YH26-0026_Verde.docx.pdf

CONTRACT # YH26-0026

Verde Environmental Technologies, Inc.

This Contract is entered into by and between Verde Environmental Technologies, Inc. and the Arizona Health Care Cost Containment System (AHCCCS) and shall be effective upon execution by both parties and terminated pursuant to the terms set forth in this agreement.

Project: Sourcing and Distribution of Deterra Medication Disposal Bags Contractor: Verde Environmental Technologies, Inc.

Amount: $1,000,000

Term of Contract: The term of this Contract is from date of last signature through September 30, 2025, unless otherwise extended by mutual agreement of the parties in a duly authorized and executed amendment.

This project is contingent upon funding that is comprised of state and federal funds. As a reminder, the following terms and conditions in your contract apply to the availability of funding for this project: Uniform Terms and Conditions, Section 4 Costs and Payments:

4.5. Availability of Funds for the Next State Fiscal Year.

Funds may not presently be available for performance under this Contract beyond the current State Fiscal Year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current State Fiscal Year until funds are made available for performance of this Contract.

4.6. Availability of Funds for the Current State Fiscal Year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these Materials or Services are not funded, the State may take any of the following actions:

4.6.1. Accept a decrease in price offered by the Contractor;

4.6.2. Cancel the Contract; or

4.6.3. Cancel the Contract and re-solicit the requirements.

Should the funding for this project become unavailable, discontinued, paused, or restructured for any reason, including State or Federal funding adjustments, the project may be temporarily or permanently stopped, terminated or cancelled in whole or in part as directed by AHCCCS in writing.

CERTIFICATION

By signing this Contract, the Contractor certifies:

1. The negotiation of this contract did not involve collusion or other anti-competitive practices.

2. The Contractor shall not discriminate against any employee or applicant for employment in violation of Federal

Executive Order 11246, State Executive Order 2009-09 or A.R.S. §§ 41-1461 through 1465.

3. The Contractor has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with this Contract. Failure to provide a valid signature affirming the stipulations required by this clause shall result in rejection of the offer. Signing the contract with a false statement shall void the offer, any resulting contract and may be subject to legal remedies provided by law.

4. The Contractor is in compliance with A.R.S. § 41-3532 when offering electronics or information technology products, services, or maintenance; and

5. The Contractor is not debarred from, or otherwise prohibited from participating in any contract awarded by federal, state, or local government.

Docusign Envelope ID: 3E2EDBE5-C332-4844-9307-CC46158E24CD

This Contract is the complete and exclusive statement of the understanding between the parties, and it supersedes all proposals, oral or written, and all other documents or communications between the parties relative to the subject matter herein covered, unless such documents or communications are specifically included by reference.

Electronic Submission: An electronic or portable document file (PDF) copy of this amendment shall serve as the original.

IN WITNESS THEREOF THE PARTIES HERETO SIGN THEIR NAMES IN AGREEMENT.

NAME OF CONTRACTOR/PROVIDER:

Verde Technologies, Inc.

ARIZONA HEALTH CARE COST CONTAINMENT

SYSTEM

SIGNATURE OF AUTHORIZED INDIVIDUAL:

SIGNATURE:

TYPED NAME:

TYPED NAME:

TITLE:

TITLE:

DATE: DATE:

Procurement Manager

Tracey Thomas

8/1/2025

Peter Lecy

General Manager

8/5/2025

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM

YH26-0026

1.0 PROJECT TITLE: Arizona Deterra Drug Deactivation Household Mailer Distribution

2.0 PROJECT TIMELINE: Upon Execution through September 30, 2025, unless otherwise extended by mutual agreement.

3.0 PURPOSE: Arizona Health Care Cost Containment System (hereinafter “AHCCCS”) is seeking consultant services to purchase and distribute drug deactivation bags along with substance use prevention messaging on mailer cards to households in Arizona. The availability of and ease of access to drugs are known risk factors of substance misuse among youth and adults at risk for substance misuse and abuse. Since the opioid pandemic began, a common place to obtain opioid drugs was from someone else’s medicine cabinet, such as a family member, or a friends’ family member. According to the 2024 Arizona Youth Survey1 (AYS), 8th, 10th, and 12th grade students reported obtaining prescription drugs from family or relatives (28.1%), from home (42.2%) and from friends (17.6%). Other drugs may also be sought out and misused by accessing prescription drugs that are not properly stored or disposed of. The proper disposal and deactivation of unused and unwanted drugs is a substance use prevention strategy that effectively reduces access to controlled substances and other drugs for people that they are not prescribed to.

Deterra Drug Deactivation System focuses on preventing misuse where it often begins – in the home medicine cabinet, by providing a product that not only disposes of, but also effectively deactivates the drug. This prevention strategy is also notable for its impact on environmental public health issues, reduces the amount of medications/drugs that enter the environment through improper disposal such as being flushed down the toilet or thrown in the garbage. Combine this strategy with substance use prevention messaging, and mailing the Deterra bags directly to people’s homes, and the result is a functional prevention education, environmental, and resource referral strategy that meets people where they are. Deterra’s mailer distribution program/service also offers the ability to customize the included prevention messaging to the local communities. AHCCCS and Deterra will collaborate to develop the language and imaging that will be disseminated with the Deterra bags and strategize on data-driven plan for distribution of Deterra mailers kits in Arizona.

4.0 BACKGROUND AND PROJECT DESCRIPTION:

The Substance Use Prevention, Treatment, Recovery Services Block Grant (SUPTRS BG) Program, herein referred to as the Substance Use Block Grant (SUBG), provides funds to all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, six (6) Pacific jurisdictions, and one (1) tribal entity to prevent and treat substance abuse. The SUBG program’s objective is to help plan, implement, and evaluate activities that prevent and treat substance abuse. The SUBG is authorized by Section 1921 of Title XIX, Part B, Subpart II and III of the Public Health Service (PHS) Act. The SUBG program targets the following populations and services:

• Pregnant women and women with dependent children

• People who use drugs by injection

• Tuberculosis (TB) services

• Early intervention services for Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome

(HIV)/AIDS

• All other substances/substance use populations

1 2024 AYS https://www.azcjc.gov/Portals/0/Documents/pubs/AYSReports/2024/2024_AYS_State_Report.pdf https://www.azcjc.gov/Portals/0/Documents/pubs/AYSReports/2024/2024_AYS_State_Report.pdf

• Primary prevention services – SAMHSA requires that grantees spend no less than 20% of their SUBG allotment on substance abuse primary prevention strategies. These strategies are directed at individuals not identified to be in need of treatment.

AHCCCS is the Grantee for the SUBG, including its supplemental funding such as the SUBG funding from the American Rescue Plan Act (ARPA) administered through SAMHSA. AHCCS uses the SUBG for prevention, treatment, recovery support, and other services to supplement Medicaid, Medicare, and private insurance services.

5.0 The Contractor/Consultant shall:

5.1 Lead all strategic discussions on the planning and implementation of the project.

5.2 Design, print, and disseminate educational postcards that accompanies the drug deactivation pouches, including providing suggested language and graphic/artwork to be included on the postcards.

5.2.1 Make necessary revisions per HACCCS request during the AHCCCS/customer review phase of the development, and customize the materials to Arizona.

5.3 Be responsible for all aspects of the logistics of developing, printing, assembling, and shipping drug deactivation pouches with postcards and overwrapping.

5.3.1 With AHCCCS input, create/provide the mailing list for mailing the drug deactivation pouches will be mailed.

5.3.2 Facilitate USPS processing

5.4 Provide clear timeline requirements to AHCCCS for any review or approvals of project deliverables to ensure the project stays on schedule.

5.5 Submit required deliverables per Section 8 Reporting Requirements and/or Deliverables.

5.6 Carry out all activities and tasks as outlined in Attachment B.

6.0 AHCCCS will:

6.1 Provide guidance to the contractor for the provision of services.

6.2 Provide AHCCCS branding standards.

6.3 Adhere to required timeline requirements identified by the Contractor to ensure the project stays on schedule.

7.0 Funding

7.1 This project will be supported by SAMHSA SUBG American Rescue Plan Act (ARPA) Funds.

7.2 Contractor must ensure its compliance with the following:

7.2.1 Uniform Guidance Title 2, Subtitle A, Part 1, Chapter II, CFR part 200 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1

7.2.2 State of Arizona Accounting Manual https://gao.az.gov/state-arizona-accounting-manual-saam

7.2.3 SAMHSA https://www.samhsa.gov/grants/block-grants/sabg and https://www.samhsa.gov/grants/block-grants/subg/primary-prevention-course

7.2.4 AHCCCS FAQs

https://www.azahcccs.gov/Resources/Downloads/Grants/FrequentlyAskedQuestions.pdf

7.3 Contractor must have business systems in place that are in compliance with 2 CFR Subtitle A, Part 1, Chapter II, part 200 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://gao.az.gov/state-arizona-accounting-manual-saam https://www.samhsa.gov/grants/block-grants/sabg https://www.samhsa.gov/grants/block-grants/subg/primary-prevention-course https://www.azahcccs.gov/Resources/Downloads/Grants/FrequentlyAskedQuestions.pdf https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1

8.0 Reporting Requirements and/or Deliverables

Timeframe Deliverable Description Due Date Send To:

Monthly Invoice/Contract or Expenditure Report (CER)

Provide an accurate and detailed expenditure report with back up documentation for allowable reimbursement of grant fund expenditures. The CER form can be found on Attachment A and at:

https://www.azahcccs.go v/PlansProviders/Guides ManualsPolicies/index.html

Emailed invoices/CERs must include the following in the subject line: (Funding Source) -

(Contractor Name) - (Invoice

Amount) – (Month in which expenses were incurred).

15th of the month, following month-end. In the event that the 15th falls on a weekend of holiday, the CER is due the next business day.

BHSinvoices@azahcccs.gov

One-time Draft/Mock Up of Postcard

Provide AHCCCS with a draft of the postcard, including graphics/images/art, and prevention messaging for review and approval.

See Attachment B SUBG@azahcccs.gov

Emma.hefton@azahcccs.gov

One-Time Printer Proof of Postcard

Provide AHCCCS with a printer proof of post card for review and approval prior to dissemination.

See Attachment B SUBG@azahcccs.gov

Emma.hefton@azahcccs.gov

One-Time Mailing List Provide AHCCCS with the list of addresses that the Contractor intends to send the drug deactivation packages to for review and approval.

See Attachment B SUBG@azahcccs.gov

Emma.hefton@azahcccs.gov

One-Time Final Report Report documenting how many mailers were purchased, distributed, and details about who received them (e.g.

personal and geographical demographics)

10/30/2025 SUBG@azahcccs.gov

Emma.hefton@azahcccs.gov

Docusign Envelope ID: 3E2EDBE5-C332-4844-9307-CC46158E24CD mailto:BHSinvoices@azahcccs.gov mailto:SUBG@azahcccs.gov mailto:Emma.hefton@azahcccs.gov mailto:SUBG@azahcccs.gov mailto:Emma.hefton@azahcccs.gov mailto:SUBG@azahcccs.gov mailto:Emma.hefton@azahcccs.gov mailto:SUBG@azahcccs.gov mailto:Emma.hefton@azahcccs.gov

One-time Final Invoice/CER

Submit final invoice or Contractor Expenditure Report (CER) with supporting documentation

15 days after contract end date

BHSInvoices@azahcccs.gov with a copy to [insert Grant Coordinator email address]

Upon Award

Federal Funding Accountability and Transparency Act (FFATA)

Required per 2 CFR Chapter 1, Part 170 REPORTING SUB-

AWARD AND EXECUTIVE

COMPENSATION

INFORMATION:

https://www.azahcccs.gov/ Resources/Grants/FFATA/

15 days after receiving fully executed contract

AHCCCSGrants@azahcccs.g ov with a copy to: [insert Grant Coordinator email address]

9.0 Notices

9.1 For programmatic notices to AHCCCS, report to:

Emma Hefton, SUBG Grant Administrator Division of Behavioral Health and Housing

AHCCCS

150 North 18th Avenue Phoenix, AZ 85007 Phone: 602-417-4748 Email: emma.hefton@azahcccs.gov

9.2 For contractual correspondence and questions, report to procurement:

Marie Horn, Procurement Specialist Email: Procurement@azahcccs.gov

10.0 Invoices

10.1 Contractor Expenditure Reports (CERs) from Contractor to AHCCCS shall be sent in accordance with Section

8, Reporting Requirements.

10.2 Each CER shall provide the following information, as applicable:

10.2.1 AHCCCS assigned contract number, YH26-0026.

10.2.2 Description of services.

10.2.3 Name of AHCCCS contact person (or program person) for this contract, Emma Hefton.

10.2.4 Date(s) services were performed.

10.2.5 Signature and title of authorized representative.

10.2.6 Adequate supporting documentation.

Docusign Envelope ID: 3E2EDBE5-C332-4844-9307-CC46158E24CD mailto:BHSInvoices@azahcccs.gov https://www.azahcccs.gov/%20Resources/Grants/FFATA/ https://www.azahcccs.gov/%20Resources/Grants/FFATA/ mailto:AHCCCSGrants@azahcccs.gov mailto:AHCCCSGrants@azahcccs.gov mailto:Procurement@azahcccs.gov

ATTACHMENT A

DEFINITIONS

As used in this Contract, the terms listed below are defined as follows:

1.0 AHCCCS: The Arizona Health Care Cost Containment System – a managed health care program which pertains to health care services provided pursuant to A.R.S. 36-2903 et seq., and is also the name of the State agency.

2.0 CONTRACT: The combination of the Contract Terms and Conditions, and Scope of Work; Contract Amendments;

and any terms applied by law.

3.0 CONTRACT AMENDMENT: A written document signed by the Procurement officer that is issued for the purpose of making changes in the contract.

4.0 CONTRACTOR: A person who has a contract with AHCCCS.

5.0 DAYS: Calendar days unless otherwise specified.

6.0 GRATUITY: A payment, loan, subscription, advance, deposit of money, services or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.

7.0 HEALTH PLAN: An organization which contracts with the AHCCCS Administration to administer the provision of a comprehensive package of AHCCCS covered acute and behavioral health care services to AHCCCS members enrolled with the health plan.

8.0 MAY: Indicates something that is not mandatory but permissible.

9.0 MATERIALS: All property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space.

10.0 PROCUREMENT OFFICER: The person, or his or her designee, duly authorized by the State and AHCCCS to enter into and administer Contracts and made written determinations with respect to the Contract.

11.0 PROGRAM CONTRACTOR: An organization which contracts with the AHCCCS Administration to execute the provision of a comprehensive package of ALTCS covered acute care, behavioral health services and long term care services to ALTCS members enrolled with the program contractor.

12.0 SHALL, MUST: Indicates a mandatory requirement. Failure to meet these mandatory requirements may result in the rejection of a proposal as non-responsive.

13.0 SHOULD: Indicates something that is recommended but not mandatory. If the Offeror fails to provide recommended information, the State may, at its sole option, ask the Offeror to provide the information or evaluate the proposal without the information.

14.0 SCOPE OF WORK: Those provisions of this solicitation which specify the work and/or results to be achieved by the Contractor.

15.0 SUBCONTRACT: Any Contract, express or implied, between the Contractor and another party or between a subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any material or any service required for the performance of the Contract.

16.0 STATE: The State of Arizona.

17.0 STATE FISCAL YEAR: The period beginning with July 1 and ending June 30.

Uniform Terms and Conditions

Version 10.5

1. Definition of Terms. As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows:

1.1. “AI” means the science and engineering of making machines capable of performing tasks that are typically associated with human intelligence, such as learning and problem-solving, and includes without limitation: AI systems, classic AI, external AI, generative AI, and large language model (LLM) AI.

1.2. “Attachment” means any item the Solicitation which requires the Offeror to submit as part of the Offer.

1.3. “Contract” means the combination of the Solicitation, including the Instructions to Offerors, the

Uniform and Special Terms and Conditions, and the Specifications and Statement or Scope of Work; the Offer and any Best and Final Offers; and any Solicitation Amendments or Contract Amendments.

1.4. "Contract Amendment" means a written document signed by the Procurement Officer that is issued for the purpose of making changes in the Contract.

1.5. “Contractor” means any person who has a Contract with the State.

1.6. “Data” means recorded information, regardless of form or the media on which it may be recorded. The term may include technical data and computer software. The term does not include information incidental to contract administration, such as financial, administrative, cost or pricing, or management information.

1.7. “Days” means calendar days unless otherwise specified.

1.8. “Exhibit” means any item labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the

Solicitation generally containing maps, schematics, examples of reports, or other documents that will be used to perform the requirements of the Scope of Work after contract award.

1.9. “Gratuity” means a payment, loan, subscription, advance, deposit of money, services, or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.

1.10. “Materials” means all property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space.

1.11. “Procurement Officer” means the person, or his or her designee, duly authorized by the State to enter into and administer Contracts and make written determinations with respect to the Contract.

1.12. “Services” means the furnishing of labor, time or effort by a Contractor or Subcontractor which does not involve the delivery of a specific end product other than required reports and performance, but does not include employment agreements or collective bargaining agreements.

1.13. “State” means any department, commission, council, board, bureau, committee, institution, agency, government corporation or other establishment or official of the executive branch or corporation commission of the State of Arizona that executes the Contract.

1.14. “State Fiscal Year” means the period beginning with July 1 and ending June 30.

1.15. “Subcontract” means any Contract, express or implied, between the Contractor and another party or between a Subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any Materials or any Services required for the performance of the Contract.

1.16. “Subcontractor” means a person who contracts to perform work or render Services to a Contractor or to another Subcontractor as a part of a Contract with the State.

2. Contract Interpretation

2.1. Arizona Law. The Arizona law applies to this Contract including, where applicable, the Uniform

Commercial Code as adopted by the State of Arizona and the Arizona Procurement Code, Arizona Revised Statutes (A.R.S.) Title 41, Chapter 23, and its implementing rules, Arizona Administrative Code (A.A.C.) Title 2, Chapter 7.

2.2. Implied Contract Terms. Each provision of law and any terms required by law to be in this Contract are a part of this Contract as if fully stated in it.

2.3. Contract Order of Precedence. In the event of a conflict in the provisions of the Contract, as accepted by the State and as they may be amended, the following shall prevail in the order set forth below:

2.3.1. Special Terms and Conditions;

2.3.2. Uniform Terms and Conditions;

2.3.3. Statement or Scope of Work;

2.3.4. Specifications;

2.3.5. Attachments;

2.3.6. Exhibits; then

2.3.7. Any other documents referenced or included in the Solicitation including, but not limited to, any Bid or Offer documents provided by the Contractor that do not fall into one of the above categories.

2.4. Relationship of Parties. The Contractor under this Contract is an independent Contractor. Neither party to this Contract shall be deemed to be the employee or agent of the other party to the Contract.

2.5. Severability. The provisions of this Contract are severable. Any term or condition deemed illegal or invalid shall not affect any other term or condition of the Contract.

2.6. No Parol Evidence. This Contract is intended by the parties as a final and complete expression of their agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or explain any terms used in this document and no other understanding either oral or in writing shall be binding.

2.7. No Waiver. Either party’s failure to insist on strict performance of any term or condition of the Contract shall not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming performance knows of the nature of the performance and fails to object to it.

3. Contract Administration and Operation

3.1. Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each Subcontractor to retain any and all Data and other “records” relating to the acquisition and performance of the Contract for a period of five (5) years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times. Upon request, the Contractor shall produce a legible copy of any or all such records.

3.2. Non-Discrimination. The Contractor shall comply with State Executive Order Nos. 2023-09, 2023-01, 2009-09, and any and all other applicable Federal and State laws, rules and regulations, including the Americans with Disabilities Act. Contractor shall include these provisions in contracts with Subcontractors when required by Federal or State law.

3.3. Audit. Pursuant to A.R.S. § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any Subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract.

3.4. Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, Subcontractor facilities, and the Contractor’s processes or services, at reasonable times for inspection of the facilities or Materials covered under this Contract as required under A.R.S. § 41-2547. The State shall also have the right to test, at its own cost, the Materials to be supplied under this Contract. Neither inspection of the Contractor’s facilities nor Materials testing shall constitute final acceptance of the Materials or Services. If the State determines non-compliance of the Materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection.

3.5. Notices. Notices to the Contractor required by this Contract shall be made by the State to the person indicated on the Offer and Acceptance form submitted by the Contractor unless otherwise stated in the Contract. Notices to the State required by the Contract shall be made by the Contractor to the Solicitation Contact Person indicated on the Solicitation, stated in the Contract, or listed on the State’s eProcurement system. An authorized Procurement Officer and an authorized Contractor representative may change their respective person to whom notice shall be given by written notice to the other and an amendment to the Contract shall not be necessary.

3.6. Advertising, Publishing and Promotion of Contract. The Contractor shall not use, advertise or promote information for commercial benefit concerning this Contract without the prior written approval of the Procurement Officer.

3.7. Continuous Improvement. Contractor shall recommend continuous improvements on an on-going basis in relation to any Materials and Services offered under the Contract, with a view to reducing State costs and improving the quality and efficiency of the provision of Materials or Services. State may require Contractor to engage in continuous improvements throughout the term of the Contract.

3.8. Other Contractors. State may undertake on its own or award other contracts to the same or other suppliers for additional or related work. In such cases, the Contractor shall cooperate fully with State employees and such other suppliers and carefully coordinate, fit, connect, accommodate, adjust, or sequence its work to the related work by others. Where the Contract requires handing-off Contractor’s work to others, Contractor shall cooperate as State instructs regarding the necessary transfer of its work product, Materials, Services, or records to State or the other suppliers. Contractor shall not commit or permit any act that interferes with the State’s or other suppliers’ performance of their work, provided that, State shall enforce the foregoing section equitably among all its suppliers so as not impose an unreasonable burden on any one of them.

3.9. Ownership of Intellectual Property

3.9.1. Rights In Work Product. All intellectual property originated or prepared by Contractor pursuant to the Contract, including but not limited to, inventions, discoveries, intellectual copyrights, trademarks, trade names, trade secrets, technical communications, records reports, computer programs and other documentation or improvements thereto, including Contractor’s administrative communications and records relating to the Contract, are considered work product and Contractor’s property, provided that, State has Government Purpose Rights to that work product as and when it was delivered to State.

3.9.2. “Government Purpose Rights” are:

3.9.2.1. the unlimited, perpetual, irrevocable, royalty free, non-exclusive, worldwide right to use, modify, reproduce, release, perform, display, sublicense, disclose and create derivatives from that work product without restriction for any activity in which State is a party;

3.9.2.2. the right to release or disclose that work product to third parties for any State government purpose; and

3.9.2.3. the right to authorize those to whom it rightfully releases or discloses that work product to use, modify, release, create derivative works from the work product for any State government purpose; such recipients being understood to include the federal government, the governments of other states, and various local governments.

3.9.3. “Government Purpose Rights” do not include any right to use, modify, reproduce, perform, release, display, create derivative works from or disclose that work product for any commercial purpose, or to authorize others to do so.

3.9.4. Joint Developments. The Contractor and State may each use equally any ideas, concepts, know-how, or techniques developed jointly during the course of the Contract, and may do so at their respective discretion, without obligation of notice or accounting to the other party.

3.9.5. Pre-existing Material. All pre-existing software and other Materials developed or otherwise obtained by or for Contractor or its affiliates independently of the Contract or applicable Purchase Orders are not part of the work product to which rights are granted State under subparagraph 3.9.1 above, and will remain the exclusive property of Contractor, provided that:

3.9.5.1. any derivative works of such pre-existing Materials or elements thereof that are created pursuant to the Contract are part of that work product;

3.9.5.2. any elements of derivative work of such pre-existing Materials that was not created pursuant to the Contract are not part of that work product; and

3.9.5.3. except as expressly stated otherwise, nothing in the Contract is to be construed to interfere or diminish Contractor’s or its affiliates’ ownership of such pre-existing Materials.

3.9.6. Developments Outside Of Contract. Unless expressly stated otherwise in the Contract, this Section does not preclude Contractor from developing competing Materials outside the Contract, irrespective of any similarity to Materials delivered or to be delivered to State hereunder.

3.10. Property of the State. If there are any materials that are not covered by Section 3.9 above created under this Contract, including but not limited to, reports and other deliverables, these materials are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.

3.11. Federal Immigration and Nationality Act. Contractor shall comply with all federal, state and local immigration laws and regulations relating to the immigration status of their employees during the term of the contract. Further, Contractor shall flow down this requirement to all Subcontractors utilized during the term of the contract. The State shall retain the right to perform random audits of Contractor and Subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should the State determine that the Contractor or any Subcontractors be found noncompliant, the State may pursue all remedies allowed by law, including, but not limited to: suspension of work, termination of the contract for default and suspension or debarment of the contractor.

3.12. E-Verify Requirements. In accordance with A.R.S. § 41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23- 214, Subsection A.

3.13. Offshore Performance of Work involving Data is Prohibited. Any Services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to Data shall be performed within the defined territories of the United States.

3.14. Protection of State Cybersecurity Interests. The Contractor shall comply with State Executive Order No.

2023-10, which includes, but is not limited to, a prohibition against (a) downloading and installing of TikTok on all State-owned and State-leased information technology; and (b) accessing TikTok through State information technology.

3.15. Artificial Intelligence (AI) Prohibitions. Consistent with State policy, if Contractor supplies AI Services or Materials (either directly or through Subcontractors or the sale of licenses), such as research, development, training, implementation, deployment, maintenance, provision, or sale of AI systems, then Contractor is prohibited from using State of Arizona Materials or Data in generative AI queries or for building or training proprietary generative AI programs unless explicitly approved in advance by the State in writing.

3.15.1. Contractor shall also disclose the utilization of generative AI before producing works owned by the State and/or integrating generative AI into Materials or Services used by the State.

3.15.2. Contractor shall perform due diligence to ensure proper licensure of model training data for all generative AI services throughout the life of the Contract.

3.16. Certifications Required by State Law.

3.16.1. If Contractor is a Company as defined in A.R.S. § 35-393, Contractor certifies that it is not currently engaged in a boycott of Israel as described in A.R.S. §§ 35-393 et seq. and will refrain from any such boycott for the duration of this Contract.

3.16.2. Contractor further certifies that it shall comply with A.R.S. § 35-394, regarding use of the forced labor of ethnic Uyghurs, as applicable.

4. Costs and Payments

4.1. Payments. Payments shall comply with the requirements of A.R.S. Titles 35 and 41, Net 30 days. Upon receipt and acceptance of Materials or Services, the Contractor shall submit a complete and accurate invoice for payment from the State within thirty (30) days.

4.2. Delivery. Unless stated otherwise in the Contract, per A.R.S. § 47-2319, all prices shall be F.O.B. (“free on board”) Destination and shall include all freight delivery and unloading at the destination.

4.3. Firm, Fixed Price. Unless stated otherwise in the Special Terms and Conditions of the Contract, all prices shall be firm-fixed-prices.

4.4. Applicable Taxes

4.4.1. Payment of Taxes. The Contractor shall be responsible for paying all applicable taxes.

4.4.2. State and Local Transaction Privilege Taxes. The State of Arizona is subject to all applicable state and local transaction privilege taxes. Transaction privilege taxes apply to the sale and are the responsibility of the seller to remit. Failure to collect such taxes from the buyer does not relieve the seller from its obligation to remit taxes.

4.4.3. Tax Indemnification. Contractor and all Subcontractors shall pay all Federal, state and local taxes applicable to its operation and any persons employed by the Contractor. Contractor shall, and require all Subcontractors to hold the State harmless from any responsibility for taxes, damages and interest, if applicable, contributions required under Federal, and/or state and local laws and regulations and any other costs including transaction privilege taxes, unemployment compensation insurance, Social Security and Worker’s Compensation.

4.4.4. IRS W9 Form. In order to receive payment the Contractor shall have a current I.R.S. W9 Form on file with the State of Arizona, unless not required by law.

4.5. Availability of Funds for the Next State Fiscal Year. Funds may not presently be available for performance under this Contract beyond the current State Fiscal Year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current State Fiscal Year until funds are made available for performance of this Contract.

4.6. Availability of Funds for the Current State Fiscal Year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these Materials or Services are not funded, the State may take any of the following actions:

4.6.1. Accept a decrease in price offered by the Contractor;

4.6.2. Cancel the Contract; or

4.6.3. Cancel the Contract and re-solicit the requirements.

5. Contract Changes

5.1. Amendments. This Contract is issued under the authority of the Procurement Officer who signed this

Contract. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of Services or Materials, the revision of payment terms, or the substitution of Services or Materials, directed by a person who is not specifically authorized by the Procurement Officer in writing or made unilaterally by the Contractor are violations of the Contract and of applicable law. Such changes, including unauthorized written Contract Amendments shall be void and without effect, and the Contractor shall not be entitled to any claim under this Contract based on those changes.

5.2. Subcontracts. The Contractor shall not enter into any Subcontract under this Contract for the performance of this Contract without the advance written approval of the Procurement Officer as described in Arizona State Procurement Office Standard Procedure 002. The Contractor shall clearly list any proposed Subcontractors and the Subcontractor’s proposed responsibilities. The Subcontract shall incorporate by reference the terms and conditions of this Contract.

5.3. Assignment and Delegation. The Contractor shall not assign any right nor delegate any duty under this Contract without the prior written approval of the Procurement Officer. The State shall not unreasonably withhold approval.

6. Risk and Liability

6.1. Risk of Loss. The Contractor shall bear all loss of conforming Materials covered under this Contract until received by authorized personnel at the location designated in the purchase order or Contract. Mere receipt does not constitute final acceptance. The risk of loss for nonconforming Materials shall remain with the Contractor regardless of receipt.

6.2. Indemnification

6.2.1. Contractor/Vendor Indemnification (Not Public Agency).To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or Subcontractors. This indemnity includes any claim or amount arising out of, or recovered under, the Workers’ Compensation Law or arising out of the failure of such Contractor to conform to any federal, state, or local law, statute, ordinance, rule, regulation, or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all claims. It is agreed that Contractor will be responsible for primary loss investigation, defense, and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of Arizona, its officers, officials, agents, and employees for losses arising from the work performed by the Contractor for the State of Arizona. This indemnity shall not apply if the Contractor or Subcontractor(s) is/are an agency, board, commission or university of the State of Arizona.

6.2.2. Public Agency Language Only. Each party (as 'indemnitor') agrees to indemnify, defend, and hold harmless the other party (as 'indemnitee') from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as 'claims') arising out of bodily injury of any person (including death) or property damage but only to the extent that such claims which result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials, agents, employees, or volunteers.

6.3. Indemnification - Patent and Copyright. The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of Materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the Contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this paragraph shall not apply.

6.4. Force Majeure.

6.4.1. Except for payment of sums due, neither the Contractor nor State shall be liable to the other nor deemed in default under this Contract if and to the extent that such party’s performance of this Contract is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the party affected and occurs without its fault or negligence. Without limiting the foregoing, force majeure includes: acts of God, acts of the public enemy, war, riots, strikes, mobilization, labor disputes, civil disorders, fire, flood, lockouts, injunctions-intervention-acts, failures or refusals to act by government authority, and other similar occurrences beyond the control of the party declaring force majeure which such party is unable to prevent by exercising reasonable diligence.

6.4.2. Force Majeure shall not include the following occurrences:

6.4.2.1. Late delivery of equipment, Materials, or Services caused by congestion at a manufacturer’s plant or elsewhere, or an oversold condition of the market;

6.4.2.2. Late performance by a Subcontractor unless the delay arises out of a force majeure occurrence in accordance with this force majeure term and condition;

or

6.4.2.3. Inability of either the Contractor or any Subcontractor to acquire or maintain any required insurance, bonds, licenses or permits.

6.4.3. If either the Contractor or State is delayed at any time in the progress of the work by force majeure, the delayed party shall notify the other party in writing of such delay, as soon as is practicable and no later than the following working day, of the commencement thereof and shall specify the causes of such delay in such notice. Such notice shall be delivered or mailed certified-return receipt and shall make a specific reference to this article, thereby invoking its provisions. The delayed party shall cause such delay to cease as soon as practicable and shall notify the other party in writing when it has done so. The time of completion shall be extended by Contract Amendment for a period of time equal to the time that results or effects of such delay prevent the delayed party from performing in accordance with this Contract.

6.4.4. Any delay or failure in performance by either party hereto shall not constitute default hereunder or give rise to any claim for damages or loss of anticipated profits if, and to the extent that such delay or failure is caused by force majeure.

6.5. Third Party Antitrust Violations. The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extent that those violations concern Materials or Services supplied by third parties to the Contractor, toward fulfillment of this Contract.

7. Warranties

7.1. Liens. The Contractor warrants that the Materials supplied under this Contract are free of liens and shall remain free of liens.

7.2. Quality. Unless otherwise modified elsewhere in the Special Terms and Conditions, the Contractor warrants that, for one (1) year after acceptance by the State of the Materials, they shall be:

7.2.1. Of a quality to pass without objection in the trade under the Contract description;

7.2.2. Fit for the intended purposes for which the Materials are used;

7.2.3. Within the variations permitted by the Contract and are of even kind, quantity, and quality within each unit and among all units;

7.2.4. Adequately contained, packaged, and marked as the Contract may require; and

7.2.5. Conform to the written promises or affirmations of fact made by the Contractor.

7.3. Conformity to Requirements.

7.3.1. Contractor warrants that, unless expressly provided otherwise elsewhere in the Contract, the Materials and Services will for one (1) year after acceptance and in each instance:

7.3.1.1. Conform to the requirements of the Contract, which by way of reminder include without limitation all descriptions, specifications, and drawings identified in the Scope of Work and any and all Contractor affirmations included as part of the Contract;

7.3.1.2. Be free from defects of material and workmanship;

7.3.1.3. Conform to or perform in a manner consistent with current industry standards;

and

7.3.1.4. Be fit for the intended purpose or use described in the Contract.

7.3.2. Mere delivery or performance does not substitute for express acceptance by the State.

Where inspection, testing, or other acceptance assessment of Materials or Services cannot be done until after installation or invoicing, the forgoing warranty will not begin until State’s explicit acceptance of the Materials or Services.

7.4. Inspection/Testing. The warranties set forth in this Section 7 [Warranties] are not affected by inspection or testing of or payment for the Materials or Services by the State.

7.5. Contractor Personnel. Contractor warrants that its personnel will perform their duties under the Contract in a professional manner, applying the requisite skills and knowledge, consistent with industry standards, and in accordance with the requirements of the Contract. Contractor further warrants that its key personnel will maintain any and all certifications relevant to their work, and Contractor shall provide individual evidence of certification to State’s authorized representatives upon request.

7.6. Compliance With Applicable Laws. The Materials and Services supplied under this Contract shall comply with all applicable federal, state, and local laws and policies (including, but not limited to, information technology policies, standards, and procedures available on the State’s website and/or the website of any department, commission, council, board, bureau, committee, institution, agency, government corporation or other establishment or official of the executive branch or corporation commission of the State of Arizona). Federal requirements may be incorporated into this Contract, if required, pursuant to A.R.S. § 41-2637. Contractor shall maintain any and all applicable license and permit requirements.

This requirement includes, but is not limited to, any and all Arizona state statutes that impact state contracts, regardless of whether those statutory references have been removed during the course of contract negotiations; this is notice to Contractors that the State does not have the authority to modify Arizona state law by contract.

7.7. Intellectual Property. Contractor warrants that the Materials and Services do not and will not infringe or violate any patent, trademark, copyright, trade secret, or other intellectual property rights or laws, except only to the extent the Specifications do not permit use of any other product and Contractor is not and cannot reasonably be expected to be aware of the infringement or violation.

7.8. Licenses and Permits. Contractor warrants that it will maintain all licenses required to fully perform its duties under the Contract and all required permits valid and in force.

7.9. Operational Continuity. Contractor warrants that it will perform without relief notwithstanding being sold or acquired; no such event will operate to mitigate or alter any of Contractor’s duties hereunder absent a consented delegation under paragraph 5.3 [Assignment and Delegation] that expressly recognizes the event.

7.10. Performance in Public Health Emergency. Contractor warrants that it will:

7.10.1. Have in effect, promptly after commencement, a plan for continuing performance in the event of a declared public health emergency that addresses, at a minimum:

7.10.1.1. Identification of response personnel by name;

7.10.1.2. Key succession and performance responses in the event of sudden and significant decrease in workforce; and

7.10.1.3. Alternative avenues to keep sufficient product on hand or in the supply chain.

7.10.2. Provide a copy of its current plan to State within three (3) business days after State’s written request. If Contractor claims relief under paragraph 6.4 [Force Majeure] for an occurrence of force majeure that is a declared public health emergency, then that relief will be conditioned on Contractor having first implemented its plan and exhausted all reasonable opportunity for that plan implementation to overcome the effects of that occurrence, or mitigate those effects to the extent that overcoming entirely is not practicable.

7.10.3. A request from the State related to this paragraph 7.10 does not necessarily indicate that there has been an occurrence of force majeure, and the Contractor will not be entitled to any additional compensation or extension of time by virtue of having to implement a plan.

7.10.4. Failure to have or implement an appropriate plan will be a material breach of contract.

7.11. Lobbying

7.11.1. Prohibition. Contractor warrants that it will not engage in lobbying activities, as defined in 40 Code of Federal Regulations (CFR) part 34 and A.R.S. § 41-1231, et seq., using monies awarded under the Contract, provided that, the foregoing does not intend to constrain Contractor's use of its own monies or property, including without limitation any net…