CTR078750_DEMA_Small_Nuclear_Monitoring_Detection__M25-0038__Annual_-_Signed.pdf

Direct Contract

Arizona Department of Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 1 of 34

CONTRACTOR IS STRONGLY ENCOURAGED TO READ THE ENTIRE CONTRACT.

Table of Contents

Scope of Work 2

Exhibit A - NAME 4

Special Terms and Conditions 5

Addendum A - Contractor Insurance Requirements 8

Addendum B - Warranties and Requirements Related to Arizona Information Technology Statewide Policies, Standards, and Procedures 9

Uniform Terms and Conditions 10.5 13

Contract Signature Page 30

* Revise Page Numbers

Scope of Work

Emergency & Military

Affairs Contract No.: CTR078750

Direct Contract | Revision No. 2 | Revised 08-25 | Page 2 of 34

1. Purpose and Background

1.1. Purpose: The purpose of this is to establish a direct contract with a Ludlum Measurements, Inc to provide service, repair, and calibration for existing radiation detection and monitoring instruments manufactured by Ludlum Measurements, Inc. The previously held State contract for these services has expired, and at this time, it is not operationally or fiscally prudent to replace the currently deployed equipment.

The instruments remain critical to ongoing operations, and continued maintenance and calibration are necessary to ensure their accuracy, reliability, and compliance with applicable safety and regulatory standards. This contract will enable the Department of Emergency and Military Affairs (DEMA) to maintain the operational integrity of its existing Ludlum instrumentation by securing timely access to factory-authorized service and support.

1.2. In accordance with A.R.S. § 41-2537, Competition Impracticable, and A.A.C. R2-7-E303, the Arizona Department of Emergency & Military Affairs establishes this contract with Ludlum Measurements, Inc. to provide service, repair, and calibration of existing radiation detection instruments.

Due to the proprietary nature of the instruments, the expiration of the previous State contract, and the impracticality of replacing functioning equipment, competition is deemed impracticable for these services.

1.3. Background: DEMA currently utilizes a variety of radiation detection and monitoring instruments manufactured by Ludlum Measurements, Inc. These instruments are critical to the agency’s mission and require regular maintenance, repair, and calibration to ensure accuracy, reliability, and compliance with safety standards.

The estimated annual spend for these services is approximately $25,000, based on historical usage and maintenance needs.

2. Definitions

2.1. Agency: The Department of Emergency and Military Affairs (DEMA), the State agency procuring services under this contract.

2.2. Contractor: The individual or company awarded the contract to provide maintenance, repair, and calibration services for Ludlum radiation detection instruments.

2.3. Instrument Return Form (IRF): A form completed and submitted by the customer prior to shipping instruments for service, providing necessary details about the instrument and requested services.

A printed copy of the IRF must accompany each instrument shipment.

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 3 of 34

2.4. Calibration: The process of adjusting and verifying an instrument to ensure its measurements conform to standards traceable to NIST or equivalent.

2.5. Service Report: Documentation provided by the Contractor that details the work performed on an instrument, including repairs, parts replaced, calibration results, and certification.

2.6. Turnaround Time: The period from the Contractor’s receipt of the instrument and completed IRF to the completion of maintenance, repair, or calibration and return shipment to the Agency.

3. Service Description

3.1. Requirements/Specifications

The Contractor shall provide on-demand maintenance, repair, and calibration services for a variety of radiation detection instruments manufactured by Ludlum Measurements, Inc. Services may include, but are not limited to:

• Functional testing and diagnostics

• Manufacturer-authorized repairs using OEM parts

• Calibration services traceable to NIST standards

• Firmware or software updates as applicable

• Return shipping and documentation of services performed

• Technical support or consultation as needed for operational issues

Only services that maintain the original instrument’s safety, accuracy, and compliance standards shall be accepted.

3.2. Timeline and Schedule

Services shall be provided on an as-needed basis throughout the term of the contract. Upon request for service:

• DEMA shall submit a Instrument Return Form (IRF) per Contractor's requirements.

• Upon receipt of instruments, standard service and calibration turnaround shall not exceed 30 calendar days, unless otherwise agreed upon

• Emergency or expedited services may be requested and priced separately

3.3. Deliverables

The Contractor shall provide the following deliverables for each instrument serviced:

• Service Report detailing work performed, parts replaced, calibration results, and certification traceability

• Calibration Certificate compliant with NIST or ISO/IEC 17025 standards (if applicable)

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 4 of 34

• Shipping Confirmation and tracking details

• Invoice referencing purchase order and itemized services rendered

3.4. Additional Terms

• All repairs shall carry a minimum 90-day warranty on parts and labor

• Contractor shall provide technical support for post-service questions at no additional charge for up to 30 days after return

• All shipping costs shall be submitted via invoice.

4. Service Level Agreements

4.1. Service Level Agreements (SLAs)

The following SLAs define the minimum level of acceptable service:

4.1.1. Instrument Return Form (IRF) Process:

• DEMA shall submit a Instrument Return Form (IRF) per Contractor's requirements.

• The customer shall include a printed copy of the IRF in the shipping package for each instrument sent for service.

4.1.2. Standard Service Turnaround:

• Contractor shall complete standard calibration and repairs within 30 calendar days from receipt of the instrument and IRF, unless otherwise agreed.

4.1.3. Expedited Service (Optional):

• When requested and available, Contractor shall offer expedited service turnaround within 10 business days, subject to applicable fees.

4.1.4. Shipping and Return:

• Serviced instruments must be returned using trackable shipping methods, and tracking details must be provided to the customer upon shipment.

4.1.5. Service Documentation:

Each serviced instrument must be returned with:

• A detailed service report

• A calibration certificate (if applicable)

4.1.6. Communication:

• Contractor must provide prompt communication regarding delays, parts backorders, or additional issues discovered during service.

4.2. Remedies for Non-Performance

4.2.1. If the Contractor fails to meet the performance expectations or service levels outlined above, DEMA reserves the right to:

• Request a corrective action plan

• Withhold payment until deficiencies are corrected

• Decline payment for incomplete or undocumented services

• Terminate the contract for cause in the event of repeated or uncorrected service failures

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 5 of 34

5. Reporting Requirements/Notices:

The Contractor shall submit the following items and all notices/correspondence relevant to this contract as directed by the Department, electronically or by mail to:

5.1. The Certificate of Insurance is to be submitted to:

Arizona Department of Emergency & Military Affairs ATTN: Procurement & Contracting 5645 E. McDowell Rd. Bldg. M5800 Phoenix, AZ 85008

6. Quoting and Payment

6.1. Quoting Requirements:

All quotes submitted by the Contractor must cite the applicable contract number and adhere to the rates established in the contract. Quotes that do not reference the contract number or that propose rates different from those in the contract may be rejected.

6.2. Invoice Requirements:

All invoices submitted for payment must include the following:

• The contract number

• The address of the customer facility receiving the services

• A detailed, itemized description of the services performed

• Dates of service

• Any other information required under applicable State guidelines for invoice processing

6.3. Payment:

Payment will be made in accordance with the contract terms after satisfactory receipt and acceptance of services and proper invoicing by the Contractor.

Special Terms and Conditions

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 6 of 34

Special Terms and Conditions

1.0 Contract Administration and Operation

1.1 Term of Contract. The term of the Contract will commence on the date indicated on the Offer and Acceptance and continue for twelve (12) months unless canceled, terminated, or permissibly extended.

1.2 Contract Extensions. State may, at its discretion, request for a mutual agreement to 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.

1.3

1.4 Eligible Agency: This contract is a single-agency contract for the sole use of DEMA.

2.0 Costs and Payments

2.1 Pricing:

2.1.1 Technician Labor rate: $150.00/hour.

No discount given on parts when necessary for repairs.

2.1.2 Standard Ludlum calibration including:

2.1.2.1 One (1) Detector

2.1.2.2 "As Found" Readings

2.1.2.3 Two (2) Points per RangeNIST Traceability

2.1.3 ANSI N323 Compliance

2.1.4 Two (2) Efficiencies Per Instrument, If Requested

2.1.5 Routine Battery Contact Cleaning, Where Applicable

Additional calibration requirements may incur extra fees. Examples include additional detectors, efficiencies, gas charging, etc.

Calibration Costs:

Ludlum Measurements Model Cost 2241-2 $110.00 2241-3 $110.00

Additional Detectors $30, after cost of calibration Additional Detectors $30, after cost of calibration

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 7 of 34

52-6-1 $420.00 52-6-1W $480.00

Calibration (in facility)

Thermo Eberline Model Cost RadEye $450.00 These are both Gamma and Neutron. Calibration ONLY, no repairs.

SPRD-ER

Mirion – Canberra Model Cost MRAD $110.00 Gamma only. Calibration ONLY, no repairs.

2.2 URAD $110.00 Gamma only. Calibration ONLY, no repairs

2.3 Fixed Price/hourly rate/time and materials for a twelve (12) month period.

2.3.1 Price Adjustments

The Department will review fully documented requests for price increases after any contract has been in effect for one (1) year. Any price increase adjustments will only be made at the time of the contract extension and will be a factor in the extension review process. The Department will determine whether the requested price increase or an alternative option is in the best interest of the Department. Any price adjustment will be effective upon the effective date of the contract extension.

2.3.2 Price Reduction

A price reduction may be offered at any time during the term of this contract and shall become effective upon notice. The price reduction request shall be in writing.

3.0 Contract Changes

Contract changes shall only be made through a formal written amendment signed by both parties.

No oral statements or other written materials shall be binding unless incorporated into an amendment executed by the authorized representatives of both the DEMA and the Contractor.

4.0 Risk and Liability

4.1 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 DEMA in the particular location and situation specified in the Order, or as specified generally elsewhere in the

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 8 of 34

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.

4.2 General Contractor Indemnification and Insurance Requirements

4.2.1 Contractor Indemnification (Not Public Agency). To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, 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.

4.2.2 Insurance Requirements: Addendum A to the Special Terms and Conditions: Contractor Insurance Requirements is incorporated herein as part of the Special Terms and Conditions.

5.0 Warranties

5.1 See Scope of Work Section 3.4 for Warranty terms.

8.0 Contractor Compliance with Federal Statues or Executive Orders:

The Contractor shall covenant and agree to comply with the following Federal Acquisition Regulation

(FAR) clauses, which are incorporated in this contract by reference to implement provisions of law or executive orders including any amendments to the Final Rule that may hereafter be issued as required by master cooperative agreement. Reference https://www.acquisition.gov

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 9 of 34

8.1. 52.203-13, Contractor Code of Business Ethics and Conduct (APR 2010) (Pub. L. 110-252, Title VI, Chapter 1 (41 U.S.C. 251 note)).

8.2. 52-203-7 Copeland Anti-Kickback Act (OCT 2010). (18 U.S.C. 874 and 29 CFR Part 3).

8.3. 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (JUL 2013)

(Pub. L. 109-282) (31 U.S.C. 6101 note).

8.4. 52.209-6, Protecting the Government's Interest When Subcontracting with Contractors

Debarred, Suspended, or Proposed for Debarment. (AUG 2013) (31 U.S.C. 6101 note).

8.5. 52.209-10, Prohibition on Contracting with Inverted Domestic Corporations (MAY 2012)

(section 738 of Division C of Pub. L. 112-74, section 740 of Division C of Pub. L. 111-117, section 743 of Division D of Pub. L. 111-8, and section 745 of Division D of Pub. L. 110-161).

8.6. 52.222-3, Convict Labor (JUN 2003) (E.O. 11755).

8.7. 52.222-4 Contract Work Hours and Safety Standards Act-Overtime Compensation (JUL

2005). (40 U.S.C. 327-330 and 29 CFR Part 5).

8.8. 52.222-19, Child Labor—Cooperation with Authorities and Remedies (JAN 2014) (E.O.

13126).

8.9. 52.222-40 Notification of Employee Rights Under the National Labor Relations Act. (DEC

2010)(E.O. 13496).

8.10. 52.222-50, Combating Trafficking in Persons (FEB 2009) (22 U.S.C. 7104(g)).

8.11. 52.223-18, Encouraging Contractor Policies to Ban Text Messaging While Driving (AUG

2011).

Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments

Direct Contract | Revision No. 2 | Revised 08-25 | Page 10 of 34

Addendum A Contractor Insurance Requirements

Arizona Department of Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 11 of 34

Addendum A - Contractor Insurance Requirements

1. Standard Professional Service Contracts Professional Liability insurance is issued for a “professional” and covers the rendering of, or failure to render, services of a professional nature. Professional Liability insurance is usually written on a claims-made basis.

Therefore, the Contractor needs to maintain coverage during the contract period and for a specified period (typically two years) after the project has been completed.

The types of losses that can occur as a result of professional rendering services are often excluded under general liability insurance policies. Therefore, these losses need to be covered through a separate professional liability insurance policy.

Professional liability insurance is needed when one of the following applies:

• If the professional is licensed, registered, or certified and expected to follow the usual and customary standards of their profession. Professions in this category include, but are not limited to, accountants, attorneys, engineers/architects, construction management, technical consultant, surveyor (AF), and appraisers.

• If the information provided by the professional is to be used by the State of Arizona in a decision-making process that may have an impact to life, health, safety, and/or a significant financial impact to the State, its agencies, and the public.

If you have questions regarding the applicability of Professional Liability insurance, please contact your assigned State Risk Insurance Analyst.

1.1. Indemnification Clause

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

Arizona Department of Emergency & Military

Affairs

Contract No.: CTR078750

Direct Contract | Revision No. 2 | Revised 08-25 | Page 12 of 34 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.

1.2. Insurance Requirements

1.2.1. 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.

1.2.2. 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.

1.3. Minimum Scope and Limits of Insurance

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

1.3.1. 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.

1.3.2. 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

Arizona Department of Emergency & Military

Affairs Contract No.: CTR078750

Description: DEMA Radiation Detection/Monitoring Instruments (M25-0038) Annual

Direct Contract | Revision No. 2 | Revised 08-25 | Page 13 of 34 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.

1.3.3. Workers’ 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 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).

1.3.4. Professional Liability (Errors and Omissions Liability)

• Each Claim $1,000,000

• Annual Aggregate $1,000,000

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.

1.4. Additional Insurance Requirements

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

1.4.1. 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).

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

1.5. 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

Arizona Department of

Direct Contract | Revision No. 2 | Revised 08-25 | Page 14 of 34 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 (State Representative’s Name, Address & Fax Number).

1.6. Acceptability of Insurers

Contractor’s 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.

1.7. 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.

1.7.1. 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.

1.7.2. 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.

1.7.3. All certificates required by this Contract shall be sent directly to the Department. The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.

1.8. 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 this contract, proof from the Contractor that its subcontractors have the required coverage.

1.9. 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

Arizona Department of

Direct Contract | Revision No. 2 | Revised 08-25 | Page 15 of 34 necessary. Such action will not require a formal Contract amendment but may be made by administrative action.

1.10. Exceptions

In the event the Contractor or subcontractor(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 subcontractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply.

Uniform Terms and Conditions

Direct Contract | Revision No. 2 | Revised 08-25 | Page 16 of 34

Uniform Terms and Conditions 10.5

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

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

AI.

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

1.3. “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.

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

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

1.6. “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.

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

1.8. “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.

1.9. “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.

1.10. “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.

1.11. “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.

Direct Contract | Revision No. 2 | Revised 08-25 | Page 17 of 34

1.12. “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.

1.13. “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.

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

1.15. “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.

1.16. “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

Direct Contract | Revision No. 2 | Revised 08-25 | Page 18 of 34

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 Order 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.

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

Direct Contract | Revision No. 2 | Revised 08-25 | Page 19 of 34 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

Direct Contract | Revision No. 2 | Revised 08-25 | Page 20 of 34 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.

Direct Contract | Revision No. 2 | Revised 08-25 | Page 21 of 34

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 TikTok on all State-owned and State-leased information technology; and (b) accessing TikTok through State information technology.

3.15. Artificial Intelligence (AI) Prohibitions. Consistent with State policy, if Contractor supplies AI Services or Materials (either directly or through Subcontractors or the sale of licenses), such as research, development, training, implementation, deployment, maintenance, provision, or sale of AI systems, then Contractor is prohibited from using State of Arizona Materials or Data in generative AI queries or for building or training proprietary generative AI programs unless explicitly approved in advance by the State in writing.

Direct Contract | Revision No. 2 | Revised 08-25 | Page 22 of 34

3.15.1. Contractor shall also disclose the utilization of generative AI before producing works owned by the State and/or integrating generative AI into Materials or Services used by the State.

3.15.2. Contractor shall perform due diligence to ensure proper licensure of model training data for all generative AI services throughout the life of the Contract.

3.16. Certifications Required by State Law.

3.16.1. 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.

3.16.2. 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 applicable taxes.

4.4.2. State and Local Transaction Privilege Taxes. The State of Arizona is subject to all applicable state and local transaction privilege taxes. Transaction privilege taxes apply to the sale and are the responsibility of the seller to remit. Failure to collect such taxes from the buyer does not relieve the seller from its obligation to remit taxes.

4.4.3. Tax Indemnification. Contractor and all Subcontractors shall pay all Federal, state and local taxes applicable to its operation and any persons employed by the Contractor. Contractor shall, and require all Subcontractors to hold the State harmless from any responsibility for taxes, damages and interest, if applicable, contributions required under Federal, and/or state and local laws and regulations and any other costs including transaction privilege taxes, unemployment compensation insurance, Social Security and Worker’s Compensation.

Direct Contract | Revision No. 2 | Revised 08-25 | Page 23 of 34

4.4.4. IRS W9 Form. In order to receive payment the Contractor shall have a current I.R.S. W9 Form on file with the State of Arizona, unless not required by law.

4.5. Availability of Funds for the Next State Fiscal Year. Funds may not presently be available for performance under this Contract beyond the current State Fiscal Year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current State Fiscal Year until funds are made available for performance of this Contract.

4.6. Availability of Funds for the Current State Fiscal Year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these Materials or Services are not funded, the State may take any of the following actions:

4.6.1. Accept a decrease in price offered by the Contractor;

4.6.2. Cancel the Contract; or

4.6.3. Cancel the Contract and re-solicit the requirements.

5. Contract Changes

5.1. Amendments. This Contract is issued under the authority of the Procurement Officer who signed this Contract. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of Services or Materials, the revision of payment terms, or the substitution of Services or Materials, directed by a person who is not specifically authorized by the Procurement Officer in writing or made…