BPM007546 SBHRF RFP.pdf

Request for Proposal under A.R.S. § 41-2534

Notice Page

Solicitation Requirements | Revision No. 8 | Revised 03-24 | Page 1 of 54

Solicitation Number: BPM007546 / YH26-0005

Description: Secured Behavioral Health Residential Facility (S-BHRF)

Solicitation Due Date and Time: January 1, 2027, 3:00pm Arizona Time

Pre-Offer Conference: N/A

Proposals will only be accepted online in the “State’s eProcurement System”, Arizona

Procurement Portal (APP), at https://app.az.gov until the “Bid/Offer Due Date” indicated in the

“State’s eProcurement System” for the Solicitation No. shown at the top of this page. Proposals must be in the State Procurement Office’s possession online no later than that deadline.

Submit technical inquiries about navigating and/or submitting proposals in the State’s eProcurement

System to the State’s eProcurement System Help Desk by phone at (602) 542-7600, option 2; or by email to app@azdoa.gov.

LATE PROPOSALS WILL NOT BE CONSIDERED. No extension or grace period will be given for delays or incomplete proposals caused by internet connectivity problems, file uploading difficulties, or misunderstanding of the requirements or procedures for online submission in the “State’s eProcurement System”.

It is the responsibility of the Prospective Offeror to routinely check the APP website for Solicitation

Amendments. Additional instructions for preparing an Offer are included in this solicitation.

Persons with a disability may request a reasonable accommodation, such as a sign language interpreter, by contacting the Solicitation contact person. Requests shall be made as early as possible to allow time to arrange for the accommodation.

https://app.az.gov/ https://app.az.gov/ mailto:app@azdoa.gov

Table of Contents Request for Proposal under A.R.S. § 41-2534

Solicitation No. BPM007546

Secured Behavioral Health Residential Facility

YH26-0005

Solicitation Requirements | Revision No. 9 | Revised 09-24 | Page 2 of 54

Click here to return to the Table of Contents

Notice Page

Table of Contents

Solicitation Summary 3

Scope of Work 5

Special Terms and Conditions 14

Addendum A to the Special Terms and Conditions 32

Uniform Terms and Conditions 10.5 37

Solicitation Summary

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1. What is the State Soliciting?

Under A.R.S. § 41-2501 et seq., the Arizona Health Care Cost Containment System (AHCCCS)

(or the “State”) is seeking to establish one or more single-agency Contracts to provide Secured

Behavioral Health Residential Facility (S-BHRF) Services.

The State anticipates awarding one or more contract(s). Whether or not it actually enters into any contracts, how many contracts it enters into, and how the work is awarded between those contracts are all at the State’s discretion. Furthermore, the State will use any awarded contracts on an as-needed basis, with no guarantee as to its actual spending under them.

The State reserves the right to accept any item or combination of items specified in the Solicitation, unless the Offeror expressly restricts an item or combination of items in its Offer, and conditions its response on receiving all items for which it provided a proposal. In the event of such restriction, the State will evaluate if an award on such a basis will result in the best value and is in the best interest for the State. The State may otherwise determine, at its sole discretion, that such restriction is non-responsive and deem the Offeror ineligible for further evaluation.

AHCCCS is required to publish a Request for Proposals (RFP) for S-BHRFs on or before May 1, 2026, pursuant to Arizona Senate Bill 1735 (S.B. 1735). Due to ongoing changes in licensure rules and procurement details, this RFP may be amended on more than one occasion. Interested parties may submit questions to the email address identified in this RFP. Please note that certain topics may not be answerable at this time due to items that remain under development;

AHCCCS will publish updates and clarifications through formal amendments when such information is finalized.

2. What is in the Solicitation?

2.1. At the time of publication, the following documents are included in the Solicitation:

2.1.1. Attachment: BPM007546 Solicitation Requirements

2.1.1.1. Notice / Cover Page

2.1.1.2. Table of Contents

2.1.1.3. Solicitation Summary

2.1.1.4. Scope of Work

2.1.1.5. Special Terms and Conditions

2.1.1.6. Addendum A to the Special Terms and Conditions

2.1.1.7. Uniform Terms and Conditions

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2.1.2. Attachment: BPM007546 Solicitation Instructions

2.1.2.1. Special Instructions to Offerors

2.1.2.2. Standard Instructions to Offerors (RFP)

2.1.3. Solicitation Attachments

2.1.3.1. Attachment A - Offer and Acceptance

2.1.3.2. Attachment B - Confidential Information Designation

○ Confidential Information Designation (for reference only)

2.1.3.3. Attachment C - Conformance Statements and Exceptions

Requests

2.1.3.4. Attachment D - Experience and Capacity Response

2.1.3.5. Attachment E - Method of Approach

2.1.3.6. Attachment F - Letter of Insurability

2.1.3.7. Attachment G - Key Personnel

2.1.3.8. Attachment H - Organization Profile

2.1.3.9. Attachment I - Proposed Subcontractors

2.1.3.10. Attachment J – Budget and Pricing

2.2. The State may issue a Solicitation Amendment at any time after Solicitation publication and before the Offer due date. It is the responsibility of the Prospective Offeror to routinely check the APP website for any Solicitation Amendments and revised documents.

Scope of Work

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Scope of Work

Scope of Work

1. Project Background

Arizona’s behavioral health system serves individuals with Serious Mental Illness (SMI) who may experience substantial and persistent symptoms, cooccurring substance use disorders, or significant functional impairment. While most individuals on Court Ordered Treatment (COT) can be safely and effectively served in community-based settings, a limited subset demonstrate chronic resistance to treatment, high frequency of relapse and crisis utilization, and ongoing risks that cannot be managed in traditional residential or outpatient programs.

These individuals often encounter complex challenges such as repeated psychiatric hospitalizations, homelessness or unstable housing, legal involvement, and difficulty maintaining treatment adherence.

To meet the needs of this subset of individuals on COT, the Legislature passed A.R.S. § 36- 425.06, creating the statutory framework for SBHRFs, which are specialized treatment settings designed to provide secure, twenty-four (24) hour care in a least restrictive environment for individuals approved for placement by court order under A.R.S. § 36-550.09.

These facilities address a long-recognized gap between community-based treatment and inpatient psychiatric hospitalization by providing a setting where individuals who are chronically resistant to treatment can stabilize, engage in treatment, and eventually transition to less restrictive care settings.

Statute limits SBHRFs to sixteen (16) beds and restricts admission solely to individuals placed under Title 36 or, in separately licensed facilities, individuals committed under A.R.S. § 13-

4521 (Title 13). These populations cannot be served in the same facility concurrently.

Because AHCCCS regulates service delivery only for Title 36 SBHRFs and does not regulate

Title 13 SBHRFs, this RFP applies exclusively to the Title 36 population.

2. Purpose

AHCCCS is issuing this RFP to support the development of SBHRFs authorized under A.R.S. §

36-425.06, using the $5 million appropriated in the SFY 2025–2026 General Appropriations Act for this purpose.

SBHRFs will provide secure, twenty‑four (24) hour on‑site supportive treatment and supervision for individuals who are placed pursuant to a court order under A.R.S. § 36‑550.09, upon the recommendation of the treatment team, following a finding that the person:

• Meets criteria for SMI designation;

• Is chronically resistant to treatment as defined in statute; and

• Requires placement in a secure setting as the least restrictive environment capable of meeting the individual’s treatment and safety needs.

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SBHRFs are intended to serve a subset of individuals on COT who cannot be safely or effectively treated in traditional community-based settings. These facilities represent a new level of care, providing stabilization, treatment engagement, and care coordination including coordinated transition to less restrictive settings for individuals found chronically resistant to treatment. Programs must operate within a person-centered, trauma informed, recovery oriented, and clinically driven framework that maintains dignity, civil rights, cultural humility, and safety within a least restrictive secure environment.

A.R.S. § 36-425.06 grants authority to the Arizona Department of Health Services (ADHS) to license SBHRFs that provide secure on-site supportive treatment to persons who are determined to be seriously mentally ill, who are chronically resistant to treatment and who are placed in the facility pursuant to a court order pursuant to A.R.S. § 36-550.09. By contrast, while A.R.S. § 36-502 provides AHCCCS with the statutory authority to regulate service delivery for individuals ordered into SBHRFs pursuant to A.R.S. § 36-550.09, AHCCCS does not regulate service delivery in SBHRFs that provide treatment to persons who have been committed pursuant to a court order issued pursuant to A.R.S. § 13-4521 and does not oversee

SBHRFs providing services pursuant to that title.

This RFP does not allow proposals for new construction. Awarded funds may only be used for

(1) purchase and retrofit of an existing property, or (2) retrofit of a property already owned by the

Offeror, subject to the funding limits described in the Offeror Requirements section.

Offerors must:

• Be the owner or proposed owner and operator of the facility located in Maricopa County.

• Renovate-o Facilities with no more than sixteen beds per facility; and o Secure facilities, defined as limiting a patient’s egress in the least restrictive manner consistent with the patient’s court-ordered treatment plan.

• Establish benchmarks/milestones to complete the development of each facility

3. Definitions. As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows:

3.1. AAC: Arizona Administrative Code.

3.2. ACA: Affordable Care Act.

3.3. ADHS: The Arizona Department of Health Services.

3.4. AFFILIATE: Any person or entity, which directly or indirectly owns or controls another person by having any family relationship, ownership interest or a Controlling Interest in that person.

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3.5. AHCCCS: The Arizona Health Care Cost Containment System – a managed health care program which pertains to health care services provided pursuant to A.R.S. § 36-2903 et seq., and is also the name of the State agency.

3.6. AHCCCS COVERED SERVICES: Those services set forth in A.R.S. § 36-2907 and 36-

2939, A.A.C. Title 9 Chapter 22, Articles 2 and 12 and, Chapter 28, Articles 2 and 11.

3.7. APPRAISAL: An estimate of the value of the Project’s real property based on market information, including comparable properties, that is current through the period ending no earlier than six (6) months before the Proposal Deadline; and that is prepared in accordance with the Uniform Standards of Professional Appraisal Practice by an analyst who does not have a Controlling Interest in the Development Team, or financing source proposed in the Proposal, and who is authorized to render the Appraisal in Arizona. An

Appraisal that deviates from the requirements of this paragraph must provide a detailed explanation of why the deviation cannot be avoided.

3.8. AS-IS MARKET VALUE: The Fee Simple Interest value of the property appraised in the condition observed upon inspection and as it physically and legally exists at the time of the appraisal without hypothetical conditions, assumptions, or qualifications on the effective date of the appraisal, and under the following conditions:

3.8.1. Buyer and seller are typically motivated;

3.8.2. Buyer and seller are well informed or well advised, and acting in what they consider their own best interests;

3.8.3. A reasonable time is allowed for exposure in the open market;

3.8.4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

3.8.5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale (Title XI, FIRREA, 34.42(f)).

3.9. BEHAVIORAL HEALTH SERVICES: Services that pertain to mental health and substance use disorders and that are either:

(a) Performed by or under the supervision of a professional who is licensed pursuant to title 32 and whose scope of practice allows for the provision of these services, or

(b) Performed on behalf of patients by behavioral health staff as prescribed by rule.

3.10. CHIP: Children’s Health Insurance Program.

3.11. CMS: Centers for Medicare and Medicaid Services, an organization within the U.S.

Department of Health and Human Services, which administers the Medicare and Medicaid programs and the State Children’s Health Insurance Program.

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3.12. CONSTRUCION PROJECT MANAGER: A 3rd party service required by AHCCCS as part of this Request for Proposals (RFP). AHCCCS will retain a Construction Project Manager to be funded through the Grant.

3.13. CONTRACT: The combination of the Solicitation, including the Instructions to Offerors, Contract Terms and Conditions, and Scope of Work; the Offer; any Best and Final Offers;

any Solicitation Amendments or Contract Amendments; and any terms applied by law.

3.14. CONTRACT AMENDMENT: A written document signed by the Procurement officer that is issued for the purpose of making changes in the contract.

3.15. CONTRACTOR: A person who has a contract with AHCCCS.

3.16. CONTROLLING INTEREST: The possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the means of Ownership, position, contract or otherwise. The holder of a more than fifty percent (50%) Ownership in a legal entity is automatically determined to have a Controlling

Interest in that legal entity.

3.17. CHRONICALLY RESISTANT TO TREATMENT: A condition that meets the criteria described in A.R.S. § 36-550.09.

3.18. DATA - means recorded information, regardless of form or the media on which it may be recorded. The term may include technical data and computer software. The term does not include information incidental to contract administration, such as financial, administrative, cost or pricing, or management information.

3.19. DAYS: Calendar days unless otherwise specified. If a due date falls on a Saturday, Sunday or legal holiday, then the due date is considered the next business day. A business day means a Monday, Tuesday, Wednesday, Thursday, or Friday unless a legal holiday falls on Monday, Tuesday, Wednesday, Thursday, or Friday. Computation of time begins the day after the event that triggers the period and includes all calendar days and the final day of the period. If the final day of the period is a weekend or legal holiday, the period is extended until the end of the next business day.

3.20. DELIVERABLES: All items that the Contractor is required to deliver under this Contract.

3.21. DEVELOPMENT CONSULTANT: A 3rd party contracted by the Offeror to develop, acquire, construct, or renovate the Facility on behalf of the Offeror.

3.22. DEVELOPMENT TEAM: The entities and professionals assembled to develop and manage the Project, typically including the Offeror, Facility Owner, Facility Operator, Service Provider, Consultant and/or general partner or any other related entities which has an identity of interest or a Controlling Interest in the Project.

3.23. DOCUMENTATION: Means all documents, including documents that are Deliverables described in the Statement of Work that are to be delivered by Contractor under this

Contract. Documentation includes documents in hard copy or electronic form.

3.24. FFP (FEDERAL FINANCIAL PARTICIPATION): The Federal share of reimbursement for services provided in accordance with Federal requirements for school-based Medicaid services.

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3.25. FMAP (FEDERAL MEDICAL ASSISTANCE PERCENTAGE): Defined in CFR 42

§433.10 Rates of FFP for Program Services, is the Federal matching assistance percentage used to calculate payment to the states for part of their expenditures for services under an approved State Plan.

3.26. GRATUITY: A payment, loan, subscription, advance, deposit of money, services or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.

3.27. HEALTH PLAN: An organization which contracts with the AHCCCS Administration to administer the provision of a comprehensive package of AHCCCS covered acute and behavioral health care services to AHCCCS members enrolled with the health plan.

3.28. KEY PERSONNEL: Contractor’s Authorized Representative, the Project Manager, and all other Contractor personnel designated as Key Persons.

3.29. KNOWLEDGE TRANSFER: Activities designed to impart detailed information from

Contractor to the Agencies in relation to the activities described in the Scope of Work.

Knowledge Transfer goes beyond formalized training and documentation to include

Contractor ensuring that staff is prepared to launch a successful Modularity program.

Knowledge Transfer includes AHCCCS/MQD staff and other resources being integrated into Contractor’s work activities and being an integral part of identifying and resolving issues. Knowledge Transfer activities include ‘shoulder to shoulder’ training, which is informal training with the specific intent of developing skills or knowledge working side by side with Contractor.

3.30. KIDSCARE: The State of Arizona’s CHIP program.

3.31. MATERIAL OMISSION: A fact, data or other information excluded from a report, contract, etc. the absence of which could lead to erroneous conclusions following reasonable review of such report, contract, etc.

3.32. MATERIALS: All property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space.

3.33. MAY: Indicates something that is not mandatory but permissible.

3.34. MEDICAID: A Federal/State program authorized by Title XIX of the Social Security Act, as amended.

3.35. MEMBER: An individual ordered by the court to receive treatment in a Secured Behavioral

Health Residential Facility and placed in the Owner’s facility.

3.36. MILESTONE: The completion date for a specific group of tasks or deliverables identified as a milestone in the statement of work.

3.37. NATIONAL PROVIDER NUMBER: This single, unique ID is used for billing purposes by the provider to all third party payers, including billing for reimbursement under the DSC

Program. All typical health care providers must have a 10-digit National Provider Identifier

(NPI).

3.38. NTE: Not-to-Exceed amount.

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3.39. OFFER: A response to a solicitation.

3.40. OFFEROR: A vendor or person who responds to a Solicitation.

3.41. OPERATING EXPENSES: For any given period of time the fixed and variable expenses of operating the Project on an accrual basis, limited to the following expenses, as applicable: 1) administrative (i.e. accounting and auditing, attorney and payroll); 2) operating and management expenses and fees (i.e. utilities, marketing, leasing, advertisement, commission, and promotional costs); 3) maintenance and repair costs of the Project; 4) general real estate taxes; 5) treatment supplies and medications; 6) dietary and activities costs; 7) premiums of insurance carried on or with respect to the Project; 7) costs of utilities for the Project; and 8) replacement and operating reserves not to exceed a reasonable amount stipulated in the Proposal; and excluding interest payments and accruals on any and all loans (including but not limited to construction, permanent, voluntary, and partner/member loans), and depreciation and amortization costs.

3.42. OPERATOR: The legal entity which will operate the Facility once development has been completed. Facility operation includes but is not limited to, oversight of the Facility physical plant, security, utilities, and maintenance. For the purposes of this grant, the Operator must also be the primary behavioral health services provider for the Secure Facility and as such must be a registered and licensed AHCCCS provider. The Operator may be the

Owner, or a separate entity legally contracted with the Owner to operate and provide behavioral health services at the Facility.

3.43. OWNER: The legal entity which will own title to the property and be responsible for the development of the Facility including any acquisition, construction or rehabilitation of the

Facility. The Owner may also be the Operator and Behavioral Health Service Provider.

3.44. PERSON: Any corporation, business, individual, union, committee, club or other organization or group of individuals.

3.45. PROCUREMENT OFFICER: The person, or his or her designee, duly authorized by the

State and AHCCCS to enter into and administer Contracts and made written determinations with respect to the Contract.

3.46. RELATED PARTY: A party that has, or may have, the ability to control or significantly influence a Contractor, or a party that is, or may be, controlled or significantly influenced by a Contractor. “Related parties” include, but are not limited to, agents, managing employees, persons with an ownership or controlling interest in the disclosing entity, and their immediate families, subcontractors, wholly-owned subsidiaries or suppliers, parent companies, sister companies, holding companies, and other entities controlled or managed by any such entities or persons.

3.47. SCOPE OF WORK: The documents that describe the Services to be provided by

Contractor, including the Tasks, Deliverables and Milestones, Documentation, Work

Product, the attributes (including requirements and specifications) of each Deliverable, identification of the Deliverables and Services that are associated with each Task, and a

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Deliverable and Milestone, and any other items as agreed by the parties.

3.48. SECURE BEHAVIORAL HEALTH RESIDENTIAL FACILITY or FACILITY: A facility as defined in A.R.S. § 36-425.06. Throughout this document, “Facility” may refer to multiple

Facilities in the event of an award involving multiple projects or multiple awards.

3.49. SERIOUS MENTIAL ILLESS (SMI): A designation as defined in A.R.S. §36-550 and determined in an individual 18 years of age or older.

3.50. SERVICES: Means the furnishing of labor, time or effort by a Contractor or Subcontractor which does not involve the delivery of a specific end product other than required reports and performance, but does not include employment agreements or collective bargaining agreements.

3.51. SHALL, MUST: Indicates a mandatory requirement. Failure to meet these mandatory requirements may result in the rejection of a proposal as non-responsive.

3.52. SHOULD: Indicates something that is recommended but not mandatory. If the Offeror fails to provide recommended information, the State may, at its sole option, ask the Offeror to provide the information or evaluate the proposal without the information.

3.53. SOLICITATION: An Invitation for Bids (“IFB”), a Request for Proposals (“RFP”), or a

Request for Quotations (“RFQ”).

3.54. SOLICITATION AMENDMENT: A written document that is authorized by the Procurement officer and issued for the purpose of making changes to the Solicitation.

3.55. STATE: Means any department, commission, council, board, bureau, committee, institution, agency, government corporation or other establishment or official of the executive branch or corporation commission of the State of Arizona that executes the

Contract.

3.56. STATE FISCAL YEAR: The period beginning with July 1 and ending June 30.

3.57. SUBCONTRACT: Any Contract, express or implied, between the Contractor and another party or between a subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any material or any service required for the performance of the Contract.

3.58. SUBCONTRACTOR: means a person who contracts to perform work or render Services to a Contractor or to another Subcontractor as a part of a Contract with the State.

3.59. TITLE XIX: Title XIX of the Social Security Act means Medicaid as defined in 42 U.S.C.

7.19.

4 . OFFEROR REQUIREMENTS

4.1. The Offeror and any other interested parties to the project including the Owner, Operator, Consultant or other Development Team participant shall be duly formed legal entity(ies) authorized to transact business in the State of Arizona and in good standing with the

Arizona Corporation Commission or the Office of the Secretary of the State of Arizona, as applicable.

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4.2. The Offeror responding to this RFP shall be the legal Owner of the Facility that is currently capable or can be retrofitted to act as a SBHRF. The Offeror shall demonstrate that the project has a clearly defined Development Team that includes at minimum the

Owner/Operator who shall be the entity enrolled with AHCCCS as the Title 36 SBHRF provider for the Facility.

4.3. The Offeror responding to this RFP shall demonstrate ability to obtain the necessary zoning, Special use permits or other applicable requirements of the local municipality.

4.4. The Offeror shall warrant and demonstrate that they possess the experience and financial capacity necessary to retrofit an owned facility for use as a SBHRF in accordance with

A.R.S. § 36-425.06 and forthcoming ADHS licensing requirements under Article 23. New construction is not permitted under this RFP.

4.5. The Offeror shall demonstrate the strategy, expertise, qualifications and all required licenses or certifications necessary to operate or oversee the operation of a licensed

SBHRF that provides twenty-four hour on-site supportive treatment and supervision for individuals placed pursuant to A.R.S. § 36-550.09 only.

4.6. The Offeror shall identify staffing levels and strategies for providing or making available appropriate SBHRF services, including 24/7 supervision, behavioral health services, supportive treatment, and secure environment operations consistent with statutory and regulatory requirements and as needed based on potential residents’ specific staffing needs.

4.7. The Offeror shall use awarded funds only for Facility development through:

4.7.1. Retrofit an existing property.

4.7.2. Eligible uses include retrofit, security upgrades, fire/life‑safety improvements, ADA compliance, environmental review or remediation, design, permitting, fixture/clinic build‑out, and other AHCCCS‑approved costs. The Offeror shall be responsible for all project costs in excess of the awarded amount.

4.8. The Offeror may include in their proposal requests to utilize the funds to support initial operations. The Facility must be physically located in Arizona.

4.9. The Operator shall obtain and maintain ADHS licensure pursuant to A.R.S. § 36-425.06 and Article 23 (when final) and must obtain and maintain AHCCCS enrollment as a Title

36 SBHRF provider type. The Operator must meet all Federal and State requirements governing SBHRFs.

4.10. The Offeror shall complete all required development activities and obtain ADHS licensure and AHCCCS enrollment within the timeline established in the finalized project schedule, to be incorporated into the construction/retrofit agreement executed upon award.

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4.11. AHCCCS shall disburse funds to the Offeror on a cost‑reimbursement basis upon completion of approved development milestones. Milestones and required documentation will be finalized and incorporated into the development agreement between AHCCCS and the Offeror. AHCCCS shall retain a portion of the total approved award to be released only upon:

4.11.1. Final completion of all retrofit activities,

4.11.2. Issuance of ADHS SBHRF licensure under A.R.S. § 36‑425.06, and

4.11.3. Completion of AHCCCS enrollment as a Title 36 SBHRF provider,

4.11.4. Demonstration of operational readiness to accept placements under A.R.S. §

36‑550.09.

4.12. The Owner shall commit to deed restrictions requiring use of property as a secure behavioral health residential facility for a minimum period of time.

4.13. The completed Facility must meet the emergency and safety standards as specified in

State and local building codes.

5. State Licensure Approval to Operate

To ensure the full performance of the Successful Offeror/AHCCCS agreement, AHCCCS will withhold final acceptance until the Arizona State Licensure is granted to Successful Offeror.

Special Terms and Conditions

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The Special Terms and Conditions modify the Uniform Terms and Conditions. It can modify them by replacing, deleting, appending to, or revising the text of an existing provision or by inserting a new paragraph into an existing article. No other document modifies or adds to the Uniform Terms and Conditions, except as may subsequently be otherwise and expressly agreed and incorporated by Contract Amendment.

1. Definition of Terms: As used in the Contract, the terms listed below are defined as follows:

1.1. Acceptance: The document titled “Offer and Acceptance Form” bearing the state contract number once Procurement Officer has signed it to signify (1) State’s formal acceptance of the Accepted Offer and (2) the formation of the Contract. For clarity of intent, the foregoing is not to be confused with the term “acceptance” used throughout the Contract in the context of delivery, inspection, etc., with respect to Materials or Services.

1.2. Accepted Offer:

1.2.1. If State did not request a Revised Offer, then “Accepted Offer” means the

Initial Offer.

1.2.2. If State requested a Revised Offer but not a Best and Final Offer, then

“Accepted Offer” means the latest Revised Offer.

1.2.3. If State requested a Best and Final Offer, then “Accepted Offer” means the

Best and Final Offer.

1.3. “AI” means the science and engineering of making machines capable of performing tasks that are typically associated with human intelligence, such as learning and problem-solving, and includes without limitation: AI systems, classic AI, external AI, generative AI, and large language model (LLM) AI.

1.4. Arizona Procurement Code: The Arizona Procurement Code consists of Arizona Revised

Statutes (A.R.S.) §§ 41-2501 et seq. and Arizona Administrative Code (A.A.C.) R2-7-101 et seq. There is additional information in the Solicitation Instructions regarding how to access these state statutes and rules.

1.5. Arizona Transaction Privilege Tax (TPT): For information, refer to the Arizona Department of Revenue (DOR) website at: https://azdor.gov/transaction-privilege-tax-tpt

1.6. Attachment. Any item that:

1.6.1. The Solicitation required Offeror to submit as part of the Offer (e.g., Initial

Offer, Revised Offer, or Best and Final Offer);

https://azdor.gov/transaction-privilege-tax-tpt

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1.6.2. Was attached to an Offer when submitted; and

1.6.3. Was included in the Accepted Offer.

1.7. Contract Terms and Conditions: The Special Terms and Conditions and the Uniform

Terms and Conditions taken collectively.

1.8. Contractor: The Person identified on the Accepted Offer who has entered into the Contract with the State.

1.9. Contractor Indemnitor: Contractor or any of its owners, officers, directors, agents, employees, or Subcontractors.

1.10. Data Breach: Data Breach is used herein as defined as stated in A.R.S. Title 18, chapter

5, article 4 (Data Security Breaches), or in any relevant state or federal standard, to indicate an unauthorized acquisition of and unauthorized access that materially compromises the security or confidentiality of unencrypted and unredacted computerized personal information maintained as part of a database of personal information regarding multiple individuals.

1.11. Instructions to Offerors: The Solicitation Instructions document of the Solicitation.

1.12. Order: The instrument by which the Eligible Agency or Co-Op Buyer authorizes a

Contractor to perform some or all of the Work. Whether the Contract will have one Order or many Orders depends on the scope of the Contract and how the State will use it. The

Special Terms and Conditions provide that information. Any of the following are construed as an “Order”: “Purchase order,” “task order,” “service order,” or “job order”.

1.13. State’s eProcurement System: The State’s official electronic procurement system, established pursuant to A.A.C. R2-7-201 as set forth in the Arizona Department of

Administration State Procurement Office policy document Technical Bulletin No. 020, The

State’s eProcurement System–The Official State eProcurement System. Technical

Bulletin No. 020 is available online at:

https://spo.az.gov/sites/default/files/documents/files/TB_020_APP_20181024.pdf

1.14. State: With respect to the Contract generally, “State” means the State of Arizona and its department, agency, university, commission, or board that has executed the Contract.

With respect to administration or rights, remedies, obligations and duties under the

Contract for a given Order, “State” means each Eligible Agency or Co-Op Buyer who has issued the Order.

https://spo.az.gov/sites/default/files/documents/files/TB_020_APP_20181024.pdf

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1.15. State Indemnitees: Collectively, the State of Arizona, its departments, agencies, universities, commissions, and boards and, and their respective officers, agents, and employees.

1.16. Work: The totality of the Materials and the Services and all the acts of administration, creation, production, and performance necessary to fulfill and incidental to fulfilling all of

Contractor's obligations and duties under the Contract in conformance with the Contract and applicable laws.

2. Contract Interpretations

2.1. Usage. Where the Contract:

2.1.1. assigns obligations to Contractor, any reference to “Contractor” is to be construed to be a reference to the Contractor and all Subcontractors, whether they are first-tier Subcontractors, sub-subcontractors, suppliers, sub-suppliers, consultants, or sub-consultants, as well as all of Contractor’s and the

Subcontractor’s respective agents, representatives, and employees in every instance unless the context plainly requires that it is a reference only to

Contractor as apart from Subcontractors.

2.1.2. uses the permissive “may” with respect to a party’s actions, determinations, etc., the terms is to be interpreted as in A.A.C. R2-7-101(32) [Definitions]. For clarity of intent, any right given to State using “State may” or a like construction denotes discretion and freedom to act so far as any regulatory or operative constraints permit in the relevant circumstances, provided that: (a) where written “may, at its discretion,” the discretion extends to whatever is most advantageous to State; and (b) where written only as “may,” the discretion is constrained by what is fair, reasonable, and as accommodating of the respective best interests of both parties as practicable under the circumstances;

2.1.3. uses the imperative “shall” with respect to a party’s actions, duties, etc., the term is to be interpreted as in A.A.C. R2-7-101(44) [Definitions]. Conversely, the phrase “shall not” is to be interpreted as an imperative prohibition.

2.1.4. uses the term “must” with respect to a requirement, criterion, etc., the term is to be interpreted as conveying compulsion or strict necessity;

2.1.5. uses the term “might” with respect to an event, outcome, action, etc., the term is to be interpreted as conveying contingency or non-discretionary conditionality; and

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2.1.6. uses the term “will” or the phrases “is to be” or “are to be” with respect to an event, outcome, action, etc., the term or phrase is to be interpreted as conveying such certainty or imperativeness that “shall” is either unnecessary or irrelevant in that instance.

2.2. Contract Order of Precedence

2.2.1. Complementary Documents. All of the documents forming the Contract are complementary. If certain work, requirements, obligations, or duties are set out only in one but not in another, Contractor shall carry out the Work as though the relevant Work, requirements, obligations, or duties had been fully described in all, consistent with the other documents forming the Contract and as is reasonably inferable from them as being necessary to produce complete results.

2.2.2. Conflicts. In case of any inconsistency, conflict, or ambiguity among the documents forming the Contract and their provisions, they are to prevail in the following order, descending from most dominate to most subordinate, provided that, among categories of documents or provisions having the same rank, the document or provision with the latest date prevails. Information being identified in one document, but not in another, is not to be considered a conflict or inconsistency.

2.2.2.1. Contract Amendments;

2.2.2.2. The final Solicitation Documents, in the following order:

(1) Special Terms and Conditions;

(2) Exhibits to the Special Terms and Conditions;

(3) Uniform Terms and Conditions;

(4) Scope of Work;

(5) Exhibits to the Scope of Work;

(6) Specifications; and

(7) Any other documents referenced or included in the

Solicitation;

2.2.2.3. Orders, in reverse chronological order; and

2.2.2.4. Accepted Offer.

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2.2.3. Attachments and Exhibits. For clarity of intent, if an item was an Attachment in the Solicitation Documents or an Offer (either Initial, Revised, Best and Final, or Accepted) and was subsequently made into an Exhibit, or its content was incorporated into one of the other Contract documents, then that Attachment no longer exists contractually as an “Attachment” since it has at that point been made into some other Contract document. In every other case, an Attachment and the Offeror Data therein remain part of the Accepted Offer for purposes of precedence and contractual effect.

3. Contract Administration and Operation

3.1. Term of Contract. The term of the Contract will commence on the date indicated on the

Acceptance and continue for twelve (12) months unless canceled, terminated, or permissibly extended.

3.2. Contract Extensions. State may at its discretion extend the initial Contract term in increments of one (1) or more months and do so one or more times, provided that the maximum aggregate term of the Contract including extensions cannot exceed the maximum aggregate term of five (5) years.

3.3. Notices and Correspondence

3.3.1. To Contractor. State shall address all Contract correspondence other than formal notices to the email address indicated as “Default for Type” for “General

Mailing Address” in Contractor’s corresponding State’s eProcurement System

Vendor Profile; and address any required notices to Contractor to the “Contact

Name and Title” at the “Mailing Address” indicated on the Accepted Offer, as that address might have been amended during the term of the Contract.

3.3.2. To State. Contractor shall address all Contract correspondence other than formal notices to the email address indicated in “Contact Instructions” in the

State’s eProcurement System Summary for State; and address any required notices to State via email to the Procurement Officer identified as “Purchaser” in the State’s eProcurement System and via email to the following email address:

AHCCCS Procurement procurement@azahcccs.gov

3.3.3. Changes. State may change the designated Procurement Officer, update contact information, or change the applicable mailing address.

mailto:procurement@azahcccs.gov

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3.4. Signing of Contract Amendments. Contractor’s counter-signature (or “approval” in the

State’s eProcurement System, in the case of an amendment) is not required to give effect if the Contract Amendment only covers either:

3.4.1. extension of the term of the Contract within the maximum aggregate term; or

3.4.2. modifications of a clerical nature that have no effect on terms, conditions, price, scope, or other material aspect of the Contract.

In every case other than those listed in 3.4.1 and 3.4.2 above, both parties’ signatures

(or “approval” in the State’s eProcurement System in the case of an Amendment) are required to give it effect.

3.5. Click-through Terms and Conditions. If either party uses a web-based ordering system, an electronic purchase order system, an electronic order acknowledgement, a form of an electronic acceptance, or any software based ordering system with respect to the Contract

(each an “Electronic Ordering System”), the parties acknowledge and agree that an

Electronic Ordering System is for ease of administration only, and Contractor is hereby given notice that the persons using Electronic Ordering Systems on behalf of State do not have any actual or apparent authority to create legally binding obligations that vary from the terms and conditions of the Contract. Accordingly, where an authorized State user is required to “click through” or otherwise accept or be made subject to any terms and conditions in using an Electronic Ordering System, any such terms and conditions are deemed void upon presentation. Additionally, where an authorized State user is required to accept or be made subject to any terms and conditions in accessing or employing any

Materials or Services, those terms and conditions will also be void.

3.6. Books and Records

3.6.1. Retain Records. In addition to the audit rights detailed in the Uniform Terms and Conditions, State also requires that, pursuant to A.R.S. § 41-2548(B), Contractor shall retain and shall contractually require each Subcontractor to retain books and records relating to any cost and pricing Data submitted in satisfaction of § 41-2543 for the period specified in the statute.

3.6.2. Usage Information. Additionally, any and all information (including, but not limited to, documentation or Data) related to Eligible Agency and Co-Op Buyer usage retained solely within the Contractor’s system (for example, related to punch-out or Contractor catalog sales) shall be considered public information or information that can be shared with and distributed by the State freely and for any purpose under the State’s government purpose rights detailed in

Section 3 of the Uniform Terms and Conditions [Ownership of Intellectual

Property]. Any modifications to this Contract notwithstanding, the State shall

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Buyer purchasing. Upon request by the State, Contractor shall promptly provide the State with any usage information requested and shall not attempt to limit the State's use in any way.

3.6.3. Right To Audit. The retained books and records are subject to audit by State during that period. Pursuant to A.R.S. § 41-2548(B), Contractor shall retain and shall contractually require each Subcontractor to retain books and records relating to performance under the Contract for the period specified in the statute and those retained books and records are subject to audit by State during that period.

3.6.4. Auditing. Contractor or Subcontractor shall either make all such books and records under subparagraphs 3.6.1 and 3.6.2 available to State at all reasonable times or produce the records at a designated State office on State’s demand, the choice of which being at State’s discretion. For the purpose of this paragraph, “reasonable times” are during normal business hours and in such a manner so as to not unreasonably interfere with normal business activities.

3.7. Subcontract

3.7.1. Initial list. At the time of Contract execution, Contractor’s candidate

Subcontractors were identified in Attachment Proposed Subcontractors to the

Accepted Offer [Proposed Subcontractors]. Agreeing to them being included in the Accepted Offer signified Procurement Officer’s advance consent for

Contractor to enter into a Subcontract with each candidate, which Contractor shall do as promptly as necessary to ensure its ability to carry out the Work in a timely manner.

3.7.2. Additional names. Contractor shall not enter into a Subcontract to perform

Work under the Contract, without first obtaining Procurement Officer’s written consent with any prospective Subcontractor that (a) was not listed on the

Attachment Proposed Subcontractors at time of Contract execution or (b) is for any Materials or Services categories other than the ones for which they were previously consented. For either case (a) or (b), Contractor shall submit a written request sufficiently in advance of the need date for those materials or services so that performance under the Contract is not impaired. Procurement

Officer may request any additional information he or she determines is necessary to assess the submittal, and may withhold consent pending it.

Approval of additional subcontractors shall be added to the Contract by a bilateral Contract Amendment.

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3.7.3. Flow-down. Contractor shall incorporate the provisions, terms, and conditions of the Contract into every Subcontract by inclusion or by reference, as appropriate. When making any post-execution consent requests, Contractor shall include its warrant that it will do the same for the pending Subcontracts covered by the request. Entering into Subcontracts will not relieve Contractor of any of its obligations or duties under the Contract, including, among other things, the duty to supervise and coordinate the work of Subcontractors.

Nothing contained in any Subcontract will create or is to be construed as creating any contractual relationship between State and the Subcontractor.

3.8. Orders

3.8.1. Order Sufficiency. The Contract was awarded in accordance with the Arizona

Procurement Code; the transactions and procedures required by the Arizona

Procurement Code for competitive source selection have been met. An Order issued that cites the correct State contract number will suffice to authorize the

Contractor to provide the Materials and perform the Services covered by that

Order.

3.8.2. Order Terms. All Orders are subject to the Contract Terms and Conditions; an

Order cannot modify the Contract Terms and Conditions. Any Contractor terms added to quotes or otherwise unilaterally added to Eligible Agency or Co-Op

Buyer Orders are null and void.

3.8.3. Orders are Obligatory. Until the expiration or earlier termination of the Contract, State may issue and Contractor shall accept Orders that make proper reference to the Contract and are permissible hereunder, provided that, Contractor is not obliged to accept any Order that is not consistent with the then-current pricing, lead times, specifications, or payment provisions of the

Contract. Contractor shall fulfill and complete any Orders that are begun but not yet completed as of expiration or earlier termination of the Contract unless

State instructs otherwise at the time.

3.8.4. No Minimums or Commitments. (a) Contractor shall not impose any minimum dollar amount, item count, services volume, or services duration on Orders; (b)

State makes no commitment of any kind concerning the quantity or monetary value of activity actually initiated or completed during the term of the Contract;

(c) Contractor shall only deliver or perform as authorized by Orders; and (d)

State is not limited as to the number of Orders it may issue for the Contract.

For clarity of intent, the foregoing applies equally whether an Eligible Agency issues the Order or, if applicable, a Co-Op Buyer issues it.

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3.8.5. Non-contracted Materials or Services. Any attempt to knowingly represent for sales, marketing, or related purposes that Materials or Services not specifically awarded are under a State contract is a violation of the Contract and law.

3.9. Order Cancellations. State may cancel Orders within a reasonable period after issuance and at its discretion. The same method used for ordering will be used for cancellation.

3.9.1. If State cancels an Order, then State shall:

3.9.1.1. pay Contractor for any portion of the Materials and Services from that Order that have been properly delivered or performed as of the cancellation effective date; and

3.9.1.2. reimburse Contractor for actual, documented costs incurred in fulfilling the…