Executed+CAFR+Technology+Contract.pdf

TECHNOLOGY CONTRACT: CAFR REPORTING COMPILATION

1. PARTIES

The parties to this contract (Contract) are the state of North Dakota, acting through its Office of Management and Budget, Fiscal Management Division (STATE), and Vertosoft, LLC, a Limited Liability Company having its principal place of business at 1602 Village Market Blvd, #215, Leesburg, VA 20175 (CONTRACTOR).

2. DEFINITIONS

a) CAFR - means Comprehensive Annual Financial Report

b) Control Environment - is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization.

c) Data - means any information provided to, or collected, generated, stored, or processed by the system. Data includes user identification information which may contain Data or from which the STATE’s Data may be ascertainable.

d) Data Breach - means any access, destruction, loss, theft, use, modification or disclosure of Data by an unauthorized party or that is in violation of Contract terms and/or applicable state or federal law.

e) Data Classification - means the process of defining data into relevant categories so the information has the appropriate controls in place to protect confidentiality, integrity, and availability based on the type of information.

f) Personally Identifiable Information (PII) - information about an individual maintained by an agency, including that 1) can be used to distinguish or trace an individual‘s identity, such as name, date; or (2) is linked or linkable to an individual, such as medical, educational, financial, and employment information.

g) Recovery Point Objective (RPO) - means the point in time to which Data can be recovered and/or systems restored when service is restored after an interruption. The Recovery Point Objective is expressed as a length of time between the interruption and the most proximate backup of Data immediately preceding the interruption. The RPO is detailed in the SLA.

h) Recovery Time Objective (RTO) - means the period of time within which information technology services, systems, applications and functions must be recovered following an unplanned interruption. The RTO is detailed in the SLA.

i) Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a provider’s infrastructure. The applications are accessible from various client devices through interfaces such as a web browser (e.g., web-based email), or a program interface. The consumer does not manage or control the underlying infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings. This definition is based on and consistent with National Institute of Standards and Technology (NIST) Special Publication 800-145.

j) Users – means contractors, subcontractors, outsourcing vendors, consultants and others who have a need to use the software for the benefit of STATE.

3. SCOPE OF WORK

CONTRACTOR, in exchange for the compensation paid by STATE under this Contract, shall provide a CAFR reporting compilation solution as described in Exhibit A – Scope of Work.

4. COMPENSATION

a. Contractual Amount

STATE shall pay for the accepted services provided by CONTRACTOR under this Contract an amount not to exceed $294,357.00 (Contractual Amount). The Contractual Amount shall be paid according to the Compensation Details document attached as Exhibit B.

The Contractual Amount is firm for the duration of this Contract and constitutes the entire compensation due CONTRACTOR for performance of its obligations under this Contract regardless of the difficulty, materials or equipment required, including fees, licenses, overhead, profit and all other direct and indirect costs or expenses incurred by CONTRACTOR except as provided by an amendment to this Contract.

b. Retainage All deliverable payments shall be subject to 10% retainage. Retained amounts due to CONTRACTOR shall be paid upon Final Acceptance.

c. Invoicing The final cost set forth on each invoice shall be equivalent to the cost for each deliverable or service as specified in the Scope of Work. CONTRACTOR shall not submit an invoice for any deliverable or service specified in the Scope of Work that STATE has not fully accepted.

d. Payment Payment made in accordance with this Compensation section shall constitute payment in full for the services and work performed and the deliverables provided under this Contract and CONTRACTOR shall not receive any additional compensation hereunder.

STATE shall make payment under this Contract within forty-five (45) calendar days after receipt of an approved invoice.

Payment of an invoice by STATE will not prejudice STATE’s right to object to or question that or any other invoice or matter in relation thereto. CONTRACTOR's invoice will be subject to reduction for amounts included in any invoice or payment made which are determined by STATE not to constitute allowable costs, on the basis of audits conducted in accordance with the terms of this Contract. At STATE’s sole discretion, all payments shall be subject to reduction for amounts equal to prior overpayments to CONTRACTOR.

For any amounts that are or will become due and payable to STATE by CONTRACTOR, STATE reserves the right to deduct the amount owed from payments that are or will become due and payable to CONTRACTOR under this Contract.

e. Travel CONTRACTOR acknowledges travel expenses are covered by the Contractual Amount and shall not invoice STATE for travel expenses.

f. Prepayment STATE will not make any advance payments before performance by CONTRACTOR under this Contract.

g. Payment of Taxes by State STATE is not responsible for and will not pay local, state, or federal taxes. STATE sales tax exemption number is E-2001. STATE will furnish certificates of exemption upon request by CONTRACTOR.

h. Taxpayer ID CONTRACTOR’s federal employer ID number is: 81-3911287.

i. Purchasing Card STATE may make a payment using a government credit card. CONTRACTOR will accept a government credit card without passing the processing fees for the government credit card back to STATE.

5. EQUIPMENT, MATERIALS, AND WORKSPACE – RESOURCES PROVIDED BY PARTIES

For periods during which the parties mutually agree that CONTRACTOR’s assigned staff is on site:

a. On site means any location in Bismarck, ND.

b. STATE agrees to provide an adequate working space, when required.

c. Equipment and software for on-site CONTRACTOR personnel is to be provided by

CONTRACTOR.

When STATE and CONTRACTOR agree that remote access to systems is required, STATE shall provide the necessary supervised remote access security to enable CONTRACTOR access to the appropriate STATE systems.

6. TERM OF CONTRACT

This Contract term (TERM) begins on its Effective Date, and ends on February 15, 2022.

a. No Automatic Renewal

This Contract will not automatically renew.

b. Extension Option

STATE reserves the right to extend this Contract for an additional period of time, not to exceed twelve months, beyond the current termination date of this Contract.

c. Renewal Option STATE may renew this Contract upon satisfactory completion of the initial Contract term.

STATE reserves the right to execute up to four options to renew this Contract under the same terms and conditions for a period of twelve months each.

d. Renegotiation Option In view of the fact that it is unknown how long the products and services will be used by STATE and that STATE will require ongoing maintenance and support of the products for as long as the system is operational, therefore after completion of the initial Term of this Contract including any extensions and renewals, STATE and CONTRACTOR may renegotiate this Contract upon mutual agreement of the parties.

7. TERMINATION

a. Termination by Mutual Agreement

This Contract may be terminated by mutual consent of both parties executed in writing.

b. Early Termination in the Public Interest

STATE is entering into this Contract for the purpose of carrying out the public policy of the State of North Dakota, as determined by its Governor, Legislative Assembly, Agencies, and Courts. If this Contract ceases to further the public policy of the State of North Dakota, STATE, in its sole discretion, by written notice to CONTRACTOR, may terminate this Contract in whole or in part.

c. Termination for Lack of Funding or Authority STATE, by written notice to CONTRACTOR, may terminate the whole or any part of this Contract under any of the following conditions:

1) If funding from federal, state, or other sources is not obtained and continued at levels sufficient to allow for purchase of the services or supplies in the indicated quantities or term.

2) If federal or state laws or rules are modified or interpreted in a way that the services are no longer allowable or appropriate for purchase under this Contract or are no longer eligible for the funding proposed for payments authorized by this Contract.

3) If any license, permit, or certificate required by law or rule, or by the terms of this Contract, is for any reason denied, revoked, suspended, or not renewed.

Termination of this Contract under this subsection is without prejudice to any obligations or liabilities of either party already accrued prior to termination.

d. Termination for Cause.

STATE may terminate this Contract effective upon delivery of written notice to CONTRACTOR, or any later date stated in the notice:

1) If CONTRACTOR fails to provide services required by this Contract within the time specified or any extension agreed to by STATE; or

2) If CONTRACTOR fails to perform any of the other provisions of this Contract, or so fails to pursue the work as to endanger performance of this Contract in accordance with its terms.

The rights and remedies of STATE provided in this subsection are not exclusive and are in addition to any other rights and remedies provided by law or under this Contract.

8. SUSPENSION FOR CONVENIENCE

STATE shall have the right at any time to order the services of CONTRACTOR fully or partially stopped for STATE’s own convenience. STATE shall provide CONTRACTOR written notice of the reason for and duration of the suspension. For the avoidance of doubt, STATE shall not be entitled to a refund for prepaid services during any period in which STATE stops or suspends services at its convenience. The schedule shall be delayed on a day-for-day basis to the extent STATE has issued a stop work order to CONTRACTOR and such stop work order is causing delays in completing services in accordance with the schedule. CONTRACTOR shall have the right to submit claims in accordance with the terms of this Contract as a result of stop work orders issued under this section.

9. FORCE MAJEURE

Neither party shall be held responsible for delay or default caused by fire, riot, terrorism, acts of God or war if the event is beyond the party’s reasonable control and the affected party gives notice to the other party promptly upon occurrence of the event causing the delay or default or that is reasonably expected to cause a delay or default.

10. INJUNCTIVE RELIEF

CONTRACTOR shall immediately report to STATE any and all unauthorized disclosures or uses of STATE’s Confidential Information or Proprietary Information of which CONTRACTOR or its staff is aware or has knowledge. CONTRACTOR acknowledges that any unauthorized publication or disclosure of STATE’s Confidential Information or Proprietary Information to others may cause immediate and irreparable harm to STATE. If CONTRACTOR should publish or disclose such Confidential Information or Proprietary Information without authorization, STATE shall immediately be entitled to injunctive relief or any other remedies to which it is entitled under law or equity without requiring a cure period. CONTRACTOR shall indemnify, defend, and hold harmless STATE from all damages, costs, liabilities, and expenses (including without limitation reasonable attorneys’ fees) caused by or arising from CONTRACTOR’s unauthorized use or disclosure of STATE’s Confidential Information or Proprietary Information. As a condition to these indemnity obligations, STATE will provide CONTRACTOR with prompt notice of any claim of which STATE is aware and for which indemnification shall be sought under this Contract and shall cooperate in all reasonable respects with CONTRACTOR in connection with any such claim.

11. RIGHT OF SETOFF DAMAGES

Amounts due STATE by CONTRACTOR, including liquidated or other damages, or claims for damages, may be deducted or set-off by STATE from any money payable to CONTRACTOR pursuant to this Contract.

12. RIGHT TO WITHHOLD AMOUNTS OTHERWISE DUE IF THE CONTRACTOR IS IN

BREACH

If CONTRACTOR fails to deliver Deliverables or to provide Services which satisfy CONTRACTOR’s obligations under this Contract, STATE shall have the right to withhold any and all payments due under this Contract. STATE may withhold any and all such payments due under this Contract to CONTRACTOR without penalty or work stoppage by CONTRACTOR, until such failure to perform is cured.

13. RIGHT TO REMEDIES AND CUMULATION OF RIGHTS

No remedy conferred by any of the specific provisions of this Contract is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given under this Contract, now or in the future existing at law or in equity or by statute or otherwise.

14. NON-WAIVER

Either party’s failure to exercise any of its rights under this Contract, its delay in enforcing any right, or its waiver of its rights on any occasion, shall not constitute a waiver of such rights on any other occasion. No course of dealing by either party in exercising any of its rights shall constitute a waiver thereof. No waiver of any provision of this Contract shall be effective unless it is in writing and signed by the party against whom the waiver is sought to be enforced.

15. INDEMNIFICATION

CONTRACTOR agrees to defend, indemnify, and hold harmless the state of North Dakota, its agencies, officers and employees (State), from and against claims based on the vicarious liability of the State or its agents, but not against claims based on the State’s contributory negligence, comparative and/or contributory negligence or fault, sole negligence, or intentional misconduct. This obligation to defend, indemnify, and hold harmless does not extend to professional liability claims arising from professional errors and omissions. The legal defense provided by CONTRACTOR to the State under this provision must be free of any conflicts of interest, even if retention of separate legal counsel for the State is necessary. Any attorney appointed to represent the State must first qualify as and be appointed by the North Dakota Attorney General as a Special Assistant Attorney General as required under N.D.C.C. § 54-12-

08. CONTRACTOR also agrees to reimburse the State for all costs, expenses and attorneys' fees incurred if the State prevails in an action against CONTRACTOR in establishing and litigating the indemnification coverage provided herein. This obligation shall continue after the termination of this Contract.

16. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION

a. CONTRACTOR, at its own expense, shall defend and indemnify STATE against claims that products furnished under this Contract infringe a United States patent or copyright or misappropriate trade secrets protected under United States law.

CONTRACTOR’S obligation shall not extend to a claim based on any alleged infringement arising from any: (a) additions, changes, or modifications to the services by or on behalf of STATE; (b) incorporation of the services or any component thereof into any other product or process; or (c) use of the services other than as permitted by this Contract.

b. As to any product which is subject to a claim of infringement or misappropriation, CONTRACTOR may (a) obtain the right of continued use of the product for STATE or (b) replace or modify the product to avoid the claim. If neither alternative is available on commercially reasonable terms then, at the request of CONTRACTOR, any applicable Software license and its charges will end, STATE will stop using the product, and will return the product to CONTRACTOR. Upon return of the product, CONTRACTOR will give STATE a credit for the price paid to CONTRACTOR, less a reasonable offset for use and obsolescence.

17. REPRESENTATIONS AND WARRANTIES

CONTRACTOR represents and warrants to STATE that neither CONTRACTOR, in connection with performing the services in performance of this Contract, nor the completed product delivered by CONTRACTOR, will infringe any patent, copyright, trademark, trade secret or other proprietary right of any person. CONTRACTOR further represents and warrants to STATE that it will not use any trade secrets or confidential or proprietary information owned by any third party in performing the services related to this Contract or in delivery of the completed product unless CONTRACTOR has the authority to license, use or provide those trade secrets or confidential or proprietary information to STATE. CONTRACTOR further represents and warrants to STATE that neither CONTRACTOR nor any other company or individual performing services pursuant to this Contract is under any obligation to assign or give any work done under this Contract to any third party.

18. INSURANCE

CONTRACTOR shall secure and keep in force during the term of this Contract and CONTRACTOR shall require all subcontractors, prior to commencement of an agreement between CONTRACTOR and the subcontractor, to secure and keep in force during the term of this CONTRACT, from insurance companies, government self-insurance pools or government self-retention funds, authorized to do business in North Dakota, the following insurance coverages:

a. Commercial general liability, including premises or operations, contractual, and products or completed operations coverages (if applicable), with minimum liability limits of $1,000,000 per occurrence

b. Workers compensation coverage meeting all statutory requirements. The policy shall provide coverage for all states of operation that apply to the performance of this Contract

c. Employer’s liability or “stop gap” insurance of not less than $1,000,000 as an endorsement on the workers compensation or commercial general liability insurance

The insurance coverages listed above must meet the following additional requirements:

a. Any deductible or self-insured retention amount or other similar obligation under the policies shall be the sole responsibility of the CONTRACTOR.

b. This insurance may be in policy or policies of insurance, primary and excess, including the so-called umbrella or catastrophe form and must be placed with insurers rated “A-” or better by A.M. Best Company, Inc., provided any excess policy follows form for coverage.

Less than an “A-” rating must be approved by the State. The policies shall be in form and terms approved by the State.

c. The duty to defend, indemnify, and hold harmless the State under this agreement shall not be limited by the insurance required in this agreement.

d. The state of North Dakota and its agencies, officers, and employees (State) shall be endorsed on the commercial general liability policy, including any excess policies (to the extent applicable), as additional insured. The State shall have all the benefits, rights and coverages of an additional insured under these policies that shall not be limited to the minimum limits of insurance required by this agreement or by the contractual indemnity obligations of the CONTRACTOR.

e. A Waiver of Subrogation” waiving any right to recovery the insurance company may have against the State.

f. CONTRACTOR shall furnish a certificate of insurance to the undersigned STATE representative prior to commencement of this agreement. All endorsements shall be provided as soon as practicable.

g. Failure to provide insurance as required in this agreement is a material breach of contract entitling STATE to terminate this agreement immediately.

h. CONTRACTOR shall provide at least 30 day notice of any cancellation or material change to the policies or endorsements. CONTRACTOR shall provide on an ongoing basis, current certificates of insurance during the term of the Contract. A renewal certificate will be provided 10 days prior to coverage expiration.

19. WORKS FOR HIRE

CONTRACTOR acknowledges that all work(s), specifically and individually created for STATE (which in no event shall include the SaaS or any intellectual property owned by CONTRACTOR or its subcontractors prior to execution of the Contract), under this Contract is "work(s) for hire" within the meaning of the United States Copyright Act (Title 17 United States Code) and hereby assigns to STATE all rights and interests CONTRACTOR may have in the work(s) it prepares under this Contract, including any right to derivative use of the work(s).

20. WORK PRODUCT

All work product, equipment or materials specifically created for STATE or purchased by STATE under this Contract belong to STATE and must be immediately delivered to STATE at STATE'S request upon termination of this Contract. For the avoidance of doubt, under no circumstance or event shall the SaaS be considered work product, equipment, or material created for or purchased by STATE that is subject to this Section 20.

21. TECHNOLOGY STANDARDS

CONTRACTOR shall comply with applicable STATE enterprise architecture technology standards. These standards can be found on STATE’s website at http://www.nd.gov/itd/standards.

22. PERSONNEL

a. STATE will designate a Project Manager to serve as the primary project manager for this

Contract. If, during the course of this Contract, it becomes necessary for STATE to change the person assigned as STATE’s Project Manager, STATE will notify CONTRACTOR in writing, pursuant to Notice section of this Contract.

b. Unless STATE otherwise notifies CONTRACTOR, STATE’s Project Manager shall carry out STATE’s administrative and management functions under this Contract, shall be responsible for acceptance of the Contract deliverables, and shall provide support and overall direction to CONTRACTOR.

c. CONTRACTOR will designate a Project Manager and provide individuals to meet the requirements and accomplish the work as stated in this Contract including any mutually agreed upon Scope of Work.

http://www.nd.gov/itd/standards

d. CONTRACTOR agrees and understands that STATE’s execution of this Contract is predicated, in part and among other considerations, on the utilization of the specific individuals and personnel qualifications as identified; primary being Tabitha Wendlboe and Scott Paasch. CONTRACTOR shall utilize commercially reasonable efforts to maintain such assignments. Notwithstanding the foregoing, said assignments are subject to change at any time as a result of, but not limited to, changes in employment status, personnel realignment and reorganization, or changes to an individual's title, role, or responsibilities.

Therefore, CONTRACTOR agrees that:

1) Prior to assignment of personnel, CONTRACTOR shall obtain written approval from

STATE for all personnel to be assigned to this project

2) The personnel assigned must have the knowledge necessary to complete requirements as defined in this Contract.

3) CONTRACTOR shall warrant that all personnel assigned to perform tasks in response to this Contract will remain assigned for the agreed-upon length of time.

4) No replacement, reassignment or substitution of any assigned individuals and personnel qualifications shall be made without the prior written approval of STATE and that such replacement, reassignment or substitution shall be made at no additional cost to STATE.

5) Any substitution made pursuant to this paragraph must be of equal or higher skills, knowledge, and abilities than those personnel originally proposed, and that STATE’s approval of a substitution is not construed as an acceptance of the substitution’s performance potential. STATE agrees that an approval of a substitution will not be unreasonably withheld.

e. Upon request by STATE, CONTRACTOR shall replace any CONTRACTOR personnel that STATE determines, in its sole discretion, to be unable to perform the responsibilities of this Contract acceptably, e.g., inappropriate or unprofessional personal conduct, professional inabilities, etc.

f. STATE's working hours are Monday through Friday from 8:00 AM until 5:00 PM (CST or CDT) with one hour for lunch. STATE Project Manager may approve alternate work schedules.

g. According to STATE policy, STATE personnel are only obligated to work a forty-hour workweek, Monday through Friday, and are allowed reasonable vacation, sick and educational absences.

h. CONTRACTOR’s personnel are not expected to work on State holidays or other mandatory leave days.

i. CONTRACTOR, upon request from STATE, will certify employees, contracted staff, subcontractors, or other individuals working under this Contract have passed a background screening performed by the CONTRACTORCONTRACTOR agrees to be responsible for all costs associated with any background checks carried out pursuant to this paragraph.

23. PROJECT MANAGEMENT

a. Reporting CONTRACTOR’s Project Manager shall deliver to STATE’s Project Manager, every other week or as agreed upon, reports of CONTRACTOR’s progress on the project and meeting the objective/deliverables as stated in the Scope of Work. Each report must contain a description of the current status of the project, the tasks on which time was spent, the estimated progress to be made in the next reporting period, and the problems encountered the proposed solutions to them and their effect, if any, on the project budget/schedule.

b. Integrated Change Control Process CONTRACTOR and STATE will utilize an integrated change control process to manage changes during the life of a project.

1) A change request must be in writing to document the potential change. The write-up for the proposed change must be submitted to CONTRACTOR and STATE’s project managers who will in turn provide it to relevant parties for assessment.

2) All change requests will be logged and tracked. STATE’s project manager will record the request in the project repository and will update the repository throughout the process.

3) The change will be reviewed and, if acceptable to STATE, CONTRACTOR will submit to STATE an estimate of the impact to cost, schedule, scope, and quality.

4) CONTRACTOR will continue performing the services in accordance with the original Contract unless otherwise agreed upon by STATE’s project manager. Work shall not commence on any new activities related to the change request until all parties agree in writing.

5) CONTRACTOR’s project manager and STATE’s project manager will adapt the Project Management Plan to incorporate approved changes.

6) Each change request duly authorized in writing by the parties shall be incorporated into and considered part of this Contract.

7) During the course of this Contract, if CONTRACTOR determines or could reasonably determine any STATE actions or directions constitute a requirement to perform additional work, CONTRACTOR shall notify STATE within thirty (30) calendar days that STATE has requested CONTRACTOR to perform additional work in the form of a change request utilizing the process above. CONTRACTOR understands that it waives the right to request additional time and reimbursable costs if CONTRACTOR fails to notify STATE within thirty (30) calendar days of determining or reasonably being able to determine that any STATE actions or directions constitute a requirement to perform additional work under this Contract.

c. Deliverable Acceptance

1) Upon completion of a deliverable, CONTRACTOR will furnish STATE with the deliverable and associated documentation, the expected performance, and agreed upon Acceptance Criteria.

2) After receipt of items in Paragraph 26(c)(1), STATE will have five (5) working days or a different period of time as is agreed to by the parties, in which to accept or reject each item in writing. STATE will accept by signature. If STATE rejects it, STATE will specify in writing its grounds for rejection and CONTRACTOR shall use its best efforts to revise any issues for the deliverables to be acceptable to STATE within the following five (5) working days. If STATE rejects it a second time, STATE will have the option of repeating the procedure as described in this acceptance statement above, escalating the issue to the Executive Steering Committee, or terminating this Contract upon written notice to CONTRACTOR.

d. Final Acceptance

1) The successful completion of all deliverables as stated in the Scope of Work in accordance with the deliverable acceptance process AND

2) The final delivered product fully implemented in STATE’s live production environment

AND

3) STATE has sixty (60) calendar days thereafter in which to accept or reject it in writing.

If STATE rejects it, STATE shall specify in writing its grounds for rejection and CONTRACTOR shall use its best efforts to make the product conform to the requirements of this Contract as soon as possible and at no additional cost to STATE.

CONTRACTOR shall continue to use its best efforts to make the product conform to the requirements of this Contract until STATE accepts the product or terminates this Contract upon written notice to CONTRACTOR.

24. PRODUCT CONFORMITY

Intentionally omitted.

25. WARRANTY

CONTRACTOR shall provide a 30 day warranty upon Final Acceptance.

26. SOFTWARE LICENSE

All ownership rights to CONTRACTOR’s software provided to STATE under this Contract (intellectual property owned by CONTRACTOR prior to performance of this Contract) shall remain with CONTRACTOR. As between STATE and CONTRACTOR (and, to the extent applicable, CONTRACTOR’s subcontractor(s)), STATE is, and will remain, the owner of all Data. With the exception of a limited license granted to CONTRACTOR and its contractors to use Data solely for the purpose of performing the services, CONTRACTOR acquires no right, title, or interest from STATE or its Users to Data, including any intellectual property rights therein. Any reports or documents generated through STATE’s use of the SaaS in accordance to this Agreement will be owned by STATE. If such reports or documents include any pre-existing intellectual property owned by CONTRACTOR or its subcontractors, CONTRACTOR hereby grants to Customer, a perpetual, nonexclusive, royalty-free license to copy, modify, create derivative works of and distribute, license and sublicense such pre-existing intellectual property to the extent made a part of Customer’s reports or documents. To the extent CONTRACTOR utilizes subcontractors, as between STATE and the applicable subcontractor, STATE shall acquire those ownership rights set forth in an end user license agreements by and between a subcontractor and STATE, which shall be consistent with those terms herein.

27. SOFTWARE AS A SERVICE (SAAS) AND SERVICE LEVEL AGREEMENT (SLA)

The terms and service level obligations are set forth in Exhibit C Software as a Service (SaaS) Service Level Agreement (SLA) are made a part of this Contract through its reference here.

CONTRACTOR shall provide Subscription Services, including software/hardware updates and technical support services for the Subscription Services pursuant to this Contract commencing at the end of the warranty period. CONTRACTOR and STATE shall negotiate the terms and price of such services. CONTRACTOR warrants that it will continue to offer Subscription Services for the product(s) for a minimum of five (5) years from the date of final acceptance of any software/product update.

a. Subscription Services:

1) The service is based on an unlimited number users.

2) Service shall be extended to any Users who have a need to use the SaaS for the benefit of STATE.

3) There shall be no limit on the number of machines, number of locations, or size of processors on which STATE can operate the service.

4) If CONTRACTOR reduces or replaces the functionality contained in the software and provides this functionality as a separate or renamed product, then STATE shall be entitled to usage of such software product at no additional fees.

b. Subscription Period The subscription period begins on the day user accounts are provisioned for the STATE and continues on an annual basis if the Contract is renewed.

c. Subscription Fee Cap CONTRACTOR agrees that any change to the annual Services fee may increase by not more than the lower of 3% or Consumer Price Index (CPI). The rates shall be adjusted in accordance with the index titled “All Urban Consumers (CPI-U). for the U.S. City Average.

All Items 1982-84=100”, prepared by the U.S. Bureau of Labor Statistics.

d. Right to Modify or Cancel Services STATE may choose to cancel Subscription Services at this Contract’s next renewal date upon thirty (30) calendar days’ notice to CONTRACTOR.

28. SOFTWARE AUDIT

CONTRACTOR may, upon sixty (60) calendar days’ notice to STATE, but not more frequently than once per year, either request a signed certification by an officer of STATE verifying that the software is being used in accordance with the terms of this Contract or audit STATE’s use of the software to ensure compliance with the terms and conditions of this Contract. Any such audit shall be conducted at CONTRACTOR’s expense during regular business hours at STATE’s offices and shall not unreasonably interfere with STATE’s business activities.

CONTRACTOR shall provide documentation to STATE defining the scope of the audit not less than thirty (30) calendar days prior to the audit. STATE shall have sixty (60) calendar days to review CONTRACTOR’s audit findings. If an audit reveals that STATE’s use of the Software exceeds the use permitted hereunder, then CONTRACTOR may invoice STATE for the applicable additional amounts based on the price agreement between the parties as of the date of completion of the audit.

29. NOTICE

All notices or other communications required under this Contract must be given by registered or certified mail and are complete on the date postmarked when addressed to the parties at the following addresses:

STATE CONTRACTOR

Rachel Kmetz Chet Hayes Fiscal Management - CAFR CTO 600 East Boulevard Ave, Dept 110 1602 Village Market Blvd. #215 Bismarck, ND 58505 Leesburg, VA 20175

Notice provided under this provision does not meet the notice requirements for monetary claims against STATE found at N.D.C.C § 32-12.2-04.

30. CONFIDENTIALITY

CONTRACTOR shall not use or disclose any information it receives from STATE under this Contract that STATE has previously identified as confidential or exempt from mandatory public disclosure except as necessary to carry out the purposes of this Contract or as authorized in advance by STATE. STATE shall not disclose any information it receives from CONTRACTOR that CONTRACTOR has previously identified as confidential and that STATE determines in its sole discretion is protected from mandatory public disclosure under a specific exception to the North Dakota public records law, N.D.C.C. ch. 44-04. The duty of STATE and CONTRACTOR to maintain confidentiality of information under this section continues beyond the Term of this Contract.

31. COMPLIANCE WITH PUBLIC RECORDS LAWS

CONTRACTOR understands that, in accordance with this Contract’s Confidentiality section of this Contract, STATE must disclose to the public upon request any records it receives from CONTRACTOR. CONTRACTOR further understands that any records obtained or generated by CONTRACTOR under this Contract may, under certain circumstances, be open to the http://www.legis.nd.gov/cencode/t32c12-2.pdf http://www.legis.nd.gov/cencode/t44c04.pdf public upon request under the North Dakota public records law. CONTRACTOR agrees to contact STATE promptly upon receiving a request for information under the public records law and to comply with STATE’s instructions on how to respond to the request.

32. INDEPENDENT ENTITY

CONTRACTOR is an independent entity under this Contract and is not a STATE employee for any purpose, including the application of the Social Security Act, the Fair Labor Standards Act, the Federal Insurance Contribution Act, the North Dakota Unemployment Compensation Law and the North Dakota Workforce Safety and Insurance Act. CONTRACTOR retains sole and absolute discretion in the manner and means of carrying out CONTRACTOR’s activities and responsibilities under this Contract, except to the extent specified in this Contract.

33. ASSIGNMENT AND SUBCONTRACTS

CONTRACTOR may not assign or otherwise transfer or delegate any right or duty without STATE’s express written consent, provided, however, that CONTRACTOR may assign its rights and obligations hereunder in the event of a change of control or sale of all or substantially all of its assets related to this Contract, whether by merger, reorganization, operation of law, or otherwise. Should Assignee be a business or entity with whom STATE is prohibited from conducting business, STATE shall have the right to terminate without cause.

CONTRACTOR may enter into subcontracts provided that any subcontract acknowledges the binding nature of this Contract and incorporates this Contract, including any attachments.

CONTRACTOR is solely responsible for the performance of any subcontractor with whom CONTRACTOR contracts. CONTRACTOR does not have authority to contract for or incur obligations on behalf of STATE.

34. SPOLIATION – NOTICE OF POTENTIAL CLAIMS

CONTRACTOR shall promptly notify STATE of all potential claims that arise or result from this Contract. CONTRACTOR shall also take all reasonable steps to preserve all physical evidence and information that may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and grants to STATE the opportunity to review and inspect such evidence, including the scene of an accident.

35. MERGER AND MODIFICATION, CONFLICT IN DOCUMENTS

This Contract, including the following documents, constitutes the entire agreement between the parties. There are no understandings, agreements, or representations, oral or written, not specified within this Contract. This Contract may not be modified, supplemented or amended, in any manner, except by written agreement signed by both parties.

Notwithstanding anything herein to the contrary, in the event of any inconsistency or conflict among the documents making up this Contract, the documents must control in this order of precedence:

a. The terms of this Contract as may be amended;

b. STATE’s Best and Final Offer to Request for Proposal (“RFP”) number 110.7-20-023, dated August 6, 2020;

c. STATE’s Solicitation Amendment #2 to Request for Proposal (“RFP”) number 110.7-20-

023, dated July 7, 2020;

d. STATE’s Solicitation Amendment #1 to Request for Proposal (“RFP”) number 110.7-20-

023, dated June 1, 2020;

e. STATE’s Request for Proposal (“RFP”) number 110.7-20-023, dated May 14, 2020;

f. CONTRACTOR’s Best and Final Offer dated August 12, 2020 in response to RFP number 110.7-20-023.

g. CONTRACTOR’s proposal dated July 15, 2020 in response to RFP number 110.7-20-023.

All automated end-user agreements (e.g., click-through, shrink-wrap, or browse-wrap) are specifically excluded and null and void. Clicking shall not represent acknowledgement or agreement to any terms and conditions contained in those agreements.

36. UNANTICIPATED AMENDMENTS

If additional work is required within the scope of this Contract due to a legitimate unforeseen circumstance, STATE shall provide CONTRACTOR a written description of the additional work and request CONTRACTOR to submit a proposal for accomplishing the scope of work.

CONTRACTOR will not commence additional work until all parties agree in writing.

37. SEVERABILITY

If any term of this Contract is declared to be illegal or unenforceable by a court having competent jurisdiction, the validity of the remaining terms is unaffected and, if possible, the rights and obligations of the parties are to be construed and enforced as if this Contract did not contain that term.

38. APPLICABLE LAW AND VENUE

This Contract is governed by and construed in accordance with the laws of the State of North Dakota. Any action to enforce this Contract must be adjudicated exclusively in the state District Court of Burleigh County, North Dakota. Each party consents to the exclusive jurisdiction of such court and waives any claim of lack of jurisdiction or forum non conveniens.

39. ALTERNATIVE DISPUTE RESOLUTION – JURY TRIAL

By entering into this Contract, STATE does not agree to binding arbitration, mediation, or any other form of mandatory Alternative Dispute Resolution. The parties may enforce the rights and remedies in judicial proceedings. STATE does not waive any right to a jury trial.

40. ATTORNEY FEES AND COSTS

In the event a lawsuit is instituted by STATE to obtain performance under this Contract, and STATE is the prevailing party, CONTRACTOR shall, except when prohibited by N.D.C.C. § 28- 26-04, pay STATE’s reasonable attorney fees and costs in connection with the lawsuit.

41. NONDISCRIMINATION - COMPLIANCE WITH LAWS

CONTRACTOR agrees to comply with all applicable federal and state laws, rules, and policies, including those relating to nondiscrimination, accessibility and civil rights. (See N.D.C.C. Title 34 – Labor and Employment, specifically N.D.C.C. ch. 34-06.1 Equal Pay for Men and Women.)

CONTRACTOR agrees to timely file all required reports, make required payroll deductions, and timely pay all taxes and premiums owed, including sales and use taxes, unemployment compensation and workers' compensation premiums. CONTRACTOR shall have and keep current at all times during the Term of this Contract all licenses and permits required by law.

CONTRACTOR’s failure to comply with this section may be deemed a material breach by CONTRACTOR entitling STATE to terminate in accordance with the Termination for Cause section of this Contract.

http://www.legis.nd.gov/cencode/t28c26.pdf http://www.legis.nd.gov/cencode/t28c26.pdf http://www.legis.nd.gov/cencode/t34c01.pdf http://www.legis.nd.gov/cencode/t34c01.pdf http://www.legis.nd.gov/cencode/t34c06-1.pdf

42. STATE AUDIT

All records, regardless of physical form, and the accounting practices and procedures of CONTRACTOR relevant to this Contract are subject to examination by the North Dakota State Auditor, the Auditor’s designee, or Federal auditors, if required. CONTRACTOR shall maintain all of these records for at least three (3) years following completion of this Contract and be able to provide them upon reasonable notice. STATE, State Auditor, or Auditor’s designee shall provide reasonable notice to CONTRACTOR prior to conducting examination.

43. RIGHT TO INSPECT PLACE OF BUSINESS

At reasonable times, STATE may inspect those areas of CONTRACTOR’S place of business that relate to the performance of this Contract. If STATE makes an inspection, CONTRACTOR must provide reasonable assistance.

44. F.O.B. POINT AND FREIGHT

All commodities purchased through this Contract shall be Free on Board (“F.O.B.”) final destination, freight prepaid. Unless specifically stated otherwise, all prices offered must include the delivery costs to any location within the state of North Dakota. Title shall pass to STATE at destination, and the vendor shall be responsible for any freight claims.

45. EFFECTIVENESS OF CONTRACT

This Contract is not effective until fully executed by all parties. If no start date is specified in the Term of Contract, the most recent date of the signatures of the parties shall be deemed the Effective Date.

CONTRACTOR STATE OF NORTH DAKOTA

Vertosoft, LLC Acting through its Office of Management and Budget, Fiscal Management Division

BY: BY:

Printed Name: Printed Name:

Title: Title:

Date: Date:

Chet Hayes

Chief Technology Officer

10/20/2020

Jeff Larshus

Director of State Financial Services

10/21/20

EXHIBIT A – Scope of Work

1. DELIVERABLE 1: PROJECT KICKOFF MEETING

a. Description:

CONTRACTOR shall coordinate with STATE to schedule a Kickoff Meeting to be held remotely, with the core project and planning team. CONTRACTOR’s Project Manager shall lead the meeting. The Kickoff Meeting must facilitate the introduction of CONTRACTOR and STATE individuals, and level-set understanding and awareness of project objectives, scope, governance, schedule, and project risks and issues.

b. Expectations of CONTRACTOR:

1) CONTRACTOR shall provide content to STATE for a detailed agenda in advance of the meeting.

2) CONTRACTOR and STATE shall facilitate the meeting, and discuss and further define, at a minimum, the following:

(a) Effective project communication

(b) Project vision, background, purpose, and objectives

(c) Project governance structure, and project roles and responsibilities

(d) Approach to creating the Project Management Plan

(e) Initial risk assessment

c. Expectations of STATE:

1) STATE shall finalize agenda and send agenda to invitees.

2) STATE shall coordinate the logistics and co-facilitate the Kickoff Meeting.

3) STATE’s Project Sponsor and project team members shall participate in the Kickoff

Meeting.

d. Completion Date:

To be agreed upon between STATE and CONTRACTOR

e. Acceptance Criteria:

For the acceptance of this deliverable to occur, the Kickoff Meeting results in:

1) Facilitation of Kickoff Meeting using a clearly defined agenda

2) An introduction of critical CONTRACTOR and STATE resources assigned to the project

3) Review of STATE’s Project Charter to include project governance structure, roles and responsibilities, project purpose, objectives, and scope

4) Discussion of communications approach and structure

5) Discussion of known project risks and issues

2. DELIVERABLE 2: PROJECT MANAGEMENT PLAN

a. Description:

CONTRACTOR shall develop and baseline a plan in collaboration with STATE. The Project Management Plan will include the project schedule.

b. Expectations of CONTRACTOR:

1) CONTRACTOR shall lead the Project Management Planning effort.

2) CONTRACTOR shall be responsible for the final product.

3) CONTRACTOR shall develop, contribute, and collaborate with STATE to create a Project Management Plan that includes, at a minimum, the following:

(a) Management plans to control cost, schedule, scope, and quality

(b) Integrated change control process

(c) Communication management plan

(d) Risk management plan

(e) Issue management plan

(f) Human resources management plan

(g) Implementation and transition plan

4) CONTRACTOR shall develop, contribute, and collaborate with STATE on a detailed project schedule. The project schedule format will be mutually agreed-upon, and the project schedule will follow STATE best practices, including:

(a) Project has appropriate start date

(b) Project has appropriate Work Breakdown Structure

(c) Both STATE and CONTRACTOR tasks are included

(d) Project tasks are broken down into timeframes that can be reasonably managed –

STATE encourages a maximum task length of approximately 80 hours/two (2) weeks

(e) Project tasks have appropriate resources assigned with appropriate and reasonable allocation

(f) Schedule has appropriate working times and incorporates STATE and CONTRACTOR holidays and nonworking times

c. Expectations of STATE:

1) STATE shall contribute and collaborate with CONTRACTOR on the Project

Management Plan.

2) STATE shall provide information and timelines on STATE tasks.

d. Completion Date:

To be agreed upon between STATE and CONTRACTOR

e. Acceptance Criteria:

For the acceptance of this deliverable to occur, CONTRACTOR shall provide a Project Management Plan which adheres to the principles of the Project Management Body of Knowledge and includes the following:

1) A mutually agreed-upon detailed baseline scope and schedule for the project

2) Management plans to control scope, schedule, cost, and quality

3) Integrated change control process

4) Communication management plan

5) Risk management plan

6) Issue management plan

7) Human resources management plan

8) Implementation and transition plan

3. DELIVERABLE 3: GAP ANALYSIS

a. Description:

CONTRACTOR to review, analyze, and confirm understanding of system functionality, business practices, interfaces and discuss any gaps to allow STATE to configure CAFR to the Wdesk platform.

b. Expectations of CONTRACTOR:

1) CONTRACTOR shall lead the analysis effort.

2) CONTRACTOR shall demonstrate how system’s core functionality meets the requirements as defined in the Request for Proposal.

3) CONTRACTOR shall identify and document gaps between the system’s out-of-the-box functionality and STATE’s requirements, and business processes and practices.

4) CONTRACTOR shall collaborate with STATE to configure CAFR gaps to the Wdesk platform.

c. Expectations of STATE:

1) STATE staff shall actively participate in work and analysis sessions.

2) STATE shall collaborate with CONTRACTOR to confirm requirements and gap analysis.

d. Acceptance Criteria:

For the acceptance of this deliverable to occur, the following criteria must be met:

1) Gap analysis to be presented in a matrix that lists requirements and identifies which requirements can be met out-of-the-box and which need to be structured differently to align with the Wdesk platform.

2) Gap analysis matrix includes a descriptive statement on how the gap can be remedied via the Wdesk platform.

4. DELIVERABLE 4: SYSTEM CONFIGURATION

a. Description:

CONTRACTOR shall configure the system according to the requirements established during the Gap Analysis phase, and decisions made throughout the configuration effort.

b. Expectations of CONTRACTOR:

1) CONTRACTOR shall lead the configuration effort.

2) CONTRACTOR shall confirm and reach configuration decisions in collaboration with

STATE.

3) CONTRACTOR shall configure components in alignment with requirements and decisions confirmed or identified in the Gap Analysis deliverable, and demonstrate completed configurations and reporting capabilities to STATE.

c. Expectations of STATE:

1) STATE shall make necessary configuration decisions.

2) STATE shall provide requested information and documentation as needed to…