CTR070049_Contract_Documents.pdf

DocuSign Envelope ID: DD1AB911-EFCD-4599-A909-71AA1EAA3C0A

2/13/2024

CTR070049

24February13th

Rev. 05/2023

Procurement

STATE OF ARIZONA

ARIZONA DEPARTMENT OF TRANSPORTATION

1655 W. Jackson St., MD 100P Phoenix, AZ 85007

REQUEST FOR PROPOSAL

SOLICITATION NUMBER: BPM005717

DESCRIPTION: Master Lease Purchase/3rd Party Financing

QUESTIONS: Inquiries regarding the solicitation are to be submitted online through the State’s e-Procurement system, Arizona Procurement Portal (APP) (https://app.az.gov/) using the Discussion Forum tab.

OFFERORS ARE STRONGLY ENCOURAGED TO READ THE ENTIRE SOLICITATION.

Bambi Brenden Procurement Officer Phone: 602-712-4294 Email: bbrenden@azdot.gov

This solicitation is issued in accordance with A.R.S. §41-2534 and A.A.C. R2-7-C301 et seq., Competitive Sealed Proposals.

“An Equal Opportunity Agency”

The Arizona Department of Transportation, in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252.42 U.S.C. §§ 2000d-4) and the Americans with Disabilities Act (ADA), hereby notifies all bidders that it will affirmatively ensure that any contract entered into pursuant to this advertisement, disadvantaged business enterprises will be afforded full and fair opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, national origin in consideration for an award.

Persons that require a reasonable accommodation based on language or disability should contact ADOT’s Procurement Office by phone (602) 712-7466. Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

Las personas que requieran asistencia (dentro de lo razonable) ya sea por el idioma o discapacidad deben ponerse en contacto con ADOT (602) 712-7466.

https://app.az.gov/

TABLE OF CONTENTS

Solicitation No: BPM005717 Available online at

SECTION PAGE

Notice 1

Table of Contents 2

Scope of Work 3

Special Terms and Conditions 10

Uniform Terms and Conditions 17

EXHIBITS

1 - Title VI/Non-Discrimination Assurances Appendix A 30

2 - Title VI/Non-Discrimination Assurances Appendix E 31

3 - Master Lease Purchase Agreement 32

4 - Quarterly Usage Report 59

SCOPE OF WORK

1. Statement of Need

1.1. Pursuant to the Arizona Procurement Code, A.R.S. §41-2501 et seq., the State of Arizona Department of Transportation (Department), and State of Arizona departments, agencies, boards and commissions have a requirement for a Lease Purchase Master Agreement Services.

2. Introduction and Background

2.1. The State of Arizona Master Lease (ML) shall be used for third party financing (in arrears)

(lease/purchase agreements) of equipment (personal property). Such property is considered to be personal property and shall not be deemed to be affixed to or become a part of the real estate on which it may be situated. The State intends to enter into a firm, fixed interest rate for each personal property lease for the term of each lease.

2.2. Arizona Department of Transportation (ADOT) is the primary user for these services.

3. General Requirements

3.1. This contract is to establish a pool of Contractors (also referred to as “Lessor”) for the State of

Arizona’s statewide Master Lease (“ML”) for use through a competitive bid process to finance the purchase of items listed below. The Contractor (Lessor) shall finance such individual purchases in accordance with the contract. The State of Arizona’s Personal Property Lease (Exhibit 1) shall be used as the lease document for each lease. The State of Arizona’s Personal Property Lease agreement shall not be modified.

3.2. The Contractor shall respond to the State’s financing requirements. The State shall not commit to a maximum financing requirement.

3.3. Definitions

3.3.1. Lease: A legal agreement between the State of Arizona and a financier for the express purpose of financier-provided long-term financing, at a specified interest rate and repayment schedule.

It may be used when the State purchases equipment items costing in excess of $100,000.

3.3.2. Lessee Purchaser: Customer or State Agency or entity to whom a lease is given.

3.3.3. Lessor: That entity that allows, in exchange for rent payments, a lessee use of property under a lease.

3.3.4. Financing Order: Order issued to implement the provisions of the State of Arizona financing agreement for specifically identified equipment.

3.3.5. Financing Order packet: A financing order packet is composed of the following original documents, these Exhibits pertain to the Master Lease Purchase Agreement:

Exhibit A Third Party Financing Checklist (Master Lease)

Exhibit 1 Personal Property Lease Exhibit 2 Financing Rate Request ‐ Description of Property Exhibit 3 Amortization schedule Exhibit 4 Certificate of Insurance Exhibit 5 Acceptance Certificate Exhibit 6 Opinion of Counsel (letter) Exhibit 7 IRS Form 8038‐G (Information Return for Tax Exempt Government Obligations) Exhibit 8 Form UCC‐1 (Arizona Uniform Commercial Code Financing Statement) Exhibit 9 Statement of Essential Use ‐ Source of Funds Exhibit 10 Notice of and Consent to Assignment & Delegation, as required

Exhibit 11 Notice of Assignment, as required

3.3.6. The exhibits as attached are contained in the contract and may be used as guidelines with the exception of Exhibit 1 – Personal Property Lease document. NOTE: Exhibit 1 must be used as a part of the completed “Financing Order Packet”. The resultant contract number shall be entered on each page that cites Contract #______________.

4. Specific Requirements

4.1. Financing Inclusions – The ML may be used to finance the purchase of the following:

4.1.1. IT Hardware

4.1.2. Telecommunications Equipment

4.1.3. Office Furniture

4.1.4. Vehicles

4.1.5. Mobile Offices

4.1.6. Items in the aggregate of $100,000 or more, including multiple equivalent items (i.e. vehicles, copiers, etc.) Purchases may be from the same or multiple vendors at the discretion of the Lessee.

4.1.7. Other equipment used in government operation.

4.2. Financing Exclusions – The ML shall not be used for the purchase of the following:

4.2.1. Financing amount of less than $100,000.

4.2.2. Contract services

4.2.3. Real Property

4.2.4. Refinancing

4.3. Contractor Finance Quote Request Response

4.3.1. Contractor shall provide a finance quote request response in three (3) business days.

4.4. Financing Terms

4.4.1. The Lessee may pay a portion of the purchase price prior to financing, in which case the interest rate would be based upon the amount to be financed rather than the purchase price.

4.4.2. Financing shall be structured as a tax‐exempt lease/purchase transaction.

4.4.3. Leases are cross‐collateralized for events of default other than the loss of fiscal funding. The termination of a lease for loss of fiscal funding as provided in the lease, shall not in any manner be considered as a default on, or have any effect on remaining leases for which funds are available.

4.4.4. The majority of transactions will be for a five (5) year period. The State may require financing for any other period. The Lessee may request rates for Monthly, Quarterly or Yearly payments for each lease. Upon lease agreement execution the lease rate locks for the duration of each lease term.

4.4.5. Each lease shall be competitively awarded and a response from each Contractor is required.

Lessee shall include a copy of each request for rates including any “No Bid” responses.

4.4.6. The financing rate shall be established as the date of the amortization schedule date and this rate shall remain “locked in established the same as quoted”, for thirty (30) days.

4.4.7. The Lessee shall request new rates and a new amortization schedule for any of the following reasons: a) If the lease is not executed within the established 30 days; b) if rates have a downward change; c) if it is to the best interest of the State.

4.4.8. The term for leases shall be allowed to vary from one year to five year period. The Lessee may request rates for monthly, quarterly or yearly payments for each lease.

4.4.9. Upon lease agreement execution the lease rate locks for the duration of each lease term.

4.5. Disbursements

4.5.1. Multiple disbursements (“draws”) under any lease competed shall be allowed upon Lessee request. All disbursements shall be made within six (6) months from the Lease Date as defined in the Personal Property Lease (Exhibit 1).

4.5.2. Multiple disbursements (“draws”) under any lease may be allowed upon Lessee request.

4.5.3. All disbursements shall be limited to within six (6) months from the Lease Date as stated in the Personal Property Lease (Exhibit 1).

4.5.4. Upon issuing a financing rate request, if applicable, Lessee shall state that multiple disbursements (“draws”) will be used under the resulting lease as well as the anticipated date(s) of the additional disbursements.

4.5.5. There shall not be more than one (1) disbursement every thirty (30) days within the allowed six

(6) month time period unless agreed upon by Lessee and Contractor (Lessor).

4.5.6. Contractor (Lessor) shall submit an amortization schedule in accordance with the anticipated disbursements as submitted by the Lessee.

4.5.7. Interest shall accrue only from the date of a disbursement and the lease rate shall remain locked.

4.5.8. Should the actual disbursement dates vary from the original amortization schedule, the Contractor (Lessor) shall submit an adjusted amortization schedule to the Lessee.

4.5.9. The multiple disbursements request shall not affect the financing period or the payment terms.

4.6. Fees. Any extra charges (i.e., prepayment, refinancing late payment fees, documentation fees, handling costs, etc.) are not allowed under this contract and Contractor (Lessor) shall not include such extra charges in their amortization schedule.

4.7. The State of Arizona and the Lessee shall retain title to all equipment financed under Master Lease contracts unless there is a default.

4.8. Lessee is limited to one (1) year for any maintenance, service and training as part of the lease financed. The Contractor (Lessor) shall not be required to furnish maintenance for any system or equipment.

4.9. Lessor shall not require final credit review/approval, preparation of credit application by the Lessee or acceptance of mutually agreed documents to execute a Personal Property Lease Agreement transaction.

4.10. Certificates of Participation ‐ The Contractor (Lessor) shall warrant that no Certificates of Participation will be issued for any transaction. Contractor (Lessor) shall not make any assignment if such assignment will result in the issuance of Certificates of Participation. State agencies are not permitted to enter into third party financing in which financial institutions or other third parties are permitted to issue Certificates of Participation. The withholding of permission to make an assignment that would result in the issuance of certificates of participation shall not be considered unreasonable.

4.11. Lessee shall not enter into a Personal Property Lease for procurements of less than $100,000.00.

However, items of less than $100,000.00 may be combined if they meet the requirements.

4.12. The Contractor (Lessor) and Lessee shall complete all forms necessary to create the lease. Lease documents shall include but not be limited to:

4.12.1. State Agency Third Party Financing (Master Lease) Checklist EXHIBIT A

4.12.2. Personal Property Lease EXHIBIT 1

4.12.3. Description of Property EXHIBIT 2

4.12.4. Amortization Schedule EXHIBIT 3

4.12.5. Certificate of Insurance EXHIBIT 4

4.12.6. Acceptance Certificate EXHIBIT 5

4.12.7. Opinion of Counsel EXHIBIT 6

4.12.8. Tax Form 8038G EXHIBIT 7

4.12.9. Arizona Uniform Commercial Code Financing Statement Form UCC‐1 EXHIBIT 8

4.12.10. Statement of Essential Use/Source of Funds EXHIBIT 9

4.12.11. Notice of and Consent to Assignment & Delegation, as required EXHIBIT 10

4.12.12. Notice of Assignment, as required EXHIBIT 11

5. Contractor’s Responsibilities

5.1. If applicable, Contractor is responsible for providing the agency the title for the underlying acquisition within 30 days of payoff.

5.2. Contractor shall provide pay off letter within 30 days of the loan being paid off.

5.2.1. Pay off letter shall provide description of all underlying property by unit. If the loan is related to a vehicle the Vehicle Identification Number shall be included.

6. Department’s Responsibilities

6.1. State Agency (Lessee) Procedural Guidelines. Below are the steps which each Agency shall follow to complete financing with Contractor (Lessor) in order of precedence for the purpose of initiating third party financing through the statewide master lease contract. These guidelines are for use by all state agencies when developing leases for installment payment of purchases of $100,000 or more over a twelve (12) to sixty (60) month payment period using the approved lease.

6.1.1. Authorizations:

6.1.1.1. The review and signature of the finance agreement shall be from the agency’s Procurement Office. If the agency is a limited delegation agency the review and signature must be obtained by the State Procurement Office Administrator.

6.1.1.2. A separate Opinion of Counsel Letter (Exhibit 6) shall be issued for each lease financed.

6.1.1.3. The Opinion of Counsel letter (See Exhibit 6) – This letter is issued by the Attorney General’s Office and verifies that each Personal Property Lease Agreement is legal and binding on the Lessee. Without this document, financing companies shall not release any funds to vendors for the payment of equipment.

6.1.2. Each individual agency head may issue or authorize the issuance of individual agency policies and procedures that implement or supplement this policy and procedures (P&P).

The State Procurement Code (A.R.S.§ 41‐2501 et seq.) and the Arizona Administrative Code (A.A.C. R2‐7‐101 et seq.), agencies policies and procedures, contract clauses, solicitation provisions, and forms that govern the contracting process or otherwise control the relationship between the agency, including any of its sub agencies, contractors or prospective contractors shall be incorporated.

6.1.3. Agency policies and procedures shall supplement the information in this document. Agency policies and procedures shall not (1) unnecessarily repeat, paraphrase or otherwise restate material contained in the State Agency Procedural Guidelines or (2) except as required by law, conflict or be inconsistent with the content of these guidelines.

6.2. All Documentation Must Be Electronic Format.

6.3. State Agency (Lessee) Third Party Financing Steps

6.3.1. Director or Designee determines and approves 3rd party financing for requirement.

6.3.2. Purchases equipment from Lessor.

6.3.3. Creates Exhibit 2 ‐ Financing Rate Request from all contractors that shall include:

a) Description and location of property

b) Dollar amount to be financed

c) Term of financing (1-5 years)

d) Assignee information

6.3.4. Notify all contractors of rate results.

6.3.5. Obtains or initiates delivery and acceptance documentation from requirement contractor.

6.3.6. Obtains Invoice from requirement contractor

6.3.7. Obtains or completes and forwards the following documents to the Contractor:

a) Original financing order

b) Original Acceptance Certificate

c) Original Invoice

d) Lease (Exhibit 1)

6.3.8. Receives amortization schedule, completed Exhibit 1 Section N, and UCC-1 form (Exhibit 8) from Contractor for each purchase order for which appropriate forms have been sent.

6.3.9. Assemble completed Financing Order Packet and Checklist and send to the agency’s Procurement Office.

6.3.9.1. If the agency is a limited delegation agency it must go to the State Procurement

Office (SPO) for completeness review.

6.3.9.2. State Agency must complete the checklist prior to review by the Procurement Office or SPO.

6.3.10. After the Procurement review, the complete package will be transmitted to the Treasurer’s office for review and signature of IRS Form 8038-G (Exhibit 7).

6.3.11. After the Treasurer’s office review, the complete package will be transmitted to the Attorney

General’s Office (OAG) for review and completion of Opinion of Counsel letter (Exhibit 6).

6.3.12. After the Attorney General’s Office review, sends the completed Financing Ordering Package to successful Contractor. Contractor sends the following to the Procurement Office:

6.3.12.1. Signed Exhibit 1

6.3.12.2. Wire confirmation information

6.3.12.3. Loan Account Number

6.3.12.4. Other, as requested

6.4. Payoff

6.4.1. Upon complete payment by Agency, and at the Agency’s discretion, Lessor shall provide to

Agency all documentation evidencing Lessor’s release of any security interest including, where applicable, a revised title report.

SPECIAL TERMS AND CONDITIONS

1. CONTRACT TERM

The term of any resultant contract shall commence on the effective date of award and shall continue for a period of twelve (12) months thereafter, unless terminated, cancelled or extended as otherwise provided herein.

2. CONTRACT EXTENSION

By mutual written contract amendment, any resultant contract may be extended for supplemental periods of up to a maximum of forty-eight (48) months.

3. ELIGIBLE AGENCIES

This contract shall be for the use of all State of Arizona departments, agencies, boards and commissions.

4. NON-EXCLUSIVE CONTRACT

This contract shall be for the sole convenience of the Department. The Department reserves the right to obtain like goods or services from another source when necessary. The Off-Contract Purchase Authorization and subsequent procurement shall be consistent with the Arizona Procurement Code.

5. ORDERING PROCESS

Eligible Agencies shall issue a purchase order to the Contractor. Each purchase order must cite the contract number. This purchase order shall be the only document required for an Eligible Agency to order and the Contractor to deliver the material and/or service.

Any attempts to represent any material and/or service not specifically awarded as being under contract is a breach of the contract and a violation of the Arizona Procurement Code. Any such action is subject to the legal and contractual remedies available to the State inclusive of but not limited to contract cancellation, suspension and/or debarment of the Contractor.

6. INVOICING REQUIREMENTS

Separate invoices are required for each delivery of service and shall include at a minimum:

• Department Location’s Name and Address

• Vendor Name, Remit to Address and Contact Information

• Contract Number

• Purchase Order Number

• Invoice Number and Date

• Date the items were shipped to the Department

• Contract Line Item Number

• Line Item Description of Item or Service

• Quantity Purchased

• Line Item Unit of Measure

• Price per Unit and Total per Unit

• Applicable taxes

• Total Invoice Amount Due

Invoices not sent to the proper address, or not containing the necessary and required information may delay payment. A Contractor whose payments are delayed due to improper invoicing shall make no claim against the Department or the State for late or finance charges.

The Department will make every effort to process payment within thirty (30) calendar days after acceptance of services. Delivery of the service to the Department does not constitute acceptance.

The date the Department accepts delivery of services shall be the valid date for starting the thirty (30) calendar day payment period.

Payment due dates, including discount periods, will be computed from the date of acceptance or date of correct invoice (whichever is later) to the date the Department’s warrant is mailed.

7. ESTIMATED USAGE

The Department anticipates considerable usage under this contract. The Department reserves the right to increase or decrease actual quantities ordered as circumstances may require. No guarantees are made concerning actual purchases under this contract.

8. PRICE REDUCTION Not Applicable.

9. PRICE INCREASE Not Applicable.

10. CONTRACT ADMINISTRATION

The contractor shall contact the Procurement Officer for guidance or direction in matters of contract interpretation or questions regarding the terms, conditions or scope of the contract.

11. NOTICES

All notices, requests, demands, consents, approvals, and other communications which may or are required to be served or given hereunder (for the purposes of this provisions collectively called “Notices”), shall be in writing and shall be sent by certified United States mail, return receipt requested, or by any other method that provides evidence of receipt, addressed to the party or parties to receive such notice as follows:

a. If intended for the State, to:

Arizona Department of Transportation, Procurement Group

1655 W. Jackson Street, MD 100P Phoenix, Arizona 85007-3276

b. If intended for the Contractor, to the address as identified in the Contractor’s electronic vendor profile.

Or to such other address as either party may from time to time furnish in writing to the other by notice hereunder. Any notice so mailed shall be deemed to have been given as of the date such notice is received as shown on the return receipt. Furthermore, such notice may be given by delivering personally such notice, if intended for the State, to the Arizona Department of Transportation, Procurement Officer and, if intended for the Contractor, to the person named on the Offer & Contract Award of this contract, or to such other person as either party may from time to time furnish in writing to the other by notice hereunder. Any notice so delivered shall be deemed to have been given as of the date such notice is personally delivered to the other party.

12. CANCELLATION FOR POSSESSION OF WEAPONS ON ADOT PROPERTY

This contract may be cancelled if the Contractor or any subcontractors or others in the employ or under the supervision of the Contractor or subcontractors is found to be in possession of weapons.

Possession of weapons (firearms, explosive devices, knives or blades of more than three (3) inches, or any other instrument designed for lethal or disabling use) is prohibited on ADOT property.

Further, if the Contractor or any subcontractors or others in the employ or under the supervision of the Contractors or subcontractors, are asked by an ADOT official to leave the ADOT property, they are advised that failure to comply with such a request shall result in cancellation of the Contract and anyone who refuses, whether armed or not, is subject to prosecution under A.R.S. § 13-1502, "Criminal trespass in the third degree; classification.”

13. REVIEW OF CONTRACTOR’S WORK

Work performed by the Contractor shall be subject to periodic reviews and partial acceptance at various stages. The Department reserves the right to make such reviews and pass upon the acceptability of the Contractor’s work. Partial acceptance shall not relieve the Contractor’s obligation to correct, without charge, any errors in the work performed under this contract.

14. ACCURACY OF WORK

The Contractor shall be responsible for the accuracy of the work and shall promptly make all the necessary revisions or corrections resulting from errors and omissions on the part of the Contractor without additional compensation. Acceptance of the work by the Department shall not relieve the Contractor of the responsibility for subsequent correction of any such errors and clarification of ambiguities.

15. 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 “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 sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona.

16. INSURANCE

The Contractor shall furnish Certificate(s) of Insurance inclusive of the following requirements to the Department. Certificate(s) shall be received within five (5) calendar days of notification of contract award by the Procurement Officer.

16.1. Insurance Requirements

16.1.1. 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.

16.1.2. 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.

16.2. Minimum Scope and Limits of Insurance

Contractor shall provide coverage with limits of liability not less than those stated below.

16.2.1. Commercial General Liability (CGL) – Occurrence Form

Policy shall include bodily injury, property damage, and broad form 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

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.

16.2.2. Worker's Compensation and Employers' Liability

• Workers' Compensation Statutory

• Employers' Liability o Each Accident $1,000,000 o Disease – Each Employee $1,000,000 o Disease – Policy Limit $1,000,000

a. Policy shall contain a waiver of subrogation endorsement, as required in 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).

16.2.3. Professional Liability (Errors and Omissions Liability)

• Each Claim $2,000,000

• Annual Aggregate $2,000,000

a. In the event that the Professional Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised, for a period of two (2) years beginning at the time work under this Contract is completed.

b. The policy shall cover professional misconduct or negligent acts for those positions defined in the Scope of Work of this contract.

16.3. Additional Insurance Requirements

The policies shall include, or be endorsed to include, as required by this written agreement, the following provisions:

16.3.1. The Contractor's policies, as applicable, shall stipulate that the insurance afforded the

Contractor shall be primary and that any insurance carried by the Department, its agents, officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).

16.3.2. Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract.

16.4. Notice of Cancellation

Applicable to all insurance policies required within the Insurance Requirements of this Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the State of Arizona. Within two (2) business days of receipt, Contractor must provide notice to the State of Arizona if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring. Such notice shall be sent directly to the Department and shall be mailed, emailed, hand delivered or sent by facsimile transmission to the Department.

16.5. Acceptability of Insurers

Contractors insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.

16.6. Verification of Coverage

Contractor shall furnish the State of Arizona with certificates of insurance (valid ACORD form or equivalent approved by the State of Arizona) evidencing that Contractor has the insurance as required by this Contract. An authorized representative of the insurer shall sign the certificates.

16.6.1. All such certificates of insurance and policy endorsements must be received by the State before work commences. The State’s receipt of any certificates of insurance or policy endorsements that do not comply with this written agreement shall not waive or otherwise affect the requirements of this agreement.

16.6.2. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract.

16.6.3. All certificates required by this Contract shall be sent directly to the Department. The certificate shall state that the insurance applies to any and all work performed for or on behalf of the State of Arizona/ADOT. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.

16.7. Subcontractors

Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum Insurance Requirements identified above. The Department reserves the right to require, at any time throughout the life of the contract, proof from the Contractor that its subcontractors have the required coverage.

16.8. Approval and Modifications

The Contracting Agency, in consultation with State Risk, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action.

16.9. Exceptions

In the event the Contractor or sub-contractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a certificate of self-insurance. If the Contractor or sub-contractor(s) is/are a State of Arizona agency, board, commission, or university then none of the above shall apply.

17. USAGE REPORT

The Contractor shall furnish the Department a quarterly report showing purchasing activity under this contract. This usage report shall be provided in a form substantially equivalent to Exhibit 4. Usage reports shall be submitted to the Procurement Officer no later than 30 days after the end of each quarter.

Usage report quarters shall be defined as follows:

• January through March – Report due April 30

• April through June – Report due July 30

• July through September – Report due October 30

• October through December – Report due January 30

18. LICENSES, PERMITS, CERTIFICATIONS

Contractor, at their expense, shall maintain in current status without any violations, complaints, or suspensions during the term of this contract all Federal, State and Local licenses, permits and certifications required for the operation of a business conducted by the contractor.

19. POST AWARD MEETING

At the discretion of the Department, the Contractor, at their expense, shall attend and participate in post award meetings as scheduled by the Procurement Officer.

UNIFORM TERMS AND CONDITIONS

1. Definition of Terms. As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows:

1.1. “Attachment” means any item the Solicitation which requires the Offeror to submit as part of the Offer.

1.2. “Contract” means the combination of the Solicitation, including the Instructions to Offerors, the Uniform and Special Terms and Conditions, and the Specifications and Statement or Scope of Work;

the Offer and any Best and Final Offers; and any Solicitation Amendments or Contract Amendments.

1.3. "Contract Amendment" means a written document signed by the Procurement Officer that is issued for the purpose of making changes in the Contract.

1.4. “Contractor” means any person who has a Contract with the State.

1.5. “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.

1.6. “Days” means calendar days unless otherwise specified.

1.7. “Exhibit” means any item labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation generally containing maps, schematics, examples of reports, or other documents that will be used to perform the requirements of the Scope of Work after contract award.

1.8. “Gratuity” means 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.

1.9. “Materials” means 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.

1.10. “Procurement Officer” means the person, or his or her designee, duly authorized by the State to enter into and administer Contracts and make written determinations with respect to the Contract.

1.11. “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.

1.12. “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.

1.13. “State Fiscal Year” means the period beginning with July 1 and ending June 30.

1.14. “Subcontract” means 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 Materials or any Services required for the performance of the Contract.

1.15. “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.

2. Contract Interpretation

2.1. Arizona Law. The Arizona law applies to this Contract including, where applicable, the Uniform Commercial Code as adopted by the State of Arizona and the Arizona Procurement Code, Arizona Revised Statutes (A.R.S.) Title 41, Chapter 23, and its implementing rules, Arizona Administrative Code (A.A.C.) Title 2, Chapter 7.

2.2. Implied Contract Terms. Each provision of law and any terms required by law to be in this Contract are a part of this Contract as if fully stated in it.

2.3. Contract Order of Precedence. In the event of a conflict in the provisions of the Contract, as accepted by the State and as they may be amended, the following shall prevail in the order set forth below:

2.3.1. Special Terms and Conditions;

2.3.2. Uniform Terms and Conditions;

2.3.3. Statement or Scope of Work;

2.3.4. Specifications;

2.3.5. Attachments;

2.3.6. Exhibits; then

2.3.7. Any other documents referenced or included in the Solicitation including, but not limited to, any Bid or Offer documents provided by the Contractor that do not fall into one of the above categories.

2.4. Relationship of Parties. The Contractor under this Contract is an independent Contractor. Neither party to this Contract shall be deemed to be the employee or agent of the other party to the Contract.

2.5. Severability. The provisions of this Contract are severable. Any term or condition deemed illegal or invalid shall not affect any other term or condition of the Contract.

2.6. No Parol Evidence. This Contract is intended by the parties as a final and complete expression of their agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or explain any terms used in this document and no other understanding either oral or in writing shall be binding.

2.7. No Waiver. Either party’s failure to insist on strict performance of any term or condition of the Contract shall not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming performance knows of the nature of the performance and fails to object to it.

3. Contract Administration and Operation

3.1. Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each Subcontractor to retain any and all Data and other “records” relating to the acquisition and performance of the Contract for a period of five (5) years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times. Upon request, the Contractor shall produce a legible copy of any or all such records.

3.2. Non-Discrimination. The Contractor shall comply with State Executive Orders Nos. 2023-09, 2023- 01, 2009-09, and any and all other applicable Federal and State laws, rules and regulations, including the Americans with Disabilities Act. Contractor shall include these provisions in contracts with Subcontractors when required by Federal or State law.

3.3. Audit. Pursuant to A.R.S. § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any Subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract.

3.4. Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, Subcontractor facilities, and the Contractor’s processes or services, at reasonable times for inspection of the facilities or Materials covered under this Contract as required under A.R.S. § 41-2547. The State shall also have the right to test, at its own cost, the Materials to be supplied under this Contract.

Neither inspection of the Contractor’s facilities nor Materials testing shall constitute final acceptance of the Materials or Services. If the State determines non-compliance of the Materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection.

3.5. Notices. Notices to the Contractor required by this Contract shall be made by the State to the person indicated on the Offer and Acceptance form submitted by the Contractor unless otherwise stated in the Contract. Notices to the State required by the Contract shall be made by the Contractor to the Solicitation Contact Person indicated on the Solicitation, stated in the Contract, or listed on the State’s eProcurement system. An authorized Procurement Officer and an authorized Contractor representative may change their respective person to whom notice shall be given by written notice to the other and an amendment to the Contract shall not be necessary.

3.6. Advertising, Publishing and Promotion of Contract. The Contractor shall not use, advertise or promote information for commercial benefit concerning this Contract without the prior written approval of the Procurement Officer.

3.7. Continuous Improvement. Contractor shall recommend continuous improvements on an on-going basis in relation to any Materials and Services offered under the Contract, with a view to reducing State costs and improving the quality and efficiency of the provision of Materials or Services. State may require Contractor to engage in continuous improvements throughout the term of the Contract.

3.8. Other Contractors. State may undertake on its own or award other contracts to the same or other suppliers for additional or related work. In such cases, the Contractor shall cooperate fully with State employees and such other suppliers and carefully coordinate, fit, connect, accommodate, adjust, or sequence its work to the related work by others. Where the Contract requires handing-off Contractor’s work to others, Contractor shall cooperate as State instructs regarding the necessary transfer of its work product, Materials, Services, or records to State or the other suppliers. Contractor shall not commit or permit any act that interferes with the State’s or other suppliers’ performance of their work, provided that, State shall enforce the foregoing section equitably among all its suppliers so as not impose an unreasonable burden on any one of them.

3.9. Ownership of Intellectual Property

3.9.1. Rights In Work Product. All intellectual property originated or prepared by Contractor pursuant to the Contract, including but not limited to, inventions, discoveries, intellectual copyrights, trademarks, trade names, trade secrets, technical communications, records reports, computer programs and other documentation or improvements thereto, including Contractor’s administrative communications and records relating to the Contract, are considered work product and Contractor’s property, provided that, State has Government Purpose Rights to that work product as and when it was delivered to State.

3.9.2. “Government Purpose Rights” are:

3.9.2.1. the unlimited, perpetual, irrevocable, royalty free, non-exclusive, worldwide right to use, modify, reproduce, release, perform, display, sublicense, disclose and create derivatives from that work product without restriction for any activity in which State is a party;

3.9.2.2. the right to release or disclose that work product to third parties for any State government purpose; and

3.9.2.3. the right to authorize those to whom it rightfully releases or discloses that work product to use, modify, release, create derivative works from the work product for any State government purpose; such recipients being understood to include the federal government, the governments of other states, and various local governments.

3.9.3. “Government Purpose Rights” do not include any right to use, modify, reproduce, perform, release, display, create derivative works from or disclose that work product for any commercial purpose, or to authorize others to do so.

3.9.4. Joint Developments. The Contractor and State may each use equally any ideas, concepts, know-how, or techniques developed jointly during the course of the Contract, and may do so at their respective discretion, without obligation of notice or accounting to the other party.

3.9.5. Pre-existing Material. All pre-existing software and other Materials developed or otherwise obtained by or for Contractor or its affiliates independently of the Contract or applicable Purchase Orders are not part of the work product to which rights are granted State under subparagraph 3.9.1 above, and will remain the exclusive property of Contractor, provided that:

3.9.5.1. any derivative works of such pre-existing Materials or elements thereof that are created pursuant to the Contract are part of that work product;

3.9.5.2. any elements of derivative work of such pre-existing Materials that was not created pursuant to the Contract are not part of that work product; and

3.9.5.3. except as expressly stated otherwise, nothing in the Contract is to be construed to interfere or diminish Contractor’s or its affiliates’ ownership of such pre-existing Materials.

3.9.6. Developments Outside Of Contract. Unless expressly stated otherwise in the Contract, this Section does not preclude Contractor from developing competing Materials outside the Contract, irrespective of any similarity to Materials delivered or to be delivered to State hereunder.

3.10. Property of the State. If there are any materials that are not covered by Section 3.9 above created under this Contract, including but not limited to, reports and other deliverables, these materials are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.

3.11. Federal Immigration and Nationality Act. Contractor shall comply with all federal, state and local immigration laws and regulations relating to the immigration status of their employees during the term of the contract. Further, Contractor shall flow down this requirement to all Subcontractors utilized during the term of the contract. The State shall retain the right to perform random audits of Contractor and Subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should the State determine that the Contractor or any Subcontractors be found noncompliant, the State may pursue all remedies allowed by law, including, but not limited to:

suspension of work, termination of the contract for default and suspension or debarment of the contractor.

3.12. E-Verify Requirements. In accordance with A.R.S. § 41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23- 214, Subsection A.

3.13. Offshore Performance of Work involving Data is Prohibited. Any Services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to Data shall be performed within the defined territories of the United States.

3.14. Protection of State Cybersecurity Interests. The Contractor shall comply with State Executive Order No. 2023-10, which includes, but is not limited to, a prohibition against (a) downloading and installing of Tik Tok on all State-owned and State-leased information technology; and (b) accessing Tik Tok through State information technology.

3.15. Certifications Required by State Law.

3.15.1. If Contractor is a Company as defined in A.R.S. § 35-393, Contractor certifies that it is not currently engaged in a boycott of Israel as described in A.R.S. §§ 35-393 et seq. and will refrain from any such boycott for the duration of this Contract.

3.15.2. Contractor further certifies that it shall comply with A.R.S. § 35-394, regarding use of the forced labor of ethnic Uyghurs, as applicable.

4. Costs and Payments

4.1. Payments. Payments shall comply with the requirements of A.R.S. Titles 35 and 41, Net 30 days. Upon receipt and acceptance of Materials or Services, the Contractor shall submit a complete and accurate invoice for payment from the State within thirty (30) days.

4.2. Delivery. Unless stated otherwise in the Contract, per A.R.S. § 47-2319, all prices shall be F.O.B. (“free on board”) Destination and shall include all freight delivery and unloading at the destination.

4.3. Firm, Fixed Price. Unless stated otherwise in the Special Terms and Conditions of the Contract, all prices shall be firm-fixed-prices.

4.4. Applicable Taxes

4.4.1. Payment of Taxes. The Contractor shall be responsible for paying all…