ESBD_508018_1776445652568_Sample Contract for RFQ 240m for Independent Tax Examiners (Final 4-6-26).docx

EXHIBIT C

TO RFQ 240m

SAMPLE CONTRACT FOR PROFESSIONAL SERVICES

BETWEEN

THE TEXAS COMPTROLLER OF PUBLIC ACCOUNTS

AND

[CONTRACTOR]

This contract for professional services (“Contract”) is entered into by the Texas Comptroller of Public Accounts (“Comptroller”) and [Name of Contractor] (“Contractor”), located at [Address of Contractor].

RECITALS

Whereas, Chapter 2254, Subchapter A, and Chapter 403 of the Texas Government Code and Chapter 111, Subchapter A, Section 111.0045 of the Texas Tax Code authorize Comptroller to contract for professional examination services to ensure compliance with state tax laws and the payment of all taxes due;

Whereas, on April 17, 2026, Comptroller issued a Request for Qualifications 240m (“RFQ No. 240m”) from qualified, independent individuals and firms to provide professional examination services to Comptroller as authorized by Chapters 403 and 2254, Subchapter A of the Texas Government Code; Chapter 111, Subchapter A, Section 111.0045 of the Texas Tax Code; and issued official responses to written questions on or about May 1, 2026 (collectively, “RFQ”);

Whereas, Contractor submitted a Statement of Qualifications dated on or about May 15, 2026, in response to Comptroller’s RFQ (“Contractor’s Statement of Qualifications”); and

Whereas, Contractor was selected as one of the Successful Respondents.

Now, therefore; the parties hereby agree as follows:

I. General Purpose, Standards of Performance, and Authority

Contractor shall provide professional examining and accounting services to Comptroller on an as-needed basis as provided in this Contract. Contractor represents and warrants that it has the requisite qualifications, experience, and resources to provide the required examination services to Comptroller in the manner required by this Contract. The standards of performance (the “Standards of Performance”) for this Contract shall consist of the following: 1) applicable professional standards; 2) general audit accounting standards; 3) Comptroller’s Audit procedures; 4) Texas Tax Code and other applicable law; 5) Texas Administrative Code, including rules on contract examinations adopted by Comptroller; 6) policies of Comptroller; 7) Comptroller’s written Audit Manual; 8) Comptroller’s policy and procedure documents; 9) orientation conducted by Comptroller; and 10) written instructions of Comptroller’s project manager. These Standards of Performance consist of such items as they exist on the date of Contract signature and as subsequently amended throughout the term of this Contract.

II. Services and Performance

2.1. Contractor shall provide to Comptroller all examination services and other deliverables as described in and in the manner required by all of the attachments set forth below attached hereto and incorporated into this Contract. In the event of conflicts between this Contract and any of the listed attachments (“Attachments”) to this Contract, the documents shall control in the following order of priority:

1. This Contract (excluding Attachments);

2. Attachment A Comptroller’s RFQ;

3. Attachment B Authorized Personnel;

4. Attachment C Contractor’s Statement of Qualifications;

5. Attachment D Confidential Treatment of Information Acknowledgment (CTIA) Form; and

6. Attachment E Cybersecurity Training Attestation (CCTA) Form.

2.2. Contractor shall provide all of the above services in accordance with the Statement of Work as set forth in the RFQ and the Standards of Performance. Contractor shall provide all other services reasonably related to the above services.

III. Examination Packages and Evaluations

3.1. Examination Packages. Contractor shall conduct examinations of the taxpayers listed in the Final Examination Packages assigned by and entered into Comptroller’s records in accordance with this Contract as follows:

1. For each Final Examination Package, Contractor shall prepare work papers in a format prescribed by Comptroller, complete examinations and reports by deadlines established by Comptroller, and provide Comptroller with Contractor’s original, complete file of work papers. Contractor must provide a draft of the work papers to its contract supervisor (“Contract Supervisor”) for approval. If Contract Supervisor identifies any deficiencies, Contract Supervisor will notify Contractor and Contractor shall correct deficiencies and resubmit the working papers to Contract Supervisor within ten (10) working days of receipt of notification of deficiencies. If there is a disagreement over the noted deficiencies, Comptroller or Comptroller’s designee will make the final decision.

2. Upon receipt of Contractor’s examination report and work papers for each taxpayer, Contract Supervisor will review the documentation for compliance and accuracy and will evaluate Contractor’s performance against the Statement of Work as set forth in the RFQ, Standards of Performance in Section I of this Contract, and all other provisions of this Contract.

3. Tax change examinations resulting in a tax deficiency or a tax refund will be forwarded to the regional processing center for final review and processing. If Contract Supervisor or regional processing center personnel take exception to the examination results for any reason, the examination report and work papers may be returned to Contractor for further work or correction, as required by this Contract.

4. When reviews are complete, a Notice of Tax Due or Refund or a No Tax Due notice will be sent to the taxpayer examined. Examinations will be considered accepted for payment to Contractor on the date that formal notice of the examination results is sent to the taxpayer. Comptroller will notify Contractor that the examination is approved within three (3) working days of final acceptance, or as soon thereafter as is practicable. Once entered into Comptroller’s records, the Final Examination Packages shall be incorporated by reference for all purposes into this Contract.

3.2. Milestone Reports. Comptroller may issue evaluations to Contractor in the form of a Milestone Report to Contractor on a quarterly basis to track Contractor’s hours worked and assignment completion percentages based on Hours Reports and Status Reports submitted by Contractor. The Milestone Reports shall be incorporated by reference for all purposes into this Contract.

IV. Compensation

4.1. Contractor shall only be compensated for examination work actually authorized, approved, and accepted in writing by Comptroller, including any of Contractor’s costs and expenses. Payments for completed examinations shall be made in $10,000 increments, as applicable. Contractor shall submit detailed invoices with supporting documentation by email, facsimile, or regular U.S. Mail within ten (10) days after examination work has been timely completed according to deadlines established by Comptroller. Comptroller will make payment in accordance with Texas Prompt Payment Act, Chapter 2251, of the Texas Government Code. Comptroller may, in its sole discretion, require additional documentation to support payment, and Contractor shall respond to any such requests within five (5) days of receipt.

4.2. The total amount payable by Comptroller to a Contractor under this Contract, including, but not limited to, all authorized fees and expenses, shall not exceed $70,400 per Final Examination Package unless a greater amount is specified at the discretion of Comptroller. Under no circumstance shall a cumulative total of more than $105,600 annually be paid to any one Contractor or more than $211,200 annually to a firm with multiple examiners working under this Contract. Contractor is not guaranteed any assignments or minimum compensation under this Contract.

V. Funding

Comptroller’s performance of its obligations under this Contract is contingent upon and subject to the availability of and actual receipt by Comptroller of sufficient and adequate funds from the sources contemplated by this Contract. This Contract is subject to immediate cancellation or termination, without penalty to Comptroller or the State of Texas (“State”), subject to the availability and receipt of these funds. In addition, Comptroller is a state agency whose authority and appropriations are subject to the actions of the Texas Legislature. If Comptroller becomes subject to a legislative change, revocation of statutory authority, or lack of funds that would render the services to be provided under this Contract impossible or unnecessary, Comptroller may terminate this Contract without penalty to Comptroller or the State. In the event of a termination or cancellation under this Section, Comptroller shall not be required to give notice and shall not be liable for any damages or losses caused or associated with such termination or cancellation.

VI. Personnel

Contractor shall act as an independent contractor in providing services under this Contract. Contractor’s personnel shall not be construed as employees of Comptroller when providing services under this Contract. Contractor shall assign to this Contract only individuals who have the training, qualifications, education, and experience to provide the services required under this Contract. As of the date of Comptroller’s execution of this Contract, Contractor has assigned the authorized personnel listed in Attachment B to this Contract. Contractor represents and warrants that each of these individuals has the training, qualifications, education, and experience to provide the services required under this Contract. Contractor represents and warrants that none of its employees or subcontractors, including, but not limited to, those authorized to provide services under this Contract and subject to the exceptions, limitations, and conditions in the RFQ are present or former employees of Comptroller within the twelve (12) months prior to the date the responses to the RFQ are due or are otherwise prohibited from providing services to Comptroller under this Contract or under applicable law. No substitutions of key personnel will be made without the prior written consent of Comptroller. All requested substitutes must be submitted to Comptroller, together with their résumés, for approval in accordance with this Contract and the RFQ. Each of Contractor’s personnel is subject to removal from the Contract by Comptroller. In addition, if the person removed is among the project’s key personnel, substituted personnel must have prior approval by Comptroller. All proposed substitute personnel must be of equal or superior experience or skill as the person replaced.

VII. Term and Termination

7.1. Term. This Contract shall become effective on signature by Comptroller after having been signed by Contractor and shall terminate on August 31, 2027, unless otherwise terminated earlier as provided in this Contract or extended under the two (2) optional one (1) year extensions that may be granted one (1) year at a time. Services provided under this Contract shall begin on September 1, 2026. Notwithstanding the termination or expiration of this Contract, the provisions of this Contract regarding confidentiality, dispute resolution, invoice and fees verification, transition, indemnification, right to examination, independent examination, property rights, hearings and trials, and records shall survive the termination or expiration of this Contract.

7.2. Termination for Cause. Comptroller reserves the right, in its sole discretion, to terminate this Contract in whole or in part, upon its determination that Contractor has failed to substantially perform under this Contract. Examples of such failure to substantially perform include:

1. Contractor fails to communicate with Comptroller as required under the Contract;

2. Contractor breaches the confidentiality requirements of the Contract;

3. Comptroller determines that Contractor or any of its employees have an unacceptable conflict of interest;

4. Comptroller determines that Contractor failed to substantially perform under the Contract, which determination shall specify the events resulting in Comptroller’s determination that Contractor failed to substantially perform under the Contract; or

5. Contractor fails to comply with any of the Standards of Performance of the Contract.

7.3. Termination for Convenience. Without limitation on Comptroller’s other rights under this Section, Comptroller may, in its sole discretion, terminate this Contract upon thirty (30) days written notice to Contractor. Such notice may be provided by facsimile or certified mail, return receipt requested and is effective upon Contractor’s receipt. Comptroller reserves the right to immediately and without prior notice, terminate this Contract, in whole or in part, if, in the sole judgment of Comptroller, and in good faith, Comptroller believes that it is in the best interests of the Comptroller or the State to do so.

7.4. No Liability on Termination. If this Contract is terminated for any reason, Comptroller and the State shall not be liable to Contractor for any damages, claims, losses, or any other amounts arising from or related to any such termination. In the event of termination of this Contract, Comptroller’s sole and maximum obligation shall be to authorize payment to Contractor for previously authorized services, performed in accordance with all requirements of this Contract, up to the termination date.

VIII. Confidentiality, Internal Revenue Service Data, and Public Information

8.1. Confidentiality.

1. Neither Contractor nor Contractor’s personnel shall disclose to anyone, directly or indirectly, any information designated by Comptroller as confidential or information accessed as a result of this Contract without prior written consent of Comptroller. Contractor and Contractor’s personnel shall comply with the provisions of the Nondisclosure Agreement, Exhibit D to the RFQ submitted with Contractor’s response to the RFQ, as well as the Confidential Treatment of Information Acknowledgment (“CTIA”) attached to and incorporated in this Contract as Attachment D. The CTIA must be signed by each individual who will require access to or be exposed to confidential information under this Contract.

2. Contractor shall be subject to Sections 111.006, 111.007, 151.027, and 171.706 of the Texas Tax Code regarding confidentiality as they apply to the types of taxes being examined.

8.2. Public Information. Notwithstanding any provisions of this Contract to the contrary, Contractor understands that Comptroller is bound by the provisions of the Texas Public Information Act and Attorney General Opinions issued under that statute. Within three (3) calendar days of receipt, Contractor will refer to Comptroller any third-party requests received directly by Contractor for information to which Contractor has access as a result of or in the course of performance under this Contract. Comptroller shall be the sole owner of all deliverables under this Contract. Contractor is required to make any information created or exchanged with Comptroller pursuant to this Contract and not otherwise excepted from disclosure under this Contract or the Texas Public Information Act available in a format that is accessible by the public at no additional charge to Comptroller. In order to comply with such requirement, any information created or exchanged with Comptroller shall be in Word, Excel, or PDF format, as applicable.

IX. Insurance and Bonds

9.1. Contractor represents and warrants that within ten (10) business days of receipt of notice of a tentative contract award it shall provide Comptroller with proof of coverage and represents and warrants that it shall maintain the following coverages required for the term of this Contract:

1. Blanket Employee Dishonesty Bond or Employee Dishonesty Coverage under a liability insurance policy with a minimum $25,000 of coverage for each individual who will provide services under this Contract. A rider or endorsement shall name Comptroller as loss payee or additional named insured under the respective bond or policy;

2. Standard Workers Compensation Insurance covering all individuals providing services under this Contract;

3. Commercial General Liability Insurance; $100,000 minimum each occurrence limit; $300,000 minimum aggregate limit; and

4. Professional Liability Insurance; $100,000 minimum each occurrence limit; $500,000 minimum aggregate limit.

9.2. Contractor represents and warrants that all coverages are with companies licensed in Texas, with “A” rating from A. M. Best Company and authorized to provide the required coverages. Contractor also represents and warrants that all of the above policies and bonds contain endorsements prohibiting cancellation except upon at least thirty (30) days prior notice to Comptroller. Contractor shall, within the time provided above, furnish proof to Comptroller of such coverage in the form of a certificate of insurance from Contractor’s insurance carrier or carriers (“Certificate”) indicating the above coverages. It is Contractor’s sole responsibility to ensure that Comptroller receives the requisite Certificate from Contractor or Contractor’s insurance carrier(s). The Certificate shall be addressed to Texas Comptroller of Public Accounts as the Certificate holder. The Certificate must list either the number of employees covered for the amount of $25,000 each or the names of all employees covered by the employee dishonesty coverage for the amount of $25,000 each. If Contractor is a sole proprietor without any other employees it shall not be necessary to obtain Worker’s Compensation coverage.

9.3. Contractor represents and warrants that it shall maintain the above coverages throughout the term of this Contract. Contractor’s failure to maintain the above coverages throughout the term of this Contract shall constitute a breach of Contract.

X. Indemnification

CONTRACTOR SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE STATE OF TEXAS AND COMPTROLLER, AND/OR THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR SUITS, AND ALL RELATED COSTS, ATTORNEY FEES, AND EXPENSES ARISING OUT OF, OR RESULTING FROM ANY ACTS OR OMISSIONS OF THE CONTRACTOR OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER FULFILLERS, OR SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE OF THIS CONTRACT AND ANY PURCHASE ORDERS ISSUED UNDER THIS CONTRACT. THE DEFENSE SHALL BE COORDINATED BY CONTRACTOR WITH THE OFFICE OF THE ATTORNEY GENERAL WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND CONTRACTOR MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM THE OFFICE OF THE ATTORNEY GENERAL. CONTRACTOR AND COMPTROLLER AGREE TO FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM.

XI. Dispute Resolution

11.1. Chapter 2260 of the Texas Government Code (“Chapter 2260”) prescribes dispute resolution processes for certain breach of contract claims applicable to certain contracts for goods and services. As required by Chapter 2260, Comptroller has adopted rules under Chapter 2260, codified at Title 34, §§1.360–1.387 of the Texas Administrative Code, and may adopt revisions to these rules throughout the term of this Contract, including any extensions. Contractor shall comply with such rules.

11.2. The dispute resolution process provided for in Chapter 2260 shall be used, as further described herein, by Comptroller and Contractor to attempt to resolve any claim for breach of Contract made by Contractor under this Contract:

1. Contractor’s claim for breach of this Contract that the parties cannot resolve in the ordinary course of business shall be submitted to the negotiation process provided in Chapter 2260. To initiate the process, Contractor shall submit written notice as required by Chapter 2260 to the Deputy Comptroller or his or her designee and all other representatives of Comptroller and Contractor otherwise entitled to notice under this Contract. Compliance by Contractor with Chapter 2260 is a condition precedent to the filing of a contested case proceeding under Chapter 2260.

2. The contested case process provided in Chapter 2260 is Contractor’s sole and exclusive process for seeking a remedy for an alleged breach of Contract by Comptroller if the parties are unable to resolve their disputes under subparagraph (A) of this Section.

3. Compliance with the contested case process provided in Chapter 2260 is a condition precedent to seeking consent to sue from the Legislature under Chapter 107, Civil Practice & Remedies Code. Neither the execution of this Contract by Comptroller nor any other conduct of any representative of Comptroller relating to this Contract shall be considered a waiver of sovereign immunity to suit.

11.3. For all other specific breach of Contract claims or disputes under this Contract, the following shall apply:

Should a dispute arise out of this Contract, Comptroller and Contractor shall first attempt to resolve it through direct discussions in a spirit of mutual cooperation. If the parties’ attempts to resolve their disagreements through negotiations fail, the dispute will be mediated by a mutually acceptable third party to be chosen by Comptroller and Contractor within fifteen (15) days after written notice by one of them demanding mediation under this Section. Contractor shall pay all costs of the mediation unless Comptroller, in its sole good faith discretion, approves payment of all or part of such costs. By mutual agreement, Comptroller and Contractor may use a non-binding form of dispute resolution other than mediation. The purpose of this section is to reasonably ensure that Comptroller and Contractor shall in good faith utilize mediation or another non-binding dispute resolution process before pursuing litigation. Comptroller’s participation in or the results of any mediation or another non-binding dispute resolution process under this Section or the provisions of this Section shall not be construed as a waiver by Comptroller of: 1) any rights, privileges, defenses, remedies or immunities available to Comptroller as an agency of the State or otherwise available to Comptroller; 2) Comptroller’s termination rights; or 3) other termination provisions or expiration dates of this Contract.

11.4. Notwithstanding any other provision of this Contract to the contrary, Contractor shall continue performance and shall not be excused from performance during the period any breach of Contract claim or dispute is pending under either of the above processes; however, Contractor may suspend performance during the pendency of such claims or disputes if Contractor has complied with all provisions of Section 2251.051 of the Texas Government Code, and such suspension of performance is expressly applicable and authorized under that law.

XII. Representations, Warranties, and General Provisions

12.1. Liability for Taxes. Contractor represents and warrants that it shall pay all taxes or similar amounts resulting from this Contract, including but not limited to, any federal, state, or local income, sales, or excise taxes of Contractor or its employees. Comptroller shall not be liable for any such taxes resulting from this Contract.

12.2. VetHUBs. Contractor represents and warrants that it shall comply with the Veteran Heroes United in Business (“VetHUB”) requirements.

12.3. Compliance with Applicable Laws; Amendments. Contractor shall comply with all laws, regulations, requirements, and guidelines applicable to a contractor providing services to the State as these laws, regulations, requirements, and guidelines currently exist and as they are amended throughout the term of this Contract. Comptroller reserves the right, in its sole discretion, to unilaterally amend this Contract throughout its term to incorporate any modifications necessary for Comptroller’s or Contractor’s compliance with all applicable state and federal laws, regulations, requirements, and guidelines.

Except as provided in this Section 12.3 and Section 12.20 of the Contract, this Contract may be amended only upon written agreement between Comptroller and Contractor; however, this Contract may not be amended so as to make it conflict with the laws of the State. Comptroller may issue purchase order change notices (“Purchase Order Change Notices”) for ordering and tracking purposes consistent with this Contract provided such Purchase Order Change Notices reference this Contract.

12.4. Texas Law; Venue. This Contract shall be governed by and construed in accordance with the laws of the State of Texas. The venue of any suit brought for any breach of this Contract is fixed in any court of competent jurisdiction of Travis County, Texas.

12.5. Time Limits. Time is of the essence in the performance of this Contract. Contractor shall strictly comply with all of the deadlines, requirements, and Standards of Performance for this Contract.

12.6. Assignments. Contractor may not assign or subcontract this Contract, in whole or in part, and may not assign or subcontract any right or duty required under it.

12.7. Partially Completed Work. No later than two (2) calendar days after Comptroller’s request, Contractor shall deliver to Comptroller all completed or partially completed work and any and all documentation or other products and results of these services. Failure to timely deliver such work or any and all documentation or other products and results of the services shall be considered a material breach of the Contract. Contractor shall not make or retain any copies of the work or any and all documentation or other products and results of the services without the prior written consent of Comptroller.

12.8. Federal, State, and Local Requirements. Contractor shall demonstrate on-site compliance with the Federal Tax Reform Act of 1986, Section 1706, amending Section 530 of the Revenue Act of 1978, dealing with issuance of Form W-2s to common law employees. Contractor is responsible for both Federal and State Unemployment insurance coverage and standard Worker’s Compensation Insurance coverage. Contractor shall comply with all Federal and State tax laws and withholding requirements. Comptroller shall not be liable to Contractor or its employees for any Unemployment or Workers’ Compensation coverage, or Federal or State withholding requirements. Contractor shall indemnify Comptroller and pay to Comptroller all costs, penalties, or losses resulting from Contractor’s omission or breach of this Section.

12.9. Severability Clause. In the event that any term, provision, covenant, or condition of this Contract, including any term, provision, covenant, or condition of the Nondisclosure Agreement, is later determined to be invalid, void, or unenforceable, then the remaining terms, provisions, covenants, and conditions of this Contract shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

12.10. Provision for Direct Deposit. The electronic funds transfer provisions of Texas law were codified in Section 403.016 of the Texas Government Code. Depending on eligibility under the law, certain payments from the State may be directly deposited into Contractor’s bank account or may be made by warrant. If Contractor is eligible for direct deposit and wishes to be paid by direct deposit, Contractor must complete the form titled “Vendor Direct Deposit Authorization” and return it as soon as possible to: Texas Comptroller of Public Accounts, Attention: Budget and Internal Accounting Division, Accounts Payable Section, LBJ State Office Building, 111 E. 17th Street, Austin, Texas 78774.

12.11. No Waiver. This Contract shall not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to Comptroller as an agency of the State or otherwise available to Comptroller. The failure to enforce or any delay in the enforcement of any privileges, rights, defenses, remedies, or immunities available to Comptroller under this Contract or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies, or immunities or be considered as a basis for estoppel. Comptroller does not waive any privileges, rights, defenses, remedies, or immunities available to Comptroller as an agency of the State or otherwise available to Comptroller by entering into this Contract or by its conduct prior to or subsequent to entering into this Contract. The modification of any privileges, rights, defenses, remedies, or immunities available to Comptroller must be in writing, must reference this Section, and must be signed by Comptroller to be effective, and such modification of any privileges, rights, defenses, remedies, or immunities available to Comptroller shall not constitute waiver of any subsequent privileges, rights, defenses, remedies, or immunities under this Contract or under applicable law.

12.12. Permits, Licenses. Contractor represents and warrants that it has obtained all necessary permits, licenses, easements, waivers, and permissions of whatsoever kind required for its performance and the performance of its employees under this Contract.

12.13. Merger. This Contract contains the entire Contract between Contractor and Comptroller relating to the rights granted and the obligations assumed in it. Any oral representations or modifications concerning this Contract shall be of no force or effect unless contained in a subsequent writing and signed by both parties.

12.14. Control; Ownership; Legal Proceedings. Contractor shall immediately notify Comptroller in writing of any actual or anticipated change in the control or ownership of Contractor and of any legal or administrative investigation or proceedings initiated against Contractor regardless of the jurisdiction from which such proceedings originate.

12.15. Refunds. Contractor will promptly refund or credit within thirty (30) calendar days any funds erroneously paid by Comptroller which are not expressly authorized under this Contract.

12.16. Independent Contractor. Contractor shall serve as an independent Contractor in providing services under this Contract. Contractor’s employees are not and shall not be construed as employees of Comptroller.

12.17. Limitation on Authority; No Other Obligations. Contractor shall have no authority to act for or on behalf of Comptroller or the State except as expressly provided for in this Contract; no other authority, power, use, or joint enterprise is granted or implied. Contractor may not incur any debts, obligations, expenses, or liabilities of any kind on behalf of Comptroller or the State.

12.18. No Other Benefits. Contractor shall have no exclusive rights or benefits other than those set forth herein.

12.19. Patent, Trademark, Copyright and Other Infringement Claims. Contractor shall indemnify, save, and hold harmless Comptroller and the State from and against claims of patent, trademark, copyright, trade secret, or other proprietary rights, violations, or infringements arising from Comptroller or Contractor use of or acquisition of any services or other items provided to Comptroller by Contractor or otherwise to which Comptroller has access as a result of Contractor’s performance under this Contract, provided that Comptroller shall notify Contractor of any such claim within a reasonable time of Comptroller receiving notice of any such claim. If Contractor is notified of any claim subject to this Section, Contractor shall notify Comptroller of such claim within five (5) working days of such notice. If Comptroller determines that a conflict exists between its interests and those of Contractor or if Comptroller is required by applicable law to select separate counsel, Comptroller shall be permitted to select separate counsel, and the reasonable costs of such Comptroller’s counsel shall be paid by Contractor. No settlement of any such claim shall be made by Contractor without Comptroller’s prior written approval. Contractor shall reimburse Comptroller and the State for any claims, damages, losses, costs, expenses, judgments, or any other amounts, including, but not limited to, attorneys’ fees and court costs arising from any such claim. Contractor represents that it has determined what licenses, patents, and permits are required under this Contract and has acquired all such licenses, patents, and permits.

12.20. Supporting Documents; Right to Audit; Independent Audits. Contractor shall maintain and retain supporting fiscal documents adequate to ensure that claims for Contract funds are in accordance with applicable Comptroller and State of Texas requirements. Contractor shall maintain all such documents and other records relating to this Contract and the State’s property for a period of seven (7) years after the date of submission of the final invoices or until a resolution of all billing questions, whichever is later. Contractor shall make available at reasonable times and upon reasonable notice, and for reasonable periods, all information related to the State’s property, such as work papers, reports, books, data, files, software, records, and other supporting documents pertaining to this Contract, for purposes of inspecting, monitoring, auditing, or evaluating by Comptroller, State of Texas or their authorized representatives. Contractor shall cooperate with auditors and other authorized Comptroller and State of Texas representatives and shall provide them with prompt access to all of such State’s property as requested by Comptroller or the State of Texas. By example and not as an exclusion to other breaches or failures, Contractor’s failure to comply with this Section shall constitute a material breach of this Contract. For purposes of this Section, the “State’s property” includes, but is not limited to, “Work” as defined in this Contract.

Comptroller may require, at Contractor’s sole cost and expense, independent audits by a qualified certified public accounting firm of Contractor’s books and records or the State’s property. The independent auditor shall provide Comptroller with a copy of such audit at the same time it is provided to Contractor. Comptroller retains the right to issue the request for Statement of Qualifications for the services of an independent certified public accounting firm under this Contract. In addition to and without limitation on the other audit provisions of this Contract, pursuant to Section 2262.154 of the Texas Government Code, the state auditor may conduct an audit or investigation of Contractor or any other entity or person receiving funds from the state directly under this Contract or indirectly through a subcontract under this Contract. The acceptance of funds by Contractor or any other entity or person directly under this Contract or indirectly through a subcontract under this Contract acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. Under the direction of the legislative audit committee, Contractor or other entity that is the subject of an audit or investigation by the state auditor must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. This Contract may be amended unilaterally by Comptroller to comply with any rules and procedures of the state auditor in the implementation and enforcement of Section 2262.154. In addition, Contractor shall ensure that this paragraph concerning the authority to audit funds received indirectly by subcontractors through Contractor and the requirement to cooperate is included in any subcontract it awards.

12.21. Retention of Records. Contractor shall retain all records, if any, not otherwise required to be delivered to Comptroller pertinent to the examinations performed under this Contract, including without limitation all financial records, supporting documents, and copies of all statistical records, examination work papers, and examination reports for a period of five (5) years from the later of: 1) termination of this Contract; or 2) until resolution of all examination findings arising out of examinations performed by Contractor. Contractor shall, during the periods set out immediately above, provide full access to all such records by Comptroller, the State, independent examiners, or other authorized persons.

12.22. Deceptive Trade Practices; Unfair Business Practices. Contractor represents and warrants that it has not been the subject of a Deceptive Trade Practices Act (“DTPA”) or any unfair business practice administrative hearing or court suit and that Contractor has not been found to be liable for such practices in such proceedings. Contractor certifies that it has no officers who have served as officers of other entities who have been the subject of a DTPA or any unfair business administrative hearing or court suit and that such officers have not been found to be liable for such practices in such proceedings.

12.23. Immigration. Contractor represents and warrants that it shall comply with the requirements of the Immigration Reform and Nationality Act (8 U.S.C. §1101 et seq.) and all subsequent immigration laws and amendments.

12.24. Equal Opportunity. Contractor represents and warrants that it shall comply with the Civil Rights Act in giving equal opportunity without regard to race, color, creed, sex or national origin.

12.25. Antitrust Affirmation. Contractor represents and warrants that, in accordance with Section 2155.005 of the Texas Government Code, neither Contractor nor any firm, corporation, partnership, or institution represented by Contractor, nor anyone acting for such firm, corporation or institution has (1) violated any provision of the Texas Free Enterprise and Antitrust Act of 1983, Chapter 15 of the Texas Business and Commerce Code, or the federal antitrust laws; or (2) communicated directly or indirectly the offer made to any competitor or any other person engaged in the same line of business as Contractor.

12.26. Conflicts of Interest.

A. General. Contractor represents and warrants that Contractor has no actual or potential conflicts of interest in providing services to Comptroller under this Contract and that Contractor’s provision of services under this Contract would not reasonably create an appearance of impropriety. Without limitation on the foregoing, other disclosures required under the RFQ and other prohibited work provisions of the RFQ, Contractor shall, throughout the term of this Contract, including the actual examination of taxpayers, comply with and provide all of the following:

1. Provide to Comptroller upon request a copy of Contractor’s most recent examination, if any, together with a full disclosure of any and all internal control weaknesses, if any;

2. Disclose and describe in detail Contractor’s most recent peer review, if any, stating the date of the review and irregularities, if any, and concluding comments;

B. Examined Taxpayers.

1. At any time during the term of this Contract, Contractor represents and warrants that neither Contractor nor any employee nor any subcontractor of Contractor authorized to perform examinations under the Contract shall:

a. own any type of debt or equity interest, or community property interest in another firm, business entity, or individual that has performed accounting, examining, management consulting, system design, tax services, or any other professional work for a designated taxpayer that has been examined by Contractor or an employee or subcontractor of Contractor under a Contract; or

b. receive any compensation whatsoever either as an employee or independent contractor with another firm, business entity, or individual that performed accounting, examining, management consulting, system design, tax services, or any other professional work for a designated taxpayer that has been examined by Contractor or employee of Contractor under a Contract; or

c. engage in any examination on behalf of Comptroller that may create any appearance of impropriety. Contractor shall notify Comptroller immediately upon learning of any potential or actual conflicts of interest.

2. Contractor and Contractor’s employees shall neither engage nor solicit in any manner, form, or media, the taxpayer as a client for accounting, examining, management consulting, system design, tax services, or any other professional work for a period of at least thirty six (36) consecutive calendar months from the date Comptroller’s assessment of tax due, denial of refund, issuance of a refund, or a “no change” becomes final.

C. Examinations. Contractor represents and warrants that Contractor will not perform accounting, examining, management consulting, or tax services for any taxpayer or any person or entity who is a subsidiary, parent, or any other affiliate of such taxpayer on which Contractor performed a tax compliance examination or special examination project, for a period of thirty six (36) consecutive calendar months following the later of:

1. the date Comptroller’s examination assessment of tax due becomes final;

2. the date a “No Change” examination becomes final;

3. the date a refund or denial of refund becomes final; or

4. the date Comptroller affirms in writing that the special examination project is complete and Contractor has reviewed the list of examinations to be completed as part of the package.

D. Referrals. Contractor represents and warrants that Contractor shall not recommend or suggest individual attorneys, law firms, accountants, accounting firms, consultants, or consulting firms to represent a designated taxpayer that has been examined by Contractor under a contract. Contractor further represents and warrants that Contractor shall not suggest a designated taxpayer that has been examined by Contractor under a Contract to another firm, business, entity, or individual from whom Contractor receives any compensation as an employee or independent contractor.

E. Failure to observe all conflict of interest provisions or to disclosure a potential conflict of interest or appearance of impropriety constitutes material breach and may result in immediate termination of this Contract.

12.27. Professional Conduct; Comptroller Guidelines. Contractor and its employees shall conduct themselves in a professional manner in all interactions with taxpayers and Comptroller personnel. Contractor and its employees shall be courteous, professional, reasonable, impartial, tactful, and honest in the performance of their duties under the Contract and in all interactions with Comptroller personnel. Comptroller acknowledges that during the term of this Contract, Contractor may also be engaged in employment on behalf of taxpayers (other than those taxpayers Contractor is assigned to examine as part of Contractor’s Final Examination Packages and subject to the conflict of interest restrictions contained herein) before the Comptroller (e.g. as a tax consultant to assist taxpayers in Comptroller audits, administrative proceedings, or court proceedings). Contractor acknowledges that its actions and the actions of its employees, whether as a Contractor under this Contract or as a consultant on behalf of taxpayers before the Comptroller during the term of this Contract, will be evaluated by the Contract Supervisor and Program Manager for compliance with Comptroller’s professional conduct standards.

12.28 Dealings with Public Servants Affirmation. Pursuant to Section 2155.003 of the Texas Government Code, Contractor represents and warrants that it has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with this Contract.

12.29 ADA and Accessibility Standards. Contractor represents and warrants that it shall comply with the requirements of the Americans with Disabilities Act of 1990, as amended (“ADA”).

12.30 Buy Texas Affirmation. As applicable, in accordance with Section 2155.4441 of the Texas Government Code, Contractor agrees that during the performance of a contract for services it shall purchase products and materials produced in Texas when they are available at a price and time comparable to products and materials produced outside Texas.

12.31. Drug Free Workplace. Contractor represents and warrants that it shall comply with the applicable provisions of the Drug-Free Workplace Act of 1988 and maintain a drug free work environment.

12.32. Felony Criminal Convictions. Contractor represents and warrants that neither Contractor nor its employees have been convicted of a felony criminal offense or that if such a conviction has occurred or occurs during the term of this Contract, Contractor will immediately fully advise Comptroller as to the facts and circumstances. Contractor has completed and returned the Criminal Conviction Certification form (Exhibit E to the RFQ).

12.33. Notices. Any written notices required under this Contract will be either by U.S. Mail, certified, return receipt requested, or hand delivery to Contractor at Contractor’s office address specified on the first page of this Contract or to Comptroller’s Operations & Support Legal Services Division, Contracts Section at Texas Comptroller of Public Accounts, 111 East 17th Street, Room 310C, Austin, Texas 78774. Notice shall be effective upon receipt by the affected party. Either party may change the designated notice address in this Section by written notification to the other party.

12.34. False Statements; Breach of Representations. By signature to this Contract, Contractor makes all the representations, warranties, guarantees, certifications, and affirmations included in this Contract. If Contractor signed the RFQ or this Contract with a false statement or it is subsequently determined that Contractor has violated any of the representations, warranties, guarantees, certifications, or affirmations included in this Contract, Contractor shall be in default under this Contract and Comptroller may terminate this Contract for cause and pursue other remedies available to Comptroller under this Contract and applicable law.

12.35. Force Majeure. Except as otherwise provided, neither Contractor nor Comptroller shall be liable to the other for any delay in or failure of performance of any requirement included in this Contract caused by force majeure. The existence of such causes of delay or failure shall extend the period of performance until after the causes of delay or failure have been removed provided the non-performing party exercises all reasonable due diligence to perform. Force majeure is defined as acts of God, war, fires, explosions, hurricanes, floods, failure of transportation, or other causes that are beyond the reasonable control of either party and that by exercise of due foresight such party could not reasonably have been expected to avoid, and which, by the exercise of all reasonable due diligence such party is unable to overcome. Each party must inform the other in writing with proof of receipt, within three (3) business days of the existence of such force majeure or otherwise waive this right as a defense.

12.36. Property Rights. For purposes of this Contract, the term “Work” is defined as all data, records, files, information, processes, policies, procedures, websites, work papers, work products, materials, approaches, designs, specifications, systems, software, programs, source code, documentation, methodologies, concepts, intellectual property, or other property developed, produced, or generated in connection with the services to be provided by Contractor. Comptroller and Contractor intend this Contract to be a Contract for services, and each considers the Work and any and all documentation or other products and results of the services to be rendered by Contractor to be a work made for hire. Contractor acknowledges and agrees that the Work (and all rights therein) belongs to and shall be the sole and exclusive property of Comptroller and the State.

If for any reason the Work would not be considered a work-for-hire under applicable law, Contractor does hereby sell, assign, and transfer to Comptroller, its successors and assigns, the entire right, title, and interest in and to all copyright and other intellectual property rights in and to the Work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the Work, and in and to all income, royalties, damages, claims, and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or future infringement based on the copyrights, and in and to all rights corresponding to the foregoing. Contractor agrees to execute all papers and to perform such other property rights as Comptroller may deem necessary to secure for Comptroller or its designee the rights herein assigned.

Contractor and Contractor’s employees shall have no rights of ownership of the Work and any documentation or other products and results of the services or any other property of Comptroller. Any property or Work not specifically scheduled in this Contract as property of Contractor shall constitute property of Comptroller.

In addition to compliance with the right to examination provisions of the Contract, Contractor must deliver to Comptroller, no later than…