CONTRACT
BETWEEN THE STATE OF TENNESSEE,
DEPARTMENT OF FINANCE AND ADMINISTRATION
AND
NATIONAL INFORMATION CONSORTIUM USA, INCORPORATED
This Contract, by and between the State of Tennessee, Department of Finance and
Administration, hereinafter referred to as the "State" and National Information
Consortium USA, Incorporated, hereinafter referred to as the "Contractor," is
for the provision of an Internet Portal and associated support services, as
further defined in the "SCOPE OF SERVICES."
The Contractor is a for-profit corporation. The Contractor's address is:
12 Corporate Woods
10975 Benson Street, Suite 390
Overland Park, KS 66210
The Contractor's place of incorporation or organization is Kansas.
A. SCOPE OF SERVICES:
A.1. The Contractor agrees to perform the services as defined in the Request
for Proposals for Portal Services (RFP Number 31703-004), including all
documents referenced in Subsection E.8, below.
B. CONTRACT TERM:
B.1. CONTRACT TERM. This Contract shall be effective for the period
commencing on 8/28/2000 and ending on 8/27/2003. The State shall have no
obligation for services rendered by the Contractor which are not
performed within the specified period.
B.2. TERM EXTENSION. The State reserves the right to extend this Contract for
two additional one-year periods, provided that the State notifies the
Contractor in writing of its intention to do so at least thirty (30)
days prior to the contract expiration date. An extension of the term of
this Contract will be effected through an amendment to the Contract. If
the extension of the Contract necessitates additional funding beyond
that which was included in the original Contract, the increase in the
State's maximum liability will also be effected through an amendment to
the Contract and shall be based upon rates provided for in the original
contract.
C. PAYMENT TERMS AND CONDITIONS:
C.1. MAXIMUM LIABILITY. In no event shall the maximum liability of the State
under this Contract exceed Two Million Eight Hundred Sixty-Two Thousand
Five Hundred Dollars ($2,862,500.00). The Service Rates in Section C.3
shall constitute the entire compensation due the Contractor for the
Service and all of the Contractor's obligations hereunder regardless of
the difficulty, materials or equipment required. The Service Rates
include, but are not limited to, all applicable taxes, fees, overheads,
and all other direct and indirect costs incurred or to be incurred by
the Contractor.
The Contractor is not entitled to be paid the maximum liability for any
period under the Contract or any extensions of the Contract for work not
requested by the State. The maximum liability represents available funds
for payment to the Contractor and does not guarantee payment of any such
funds to the Contractor under this Contract unless the State requests
work and the Contractor performs said work. In which case, the
Contractor shall be paid in accordance with the Service Rates detailed
in Section C.3. The State is under no obligation to request work from
the Contractor in any specific
dollar amounts or to request any work at all from the Contractor during
any period of this Contract.
C.2. COMPENSATION FIRM. The Service Rates and the Maximum Liability of the
State under this Contract are firm for the duration of the Contract and
are not subject to escalation for any reason unless amended.
C.3. PAYMENT METHODOLOGY. The Contractor shall be compensated based on the
Service Rates herein for units of service authorized by the State in a
total amount not to exceed the Contract Maximum Liability established in
Section C.1. The Contractor's compensation shall be contingent upon the
satisfactory completion of units of service or project milestones
defined in Section A. The Contractor shall be compensated based upon the
following Service Rates and Payment Rates shown below:
AMOUNT PER
SERVICE UNIT/MILESTONE TRANSACTION
---------------------- -----------
Driver's License renewals $2.50
Driver's License reinstatements $1.00
Professional License renewals $3.50
Corporate Certificates and Copies $2.00
TENNCare Eligibility Verification $0.00
Personalized Motor Vehicle Tag $3.00
Environmental Licenses and Permits $2.00
Simple Database Search $1.00
Intermediate Database Search $1.00
Vital Records $1.00
The Contractor shall be compensated for securing and supporting Premium
Service Subscribers on an annual basis, the following annual fee:
SERVICE UNIT/MILESTONE ANNUAL FEE
---------------------- ----------
Premium Service Subscriber $75.00
The Contractor shall be compensated for each Consulting Classification
Skill, based on the following payment rate per hour:
SERVICE/CLASSIFICATION PAYMENT RATE PER HOUR
---------------------- ---------------------
Web Designer $65.00
Web Publisher $55.00
Advanced Web Publisher $80.00
Web Programmer/Analyst $65.00
Advanced Web Programmer/Analyst $80.00
The Contractor shall submit monthly invoices, in form and substance
acceptable to the State with all of the necessary supporting
documentation, prior to any payment. Such
invoices shall be submitted for completed units of service or project
milestones for the amount stipulated. The Contractor shall not be
compensated for travel time to the primary location of service
provision.
C.4. TRAVEL COMPENSATION. The Contractor shall not be compensated or
reimbursed for travel, meals, or lodging.
C.5 PAYMENT PROCEDURE. The State will pay the Portal Contractor upon
submission and approval of a consolidated invoice. The consolidated
invoice should be broken down by State agency and related Portal
application and should be available to the State in an electronic file
format. The Portal Contractor will capture relevant accounting
information so that Portal processing fees can be properly recorded in
the State's financial system.
The Contractor must provide an on-line Premium Subscriber Billing System
for premium service subscribers. Subscribers must be able to access and
review their invoices on-line over the Portal. The State will define to
the Contractor the accounting information, credit terms and processing
cycle for this billing process. The Premium Service Subscribers will pay
the Contractor based upon these invoices.
C.6. PAYMENT OF INVOICE. The payment of the invoice by the State shall not
prejudice the State's right to object to or question any invoice or
matter in relation thereto. Such payment by the State shall neither be
construed as acceptance of any part of the work or service provided nor
as an approval of any of the amounts invoiced therein.
C.7. INVOICE REDUCTIONS. The Contractor's invoice shall be subject to
reduction for amounts included in any invoice or payment theretofore
made which are determined by the State, on the basis of audits conducted
in accordance with the terms of this contract, not to constitute proper
remuneration for compensable services.
C.8. DEDUCTIONS. The State reserves the right to deduct from amounts which
are or shall become due and payable to the Contractor under this or any
contract between the Contractor and the State of Tennessee any amounts
which are or shall become due and payable to the State of Tennessee by
the Contractor.
C.9. AUTOMATIC DEPOSITS. The Contractor shall complete and sign an
"Authorization Agreement for Automatic Deposit (ACH Credits) Form." This
form shall be provided to the Contractor by the State. Once this form
has been completed and submitted to the State by the Contractor all
payments to the Contractor, under this or any other contract the
Contractor has with the State of Tennessee shall be made by Automated
Clearing House (ACH). The Contractor shall not invoice the State for
services until the Contractor has completed this form and submitted it
to the State.
D. STANDARD TERMS AND CONDITIONS:
D.1. REQUIRED APPROVALS. The State is not bound by this Contract until it is
approved by the appropriate State officials in accordance with
applicable Tennessee State laws and regulations.
D.2. MODIFICATION AND AMENDMENT. This Contract may be modified only by a
written amendment executed by all parties hereto and approved by the
appropriate Tennessee State officials in accordance with applicable
Tennessee State laws and regulations.
D.3. TERMINATION FOR CONVENIENCE. The State may terminate this Contract
without cause for any reason. Said termination shall not be deemed a
Breach of Contract by the State. The State shall give the Contractor at
least ninety (90) days written notice before the effective termination
date.
D.3.a. The Contractor shall be entitled to receive compensation for
satisfactory, authorized service completed as of the termination date,
but in no event shall the State be liable to the Contractor for
compensation for any service which has not been rendered.
D.3.b. Upon such termination, the Contractor shall have no right to any actual
general, special, incidental, consequential, or any other damages
whatsoever of any description or amount.
D.4. TERMINATION FOR CAUSE. If the Contractor fails to properly perform its
obligations under this Contract in a timely or proper manner, or if the
Contractor violates any terms of this Contract, the State shall have the
right to immediately terminate the Contract and withhold payments in
excess of fair compensation for completed services. Notwithstanding the
above, the Contractor shall not be relieved of liability to the State
for damages sustained by virtue of any breach of this Contract by the
Contractor.
D.5. SUBCONTRACTING. The Contractor shall not assign this Contract or enter
into a subcontract for any of the services performed under this Contract
without obtaining the prior written approval of the State. If such
subcontracts are approved by the State, they shall contain, at a
minimum, sections of this Contract pertaining to "Conflicts of Interest"
and "Nondiscrimination" (sections D.6. and D.7.).
Notwithstanding any use of approved subcontractors, the Contractor shall
be the prime contractor and shall be responsible for all work performed.
D.6. CONFLICTS OF INTEREST. The Contractor warrants that no part of the total
Contract Amount shall be paid directly or indirectly to an employee or
official of the State of Tennessee as wages, compensation, or gifts in
exchange for acting as an officer, agent, employee, subcontractor, or
consultant to the Contractor in connection with any work contemplated or
performed relative to this Contract.
D.7. NONDISCRIMINATION. The Contractor hereby agrees, warrants, and assures
that no person shall be excluded from participation in, be denied
benefits of, or be otherwise subjected to discrimination in the
performance of this Contract or in the employment practices of the
Contractor on the grounds of disability, age, race, color, religion,
sex, national origin, or any other classification protected by Federal,
Tennessee State constitutional, or statutory law. The Contractor shall,
upon request, show proof of such nondiscrimination and shall post in
conspicuous places, available to all employees and applicants, notices
of nondiscrimination.
D.8. RECORDS. The Contractor shall maintain documentation for all charges
against the State under this Contract. The books, records, and documents
of the Contractor, insofar as they relate to work performed or money
received under this contract, shall be maintained for a period of three
(3) full years from the date of the final payment and shall be subject
to audit at any reasonable time and upon reasonable notice by the State,
the Comptroller of the Treasury, or their duly appointed
representatives. The financial statements shall be prepared in
accordance with generally accepted accounting principles.
D.9. MONITORING. The Contractor's activities conducted and records maintained
pursuant to this Contract shall be subject to monitoring and evaluation
by the State, the Comptroller of the Treasury, or their duly appointed
representatives.
D.10. PROGRESS REPORTS. The Contractor shall submit brief, periodic, progress
reports to the State as requested.
D.11. STRICT PERFORMANCE. Failure by any party to this Contract to insist in
any one or more cases upon the strict performance of any of the terms,
covenants, conditions, or provisions of this Contract shall not be
construed as a waiver or relinquishment of any such term, covenant,
condition, or provision. No term or condition of this Contract shall be
held to be waived, modified, or deleted except by a written amendment
signed by the parties hereto.
D.12. INDEPENDENT CONTRACTOR. The parties hereto, in the performance of this
Contract, shall not act as employees, partners, joint venturers, or
associates of one another. It is
expressly acknowledged by the parties hereto that such parties are
independent contracting entities and that nothing in this Contract shall
be construed to create an employer/employee relationship or to allow
either to exercise control or direction over the manner or method by
which the other transacts its business affairs or provides its usual
services. The employees or agents of one party shall not be deemed or
construed to be the employees or agents of the other party for any
purpose whatsoever.
The Contractor, being an independent contractor and not an employee of
the State, agrees to carry adequate public liability and other
appropriate forms of insurance, including adequate public liability and
other appropriate forms of insurance on the Contractor's employees, and
to pay all applicable taxes incident to this Contract.
D.13. STATE LIABILITY. The State shall have no liability except as
specifically provided in this Contract.
D.14. FORCE MAJEURE. The obligations of the parties to this contract are
subject to prevention by causes beyond the parties' control that could
not be avoided by the exercise of due care including, but not limited
to, acts of God, riots, wars, strikes, epidemics or any other similar
cause.
D.15. STATE AND FEDERAL COMPLIANCE. The Contractor shall comply with all
applicable State and Federal laws and regulations in the performance of
this Contract.
D.16. GOVERNING LAW. This Contract shall be governed by and construed in
accordance with the laws of the State of Tennessee. The Contractor
agrees that it will be subject to the exclusive jurisdiction of the
courts of the State of Tennessee in actions that may arise under this
Contract. The Contractor acknowledges and agrees that any rights or
claims against the State of Tennessee or its employees hereunder, and
any remedies arising therefrom, shall be subject to and limited to those
rights and remedies, if any, available under TENNESSEE CODE ANNOTATED,
Sections 9-8-101 through 9-8-407.
D.17. COMPLETENESS. This Contract is complete and contains the entire
understanding between the parties relating to the subject matter
contained herein, including all the terms and conditions of the parties'
agreement. This Contract supersedes any and all prior understandings,
representations, negotiations, and agreements between the parties
relating hereto, whether written or oral.
D.18. SEVERABILITY. If any terms and conditions of this Contract are held to
be invalid or unenforceable as a matter of law, the other terms and
conditions hereof shall not be affected thereby and shall remain in full
force and effect. To this end, the terms and conditions of this Contract
are declared severable.
D.19. HEADINGS. Section headings of this Contract are for reference purposes
only and shall not be construed as part of this Contract.
E. SPECIAL TERMS AND CONDITIONS:
E.1. CONFLICTING TERMS AND CONDITIONS. Should any of these special terms and
conditions conflict with any other terms and conditions of this
Contract, these special terms and conditions shall control.
E.2. COMMUNICATIONS AND CONTACTS. All instructions, notices, consents,
demands, or other communications required or contemplated by this
Contract shall be in writing and shall be made by facsimile
transmission, by overnight courier service, or by first class mail,
postage prepaid, addressed to the respective party at the appropriate
facsimile number or address as set forth below OR to such other party,
facsimile number, or address as may be hereafter specified by written
notice.
The State:
Bonnie Heithcock, State Portal Manager
Department of Finance and Administration
312 8th Avenue, North
16th Floor, William R. Snodgrass Tennessee Tower
615-741-3700 (voice)
615-532-0471 (fax)
The Contractor:
Debra Luling, Portal General Manager
National Information Consortium USA, Inc.
534 South Kansas Avenue, Suite 1210
Topeka, KS 66603-3406
785-296-5275
785-296-5563
All instructions, notices, consents, demands, or other communications
shall be considered effectively given as of the day of delivery; as of
the date specified for overnight courier service delivery; as of three
(3) business days after the date of mailing; or on the day the facsimile
transmission is received mechanically by the telefax machine at the
receiving location and receipt is verbally confirmed by the sender if
prior to 4:30 p.m. CST. Any communication by facsimile transmission
shall also be sent by United States mail on the same date of the
facsimile transmission.
E.3. SUBJECT TO FUNDS AVAILABILITY. The Contract is subject to the
appropriation and availability of State and/or Federal funds. In the
event that the funds are not appropriated or are otherwise unavailable,
the State reserves the right to terminate the Contract upon written
notice to the Contractor. Said termination shall not be deemed a breach
of Contract by the State. Upon receipt of the written notice, the
Contractor shall cease all work associated with the Contract. Should
such an event occur, the Contractor shall be entitled to compensation
for all satisfactory and authorized services completed as of the
termination date. Upon such termination, the Contractor shall have no
right to recover from the State any actual, general, special,
incidental, consequential, or any other damages whatsoever of any
description or amount.
E.4. BREACH. A party shall be deemed to have breached the Contract if any of
the following occurs:
I) failure to perform in accordance with any term or provision of
the Contract;
II) partial performance of any term or provision of the Contract;
III) any act prohibited or restricted by the Contract, or
IV) violation of any warranty.
For purposes of this contract, items I through IV shall hereinafter be
referred to as a "Breach."
E.4.a. Contractor Breach--In event of a Breach by Contractor, the state shall
have available the following remedies as described further herein:
E.4.a.i. Actual Damages and any other remedy available at law or equity;
E.4.a.ii. Liquidated Damages--the State may withhold as liquidated damages the
amounts designated on Attachment A of this contract from any amounts
owed Contractor.
E.4.a.ii.(1) The State shall notify Contractor in writing of the Breach and
the amounts to be withheld as Liquidated Damages.
E.4.a.ii.(2) The parties agree that due to the complicated nature of the
Contractor's obligations under this Contract it would be
difficult to specifically
designate a monetary amount for a Breach by Contractor as said
amounts are likely to be uncertain and not easily proven.
Contractor hereby represents and covenants it has carefully
reviewed the liquidated damages contained in Attachment A and
agree that said amounts represent a reasonable relationship
between the amount and what might reasonably be expected in the
event of Breach, and are a reasonable estimate of the damages
that would occur from a Breach.
E.4.a.ii.(3) It is hereby agreed between the parties that the liquidated
damages represent solely the damages and injuries sustained by
the State in losing the benefit of the bargain with Contractor
and do not include: any injury or damage sustained by a third
party and Contractor agrees that the liquidated damage amount is
in addition to any amounts Contractor may owe the State pursuant
to the indemnity provision or other section of this Contract;
E.4.a.ii.(4) The State may continue to withhold the liquidated damages or a
portion thereof until the Contractor cures the Breach, the State
exercises its option to declare a Partial Default, or the State
terminates the Contract.
E.4.a.ii.(5) The State is not obligated to assess liquidated damages before
availing itself of any other remedy.
E.4.a.ii.(6) The State may chose to discontinue liquidated damages and avail
itself of any other remedy available under this Contract or at
law or equity; provided, however, Contractor shall receive a
credit for said liquidated damages previously withheld except in
the event of a Partial Default.
E.4.a.iii. Partial Default
E.4.a.iii.(1) In the event the State declares a Partial Default, the State
shall provide written notice to the Contractor of the following:
E.4.a.iii.(1)(a) The date which Contractor shall terminate providing the
service associated with the Breach; and
E.4.a.iii.(1)(b) The date the State will begin to provide the service
associated with the Breach.
E.4.a.iii.(2) The State may revise the time periods contained in the notice
written to the Contractor.
E.4.a.iii.(3) In the event the State declares a Partial Default, the State may
withhold, together with any other damages associated with the
Breach, from the amounts due the Contractor the greater of:
E.4.a.iii.(3)(a) amounts which would be paid the Contractor to provide
the defaulted service as provided in subsection (4); or
E.4.a.iii.(3)(b) the cost to the State of providing the defaulted
service, whether said service is provided by the State
or a third party.
E.4.a.iii.(4) To determine the amount the Contractor is being paid for any
particular service, the Department shall be entitled to receive
within five (5) days any requested material from Contractor. The
State shall make the final and binding determination of said
amount.
E.4.a.iii.(5) The State may assess liquidated damages against the Contractor
for any failure to perform which ultimately results in a Partial
Default with said liquidated damages to cease when said Partial
Default is effective.
E.4.a.iii.(6) Upon Partial Default, the Contractor shall have no right to
recover from the State any amount whether actual, general,
special, incidental, consequential, or of any other whatsoever
description.
E.4.a.iii.(7) Contractor agrees to cooperate fully with the State in the event
a Partial Default is taken.
E.4.a.iv. Termination of the Contract--In the event of a Breach by
Contractor, the State may terminate the Contract immediately or
in stages.
E.4.a.iv.(1) The Contractor shall be notified of the termination writing by
the State. Said notice shall hereinafter be referred to as
Termination Notice.
E.4.a.iv.(2) The Termination Notice may specify either that the termination
is to be effective immediately, on a date certain in the future,
or that the Contractor shall cease operations under this
Contract in stages.
E.4.a.iv.(3) Contractor agrees to cooperate with the State in the event of a
termination, Partial Default or Partial Takeover.
E.4.a.iv.(4) In the event of a termination, the State may withhold any
amounts which may be due Contractor without waiver of any other
remedy or damages available to the State at law or at equity.
E.4.a.iv.(5) In the event of a termination, the Contractor shall be liable to
the State for any and all damages incurred by the State and any
and all expenses incurred by the State which exceed the amount
the State would have paid Contractor under this Contract.
E.4.b. State Breach--In the event of a Breach of contract by the State, the
Contractor shall notify the State in writing within thirty (30) days of
any Breach of contract by the State. Said notice shall contain a
description of the Breach.
E.4.b.i. Failure by the Contractor to provide the written notice
described in section E.4.b. shall operate as an absolute waiver
by the Contractor of the State's Breach.
E.4.b.ii. In no event shall any Breach on the part of the State excuse the
Contractor from full performance under this Contract.
E.4.b.iii. In the event of Breach by the State, the Contractor may avail
itself of any remedy at law in the forum with appropriate
jurisdiction; provided, however, failure by the Contractor to
give the State written notice and opportunity to cure as
described in section E.4.b. operates as a waiver of the State's
Breach.
E.4.b.iv. Failure by the Contractor to file a claim before the appropriate
forum in Tennessee with jurisdiction to hear such claim within
one (1) year of the notice described in section E.4.b. shall
operate as a waiver of said claim in its entirety. It is agreed
by the parties this provision establishes a contractual period
of limitations for any claim brought by the Contractor.
E.5. PARTIAL TAKEOVER. The State may, at its convenience and without cause,
exercise a partial takeover of any service which the Contractor is
obligated to perform under this Contract, including but not limited to
any service which is the subject of a subcontract between Contractor and
a third party, although the Contractor is not in Breach (hereinafter
referred to as "Partial Takeover"). Said Partial Takeover shall not be
deemed a Breach of Contract by the State.
E.5.a. Contractor shall be given at least thirty (30) days prior written notice
of said Partial Takeover with said notice to specify the area(s) of
service the State will assume and the date of said assumption.
E.5.b. Any Partial Takeover by the State shall not alter in any way
Contractor's other obligations under this Contract.
E.5.c. The State may withhold from amounts due the Contractor the amount the
Contractor would have been paid to deliver the service as determined by
the State. The amounts shall be withheld effective as of the date the
State assumes the service.
E.5.d. Upon Partial Takeover, the Contractor shall have no right to recover
from the State any actual, general, special, incidental, consequential,
or any other damages whatsoever of any description or amount.
E.6. PERFORMANCE BOND. Upon approval of the Contract by all appropriate State
officials in accordance with applicable State laws and regulations, the
Contractor shall furnish a performance bond in the amount equal to one
million dollars ($1,000,000.00), guaranteeing full and faithful
performance of all undertakings and obligations under this Contract for
the initial Contract term and all extensions thereof. The bond shall be
in the manner and form prescribed by the State and must be issued
through a company licensed to issue such a bond in the State of
Tennessee.
The Contractor shall obtain the required performance bond in form and
substance acceptable to the State and provide it to the State no later
than 9/8/2000. Failure to provide the performance bond prior to the
deadline as required shall result in contract termination.
In lieu of a performance bond, an irrevocable letter of credit may be
substituted as a surety deposit. The substitution of a performance bond
with a surety deposit, as well as the form and substance of such a
surety deposit, must be approved by the State prior to its submittal and
may be rejected by the State at its sole discretion.
E.7. STATE FURNISHED PROPERTY. The Contractor shall be responsible for the
correct use, maintenance, and protection of all articles of
nonexpendable, tangible, personal property furnished by the State for
the Contractor's temporary use under this Contract. Upon termination of
this Contract, all property furnished shall be returned to the State in
good order and condition as when received, reasonable use and wear
thereof excepted. Should the property be destroyed, lost, or stolen, the
Contractor shall be responsible to the State for the residual value of
the property at the time of loss.
E.8. INCORPORATION OF ADDITIONAL DOCUMENTS. Included in this Contract by
reference are the following documents:
I) The Contract document and its attachments
II) All Clarifications and addenda made to the Contractor's Proposal
III) The Request for Proposal and its associated amendments
IV) Technical Specifications provided to the Contractor
V) The Contractor's Proposal
In the event of a discrepancy or ambiguity regarding the Contractor's
duties, responsibilities, and performance under this Contract, these
documents shall govern in order of precedence detailed above.
E.9. WORKPAPERS SUBJECT TO REVIEW. The Contractor shall make all audit,
accounting, or financial analysis workpapers, notes, and other
documentation available for review by the
Comptroller of the Treasury or his representatives, upon request, during
normal working hours either while the analysis is in progress or
subsequent to the completion of this Contract.
E.10. PUBLIC FUNDING NOTICE. All notices, informational pamphlets, press
releases, research reports, signs, and similar public notices prepared
and released by the Contractor relative to this Contract shall include
the statement, "This project is funded under an agreement with the State
of Tennessee." Any such notices by the Contractor shall be approved by
the State.
E.11. PROHIBITED ADVERTISING. The Contractor shall not refer to this Contract
or the Contractor's relationship with the State hereunder in commercial
advertising in such a manner as to state or imply that the Contractor or
the Contractor's services are endorsed.
E.12. CONFIDENTIALITY OF RECORDS. Strict standards of confidentiality of
records shall be maintained in accordance with the law. All material and
information provided to the Contractor by the State or acquired by the
Contractor on behalf of the State whether verbal, written, magnetic
tape, cards or otherwise shall be regarded as confidential information
in accordance with the provisions of State law and ethical standards and
shall not be disclosed, and all necessary steps shall be taken by the
Contractor to safeguard the confidentiality of such material or
information in conformance with State law and ethical standards.
The Contractor will be deemed to have satisfied its obligations under
this section by exercising the same level of care to preserve the
confidentiality of the State's information as the Contractor exercises
to protect its own confidential information so long as such standard of
care does not violate the applicable provisions of the first paragraph
of this section.
The Contractor's obligations under this section do not apply to
information in the public domain; entering the public domain but not
from a breach by the Contractor of this Contract; previously possessed
by the Contractor without written obligations to the State to protect
it; acquired by the Contractor without written restrictions against
disclosure from a third party which, to the Contractor's knowledge, is
free to disclose the information; independently developed by the
Contractor without the use of the State's information; or, disclosed by
the State to others without restrictions against disclosure.
It is expressly understood and agreed the obligations set forth in this
section shall survive the termination of this Contract.
E.13. COPYRIGHTS AND PATENTS. The Contractor agrees to indemnify and hold
harmless the State of Tennessee as well as its officers, agents, and
employees from and against any and all claims or suits which may be
brought against the State for infringement of any laws regarding patents
or copyrights which may arise from the Contractor's performance of this
Contract. In any such action brought against the State, the Contractor
shall satisfy and indemnify the State for the amount of any final
judgment for infringement. The Contractor further agrees it shall be
liable for the reasonable fees of attorneys for the State in the event
such service is necessitated to enforce the terms of this Contract or
otherwise enforce the obligations of the Contractor to the State. The
State shall give the Contractor written notice of any such claim or suit
and full right and opportunity to conduct the Contractor's own defense
thereof.
E.14. PUBLIC ACCOUNTABILITY. If this Contract involves the provision of
services to citizens by the Contractor on behalf of the State, the
Contractor agrees to establish a system through which recipients of
services may present grievances about the operation of the service
program, and the Contractor agrees to display a sign stating:
"NOTICE: This Contractor is a recipient of taxpayer funding. If you
observe an employee engaging in any activity which you consider to be
illegal or improper, please call the State Comptroller's toll free
hotline: 1-800-232-5454"
Said sign shall be displayed in a prominent place, located near the
passageway(s) through which the public passes to receive State funded
services.
E.15. AUTHORIZED INDIVIDUALS. Each party hereto has provided the other party
hereto with a list identifying the individuals from whom the other party
is authorized to accept any notices, requests, demands, or other advice
which may be given hereunder by the party providing such list. Said
lists, which are attached hereto as Attachment B, shall be valid until
revoked or amended by further written notice. The parties hereto shall
only be entitled to rely on notices, requests, demands, or other advice
given by such individuals.
E.16. YEAR 2000. Notwithstanding any provisions contained in the contract, the
contractor warrants that each hardware, commercial or custom software,
firmware, and middleware product delivered under this contract and
listed below ("listed item") shall be able to accurately process
date/time data (including, but not limited to, displaying, calculating,
comparing and sequencing) from, into, and between the twentieth and
twenty-first centuries, including leap year calculations, when used in
accordance with the product documentation provided by the contractor and
subject to the following:
I. In the case of hardware, commercial software, firmware, or
middleware, the aforementioned warranty shall apply to the
extent that information technology not provided pursuant to this
contract, but used in combination with the listed items,
properly exchanges date/time data with it.
II. Notwithstanding the foregoing, in cases involving any
development of new software or system(s) ("custom software"),
the contractor further warrants that any contractor-provided
data interfaces between listed items and items or systems not
provided pursuant to this contract shall accurately process
date/time data, as defined above and further qualified by
specific interface requirements; provided that the date/time
data is accurate within the items or systems not provided.
In any case, if the contract requires that specific listed items must
perform as a system in accordance with the foregoing warranty, then that
warranty shall apply to those listed products as a system. Nothing in
this warranty shall be construed to limit any rights or remedies the
State may otherwise have under this contract with respect to defects
other than year 2000 performance.
The remedies available to the State under this warranty shall include
repair or replacement of any listed product whose non-compliance is
discovered and made known to the contractor in writing within the term
of that listed item's warranty, as expressed elsewhere in this
agreement. The contractor shall proceed with repair or replacement
immediately upon notification by the State of non-compliance, time being
of the essence.
The State of Tennessee, at its sole option, may require the contractor,
at any time, to demonstrate that procedures have been established to
comply with all the obligations contained herein.
This Section shall constitute the exclusive warranty regarding the Year
2000 and is in lieu of all other Year 2000 warranties, whether express
or implied, including the implied warranties of merchantability and
fitness for a particular purpose.
E.17. YEAR 2000 HOLD HARMLESS. As required by Tennessee Code Annotated,
Section 12-4-118, the contractor shall hold harmless and indemnify the
State of Tennessee; its officers and employees; and any agency or
political subdivision of the State for any breach of contract caused
directly or indirectly by the failure of computer software or any device
containing a computer processor to accurately or properly recognize,
calculate, display, sort or otherwise process dates or times.
E.18. ADDITIONAL PORTAL APPLICATION SERVICES. During the course of this
Contract, the State may request the Contractor to design additional
applications for the State Service Portal. The additional applications
must be within the scope of this Contract. The State will provide the
Contractor with documented requirements for the application and the
Contractor will provide the requesting agency a proposed transaction fee
or funding mechanism for the application. If the requesting agency and
the Contractor mutually agree on the transaction fee or funding
mechanism, the requested application and the associated transaction fee
or funding mechanism will be reviewed by the Portal Advisory Committee.
The Portal Advisory Committee must approve and prioritize all Portal
applications. Approval of additional portal applications will be
effected through an amendment to the contract before any work can begin
on any approved application.
E.19. STATE OWNERSHIP OF WORK PRODUCTS. The State shall have all ownership
right, title, and interest, including ownership of copyright, in all
work products, including application software, source code, or
modifications thereof and associated documentation, created, designed,
and/or developed solely for the State under this Contract (known
collectively as "Work Products"). The State shall have royalty-free,
non- exclusive, and unlimited rights to use, disclose, reproduce, and/or
publish, for any purpose whatsoever, all said Work Products. The
Contractor shall furnish the Work Products upon request of the State, in
accordance with the Contract and applicable State law. The Contractor
will be able to use the application source code and documentation where
they may have applicability with other state and local government
entities.
E.20. CONTRACTOR PROPRIETARY PRODUCTS. The Contractor shall retain ownership
right, title, and interest in the portions of the Portal applications
that were not developed solely using State moneys or resources (known
collectively as "Contractor Proprietary Products").
The Contractor hereby grants the State a perpetual, royalty-free,
irrevocable, unlimited, and nonexclusive right to use the Contractor
Proprietary Products for the State's business purposes, including, but
not limited to, use for State's business purposes by any future service
providers with whom the State may contract. The Contractor warrants that
Contractor is duly authorized to grant this right.
E.21. WORK PRODUCTS IN ESCROW. All Work Products and Contractor Portal
Applications used to support the State Service Portal shall be
maintained in escrow with an escrow agent. The State shall have access
to the Products held in escrow in the event of Contractor business
failure, Contractor breach of contract, Contract termination, or as
necessary for disaster recovery purposes.
E.22. POST-CONTRACT TRANSITION SERVICES. In the event that a different vendor
is awarded the subsequent contract, the Contractor agrees to provide
continuing services as the State transitions itself to receive such
services from the new vendor. The services required are those as defined
under this contract and shall be provided on a month-to-month basis for
a period not to exceed twelve (12) months. Charges for these services
shall be at the unit rates then current at the time of contract
termination.
IN WITNESS WHEREOF:
NATIONAL INFORMATION CONSORTIUM USA, INC.
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HARRY HERINGTON, PRESIDENT
DEPARTMENT OF FINANCE AND ADMINISTRATION:
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C. WARREN NEEL, PH.D., COMMISSIONER DATE
APPROVED:
DEPARTMENT OF FINANCE AND ADMINISTRATION:
- --------------------------------------------------------------------------------
C. WARREN NEEL, PH.D., COMMISSIONER DATE
COMPTROLLER OF THE TREASURY:
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JOHN G. MORGAN, COMPTROLLER OF THE TREASURY DATE
ATTACHMENT A
LIQUIDATED DAMAGES
SERVICE LEVEL AGREEMENTS
The additional remedies identified in this section shall not be construed to
limit or restrict the State's application of any other remedies available under
this Contract. As used in A, B, and C below, "total monthly costs for all
effected services purchased under this contract" refers to the "amount due the
Contractor by the state, based upon the payment methodology described in Section
C.3 of the Contract." If, at the State's sole discretion, the Contractor is
unable to meet a performance standard due to causes beyond the Contractor's
control, the remedies described below may not be assessed.
A. Portal Availability
The following shall define the Service Level Agreement (SLA) commitment for
the State Service Portal's availability:
Performance Standard: State Service Portal available 99.7% of the time for
the entire calendar month.*
Penalty: Failure to meet the above availability requirement will result in
a penalty payment of 1% of the total monthly costs for all effected
services purchased under this contract. Failure to meet the above
availability requirement for a second consecutive month will result in a
penalty payment of 2% of the total monthly costs for all effected services
purchased under this contract. Failure to meet the above availability
requirement for a "n" consecutive month will result in a penalty payment of
n% of the total monthly costs for all effected services purchased under
this contract.
B. Security Management
The following shall define the SLA commitment for the State Service
Portal's Security Management:
Performance Standard: State Service Portal Security Management identifies
security breaches, attempted breaches or attacks and TAKES corrective
action within 2 hours of the occurrence.
Penalty: Failure to meet the above security management requirement will
result in a penalty payment of 2% of the total monthly costs for all
effected services purchased under this contract for each occurrence.
Failure to meet the above availability requirement for a second consecutive
month will result in a penalty payment of 2.5% of the total monthly costs
for all effected services purchased under this contract for each
occurrence. Failure to meet the above availability requirement for a "n"
consecutive month will result in a penalty payment of the prior (n minus 1)
month's penalty percentage with an additional 0.5% added of the total
monthly costs for all effected services purchased under this contract for
each occurrence.
C. Application Availability
The following shall define the SLA commitment for the State Service
Portal's specific application availability:
Performance Standard: State Service Portal applications provided by the
Contractor will be available to the customer 99.5% of the time for the
entire calendar month.
Penalty: Failure to meet the above application availability requirement
will result in a penalty payment of 1% of the total monthly costs for all
effected services purchased under this contract. Failure to meet the above
availability requirement for a second consecutive month will result in a
penalty payment of 2% of the total monthly costs for all effected services
purchased under this contract. Failure to meet the above availability
requirement for a "n" consecutive month will result in a penalty payment of
n% of the total monthly costs for all effected services purchased under
this contract.
* "For the entire calendar month" refers to the portion of the month that the
application or portal site was implemented. All time references refer to
scheduled uptime and exclude scheduled downtimes.
ATTACHMENT B
AUTHORIZED INDIVIDUALS
The State:
Chief of Information Systems
Department of Finance and Administration
State Portal Manager
Department of Finance and Administration
The Contractor:
Portal General Manager
National Information Consortium USA, Inc.
President
National Information Consortium USA, Inc.
President
National Information Consortium