STATE 0000000568SL - Electronic REC Managment System .doc

State of Missouri Office of Administration, Division of Purchasing

Request for Proposal (RFP) for

Electronic Renewable Energy Credit Management System (PSC)

PROPOSAL DUE NO LATER THAN: 11/23/26 AT 2:00 PM CENTRAL TIME

Proposal response must be submitted electronically through MissouriBUYS, powered by MOVERS, at https://missouribuys.mo.gov.

E-mailed, mailed, courier, or hand-delivered proposal responses will not be accepted.

RFP CONTACT INFORMATION:

BUYER: Emily Thompson

PHONE NO.: (573) 751-8897

EMAIL: Emily.Thomposn@oa.mo.gov

See “RFP Questions” in Section 1 for appropriate communications during the procurement process.

DELIVER SUPPLIES/SERVICES FREE ON BOARD (FOB) DESTINATION TO THE FOLLOWING ADDRESS:

Missouri Public Service Commission 200 Madison Street

PO Box 360

Jefferson City, MO 65102

ATTENTION:

1. After reviewing the Request for Proposal (RFP), the vendor must complete and return Exhibit A, Proposal Signature Page and all other necessary exhibits.

2. Due to lead times for obtaining the information needed to complete the various Business Compliance Exhibits herein as explained in the RFP’s Vendor Response Exhibits, vendors are encouraged to IMMEDIATELY begin securing these verifications.

3. The vendor must be registered in MissouriBUYS, powered by MOVERS in a “Prospective” or “Spend Authorized” registration status to submit a proposal. The vendor must achieve “Approved” registration status in MissouriBUYS (WebProcure/Proactis) and “Spend Authorized” registration status in MissouriBUYS, powered by MOVERS to be considered for a contract award. Reference Section 5.

RFP Organization:

RFP Sections:

RFP Vendor Response Exhibits (Return these exhibits with the proposal):

BUSINESS COMPLIANCE EXHIBITS

1. INTRODUCTION AND BACKGROUND INFORMATION SECTION

1.1 Introduction:

1.1.1 Purpose: This document constitutes a request for competitive, sealed proposals for the provision of Renewable Energy Credit (REC) certification, tracking, and transaction management services for the Missouri Renewable Standard (RES) compliance services as set forth herein for Missouri Public Service Commission (hereinafter referred to as “state agency”) in compliance with Sec. 393.1030, seq. RSMo.

1.1.2 Minimum Experience Qualifications: There are minimum experience qualifications in the RFP (See Section 2.2, Minimum Experience Requirements in Section 2: Scope of Work).

1.1.3 Titles: Titles of paragraphs used herein are for the purpose of facilitating reference only and shall not be construed to infer a contractual construction of language.

1.2 Background and Historical Usage Information:

1.2.1 The Missouri Public Service Commission (Commission) consist of five (5) members who are appointed by the Missouri Governor with the advice and consent of the Missouri Senate. The Commision is both quasi-judicial and quasi-legislative. The Commission is responsible for deciding cases brought before it and for promulgation of administrative rules and their enforcement respecting investor owned public utilities. The Commission performs many of its duties by conducting hearings in contested cases. The hearings are conducted in a trial-like setting using evidentiary standards under the Missouri Administrative Procedure Act and the Commission’s own rules. The Commission must render decisions in a timely manner to afford all parties procedural and substantive due process and to comply with statutory time limits.

1.2.2 The Commission is assisted by a staff of professionals in the fields of engineering, management, accounting, law, finance, economics, and consumer affairs. The staff participates as a party in cases filed before the Commission. In reaching a decision, the Commission uses the recommendations of the staff and the other parties to the proceeding.

1.2.3 On November 4, 2008, the voters in Missouri approved Proposition C, an initiative petition that enacted three statutory sections, Sections 393.1020, 393.1025, and 393.1030 RSMo, known as the Renewable Energy Standard (RES). The RES requires that the Commission, in consultation with the Missouri Department of Natural Resources, select a program for tracking and verifying the trading of RECs within one year of November 4, 2008. The REC tracking system originally selected was the North American Renewables RegistryTM. The Commission’s rules relevant to the RES defines an REC as a tradable certificate of proof that one megawatt-hour of electricity has been generated from renewable energy sources.

1.2.4 The RES sets portfolio requirements for electric utilities to meet with electricity from renewable energy resources as a portion of the electric utility’s retail sales: 2% by 2011; 5% by 2014, 10% by 2018, and 15% by 2021 and thereafter. At least 2% of each portfolio requirement shall be derived from solar energy.

1.2.5 The electric utility retail sales (MWh) for calendar year 2025 are listed below for the electric utilities under the Commission’s jurisdiction:

a. Ameren Missouri 31,738,926

b. Evergy Missouri Metro

8,396,957

c. Evergy Missouri West

8,766,142

d. Liberty Empire District Electric Company 4,372,359

1.3 Current and/or Previous Contract Information:

1.3.1 A current contract exists for the products and/or services being obtained via this RFP. A copy of the contract can be viewed and printed from the Division of Purchasing Awarded Bid & Contract Document Search System located on the Internet at: https://purch.oa.mo.gov/bidding-contracts/awarded-bid-contract-document-search. In addition, all proposal and evaluation documentation leading to the award of that contract may also be viewed and printed from the Division of Purchasing’s Awarded Bid & Contract Document Search System. Please reference the Bid number RFPT30034902200725 or the contract number CT220725001 when searching for these documents.

1.4 RFP Questions:

1.4.1 Buyer is Single Point of Contact for Solicitation: Vendors and their agents (including subcontractors, employees, consultants, or anyone else acting on their behalf) must direct all of their questions or comments regarding the RFP, the evaluation, etc., to the buyer indicated on the first page of this RFP. It is preferred that questions be emailed to the buyer.

a. Except as noted herein, vendors and their agents are instructed not to contact any other state employee regarding any of these matters during the solicitation and evaluation process. Inappropriate contacts are grounds for suspension and/or exclusion from specific procurements. Vendors can be sanctioned for unauthorized contact with any evaluator under 1 Code of State Regulation (CSR) 40-1.060(8)(G) and (H) available at http://www.sos.mo.gov/adrules/csr/csr.asp.

b. Service Disabled Veteran Enterprise and Honorably Discharged Veteran Enterprise certification certifications or subcontract questions should be directed to the Office of Equal Opportunity (OEO) at http://oeo.mo.gov.

1.4.2 Vendor is Responsible for Asking Questions About the RFP: It is the vendor’s responsibility to ask questions, request changes or clarifications, or otherwise advise the Division of Purchasing if the vendor believes that any language, specifications, or requirements are: (1) ambiguous, (2) contradictory or arbitrary, (3) violate any state or federal law or regulation, (4) restrict or limit the requirements to a single source, or (5) restrict or limit the vendor’s ability to submit a proposal.

1.4.3 Vendor Question Deadline: Every attempt shall be made to ensure that the vendor receives an adequate and prompt response. However, in order to maintain a fair and equitable procurement process, all vendors will be advised, via the issuance of an amendment to the RFP, of any relevant or pertinent information related to the procurement. All questions and issues should be submitted no later than ten (10) calendar days prior to the proposal closing date and time of the proposals. If not received prior to ten (10) calendar days before the proposal closing date and time, the Division of Purchasing may not be able to fully research and consider the respective questions or issues.

1.4.4 State’s Response to Vendor Questions: Upon the Division of Purchasing’s consideration of questions and issues, if the Division of Purchasing determines that changes are necessary, the resulting changes will be included in a subsequently issued RFP amendment(s); absence of such response indicates that the questions and issues were considered but deemed unnecessary for an RFP amendment. All vendors will be advised of any change to the RFP’s language, specifications, or requirements by a formal amendment to the RFP. There will be no posted written records of the questions/communications (i.e., formal question/answer document).

1.4.5 RFP is State’s Only Official Position: The only official position of the State of Missouri shall be that which is contained in the RFP and any amendments thereto.

1.5 Amendments:

1.5.1 If the Division of Purchasing determines that changes to the RFP are necessary, the resulting changes will be included in a subsequently issued RFP amendment(s) prior to the proposal closing date and time.

1.6 Glossary of Terms and Acronyms:

1.6.1 Whenever the following terms and acronyms appear in the RFP document or any amendment thereto, the definitions or meanings described below shall apply.

1.6.2 General Glossary, Acronyms, and Abbreviations:

a. Agency and/or State Agency means the statutory unit of state government in the State of Missouri for which the equipment, supplies, and/or services are being purchased by the Division of Purchasing (Purchasing). The agency is also responsible for payment, unless otherwise specified herein.

b. Amendment means a written, official modification to a solicitation or contract.

c. Attachment applies to all documents which are included with an RFP to incorporate any informational data or requirements related to the performance requirements and/or specifications.

d. Buyer means the procurement staff member of Purchasing.

e. Code of State Regulation (CSR) contains the current administrative rules of executive agencies of Missouri government. The regulations are arranged by agency rather than by subject.

f. Contract means a legal and binding agreement between two or more competent parties, for a consideration for the procurement of equipment, supplies, and/or services.

g. Contractor means a supplier, offeror, person, or organization who is a successful vendor as a result of an RFP and who enters into a contract.

h. Exhibit applies to forms which are included with an RFP for the vendor to complete and submit with their proposal prior to the specified closing date and time.

i. May means that a certain feature, component, or action is permissible, but not required.

j. Must means that a certain feature, component, or action is a mandatory condition.

k. Party refers to either the State of Missouri or the contractor as an entity that may enter into a contract pursuant to the terms herein.

l. Pricing Page(s) applies to the form(s) on which the vendor must state the price(s) applicable for the equipment, supplies, and/or services required in the RFP. The pricing pages must be completed and submitted by the vendor with the proposal prior to the specified proposal closing date and time.

m. Proposal Closing Date and Time and similar expressions mean the exact deadline required by the RFP for the receipt of sealed proposals.

n. Purchase Order means the authorized document issued by the state agency to the contractor indicating descriptions, quantities, and agreed prices for products and/or services.

o. Reasonable, Necessary or Proper as used herein shall be interpreted solely by the State of Missouri.

p. Request for Proposal (RFP) means the solicitation document issued by Purchasing to potential vendors for the purchase of equipment, supplies, and/or services as described in the document. The definition includes the following sections: Introduction and Background Information; Scope of Work; Terms and Conditions (“terms and conditions” and “Terms and Conditions” are used interchangeably throughout the RFP); General Contractual Requirements; and Vendor Submission, Evaluation, and Award Information; and the RFP Vendor Response Exhibits, Attachments, and Amendments of the RFP.

q. RSMo (Revised Statutes of Missouri) refers to the body of laws enacted by the Legislature which govern the operations of all agencies of the State of Missouri. Chapter 34 of the statutes is the primary chapter governing the operations of Purchasing.

r. Shall has the same meaning as the word must.

s. Should means that a certain feature, component and/or action is desirable but not mandatory.

t. State collectively referring to the state government and/or the agencies thereof.

u. Supplier has the same meaning as the word, vendor.

v. Vendor means the supplier, offeror, person, or organization that responds to an RFP by submitting a proposal with prices to provide the equipment, supplies, and/or services as required in the RFP document.

1.6.3 Technical Acronyms and Abbreviations:

a. REC – Renewable Energy Credit

b. RES – Renewable Energy Standard

c. Electrical Utility-Any Electrical Corporation as defined by section 386.020, RSMo.

d. Office of Public Counsel or OPC-The Separate Office created by section 386.700 et seq to represent the interests of the public in proceedings before the Missouri Public Service Commission

1.6.4 Artificial Intelligence (AI) Definitions:

a. Artificial Intelligence (AI): A machine-based system or service that can generate outputs such as content, predictions, recommendations, or decisions (i.e. virtual or real environments) influencing the environments they interact with.

b. Generative AI: Artificial intelligence (AI) service that generates new content, such as text, images, audio, code, synthetic data, or other content based on learned patterns from large data sets, including but not limited to Large Language Models (LLMs).

c. Machine Learning (ML): A type of Artificial Intelligence (AI) that helps computers and machines learn like humans, to perform tasks, and to improve their performance and accuracy through experience and exposure to more data.

d. AI Training: The computational process by which an artificial intelligence or machine learning model ingests and processes data to develop, adjust, or optimize its internal parameters, weights, or algorithms for the purpose of enabling the model to perform specified tasks, generate outputs, or make predictions. Training includes initial pre-training on large datasets, fine-tuning on domain-specific data, and any reinforcement or feedback-based optimization processes applied to the model.

e. Automated Decision-Making (ADM) Technology: Any system, software, or algorithmic process—utilizing either artificial intelligence, machine learning, or advanced rule-based logic—that automates the evaluation of data to make a decision, issue a score, or recommend a specific course of action with minimal or no human intervention.

f. AI Model: A component of an information system that implements AI technology and uses computational, statistical, or machine-learning techniques to produce outputs from a given set of inputs.

g. AI Prompt: The input, instruction, or command that a user provides to an Artificial Intelligence (AI) model to elicit a specific AI generated output, which can be in the form of text, code, images, audio, automated task or function.

h. Agentic AI: Artificial Intelligence (AI) service that exhibits a level of autonomy, proactivity, and decision-making capability, often acting as agents that can pursue goals, initiate actions, and adapt based on context without direct human prompting.

1.7 Accuracy of Background Information:

1.7.1 Although an attempt has been made to provide accurate and up-to-date information, the State of Missouri does not warrant or represent that the background information provided herein reflects all relationships or existing conditions related to this RFP.

****END OF INTRODUCTION AND BACKGROUND INFORMATION SECTION****

2. SCOPE OF WORK SECTION

2.1 General Requirements:

2.1.1 The contractor shall provide an REC Management System for the Public Service Commission, which the Office of Public Counsel shall have access to which meets or exceeds the specifications of the provisions and requirements stated herein and to the sole satisfaction of the state agency.

2.1.2 The contractor shall agree and understand the State of Missouri and the Missouri Public Service Commission are not responsible for any payments for the electronic renewable energy credit management system. The services herein shall be paid for through investor-owned utilities subscription and per REC fees in accordance with the Exhibit B Pricing Page.

2.1.3 The contractor shall provide an account administrator as the contact person to coordinate communication with the state agency.

2.1.4 Background Checks: If requested by the State Agency prior to providing services, the contractor must ensure all personnel (including third-party staff) pass nationwide fingerprint-based background checks through the Missouri State Highway Patrol (https://www.machs.mo.gov/MACHSFP/home.html) that meet or exceed state standards for employees. The contractor shall be responsible for all associated costs. The state reserves the right to require evidence of compliance or a formal attestation regarding the results and the contractor’s background check process for audit purposes.

2.1.5 The State of Missouri does not guarantee any minimum or maximum amount of the contractor’s products/services that may be required under the contract. The contractor shall provide products/services on an as needed basis. The State of Missouri does not guarantee any usage of the contract whatsoever.

2.1.6 Contractor’s Obligation: Unless otherwise specified herein, the contractor shall furnish all material, labor, facilities, equipment, and supplies necessary to perform the services required herein.

2.2 Minimum Experience Requirements:

2.2.1 The contractor must meet or exceed the following minimum experience requirements at the time of proposal submission and for the duration of the contract:

a. The contractor shall have two (2) or more clients that they are providing a web-based REC management System, it is highly desirable that one of the clients is a governmental entity/agency.

b. The contractor should have five (5) years of prior experience in providing a contractor hosted web-based applications that are similar to the requirements herein.

c. The contractor should have five (5) years of prior experience with the utility industry, particularly in the knowledge and business rules of an REC Management System.

2.3 Technical Requirements

2.3.1 The contractor shall provide a secure website through which all RES compliance transactions can be performed. The website shall be maintained in a manner such that transactions can be accomplished twenty four (24) hours per day, seven (7) days per week. The website shall allow access for transaction purposes to only registered and authorized users.

2.3.2 The contractor’s hosted web-based REC management system must allow origination, certification, tracking, transfer, import, export and retirement of RECs for purposes of compliance with the RES. It should also track certain environmental attributes as noted in 2.3.6 below.

2.3.3 The REC management system must allow the transfer of RECs from the North American Renewables RegistryTM.

2.3.4 The REC management system’s certification process shall consist of obtaining basic information relative to each generating facility, including but not limited to the following:

a. Geographical location;

b. A rating of its electrical generation capacity;

c. Owner of facility;

d. Fuel or energy source;

e. Commenced Operation Date; and

f. Electric transmission system interconnection.

2.3.5 The following types of RECs must be accommodated by the REC management system:

a. Created by the generation of electricity from wind;

b. Solar, including solar thermal source utilized to generate electricity, photovoltaic cells, or photovoltaic panels;

c. Dedicated crops grown for energy production;

d. Cellulosic agricultural residues;

e. Plant residues;

f. Methane from landfills, from agricultural operations or from wastewater treatment;

g. Thermal depolymerization or pyrolysis for converting waste material to energy;

h. Clean and untreated wood such as pallets;

i. Hydropower (not including pumped storage) that does not require a new diversion or impoundment of water and that has generator nameplate ratings of ten (10) megawatts or less; and

j. Fuel cells using hydrogen produced by one of the above-named renewable energy sources.

2.3.6 The REC Management system should accommodate and track environmental attributes or adders, but not be limited to the following:

a. Zero-emissions credits;

b. Technology (such as battery energy storage systems) or location based adders; and

c. Any other sources of energy that become available after November 4, 2008 and are certified as renewable by the Division of Energy within the Department of Natural Resources.

2.3.7 The REC management system must accommodate small generator reporting and aggregation with the following conditions:

a. The nameplate capacity of each generating unit shall be less than 150 kW;

b. Generating units aggregated shall be located in Missouri;

c. Generating units aggregated shall utilize the same technology.

2.3.8 The REC management system must accommodate the estimation and/or the measurement of RECs generated from small generators with nameplate capacities less than 150 kW.

2.3.9 The REC management system shall allow the Missouri jurisdictional electric utilities to determine whether specified data regarding the creation, purchase, transfer, and retirement of RECs by Missouri jurisdictional electric utilities is made publicly available.

2.3.10 The REC management system shall provide a mechanism for tracking, importing and exporting each REC to verify the following:

a. Creation date;

b. Source of REC;

c. Ownership traceability;

d. Current status (including status effective date).

e. Retired;

f. Active;

g. Expired; and

h. Other.

2.3.11 The REC management system must have a mechanism for ensuring that each REC retired for the purposes of compliance with the RES cannot be utilized for compliance with any other non-Federal requirement or green pricing program.

2.3.12 The REC management system must be accessible, but not limited to the following web-browsers:

a. Google Chrome;

b. Mozilla Firefox

c. Apple Safari; and

d. Microsoft Edge

2.3.13 The REC management system must have documented procedures related to the following:

a. The origination, certification, tracking, transfer, aggregation, import, export, and retirement of RECs;

b. Ability to track environmental attributes;

c. User registration and account structure;

d. Data security and confidentiality; and

e. Tracking of Errors and corrections

2.3.14 Any deviations from the REC management system’s documented procedures related to compliance or potential compliance with the Missouri RES must be documented and notification provided to Commission Staff.

2.3.15 The contractor shall have procedures in place to prevent a data breach and to handle a data breach.

2.4 Implementation Requirements:

2.4.1 The contractor must deliver and fully implement and operate the system to the satisfaction of the Commission.

2.4.2 It is highly desirable that the contractor’s REC management system be available for implementation thirty (30) days after notice to proceed from the state agency or other date as established by the Commission for users including Missouri jurisdictional electric utilities.

2.5 Training Requirements:

2.5.1 The contractor shall provide a minimum of two (2) sessions of virtual training at no cost to the state, for Commission staff, OPC staff and a limited number of utility representatives pertaining to utilization of the REC management system. Training manuals must be provided to the Commission's staff during all training programs and shall become the property of the state. Training manuals must be provided to the utility representatives at the training programs conducted for them.

2.6 Maintenance and Support Requirements

2.6.1 The contractor shall provide all labor, parts, materials, and transportation to maintain the REC management system in compliance with the requirements herein throughout the life of the contract. No charges may be made to the State of Missouri for maintenance of the system.

2.6.2 The contractor shall provide REC management system upgrades and technology enhancements consistent with the ongoing maintenance of a web-based application.

2.6.3 The contractor shall maintain a twenty-four (24) hour toll-free help line to manage inquiries from registered account holders and others. The contractor and Commission shall mutually agree to the performance standards for the help line.

2.6.4 The contractor must provide maintenance twenty-four (24) hours per day, seven (7) days per week, including preventive and remedial maintenance as well as all parts and labor. For repair service, the contractor must be able to respond by arriving onsite at the institution any time during a twenty-four (24) hour per day basis, 365 days of the year. All repairs or replacements must be started within four (4) hours following notification of a major system failure and the contractor must exhibit to the State of Missouri a best-efforts approach to completion of the repairs or replacement during the first twenty-four (24) hours following notification by the State of Missouri. The contractor shall understand and agree that a response shall be defined as a qualified technician, certified on the installed equipment, on-site or the problem corrected.

2.6.5 The contractor shall keep the Commission up to date on customer and technical support issues through email notification.

2.6.6 System maintenance shall also include all services necessary to maintain 98% system operational uptime, system backup procedures, and disaster recovery services described herein to include all system configurations, troubleshooting, resolution of system errors, malfunctions, and system restoration.

2.7 Reporting:

2.7.1 Annual Fee Report: The contractor shall provide an annual report to the state agency’s staff summarizing the fees and any other charges that have been received from Missouri jurisdictional electric utilities and other sources.

2.7.2 The contractor must provide the state agency with access to the REC management system reporting functionality so staff will be able to run any reports relating to any of the required tracking fields in the REC management system.

2.7.3 Report Data: Any data or other information gathered or used in reports which is Missouri specific information shall be and remain the property of the State of Missouri.

2.8 Licenseing Requirements:

2.8.1 Software License Grant: Any software licensed by the state in connection with the contractor’s system shall include a grant to the State of Missouri of seven (7) concurrent licenses, to use such software on its own behalf as well as on behalf of its agency end users, consultants, agents, whether now existing or hereafter. The state agency shall further have the right to appoint third-party agents to utilize the contractor’s system on its behalf as long as such third parties comport with the provisions of the licensing stated herein. The contractor shall grant the State of Missouri the right to use the software throughout the applicable contract period contingent upon payment through the investor-owned utilities of license fees specified in Exhibit B.

a. There shall be no upgrade fee charges and no additional license fee charges for increasing the number of users. There shall be no limitations placed on the system with regards to the size/capacity of the record population in which the system shall encompass/utilize. NOTE: All components of the system’s “licensed software” shall be for the specific purpose of operating the system as described herein.

2.8.2 License Grant for Software-as-a-Services (SaaS) (i.e. Subscription Licensing): The contractor shall grant the State of Missouri licenses for internal state agency users and external users for a contractor-hosted system. The contractor shall be responsible for the maintenance of the subscription license and contractor-hosted cloud system service platform including hardware and maintenance, patches, software upgrades, and bug fixes. The state shall have the right to receive the automated system without limitations as long as the subscription license fees are current. The SaaS license shall not be a named license.

a. Subscription Licensing: The system solution’s subscription licensing arrangement must include all maintenance and technical support fees required in order to receive system updates (which include enhancements, corrections, modifications, system configuration, database maintenance, additions, and later versions of the licensed product) and fixes to technical support problems/website errors shall be included in the license subscription fees specified in Exhibit B.

2.8.3 Software License Agreements: The state will execute software license agreements directly with the software manufacturer, as applicable. The contractor shall facilitate all necessary dialog and communication between the state and the software manufacturer in order to arrive at a license agreement that is appropriately aligned with the requirements herein, terms and conditions, pricing, and state law. All contractor-hosted, cloud system, subscription license agreements shall guarantee the use of the platform as long as annual subscription payments are up-to-date. A failure of the state to reach agreement with the software manufacturers will jeopardize the continuation of the contract and may result in cancellation. The contractor must agree and understand that in event of conflict between the software license agreement and the requirements, provisions, and terms and conditions of the contract, the contract governs over all conflicts.

2.8.4 Third Party Software: The contractor shall be responsible for the licensing of all third-party software utilized as part of, or in conjunction with, the contractor’s system. The terms and conditions of such licenses shall be compatible with and compliant to the State of Missouri’s terms and conditions expressed herein, and the RFP’s intended use of the system, and shall guarantee the continuous use of such third-party software by the state agency for the term of the final, definitive agreements.

2.8.5 Preserving Rights to System Functionality: In the event that the contractor deletes functions that were mandatory requirements of the RFP from the licensed system and offers those functions in other or new system products, the portion of those other or new products which contain the functions in question, or the entire product, if the functions cannot be separated out, shall be provided to the state agency under the terms of their license along with any applicable modifications necessary to make the product operate with the licensed system, at no cost to the state agency and shall be covered under the license/maintenance at no cost to the state agency.

2.8.6 Prohibition of Electronic Self-Help: The contractor agrees that in the event of any dispute with the state regarding an alleged breach of contract, the contractor shall not use any type of electronic means to prevent or interfere with the operation of or agency access to the licensed system, without first obtaining a valid court order authorizing same in accordance with the State of Missouri Terms and Conditions, Section 2 subparagraph e. The state shall be given proper written notice and an opportunity to be heard in connection with any request for such a court order. The contractor understands that it is foreseeable that a breach of this provision could cause substantial harm to the state. No limitation of liability, whether contractual or statutory, shall apply to a breach of this paragraph.

2.8.7 License-Type Conversions: If the state agency chooses or if the contractor mandates the state agency to transfer its current license type to another license type, then the CPU capacity licensed under the existing license type will be converted to the new license type with no additional charges for the same CPU capacity under the same current operating system environment (i.e., the current operating system has not changed; only the way in which the software is licensed has changed).

2.8.8 Intellectual Property Rights: The contractor hereby warrants that it has and will continue to have free and clear title (including all proprietary rights) to any products delivered to the State of Missouri or the right to license, transfer, or assign any and all products that are licensed, transferred, or otherwise provided to the state by the contractor, pursuant to this contract. Upon request of the State of Missouri, the contractor shall demonstrate that all aspects of the licensed software are its original work or that the contractor is authorized to sublicense on the terms stated herein. The State of Missouri shall not be liable in the event of loss, incident, destruction, theft, damage, etc., for the licensed software. It shall be the contractor's sole responsibility to obtain insurance coverage for such loss in an amount that the contractor deems appropriate.

2.8.9 Software Rights & Protections: The State of Missouri acknowledges that the licensed products are proprietary and are the intellectual property of the contractor. The state agency shall only use the software in accordance with the licensing terms and conditions as provided in this RFP. The state agency shall not permit the licensed products, acquired under this contract, to be used by any other person except for employees, municipal/local law enforcement staff, agents and/or consultants of the State of Missouri (“Authorized Agency”) who need to use the licensed products in the performance of their duties for the state agency and who are authorized and enabled by the State of Missouri to access and utilize the licensed products.

a. It shall be the contractor’s responsibility and expense to thoroughly educate and inform state agencies and their software end users regarding the software usage and copyrights. In the event that agency personnel or the contractor discover any misuse of the software or related documentation within the state agency(s), they must immediately notify the designated software manager, department manager, or legal counsel. Unauthorized reproduction of software is a federal offense. Offenders may be subject to damages, fines, and penalties in accordance with United States Copyright Law.

2.8.10 Upgrades/Replacements: The contractor shall agree and understand that the State of Missouri reserves the right to bid out any future upgrades and/or replacements.

2.8.11 Illicit Code: The contractor must warrant that unless necessary to perform valid duties under this contract or can be verified and documented as to not cause harm to the state’s operating environment and/or utilization of the system, any system programs developed or provided by the contractor under this contract to the State of Missouri shall: (i) contain no hidden files; (ii) not replicate, transmit, or activate itself without control of a person operating computing equipment on which it resides; (iii) not alter, damage, or erase any data or computer programs without control of a person operating the computing equipment on which it resides; (iv) contain no virus or similar code known or unknown to the contractor; (v) contain no enabled restrictive key, node lock, time out or other function, whether implemented by electronic, mechanical, or other means, which limits/hinders the use or access to any software programs based on residency on a specific hardware configuration, frequency of duration of use, or other limiting criteria (the matters described in (i) - (v) comprise illicit code).

a. Provided and to the extent any program has the foregoing attributes described in 2.8.14 (i) through (iv) above, and notwithstanding any other provision of this contract to the contrary, the contractor shall be considered in default of this contract, and no cure period shall apply unless contractor can demonstrate that it took reasonable steps to prevent the presence of illicit code in the licensed system, in which case contractor may receive a cure period of forty-eight (48) business hours to remove the illicit code. At the request of the State of Missouri, the contractor must remove any such illicit code from the licensed system. In addition to any other remedies available to it under this contract, the State of Missouri reserves the right to pursue any civil and/or criminal penalties available to it against the contractor. The contractor agrees, in order to protect the State of Missouri from damages which may be intentionally or unintentionally caused by the introduction of such illicit code to the State of Missouri’s computer network, no software, plug-in, or other electronic file shall be installed, executed, or copied on the State of Missouri’s equipment without the express approval of the agency’s program manager.

b. If the software contains a restrictive key, expiration date, or other limiting function as described in 2.8.14(v) above, such restrictive function must be disabled or otherwise prevented from expiring, limiting or hindering the use or access of the software or data under this contract.

2.8.12 The solution must be compliant with promulgated accessibility standards (e.g., ADA Section 508).

2.8.13 The contractor’s production solutions must not include Beta software.

2.8.14 All proposed software and solutions should adhere to industry best practices.

2.9 Artificial Intelligence (AI) Requirements:

2.9.1 The contractor shall disclose in writing whether any system, service, or deliverable provided under this contract incorporates or relies upon Artificial Intelligence (AI), Machine Learning, or Automated Decision-Making Technologies. Such disclosure must occur prior to implementation or use in the performance of state business and must be approved by the state, in writing, before the contractor may proceed. The state reserves the right to request additional technical and risk documentation prior to granting approval. Failure to disclose such utilization shall constitute a material breach of contract.

a. Initial disclosure of the intent to use AI shall be provided by the contractor in their proposal response prior to contract execution.

b. If any AI, Machine Learning, or Automated Decision-Making Technology is introduced after initial disclosure prior to contract award, the contractor shall provide the state with a minimum of 20 business days' advance written notice to state designated contract manager, who will coordinate technical and risk review with the Information Technology Services Division, prior to utilizing any new, previously undisclosed, or third-party AI (including Generative AI), Machine Learning, or Automated Decision-Making Technologies in the performance of its obligations under this contract. The state retains sole discretion to approve or deny the contractor's use or integration of these technologies into the contract work. The contractor shall not proceed with the integration or use of these technologies unless and until written approval is granted by the state. Failure to respond by the state shall not be construed as approval.

2.9.2 If AI is used to develop or perform any services under the contract, the contractor must not transmit, process, analyze, store, train, fine-tune, or otherwise use any State Data in any Artificial Intelligence (AI) system—including Generative AI (GenAI), Large Language Models (LLMs), Machine Learning models, external analytics services, or Automated Decision-Making Technologies—without prior written authorization from the state.

a. Notwithstanding any authorization granted by the previous statement, the contractor shall not use State Data, or any derivative data, to train, fine-tune, or enhance any proprietary or third-party AI models.

2.9.3 The contractor shall ensure that its employees, agents, subcontractors, affiliates, and any third parties acting on its behalf strictly comply with all AI provisions set forth in this contract. The contractor shall be fully responsible and strictly liable for any acts, omissions, or violations of these requirements by such parties. The contractor shall agree to defend, indemnify, and hold harmless the state from any claims, damages, liabilities, or expenses (including legal fees) arising out of or related to the unauthorized or non-compliant use of AI technologies by the contractor or any party acting on its behalf.

2.9.4 The state reserves the right to deny the use of any AI system for any reason, or to rescind previous approval, at its sole discretion.

2.9.5 The state reserves the right to amend the contract, without additional cost, to incorporate updated AI terms, conditions, and security protocols. Furthermore, the state may cancel this Contract immediately, without penalty, if it determines in its sole discretion that the contractor’s use or integration of AI, Machine Learning, or Automated Decision Making Technologies, pose unacceptable risk(s) to state data, operations, or cybersecurity.

2.9.6 If AI is used to provide the system or services required herein, the contractor must comply with NIST AI Risk Management Framework 1.0, or newer versions, as required to satisfy an audit from a federal agency, state agency, or other regulatory body, including framework revisions adopted by these entities.

2.9.7 The contractor must provide the state the information identified in subparagraphs a, b, and c below for any Machine Learning, AI models, or Automated Decision-Making Technologies used to provide the system or services required in the contract. Additionally, the state reserves the right to request the information identified in subparagraphs d through l from the contractor after a risk assessment has been completed regarding the information provided in subparagraphs a, b, and c.

a. A detailed description of the Machine Learning, AI model, or Automated Decision-Making Technologies to be used (e.g., model name, provider);

b. The specific purpose and scope of its use;

c. A description of the data inputs to be used and the outputs to be generated;

d. A summary of the contractor’s risk assessment, including how the contractor plans to mitigates risks of inaccuracy, bias, and data privacy violations;

e. Process workflow;

f. Network diagrams;

g. Large Language Model (LLM) frameworks and related services;

h. LLM data sources during training and ongoing;

i. Information security procedures;

j. Governance related to the LLM and infrastructure;

k. Audit procedures; and

l. Any other additional documentation or technical specifications regarding the technology that the state may request to evaluate compliance with state policies or assess and mitigate risk.

2.9.8 The state reserves the right to audit the Machine Learning solution, AI solution, and Automated Decision-Making Technologies used within the system or service. This audit may evaluate data usage, compliance, and the ethics and accuracy of the system's calculations and outputs.

2.9.9 The contractor shall be solely and fully responsible for the factual accuracy, completeness, and quality of all deliverables, regardless of whether AI was used in the preparation of the deliverable.

2.9.10 The contractor must warrant that all content, data, analysis, and recommendations generated by an AI system have been independently reviewed, fact-checked, and verified for accuracy and appropriateness by contractor qualified human experts prior to its submission of the content, data, analysis, and recommendations to the state.

2.9.11 The contractor warrants that all deliverables, data, and outputs provided under this contract shall be accurate, complete, and compliant, regardless of whether AI or Generative AI technologies were used to produce them. The contractor acknowledges that third-party AI provider disclaimers shall not shield the contractor from liability. The contractor shall indemnify, defend, and hold harmless the state against any third-party claims, losses, or damages resulting from AI-generated errors, omissions, systemic defects, or "hallucinations," and shall bear all costs associated with remediating such errors.

2.9.12 Data Isolation: The contractor must ensure that any approved use of an AI system is conducted in a secure, isolated environment (e.g., an enterprise-level instance) where "opt-out" from model training is enabled and enforced, and where no State Data is retained, logged, or used by the AI provider for any purpose other than to fulfil contractor’s obligations under this contract.

2.10 State Data:

2.10.1 State Data Location: All data associated with the service shall only be hosted, stored, and accessed within the United States. The contractor shall not store, locate, transfer, transmit or permit access to any portion of the state agency’s system instance, configuration, customization, documentation, or code related to the contractor’s services, nor any state agency data at rest, outside of the United States. The contractor shall also prohibit all personnel from storing state agency data on removeable media, including but not limited to USB drives, optical discs, or on mobile or personally owned devices such as tablets, mobile phones, or laptops. Storage of such data is permitted only on devices used exclusively within secured and controlled data centers.

a. Ownership: The state’s electronic data or information submitted by the state or its authorized users with authorized access to the solution/service shall be considered “State Data” for ownership purposes of the contract, as the state serves as either the owner or curator of the data submitted in the solution/service. “State Data” shall include: (a) the state’s data collected, used, processed, stored, or generated as the result of the Services; (b) personally identifiable information (“PII”) collected, used, processed, stored, or generated as the result of the services, including, without limitation, any information that identifies an individual, such as an individual’s social security number or other government-issued identification number, date of birth, address, telephone number, biometric data, mother’s maiden name, email address, credit card information, or an individual’s name in combination with any other of the elements listed herein; (c) protected health information (“PHI”) as that term is defined under the Privacy Rule, 45 Code of Federal Regulations (CFR) §160.103: and (d) all aforementioned data in (a), (b), and (c) without regard to whether such data is encrypted and/or de-identified. State data is and shall remain the sole and exclusive property of the state and all right, title, and interest in the same is reserved by the state.

b. “State Data” stored in the software and services being provided as a result of the contract shall also be known and treated by the contractor as confidential information in accordance with the contract, applicable contractor’s documentation, and applicable law.

2.10.2 Contractor Use of State Data: The contractor shall: (a) keep and maintain state data in strict confidence, using such degree of care as is appropriate and consistent with its obligations as further described in the contract and applicable law to avoid unauthorized access, use, disclosure, or loss; (b) use and disclose state data solely and exclusively for the purpose of providing the services, such use and disclosure being in accordance with the contract, any applicable Statement of Work, and applicable law; (c) not use, sell, rent, transfer, distribute, or otherwise disclose or make available state data for contractor’s own purposes or for the benefit of anyone other than the state without the state’s prior written consent; and, (d) not provide state data to any third party without the express written permission of the state. “…for the purpose of providing the services” as referenced above includes the right of the contractor to use state data to prevent or address service or technical problems, and verify service improvements, in accordance with the contract and the solution’s documentation, or in accordance with the state’s instructions.

2.10.3 Incremental Extraction of State Data: The contractor shall provide the state with the ability to conduct an incremental extraction of the state’s data (e.g. new and changed data) from the solution on a nightly basis to update the data available in the State Data Warehouse.