Services and Commodities Terms and Conditions.docx

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SERVICES AND COMMODITIES TERMS AND CONDITIONS

Bidder Instructions

Bidders must propose all changes utilizing the track changes feature in Word. Bidders must include justification for the requested change utilizing the comment feature in Word. Bidders who provide redlines as part of their initial bid submission but fail to note justifications for each red line provided, may be disqualified The State reserves the right not to accept any redlines proposed by Bidders after the initial bid submission. Redlines proposed after initial bid submission may result in the Bidder being deemed non-responsive. Additionally, General statements, such as that the Bidder reserves the right to negotiate the terms and conditions or extensive redlines, may be considered non-responsive.

Bidder Response (pick one) ☐ I confirm that I have read and understand the instructions provided above and accept these contract terms as written.

OR

☐ I confirm that I have read and understand the instructions provided above and will be providing redlines as per the instructions above.

To assist bidders in reviewing the Terms and Conditions, we have provided information explaining why some provisions should not be changed and why certain concepts should not be added. The absence of specific provisions or concepts from this document is not an indication of the State’s willingness to accept proposed redlines to any other provisions. The explanations herein do not constitute legal advice.

1. Non-negotiable provisions:

Termination for Convenience (Section 17.2). Michigan is an annual pay-as-you-go budget state. Therefore, for the State to lawfully enter a multi-year contract, it must retain the right to terminate the contract if funds are not appropriated, if appropriations are reduced, or if the law changes. Without this right, the contract would unconstitutionally extend the State’s credit. The executive branch cannot enter into contracts that compel the legislature to make future appropriations, as doing so violates the separation of powers.

Assignment (Section 14). This contract will be the result of a competitive solicitation in which the State may award the contract to a responsive and responsible bidder. Accordingly, awarded contractors are prohibited from assigning the contract except as set forth in the terms as written.

Governing Law (Section 40). This is a contract with the State of Michigan; therefore, the State will not agree to have the contract governed by any law other than the laws of the State of Michigan.

Accessibility (Section 18). The State of Michigan is required to comply with the Americans with Disabilities Act. The digital standards used to determine compliance for public facing/accessible Digital Deliverables are not negotiable. Accordingly, any awarded contractor providing Digital Deliverables to the State must agree to comply with the Accessibility Requirements outlined in the contract.

2. Non-negotiable provisions required by statute to be included in State contracts:

Nondiscrimination (Section 19.1). MCL 37.2101 et seq; MCL 37.1101 et seq.

Unfair Labor Practice (Section 19.2). MCL 423.324 Records Maintenance, Inspection, Examination, and Audit (Section 19.3). MCL 18.1470 Strategic Partner Boycott (Section 19.4), boycott of a person in or doing business with a strategic partner. MCL 18.1261 (12)

3. Provisions that will not be accepted in State contracts:

Indemnification by the State. The State is prohibited from providing indemnification because doing so would constitute an unconstitutional extension of the State’s credit. The legislature has appropriated funds only for the purchase itself, not for indemnification. Therefore, any contractual commitment requiring the State to pay potential future costs – beyond the purchase price – would improperly bind the State to spend funds that have not been appropriated. This restriction includes any provision requiring the State to “be responsible for,” “reimburse,” or otherwise pay amounts beyond the cost of the goods or services being purchased. This principle is not unique to Michigan; it is a widely adopted position across federal, state, and local governmental entities. Please see Attorney General Opinion 5683.

Contract Confidentiality/Confidential Pricing. State procurement contracts are public records, and the public has a right to know the contract pricing. Confidential pricing would undermine the integrity of the procurement process and violate the Michigan Freedom of Information Act. Accordingly, the State cannot contractually agree to prevent the disclosure of public records when no exemption exists.

Contractor Termination. State contracts are awarded pursuant to a competitive bidding process. Allowing a contractor to terminate the contract at any time undermines the process which is designed to secure the specific goods and services for the required term. The State has a statutory obligation to pay for goods and services under the Prompt Payment Act which includes a process to redress any delays or failures.

Binding Arbitration. As a sovereign immunity issue, the State will not contractually agree to binding arbitration to resolve contract disputes.

Bidder Response ☐ I confirm that I have read and understand the instructions provided above.

This Contract is agreed to between the State of Michigan (“State”) and the Contractor. This Contract will be effective approximately December 1, 2026 (“Effective Date”), and unless terminated, will expire on November 30, 2029 (the “Term”).

This Contract may be renewed for up to two (2) additional one-year periods. Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

1. Contract Composition.

This Contract is composed of the following:

Notice of Contract Commodities and Services Terms and Conditions Schedule A - Statement of Work Schedule B - Pricing Schedule Schedule C - Insurance Schedule Schedule D – Equipment List Subsequent Contract Change Notices, if any The above schedules are referred to by their corresponding titles. The schedules include any exhibits attached to the schedule.

1. Order of Precedence.

In the event of any inconsistency between the statements made in this Contract, the following order of precedence governs:

1. first, these Terms and Conditions;

1. second, each Statement of Work;

1. third, Software Schedule, including Exhibits, if applicable;

1. fourth, the remaining Schedules to this Contract; and

1. last, the Notice of Contract.

1. Notices.

2. All notices and other communications required or permitted under this Contract must be in writing and will be considered given: when verified by written receipt if sent by courier; when received if sent by mail without verification of receipt; or when verified by automated receipt or electronic logs if sent by email.

Anna Swanson MDOT Contract Services Division 425 W. Ottawa St.

Lansing, MI 48933 SwansonA1@michigan.gov 517-230-2063

1. Duties of Contractor.

3. Provision of Deliverables.

Contractor will provide Deliverables as set forth in this Contract and as specifically detailed in the Statement(s) of Work. Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of this Contract unless otherwise specified in a Statement of Work. The Deliverables include the performance of any functions, activities, tasks, obligations, roles, and responsibilities necessary to fulfil this Contract including (1) the delivery of all Deliverables in accordance with Specifications, and (2) the diagnosis and correction of Nonconformities in the Deliverables whether they are discovered prior to or after Acceptance, or as necessary for Contractor to fulfill its warranty requirements. The Statement of Work describes Acceptance and Acceptance Testing of the Deliverables.

3. Contractor Personnel.

1. Contractor is solely responsible for all Contractor Personnel. The State is not responsible for the payment of their compensation, including, if applicable, withholding of income taxes, and the payment and withholding of social security and other payroll taxes, unemployment insurance, workers’ compensation insurance payments and disability benefits.

1. Prior to any Contractor Personnel performing any Services, Contractor will:

1. ensure that such Contractor Personnel have the legal right to work in the United States; and

1. upon request, or as otherwise specified in a Statement of Work, perform background checks on all Contractor Personnel prior to their assignment. The scope is at the discretion of the State and documentation must be provided as requested. Contractor is responsible for all costs associated with the requested background checks. The State may also perform background checks.

1. Contractor and Contractor Personnel must not endanger the safety or security of the State’s personnel or facilities, State Systems, or State Data, and will comply with all State rules, regulations, and policies provided to Contractor in writing. This includes, but is not limited to, building security procedures, restricted access to certain areas or systems, and applicable health and safety practices and procedures.

1. Contractor Personnel must be clearly identifiable while on State property by wearing identification issued by the State and clearly identify themselves whenever contacting the State.

1. The State can require the removal of any Contractor Personnel deemed unacceptable by providing written notice that specifies the individual and explains the reasons for requiring the removal. Contractor must provide replacement personnel for the removed person who fully meets the qualifications for the position. If the State exercises this right, and Contractor cannot immediately replace the removed personnel, the State agrees to negotiate an equitable adjustment in schedule or other terms that may be affected by the State’s required removal.

3. Subcontracting.

Contractor may not delegate any of its obligations under this Contract without the prior written approval of the State. Contractor must notify the State at least 90 calendar days before the proposed delegation and provide the State with any information it requests to determine whether the delegation is in its best interest. If approved, Contractor must: (a) be the sole point of contact regarding all contractual matters, including payment and charges for all Deliverables; (b) make all payments to the subcontractor; and (c) incorporate the terms and conditions contained in this Contract in any subcontract with a subcontractor. Contractor remains responsible for the completion of the Deliverables, compliance with the terms of this Contract, and the acts and omissions of the subcontractor. The State, in its sole discretion, may require the replacement of any subcontractor.

3. Deliverables Representations and Warranties:

Contractor represents and warrants to the State that it will:

3. perform all Services in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry;

3. meet or exceed the performance and operational standards, and specifications of this Contract;

3. provide all Commodities in good quality, with no material defects;

3. not interfere with the State’s operations;

3. obtain and maintain all necessary licenses, permits or other authorizations necessary for the performance of this Contract;

3. cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of this Contract;

3. assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of this Contract;

3. comply with all State physical and IT security policies and standards which will be made available upon request; and

3. provide the State priority in performance of this Contract except as mandated by federal disaster response requirements.

1. Contract Modification.

Neither party may amend or modify this Contract in any way, except by a properly signed Change Notice. Notwithstanding the foregoing, no subsequent Statement of Work or Change Notice amends this Contract unless it specifically states an intent to do so and cites the section or sections to be amended.

1. Dispute Resolution.

During the term, the parties will try to resolve any Contract dispute in accordance with this provision. The parties will refer the dispute to their respective Contract Administrators or Program Managers. If they do not resolve the dispute within 15 business days, the parties must submit the dispute to a senior executive. The parties will continue performing while a dispute is being resolved, unless the dispute precludes performance. A dispute involving payment does not preclude performance. Litigation to resolve the dispute will not be instituted until after the dispute has been elevated to the parties’ senior executive and either concludes that resolution is unlikely or fails to respond within 15 business days. The parties are not prohibited from instituting formal proceedings to avoid the expiration of statute of limitations period; to preserve a superior position with respect to creditors; or where a party decides that a temporary restraining order or other injunctive relief is the only adequate remedy. This Section does not limit the State’s right to terminate this Contract.

1. Contractor Representations and Warranties.

6. Authority.

Contractor represents and warrants to the State that:

0. It is duly organized, validly existing, and in good standing as a corporation or other entity as represented under this Contract under the laws and regulations of its jurisdiction of incorporation, organization, or chartering;

0. It has the full right, power, and authority to enter this Contract, and to perform its contractual obligations;

0. The signing of this Contract has been duly authorized by all necessary organizational action; and

0. When signed and delivered by Contractor, this Contract will constitute the legal, valid, and binding obligation of Contractor, enforceable against Contractor in accordance with its terms.

6. Contractor’s Bid Response.

Contractor represents and warrants to the State that:

1. The prices proposed by Contractor were arrived at independently, without consultation, communication, or agreement with any other Person submitting a bid response for the purpose of restricting competition;

1. Contractor did not knowingly disclose the quoted prices to any other Person submitting a bid response to the Solicitation; and no attempt was made by Contractor to induce any other Person to submit or not submit a proposal for the purpose of restricting competition;

1. All information furnished to the State by or for Contractor in connection with this Contract, including Contractor’s bid response is true, accurate, and complete, and contains no untrue statement of material fact or omits any material fact necessary to make the information not misleading;

1. Contractor is not in material default or breach of any other contract or agreement that it may have with the State or any of its departments, commissions, boards, or agencies. Contractor further represents and warrants that it has not been a party to any contract with the State or any of its departments that was terminated by the State within the previous 5 years because Contractor failed to perform or otherwise breached an obligation of that contract; and

1. If any of the certifications, representations, or disclosures made in Contractor’s bid response change after contract award, Contractor is required to report those changes immediately to the Contract Administrator.

6. Contractor Financial Resources.

Contractor will always have financial resources sufficient, in the opinion of the State, to ensure performance of this Contract and must provide proof upon request.

1. Conflicts and Ethics.

7. Contractor will uphold high ethical standards and is prohibited from:

0. holding or acquiring an interest that would conflict with this Contract;

0. doing anything that creates an appearance of impropriety with respect to the award or performance of this Contract;

0. attempting to influence or appearing to influence any State employee by the direct or indirect offer of anything of value including an offer of employment; or

0. paying or agreeing to pay any person, other than employees and consultants working for Contractor, any consideration contingent upon the award of this Contract.

7. Contractor must immediately notify the State of any violation or potential violation of this Section. This Section applies to Contractor, any parent, affiliate, or subsidiary organization of Contractor, and any subcontractor that provides the Deliverables in connection with this Contract.

1. Ordering, Invoices, and Payment.

8. Ordering.

Contractor is not authorized to begin performance until receipt of authorization as identified in a Statement of Work.

8. Invoices.

Invoices must conform to the requirements communicated by the State. Contractor may only invoice for Deliverables specified in Statement(s) of Work. Unless otherwise stated in this Contract, invoices must include: (a) date; (b) purchase order or delivery order; (c) quantity; (d) description of licensing; (e) unit price; (f) shipping cost (if any); (g) Contractor-generated invoice number; (h) total price; and (i) name of the applicable State agency.

8. Payment.

Unless otherwise stated in this Contract, the State will only pay for Deliverables that have been Accepted. As set forth in MCL 17.51, et. Seq., all undisputed amounts are payable within 45 calendar days of the State’s receipt. All payments will be made in U.S. dollars. The State will only disburse payments under this Contract through Electronic Funds Transfer (EFT). Contractor must register with the State at SIGMA VSS to receive electronic fund transfer payments. If Contractor does not register, the State is not liable for failure to provide payment. The State has the right to withhold payment of any disputed amounts until the parties agree as to the validity of the disputed amount. The State will notify Contractor of any dispute within a reasonable time. Payment by the State will not constitute a waiver of any rights as to Contractor’s continuing obligations, including claims for deficiencies or substandard Deliverables. Contractor’s acceptance of final payment by the State constitutes a waiver of all claims by Contractor against the State for payment under this Contract, other than those claims previously filed in writing on a timely basis and still disputed.

8. Right of Setoff.

The State may setoff any amount owed by Contractor against payments due under this Contract, without limiting any other rights or remedies.

8. Taxes.

The State is exempt from federal excise tax, state, and local sales taxes, and use taxes if the Deliverables purchased under this Contract are for the State’s exclusive use. Contractor will not include the collection of taxes for which the State is exempt in any invoices or payments related to this Contract. The State is not responsible for taxes imposed or assessed on Contractor.

8. Pricing and Fees Changes.

Contractor will not increase the Fees set forth in the Pricing Schedule.

1. Reserved.

1. Reserved.

1. Insurance.

Contractor must maintain the insurance identified in Schedule C - Insurance Terms.

1. Change of Control.

12. Contractor must notify the State of a change in Contractor’s organizational structure or ownership within 30 calendar days of any public announcement or otherwise once legally permitted to do so. For purposes of this Contract, a change in control happens when any of the following occur: a sale of more than 50% of Contractor’s stock; a sale of substantially all of Contractor’s assets; a change in a majority of Contractor’s board members; a consummation of a merger or consolidation of Contractor with any other entity; a change in ownership through a transaction or series of transactions; or the board (or the stockholders) approves a plan of complete liquidation.

12. A change of control does not include any consolidation or merger effected exclusively to change the domicile of Contractor, or any transaction or series of transactions principally for bona fide equity financing purposes. In the event of a change of control that results in a successor organization, Contractor must require the successor to assume this Contract and its obligations under this Contract.

1. Assignment.

13. Contractor may not assign this Contract or any of its rights or delegate any of its duties or obligations hereunder, voluntarily, or involuntarily, whether by merger (regardless of whether it is the surviving or disappearing entity), conversion, consolidation, dissolution, or operation of law to any other party without the prior written approval of the State. Upon notice to Contractor, the State may assign in whole or in part, its rights or responsibilities under this Contract to any other governmental entity if such assignment is made reasonably necessary by operation of controlling law or regulation. If the State determines that a novation of this Contract to a third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

1. Force Majeure.

14. Neither party will be liable or responsible to the other party, or deemed to have defaulted under or breached this Contract, for any failure or delay in fulfilling or performing any term hereof, when and to the extent such failure or delay is caused by a Force Majeure Event provided that:

0. such event is outside the reasonable control of the affected party:

0. the affected party gives prompt written notice to the other party, stating the period the occurrence is expected to continue;

0. the affected party uses diligent efforts to end the failure or delay and minimize the effects of such Force Majeure Event.

14. In the event of a Force Majeure Event affecting Contractor’s performance under this Contract, the State may suspend its performance hereunder until such time as Contractor resumes performance or the State may terminate this Contract. Unless the State terminates this Contract, any date specifically designated for Contractor’s performance under this Contract will automatically be extended for a period of up to the duration of the Force Majeure Event.

1. Stop Work Order.

The State may suspend Deliverables at any time. The State will provide Contractor a written stop work order detailing the suspension. Contractor must comply with the stop work order upon receipt. Within 90 calendar days, or any longer period agreed to by Contractor, the State will either: issue a notice authorizing Contractor to resume work; or terminate this Contract or delivery order. The State will not pay for Deliverables that have been suspended, Contractor’s lost profits, or any additional compensation during a stop work period.

1. Termination, Expiration, Transition.

The State may terminate this Contract in accordance with the following:

16. Termination for Cause.

In addition to any right of termination set forth elsewhere in this Contract:

0. The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the State:

0. breaches any of its material duties or obligations. Any reference to specific breaches being material breaches will not be construed to mean that other breaches are not material;

0. fails to cure a breach within the time stated by the State in the notice of breach, if in its sole discretion the State has chosen to provide a time to cure;

0. becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; or

0. engages in any conduct that may expose the State to liability.

0. If the State terminates this Contract under Section 17.1, the State will issue a termination notice specifying whether Contractor must cease performance immediately or continue to perform for a specified period.

0. If it is later determined that Contractor was not in breach of this Contract, the parties will treat the termination as a termination for convenience, effective as of the same date, and the rights and obligations of the parties will be limited to those provided in Section 17.2.

0. The State will only pay for amounts due to Contractor for Deliverables accepted by the State on or before the date of termination, subject to the State’s right to setoff any amounts owed by Contractor for the State’s reasonable costs in terminating this Contract. Contractor must promptly reimburse to the State any prepaid Fees prorated to the date of termination. Contractor must pay all reasonable costs incurred by the State in terminating this Contract for cause, including administrative costs, attorneys’ fees, court costs, transition costs, and any costs the State incurs to procure the Deliverables from other sources.

0. Contractor must submit all invoices for Deliverables accepted by the State within 30 calendar days of the date of termination. Failure to submit an invoice timely will constitute a waiver by Contractor for any amounts due to Contractor for Deliverables accepted by the State.

16. Termination for Convenience.

The State may immediately terminate this Contract in whole or in part, without penalty and for any reason or no reason, including but not limited to, appropriation or budget shortfalls.

1. The termination notice will specify whether Contractor must cease performance immediately or continue to perform in accordance with Subsection 17.3.

1. If the State terminates this Contract for convenience, the State will pay all reasonable costs, as determined by the State, for State approved Transition Assistance to the extent the funds are available.

1. Contractor must submit all invoices for Deliverables accepted by the State within 30 days of the date of termination. Failure to submit an invoice within that timeframe will constitute a waiver by Contractor for any amounts due Contractor for Deliverables accepted by the State under this Contract.

16. Transition Assistance.

2. Upon termination or expiration of this Contract for any reason, during the Transition Period, Contractor must provide all reasonable Transition Assistance requested by the State, to allow for the expired or terminated portion of this Contract to continue without interruption or adverse effect, and to facilitate the orderly transfer of such to the State or its designees. Such Transition Assistance may include, but is not limited to:

0. continuing to provide the Deliverables at the established Contract rates;

0. taking all reasonable and necessary measures to transition performance of the work to the State or the State’s designee;

0. taking all necessary and appropriate steps, or such other action as the State may direct, to preserve, maintain, protect, and comply with Section 26, including without limitation, the return or destruction of State Data at the conclusion of the Transition Period; and

0. preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts.

2. The Term is automatically extended through the end of the Transition Period.

1. Accessibility Requirement.

All Deliverables created, provided, or made available by Contractor under this Contract in a digital format, including but not limited to, websites, applications, software, mobile applications, text, images, sounds, videos, controls, animations, links, and documents (including files in the following formats: PDF, word processing, presentation, and spreadsheet) (hereinafter “Digital Deliverables”), must conform to the accessibility standards provided in the SOM Digital Standards, located at https://www.michigan.gov/standards (the “Digital Accessibility Standards”). Throughout the Term of the Contract, Contractor must: (a) ensure that no changes made by Contractor to any Digital Deliverables will have any adverse effect on conformance to the Digital Accessibility Standards; and (b) comply with plans and timelines approved by the State to remediate issues and achieve conformance with the Digital Accessibility Standards in the event of any deficiencies, at its sole cost and expense.

1. Statutorily Required Provisions The following provisions are required to be included in all State procurement contracts.

18. Nondiscrimination.

Under the Elliott-Larsen Civil Rights Act, 1976 PA 453, MCL 37.2101, et seq., the Persons with Disabilities Civil Rights Act, 1976 PA 220, MCL 37.1101, et seq., and Executive Directive 2019-09, Contractor and its subcontractors agree not to discriminate against an employee or applicant for employment with respect to hire, tenure, terms, conditions, or privileges of employment, or a matter directly or indirectly related to employment, because of race, color, religion, national origin, age, sex, sexual orientation, gender identity or expression, height, weight, marital status, partisan considerations, any mental or physical disability, or genetic information that is unrelated to the person’s ability to perform the duties of a particular job or position.

18. Unfair Labor Practice.

Under MCL 423.324, the State may void this Contract if the name of Contractor, or the name of a subcontractor, manufacturer, or supplier of Contractor, subsequently appears on the Unfair Labor Practice register compiled under MCL 423.322.

18. Records Maintenance, Inspection, Examination, and Audit.

Pursuant to MCL 18.1470, the State or its designee may audit Contractor to verify compliance with this Contract. Federal regulations may require longer audit periods and may allow for broader audit scopes.

18. Strategic Partner Boycott.

As required by MCL 18.1261(12) Contractor represents that it is not currently engaged in and agrees that it will not engage in the boycott of a person based in or doing business with a strategic partner as described in 22 USC 8601 to 8606.

18. Reserved.

1. General Indemnification.

19. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and employees harmless, without limitation, from and against actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to:

0. any breach by Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable) of any of the promises, agreements, representations, warranties, or insurance requirements contained in this Contract;

0. any bodily injury, death, or damage to real or tangible personal property occurring wholly or in part due to action or inaction by Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable); and

0. any acts or omissions of Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable).

1. Infringement Indemnification and Remedies.

20. Contractor must defend, indemnify, and hold the State, its departments, divisions, agencies, offices, commissions, officers, and employees harmless, without limitation, from and against actions, claims, losses, liabilities, damages, costs, and expenses (including those required to establish the right to indemnification), arising out of or relating to any alleged infringement, misappropriation, or other violation of any Intellectual Property Right or other right of any third party.

20. If, in the State’s opinion, a third party’s assertion of their intellectual property rights interferes with State’s use of any Deliverable, or any component thereof, other than State Materials, Contractor must, at Contractor’s sole cost and expense:

1. procure for the State the right to continue to use such Deliverable, or component thereof, to the full extent contemplated by this Contract; or

1. modify or replace the Deliverable, or component thereof, to make it non-infringing, while continuing to provide fully equivalent features and functionality, required by this Contract.

20. If neither of the foregoing is possible, then Contractor may direct the State to cease any use of any Deliverable or component thereof, that have been enjoined or finally adjudicated as infringing, and refund to the State all amounts paid by the State in respect of such infringing Deliverable and any other aspects of the Deliverable that the State cannot reasonably use as intended under this Contract.

20. However, Contractor will have no liability for any claim of infringement that arises solely from Contractor’s compliance with any designs, specifications, or instructions of the State; or modification of the Deliverable by the State without the prior knowledge and approval of Contractor.

20. The remedies set forth in this Section 21 are in addition to, and not in lieu of, all other remedies that may be available to the State under this Contract or otherwise, including the State’s right to be indemnified for such actions and to terminate this Contract under Section 17.

1. Indemnification Procedure.

21. The State will notify Contractor in writing if indemnification is sought; however, even if the State fails to notify, Contractor remains responsible unless the failure materially prejudices Contractor. Contractor must, to the satisfaction of the State, demonstrate its financial ability to carry out these obligations. The State is entitled to:

0. regular updates on proceeding status;

0. participate in the defense of the proceeding;

0. employ its own counsel; and

0. retain control of the defense, at its own cost and expense, if the State deems it necessary. Contractor will not, without the State’s prior written consent (not to be unreasonably withheld), settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any claim, action, or proceeding.

21. Any litigation activity on behalf of the State or any of its subdivisions must be done in coordination with the Department of Attorney General. An attorney designated to represent the State may not do so until approved by the Michigan Attorney General and appointed as a Special Assistant Attorney General.

1. Disclaimer of Damages and Limitation of Liability.

22. The State’s Disclaimer of Damages.

THE STATE WILL NOT BE LIABLE, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR BY STATUTE OR OTHERWISE, FOR ANY CLAIM RELATED TO OR ARISING UNDER THIS CONTRACT FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST PROFITS AND LOST BUSINESS OPPORTUNITIES.

22. The State’s Limitation of Liability.

THE STATE’S TOTAL AGGREGATE LIABILITY TO CONTRACTOR UNDER THIS CONTRACT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR BY STATUTE OR OTHERWISE, FOR ANY CLAIM RELATED TO OR ARISING UNDER THIS CONTRACT, WILL NOT EXCEED THE LESSER OF $1,000,000 OR THE MAXIMUM AMOUNT OF FEES PAYABLE UNDER THIS CONTRACT.

1. Liquidated Damages.

23. The parties understand and agree that any liquidated damages (which includes but is not limited to applicable credits) are difficult to accurately calculate and that the amounts set forth in this Contract are reasonable estimates of the State’s damages in accordance with applicable law.

23. The parties acknowledge and agree that Contractor could incur liquidated damages for more than one event.

23. The assessment of liquidated damages will not constitute a waiver or release of any other remedy the State may have under this Contract for Contractor’s breach of this Contract, including without limitation, the State’s right to terminate this Contract for cause. The State is entitled to recover actual damages caused by Contractor’s failure to perform its obligations under this Contract. However, the State will reduce such actual damages by the amounts of liquidated damages received for the same events causing the actual damages.

23. The State may setoff amounts due to the State as liquidated damages against any Fees payable to Contractor under this Contract, or the State may bill Contractor as a separate item and Contractor will promptly make payments on such bills.

1. State Data.

The State reserves all rights, title, and interest in State Data. Upon request, Contractor must provide to the State, or a third party designated by the State, all State Data within 10 calendar days of the request and in the format requested by the State. Contractor will assume all costs incurred in compiling and supplying State Data. No State Data may be used for any marketing or commercial purposes.

1. Non-Disclosure of Confidential Information.

The parties acknowledge that each party may be exposed to or acquire communication or data of the other party that is confidential, privileged communication not intended to be disclosed to third parties.

25. Obligation of Confidentiality.

The parties agree to hold all Confidential Information in strict confidence and not to copy, reproduce, sell, transfer, or otherwise dispose of, give or disclose such Confidential Information to third parties and only to the employees of a party if they need the Confidential Information to perform this Contract. State Data is Confidential Information. The parties agree to advise and require their respective employees, agents, and subcontractors of their obligations to keep all Confidential Information confidential. The parties may disclose Confidential Information only when:

0. in the case of Contractor, use of a subcontractor is authorized under this Contract; the disclosure is necessary or otherwise naturally occurs in connection with work that is within their responsibilities; and Contractor is responsible for subcontractors maintaining the State's Confidential Information in equally strict confidence as required under this Contract; or

0. as provided in a Business Associate Agreement (BAA). Contractor must provide the State, within 5 Business Days of the State’s request, with a list of the requested disclosures. The list must include the recipient’s name, the details of the release, and the authority for the disclosure including any applicable statutory provision.

25. Cooperation to Prevent Disclosure of Confidential Information.

Each party must use its best efforts to assist the other party to identify and prevent any unauthorized use or disclosure of any Confidential Information. Without limiting the foregoing, each party must advise the other party immediately in the event either party learns, discovers, or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Contract. Each party will cooperate with the other party in seeking injunctive or other equitable relief against any such person.

25. Surrender of Confidential Information.

Within 5 Business Days from the date of termination or expiration of this Contract, each party must return all the other party’s Confidential Information created or received by the other party that is in the party’s possession, custody, or control. Upon confirmation from the State of receipt of all data, Contractor must permanently sanitize or destroy the State’s Confidential Information from all media, including backups, using National Security Agency and/or National Institute of Standards and Technology (“NIST”) (NIST Guide for Media Sanitation 800-88) data sanitization methods or as the State instructs. If the State determines that the return of any Confidential Information is not feasible or necessary, Contractor must destroy the Confidential Information as specified above. Contractor must certify the destruction of the Confidential Information in writing within 5 Business Days from the date of confirmation from the State.

25. In the event of any overlap or conflict between Section 25 and Section 26, the provision that establishes the more stringent or restrictive standard of protection for State Data will prevail and control.

1. Reserved.

1. Reserved.

1. Reserved.

1. Return of State Property.

Upon termination or expiration of this Contract for any reason, Contractor must take all necessary and appropriate steps, or such other action as the State may direct, to preserve, maintain, protect, or return to the State all materials, data, and property provided directly or indirectly to Contractor by any entity, agent, vendor, or employee of the State in as good a condition as when received, excepting normal wear and tear.

1. Reserved.

1. Reserved.

1. Deliverables Representations and Warranties.

Contractor represents and warrants to the State that:

32. Excluding Work Product, Contractor is the owner or licensee and has the rights necessary to convey title, ownership rights, or licensed use of all Deliverables under this Contract;

32. all Deliverables are delivered free from any security interest, lien, or encumbrance and will continue in that respect;

32. the Deliverables will not infringe the patent, trademark, copyright, trade secret, or other proprietary rights of any third party;

32. the Deliverables are merchantable and fit for the specific purposes identified in this Contract.

1. Reserved.

1. Artificial Intelligence.

Contractor will disclose in writing any use of artificial intelligence, including but not limited to machine learning or automated tools used in the performance of the Services or used in the design, manufacture, specification, or production of the Commodities. The disclosure will include a description of the artificial intelligence used and the role in generating the Deliverables.

1. Reserved.

1. Reserved.

1. Reserved.

1. Reserved.

1. Governing Law.

This Contract is governed, construed, and enforced in accordance with Michigan law, excluding choice-of-law principles. Contractor agrees that any legal action arising from this Contract may be brought in a court located in the State of Michigan and waives any objection based on lack of personal jurisdiction or forum non conveniens. Contractor must appoint an agent in Michigan to receive service of process.

1. Compliance with Laws.

Contractor, its subcontractors, and their respective representatives must comply with all laws in connection with this Contract.

1. Disclosure of Proceedings.

Within 14 calendar days of receiving notice, Contractor must notify the State of the following:

41. Proceedings related to the subject matter of this Contract including criminal Proceedings; parole or probation Proceedings; or Proceedings involving any license that Contractor is required to possess to perform under this Contract.

41. Proceedings even if not related to the subject matter of this Contract including Proceedings under the Sarbanes-Oxley Act; civil Proceedings involving a claim that might reasonably be expected to adversely affect Contractor’s viability or financial stability; or a governmental or public entity’s claim or written allegation of fraud.

1. Non-Exclusivity.

This Contract does not constitute a requirements contract. The State may acquire similar or equivalent Deliverables from other sources during the Term. Contractor has no exclusive rights under this Contract. Contractor has no guarantee of, or right of first refusal, for any future work.

1. Relationship of the Parties.

The relationship between the parties is that of independent contractors. The State does not consider Contractor, its employees, and agents to be the State’s employees. This Contract does not create a partnership or joint venture relationship. Prior performance does not modify Contractor’s status as an independent contractor. Neither party has authority to contract for nor bind the other party in any manner whatsoever.

1. Further Assurances.

Each party will, upon the reasonable request of the other party, sign such documents and perform such acts as may be necessary to give full effect to the terms of this Contract.

1. Waiver.

Any waiver of rights must be in writing and signed by the waiving party. No waiver of rights will be implied by any delay, inaction, silence or course of conduct. Failure to enforce any provision of this Contract will not constitute a waiver.

1. Media Releases.

News releases (including promotional literature and commercial advertisements) pertaining to this Contract or project to which it relates must not be made without the prior written approval of the State, and then only in accordance with the explicit written instructions of the State.

1. No Third-Party Beneficiaries.

This Contract is for the sole benefit of the parties and their respective successors and permitted assigns. This Contract does not confer on any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Contract. However, if this Contract is subject to the Michigan Prevailing Wage Act, MCL 408.1101 et seq. construction mechanics (as defined in MCL 408.1101(b)) are intended beneficiaries for the limited purposes required by MCL 408.1112.

1. Severability.

If a court of competent jurisdiction holds any part of this Contract invalid or unenforceable, the parties will treat that part as being deleted from this Contract, and the severed part will be replaced by agreed upon language that achieves the same or similar objectives. The remaining Contract will continue in full force and effect.

1. Survival.

The parties intend that any right, obligation or condition that, by its express terms or nature and context is intended to survive, will survive the termination or expiration of this Contract. Such rights, obligations, or conditions include, but are not limited to, those related to Transition Assistance; indemnification; disclaimer of damages and limitations of liability; State Data; non-disclosure of Confidential Information; representations and warranties; insurance and bankruptcy.

1. Counterparts.

This Contract, including any subsequent Change Notice, treats each signed counterpart, as an original, all of which together are deemed to be one and the same agreement and will become effective and binding upon the parties as of the effective date at such time as all the signatories hereto have signed a counterpart of this Contract.

1. Electronic Signatures and Delivery.

Signatures provided by electronic means, including scanned copies sent by email or other digital means, are valid and binding and will have the same force and effect as original signatures.

1. Entire Agreement.

This Contract constitutes the sole and entire agreement of the parties related to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, representations and warranties, both written and oral, with respect to such subject matter. NO TERMS ON CONTRACTOR’S INVOICES, ORDERING DOCUMENTS, WEBSITE, BROWSE-WRAP, SHRINK-WRAP, CLICK-WRAP, CLICK-THROUGH OR OTHER NON-NEGOTIATED TERMS AND CONDITIONS PROVIDED WITH ANY OF THE DELIVERABLES, OR DOCUMENTATION HEREUNDER, EVEN IF ATTACHED TO THE STATE’S DELIVERY OR PURCHASE ORDER, WILL CONSTITUTE A PART OR AMENDMENT OF THIS CONTRACT OR IS BINDING ON THE STATE OR ANY AUTHORIZED USER FOR ANY PURPOSE. THE STATE AND ITS AUTHORIZED USERS REJECT ALL OTHER TERMS AND CONDITIONS AND GIVES THEM NO FORCE AND EFFECT EVEN IF ACCESS TO OR USE OF THE DELIVERABLES REQUIRES AFFIRMATIVE ACCEPTANCE OF SUCH TERMS AND CONDITIONS.

1. DEFINITIONS

For the purposes of this Contract, the following terms have the following meanings:

“Acceptance” means the State’s written notice accepting or approving one or more Deliverables. “Accept” and “Accepted” have correlative meanings.

“Acceptance Tests” or “Acceptance Testing” means such tests as may be conducted to determine whether the Deliverable meets the requirements of this Contract and the Documentation.

“Access” means (1) the ability and means to enter a restricted or locked area, room, or physical container containing State Data; or (2) the ability and means to communicate with or otherwise interact with a system, to use system resources to handle or view information, to gain the information or knowledge of the information the system contains, or to control system components and functions (including physical or technical controls, or having the ability to modify or bypass any or all security controls).

“Business Day” means Monday, Tuesday, Wednesday, Thursday, and Friday except for State recognized holidays or when the State is authorized or required by law to be closed for business.

“Change Notice” means a writing executed by the parties to this Contract memorializing a change to this Contract.

“Commodity” means a tangible economic good, as describe in the Statement of Work.

“Confidential Information” means all information and documentation of a party that: has been marked “confidential” or with words of similar meaning, at the time of disclosure by such party; if disclosed orally or not marked “confidential” or with words of similar meaning, was subsequently summarized in writing by the disclosing party and marked “confidential” or with words of similar meaning; and, should reasonably be recognized as confidential information of the disclosing party.

Except for State Data, the term “Confidential Information” does not include any information or documentation that was: subject to disclosure under the Michigan Freedom of Information Act or other freedom of information/right to know requests; already in the possession of the receiving party without an obligation of confidentiality; developed independently by the receiving party, as demonstrated by the receiving party, without violating the disclosing party’s proprietary rights; obtained from a source other than the disclosing party without an obligation of confidentiality; or, publicly available when received, or thereafter became publicly available (other than through any…