Contract_Final_12.07.23.pdf

CONTRACT

1. PARTIES

The parties to this contract (Contract) are the State of North Dakota, acting through its Office of Management and Budget, Risk Management Division (STATE), and Aon Risk Consultants, Inc., having a principal place of business at 5600 West 83rd Street, 8200 Tower, Suite 1100, Minneapolis, MN

55437-1024 (CONTRACTOR).

2. SCOPE OF WORK

CONTRACTOR, in exchange for the compensation paid by STATE under this Contract, shall provide actuarial services for the purposes of determining necessary funding levels for the Risk Management Fund and make recommendations on risk financing alternatives, including excess insurance. Actuarial services include assisting in the evaluation of funding, reserving, premium allocation and discount calculation practices for its discount program. The CONTRACTOR will be required to provide the following to achieve the objective of this project.

a) A forecast at expected and 75% confidence level for liabilities of the North Dakota Risk Management Fund (NDRMF) for the biennium July 1, 2025, through June 30, 2027. The State’s prior tort cap of $250,000 per claim/$1 million per occurrence, the current caps and future statutory caps will be considered in the forecasting process.

b) A fund adequacy estimates of the funds necessary to cover the liabilities incurred since the inception of the NDRMF. The analysis would examine the ultimate expected liabilities beginning April 22, 1995, until inception of the biennium beginning, July 1, 2025. This analysis will be estimated at “expected” and “pessimistic” levels and would consider the State’s tort cap and changes to the caps over time.

c) An allocation of the selected funding level for the NDRMF. Based upon State’s selection of the Fund adequacy and the biennial projection, actuary will develop an experience modification factor and allocate the selected funding need to the state agencies.

d) Loss Development factors collected, compiled, and generated with the assistance of the Risk Management Division.

e) Written draft and final report with a summary of findings, an analysis of the methods used together with exhibits and loss triangles which support the CONTRACTOR’S estimates.

f) Draft report and recommendations must be received no later than February 1, 2024, with final report due no later than March 1, 2024.

g) The Contract may include additional or unanticipated actuarial work to assist with commercial insurance purchases and fiscal impact of proposed legislation.

h) The services to be provided by CONTRACTOR are not of a legal or accounting nature, and CONTRACTOR shall in no event give, or be required to give, any legal opinion or provide any legal or accounting representation to STATE.

i) STATE shall provide the data and access to personnel necessary to assist CONTRACTOR in performing the Services.

j) STATE acknowledges that in performing the Services CONTRACTOR shall rely on all information furnished by STATE and on any decisions made or approvals given by STATE in connection with the Services. CONTRACTOR shall be under no obligation to verify or investigate the accuracy or completeness of the data and information provided by STATE. STATE accepts sole responsibility for errors or delays in services solely resulting from inaccurate or incomplete data supplied to CONTRACTOR and acknowledges and agrees that CONTRACTOR shall have no liability for any resulting losses and acknowledges that any additional services thereby necessitated will result in additional fees payable by STATE to CONTRACTOR.

3. COMPENSATION-PAYMENTS

a. Contractual Amount

STATE shall pay for the accepted services provided by CONTRACTOR under this Contract an amount not to exceed $25,000 (Contractual Amount). CONTRACTOR will be paid on an hourly basis as outlined below.

The Contractual Amount is firm for the first year of this Contract with the option to adjust by 5% per each biennium analysis. This constitutes the entire compensation due CONTRACTOR for performance of its obligations under this Contract regardless of the difficulty, materials or equipment required, including fees, licenses, overhead, profit and all other direct and indirect costs incurred by CONTRACTOR, except as provided by an amendment to this Contract.

Biennial Report Cost

Name Job Title Expected Hours

Percent of Time on Project

Hourly Rate

Total

Neal Anderson

Brenda Reddick

Director

15 20% $390 $5,850

Ryan Stoehr Consultant 20 27% $292 $5,900

Alison Millerbernd Analyst 40 53% $210 $8,400

Total 75 100% $20,150

Hourly Rate for Unanticipated Work

Job Title Hourly Rate

Director $390

Consultant $292

Analyst $210

Average Hourly Rate $298

b. Payment

1) Payment made in accordance with this Compensation section shall constitute payment in full for the services and work performed and the deliverables and work(s) provided under this Contract and CONTRACTOR shall not receive any additional compensation hereunder.

2) STATE shall make payment under this Contract within forty-five (45) calendar days after receipt of a correct invoice. Invoice shall be issued upon completion of the report.

3) Payment of an invoice by STATE will not prejudice STATE’s right to object to or question that or any other invoice or matter in relation thereto. CONTRACTOR's invoice will be subject to reduction for amounts included in any invoice or payment made which are determined by STATE, on the basis of audits conducted in accordance with the terms of this Contract, not to constitute allowable costs. At STATE’s sole discretion, all payments shall be subject to reduction for amounts equal to prior overpayments to CONTRACTOR.

4) For any amounts that are or will become due and payable to STATE by CONTRACTOR, STATE reserves the right to deduct the amount owed from payments that are or will become due and payable to CONTRACTOR under this Contract.

c. Prepayment

STATE will not make any advance payments before performance or delivery by CONTRACTOR under this Contract.

d. Payment of Taxes by STATE

STATE is not responsible for and will not pay local, state, or federal taxes. STATE sales tax exemption number is E 2001. STATE will furnish certificates of exemption upon request by the

CONTRACTOR.

e. Taxpayer ID

CONTRACTOR’S federal employer ID number is: 36-3617077.

f. Purchasing Card

STATE may make payment using a government credit card. CONTRACTOR will accept a government credit card without passing the processing fees for the government credit card back to STATE.

4. TERM OF CONTRACT

This Contract term (Term or Initial Term) begins on November 1, 2023, or its Effective Date, and ends on June 30, 2024.

a. No Automatic Renewal

This Contract will not automatically renew.

b. Renewal Option

STATE may renew this Contract upon satisfactory completion of the Initial Term. STATE reserves the right to execute up to three (3) options to renew this Contract under the same terms and conditions for a period of 24 months each (Renewal Term).

c. Extension Option

STATE reserves the right to extend this Contract for an additional period, not to exceed twelve

(12) months, beyond the current termination date of this Contract.

5. TERMINATION

a. Termination by Mutual Agreement

This Contract may be terminated by mutual consent of both Parties executed in writing.

b. Early Termination in the Public Interest

STATE is entering this Contract for the purpose of carrying out the public policy of the State of North Dakota, as determined by its Governor, Legislative Assembly, Agencies and Courts. If this Contract ceases to further the public policy of the State of North Dakota, STATE, in its sole discretion, by written notice to CONTRACTOR, may terminate this Contract in whole or in part.

c. Termination for Lack of Funding or Authority

STATE by written notice to CONTRACTOR, may terminate the whole or any part of this Contract under any of the following conditions:

1) If funding from federal, state, or other sources is not obtained or continued at levels sufficient to allow for purchase of the services or goods in the indicated quantities or term.

2) If federal or state laws or rules are modified or interpreted in a way that the services or goods are no longer allowable or appropriate for purchase under this Contract or are no longer eligible for the funding proposed for payments authorized by this Contract.

3) If any license, permit, or certificate required by law or rule, or by the terms of this

Contract, is for any reason denied, revoked, suspended, or not renewed.

Termination of this Contract under this subsection is without prejudice to any obligations or liabilities of either Party already accrued prior to termination.

d. Termination for Cause

STATE may terminate this Contract effective upon delivery of written notice to CONTRACTOR, or any later date stated in the notice:

1) If CONTRACTOR fails to provide services or goods required by this Contract within the time specified or any extension agreed to in writing by STATE; or

2) If CONTRACTOR fails to perform any of the other provisions of this Contract, or so fails to pursue the work as to endanger performance of this Contract in accordance with its terms.

The rights and remedies of STATE provided in this subsection are not exclusive and are in addition to any other rights and remedies provided by law or under this Contract.

6. FORCE MAJEURE

Neither Party shall be held responsible for delay or default caused by fire, riot, terrorism, pandemic (excluding COVID-19), acts of God, or war if the event was not foreseeable through the exercise of reasonable diligence by the affected Party, the event is beyond the Party’s reasonable control, and the affected Party gives notice to the other Party promptly upon occurrence of the event causing the delay or default or that is reasonably expected to cause a delay or default. If CONTRACTOR is the affected Party and does not resume performance within fifteen (15) days or another period agreed between the Parties, then STATE may seek all available remedies, up to and including termination of this Contract pursuant to its Termination Section, and STATE shall be entitled to a pro-rata refund of any amounts paid for which the full value has not been realized, including amounts paid toward software subscriptions, maintenance, or licenses.

7. INDEMNIFICATION

The State and Contractor each agrees to assume its own liability for any and all claims of any nature including all costs, expenses and attorneys’ fees which may in any manner result from or arise out of this agreement.

7.1 Liability.

State acknowledges that there are inherent uncertainties in actuarial forecasting and expressly assumes all risks arising from these uncertainties and will exercise its own independent judgment in determining final recommended funding levels and allocations. State further disclaims any reliance upon the CONTRACTOR’S work product in a manner that could give rise to indirect consequential loss exceeding the cost of cover for one additional or alternative biennial funding analysis. To the extent applicable and allowed under NDCC 32-12.2-15, CONTRACTOR’’S maximum liability to STATE shall not exceed two times the fees paid to the CONTRACTOR under this contract.

8. INSURANCE

Contractor shall secure and keep in force during the term of this agreement and Contractor shall require all subcontractors, prior to commencement of an agreement between Contractor and the subcontractor, to secure and keep in force during the term of this agreement, from insurance companies, government self-insurance pools or government self-retention funds, authorized to do business in North Dakota, the following insurance coverages:

1) Commercial general liability, with minimum liability limits of $2,000,000 per occurrence that can be met through primary and excess layers.

2) Workers compensation coverage meeting all statutory requirements. The policy shall provide coverage for all states of operation that apply to the performance of this contract.

3) Professional errors and omissions with limits of $1,000,000 per claim and in the aggregate, Contractor shall continuously maintain such coverage during the contact period and for three years thereafter. In the event of a materially adverse change or cancellation of coverage, Contractor shall purchase an extended reporting period to meet the time periods required in this section.

The insurance coverages listed above must meet the following additional requirements:

1) Any deductible or self-insured retention amount or other similar obligation under the policies shall be the sole responsibility of the Contractor.

2) This insurance may be in policy or policies of insurance, primary and excess, including the so-called umbrella or catastrophe form and must be placed with insurers rated “A-” or better by

A.M. Best Company, Inc., provided any excess policy follows form for the primary coverage.

Less than an “A-” rating must be approved by the State.

3) The Contractor shall furnish upon request a certificate of insurance to the undersigned State representative.

4) Failure to provide insurance as required in this agreement is a material breach of contract entitling the State to terminate this agreement immediately.

5) Contractor shall provide at least 30-day notice of any cancellation or materially adverse change to the policies.

9. WORKS FOR HIRE

CONTRACTOR acknowledges that all reports under this Contract is "work(s) for hire" within the meaning of the United States Copyright Act (Title 17 United States Code) and hereby assigns to STATE all rights and interests CONTRACTOR may have in the work(s) it prepares under this Contract, including any right to derivative use of the work(s). All software and related materials developed by CONTRACTOR in performance of this Contract for STATE shall be the sole property of STATE, and CONTRACTOR hereby assigns and transfers all its right, title, and interest therein to STATE.

CONTRACTOR shall execute all necessary documents to enable STATE to protect STATE’s intellectual property rights under this section. The Services and work product provided by CONTRACTOR hereunder are provided for the exclusive use of STATE. STATE acknowledges and agrees that CONTRACTOR is in the business of providing consulting services to clients utilizing CONTRACTOR's knowledge, including background software, ideas, concepts, methodologies, and processes ("Prior Works") and CONTRACTOR reserves all right, title and interest in and to any of the Prior Works that CONTRACTOR shall use in the course of the Services for STATE.

10. WORK PRODUCT

Upon full and final payment for services, all final reports created exclusively for STATE or purchased by STATE under this Contract belong to STATE and must be immediately delivered to STATE at STATE's request upon termination of this Contract.

11. NOTICE

All notices or other communications required under this Contract must be given by email (with notice via another method immediately following), registered or certified mail and are complete on the date received when addressed to the Parties at the following addresses:

STATE CONTRACTOR

Tag Anderson Neal Anderson, Aon

Risk Management Director Director & Actuary

1600 E. Century Ave. Suite 4 5600 W. 83rd St., 8200 Tower

Bismarck, ND 58503 Bloomington, MN, 55437 tcanderson@nd.gov neal.anderson@aon.com

Notice provided under this provision does not meet the notice requirements for monetary claims against the State found at N.D.C.C. § 32-12.2-04.

12. CONFIDENTIALITY

CONTRACTOR shall not use or disclose any information it receives from STATE under this Contract that STATE has previously identified as confidential or exempt from mandatory public disclosure except as necessary to carry out the purposes of this Contract or as authorized in advance by STATE. STATE shall not disclose any information it receives from CONTRACTOR that CONTRACTOR has previously identified as confidential and that STATE determines in its sole discretion is protected from mandatory public disclosure under a specific exception to the North Dakota public records law, N.D.C.C. CH.

44-04. The duty of STATE and CONTRACTOR to maintain confidentiality of information under this section continues beyond the Term of this Contract.

13. COMPLIANCE WITH PUBLIC RECORDS LAWS

Under the North Dakota public records law and subject to the Confidentiality clause of this Contract, certain records may be open to the public upon request.

Public records may include: (a) records STATE receives from CONTRACTOR under this Contract, (b) records obtained by either Party under this Contract, and (c) records generated by either Party under this Contract.

CONTRACTOR agrees to contact STATE immediately upon receiving a request for information under the public records law and to comply with STATE’s instructions on how to respond to such request.

14. INDEPENDENT ENTITY

CONTRACTOR is an independent entity under this Contract and is not a STATE employee for any purpose, including the application of the Social Security Act, the Fair Labor Standards Act, the Federal Insurance Contribution Act, the North Dakota Unemployment Compensation Law and the North Dakota Workforce Safety and Insurance Act. CONTRACTOR retains sole and absolute discretion in the manner and means of carrying out CONTRACTOR’s activities and responsibilities under this Contract, except to the extent specified in this Contract.

15. ASSIGNMENT AND SUBCONTRACTS

CONTRACTOR may not assign or otherwise transfer or delegate any right or duty without STATE’s express written consent, provided, however, that CONTRACTOR may assign its rights and obligations hereunder in the event of a change of control or sale of all or substantially all of its assets related to this Contract, whether by merger, reorganization, operation of law, or otherwise. Should Assignee be a business or entity with whom STATE is prohibited from conducting business, STATE shall have the right to terminate in accordance with the Termination for Cause section of this Contract.

CONTRACTOR may enter subcontracts provided that any subcontract acknowledges the binding nature of this Contract and incorporates this Contract, including any attachments. CONTRACTOR is solely responsible for the performance of any subcontractor with whom CONTRACTOR contracts.

CONTRACTOR does not have authority to contract for or incur obligations on behalf of STATE.

16. SPOLIATION – PRESERVATION OF EVIDENCE

CONTRACTOR shall promptly notify STATE of all potential claims that arise or result from this Contract. CONTRACTOR shall also take all reasonable steps to preserve all physical evidence and information that may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and grants to STATE the opportunity to review and inspect such evidence, including the scene of an accident.

17. MERGER AND MODIFICATION, CONFLICT IN DOCUMENTS

This Contract, including the following documents, constitutes the entire agreement between the Parties.

There are no understandings, agreements, or representations, oral or written, not specified within this Contract. This Contract may not be modified, supplemented or amended, in any manner, except by written agreement signed by both Parties.

Notwithstanding anything herein to the contrary, in the event of any inconsistency or conflict among the documents making up this Contract, the documents must control in this order of precedence:

a. The terms of this Contract as may be amended;

b. STATE’s Request for Best and Final Offer to Request for Proposal (“RFP”) number 110.7-23-

027 dated August 1, 2023;

c. STATE’s Solicitation Amendment #1 to Request for Proposal (“RFP”) number 110.7-23-027 dated May 22, 2023;

d. STATE’s Request for Proposal (“RFP”) number 110.7-23-027, dated May 1, 2023;

e. CONTRACTOR’s best and final offer proposal dated August 16, 2023 in response to Best and

Final RFP Number 110.7-23-027.

f. CONTRACTOR’s proposal dated May 25, 203 in response to RFP number 110.7-23-027.

g. All terms and conditions contained in any automated end-user agreements (e.g., click-throughs, shrink wrap, or browse wrap) are specifically excluded and null and void, and shall not alter the terms of this Contract.

18. SEVERABILITY

If any term of this Contract is declared to be illegal or unenforceable by a court having competent jurisdiction, the validity of the remaining terms is unaffected and, if possible, the rights and obligations of the Parties are to be construed and enforced as if this Contract did not contain that term.

19. APPLICABLE LAW AND VENUE

This Contract is governed by and construed in accordance with the laws of the State of North Dakota.

Any action to enforce this Contract must be adjudicated exclusively in the state District Court of Burleigh County, North Dakota. Each Party consents to the exclusive jurisdiction of such court and waives any claim of lack of jurisdiction or forum non conveniens.

20. ALTERNATIVE DISPUTE RESOLUTION – JURY TRIAL

By entering this Contract, STATE does not agree to binding arbitration, mediation, or any other form of mandatory Alternative Dispute Resolution. The Parties may enforce the rights and remedies in judicial proceedings. STATE does not waive any right to a jury trial.

21. ATTORNEY FEES

In the event a lawsuit is instituted by STATE to obtain performance due under this Contract, and STATE is the prevailing Party, CONTRACTOR shall, except when prohibited by N.D.C.C. § 28 26 04, pay STATE’s reasonable attorney fees and costs in connection with the lawsuit.

22. NONDISCRIMINATION AND COMPLIANCE WITH LAWS

CONTRACTOR agrees to comply with all applicable federal and state laws, rules, and policies, including those relating to nondiscrimination, accessibility and civil rights. (See N.D.C.C. Title 34 – Labor and Employment, specifically N.D.C.C. ch. 34-06.1 Equal Pay for Men and Women.)

CONTRACTOR agrees to timely file all required reports, make required payroll deductions, and timely pay all taxes and premiums owed, including sales and use taxes, unemployment compensation and workers' compensation premiums.

CONTRACTOR shall have and keep current all licenses and permits required by law during the Term of this Contract all licenses and permits required by law.

CONTRACTOR is prohibited from boycotting Israel for the duration of this Contract. (See N.D.C.C § 54- 44.4-15.) CONTRACTOR represents that it does not and will not engage in a boycotting Israel during the term of this Contract. If STATE receives evidence that CONTRACTOR boycotts Israel, STATE shall determine whether the company boycotts Israel. The foregoing does not apply to contracts with a total value of less than $100,000 or if CONTRACTOR has fewer than ten full-time employees.

CONTRACTOR’s failure to comply with this section may be deemed a material breach by CONTRACTOR entitling STATE to terminate in accordance with the Termination for Cause section of this Contract.

23. STATE AUDIT

Pursuant to N.D.C.C. § 54-10-19, all records, regardless of physical form, and the accounting practices and procedures of CONTRACTOR relevant to this Contract are subject to examination by the North Dakota State Auditor, the Auditor’s designee, or Federal auditors, if required. CONTRACTOR shall maintain these records for at least three (3) years following completion of this Contract and be able to provide them upon reasonable notice. STATE, State Auditor, or Auditor’s designee shall provide reasonable notice to CONTRACTOR prior to conducting examination.

24. COUNTERPARTS

This Contract may be executed in multiple, identical counterparts, each of which is be deemed an original, and all of which taken together shall constitute one and the same contract.

25. EFFECTIVENESS OF CONTRACT

This Contract is not effective until fully executed by both Parties. If no start date is specified in the Term of Contract, the most recent date of the signatures of the Parties shall be deemed the Effective Date.

CONTRACTOR STATE OF NORTH DAKOTA

AON Risk Consultants, Inc. Acting through its Office of Management, Risk Management Division

BY: BY:

Amy Sestito Tag Anderson

Senior Vice President Risk Management Director

Date:

December 7, 2023

Date:

December 7, 2023