BPM006272_Solicitation_Attachment_-_Conformance_Statements_and_Exceptions_Requests_MSC.pdf

EXCEPTIONS TO CONTRACT TERMS & CONDITIONS:

Request for Proposal (“RFP”) Solicitation No. BPM006272 (“Solicitation”) for Statewide Facilities and

Building Supplies (“Bid”) of State of Arizona Department of Administration including any Eligible

Agency or Co-op Buyer

(Individually and collectively the “State”, “Arizona”, City”, “Buyer” or “Customer”) by

Sid Tool Co., Inc. d/b/a MSC Industrial Supply Co. (“MSC”, “Offeror”, “Vendor”, “Bidder”, “Contractor”, “Seller” or “Supplier”)

June 21, 2024

Notwithstanding anything to the contrary, the following exceptions are hereby incorporated as an integral part of MSC’s Offer/Proposal to the Bid Solicitation, and the purchase of goods and any services by the State and any other participating cooperative

Eligible Agency, Co-Op Buyer or other purchasing entities authorized hereunder

(“Customer” or “Buyer”) from MSC shall be covered exclusively by the terms of the Bid modified by the Exceptions listed herein, which together, shall constitute the entire agreement between the parties (“Agreement” or “Contract”). In the event of a conflict between these Exceptions and the terms of the proposed Agreement provided to Bidder, these Exceptions shall govern and control. The proposed changes to the RFP Sections are in some cases where feasible, shown in bold.

1. Exception – Indemnification.

Special Terms & Conditions Section 6.2.1 & 6.2.2 (General Contractor

Indemnification & Insurance requirements). The changes have been shown in bold so that “alleged to be caused in whole or in part” is deleted and replaced by

“caused solely” and Contractor shall indemnify only to the extent of, and in proportion to, the negligence or willful misconduct of Contractor, and Contractor shall waive the right of subrogation except for workers compensation and automobile liability.

RFP Language with Proposed Changes Contractor Indemnification (Not

Public Agency). To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, solely, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or Subcontractors. This indemnity includes any claim or amount arising out of, or recovered under, the

Workers’ Compensation Law or arising out of the failure of such Contractor to conform to any federal, state, or local law, statute, ordinance, rule, regulation, or court decree. It is the specific intention of the parties that the Contractor shall indemnify an Indemnitee, only, for Claims arising solely from the negligent or willful acts or omissions of the Contractor and only to the extent of, and in proportion to the negligence or willful misconduct of

Contractor as the Indemnifying party. It is agreed that Contractor will be responsible for primary loss investigation, defense, and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of

Arizona, its officers, officials, agents, and employees for losses arising from the work performed by the Contractor for the State of Arizona, with the exception of workers compensation and automobile liability. This indemnity shall not apply if the Contractor or Subcontractor(s) is/are an agency, board, commission or university of the State of Arizona.

Special T&Cs Section 6.2.2.: Amend the Section by adding the bolded language to the end of that Section:

RFP Language & Proposed Change: Public Agency Language Only. Each party (as 'indemnitor') agrees to indemnify, defend, and hold harmless the other party (as 'indemnitee') from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as 'claims') arising out of bodily injury of any person

(including death) or property damage but only to the extent that such claims which result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials, agents, employees, or volunteers. For avoidance of doubt, the Contractor ‘s indemnification obligations extend only to the extent of, and in proportion to the negligence or willful misconduct of the

Contractor.

Addendum A to Special T&Cs Article 1.1

RFP Language & Proposed Change: To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses

(including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, solely, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or subcontractors. This indemnity includes any claim or amount arising out of, or recovered under, the Workers’ Compensation Law or arising out of the failure of such Contractor to conform to any federal, state, or local law, statute, ordinance, rule, regulation, or court decree. It is the specific intention of the parties that the Indemnitee shall only be indemnified by the Contractor, for

Claims arising solely from the negligent or willful acts or omissions of the

Contractor and only to the extent of and in proportion to the negligence or willful misconduct of the Contractor as the Indemnifying party. It is agreed that Contractor will be responsible for primary loss investigation, defense, and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of Arizona, its officers, officials, agents, and employees for losses arising from the work performed by the Contractor for the State of

Arizona, with the exception of workers compensation and automobile liability.

Sections 6.2 and 6.2.1 (Indemnification) of Uniform Terms and Conditions.

RFP Language & Proposed Changes: Same changes as in corresponding sections in Special Terms and Conditions.

Rationale for all above changes regarding indemnification are as follow:

MSC cannot indemnify for the negligence or intentional acts or omissions of the State or the Indemnitees and can only indemnify the extent of and in proportion to the negligent or willful acts or omissions of MSC.

2. Exception- Indirect Damages.

Section 15.7 First Party Liability Limitation of Special Terms & Conditions

RFP Language & Proposed Changes

Section 15.7.2. Provisos which read as follows: “This paragraph limits liability for first party direct, indirect, incidental, special, punitive, and consequential damages relating to the Work regardless of the legal theory under which the liability is asserted. This paragraph does not limit liability arising from any:

15.7.2.1 Indemnified Claim against which Contractor has

indemnified State Indemnitees under paragraph 6.2;

15.7.2.2 claim against which Contractor has indemnified State

Indemnitees under paragraph 6.3; or

15.7.2.3 provision of the Contract calling for liquidated damages or specifying amounts or percentages as being at-risk or subject to deduction for performance deficiencies.”

Amend the Section 15.7 2 by deleting above Sections 15.7.2.1 through Section

15.7.2.3 and replace with the following:

“For avoidance of doubt and notwithstanding anything to the contrary elsewhere herein, MSC, as Contractor shall not indemnify for or be liable for any liquidated, special, indirect, punitive, incidental, cover or consequential damages or penalties or any business interruption or other consequential loss.

IN NO EVENT SHALL msc HAVE ANY LIABILITY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, liquidated, COVER, OR

CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON ANY

THEORY OF LIABILITY, ARISING OUT OF THe contract, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED

OPPORTUNITY OR PROFITS, EVEN IF ADVISED OF THE

POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION OF

LIABILITY APPLIES TO THE INDEMNIFICATION PROVISIONS OF

THE AGREEMENT.”

Rationale for changes: MSC cannot have unlimited liability.

3. Exception – Price Reductions/Decreases.

RFP Language and Proposed change:

Section 4.5 of Special Terms and Conditions whch reads as follows:

“Price Reductions. Price reductions shall be immediately passed along to State and may be submitted in writing to State for consideration at any time during the Contract period. The contractor shall offer State a price reduction on the

Contract product(s) concurrent with a published price reduction made to other customers. The State at its own discretion may accept a price reduction. The price reduction request shall be in writing and include documentation showing the actual reduction of cost. Sales promotions requests shall include differences in pricing, begin, and end date of promotion along with the products covered.”

Delete that Section 4.5 of Special Terms & Conditions in its its entirety and repace with the following: “Contractor MSC cannot guarantee that price reductions and /or decreases will be passed on to the State as Customer, but Contractor will make commercially reasonable efforts to communicate pricing changes to the State.”

Rationale for changes – MSC cannot guarantee that all price decreaes will be passed on to the State as Customer.

4. Exception- Most Favored Nation (“MFN”)

RFP Language and Proposed Change:

MSC makes no representations or guarantee that the pricing offered herein is comparable, less than, or equal to the pricing received by any other of its customers and requires the following change:

Delete Section 4.2 (Contractor Best Pricing) of Special Terms and

Conditions in its entirety which reads as follows:

4.2 Contractor’s Best Pricing. Contractor warrants that, for the term of the

Contract, the prices and discounts set out in the Attachments titled Pricing, including any subsequent agreed amendment to it (the “Contract Pricing”), shall be equal to or better than the lowest prices and largest discounts, both separately and in combination, at which Contractor sells equivalent services, items of equipment, and materials.

4.2.1. That price-plus-discount equivalence (“Contractor’s Best Pricing”) is intended to be irrespective of whether or not those other sales have special purchase terms, conditions, rebates, or allowances.

4.2.2 If Contractor’s Best Pricing for equivalent services, items of equipment, and materials is better than the Contract Pricing, then Contractor agrees to adjust the Contract Pricing to match the Contractor’s Best Pricing for all sales related to the Contractor made after the date when the Contractor’s

Best Pricing was first better than the Contract Pricing.

4.2.3 For clarification of intent, that date is intended to be the date when the difference first occurred, which might have been before the difference was first identified. If the difference occurred before it was identified, then Supplier agrees to charge less than the Contract Pricing until the extended difference that would have been realized (i.e. if the Contractor’s Best Pricing had been applied when it should have been) has been settled.

and replace with the following:

“STRATEGIC CUSTOMER. MSC will treat the Customer as a strategic customer at all times, and if at any time the Customer believes that MSC is not treating the Customer as such, the Customer may cancel any purchase order for any reason prior to shipment, or terminate this

Agreement as provided for hereunder.”

Rationale for changes: MSC does not provide a Most Favored Nation provision to customers.