim, suit or proceeding.

If, in the contractor's opinion, the equipment, materials, or information mentioned in the paragraphs above is likely to or does become the subject of a claim or infringement of a United States patent or copyright, then without diminishing the contractor's obligation to satisfy any final award, the contractor may, with the Commonwealth's written consent, substitute other equally suitable equipment, materials, and information, or at the contractor's options and expense, obtain the right for the Commonwealth to continue the use of such equipment, materials, and information.

The Commonwealth agrees that the contractor has the right to defend, or at its option, to settle and the contractor agrees to defend at its own expense, or at its option to settle, any claim, suit or proceeding brought against the Commonwealth on the issue of infringement of any United States patent or copyright or any product, or any part thereof, supplied by the contractor to the Commonwealth under this agreement. The contractor agrees to pay any final judgment entered against the Commonwealth on such issue in any suit or proceeding defended by the contractor.

If principles of governmental or public law are involved, the Commonwealth may participate in the defense of any such action, but no costs or expenses shall be incurred for the account of the contractor without the contractor's written consent.

The contractor shall have no liability for any infringement based upon:

A. the combination of such product or part with any other product or part not furnished to the Commonwealth by the contractor

B. the modification of such product or part unless such modification was made by the contractor

C. the use of such product or part in a manner for which it was not designed

40.20 Permits, Licenses, Taxes and Commonwealth Registration

The contractor shall procure all necessary permits and licenses and abide by all applicable laws, regulations, and ordinances of all Federal, State, and local governments in which work under this contract is performed.

The contractor shall maintain certification of authority to conduct business in the Commonwealth of Kentucky during the term of this contract. Such registration is obtained from the Secretary of State, who will also provide the certification thereof.

However, the contractor need not be registered as a prerequisite for responding to the RFP. Additional local registration or license may be required.

The contractor shall pay any sales, use, and personal property taxes arising out of this contract and the transaction contemplated hereby. Any other taxes levied upon this contract, the transaction, or the equipment or services delivered pursuant hereto shall be borne by the contractor.

40.21 EEO Requirements

The Equal Employment Opportunity Act of 1978 applies to All State government projects with an estimated value exceeding $500,000. The contractor shall comply with all terms and conditions of the Act.

http://finance.ky.gov/services/eprocurement/Pages/VendorServices.aspx.

40.22 Provisions for Termination of the Contract

Any contract resulting from this solicitation shall be subject to the termination provisions set forth in 200 KAR 5:312.

40.23 Bankruptcy

In the event the contractor becomes the subject debtor in a case pending under the Federal Bankruptcy Code, the Commonwealth's right to terminate this contract may be subject to the rights of a trustee in bankruptcy to assume or assign this contract. The trustee shall not have the right to assume or assign this contract unless the trustee (a) promptly cures all defaults under this contract; (b) promptly compensates the Commonwealth for the monetary damages incurred as a result of such default, and (c) provides adequate assurance of future performance, as determined by the Commonwealth.

40.24 Conformance with Commonwealth & Federal Laws/Regulations This contract shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky. Any action brought against the Commonwealth on the contract, including but not limited to actions either for breach of contract or for enforcement of the contract, shall be brought in Franklin Circuit Court, Franklin County, Kentucky in accordance with KRS 45A.245.

40.25 Accessibility

Vendor hereby warrants that the products or services to be provided under this contract comply with the accessibility requirements of Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794d), and its implementing regulations set forth at Title 36, Code of Federal Regulations, part 1194. Vendor further warrants that the products or services to be provided under this contract comply with existing federal standards established under Section 255 of the Federal Telecommunications Act of 1996 (47 U.S.C. § 255), and its implementing regulations set forth at Title 36, Code of Federal Regulations, part 1193, to the extent the vendor's products or services may be covered by that act. Vendor agrees to promptly respond to and resolve any complaint regarding accessibility of its products or services which is brought to its attention.

40.26 Access to Records

The contractor, as defined in KRS 45A.030 (9) agrees that the contracting agency, the Finance and Administration Cabinet, the Auditor of Public Accounts, and the Legislative Research Commission, or their duly authorized representatives, shall have access to any books, documents, papers, records, or other evidence, which are directly pertinent to this contract for the purpose of financial audit or program http://finance.ky.gov/services/eprocurement/Pages/VendorServices.aspx review. Records and other prequalification information confidentially disclosed as part of the bid process shall not be deemed as directly pertinent to the contract and shall be exempt from disclosure as provided in KRS 61.878(1)(c). The contractor also recognizes that any books, documents, papers, records, or other evidence, received during a financial audit or program review shall be subject to the Kentucky Open Records Act, KRS 61.870 to 61.884.

40.27 Prohibitions of Certain Conflicts of Interest

In accordance with KRS 45A.340, the contractor represents and warrants, and the Commonwealth relies upon such representation and warranty, that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of its services. The contractor further represents and warrants that in the performance of the contract, no person, including any subcontractor, having any such interest shall be employed.

In accordance with KRS 45A.340 and KRS 11A.040 (4), the contractor agrees that it shall not knowingly allow any official or employee of the Commonwealth who exercises any function or responsibility in the review or approval of the undertaking or carrying out of this contract to voluntarily acquire any ownership interest, direct or indirect, in the contract prior to the completion of the contract.

40.28 No Contingent Fees

No person or selling agency shall be employed or retained or given anything of monetary value to solicit or secure this contract, excepting bona fide employees of the offeror or bona fide established commercial or selling agencies maintained by the offeror for the purpose of securing business.