ESBD_File_329629_Exhibit F.1_DPS Standard Terms and Conditions.pdf

STANDARD TERMS AND CONDITIONS

Department of Public Safety of the State of Texas

OGC Approved 4/20/2022

Table of Contents

ARTICLE 1, INTRODUCTION

1.1 GLOBAL DRAFTING CONVENTIONS

1.2 HEADINGS

1.3 AUTHORIZED REPRESENTATIVES

1.4 SEVERABILITY

1.5 APPLICABLE LAW; VENUE

ARTICLE 2, REMEDIES AND DISPUTES

2.1 TERMINATION

2.2 CURE; DISPUTE RESOLUTION

2.3 ROLLING ESTOPPEL

2.4 SURVIVAL OF OBLIGATIONS

2.5 NO WAIVER OF DEFENSES

2.6 FORCE MAJEURE

2.7 FORESEEABLE DELAY

2.8 NOTICES

2.9 NO LIABILITY FOR INCREASED COSTS OR DAMAGES

ARTICLE 3, AMENDMENTS AND CONTRACTOR CHANGES

3.1 AMENDMENTS

3.2 NO AMOUNTS PAID FOR UNAUTHORIZED

PERFORMANCE

3.3 NO CONFLICT WITH LAWS OF THE STATE OF

TEXAS 11

3.4 OPTION TO EXTEND THE INITIAL TERM OF THE

CONTRACT

3.5 OPTION TO EXTEND SERVICES PAST ALL

EXERCISED TERMS

3.6 CONTRACTOR CHANGES (INCLUDES

SUCCESSORS AND ASSIGNEES)

ARTICLE 4, INDEMNIFICATION

4.1 INDEMNIFICATION (GENERAL)

4.2 INDEMNIFICATION (INTELLECTUAL PROPERTY)

ARTICLE 5, CONTRACT PERFORMANCE

5.1 NO SUBSTITUTIONS

5.2 DELIVERY TIMES

5.3 TITLE AND RISK OF LOSS

5.4 RECALL NOTICE

5.5 TESTING; ACCEPTANCE; RETURN; REVOCATION

5.6 INSPECTION

5.7 PERSONNEL

5.8 WARRANTIES

5.9 SUSPENSION OF WORK

5.10 STOP-WORK ORDER

5.11 MONITORING CRITERIA

5.12 SUBCONTRACTS

5.13 WORK MADE FOR HIRE

5.14 DPS OWNERSHIP

5.15 OTHER CONTRACTS

5.16 INDEPENDENT CONTRACTOR

5.17 PAYMENTS

ARTICLE 6, PUBLICITY, MARKETING, AND PUBLIC

INFORMATION

6.1 NEWS RELEASES, ADVERTISEMENTS,

MARKETING, AND PUBLICITY

6.2 PUBLIC INFORMATION ACT

ARTICLE 7, FEDERAL, STATE, AND LOCAL LAWS, RULES,

AND REGULATIONS

7.1 DRUG-FREE WORKPLACE

7.2 DISCLOSURE OF INTERESTED PARTIES

7.3 BUY TEXAS

7.4 COMPLIANCE WITH STATE, FEDERAL, AND

LOCAL LAWS, RULES, AND REGULATIONS

7.5 APPLICABLE LAW AND CONFORMING

AMENDMENTS

7.6 TAXES; UNEMPLOYMENT; WORKERS

COMPENSATION

7.7 IMMIGRATION AND E-VERIFY

7.8 FRAUD, WASTE, OR ABUSE

7.9 RIGHT TO AUDIT

7.10 CONSTITUTIONAL AND STATUTORY

LIMITATIONS

ARTICLE 8, CERTIFICATIONS

8.1 REPRESENTATIONS AND CERTIFICATIONS;

FALSE STATEMENTS; CONTINUING DUTY TO AMEND,

SUPPLEMENT, AND CORRECT

8.2 BUSINESS CONTINUITY AND DISASTER RECOVERY PLAN

OGC Approved 4/20/2022

8.3 NOTICE UNDER TEX. GOV’T CODE § 2261.252

8.4 PROHIBITED USE OF APPROPRIATED OR OTHER

FUNDS UNDER CONTROL OF STATE AGENCY; LOBBYING

8.5 NON-DISCRIMINATION

8.6 EMPLOYEE NON-SOLICITATION

8.7 ANTITRUST AFFIRMATION

8.8 FELONY CRIMINAL CONVICTIONS

8.9 DPS BACKGROUND CHECK AND ID CARD

REQUIREMENTS

8.10 BOOKS AND RECORDS

8.11 LIMITATION ON AUTHORITY; NO OTHER

OBLIGATIONS

ARTICLE 1, INTRODUCTION

Any contract resulting from a DPS solicitation incorporates the following Standard Terms and Conditions. Subcontractors must also comply with these provisions.

1.1 GLOBAL DRAFTING CONVENTIONS

A. “Includes” and “including” are terms of enlargement and not of limitation or exclusive enumeration. Use of the terms does not create a presumption that components not expressed are excluded.

B. Any references to laws, rules, regulations, and guidance in the Contract are references as they exist at the time of execution and as they may be amended, changed, or supplemented during the life of the Contract.

1.2 HEADINGS

The headings, captions, and arrangements used in the Contract are, unless specified otherwise, for reference and convenience only and do not alter the interpretation of the Contract.

1.3 AUTHORIZED REPRESENTATIVES

A. Contractor must designate its authorized representative in its solicitation response but also no later than the effective date of the Contract. Contractor’s authorized representative may designate other people (such as a contract manager or project manager) to assist in the performance of certain obligations required by the Contract.

B. DPS’s authorized representative is the only person authorized to make or approve changes in any Contract requirements. If Contractor makes any change at the direction of any person other than the Director or his legally designated representatives (his Deputy Directors), DPS will consider the change to have been made without authority and no adjustment will be made in the Contract price to cover any increase in cost incurred as a result.

1.4 SEVERABILITY

The parties acknowledge that if a dispute between the parties arises out of the Contract or the subject matter of the Contract, including a dispute over possibly ambiguous language, they would want the court to interpret the Contract as follows:

A. With respect to any provision that it holds to be unenforceable, by changing that provision to the minimum extent necessary to make it enforceable or, if that change is not permitted by law, by disregarding that provision;

B. If an unenforceable provision is changed or disregarded in accordance with this section, by holding that the rest of the Contract will remain in effect as written;

C. By holding that any unenforceable provision will remain as written in any circumstances other than those in which the provision is held to be unenforceable; and

D. If changing or disregarding the unenforceable provision would result in failure of an essential purpose of the Contract, by holding the entire Contract unenforceable.

1.5 APPLICABLE LAW; VENUE

The Contract will be governed by and construed in accordance with the laws of the State of Texas. The venue of any suit arising under the Contract is fixed in any state court of competent jurisdiction in Travis County, Texas.

ARTICLE 2, REMEDIES AND DISPUTES

2.1 TERMINATION

The Contract may be terminated or cancelled in any of the following circumstances.

2.1.1 Termination with Notification and Opportunity to Cure

DPS will notify Contractor in writing of any failure, cause, or default if Contractor fails to carry out or comply with any requirements of the Contract (including any statement, affirmation, disclosure, certification, representation, or warranty in the Contract that is false, misleading, or erroneous in any material respect). DPS’s notification will demand that the failure, cause, or default be remedied within ten days. DPS will have the right to cancel the Contract upon ten days from written notice if Contractor fails to remedy such failure, cause, or default within the ten days’ period.

2.1.2 Termination for Unavailability of Funds

A. The parties understand and agree that the obligations of DPS and its liabilities under the Contract are subject to the availability of funds given to DPS: (1) through appropriations from the Texas Legislature, (2) through federal funds, or (3) both.

B. If DPS is unable to perform its obligations under the Contract as a result of the suspension, termination, or withdrawal of funding to DPS, the failure to fund DPS, or lack of sufficient funding of DPS for any activities or functions contained within the scope of the Contract, DPS may immediately terminate the Contract without prior notice and without penalty to or any liability whatsoever on the part of DPS, the State of Texas, and the United States, if these funds become unavailable to DPS. Contractor will have no right of action against DPS.

C. DPS will make its best efforts to provide reasonable written advance notice to Contractor. In the event of a termination under this section, Contractor must, unless otherwise mutually agreed upon in writing, cease all work immediately upon the effective date of termination, either on the particular order if an order is being terminated, or the Contract if the Contract is being terminated. DPS will be liable for payments limited only to the portion of work DPS authorized in writing and which Contractor has completed, delivered to DPS, and which has been accepted by DPS in writing in accordance with all requirements of the Contract. All such work must have been completed, tested, and accepted in writing, per the requirements of the Contract, prior to the effective date of termination.

2.1.3 Termination for Convenience

DPS reserves the right to terminate the Contract any time, in whole, or in part, without cost or penalty, by providing 30 days’ advance written notice of such termination to Contractor, if DPS determines that such termination is in the best interest of the State.

2.1.4 Termination by Mutual Agreement

The Contract may be terminated upon mutual written agreement.

2.1.5 Termination for Failure to Perform

A. The Contract may be terminated by DPS if Contractor fails to perform as agreed or is otherwise in default, without the necessity of complying with the requirements in the section entitled “Termination with Notification and Opportunity to Cure.” DPS will provide Contractor with written notice to terminate the Contract, which termination will become effective immediately upon Contractor’s receipt of the notice.

B. If Contractor fails to provide the deliverables or other performance in accordance with the provisions of the Contract, or fails to comply with any of the terms or conditions of the Contract, DPS may, upon written notice of default to Contractor, immediately terminate all or any part of the Contract. Termination is not an exclusive remedy, but will be in addition to any other rights and remedies provided in equity, by law or under the Contract.

C. DPS may exercise any other right, remedy, or privilege that may be available to it under applicable law of the State and any other applicable law or may proceed by appropriate court action to enforce the provisions of the Contract, or to recover damages for the breach of the Contract. The exercise of any of the foregoing remedies will not constitute a termination of the Contract unless DPS notifies Contractor in writing prior to the exercise of such remedy. Contractor must remain liable for all covenants and indemnities under the Contract. Contractor must be liable for all costs and expenses, including court costs, incurred by DPS with respect to the enforcement of any of the remedies listed in the Contract.

2.1.6 Termination for Listing on Federal Excluded Party List, the Terrorism List (Executive

Order 13224) or on the State of Texas Debarred Contractor List

DPS will have the absolute right to terminate the Contract without recourse as follows: (a) if Contractor becomes listed on the prohibited Contractor list authorized by Executive Order 13224 “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism,” published by the United States DPS of Treasury, Office of Foreign Assets Control; (b) if Contractor becomes suspended or debarred from doing business with the federal government as listed in the System for Award Management (SAM) maintained by the General Services Administration; or (c) if Contractor becomes listed on the Texas

Debarred Vendor List. DPS will provide Contractor with written notice to terminate the Contract, which termination will become effective immediately upon Contractor’s receipt of the notice.

2.1.7 Termination by Change of Law

DPS may immediately terminate the Contract, in whole or in part, without penalty to, or any liability whatsoever on the part of DPS, the State of Texas, and the United States if DPS or the subject matter of the Contract become subject to a legislative or regulatory change or the revocation of statutory or regulatory authority that would render the deliverables to be provided under the Contract impossible, unnecessary, void, substantially amended, or that would terminate the appropriations for the Contract. DPS is not required to provide 30 days’ written notice as termination under this section is immediate.

2.1.8 General Termination Provisions; All Contracts are Non-Exclusive

A. The termination of the Contract, under any circumstances, will not affect or relieve Contractor from any obligation or liability that may have been incurred under the Contract, and such cancellation by DPS will not limit any other right or remedy available to DPS at law or in equity.

B. The Contract does not grant Contractor a vested property right and Contractor has no guarantee of exclusivity. DPS reserves the right, in its sole discretion, to solicit or contract with other contractors for similar subject matter, services, or deliverables to those under the Contract at any time. Additionally, Contractor is not guaranteed any minimum amount of compensation.

C. DPS will not be considered in default or breach of the Contract, nor will it give rise to any liability whatsoever on the part of DPS whether such claims of Contractor are for compensation of anticipated profits, unabsorbed overhead, interest on borrowing, or for any other reason in the event of termination.

D. Contractor must, unless mutually agreed upon in writing, cease all work immediately upon the effective date of termination. DPS will be liable for payments limited only to the portion of the work DPS authorized in writing and which Contractor has completed, delivered to DPS, and which have been accepted by DPS. All such work will have been completed, per the Contract’s requirements, prior to the effective date of termination.

E. Contractor must deliver to DPS all completed, or partially completed work and any and all documentation or other products and results of these services no later than the first day after the termination of the Contract, or at DPS’s request. Failure to timely deliver such work or all documentation or other products and results of the services will be considered a material breach of the Contract. Contractor will not make or retain any copies of the work or any documentation or other products and results of the services without the prior written consent of DPS.

F. DPS reserves the right to recover reasonable costs, fees, expenses, and other amounts or damages available to DPS under the Contract or under applicable law, including, attorneys’ fees and court costs, if termination is at Contractor’s request or if termination is for cause. This right is in addition to any other remedies available to DPS under the Contract or applicable law. DPS reserves the right to pursue all applicable rights and remedies if the Contract is terminated for any reason and DPS expressly waives no such rights or remedies.

G. DPS reserves the right to cancel the Contract without notice and either re-solicit or re-award the Contract to the next best responsive and responsible contractor if Contractor defaults on the Contract. DPS will not consider the defaulting Contractor in the re-solicitation and DPS may not consider the defaulting Contractor in future solicitations for the same type of work, unless the specification or scope of work significantly changes. DPS will determine the period of suspension based on the seriousness of the default.

H. DPS and the State of Texas will not be liable to Contractor for any damages, claims, losses, or any other amounts arising from or related to any such termination if the Contract is terminated for any reason. However, Contractor may be entitled to the remedies provided in Tex. Gov’t Code Chapter 2260.

I. The transition duties of Contractor survive the termination of the Contract, regardless of the reason for the termination.

2.2 CURE; DISPUTE RESOLUTION

2.2.1 Further Opportunity to Cure

A. If an Event of Default of the type specified in section entitled “Termination with Notification and Opportunity to Cure” occurs and if Contractor reasonably believes that such Event of Default cannot be cured within the ten business days allowed in the section entitled “Inspection of Services” but that such Event of Default can be cured through a diligent, on-going, and conscientious effort on the part of Contractor, within a reasonable period not to exceed three months, then Contractor may, within the ten-day cure period, submit a detailed plan for curing the Event of Default to DPS.

B. DPS will promptly review Contractor’s plan for curing an Event of Default and may, at its discretion, allow Contractor to pursue such plan of cure.

C. DPS will communicate its decision in writing to Contractor.

D. DPS may not exercise its remedies hereunder with respect to such Event of Default while Contractor diligently, conscientiously, and timely undertakes to cure the Event of Default in accordance with the approved plan.

E. The ten-day time period will be tolled during the time the request was pending, if DPS does not allow Contractor an extension of the cure period.

2.2.2 Dispute Resolution

A. Any dispute arising under the Contract, which is not disposed of by mutual agreement between DPS and Contractor will be resolved as follows:

1. The dispute resolution process provided for in Tex. Gov’t Code Chapter 2260 must be used, as further described in this section, by Contractor to attempt to resolve all disputes or contract claims arising under the Contract.

2. Contractor’s claim for breach of the Contract that the parties cannot resolve in the ordinary course of business must be submitted to the negotiation process provided in Tex. Gov’t Code Chapter 2260, Subchapter B.

3. Contractor must initiate the process by submitting written notice, as required by Subchapter B, to the Procurement and Contract Services Director or designee, at 5805 North Lamar Blvd, Bldg. A, Austin, Texas 78752.

4. Said notice will specifically state that the provisions of the Tex. Gov’t Code Chapter 2260, Subchapter B, are being invoked, and will also be given to all other representatives of DPS and Contractor otherwise entitled to notice under the Contract.

5. Compliance by Contractor with the Tex. Gov’t Code Chapter 2260, Subchapter B, is a condition precedent to the filing of a contested case proceeding under Chapter 2260, Subchapter C.

6. The contested case process provided in Tex. Gov’t Code Chapter 2260, Subchapter C, is Contractor’s sole and exclusive process for seeking a remedy for an alleged breach of the Contract by DPS if the parties are unable to resolve a dispute under this subparagraph (A).

7. Compliance with the contested case process provided in the Tex. Gov’t Code Chapter 2260, Subchapter C, is a condition precedent to sue from the Legislature under Tex. Civ. Prac. & Rem. Code Chapter 107.

8. Neither the execution of the Contract by DPS nor any other conduct of any representative of DPS related to the Contract will be considered a waiver of sovereign immunity to suit.

B. In addition to complying with Tex. Gov’t Code Chapter 2260, Contractor must comply with DPS administrative rules published in 37 Tex. Admin. Code Chapter 34, Subchapter C, Mediation of Certain Contract Disputes.

C. Contractor must continue providing the deliverables as directed, in a diligent manner and without delay, and must conform to DPS directives, decisions, or orders, be governed by all applicable provisions of the Contract, unless directed otherwise in writing by DPS at all times during the course of the dispute resolution process.

Contractor may suspend performance during the pendency of such claim or dispute if Contractor has complied with all provisions of Tex. Gov’t Code § 2251.051 and such suspension of performance is expressly applicable and authorized under that law.

2.3 ROLLING ESTOPPEL

A. DPS will be conclusively deemed to have fulfilled its obligations under the Contract, unless DPS receives a deficiency report from Contractor within five business days of the occurrence of the alleged deficiencies and Contractor identifies specific deficiencies in DPS’s fulfillment of its obligations in that report. Deficiencies will be described in terms of how they have impacted the specific performance requirements of Contractor.

Contractor is estopped from claiming that a situation has arisen that might otherwise justify changes in the project timetable, the standards of performance under the Contract, or the project cost, if Contractor knew of that problem and failed to include it in the applicable report. The deficiency report will be sent to DPS’s Contract Monitor.

B. In the event Contractor identifies a situation in which DPS is impairing Contractor’s ability to perform for any reason, Contractor’s deficiency report will contain Contractor’s suggested solutions to the situation(s). These suggestions should be in sufficient detail so that the DPS Contract Monitor can make a prompt decision as to the best method of dealing with the problem and continuing the project in an unimpeded fashion.

2.4 SURVIVAL OF OBLIGATIONS

Termination of the Contract for any reason will not release Contractor from any liability or obligation set forth in the Contract that is expressly stated to survive any such termination or by its nature would be intended to be applicable following any such termination, including the provisions regarding confidentiality, indemnification, warranty, transition, records, audit, property rights, dispute resolution, invoice and fees verification, and any other provisions of the Contract that impose continuing obligations on either of the parties or that govern the rights and limitations of either of the parties after the expiration or termination of the Contract.

2.5 NO WAIVER OF DEFENSES

Nothing in the Contract will be construed as a waiver of the state’s sovereign immunity. The Contract will not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to the State of Texas. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities available to the State of Texas under the Contract or under applicable law will not constitute a waiver of such privileges, rights, defenses, remedies, or immunities or to be considered as a basis for estoppel. DPS does not waive any privileges, rights, defenses, or immunities available to DPS by entering into the Contract or by its conduct prior to or subsequent to entering into the Contract.

2.6 FORCE MAJEURE

Neither Contractor nor DPS will be liable for failure or delay to perform obligations under the Contract, which have become practicably impossible because of circumstances beyond the reasonable control of the applicable party. The existence of such causes of delay or failure will 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 natural disasters; acts of God; acts of terrorism; war; government acts or orders; epidemics, pandemics or outbreak of communicable disease; quarantines; national or regional emergencies; or any other cause, whether similar in kind to the foregoing or otherwise, beyond the party’s reasonable control. The applicable party must inform the other in writing, with proof of receipt, within five business days of the existence of such force majeure and actions taken to minimize the impact, or otherwise waive this right as a defense.

All delivery dates under the Contract affected by force majeure will be tolled for the duration of the force majeure event. When feasible, the parties agree not to cancel, but reschedule the pertinent obligations and deliverables for mutually agreed upon dates as soon as practicable after the force majeure condition ceases to exist.

2.7 FORESEEABLE DELAY

If a delay in delivery of a deadline or other performance under the Contract is foreseeable and the delay is not caused by a force majeure event, Contractor must give written notice to DPS.

DPS has the right, in its sole discretion, to extend the delivery date if DPS determines the reasons for the delay are acceptable to DPS. Contractor must keep DPS advised at all times of the status of the delay.

Contractor’s failure to perform under the Contract and failure to meet the requirements of the Contract, including Contractor delays not accepted by DPS, may result in DPS issuing a new solicitation or entering into another contract for the subject matter of the Contract.

Contractor must pay all costs to DPS due to a re-solicitation or contracting under this section.

2.8 NOTICES

Any notice required or permitted under the Contract will be directed to Contractor’s Project Manager and DPS’s Contract Administrator and will be deemed received: (1) When delivered in hand and a receipt granted; (2) Three days after it is deposited in the United States mail by certified mail, return receipt requested; or (3) When received if sent by confirmed facsimile or confirmed email.

Either of the parties may change its address or designated individual(s) to receive notices by giving the other party written notice as provided above, specifying the new address or individual and the date upon which it will become effective.

2.9 NO LIABILITY FOR INCREASED COSTS OR DAMAGES

DPS will not be liable to Contractor for any increased costs or expenses that may be incurred by Contractor, or for any other damages that may be suffered by Contractor as a result of any act or omission of any other contractor to the State of Texas or DPS.

ARTICLE 3, AMENDMENTS AND CONTRACTOR CHANGES

3.1 AMENDMENTS

DPS and Contractor may amend the Contract through a written amendment signed by an authorized signatory on behalf of the respective party.

3.2 NO AMOUNTS PAID FOR UNAUTHORIZED PERFORMANCE

Contractor will not receive compensation for performance not authorized under the Contract, including any performance prior to the effective date of a written Contract amendment signed by both parties. Any such performance is at the sole risk of Contractor.

3.3 NO CONFLICT WITH LAWS OF THE STATE OF TEXAS

Any subsequent addition to the solicitation or amended language to the Contract that conflicts with the laws of the State of Texas is void.

3.4 OPTION TO EXTEND THE INITIAL TERM OF THE CONTRACT

At its sole discretion, DPS may exercise the option to renew the term of the Contract by written notification to Contractor prior to the Contract’s expiration. If DPS exercises this option, the renewed Contract will include this option provision.

3.5 OPTION TO EXTEND PAST ALL EXERCISED OPTIONAL RENEWAL TERMS

DPS may require continued performance of any services within the scope and at the rates specified in the Contract. DPS reserves the right to extend the Contract by written notification to Contractor for no more than six-month period at the end of all exercised optional Contract renewal periods for the purpose of re-advertising the commodity or service, awarding a new Contract, or transitioning into a new Contract.

3.6 CONTRACTOR CHANGES (INCLUDES SUCCESSORS AND ASSIGNEES)

Contractor may not assign or transfer any interest in or duty under the Contract without the express, prior written consent of DPS, with DPS providing such consent at its sole discretion. An attempted assignment in violation of this provision is null and void. Any approved assignment will not relieve the assignor of any liability or obligation under the Contract.

Contractor must submit timely written notification to DPS of any changes in Contractor status, including changes in Contractor’s name, organizational structure, ownership, affiliated entities, principals, mergers, acquisitions, address, telephone number, facsimile number, or email address with an effective date of such change. Contractor must submit to DPS a copy of any “DBA” registration and any legal corporate name change filed with the Secretary of State.

Contractor must provide written notification to DPS of any contractor changes prior to the change; however, assignment of the Contract and performance under the Contract are limited as provided under the Contract.

Contractor must provide detailed information requested by DPS, including without limitation the tax identification number of the proposed new contractor. All written notifications of organizational change must include a detailed statement specifying the change and supporting documentation evidencing continued right of Contractor or successor entity, as applicable, to maintain its status as a party to the Contract.

Notwithstanding DPS’s receipt of written notification by Contractor under this section, DPS may, in its sole discretion, terminate the Contract due to any change that DPS believes materially alters Contractor’s ability to perform under the Contract in accordance with all terms and conditions.

DPS may require a novation agreement dependent upon the change, but especially in the event of a merger or acquisition. DPS may have to amend the Contract dependent upon the change.

ARTICLE 4, INDEMNIFICATION

4.1 INDEMNIFICATION (GENERAL)

CONTRACTOR MUST DEFEND, INDEMNIFY, AND HOLD HARMLESS THE STATE OF TEXAS AND

DPS, AND THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, CONTRACTORS,

ASSIGNEES, 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 CONTRACTOR OR ITS AGENTS, EMPLOYEES,

SUBCONTRACTORS, ORDER FULFILLERS, OR SUPPLIERS OF SUBCONTRACTORS IN THE

EXECUTION OR PERFORMANCE OF THE CONTRACT AND ANY PURCHASE ORDERS ISSUED

UNDER THE CONTRACT. THE DEFENSE MUST BE COORDINATED BY CONTRACTOR WITH THE

OFFICE OF THE TEXAS ATTORNEY GENERAL (OAG) WHEN TEXAS STATE AGENCIES ARE NAMED

DEFENDANTS IN ANY LAWSUIT AND CONTRACTOR MAY NOT AGREE TO ANY SETTLEMENT

WITHOUT FIRST OBTAINING THE CONCURRENCE FROM OAG. CONTRACTOR AND DPS AGREE

TO FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM.

4.2 INDEMNIFICATION (INTELLECTUAL PROPERTY)

CONTRACTOR MUST DEFEND, INDEMNIFY, AND HOLD HARMLESS DPS AND THE STATE OF

TEXAS FROM AND AGAINST ANY AND ALL CLAIMS,VIOLATIONS, MISAPPROPRIATIONS, OR

INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT, TRADE SECRET, OR OTHER

INTELLECTUAL PROPERTY RIGHTS OR OTHER INTANGIBLE PROPERTY, PUBLICITY, OR PRIVACY

RIGHTS OR IN CONNECTION WITH OR ARISING FROM: (1) THE PERFORMANCE OR ACTIONS OF

CONTRACTOR UNDER THE CONTRACT; (2) ANY DELIVERABLE, WORK PRODUCT, CONFIGURED

SERVICE, OR OTHER SERVICE PROVIDED UNDER THE CONTRACT; OR DPS’S USE OF OR

ACQUISITION OF ANY REQUESTED SERVICES OR OTHER ITEMS PROVIDED TO DPS BY

CONTRACTOR OR OTHERWISE TO WHICH DPS HAS ACCESS AS A RESULT OF CONTRACTOR’S

PERFORMANCE UNDER THE CONTRACT. CONTRACTOR AND DPS AGREE TO FURNISH TIMELY

WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM. CONTRACTOR WILL BE LIABLE TO

PAY ALL COSTS OF DEFENSE, INCLUDING ATTORNEYS’ FEES. THE DEFENSE WILL BE

COORDINATED BY CONTRACTOR WITH OAG WHEN TEXAS STATE AGENCIES ARE NAMED

DEFENDANTS IN ANY LAWSUIT AND CONTRACTOR MAY NOT AGREE TO ANY SETTLEMENT

WITHOUT FIRST OBTAINING THE CONCURRENCE FROM OAG. IN ADDITION, CONTRACTOR

WILL REIMBURSE DPS AND THE STATE OF TEXAS FOR ANY CLAIMS, DAMAGES, COSTS,

EXPENSES, OR OTHER AMOUNTS, INCLUDING ATTORNEYS’ FEES AND COURT COSTS, ARISING

FROM ANY SUCH CLAIM. IF DPS DETERMINES THAT A CONFLICT EXISTS BETWEEN ITS

INTERESTS AND THOSE OF CONTRACTOR OR IF DPS IS REQUIRED BY APPLICABLE LAW TO

SELECT SEPARATE COUNSEL, DPS WILL BE PERMITTED TO SELECT SEPARATE COUNSEL AND

CONTRACTOR WILL PAY ALL REASONABLE COSTS OF DPS’S COUNSEL.

ARTICLE 5, CONTRACT PERFORMANCE

5.1 NO SUBSTITUTIONS

Contractor may not substitute or cancel commodities or services without the prior written approval of an authorized representative of DPS.

5.2 DELIVERY TIMES

Contractor may only deliver during normal business hours only or as written into the solicitation, unless prior written approval for late delivery has been obtained from DPS’s authorized representative.

5.3 TITLE AND RISK OF LOSS

As required by state law, title and risk of loss for deliverables will not pass to DPS until DPS actually receives, takes possession, and accepts the deliverables at the point or points of delivery.

5.4 RECALL NOTICE

Upon discovery of any recall notice, Contractor must immediately advise DPS of all required replacements or changes to any equipment or hardware provided under the Contract or the withdrawal of any such equipment or hardware due to a safety hazard or recall regardless of the nature of it. Contractor must submit a written confirmation to the DPS Contract Monitor no later than 24 hours after any verbal notification.

5.5 TESTING; ACCEPTANCE; RETURN; REVOCATION

A. All samples requested in the solicitation will be subject to inspection and testing by DPS or the State of Texas. DPS reserves the right to test samples upon request and Vendor bears all costs of such testing.

B. After Contract award, but prior to payment, DPS may conduct acceptance testing on the commodities and services delivered under the Contract. If the delivered and installed items fail to meet the acceptance criteria or any other requirements, DPS may refuse to accept such items. Upon DPS’s acceptance that the commodities and services meet or exceed all Contract requirements, DPS will notify Contractor in writing that Contractor may submit an invoice to DPS. DPS reserves the right to revoke prior acceptance for, among other things, latent defects.

C. If relevant to the type of services provided under the Contract, Contractor must have a separate Production, Quality Assurance (QA), and User Acceptance (UAT) testing environment. Updates must be tested and approved by DPS prior to deployment to production. If incorporated, reference the exhibit entitled IT Standards and Requirements.

5.6 INSPECTION

A. DPS has the right to inspect and validate all commodities and services in the Contract, to the extent practicable at all times and places during the Contract. DPS will perform inspections in a manner that will not unduly interfere with Contractor’s performance of the Contract. Contractor must furnish, and must require subcontractors to furnish, at no increase in the Contract’s price, all reasonable assistance for the safe and convenient performance of these duties.

B. If any deliverables do not conform to the Contract’s requirements, DPS will require Contractor to perform the deliverables or services again in conformity with the Contract’s requirements, at no increase in the Contract’s amount, in addition to all other legal and equitable remedies.

C. DPS will, subject to limitations provided by law with respect to rights of privacy, have the right to reasonably prompt access and to examine all records of Contractor, including financial records, maintenance records, employee records including time, and attendance records generated by Contractor and its subcontractors in connection with performance of the Contract.

D. If subject to the outcome of an audit, it is determined that Contractor is in non-compliance with any provisions of the Contract or that money is owed to DPS by Contractor, then DPS will exercise its rights of recovery of money owed as authorized by the Contract.

E. If any services are non-compliant with the Contract’s requirements, Contractor will be notified describing specific areas of non-compliance. Contractor will have a ten-day period to file a written response detailing corrective action taken to address all such items of non-compliance. The response will include supporting documentation. Unless otherwise specified, or previously agreed to by DPS, the submission of a corrective action plan will not be accepted as corrective action. For all items of non-compliance satisfactorily resolved by agreement between Contractor and DPS, no further action regarding such items will be taken. If an item of non-compliance cannot be resolved between Contractor and DPS, and such item remains uncorrected for a period of ten days or longer after written notification to Contractor, then such item will be declared to be an “event of default.”

F. Contractor must provide entry at all times to DPS, the Public Safety Commission, or any authorized employee or agent for inspections and other official purposes. The Governor, members of the Legislature, and all other members of the Executive and Judicial Departments of the State of Texas, as well as any other persons designated by DPS, including the Office of the Inspector General, will be admitted to monitor the delivery of deliverables.

G. Contractor must provide and maintain all documentation pertaining to quality testing, acceptance of deliverables, maintenance and warranty records, inventories of equipment per location, and all reports necessary under the terms of the Contract, in a manner acceptable to DPS for the deliverables provided under the Contract. Complete records of all inspection work performed by Contractor must be maintained and made available to DPS during the Contract’s performance and for a period of seven years after the termination of the Contract.

5.7 PERSONNEL

5.7.1 Qualifications of Personnel

A. Contractor warrants that all personnel assigned to the Contract are Contractor employees, agents, or subcontractors and meet all qualifications as defined within the Contract to perform the work required.

B. DPS must approve Contractor’s selected upper level management personnel for administration of contracted services. DPS will not withhold approval unreasonably.

C. Contractor must assign all personnel identified in the Contract to complete all of its planned and assigned responsibilities in connection with performance of the Contract.

DPS will have the right to approve the assignment and replacement by Contractor of all personnel assigned to provide deliverables or to provide on-site representation of Contractor.

D. If DPS requests it, Contractor must provide the name of an employee, agent, or subcontractor working on the Contract and all previous and pending investigations and disciplinary actions.

5.7.2 Replacement of Personnel

A. Contractor must notify DPS before assigning a replacement individual for any of the personnel commitments identified in the Contract. Contractor must notify DPS of the proposed assignment, must introduce the individual to the appropriate DPS representatives, must provide a transfer of knowledge validation, and must provide to DPS a résumé and any other information about the individual reasonably requested by DPS. DPS reserves the right to interview the individual before granting approval.

Contractor must obtain prior written approval from DPS for any replacement personnel before beginning any work assignments.

B. DPS reserves the right to require Contractor to replace Contractor’s personnel (employees, agents, and subcontractors) whom DPS judges to be incompetent, careless, unsuitable, otherwise objectionable, or whose continued use DPS deems contrary to the best interests of DPS or the State of Texas. Before DPS issues a written request, DPS representatives and Contractor will discuss the circumstances of the proposed personnel replacement. Upon receipt of a written request from DPS’s Contract Administrator, Contractor will be required to proceed with the replacement. The replacement request will include the desired replacement date and the reason for the request. Contractor must use its best efforts to effect the replacement in a manner that does not degrade performance or quality. Contractor must also provide DPS with evidence of a sufficient transfer of knowledge to the proposed replacement.

C. Replacement of personnel, if approved by DPS, must be with personnel of equal or greater ability and qualifications. DPS will be the arbiter of whether the replacement personnel have equal or greater ability and qualifications than the personnel being replaced.

D. This provision will not give DPS the right to require Contractor to terminate any Contractor employee’s employment. Rather, this provision gives DPS the right to require Contractor to discontinue using particular personnel in the performance of deliverables for DPS.

5.7.3 Unauthorized Removal of Personnel

It is critical to the overall success of the project that Contractor not remove or reassign, without DPS’s prior written approval, any of the assigned personnel until the personnel have completed all of their planned and assigned responsibilities in connection with performance of Contractor’s obligations under the Contract. Without prior written approval from DPS, personnel must only be changed in the event of death, personal injury, debilitating illness, or termination of employment with Contractor. DPS will consider the unauthorized removal of personnel by Contractor as a material breach of the Contract and grounds for contract remedies, including termination.

5.8 WARRANTIES

5.8.1 Third-Party Warranties

If, under the Contract, Contractor procures any materials or products for DPS, Contractor must assign or otherwise transfer to DPS, or afford DPS the benefits of, any manufacturer’s warranty for such materials or products that Contractor receives. Contractor must not knowingly infringe the intellectual property or proprietary rights of any third party. Contractor or any subcontractor will not use or copy any intellectual property owned by a third party without paying any required license fees or royalties.

5.8.2 Contractor Warranties

Contractor and any subcontractor represent and warrant that it has the requisite qualifications, experience, personnel, and other resources to provide goods or services in the manner required by the Contract.

5.9 SUSPENSION OF WORK

A. DPS may order Contractor, in writing, to suspend, delay, or interrupt all or any part of the Contract for the period of time that the Contract Monitor determines appropriate for the convenience of DPS.

B. If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted:

1. By an act of the Contract Monitor in the administration of the Contract, or

2. By the Contract Monitor’s failure to act within the time specified in this Contact

(or within a reasonable time if not specified), an adjustment will be made for any increase in the cost of performance of the Contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption, and the Contract changed in writing accordingly.

C. A claim under this provision will not be allowed:

1. For any costs incurred more than 20 days before Contractor will have notified the Contract Administrator in writing of the act or failure to act involved (but this requirement will not apply as to a claim resulting from a suspension order); and

2. Unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of the suspension, delay, or interruption, but not later than the date of final payment under the Contract.

5.10 STOP-WORK ORDER

A. The Contract Administrator may at the request of DPS, at any time, by written order to

Contractor, require Contractor to stop all, or any part, of the work called for by the Contract for a period of up to 90 days after the order is delivered to Contractor, and for any further period to which the parties may agree. The order will be specifically identified as a stop-work order issued under this provision. Upon receipt of the order, Contractor must, at DPS’s expense, immediately comply with its terms and take all reasonable steps to minimize the incurrence of cost allocable to the work covered by the order during the period of work stoppage. Within a period of up to 90 days after a stop-work order is delivered to Contractor, or within any extension of that period to which the parties must have agreed, the Contract Administrator may either:

1. Cancel the stop-work order; or

2. Terminate the work covered by the order as provided in the stop-work order of this Contact.

B. If a stop-work order issued under this provision is canceled or the period of the order or any extension thereof expires, Contractor must resume work. DPS will make an equitable adjustment in the delivery completion schedule, the estimated cost, or both, and the Contract will be changed, in writing accordingly, if:

1. The stop-work order results in an increase in the time required for, or in Contractor’s cost properly allocable to, the performance of any part of the Contract; and

2. Contractor asserts its right to the adjustment within 30 days after the end of the period of work stoppage; provided that the Contract Administrator decides the facts justify the action, the Contract Administrator may receive and approve the claim submitted at any time before final payment under the Contract.

C. If a stop-work order is not canceled and the work covered by the order is terminated, the Contract Administrator may allow reasonable cost resulting from the stop-work order in arriving at the termination settlement.

D. An appropriate equitable adjustment may be made in any related contract of Contractor that provides for adjustment and is affected by any stop-work order under this provision. DPS will not be liable to Contractor for damages or loss of profits because of a stop-work order issued under this provision.

5.11 MONITORING CRITERIA

A. DPS will monitor the quality of Contractor’s performance under the Contract.

B. Contractor must cooperate fully with DPS in obtaining the requisite information needed to complete such audits and to assess the quality of Contractor’s performance.

C. Monitoring may include document reviews and on-site audits conducted by DPS. Such monitoring by DPS will not relieve Contractor of any of its obligations under the Contract.

D. The Contract Monitor and other DPS staff will provide written findings regarding non-compliant conditions, processes, procedures, and observations that could, if not addressed by Contractor, become an item of non-compliance.

5.12 SUBCONTRACTS

A. Contractor must assume full responsibility for all deliverables and performance under the Contract. DPS will consider Contractor to be the sole point of contact with regard to contractual matters, including payment of any charges under the Contract. If any part of the Contract is planned to be subcontracted, Contractor must include a list of all subcontractors, including the firm name, address, and contact person of each subcontractor, a complete description of the deliverables or other work to be subcontracted, financial statements for each subcontractor, and descriptive information concerning each subcontractor’s qualifications.

B. Contractor may not delegate any duties under the Contract to a subcontractor unless DPS has given prior, written consent to the delegation. DPS must approve all subcontractors and will require Contractor to replace any subcontractor found, either initially or based on performance, to be unacceptable in DPS’s opinion.

C. The management of any subcontractor will be the sole responsibility of Contractor, and failure by a subcontractor to perform will be deemed to be failure of Contractor.

Contractor must make all payments to subcontractors and suppliers. DPS will not direct payments for deliverables acquired in connection with the Contract other than to Contractor, nor will DPS release Contractor from having to perform any obligations under the Contract, notwithstanding the fact that a subcontractor may have been engaged by Contractor to perform those obligations.

D. Contractor will furnish to DPS copies of all subcontracts upon request. All subcontracts will include all applicable provisions contained in the Contract and any provisions required by law.

E. Contractor is solely responsible and accountable for the completion of all work for which Contractor has subcontracted. Should Contractor subcontract any of the commodities and services provided under the Contract, Contractor understands and acknowledges that in entering into such subcontracts, DPS is in no manner liable to any subcontractor of Contractor. In no event will this provision relieve Contractor of the responsibility for ensuring the commodities delivered and services rendered under all subcontracts are delivered and rendered in compliance with the Contract.

5.13 WORK MADE FOR HIRE

A. For the purposes of the Contract, the term “Work” is defined as all reports, statistical analyses, work papers, work products, materials, approaches, designs, specifications, systems, documentation, methodologies, concepts, research, materials, intellectual property or any other property prepared, created, developed, produced, or generated in connection with the Contract specifically for DPS and defined as Work. Work does not include that which was prepared, created, developed, produced, or generated prior to the Contract award date (such as Contractor’s preexisting assets, code, software, or COTS), but does include prior Work prepared, created, developed, produced, or generated specifically for DPS through any other or previous DPS contract with Vendor if there was Work in that contract (if, for example, Vendor is an incumbent with a contract for prior Work).

B. All Work performed under the Contract is made the exclusive property of DPS. All rights, title, and interest in and to said property will vest in DPS upon creation and will be deemed to be a Work for Hire and made in the course of the services rendered under the Contract. To the extent that title to any such Work may not, by operation of law, vest in DPS, or such Work may not be considered a Work Made for Hire, Contractor grants DPS a perpetual, irrevocable, fully paid, royalty-free, worldwide license to reproduce, create derivative works from, distribute, publicly display, publicly perform, use, make, have made, offer for sale, sell or otherwise dispose of, and import the Work, with the right to sublicense each and every right. DPS will have the right to obtain and to hold in its name all patents, copyrights, trademarks, registrations, or such other protection as may be appropriate to the subject matter, and any extensions and renewals. Contractor must give DPS or the State of Texas, as well as any person designated by DPS or the State of Texas, all assistance required to perfect the rights defined in the Contract without any charge or expense beyond those amounts payable to Contractor for services rendered under the Contract.

5.14 DPS OWNERSHIP

5.14.1 Rights to Data, Documents, and Computer Software (State Ownership) A. Any DPS-owned data, DPS-created data, and DPS-loaned data from other governmental entities, biographic data, demographic data, image data inclusive of fingerprints, photograph and signatures or any other data or metadata in any form acquired or accessed by Contractor in the performance of its obligations under the Contract will be the exclusive property of the State of Texas and all such data will be delivered to DPS by Contractor upon completion, termination, or…