CTR067443_Contract_Document.pdf

SCOPE OF WORK

Contract No.: CTR067443 Description: Securities Litigation Counsel

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1. SECURITIES LITIGATION BACKGROUND

While not a party to this Contract, the ASRS’s third party class action claims filing provider (“TPP”) or custodial bank (“CB”) will provide the following services in connection with this Contract:

• The CB to provide Outside Counsel (“OC”) and TPP with access to ASRS transaction and holdings records for at least the last five years and all future transactions, as well as any other requested information;

• The CB or TPP to monitor class action filings;

• The CB or TPP to identify all securities affected by the class action;

• The CB or TPP to file timely and accurate proof of claim and any other required materials, on behalf of the

ASRS;

• The CB or TPP to deposit proceeds from a settlement, or other case resolution, into the account which held the securities during the class period or, if account is closed, successor account; and

• The CB or TPP to provide quarterly reports to the ASRS.

While not a party to this contract, if the ASRS Securities Litigation Oversight Committee (“SLOC”) determines that joining in an international securities action is appropriate, the SLOC will authorize the ASRS to work with the Arizona Attorney General’s (“AG”) Office to retain International Representation (“IR”) in the appropriate jurisdiction. Fees and costs of the lawsuit (in which costs will be advanced by the OC) will be contingent on the successful outcome of the lawsuit and will be paid out of the settlement fund or judgment obtained. IR will be required to secure ATE (after-the-event) insurance for the benefit of the ASRS when pursuing claims against companies in foreign courts that employ the “loser pays” rule. IR will perform the following services:

A. Manage the ASRS international securities action process; upon approval, file and maintain all required documents in a timely manner consistent with the terms of the filing.

B. Provide the Chief Investment Officer (“CIO”) with documentation consisting of the timetable and associated activities anticipated to occur during the litigation process.

C. Provide the CIO and SLOC with estimates of final settlement monies.

D. Maintain records of all documents related to international securities actions; upon conclusion of the lawsuits provide the CIO with a written postmortem of the results.

E. Vigorously represent the interests of the ASRS and the co-plaintiffs.

F. Ensure the ATE insurance is sufficient to minimize costs to the ASRS in the event the action fails, where applicable.

2. SPECIFIC REQUIREMENTS

A. Outside Counsel (OC) The OC will provide the following services:

1. Monitor new domestic and international class action cases, news media and other sources for indications of corporate wrongdoings. When appropriate, recommend that the ASRS initiate a private or class action suit or move for lead plaintiff.

2. Monitor ASRS investment holdings files from the CB or TPP; evaluate all cases in which the ASRS is a possible class member and quantify the estimated impact (losses) sustained.

3. Notify the ASRS if and when filings are required to participate in a recovery in a class action. Such notification will be made in a timely manner and include the requirements and the deadlines for each filing.

4. As needed, be available to confer with and provide recommendations to the SLOC on newly filed, pending, and recently settled securities litigation (domestic and international) or other cases in which the ASRS and its offshore investment vehicles may have a financial interest.

5. As needed, provide legal advice to the SLOC regarding potential strategies for recovery that may be unique to the particular jurisdiction, forum, action, or claim, including strategies beyond mere participation as a class member or lead plaintiff in domestic class action securities litigation.

6. Evaluate whether the ASRS has sufficient losses to qualify as lead plaintiff on behalf of the class and within thirty (30) days of the initial case filing, formally recommend a course of action to the SLOC and AG’s office.

Such recommendations will include, but are not limited to, 1) a review of the claim, 2) an opinion of whether the ASRS should consider accepting the role as lead plaintiff, initiate a private action, or continue to monitor the class action, 3) the rationale (supporting and opposing) of the opinion, and 4) an assessment of the financial and other risks the ASRS would assume by accepting the recommendation of the OC.

7. Provide the methodology and transaction data used for the calculation of estimated losses in cases where the loss or potential loss meets ASRS’s policy threshold for potential lead plaintiff status (currently $10

SCOPE OF WORK

Contract No.: CTR067443 Description: Securities Litigation Counsel

Page million for domestic actions), such that the ASRS may consider being lead plaintiff under its Security Litigation Strategic Investment Policy.

8. Provide quarterly reports to the CIO and SLOC about the status of each case in which the ASRS is actively involved either as a lead plaintiff or taken as a private action.

9. Provide the ASRS with ready access to valuation estimates, corresponding dates, and status for each for each class action case in which the ASRS has a financial interest.

10. Recommend, and act as liaison to, litigation counsel, IR or potential counsel, in domestic and/or international jurisdictions.

11. Upon request, provide to the AG’s office all information regarding ASRS claim filings and the aforementioned recommendations.

Contractor shall provide all services as OC on a complimentary basis, without compensation for services performed or expenses incurred.

B. Lead Counsel (LC) If the ASRS determines that applying to the court to serve as lead plaintiff, or initiating a private action, is appropriate, the SLOC will designate an LC to represent the ASRS, subject to approval by the AG. Prior to designation, ASRS and the AG will develop a mutually acceptable plan of supervision of the LC. The LC may not file any document or make any appearance without prior approval from the AG. The LC will be selected from (a) the existing pool of securities litigation outside counsels that are hired as an OC under this Contract (see section A. above), (b) any firm not on the Contract including a firm retained or to be retained by any other entities injured by the proposed defendant, or (c) the AG’s office.

The LC will provide the following services:

1. Manage the ASRS lead plaintiff motion, or domestic private action, process; upon approval, file and maintain all required documents in a timely manner consistent with the terms of the filing;

2. Provide the CIO with documentation consisting of the timetable and associated activities anticipated to occur during the litigation process;

3. Provide the CIO with, at a minimum, monthly status reports regarding cases or claims in which the ASRS is actively involved;

4. At the appropriate time, provide the CIO and SLOC with estimates of final settlement monies for the class and for the ASRS; the Board must approve final settlements;

5. Provide the CIO records of all documents related to lead plaintiff, or private action, claims; upon the conclusion, provide the CIO with a detailed summary of awarded and/or settled cases;

6. Maintain records of all documents related to lead plaintiff, or private action, claims; upon the conclusion, provide the CIO with a detailed summary of awarded and/or settled cases; and

7. Vigorously represent the interests of the ASRS and, during class actions, the class.

The ASRS will negotiate fees with the LC using a tiered fee structure based on factors such as the size of the recovery, the stage of the proceedings at which the recovery was obtained, the amount of time and services expended and difficulty of the case. The ASRS expects that, in litigation pursuant to this RFP, legal fees, costs and expenses will be paid on a contingent fee basis upon application and award by the Court from the proceeds of any recovery; that all legal fees, costs and expenses incurred under this Contract will be obtained from the proceeds of any recovery; and that the ASRS will have no responsibility for fees, costs and expenses in excess of any recovery or if a recovery is not obtained. LC fees will not exceed 25% of the settlement amount awarded and received, and must be approved by the Court.

All terms not defined herein shall have the meaning given to them in the Uniform Terms and Conditions.

BEST AND FINAL OFFER

ATTACHMENT E: Pricing Schedule ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Securities Litigation Counsel Solicitation Code: BPM005015

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By signing Attachment A: Offer and Acceptance, Offeror agrees to the following:

Check each to confirm your understanding.

☐ To provide all services listed in Part 2A-Scope of Work, Section 2A as OC on a complimentary basis, without compensation for services performed or expenses incurred.

☐ Fees and costs of the lawsuit (in which costs will be advanced by the OC) will be contingent on the successful outcome of the lawsuit and will be paid out of the settlement fund or judgment obtained. IR will be required to secure ATE (after-the-event) insurance for the benefit of the ASRS when pursuing claims against companies in foreign courts that employ the “loser pays” rule.

☐ The ASRS will negotiate fees with the Lead Counsel (“LC”) using a tiered fee structure based on factors such as the size of the recovery, the stage of the proceedings at which the recovery was obtained, the amount of time and services expended and difficulty of the case. The ASRS expects that, in litigation pursuant to this RFP, legal fees, costs and expenses will be paid on a contingent fee basis upon application and award by the Court from the proceeds of any recovery; that all legal fees, costs and expenses incurred under this Contract will be obtained from the proceeds of any recovery; and that the ASRS will have no responsibility for fees, costs and expenses in excess of any recovery or if a recovery is not obtained. LC fees will not exceed 25% of the settlement amount awarded and received, and must be approved by the Court.

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SPECIAL TERMS AND CONDITIONS

Contract No.: CTR0067443 Description: Securities Litigation Counsel

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CONTENTS

1. DEFINITION OF TERMS

2. CONTRACT INTERPRETATION

3. CONTRACT ADMINISTRATION AND OPERATION

4. COSTS AND PAYMENTS

5. CONTRACT CHANGES

6. RISK AND LIABILITY

7. WARRANTIES

8. GENERAL PROVISIONS FOR SERVICES

9. DATA AND INFORMATION HANDLING

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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

All other terms not defined herein shall have the meaning given to them in the Uniform Terms and Conditions.

1.1. Acceptance of Offer. The Attachment labeled “Offer and Acceptance” bearing the State contract number once the Procurement Officer has signed it to signify the (1) formal acceptance of the 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.

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

If State requested a Revised Offer but not a Best and Final Offer, then “Accepted Offer” means the latest Revised Offer.

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

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

1.4. Contract Terms and Conditions. The Special Terms and Conditions and the Uniform Terms and Conditions taken collectively.

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

1.6. Instructions to Offerors. “Instructions to Offerors” means the Solicitation Instructions document of the Solicitation.

1.7. Order. The instrument by which ASRS authorizes 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 ASRS will use

it. Any of the following is to be construed as being an “Order”: “Purchase order”, “task order”, “service order”, “job order” or written correspondence or instruction.

1.8. 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.

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

1.10. 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 INTERPRETATION

2.1. Usage. Where the Contract:

assigns obligations to Contractor, any reference to “Contractor” is to be construed to be a reference to 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 Subcontractors’ respective agents, representatives, and employees in every instance unless the context plainly requires that it is be a reference only to Contractor as apart from Subcontractors;

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

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Page uses the permissive “may” with respect to a party’s actions, determinations, etc., the term is to be interpreted as in A.A.C. R2-7-101(31) [Definitions]. For clarity of intent, any right given to ASRS using “ASRS 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 ASRS; 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;

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(43) [Definitions]. Conversely, the phrase “shall not” is to be interpreted as an imperative prohibition.

uses the term “must” with respect to a requirement, criterion, etc., the term is to be interpreted as conveying compulsion or strict necessity, and is to be read as though written “must, if [the subject] is to be entitled to have [the object] considered or credited as being compliant with, conforming to, or satisfying [the requirement, criterion, constraint, etc.], otherwise, [the object] will be considered or debited as being non-compliant, non-conforming, or unsatisfactory for its Contract-related purposes” in every instance;

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 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.

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.

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

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2.2.2.4. Accepted Offer.

3. CONTRACT ADMINISTRATION AND OPERATION

3.1. Term of Contract. The term of the Contract shall commence on the effective date indicated in the “Acceptance of Offer” and shall remain in effect for a period of twelve (12) months thereafter unless canceled, terminated or extended as otherwise provided herein.

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.

To Contractor. ASRS 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.

To State. Contractor shall address all Contract correspondence other than format notices to the email address ASRSProcurement@azasrs.gov;

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

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:

extension of the term of the Contract within the maximum aggregate term; or 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. Books and Records.

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.

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 have free use of any and all information related to Eligible Agency or Co-Op 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.

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 mailto:ASRSProcurement@azasrs.gov

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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.

3.6. Subcontract.

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.

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.

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.

3.7. Orders.

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.

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.

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.

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

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Page 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.

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.

3.8. 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.

If State cancels and Order, then State shall:

3.8.1.1. 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

3.8.1.2. reimburse Contractor for actual, documented costs incurred in fulfilling the Order up to the cancellation effective date and the cost of any obligations incurred in fulfilling the Order up to the cancellation effective date that demonstrably cannot be canceled or that have pre-established cancellation penalties specified in the relevant Subcontracts, to the extent the penalties are reasonable and customary for the work in question.

Contractor shall not charge or be entitled to charge State for any new costs it incurs after receiving the cancellation notice; State is not liable for any Materials that were produced, shipped, or delivered, or Services that were performed before Contractor had acknowledged the corresponding Order.

State shall also be able to cancel Orders freely and without any further obligation at any time prior to Contractor’s formal acknowledgement of the Order.

3.9. Work on State Premises.

Compliance With Rules. Contractor is responsible for ensuring that its personnel comply with State’s rules, regulations, policies, documented practices, and documented operating procedures while delivering or installing Materials or performing Services on State’s grounds or in its facilities. For clarity of intent, the foregoing means that if Contractor is required to comply with certain security requirements in order to deliver, install, or perform at that particular location, then it shall do so nonetheless and without entitlement to any additional compensation or additional time for performance if those particular requirements are not expressly stated in the Contract. Contractor is reminded that violation of the prohibition under A.R.S. § 13-1502 against possession of weapons on State’s property by anyone for whom Contractor is responsible is a material breach of contract and grounds for termination for default.

Protection Of Grounds And Facilities. Contractor shall deliver or install the Materials and perform the Services without damaging any State grounds or facilities. Contractor shall repair or replace any damage it does cause promptly and at its own expense, subject to whatever instructions and restrictions State needs to make to prevent inconvenience or disruption of operations. If Contractor fails to make the necessary repairs or replacements in a timely manner, State will be entitled to exercise its remedies under paragraph 8.5 of the Uniform Terms and Conditions [Right of Offset].

3.10. Transitions.

During commencement, Contractor shall attend transition meetings with any outgoing suppliers to coordinate and ease the transition so that the impact on State’s operations is kept to a minimum. State may elect to have outgoing suppliers complete some or all of their Work or Orders in progress, even if that Work could be covered under the incoming supplier’s Contract. Conversely, the State may have a continued need for the same Materials and Services upon expiration or earlier termination of the Contract.

Accordingly, Contractor shall work closely with any incoming supplier and State to ensure as smooth and complete a transition transfer as is practicable.

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Eligible Agency or Co-Op Buyer State’s representative will coordinate all transition activities and facilitate joint development of a comprehensive transition plan by both Contractor and the incoming supplier. As with the incoming transition, State may permit Contractor, when Contractor is outgoing, to complete work or orders in progress to ease the transition as is safest and most efficient in each instance.

RESERVED [for additional transition needs including, but not limited to, the transfer of any required data]

4. COSTS AND PAYMENTS

4.1. Type of Pricing. Offeror shall include only firm, fixed pricing in the Offer.

4.2. Contractor’s Best Pricing. Contractor warrants that, for the term of the Contract, the prices and discounts set out in Attachment C: Pricing Schedule 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.

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.

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.

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.

4.3. Pricing is all-inclusive, including any ancillary fees and costs required to accomplish the Scope of Work and all aspects of Contractor’s offer as accepted by State.

Details of service not explicitly stated in the Scope of Work or in Contractor’s Offer, but necessarily a part of, are deemed to be understood by Contractor and included herein. All administrative, reporting, or other requirements, all overhead costs and profit and any other costs toward the accomplishment of the requirements in the Contract are included in the pricing provided.

Additional Charges. Any charges or fees not delineated in the Contract shall not be added, billed, or invoiced under the Contract.

4.4. Price Increase. The State may review a fully documented request for a price increase. The requested increase shall be in writing and be based upon a cost increase to the contractor that was clearly unpredictable at the time of the offer and is directly correlated to the price of the product concerned. Contractor must provide conclusive evidence of a need for any price increases.

Initial Contract prices shall be honored for one (1) year after award of Contract.

All written requests for price adjustments made by the Contractor shall be initiated thirty (30) days in advance of any desired price increase to allow the State sufficient time to make a fair and equitable determination to any such requests. This may be waived upon proper documentation demonstrating the urgency of the request.

All price adjustments will be implemented by a formal Contract Amendment. State shall determine whether the requested price increase or an alternate option is in the best interest of the State.

State expects Contractors to use Lean Six Sigma principles to reduce costs in their supply chain, and not simply pass new costs on to the State. If a price increase is requested, State will ask for evidence that

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Lean Six Sigma principles and tools have been used by Contractor to attempt to reduce costs in advance of any request for a price increase under the Contract.

4.5. 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.

4.6. Travel. Contractor shall request and receive written approval prior to any travel under the Contract in which reimbursement of expenses will be requested. Contractor will be reimbursed for actual expenses incurred in accordance with the current rates specified in the State's Travel Policy. Contractor shall itemize all per diem and lodging charges. State Travel Policy, including State rates, may be located at https://gao.az.gov/travel. Eligible Agency or State shall reject any claim for travel reimbursement for which Contractor did not receive prior written approval.

4.7. Funding. No particular funding considerations apart from Uniform Terms and Conditions Sections 4.5 [Availability of Funds for the Next State Fiscal Year] and 4.6 [Availability of Funds for the Current State Fiscal Year] have been identified as of the Solicitation publication date.

4.8. Invoicing.

Minimum Invoice Requirements. Every invoice shall include the following information:

Bill-to name and address;

Contractor name and contact information;

Remit-to address;

Invoice number and date;

Contract number;

Order number (PO number);

Material or Service description (itemized);

Date(s) Services were performed or Materials were delivered;

Applicable payment terms;

Quantity delivered or performed;

Line item unit of measure;

Item price;

Extended pricing;

Receipt for pass-through expenses (if applicable);

Taxes (as a separate invoice line item), including the percentage used to calculate taxes;

Mailing fees (if applicable); and https://gao.az.gov/travel https://gao.az.gov/travel

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Total invoice amount due.

No Invoice Without Authorization. Contractor shall not seek payment for any:

Materials or Services that have not been authorized on an acknowledged Order;

Expediting, overtime, premiums, or upcharges absent State’s express prior approval; or

Materials or Services that are the subject of a Contract Amendment that has not been fully signed by the Procurement Officer.

Defective Invoices. Without prejudice to its other rights under the Contract or further obligation to Contractor, the ordering Eligible Agency or Co-Op Buyer may, at its discretion, reject any materially defective invoice.

The ordering Eligible Agency or Co-Op Buyer shall notify the Contractor within five (5) business days after receipt if it determines an invoice to be materially defective.

Invoices will be deemed automatically rejected upon delivery if they: are sent to an incorrect address, do not reference the correct State contract and Purchase Order number, or are payable to any Person other than the Contractor.

The ordering Eligible Agency or Co-Op Buyer shall have no obligation to pay against a defective invoice unless and until Contractor has re-submitted it free of defects.

4.9. Payments.

Payment Deadline. State shall make payments in compliance with Arizona Revised Statutes Titles 35 and 41. Unless and then only to the extent expressly stated otherwise in the Pricing Section of the Special Terms and Conditions above, State shall make payment in full for Materials that have been delivered and accepted and Services that have been performed and accepted within the time specified in A.R.S. § 35- 342, after both of the following occur: (a) all of the Materials being invoiced have been delivered or installed (as applicable) and accepted and all of the Services being invoiced have been performed and accepted; and (b) Contractor has provided a complete and accurate invoice in the form and manner called for in the Contract, provided that, State will not make or be liable for any payments to Contractor until Contractor has registered properly in the State’s eProcurement System and provided a current IRS Form W-9 to State unless excused by law from providing one.

Payments Only To Contractor. Unless an assignment and assumption agreement has been reached between the Contractor and State pursuant to Section 5.2 of the Special Terms and Conditions [Assignment and Delegation] or the State has been otherwise compelled by operation of law or order of a court of competent jurisdiction, State will only make payment to Contractor under the federal tax identifier indicated on the Accepted Offer.

Payment. The applicable Eligible Agency or Co-Op Buyer shall pay undisputed amounts due to Contractor within the time period specified in Section 4 Costs and Payments of the Uniform Terms and Conditions.

Recovery of Overpayment. If applicable, Eligible Agency or Co-Op Buyer determines that an overpayment has been made to Contractor on any prior invoice, it shall inform Contractor of the amount and date of the overpayment and may deduct the overpaid amount from amounts then or thereafter due to Contractor.

Purchasing Card. Applicable Eligible Agency or Co-Op Buyer may pay invoices for some or all Orders using a purchasing card. Any and all fees related to payment using a purchasing card (also called a p-card) are the responsibility of the Contractor. Unless otherwise stated in the Contract, there will be no additional fees or increase in prices associated with this method of payment.

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Automated clearing house. Applicable Eligible Agency or Co-Op Buyer may pay invoices for some or all Orders through an Automated Clearing House (ACH). In order to receive payments in this manner from Eligible Agencies, the Contractor must complete an ACH Vendor Authorization Form (form GAO-618) within 30 (thirty) days after the effective date of the Contract. The form is available online at:

https://gao.az.gov/publications/forms.

Applicable Taxes.

4.9.7.1. Contractor To Pay All Taxes. State is subject to Arizona Transaction Privilege Tax (TPT).

Therefore, Arizona TPT applies to all sales under the Contract and Arizona TPT is Contractor’s responsibility (as seller) to remit. Contractor’s failure to collect Arizona TPT or any other applicable sales or use taxes from an Eligible Agency or Co-Op Buyer will not relieve the Contractor of any obligation to remit sales or use taxes that are due under the Contract or laws. Unless clearly stated otherwise in the Contract, all prices therein include Arizona TPT as well as every other manner of transaction privilege or sales/use tax that is due to a municipality or another state or its political subdivisions. Contractor shall pay all federal, state, and local taxes applicable to its operations and personnel.

4.9.7.2. Tax Indemnity. Contractor shall hold State harmless from any responsibility for taxes or contributions, including any applicable damages and interest, that are due to federal, state, and local authorities with respect to the Work and the Contract, as well as any related costs; the foregoing expressly includes Arizona TPT, unemployment compensation insurance, social security, and workers’ compensation insurance.

5. CONTRACT CHANGES

5.1. Assignment and Delegation.

In Whole. Contractor shall not assign in whole its rights or delegate in whole its duties under the Contract without Procurement Officer’s prior written consent, which consent Procurement Officer may withhold at his or her discretion. If Contractor’s proposed assignment or delegation stems from a split, sale, acquisition, or other non-merger change in control, then no such consent will be given in any event without the assignee or delegate giving State satisfactory and equivalent evidence or assurance of its financial soundness, competency, capacity, and qualification to perform as that which Contractor possessed when State first awarded it the Contract.

In Part. Subject to Special Terms and Conditions sections 3.10 [Subcontracts] with respect to subcontracting, Contractor may assign particular rights or delegate particular duties under the Contract, but shall obtain Procurement Officer’s written consent before doing so. Procurement Officer shall not unreasonably withhold consent so long as the proposed assignment or delegation does not attempt to modify the Contract in any way or to alter or impair State’s rights or remedies under the Contract or state law.

6. RISK AND LIABILITY

6.1. Risk of Loss. Contractor shall bear all risk of loss to Materials while in pre-production, production, storage, transit, staging, assembly, installation, testing, and commissioning, if and as those duties are within the scope of the Work, until they have been accepted as conforming by State in the particular location and situation specified in the Order, or as specified generally elsewhere in the Contract if the Order does not provide particulars, provided that, risk of loss for nonconforming Materials will remain with Contractor notwithstanding acceptance to the extent the loss stems from the nonconformance.

6.2. General Contractor Indemnification.

Contractor Indemnification. 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

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“Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, 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, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all claims. 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. This indemnity shall not apply if the Contractor or Subcontractor(s) is/are an agency, board, commission or university of the State of Arizona.

6.3. Patent and Copyright Indemnification. With respect to Materials or Services provided or proposed by a Contractor Indemnitor for performance under the Contract, Contractor shall indemnify, defend and hold harmless State Indemnitees against any third-party claims for liability, costs, and expenses, including, but not limited to reasonable attorneys' fees, for infringement or violation of any patent, trademark, copyright, or trade secret by the Materials and the Services. With respect to the defense and payment of claims under this subparagraph:

State shall provide reasonable and timely notification to Contractor of any claim for which Contractor may be liable under this paragraph;

Contractor, with reasonable consultation from State, shall have control of the defense of any action on an indemnified claim including all negotiations for its settlement or compromise;

State may elect to participate in such action at its own expense; and

State may approve or disapprove any settlement or compromise, provided that, (i) State shall not unreasonably withhold or delay such approval or disapproval and (ii) State shall cooperate in the defense and in any related settlement negotiations.

6.4. Insurance Requirements.

Contractor and subcontractors shall procure and maintain, until all of their obligations have been discharged, including any warranty periods under this Contract, insurance against claims for injury to persons or damage to property arising from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors.

The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representatives, employees or subcontractors, and the Contractor is free to purchase additional insurance.

Minimum Scope and Limits of Insurance Contractor shall provide coverage with limits of liability not less than those stated below.

6.4.3.1. Commercial General Liability (CGL) – Occurrence Form

Policy shall include bodily injury, property damage, and broad from contractual liability coverage.

• General Aggregate $2,000,000

• Products – Completed Operations Aggregate $1,000,000

• Personal and Advertising Injury $1,000,000

• Damage to Rented Premises $50,000

• Each Occurrence $1,000,000

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a. The policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor.

b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

6.4.3.2. Business Automobile Liability

Bodily Injury and Property Damage for any owned, hired, and/or non- owned automobiles used in the performance of this Contract.

• Combined Single Limit (CSL) $1,000,000

a. Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor.

b. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

6.4.3.3. Workers’ Compensation and Employers' Liability

• Workers' Compensation Statutory

• Employers' Liability

Each Accident $1,000,000 Disease – Each Employee $1,000,000 Disease – Policy Limit $1,000,000

a. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

b. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S. § 23-901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor).

6.4.3.4. Professional Liability (Errors and Omissions Liability)

• Each Claim $2,000,000

• Annual Aggregate $2,000,000

a. In the event…