STATE OF MICHIGAN
DEPARTMENT OF CORRECTIONS
BUREAU OF FISCAL MANAGEMENT
P.O. BOX 30003, LANSING, MI 48909
CONTRACT NO. 472B9200101
between
THE DEPARTMENT OF CORRECTIONS
and
NAME & ADDRESS OF VENDOR

TELEPHONE

JPay, Inc.
10800 Biscayne Blvd., Suite 770
Miami, FL 33161

(305) 358-8689
Errol Feldman
efeldman@jpay.com
AGENCY CONTACT

517-373-3821
Deborah A. Kline
klineda@michigan.gov
Description:

Prisoner Services – Incoming Electronic Mail, Electronic Deposit and Debit Card
CONTRACT PERIOD:

From: 01/01/2009

To: 12/31/2011

TERMS

N/A
In the event of any conflicts between the specifications, terms and conditions indicated
by the State and those indicated by the vendor, those of the State take precedence.
Est. Contract Value: No Cost to the State of Michigan

FOR THE VENDOR:

FOR THE STATE:

Firm Name
Authorized Agent Signature

Signature
Patricia L. Caruso
Name

Director, Department of Corrections

Rev 7-11-08

Authorized Agent (Print or Type)

Title

Date

Date

1

STATE OF MICHIGAN
MICHIGAN DEPARTMENT OF CORRECTIONS

Contract No. 472B9200101
Prisoner Services – Incoming Electronic Mail, Electronic Deposit and Debit Card

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2

Table of Contents
DEFINITIONS ............................................................................................................................................... 7
Article 1 – Statement of Work (SOW) ........................................................................................................ 9
1.010 Project Identification............................................................................................................. 9
1.011 Project Request .......................................................................................................... 9
1.012 Background ................................................................................................................ 9
1.020 Scope of Work and Deliverables.......................................................................................... 9
1.021 In Scope ..................................................................................................................... 9
1.022 Work and Deliverable ............................................................................................... 11
1.030 Roles and Responsibilities................................................................................................. 14
1.031 Contractor Staff, Roles, and Responsibilities........................................................... 14
1.040 Project Plan.......................................................................................................................... 15
1.041 Project Plan Management ........................................................................................ 15
1.042 Reports ..................................................................................................................... 15
1.050 Acceptance .......................................................................................................................... 15
1.051 Criteria ...................................................................................................................... 15
1.052 Final Acceptance ...................................................................................................... 16
1.060 Proposal Pricing .................................................................................................................. 16
1.061 Proposal Pricing ....................................................................................................... 16
1.062 Price Term ................................................................................................................ 17
1.070 Additional Requirements.................................................................................................... 17
1.071 Additional Terms and Conditions specific to this RFP ............................................. 17
Article 2, Terms and Conditions.............................................................................................................. 18
2.000 Contract Structure and Term ............................................................................................. 18
2.001 Contract Term .......................................................................................................... 18
2.002 Renewal(s) ............................................................................................................... 18
2.003 Legal Effect............................................................................................................... 18
2.004 Attachments & Exhibits ............................................................................................ 18
2.005 Ordering.................................................................................................................... 18
2.006 Order of Precedence ................................................................................................ 18
2.007 Headings .................................................................................................................. 19
2.008 Form, Function & Utility ............................................................................................ 19
2.009 Reformation and Severability ................................................................................... 19
2.010 Consents and Approvals .......................................................................................... 19
2.011 No Waiver of Default ................................................................................................ 19
2.012 Survival..................................................................................................................... 19
2.020 Contract Administration ..................................................................................................... 19
2.021 Issuing Office............................................................................................................ 19
2.022 Contract Compliance Inspector (CCI) ...................................................................... 20
2.023 Project Manager ....................................................................................................... 20
2.024 Change Requests..................................................................................................... 20
2.025 Notices...................................................................................................................... 21
2.026 Binding Commitments .............................................................................................. 21
2.027 Relationship of the Parties ....................................................................................... 22
2.028 Covenant of Good Faith ........................................................................................... 22
2.029 Assignments ............................................................................................................. 22
2.030 General Provisions.............................................................................................................. 22
2.031 Media Releases........................................................................................................ 22
2.032 Contract Distribution................................................................................................. 22
2.033 Permits ..................................................................................................................... 22
2.034 Website Incorporation .............................................................................................. 23
2.035 Future Bidding Preclusion ........................................................................................ 23
2.036 Freedom of Information ............................................................................................ 23
2.037 Disaster Recovery .................................................................................................... 23
2.040 Financial Provisions ........................................................................................................... 23
2.041 Fixed Prices for Services/Deliverables..................................................................... 23
2.042 Adjustments for Reductions in Scope of Services/Deliverables .............................. 23
2.043 Services/Deliverables Covered ................................................................................ 23
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2.050

2.060

2.070

2.080

2.090

2.100

2.110

2.120

2.130

2.140

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2.044 Invoicing and Payment – In General ........................................................................ 23
2.045 Pro-ration.................................................................................................................. 24
2.046 Antitrust Assignment ................................................................................................ 24
2.047 Final Payment .......................................................................................................... 24
2.048 Electronic Payment Requirement............................................................................. 24
Taxes .................................................................................................................................... 24
2.051 Employment Taxes................................................................................................... 24
2.052 Sales and Use Taxes ............................................................................................... 24
Contract Management......................................................................................................... 24
2.061 Contractor Personnel Qualifications......................................................................... 24
2.062 Contractor Key Personnel ........................................................................................ 25
2.063 Re-assignment of Personnel at the State’s Request ............................................... 25
2.064 Contractor Personnel Location................................................................................. 25
2.065 Contractor Identification ........................................................................................... 26
2.066 Cooperation with Third Parties ................................................................................. 26
2.067 Contractor Return of State Equipment/Resources................................................... 26
2.068 Contract Management Responsibilities.................................................................... 26
Subcontracting by Contractor ........................................................................................... 26
2.071 Contractor Full Responsibility................................................................................... 26
2.072 State Consent to Delegation .................................................................................... 26
2.073 Subcontractor Bound to Contract ............................................................................. 27
2.074 Flow Down................................................................................................................ 27
2.075 Competitive Selection............................................................................................... 27
State Responsibilities ......................................................................................................... 27
2.081 Equipment ................................................................................................................ 27
2.082 Facilities.................................................................................................................... 27
Security ................................................................................................................................ 27
2.091 Background Checks ................................................................................................. 27
2.092 Security Breach Notification ..................................................................................... 28
Confidentiality...................................................................................................................... 28
2.101 Confidentiality ........................................................................................................... 28
2.102 Protection and Destruction of Confidential Information............................................ 29
2.103 Exclusions ................................................................................................................ 29
2.104 No Implied Rights ..................................................................................................... 29
2.105 Respective Obligations............................................................................................. 29
Records and Inspections.................................................................................................... 29
2.111 Inspection of Work Performed.................................................................................. 29
2.112 Examination of Records ........................................................................................... 30
2.113 Retention of Records................................................................................................ 30
2.114 Audit Resolution ....................................................................................................... 30
2.115 Errors........................................................................................................................ 30
Warranties ............................................................................................................................ 30
2.121 Warranties and Representations ............................................................................. 30
2.122 Warranty of Merchantability...................................................................................... 32
2.123 Warranty of Fitness for a Particular Purpose ........................................................... 32
2.124 Warranty of Title ....................................................................................................... 32
2.125 Equipment Warranty................................................................................................. 32
2.126 Equipment to be New ............................................................................................... 33
2.127 Prohibited Products .................................................................................................. 33
2.128 Consequences For Breach....................................................................................... 33
Insurance.............................................................................................................................. 33
2.131 Liability Insurance..................................................................................................... 33
2.132 Subcontractor Insurance Coverage ......................................................................... 34
2.133 Certificates of Insurance and Other Requirements .................................................. 35
Indemnification .................................................................................................................... 35
2.141 General Indemnification ........................................................................................... 35
2.142 Code Indemnification................................................................................................ 35
2.143 Employee Indemnification ........................................................................................ 35
2.144 Patent/Copyright Infringement Indemnification ........................................................ 36

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2.150

2.160
2.170

2.180

2.190

2.200

2.210

2.220
2.230

2.240

2.250

2.260

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2.145 Continuation of Indemnification Obligations............................................................. 36
2.146 Indemnification Procedures...................................................................................... 36
Termination/Cancellation ................................................................................................... 37
2.151 Notice and Right to Cure .......................................................................................... 37
2.152 Termination for Cause.............................................................................................. 37
2.153 Termination for Convenience ................................................................................... 37
2.154 Termination for Non-Appropriation ........................................................................... 38
2.135 Termination for Criminal Conviction ......................................................................... 38
2.156 Termination for Approvals Rescinded ...................................................................... 38
2.157 Rights and Obligations upon Termination ................................................................ 38
2.158 Reservation of Rights ............................................................................................... 39
Termination by Contractor ................................................................................................. 39
2.161 Termination by Contractor........................................................................................ 39
Transition Responsibilities ................................................................................................ 39
2.171 Contractor Transition Responsibilities...................................................................... 39
2.172 Contractor Personnel Transition .............................................................................. 40
2.173 Contractor Information Transition............................................................................. 40
2.174 Contractor Software Transition................................................................................. 40
2.175 Transition Payments................................................................................................. 40
2.176 State Transition Responsibilities .............................................................................. 40
Stop Work............................................................................................................................. 40
2.181 Stop Work Orders..................................................................................................... 40
2.182 Cancellation or Expiration of Stop Work Order ........................................................ 41
2.183 Allowance of Contractor Costs ................................................................................. 41
Dispute Resolution.............................................................................................................. 41
2.191 In General................................................................................................................. 41
2.192 Informal Dispute Resolution ..................................................................................... 41
2.193 Injunctive Relief ........................................................................................................ 42
2.194 Continued Performance ........................................................................................... 42
Federal and State Contract Requirements ....................................................................... 42
2.201 Nondiscrimination ..................................................................................................... 42
2.202 Unfair Labor Practices.............................................................................................. 42
2.203 Workplace Safety and Discriminatory Harassment.................................................. 42
Governing Law..................................................................................................................... 43
2.211 Governing Law ......................................................................................................... 43
2.212 Compliance with Laws.............................................................................................. 43
2.213 Jurisdiction................................................................................................................ 43
Limitation of Liability .......................................................................................................... 43
2.221 Limitation of Liability ................................................................................................. 43
Disclosure Responsibilities ............................................................................................... 43
2.231 Disclosure of Litigation ............................................................................................. 43
2.232 Call Center Disclosure.............................................................................................. 44
2.233 Bankruptcy................................................................................................................ 44
Performance......................................................................................................................... 44
2.241 Time of Performance................................................................................................ 44
2.243 Liquidated Damages ................................................................................................ 45
2.244 Excusable Failure ..................................................................................................... 45
Approval of Deliverables .................................................................................................... 45
2.251 Delivery Responsibilities .......................................................................................... 45
2.252 Delivery of Deliverables............................................................................................ 46
2.253 Testing...................................................................................................................... 46
2.254 Approval of Deliverables, In General ....................................................................... 46
2.255 Process For Approval of Written Deliverables ......................................................... 47
2.256 Process for Approval of Services ............................................................................. 47
2.257 Process for Approval of Physical Deliverables......................................................... 48
2.258 Final Acceptance ...................................................................................................... 48
Ownership ............................................................................................................................ 48
2.261 Ownership of Work Product by State ....................................................................... 48
2.262 Vesting of Rights ...................................................................................................... 48

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2.270

2.280
2.290

2.263 Rights in Data ........................................................................................................... 48
2.264 Ownership of Materials............................................................................................. 49
State Standards ................................................................................................................... 49
2.271 Existing Technology Standards................................................................................ 49
2.272 Acceptable Use Policy.............................................................................................. 49
Extended Purchasing.......................................................................................................... 49
2.281 MIDEAL .................................................................................................................... 49
Environmental Provision .................................................................................................... 50
2.291 Environmental Provision........................................................................................... 50

Attachment A, Price Proposal and Pricing Structure for Families
Attachment B, Statewide Demographic Information
Attachment C, Map of Prison and Camp Facilities

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DEFINITIONS
“Days” means calendar days unless otherwise specified.
“24x7x365” means 24 hours a day, seven days a week, and 365 days a year (including the 366th day in a
leap year).
“Additional Service” means any Services/Deliverables within the scope of the Contract, but not specifically
provided under any Statement of Work, that once added will result in the need to provide the Contractor
with additional consideration.
“Audit Period” has the meaning given in Section 2.112.
“Business Day,” whether capitalized or not, shall mean any day other than a Saturday, Sunday or Staterecognized legal holiday (as identified in the Collective Bargaining Agreement for State employees) from
8:00am EST through 5:00pm EST unless otherwise stated.
“Blanket Purchase Order” is an alternate term for Contract and is used in the States computer system.
“Business Critical” means any function identified in any Statement of Work as Business Critical.
“Chronic Failure” is defined in any applicable Service Level Agreements.
“Deleted – Not Applicable” means that section is not applicable or included in this RFP. This is used as a
placeholder to maintain consistent numbering.
“Deliverable” means physical goods and/or commodities as required or identified by a Statement of Work
“Environmentally preferable products” means a product or service that has a lesser or reduced effect on
human health and the environment when compared with competing products or services that serve the
same purpose. Such products or services may include, but are not limited to, those which contain
recycled content, minimize waste, conserve energy or water, and reduce the amount of toxics either
disposed of or consumed.
“Excusable Failure” has the meaning given in Section 2.244.
“Hazardous material” means any material defined as hazardous under the latest version of federal
Emergency Planning and Community Right-to-Know Act of 1986 (including revisions adopted during the
term of the Contract).
“Incident” means any interruption in Services.
“ITB” is a generic term used to describe an Invitation to Bid. The ITB serves as the document for
transmitting the RFP to potential bidders
“Key Personnel” means any Personnel designated in Section 1.031 as Key Personnel.
“New Work” means any Services/Deliverables outside the scope of the Contract and not specifically
provided under any Statement of Work, that once added will result in the need to provide the Contractor
with additional consideration.
“Ozone-depleting substance” means any substance the Environmental Protection Agency designates in
40 CFR part 82 as: (1) Class I, including, but not limited to, chlorofluorocarbons, halons, carbon
tetrachloride, and methyl chloroform; or (2) Class II, including, but not limited to,
hydrochlorofluorocarbons.

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“Post-Consumer Waste” means any product generated by a business or consumer which has served its
intended end use, and which has been separated or diverted from solid waste for the purpose of recycling
into a usable commodity or product, and which does not include post-industrial waste.
“Post-Industrial Waste” means industrial by-products which would otherwise go to disposal and wastes
generated after completion of a manufacturing process, but does not include internally generated scrap
commonly returned to industrial or manufacturing processes.
“Recycling” means the series of activities by which materials that are no longer useful to the generator are
collected, sorted, processed, and converted into raw materials and used in the production of new
products. This definition excludes the use of these materials as a fuel substitute or for energy production.
“Reuse” means using a product or component of municipal solid waste in its original form more than
once.
“RFP” means a Request for Proposal designed to solicit proposals for services.
“Services” means any function performed for the benefit of the State.
“Source reduction” means any practice that reduces the amount of any hazardous substance, pollutant,
or contaminant entering any waste stream or otherwise released into the environment prior to recycling,
energy recovery, treatment, or disposal.
“State Location” means any physical location where the State performs work. State Location may include
state-owned, leased, or rented space.
“Subcontractor” means a company Contractor delegates performance of a portion of the Services to, but
does not include independent contractors engaged by Contractor solely in a staff augmentation role.
“Unauthorized Removal” means the Contractor’s removal of Key Personnel without the prior written
consent of the State.
“Waste prevention” means source reduction and reuse, but not recycling.
“Waste reduction”, or “pollution prevention” means the practice of minimizing the generation of waste at
the source and, when wastes cannot be prevented, utilizing environmentally sound on-site or off-site
reuse and recycling. The term includes equipment or technology modifications, process or procedure
modifications, product reformulation or redesign, and raw material substitutions. Waste treatment,
control, management, and disposal are not considered pollution prevention, per the definitions under Part
143, Waste Minimization, of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA
451, as amended.
“Work in Progress” means a Deliverable that has been partially prepared, but has not been presented to
the State for Approval.
“Work Product” refers to any data compilations, reports, and other media, materials, or other objects or
works of authorship created or produced by the Contractor as a result of an in furtherance of performing
the services required by this Contract.

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Article 1 – Statement of Work (SOW)
1.010
1.011

Project Identification

Project Request

The State of Michigan, through the Michigan Department of Corrections (MDOC), has issued this
Contract. The Contractor will provide incoming electronic mail to prisoners, with optional outgoing
electronic mail from prisoners at the request of the MDOC; electronic deposit for family members to
deposit into a prisoner’s account; and, debit cards for released prisoners.
1.012

Background

The MDOC is expanding existing services and taking advantage of electronic technology.
Incoming Electronic Mail – The MDOC currently processes mail by hand, and anticipates having
incoming electronic mail sent to prisoners located at the MDOC correctional facilities. This option should
be available to family members and friends that are in contact with prisoners. At a later date, the MDOC
may offer outgoing electronic mail from prisoners, including scanning letters.
Electronic Deposit – The MDOC currently has all deposits to prisoners sent either through the United
States Postal Service or dropped off at the lobby safe that is located at each correctional facility. The
MDOC is interested in providing a quick, efficient and easy-to-access option for the public to send funds
to prisoners using current technologies. The program for electronic deposit must be able to restrict
deposits as determined by the MDOC and the deposits must interface with the MDOC’s current Trust
Accounting System (TAPS).
Debit Card – Currently, when a prisoner is released from a correctional facility, they receive cash and/or
a check. Without proper identification, prisoners have a hard time getting access to their money. The
MDOC is interested in providing a debit card to the prisoner that is being released so that they may use
the card at ATMs or at retail locations with a PIN number for easy access to their money.
1.020

1.21

Scope of Work and Deliverables

In Scope

Incoming Electronic Mail – The MDOC expects the Contractor to provide all components necessary to
allow prisoners to receive electronic mail at no cost to the State, and at a later date, outgoing electronic
mail. The Contractor must ensure required security over computer Internet and State firewalls is
maintained. Incoming electronic mail security must have the capability to recognize words or phrases on
prohibited lists for further review. The system must have rerouting capabilities for inmate transfers
throughout the State to allow for printing of emails at the new location. Nightly reports will be sent to the
Contractor for Contractor movement.
Contractor Response:
The JPay Team has read, understands and agrees to comply.
Electronic Deposit – The program must be accessible nationwide, 24x7x365 by telephone, Internet and
kiosk, as well as an option for a future drop/lock box for money orders processing, and be interfaced with
the MDOC’s Trust Accounting System (TAPS), with no cost or fees to the State for equipment, software
or any maintenance or upgrades. The Contractor must provide training to staff and must provide free-ofcharge forms and other marketing tools to promote the service to the public. The receipts are to be
batched nightly and sent to TAPS.
Contractor Response:
The JPay Team has read, understands and agrees to comply.

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Debit Card – The Contractor will supply debit cards and any equipment necessary to load the cards with
prisoner release money at all correctional facilities. The cards are to be loaded by MDOC through a Webbased interface. The cardholder must be able to access their release money immediately upon release.
The cardholder (prisoner) will be able to access their account information nationwide, 24x7x365 by
telephone and Internet. The amount of money loaded on the debit cards will have no minimum and
maximum load amounts. The debit card service must have no costs or fees to the State for equipment,
software or any maintenance or upgrades. The Contractor must provide training to staff and prisoners.
Contractor Response:
The JPay Team has read, understands and agrees to comply.
TAPS Integration – The system must have the ability to interface with the MDOC’s TAPS system.
Trust Accounting and Payroll System (TAPS)
The Database is Sybase 12.5 residing on a Sun Solaris Unix box, and the TAPS application is developed
in PowerBuilder 9.0.
The MDOC currently has a client-server environment with locally hosted applications on a Unix server.
The MDOC has approximately 48 prison locations connected to the Lansing Metropolitan Network
(LMAN) operating on T1 lines. Other sites connect back to the LMAN with slower line speeds such as
768 KB. The minimum desktop has a Pentium 3 processor with at least 256K RAM running on Windows
NT or Windows XP.
The MDOC uses the Microsoft Office XP Professional Suite for word processing and office applications.
In addition, the MDOC uses Adobe Acrobat 6.1 for creating and reviewing PDF documents. The MDOC
has implemented a managed desktop environment where users do not have administrative rights to the
desktop. There is a limited development, production and testing environment available.
Contractor Response:
The JPay Team has read, understands and agrees to comply.
Implementation and System Capabilities
The service should have the capability of sending a data file to the TAPS system. The data file would be
sent daily with transaction listings for the purpose of process in the TAPS system and may be converted
to a preferred format such as ASCII. The Contractor will propose a plan and time line for implementation
that includes all aspects of bringing the system on-line.
The service should have the capability of receiving and processing a data file from the TAPS system.
The data file would be sent daily with offender listings for the purpose of verification of offender
information. This data would include an offender’s name, identification number, and current location for
those offenders that are incarcerated in an MDOC correctional facility.
The service would be utilized to manage the money order process for approximately 50,000 offenders
who reside throughout the State of Michigan correctional institutions.
The Contractor shall provide customer service that permits open communication between MDOC staff
and Contractor support. The Contractor shall provide toll-free telephone access for MDOC staff. The
Contractor support must be available, during normal business hours (8:00 A.M to 5:00 P.M. Eastern
Time) at a minimum, with reasonable exceptions for holidays and or technical difficulties.
Contractor Response:
The JPay Team has read, understands and agrees to comply.

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1.022

Work and Deliverable

The Contractor must provide Deliverables/Services and staff, and otherwise do all things necessary for or
incidental to the performance of work, as set forth below:
The Debit Cards and Electronic Deposit services will rollout Statewide from the beginning of the Contract.
Since the MDOC will soon implement a centralized receipting office, it will now rollout the electronic
deposits Statewide. The Electronic Mail service will be rolled out initially at three correctional facilities:
the Newberry Correctional Facility, the Cooper Street Correctional Facility and the Carson City
Correctional Facility. The Electronic Mail service will then be rolled out by MDOC regional areas following
equipment delivery, installation, end-to-end testing and accurate completion of operations for 30 days.
Incoming Electronic Mail
1.

The Contractor shall provide needed Internet connections, required security, CPU, monitor,
printer, supplies for printer including but not limited to paper and toner, and any other necessary
components for the electronic mail to be received and printed in the mailroom. The Contractor
will be responsible for reimbursing MDOC for supplies purchased before stock is replenished by
the Contractor. Mailroom counts by facility are included in Attachment B.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
2.

At a later date, the Contractor will provide the ability for prisoners to receive and send electronic
mail from secure stations in the housing units of correctional facilities to approved persons, and
the ability for scanning letters.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
3.

These services will be at no cost to the State of Michigan.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
4.

This service is to be made available at all State of Michigan MDOC facilities. See attachment for
location of facilities. MDOC would like to implement in three stages by Region (Region 3, Region
2 then Region 1) then rollout statewide following equipment delivery, installed, end to end testing,
and accurate completion of operations for 30 days. The Contractor must have a plan in place for
a high volume of mail upon implementation of the service statewide.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
5.

The Contractor shall provide a schedule of estimated install and completion dates with
timeframes not to exceed 90 days from the date the Contract is awarded.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
6.

The Contractor shall provide a schedule of fees to be charged. These fees must be low cost to
prisoners’ families and friends, to encourage the use of this service. See Attachment A.
Contractor Response:

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The JPay Team has read, understands and agrees to comply.
7.

The MDOC must have access to track senders of electronic mail. Part of the process must
include the friend or family member approving the MDOC being supplied needed information on
IP addresses and users when requested.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
8.

The Contractor shall have the repair of equipment and/or system completed within 48 hours of
being notified.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Electronic Deposit
1.

The electronic deposit must be final at point of sale using the prisoner’s name and prisoner’s
number and sender’s name, address, relationship to the prisoner and must produce a receipt to
the depositor.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
2.

The Contractor must transfer funds to the MDOC bank at least once daily through batch
processing and must guarantee the funds pending transfer. The receipts are to be batched
nightly and sent to TAPS.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
3.

Reports must be available to MDOC staff online. Reports shall include prisoner’s name,
prisoner’s number, sender’s information on daily deposits and bank confirmation on transfer of
funds to MDOC bank.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
4.

The Contractor must provide training to MDOC staff on an as needed basis.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
5.

MDOC would like to implement in three stages by Region (Region 3, Region 2 then Region 1)
then rollout statewide following successful end to end testing of batch processing to TAPS
system, transfers of funds, and accurate completion of operations for 30 days.
Contractor Response:

The JPay Team has read, understands and agrees to comply.

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6.

The Contractor shall provide a schedule of estimated install and completion dates with
timeframes not to exceed 90 days from the date the Contract is awarded.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
7.

The Contractor shall have the repair of equipment and/or system completed within 48 hours of
being notified.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Debit Card
1.

The Contractor will supply debit cards on a monthly basis to each Regional Business Office,
which will exceed the number of prisoners being released for the month.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
2.

The Contractor will supply the equipment necessary to each Regional Business Office to load the
debit cards with release money at no cost to the State. The cards are to be loaded by MDOC
through a Web-based interface.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
3.

The cardholder (prisoner) must be able to access their account information immediately,
nationwide, 24x7x365 by telephone and Internet.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
4.

Reports must be available to MDOC staff online. These reports must include debit card
activations by prisoner and correctional facility and transfer of funds to Contractor by MDOC by
correctional facility.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
5.

The Contractor must provide training to staff on an as needed basis.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
6.

MDOC would like to implement statewide following successful end to end testing and accurate
completion of operations for 30 days.
Contractor Response:

The JPay Team has read, understands and agrees to comply.

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7.

The Contractor shall provide a schedule of estimated install and completion dates with
timeframes not to exceed 90 days from the date the Contract is awarded.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
8.

The Contractor shall have the repair of equipment and/or system completed within 48 hours of
being notified.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
1.030
1.31

Roles and Responsibilities

Contractor Staff, Roles, and Responsibilities

The Contractor shall provide and maintain the following key personnel positions:
•
•
•
•
•

Contract Manager
Project Manager
Programming Manager
Programming Staff
Customer Service Representative

The key personnel identified below shall be committed, and shall perform the assigned work:
Errol Feldman, GC, Contract Manager
The roles and responsibilities of the Contract Manager will include:
•

MDOC contract management

Danny Shapiro, COO, Project Manager
The roles and responsibilities of the Project Manager will include:
•

Overall MDOC account management, including implementation, training and support

Shai Ziv, CIO, Programming Manager
The roles and responsibilities of the Programming Manager will include:
•

Technical lead, integrations and deployment

Joseph Bush, Professional Services, Engineer
The roles and responsibilities of this position will include:
•

Technical deployment, hardware and software

Javier Pico, Help Desk Manager
The roles and responsibilities of the Customer Service Representative will include:
•

Technical manager for help desk support

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1.040
1.041

Project Plan

Project Plan Management

The Contractor shall propose a project plan including a service delivery plan, communication plan,
equipment installation by region, end to end testing and an implementation plan for the project. The
Contractor shall present a project management plan, identifying methods, tools and processes proposed
to oversee the project, address issues/changes as they may arise, and keep the appropriate parties
apprised of progress.

Contractor Response:
The JPay Team has read, understands and agrees to comply.
1.042

Reports

Incoming Electronic Mail
1.

The MDOC requires monthly reports of incoming electronic mail processed by correctional facility,
by prisoner’s number, by IP address and by user IDs. These reports should arrive electronically
with the ability to sort as needed. Should the MDOC ask for a commission, monthly reports will
be provided, including monthly usage. The Contractor will provide sample reports available for
review.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
2.

The Contractor shall provide weekly project reports and include a list of milestones with a sign-off
for deliverables for the incoming electronic mail service.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Electronic Deposit
1.

The Contractor shall provide weekly project reports and include a list of milestones with a sign-off
for deliverables for the electronic deposit service.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Debit Card
1.

The Contractor shall provide weekly project reports and include a list of milestones with a sign-off
for deliverables for the debit card service.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
1.050
1.051

Acceptance

Criteria

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The following criteria will be used by the State to determine Acceptance of the Services or Deliverables
provided under this SOW:
1.

Statewide implementation following successful end to end testing and accurate completion of
operations for 30 days.
Minimal downtime of the systems.
Receive accurate reports and audits.
Error rate of less than 2%.
Offender cash collections are being accurately reflected in the TAPS system daily.
Offender cash collections are being transferred to the State of Michigan daily as required in the
Contract.
Offenders are provided timely feedback when they have questions regarding their new services.
Offenders, staff and families are trained.
The supply of marketing brochures to the public and prisoner population are received and posted.

2.
3.
4.
5.
6.

7.
8.
9.

Contractor Response:
The JPay Team has read, understands and agrees to comply.
1.052

Final Acceptance

Final Acceptance will occur when all equipment has been delivered and software changes have been
made for recording transactions in the TAPS system, payments batches are received on a timely basis,
and the MDOC staff and families are trained and using the new technology.
Incoming Electronic Mail
1.

Final acceptance for incoming electronic mail will be when this service is operational at each
MDOC correctional facility with prisoners’ family and friends making use of this service.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Electronic Deposit
1.

Final acceptance for electronic deposit will be when this service is operational at each MDOC
correctional facility.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
Debit Card
1.

Final acceptance for debit cards will be when delivery of supply of debit cards and equipment to
each Regional Business Office, training and testing is completed and acceptable to MDOC.
Contractor Response:

The JPay Team has read, understands and agrees to comply.
1.060
1.061

Proposal Pricing

Proposal Pricing

For authorized Services and Price List, see Attachment A.

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Contractor’s out-of-pocket expenses are not separately reimbursable by the State unless, on a case-bycase basis for unusual expenses, the State has agreed in advance and in writing to reimburse Contractor
for the expense at the State’s current travel reimbursement rates. See www.michigan.gov/dmb for
current rates.
1.062

Price Term

There is no cost to the State of Michigan.
This Contract will be fixed prices with prospective re-determination at an agreed upon time
Prices quoted are the maximum for a period of 365 days from the date the Contract becomes effective.
Prices are subject to change at the end of each 365-day period. Such changes shall be based on
changes in actual costs incurred. Documentation of such changes must be provided with the request for
price change in order to substantiate any requested change. The MDOC reserves the right to consider
various pertinent information sources to evaluate price increase requests (such as the CPI and PPI, US
City Average, as published by the US Department of Labor, Bureau of Labor Statistics). The MDOC also
reserves the right to consider other information related to special economic and/or industry circumstances,
when evaluating a price change request. Changes may be either increases or decreases, and may be
requested by either party. Approved changes shall be firm for the remainder of the contract period unless
further revised at the end of the next 365-day period. Requests for price changes shall be RECEIVED IN
WRITING AT LEAST 10 DAYS PRIOR TO THEIR EFFECTIVE DATE, and are subject to written
acceptance before becoming effective. In the event new prices are not acceptable, the CONTRACT may
be canceled. The Contractor remains responsible for performing according to the Contract terms
at the Contract price for all orders received before price revisions are approved or before the
Contract is canceled.
Contractor Response:
The JPay Team has read, understands and agrees to comply.
1.063

Tax Excluded from Price

(a)
Sales Tax: For purchases made directly by the State, the State is exempt from State and Local
Sales Tax. Prices must not include the taxes. Exemption Certificates for State Sales Tax will be
furnished upon request.
(b)
Federal Excise Tax: The State may be exempt from Federal Excise Tax, or the taxes may be
reimbursable, if articles purchased under any resulting Contract are used for the State’s exclusive use.
Certificates showing exclusive use for the purposes of substantiating a tax-free, or tax-reimbursable sale
will be sent upon request. If a sale is tax exempt or tax reimbursable under the Internal Revenue Code,
prices must not include the Federal Excise Tax.
1.064

Holdback

Deleted – Not Applicable
1.070
1.071

Additional Requirements

Additional Terms and Conditions

Deleted – Not Applicable

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Article 2, Terms and Conditions
2.000
2.001

Contract Structure and Term

Contract Term

This Contract is for a period of three years beginning January 1, 2009 through December 31, 2011. All
outstanding Purchase Orders must also expire upon the termination (cancellation for any of the reasons
listed in Section 2.150) of the Contract, unless otherwise extended under the Contract. Absent an early
termination for any reason, Purchase Orders issued but not expired, by the end of the Contract’s stated
term, will remain in effect for the balance of the fiscal year for which they were issued.
2.002

Renewal(s)

This Contract may be renewed in writing by mutual agreement of the parties not less than 30 days before
its expiration. The Contract may be renewed for up to five additional one-year periods.
2.003

Legal Effect

The Contractor shall show acceptance of this Contract by signing two copies of the Contract and
returning them to the Contract Administrator. The Contractor shall not proceed with the performance of
the work to be done under the Contract, including the purchase of necessary materials, until both parties
have signed the Contract to show acceptance of its terms, and the Contractor receives a contract
release/purchase order that authorizes and defines specific performance requirements.
Except as otherwise agreed in writing by the parties, the State assumes no liability for costs incurred by
Contractor or payment under this Contract, until Contractor is notified in writing that this Contract (or
Change Order) has been approved by the State Administrative Board (if required), approved and signed
by all the parties, and a Purchase Order against the Contract has been issued.
2.004

Attachments & Exhibits

All Attachments and Exhibits affixed to any and all Statement(s) of Work, or appended to or referencing
this Contract, are incorporated in their entirety and form part of this Contract.
2.005

Ordering

The State will issue a written Purchase Order, Blanket Purchase Order, Direct Voucher or Procurement
Card Order, which must be approved by the Contract Administrator or the Contract Administrator's
designee, to order any Services/Deliverables under this Contract. All orders are subject to the terms and
conditions of this Contract. No additional terms and conditions contained on either a Purchase Order or
Blanket Purchase Order apply unless they are also specifically contained in that Purchase Order's or
Blanket Purchase Order's accompanying Statement of Work. Exact quantities to be purchased are
unknown, however, the Contractor will be required to furnish all such materials and services as may be
ordered during the Contract period. Quantities specified, if any, are estimates based on prior purchases,
and the State is not obligated to purchase in these or any other quantities.
2.006

Order of Precedence

(a)
The Contract, including any Statements of Work and Exhibits, to the extent not contrary to the
Contract, each of which is incorporated for all purposes, constitutes the entire agreement between the
parties with respect to the subject matter and supersedes all prior agreements, whether written or oral,
with respect to the subject matter and as additional terms and conditions on the purchase order must
apply as limited by Section 2.005.
(b)
In the event of any inconsistency between the terms of the Contract and a Statement of Work, the
terms of the Statement of Work will take precedence (as to that Statement of Work only); provided,
however, that a Statement of Work may not modify or amend the terms of the Contract, which may be
modified or amended only by a formal Contract amendment.

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2.007

Headings

Captions and headings used in the Contract are for information and organization purposes. Captions and
headings, including inaccurate references, do not, in any way, define or limit the requirements or terms
and conditions of the Contract.
2.008

Form, Function & Utility

If the Contract is for use of more than one State agency and if the Deliverable/Service does not the meet
the form, function, and utility required by that State agency, that agency may, subject to State purchasing
policies, procure the Deliverable/Service from another source.
2.009

Reformation and Severability

Each provision of the Contract is severable from all other provisions of the Contract and, if one or more of
the provisions of the Contract is declared invalid, the remaining provisions of the Contract remain in full
force and effect.
2.010

Consents and Approvals

Except as expressly provided otherwise in the Contract, if either party requires the consent or approval of
the other party for the taking of any action under the Contract, the consent or approval must be in writing
and must not be unreasonably withheld or delayed.
2.011

No Waiver of Default

If a party fails to insist upon strict adherence to any term of the Contract then the party has not waived the
right to later insist upon strict adherence to that term, or any other term, of the Contract.
2.012

Survival

Any provisions of the Contract that impose continuing obligations on the parties, including without
limitation the parties’ respective warranty, indemnity and confidentiality obligations, survive the expiration
or termination of the Contract for any reason. Specific references to survival in the Contract are solely for
identification purposes and not meant to limit or prevent the survival of any other section.
2.020
2.021

Contract Administration

Issuing Office

This Contract is issued by the Michigan Department of Corrections (MDOC) (collectively, including all
other relevant State of Michigan departments and agencies, the “State”). The MDOC is the sole point of
contact in the State with regard to all procurement and contractual matters relating to the Contract. The
MDOC is the only State office authorized to change, modify, amend, alter or clarify the prices,
specifications, terms and conditions of this Contract. The Contractor Administrator within the MDOC
for this Contract is:
Deborah A. Kline, Accountant Manager
Finance Division
Bureau of Fiscal Management
Michigan Department of Corrections
P.O. Box 30003
Lansing, MI 48909
Telephone: 517-373-3821
Fax: 517-241-5129
Email: klineda@michigan.gov

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2.022

Contract Compliance Inspector (CCI)

After the MDOC receives the properly executed Contract, it is anticipated that the MDOC, will direct the
person named below, or any other person so designated, to monitor and coordinate the activities for the
Contract on a day-to-day basis during its term. However, monitoring of this Contract implies no authority
to change, modify, clarify, amend, or otherwise alter the prices, terms, conditions and
specifications of the Contract as that authority is retained by the MDOC. The Contract Compliance
Inspector for this Contract is:
Deborah A. Kline, Accountant Manager
Finance Division
Bureau of Fiscal Management
Michigan Department of Corrections
P.O. Box 30003
Lansing, MI 48909
Telephone: 517-373-3821
Fax: 517-241-5129
Email: klineda@michigan.gov
2.023

Project Manager

The following individuals will oversee the project:
Deborah A. Kline, Accountant Manager
Finance Division
Bureau of Fiscal Management
Michigan Department of Corrections
P.O. Box 30003
Lansing, MI 48909
Telephone: 517-373-3821
Fax: 517-241-5129
Email: klineda@michigan.gov
Michael R. Ouendag, Information Technology Manager
Agency Services
Department of Information Technology
Hannah Building
608 W. Allegan, First Floor West
Lansing, MI 48913
Telephone: 517-335-0493
Fax: 517-335-2071
Email: ouendamr@michigan.gov
2.024

Change Requests

The State reserves the right to request from time to time any changes to the requirements and
specifications of the Contract and the work to be performed by the Contractor under the Contract. During
the course of ordinary business, it may become necessary for the State to discontinue certain business
practices or create Additional Services/Deliverables. At a minimum, to the extent applicable, the State
would like the Contractor to provide a detailed outline of all work to be done, including tasks necessary to
accomplish the services/deliverables, timeframes, listing of key personnel assigned, estimated hours for
each individual per task, and a complete and detailed cost justification.
If the Contractor does not so notify the State, the Contractor has no right to claim thereafter that it is
entitled to additional compensation for performing that service or providing that deliverable.

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Change Requests:
(a)
By giving Contractor written notice within a reasonable time, the State must be entitled to
accept a Contractor proposal for Change, to reject it, or to reach another agreement with
Contractor. Should the parties agree on carrying out a Change, a written Contract Change Notice
must be prepared and issued under this Contract, describing the Change and its effects on the
Services and any affected components of this Contract (a “Contract Change Notice”).
(b)
No proposed Change may be performed until the proposed Change has been specified in
a duly executed Contract Change Notice issued by the MDOC.
(c)
If the State requests or directs the Contractor to perform any activities that Contractor
believes constitute a Change, the Contractor must notify the State that it believes the requested
activities are a Change before beginning to work on the requested activities. If the Contractor
fails to notify the State before beginning to work on the requested activities, then the Contractor
waives any right to assert any claim for additional compensation or time for performing the
requested activities. If the Contractor commences performing work outside the scope of this
Contract and then ceases performing that work, the Contractor must, at the request of the State,
retract any out-of-scope work that would adversely affect the Contract.
2.025

Notices

Any notice given to a party under the Contract must be deemed effective, if addressed to the party as
addressed below, upon: (i) delivery, if hand delivered; (ii) receipt of a confirmed transmission by facsimile
if a copy of the notice is sent by another means specified in this Section; (iii) the third Business Day after
being sent by U.S. mail, postage pre-paid, return receipt requested; or (iv) the next Business Day after
being sent by a nationally recognized overnight express courier with a reliable tracking system.
State:
Deborah A. Kline, Accountant Manager
Finance Division
Bureau of Fiscal Management
Michigan Department of Corrections
P.O. Box 30003
Lansing, MI 48909
Telephone: 517-373-3821
Fax: 517-241-5129
Email: klineda@michigan.gov

Contractor:
Errol Feldman, General Counsel
JPay, Inc.
10800 Biscayne Blvd., Suite 770
Miami, FL 33161
Telephone: 305-358-8689
Fax: 305-893-8985
Email: efeldman@jpay.com
Either party may change its address where notices are to be sent by giving notice according to this
Section.
2.026

Binding Commitments

Representatives of Contractor must have the authority to make binding commitments on Contractor’s
behalf within the bounds set forth in this Contract. Contractor may change the representatives from time
to time upon written notice.

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2.027

Relationship of the Parties

The relationship between the State and Contractor is that of client and independent contractor. No agent,
employee, or servant of Contractor or any of its Subcontractors must be or must be deemed to be an
employee, agent or servant of the State for any reason. Contractor will be solely and entirely responsible
for its acts and the acts of its agents, employees, servants and Subcontractors during the performance of
the Contract.
2.028

Covenant of Good Faith

Each party must act reasonably and in good faith. Unless stated otherwise in the Contract, the parties
will not unreasonably delay, condition or withhold the giving of any consent, decision or approval that is
either requested or reasonably required of them in order for the other party to perform its responsibilities
under the Contract.
2.029

Assignments

(a)
Neither party may assign the Contract, or assign or delegate any of its duties or obligations under
the Contract, to any other party (whether by operation of law or otherwise), without the prior written
consent of the other party; provided, however, that the State may assign the Contract to any other State
agency, department, division or department without the prior consent of Contractor and Contractor may
assign the Contract to an affiliate so long as the affiliate is adequately capitalized and can provide
adequate assurances that the affiliate can perform the Contract. The State may withhold consent from
proposed assignments, subcontracts, or novations when the transfer of responsibility would operate to
decrease the State’s likelihood of receiving performance on the Contract or the State’s ability to recover
damages.
(b)
Contractor may not, without the prior written approval of the State, assign its right to receive
payments due under the Contract. If the State permits an assignment, the Contractor is not relieved of its
responsibility to perform any of its contractual duties, and the requirement under the Contract that all
payments must be made to one entity continues.
(c)
If the Contractor intends to assign the contract or any of the Contractor's rights or duties under
the Contract, the Contractor must notify the State in writing at least 90 days before the assignment. The
Contractor also must provide the State with adequate information about the assignee within a reasonable
amount of time before the assignment for the State to determine whether to approve the assignment.
2.030
2.031

General Provisions

Media Releases

News releases (including promotional literature and commercial advertisements) pertaining to the RFP
and Contract or project to which it relates shall not be made without prior written State approval, and then
only in accordance with the explicit written instructions from the State. No results of the activities
associated with the RFP and Contract are to be released without prior written approval of the State and
then only to persons designated.
2.032

Contract Distribution

The MDOC retains the sole right of Contract distribution to all State agencies and local units of
government unless other arrangements are authorized by the MDOC.
2.033

Permits

The Contractor must obtain and pay any associated costs for all required governmental permits, licenses
and approvals for the delivery, installation and performance of the Services. The State must pay for all
costs and expenses incurred in obtaining and maintaining any necessary easements or right of way.

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2.034

Website Incorporation

The State is not bound by any content on the Contractor’s website, even if the Contractor’s
documentation specifically referenced that content and attempts to incorporate it into any other
communication, unless the State has actual knowledge of the content and has expressly agreed to be
bound by it in a writing that has been manually signed by an authorized representative of the State.
2.035

Future Bidding Preclusion

The Contractor acknowledges that, to the extent this Contract involves the creation, research,
investigation or generation of a future RFP, it may be precluded from bidding on the subsequent RFP.
The State reserves the right to disqualify any bidder if the State determines that the bidder has used its
position (whether as an incumbent Contractor, or as a Contractor hired to assist with the RFP
development, or as a Vendor offering free assistance) to gain a competitive advantage on the RFP
2.036

Freedom of Information

All information in any proposal submitted to the State by Contractor and this Contract is subject to the
provisions of the Michigan Freedom of Information Act, 1976 Public Act No. 442, as amended, MCL
15.231, et seq (the “FOIA”).
2.037

Disaster Recovery

The Contractor and the State recognize that the State provides essential services in times of natural or
man-made disasters. Therefore, except as so mandated by Federal disaster response requirements,
Contractor personnel dedicated to providing Services/Deliverables under this Contract will provide the
State with priority service for repair and work around in the event of a natural or man-made disaster.
2.040
2.041

Financial Provisions

Fixed Prices for Services/Deliverables

Each Statement of Work or Purchase Order issued under this Contract shall specify (or indicate by
reference to the appropriate Contract Exhibit) the firm, fixed prices for all Services/Deliverables, and the
associated payment milestones and payment amounts. The State may make progress payments to the
Contractor when requested as work progresses, but not more frequently than monthly, in amounts
approved by the Contract Administrator, after negotiation. The Contractor must show verification of
measurable progress at the time of requesting progress payments.
2.042

Adjustments for Reductions in Scope of Services/Deliverables

If the scope of the Services/Deliverables under any Statement of Work issued under this Contract is
subsequently reduced by the State, the parties shall negotiate an equitable reduction in Contractor’s
charges under such Statement of Work commensurate with the reduction in scope.
2.043

Services/Deliverables Covered

For all Services/Deliverables to be provided by Contractor (and its Subcontractors, if any) under this
Contract, the State shall not be obligated to pay any amounts in addition to the charges specified in this
Contract.
2.044

Invoicing and Payment – In General

(a)
Each Statement of Work issued under this Contract shall list (or indicate by reference to the
appropriate Contract Exhibit) the prices for all Services/Deliverables, equipment and commodities to be
provided, and the associated payment milestones and payment amounts.

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2.045

Pro-ration

To the extent there are any Services that are to be paid for on a monthly basis, the cost of such Services
shall be pro-rated for any partial month.
2.046

Antitrust Assignment

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.
2.047

Final Payment

The making of final payment by the State to Contractor does not constitute a waiver by either party of any
rights or other claims as to the other party’s continuing obligations under the Contract, nor will it constitute
a waiver of any claims by one party against the other arising from unsettled claims or failure by a party to
comply with this Contract, including claims for Services and Deliverables not reasonably known until after
acceptance to be defective or substandard. Contractor’s acceptance of final payment by the State under
this Contract shall constitute a waiver of all claims by Contractor against the State for payment under this
Contract, other than those claims previously filed in writing on a timely basis and still unsettled.
2.048

Electronic Payment Requirement

Electronic transfer of funds is required for payments on State Contracts. Contractors are required to
register with the State electronically at http://www.cpexpress.state.mi.us. As stated in Public Act 431 of
1984, all contracts that the State enters into for the purchase of goods and services shall provide that
payment will be made by electronic fund transfer (EFT).
2.050
2.051

Taxes

Employment Taxes

Contractors are expected to collect and pay all applicable federal, state, and local employment taxes,
including the taxes.
2.052

Sales and Use Taxes

Contractors are required to be registered and to remit sales and use taxes on taxable sales of tangible
personal property or services delivered into the State. Contractors that lack sufficient presence in
Michigan to be required to register and pay tax must do so as a volunteer. This requirement extends to:
(1) all members of any controlled group as defined in § 1563(a) of the Internal Revenue Code and
applicable regulations of which the company is a member, and (2) all organizations under common
control as defined in § 414(c) of the Internal Revenue Code and applicable regulations of which the
company is a member that make sales at retail for delivery into the State are registered with the State for
the collection and remittance of sales and use taxes. In applying treasury regulations defining “two or
more trades or businesses under common control” the term “organization” means sole proprietorship, a
partnership (as defined in § 701(a)(2) of the Internal Revenue Code), a trust, an estate, a corporation, or
a limited liability company.
2.060
2.061

Contract Management

Contractor Personnel Qualifications

All persons assigned by the Contractor to the performance of Services under this Contract must be
employees of Contractor or its majority-owned (directly or indirectly, at any tier) subsidiaries (or a Stateapproved Subcontractor) and must be fully qualified to perform the work assigned to them. The
Contractor must include a similar provision in any subcontract entered into with a Subcontractor. For the
purposes of this Contract, independent contractors engaged by Contractor solely in a staff augmentation
role must be treated by the State as if they were employees of Contractor for this Contract only; however,

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the State understands that the relationship between Contractor and Subcontractor is an independent
contractor relationship.
2.062

Contractor Key Personnel

(a)
The Contractor must provide the Contract Compliance Inspector with the names of the Key
Personnel.
(b)
Key Personnel must be dedicated as defined in the Statement of Work to the Project for its
duration in the applicable Statement of Work with respect to other individuals designated as Key
Personnel for that Statement of Work.
(c)
The State will have the right to recommend and approve in writing the initial assignment, as well
as any proposed reassignment or replacement, of any Key Personnel. Before assigning an individual to
any Key Personnel position, Contractor will notify the State of the proposed assignment, will introduce the
individual to the appropriate State representatives, and will provide the State with a resume and any other
information about the individual reasonably requested by the State. The State reserves the right to
interview the individual before granting written approval. In the event the State finds a proposed
individual unacceptable, the State will provide a written explanation including reasonable detail outlining
the reasons for the rejection.
(d)
The Contractor must not remove any Key Personnel from their assigned roles or the Contract
without the prior written consent of the State. The Contractor’s removal of Key Personnel without the
prior written consent of the State is an unauthorized removal (“Unauthorized Removal”). Unauthorized
Removals does not include replacing Key Personnel for reasons beyond the reasonable control of
Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation
or for cause termination of the Key Personnel’s employment. Unauthorized Removals does not include
replacing Key Personnel because of promotions or other job movements allowed by Contractor personnel
policies or Collective Bargaining Agreement(s) as long as the State receives prior written notice before
shadowing occurs and Contractor provides 30 days of shadowing unless parties agree to a different time
period. The Contractor with the State must review any Key Personnel replacements, and appropriate
transition planning will be established. Any Unauthorized Removal may be considered by the State to be
a material breach of the Contract, in respect of which the State may elect to exercise its termination and
cancellation rights.
(e)
The Contractor must notify the Contract Compliance Inspector and the Contract Administrator at
least 10 business days before redeploying non-Key Personnel, who are dedicated to primarily to the
Project, to other projects. If the State does not object to the redeployment by its scheduled date, the
Contractor may then redeploy the non-Key Personnel.
2.063

Re-assignment of Personnel at the State’s Request

The State reserves the right to require the removal from the Project of Contractor personnel found, in the
judgment of the State, to be unacceptable. The State’s request must be written with reasonable detail
outlining the reasons for the removal request. Additionally, the State’s request must be based on
legitimate, good-faith reasons. Replacement personnel for the removed person must be fully qualified for
the position. If the State exercises this right, and the Contractor cannot immediately replace the removed
personnel, the State agrees to an equitable adjustment in schedule or other terms that may be affected
by the State’s required removal. If any incident with removed personnel results in delay not reasonably
anticipatable under the circumstances and which is attributable to the State, the applicable SLAs for the
affected Service will not be counted for a time as agreed to by the parties.
2.064

Contractor Personnel Location

All staff assigned by Contractor to work on the Contract will perform their duties either primarily at
Contractor’s offices and facilities or at State facilities. Without limiting the generality of the foregoing, Key
Personnel will, at a minimum, spend at least the amount of time on-site at State facilities as indicated in
the applicable Statement of Work. Subject to availability, selected Contractor personnel may be assigned
office space to be shared with State personnel.

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2.065

Contractor Identification

Contractor employees must be clearly identifiable while on State property by wearing a State-issued
badge, as required. Contractor employees are required to clearly identify themselves and the company
they work for whenever making contact with State personnel by telephone or other means.
2.066

Cooperation with Third Parties

The Contractor agrees to cause its personnel and the personnel of any Subcontractors to cooperate with
the State and its agents and other contractors including the State’s Quality Assurance personnel. As
reasonably requested by the State in writing, the Contractor will provide to the State’s agents and other
contractors reasonable access to Contractor’s Project personnel, systems and facilities to the extent the
access relates to activities specifically associated with this Contract and will not interfere or jeopardize the
safety or operation of the systems or facilities. The State acknowledges that Contractor’s time schedule
for the Contract is very specific and agrees not to unnecessarily or unreasonably interfere with, delay or
otherwise impeded Contractor’s performance under this Contract with the requests for access.
2.067

Contractor Return of State Equipment/Resources

The Contractor must return to the State any State-furnished equipment, facilities and other resources
when no longer required for the Contract in the same condition as when provided by the State,
reasonable wear and tear excepted.
2.068

Contract Management Responsibilities

The Contractor will be required to assume responsibility for all contractual activities, whether or not that
Contractor performs them. Further, the State will consider the Contractor to be the sole point of contact
with regard to contractual matters, including payment of any and all charges resulting from the anticipated
Contract. If any part of the work is to be subcontracted, the Contract must include a list of
Subcontractors, including firm name and address, contact person and a complete description of work to
be subcontracted. The State reserves the right to approve Subcontractors and to require the Contractor
to replace Subcontractors found to be unacceptable. The Contractor is totally responsible for adherence
by the Subcontractor to all provisions of the Contract. Any change in Subcontractors must be approved
by the State, in writing, prior to such change.
2.070
2.071

Subcontracting by Contractor

Contractor Full Responsibility

The Contractor shall have full responsibility for the successful performance and completion of all of the
Services and Deliverables. The State will consider the Contractor to be the sole point of contact with
regard to all contractual matters under this Contract, including payment of any and all charges for
Services and Deliverables.
2.072

State Consent to Delegation

The Contractor shall not delegate any duties under this Contract to a Subcontractor unless the MDOC
has given written consent to such delegation. The State shall have the right of prior written approval of all
Subcontractors and to require Contractor to replace any Subcontractors found, in the reasonable
judgment of the State, to be unacceptable. The State’s request shall be written with reasonable detail
outlining the reasons for the removal request. Additionally, the State’s request shall be based on
legitimate, good-faith reasons. Replacement Subcontractor(s) for the removed Subcontractor shall be
fully qualified for the position. If the State exercises this right, and the Contractor cannot immediately
replace the removed Subcontractor, the State will agree to an equitable adjustment in schedule or other
terms that may be affected by the State’s required removal. If any such incident with a removed
Subcontractor results in delay not reasonable anticipatable under the circumstances and which is
attributable to the State, the applicable SLA for the affected Work will not be counted for a time agreed
upon by the parties.

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2.073

Subcontractor Bound to Contract

In any subcontracts entered into by Contractor for the performance of the Services, the Contractor shall
require the Subcontractor, to the extent of the Services to be performed by the Subcontractor, to be
bound to Contractor by the terms of this Contract and to assume toward Contractor all of the obligations
and responsibilities that Contractor, by this Contract, assumes toward the State. The State reserves the
right to receive copies of and review all subcontracts, although Contractor may delete or mask any
proprietary information, including pricing, contained in such contracts before providing them to the State.
The management of any Subcontractor will be the responsibility of Contractor, and Contractor shall
remain responsible for the performance of its Subcontractors to the same extent as if Contractor had not
subcontracted such performance. Contractor shall make all payments to Subcontractors or suppliers of
Contractor. Except as otherwise agreed in writing by the State and Contractor, the State will not be
obligated to direct payments for the Services other than to Contractor. The State’s written approval of
any Subcontractor engaged by Contractor to perform any obligation under this Contract shall not relieve
Contractor of any obligations or performance required under this Contract.
2.074

Flow Down

Except where specifically approved in writing by the State on a case-by-case basis, the Contractor shall
flow down the obligations in Sections 2.031, 2.060, 2.100, 2.110, 2.120, 2.130, 2.200 in all of its
agreements with any Subcontractors.
2.075

Competitive Selection

The Contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum
practical extent consistent with the objectives and requirements of the Contract.
2.080
2.081

State Responsibilities

Equipment

The State will provide only the equipment and resources identified in the Statements of Work and other
Contract Exhibits.
2.082

Facilities

The State must designate space as long as it is available and as provided in the Statement of Work, to
house the Contractor’s personnel whom the parties agree will perform the Services/Deliverables at State
facilities (collectively, the “State Facilities”). The Contractor must have reasonable access to, and, unless
agreed otherwise by the parties in writing, must observe and comply with all rules and regulations relating
to each of the State Facilities (including hours of operation) used by the Contractor in the course of
providing the Services. The Contractor agrees that it will not, without the prior written consent of the
State, use any State Facilities or access any State information systems provided for the Contractor’s use,
or to which the Contractor otherwise gains access in the course of performing the Services, for any
purpose other than providing the Services to the State.
2.090
2.091

Security

Background Checks

On a case-by-case basis, the State may investigate the Contractor's personnel before they may have
access to State facilities and systems. The scope of the background check is at the discretion of the
State and the results will be used to determine Contractor personnel eligibility for working within State
facilities and systems. The investigations will include Michigan State Police Background checks (ICHAT)
and the Law Enforcement Information Network (LEIN) and may include the National Crime Information
Center (NCIC) Finger Prints. Proposed Contractor personnel may be required to complete and submit an
RI-8 Fingerprint Card for the NCIC Finger Print Check. Any request for background checks will be
initiated by the State and will be reasonably related to the type of work requested.

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All Contractor personnel will also be expected to comply with the State’s security and acceptable use
policies for State IT equipment and resources. See http://www.michigan.gov/dit. Furthermore, Contractor
personnel will be expected to agree to the State’s security and acceptable use policies before the
Contractor personnel will be accepted as a resource to perform work for the State. It is expected the
Contractor will present these documents to the prospective employee before the Contractor presents the
individual to the State as a proposed resource. Contractor staff will be expected to comply with all
Physical Security procedures in place within the facilities where they are working.
2.092

Security Breach Notification

If the Contractor breaches this Section, the Contractor must (i) promptly cure any deficiencies and (ii)
comply with any applicable federal and state laws and regulations pertaining to unauthorized disclosures.
Contractor and the State will cooperate to mitigate, to the extent practicable, the effects of any breach,
intrusion, or unauthorized use or disclosure. The Contractor must report to the State in writing any use or
disclosure of Confidential Information, whether suspected or actual, other than as provided for by the
Contract within 10 days of becoming aware of the use or disclosure or the shorter time period as is
reasonable under the circumstances.
2.093

PCI Data Security Requirements

Contractors with access to credit/debit card cardholder data must adhere to the Payment Card Industry
(PCI) Data Security requirements. Contractor agrees that they are responsible for security of cardholder
data in their possession. Contractor agrees that data can ONLY be used for assisting the State in
completing a transaction, supporting a loyalty program, supporting the State, providing fraud control
services, or for other uses specifically required by law.
The Contractor agrees to provide business continuity in the event of a major disruption, disaster or failure.
The Contractor will contact the MDOC immediately to advise them of any breaches in security where card
data has been compromised. In the event of a security intrusion, the Contractor agrees the Payment
Card Industry representative, or a Payment Card Industry approved third party, will be provided with full
cooperation and access to conduct a thorough security review. The review will validate compliance with
the Payment Card Industry Data Security Standard for protecting cardholder data.
The Contractor agrees to properly dispose sensitive cardholder data when no longer needed. The
Contractor will continue to treat cardholder data as confidential upon contract termination.
The Contractor will provide the MDOC documentation showing PCI Data Security certification has been
achieved. The Contractor will advise the MDOC of all failures to comply with the PCI Data Security
Requirements. Failures include, but are not limited to system scans and self-assessment questionnaires.
The Contractor will provide a time line for corrective action.
2.100
2.101

Confidentiality

Confidentiality

The Contractor and the State each acknowledge that the other possesses and will continue to possess
confidential information that has been developed or received by it. As used in this Section, “Confidential
Information” of Contractor must mean all non-public proprietary information of Contractor (other than
Confidential Information of the State as defined below) which is marked confidential, restricted,
proprietary or with a similar designation. “Confidential Information” of the State must mean any
information which is retained in confidence by the State (or otherwise required to be held in confidence by
the State under applicable federal, state and local laws and regulations) or which, in the case of tangible
materials provided to Contractor by the State under its performance under this Contract, is marked as
confidential, proprietary or with a similar designation by the State. “Confidential Information” excludes
any information (including this Contract) that is publicly available under the Michigan FOIA.

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2.102

Protection and Destruction of Confidential Information

The State and Contractor will each use at least the same degree of care to prevent disclosing to third
parties the Confidential Information of the other as it employs to avoid unauthorized disclosure,
publication or dissemination of its own confidential information of like character, but in no event less than
reasonable care. Neither Contractor nor the State will (i) make any use of the Confidential Information of
the other except as contemplated by this Contract, (ii) acquire any right in or assert any lien against the
Confidential Information of the other, or (iii) if requested to do so, refuse for any reason to promptly return
the other party's Confidential Information to the other party. Each party will limit disclosure of the other
party’s Confidential Information to employees and Subcontractors who must have access to fulfill the
purposes of this Contract. Disclosure to, and use by, a Subcontractor is permissible where (A) use of a
Subcontractor is authorized under this Contract, (B) the disclosure is necessary or otherwise naturally
occurs in connection with work that is within the Subcontractor's scope of responsibility, and (C)
Contractor obligates the Subcontractor in a written Contract to maintain the State’s Confidential
Information in confidence. At the State's request, any employee of Contractor and of any Subcontractor
having access or continued access to the State’s Confidential Information may be required to execute an
acknowledgment that the employee has been advised of Contractor’s and the Subcontractor’s obligations
under this Section and of the employee’s obligation to Contractor or Subcontractor, as the case may be,
to protect the Confidential Information from unauthorized use or disclosure.
Promptly upon termination or cancellation of the Contract for any reason, Contractor must certify to the
State that Contractor has destroyed all State Confidential Information.
2.103

Exclusions

Notwithstanding the foregoing, the provisions of Section 2.100 will not apply to any particular information
which the State or Contractor can demonstrate (i) was, at the time of disclosure to it, in the public domain;
(ii) after disclosure to it, is published or otherwise becomes part of the public domain through no fault of
the receiving party; (iii) was in the possession of the receiving party at the time of disclosure to it without
an obligation of confidentiality; (iv) was received after disclosure to it from a third party who had a lawful
right to disclose the information to it without any obligation to restrict its further disclosure; or (v) was
independently developed by the receiving party without reference to Confidential Information of the
furnishing party. Further, the provisions of Section 2.100 will not apply to any particular Confidential
Information to the extent the receiving party is required by law to disclose the Confidential Information,
provided that the receiving party (i) promptly provides the furnishing party with notice of the legal request,
and (ii) assists the furnishing party in resisting or limiting the scope of the disclosure as reasonably
requested by the furnishing party.
2.104

No Implied Rights

Nothing contained in this Section must be construed as obligating a party to disclose any particular
Confidential Information to the other party, or as granting to or conferring on a party, expressly or
impliedly, any right or license to the Confidential Information of the other party.
2.105

Respective Obligations

The parties’ respective obligations under this Section must survive the termination or expiration of this
Contract for any reason.
2.110
2.111

Records and Inspections

Inspection of Work Performed

The State’s authorized representatives must at all reasonable times and with 10 days prior written
request, have the right to enter Contractor’s premises, or any other places, where the Services are being
performed, and must have access, upon reasonable request, to interim drafts of Deliverables or work-inprogress. Upon 10 Days prior written notice and at all reasonable times, the State’s representatives must
be allowed to inspect, monitor, or otherwise evaluate the work being performed and to the extent that the

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access will not reasonably interfere or jeopardize the safety or operation of the systems or facilities.
Contractor must provide all reasonable facilities and assistance for the State’s representatives.
2.112

Examination of Records

For seven years after the Contractor provides any work under this Contract (the "Audit Period"), the State
may examine and copy any of Contractor’s books, records, documents and papers pertinent to
establishing Contractor’s compliance with the Contract and with applicable laws and rules. The State
must notify the Contractor 20 days before examining the Contractor's books and records. The State does
not have the right to review any information deemed confidential by the Contractor to the extent access
would require the confidential information to become publicly available. This provision also applies to the
books, records, accounts, documents and papers, in print or electronic form, of any parent, affiliated or
subsidiary organization of Contractor, or any Subcontractor of Contractor performing services in
connection with the Contract.
2.113

Retention of Records

The Contractor must maintain at least until the end of the Audit Period all pertinent financial and
accounting records (including time sheets and payroll records, and information pertaining to the Contract
and to the Services, equipment, and commodities provided under the Contract) pertaining to the Contract
according to generally accepted accounting principles and other procedures specified in this Section.
Financial and accounting records must be made available, upon request, to the State at any time during
the Audit Period. If an audit, litigation, or other action involving Contractor’s records is initiated before the
end of the Audit Period, the records must be retained until all issues arising out of the audit, litigation, or
other action are resolved or until the end of the Audit Period, whichever is later.
2.114

Audit Resolution

If necessary, the Contractor and the State will meet to review each audit report promptly after issuance.
The Contractor will respond to each audit report in writing within 30 days from receipt of the report, unless
a shorter response time is specified in the report. The Contractor and the State must develop, agree
upon and monitor an action plan to promptly address and resolve any deficiencies, concerns, and/or
recommendations in the audit report.
2.115

Errors

(a)
If the audit demonstrates any errors in the documents provided to the State, then the amount in
error must be reflected as a credit or debit on the next invoice and in subsequent invoices until the
amount is paid or refunded in full. However, a credit or debit may not be carried for more than four
invoices. If a balance remains after four invoices, then the remaining amount will be due as a payment or
refund within 45 days of the last quarterly invoice that the balance appeared on or termination of the
Contract, whichever is earlier.
(b)
In addition to other available remedies, the difference between the payment received and the
correct payment amount is greater than 10%, then the Contractor must pay all of the reasonable costs of
the audit.
2.120
2.121

Warranties

Warranties and Representations

The Contractor represents and warrants:
(a)
It is capable in all respects of fulfilling and must fulfill all of its obligations under this Contract. The
performance of all obligations under this Contract must be provided in a timely, professional, and
workman-like manner and must meet the performance and operational standards required under this
Contract.

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(b)
The Contract Appendices, Attachments and Exhibits identify the equipment and software and
services necessary for the Deliverable(s) to perform and Services to operate in compliance with the
Contract’s requirements and other standards of performance.
(c)
It is the lawful owner or licensee of any Deliverable licensed or sold to the State by Contractor or
developed by Contractor under this Contract, and Contractor has all of the rights necessary to convey to
the State the ownership rights or licensed use, as applicable, of any and all Deliverables. None of the
Deliverables provided by Contractor to the State under this Contract, nor their use by the State, will
infringe the patent, copyright, trade secret, or other proprietary rights of any third party.
(d)
If, under this Contract, Contractor procures any equipment, software or other Deliverable for the
State (including equipment, software and other Deliverables manufactured, re-marketed or otherwise sold
by Contractor under Contractor’s name), then in addition to Contractor’s other responsibilities with respect
to the items in this Contract, Contractor must assign or otherwise transfer to the State or its designees, or
afford the State the benefits of, any manufacturer's warranty for the Deliverable.
(e)
The contract signatory has the power and authority, including any necessary corporate
authorizations, necessary to enter into this Contract, on behalf of Contractor.
(f)

It is qualified and registered to transact business in all locations where required.

(g)
Neither the Contractor nor any Affiliates, nor any employee of either, has, must have, or must
acquire, any contractual, financial, business, or other interest, direct or indirect, that would conflict in any
manner or degree with Contractor’s performance of its duties and responsibilities to the State under this
Contract or otherwise create an appearance of impropriety with respect to the award or performance of
this Agreement. Contractor must notify the State about the nature of the conflict or appearance of
impropriety within two days of learning about it.
(h)
Neither Contractor nor any Affiliates, nor any employee of either has accepted or must accept
anything of value based on an understanding that the actions of the Contractor or Affiliates or employee
on behalf of the State would be influenced. Contractor must not attempt to influence any State employee
by the direct or indirect offer of anything of value.
(i)
Neither Contractor nor any Affiliates, nor any employee of either has paid or agreed to pay any
person, other than bona fide employees and consultants working solely for Contractor or the Affiliate, any
fee, commission, percentage, brokerage fee, gift, or any other consideration, contingent upon or resulting
from the award or making of this Contract.
(j)
The prices proposed by Contractor were arrived at independently, without consultation,
communication, or agreement with any other bidder for the purpose of restricting competition; the prices
quoted were not knowingly disclosed by Contractor to any other bidder; and no attempt was made by
Contractor to induce any other person to submit or not submit a proposal for the purpose of restricting
competition.
(k)
All financial statements, reports, and other information furnished by Contractor to the State as
part of its response to the RFP or otherwise in connection with the award of this Contract fairly and
accurately represent the business, properties, financial condition, and results of operations of Contractor
as of the respective dates, or for the respective periods, covered by the financial statements, reports,
other information. Since the respective dates or periods covered by the financial statements, reports, or
other information, there have been no material adverse change in the business, properties, financial
condition, or results of operations of Contractor.
(l)
All written information furnished to the State by or for the Contractor in connection with this
Contract, including its bid, is true, accurate, and complete, and contains no untrue statement of material
fact or omits any material fact necessary to make the information not misleading.
(m)
It is not in material default or breach of any other contract or agreement that it may have with the
State or any of its departments, commissions, boards, or agencies. Contractor further represents and
warrants that it has not been a party to any contract with the State or any of its departments that was

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terminated by the State or the department within the previous five years for the reason that Contractor
failed to perform or otherwise breached an obligation of the Contract.
(n)
If any of the certifications, representations, or disclosures made in the Contractor’s original bid
response change after contract award, the Contractor is required to report those changes immediately to
the MDOC.
2.122

Warranty of Merchantability

Goods provided by Contractor under this agreement shall be merchantable. All goods provided under
this Contract shall be of good quality within the description given by the State, shall be fit for their ordinary
purpose, shall be adequately contained and packaged within the description given by the State, shall
conform to the agreed upon specifications, and shall conform to the affirmations of fact made by the
Contractor or on the container or label.
2.123

Warranty of Fitness for a Particular Purpose

When the Contractor has reason to know or knows any particular purpose for which the goods are
required, and the State is relying on the Contractor’s skill or judgment to select or furnish suitable goods,
there is a warranty that the goods are fit for such purpose.
2.124

Warranty of Title

Contractor shall, in providing goods to the State, convey good title in those goods, whose transfer is right
and lawful. All goods provided by Contractor shall be delivered free from any security interest, lien, or
encumbrance of which the State, at the time of contracting, has no knowledge. Goods provided by
Contractor, under this Contract, shall be delivered free of any rightful claim of any third person by of
infringement or the like.
2.125

Equipment Warranty

To the extent Contractor is responsible under this Contract for maintaining equipment/system(s),
Contractor represents and warrants that it will maintain the equipment/system(s) in good operating
condition and will undertake all repairs and preventive maintenance according to the applicable
manufacturer's recommendations for the period specified in this Contract.
The Contractor represents and warrants that the equipment/system(s) are in good operating condition
and operate and perform to the requirements and other standards of performance contained in this
Contract, when installed, at the time of Final Acceptance by the State, and for a period of one year
commencing upon the first day following Final Acceptance.
Within two business days of notification from the State, the Contractor must adjust, repair or replace all
equipment that is defective or not performing in compliance with the Contract. The Contractor must
assume all costs for replacing parts or units and their installation including transportation and delivery
fees, if any.
The Contractor must provide a toll-free telephone number to allow the State to report equipment failures
and problems to be remedied by the Contractor.
The Contractor agrees that all warranty service it provides under this Contract must be performed by
Original Equipment Manufacturer (OEM) trained, certified and authorized technicians.
The Contractor is the sole point of contact for warranty service. The Contractor warrants that it will pass
through to the State any warranties obtained or available from the original equipment manufacturer,
including any replacement, upgraded, or additional equipment warranties.
All warranty work must be performed on the State of Michigan worksite(s).

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2.126

Equipment to be New

If applicable, all equipment provided under this Contract by Contractor shall be new where Contractor has
knowledge regarding whether the equipment is new or assembled from new or serviceable used parts
that are like new in performance or has the option of selecting one or the other. Equipment that is
assembled from new or serviceable used parts that are like new in performance is acceptable where
Contractor does not have knowledge or the ability to select one or other, unless specifically agreed
otherwise in writing by the State.
2.127

Prohibited Products

The State will not accept salvage, distressed, outdated or discontinued merchandise. Shipping of such
merchandise to any State agency, as a result of an order placed against the Contract, shall be considered
default by the Contractor of the terms and conditions of the Contract and may result in cancellation of the
Contract by the State. The brand and product number offered for all items shall remain consistent for the
term of the Contract, unless the MDOC has approved a change order pursuant to Section 2.024.
2.128

Consequences For Breach

In addition to any remedies available in law, if the Contractor breaches any of the warranties contained in
this section, the breach may be considered as a default in the performance of a material obligation of this
Contract.
2.130
2.131

Insurance

Liability Insurance

The Contractor must provide proof of the minimum levels of insurance coverage as indicated below. The
insurance must protect the State from claims which may arise out of or result from the Contractor’s
performance of services under the terms of this Contract, whether the services are performed by the
Contractor, or by any subcontractor, or by anyone directly or indirectly employed by any of them, or by
anyone for whose acts they may be liable.
The Contractor waives all rights against the State of Michigan, its departments, divisions, agencies,
offices, commissions, officers, employees and agents for recovery of damages to the extent these
damages are covered by the insurance policies the Contractor is required to maintain under this Contract.
All insurance coverage’s provided relative to this Contract/Purchase Order are PRIMARY and NONCONTRIBUTING to any comparable liability insurance (including self-insurances) carried by the State.
The insurance must be written for not less than any minimum coverage specified in this Contract or
required by law, whichever is greater.
The insurers selected by Contractor must have an A.M. Best rating of A or better, or as otherwise
approved in writing by the State, or if the ratings are no longer available, with a comparable rating from a
recognized insurance rating agency. All policies of insurance required in this Contract must be issued by
companies that have been approved to do business in the State.
See www.michigan.gov/dleg.
Where specific limits are shown, they are the minimum acceptable limits. If Contractor’s policy contains
higher limits, the State must be entitled to coverage to the extent of the higher limits.
The Contractor is required to pay for and provide the type and amount of insurance checked
1.

below:

Commercial General Liability with the following minimum coverage:
$2,000,000 General Aggregate Limit other than Products/Completed Operations
$2,000,000 Products/Completed Operations Aggregate Limit
$1,000,000 Personal & Advertising Injury Limit

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$1,000,000 Each Occurrence Limit
The Contractor must list the State of Michigan, its departments, divisions, agencies, offices, commissions,
officers, employees and agents as ADDITIONAL INSUREDS on the Commercial General Liability
certificate. The Contractor also agrees to provide evidence that insurance policies contain a waiver of
subrogation by the insurance company.
2.
If a motor vehicle is used to provide services or products under this Contract, the
Contractor must have vehicle liability insurance on any auto including owned, hired and non-owned
vehicles used in Contractor‘s business for bodily injury and property damage as required by law.
The Contractor must list the State of Michigan, its departments, divisions, agencies, offices, commissions,
officers, employees and agents as ADDITIONAL INSUREDS on the vehicle liability certificate. The
Contractor also agrees to provide evidence that insurance policies contain a waiver of subrogation by the
insurance company.
3.
Workers’ compensation coverage must be provided according to applicable laws
governing the employees and employers work activities in the state of the Contractor’s domicile. If the
applicable coverage is provided by a self-insurer, proof must be provided of approved self-insured
authority by the jurisdiction of domicile. For employees working outside of the state of qualification,
Contractor must provide appropriate certificates of insurance proving mandated coverage levels for the
jurisdictions where the employees’ activities occur.
Any certificates of insurance received must also provide a list of states where the coverage is applicable.
The Contractor also agrees to provide evidence that insurance policies contain a waiver of subrogation by
the insurance company. This provision must not be applicable where prohibited or limited by the laws of
the jurisdiction in which the work is to be performed.
4.

Employers liability insurance with the following minimum limits:
$100,000 each accident
$100,000 each employee by disease
$500,000 aggregate disease

5.
Employee Fidelity, including Computer Crimes, insurance naming the State as a loss
payee, providing coverage for direct loss to the State and any legal liability of the State arising out of or
related to fraudulent or dishonest acts committed by the employees of Contractor or its Subcontractors,
acting alone or in collusion with others, in a minimum amount of one million dollars ($1,000,000.00) with a
maximum deductible of fifty thousand dollars ($50,000.00).
6.
Fire and Personal Property Insurance covering against any loss or damage to the office
space used by Contractor for any reason under this Contract, and the equipment, software and other
contents of the office space, including without limitation, those contents used by Contractor to provide the
Services to the State, up to its replacement value, where the office space and its contents are under the
care, custody and control of Contractor. The policy must cover all risks of direct physical loss or damage,
including without limitation, flood and earthquake coverage and coverage for computer hardware and
software. The State must be endorsed on the policy as a loss payee as its interests appear.
2.132

Subcontractor Insurance Coverage

Except where the State has approved in writing a Contractor subcontract with other insurance provisions,
Contractor must require all of its Subcontractors under this Contract to purchase and maintain the
insurance coverage as described in this Section for the Contractor in connection with the performance of
work by those Subcontractors. Alternatively, Contractor may include any Subcontractors under
Contractor’s insurance on the coverage required in this Section. Subcontractor(s) must fully comply with
the insurance coverage required in this Section. Failure of Subcontractor(s) to comply with insurance
requirements does not limit Contractor’s liability or responsibility.

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2.133

Certificates of Insurance and Other Requirements

Contractor must furnish to the MDOC, certificate(s) of insurance verifying insurance coverage or providing
satisfactory evidence of self-insurance as required in this Section (the “Certificates”). The Certificate must
be on the standard “accord” form or equivalent. THE CONTRACT OR PURCHASE ORDER NO. MUST
BE SHOWN ON THE CERTIFICATE OF INSURANCE TO ASSURE CORRECT FILING. All
Certificate(s) are to be prepared and submitted by the Insurance Provider. All Certificate(s) must contain
a provision indicating that coverages afforded under the policies WILL NOT BE CANCELED,
MATERIALLY CHANGED, OR NOT RENEWED without 30 days prior written notice, except for 10 days
for non-payment of premium, having been given to the MDOC. The notice must include the Contract or
Purchase Order number affected. Before the Contract is signed, and not less than 20 days before the
insurance expiration date every year thereafter, the Contractor must provide evidence that the State and
its agents, officers and employees are listed as additional insureds under each commercial general
liability and commercial automobile liability policy. In the event the State approves the representation of
the State by the insurer’s attorney, the attorney may be required to be designated as a Special Assistant
Attorney General by the Attorney General of the State of Michigan.
The Contractor must maintain all required insurance coverage throughout the term of the Contract and
any extensions and, in the case of claims-made Commercial General Liability policies, must secure tail
coverage for at least three years following the expiration or termination for any reason of this Contract.
The minimum limits of coverage specified above are not intended, and must not be construed, to limit any
liability or indemnity of Contractor under this Contract to any indemnified party or other persons.
Contractor is responsible for all deductibles with regard to the insurance. If the Contractor fails to pay any
premium for required insurance as specified in this Contract, or if any insurer cancels or significantly
reduces any required insurance as specified in this Contract without the State’s written consent, then the
State may, after the State has given the Contractor at least 30 days written notice, pay the premium or
procure similar insurance coverage from another company or companies. The State may deduct any part
of the cost from any payment due the Contractor, or the Contractor must pay that cost upon demand by
the State.
2.140
2.141

Indemnification

General Indemnification

To the extent permitted by law, the Contractor must indemnify, defend and hold harmless the State from
liability, including all claims and losses, and all related costs and expenses (including reasonable
attorneys’ fees and costs of investigation, litigation, settlement, judgments, interest and penalties),
accruing or resulting to any person, firm or corporation that may be injured or damaged by the Contractor
in the performance of this Contract and that are attributable to the negligence or tortious acts of the
Contractor or any of its Subcontractors, or by anyone else for whose acts any of them may be liable.
2.142

Code Indemnification

To the extent permitted by law, the Contractor shall indemnify, defend and hold harmless the State from
any claim, loss, or expense arising from Contractor’s breach of the No Surreptitious Code Warranty.
2.143

Employee Indemnification

In any claims against the State of Michigan, its departments, divisions, agencies, sections, commissions,
officers, employees and agents, by any employee of the Contractor or any of its Subcontractors, the
indemnification obligation under the Contract must not be limited in any way by the amount or type of
damages, compensation or benefits payable by or for the Contractor or any of its Subcontractors under
worker’s disability compensation acts, disability benefit acts or other employee benefit acts. This
indemnification clause is intended to be comprehensive. Any overlap in provisions, or the fact that
greater specificity is provided as to some categories of risk, is not intended to limit the scope of
indemnification under any other provisions.

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2.144

Patent/Copyright Infringement Indemnification

To the extent permitted by law, the Contractor must indemnify, defend and hold harmless the State from
and against all losses, liabilities, damages (including taxes), and all related costs and expenses (including
reasonable attorneys’ fees and costs of investigation, litigation, settlement, judgments, interest and
penalties) incurred in connection with any action or proceeding threatened or brought against the State to
the extent that the action or proceeding is based on a claim that any piece of equipment, software,
commodity or service supplied by the Contractor or its subcontractors, or the operation of the equipment,
software, commodity or service, or the use or reproduction of any documentation provided with the
equipment, software, commodity or service infringes any United States patent, copyright, trademark or
trade secret of any person or entity, which is enforceable under the laws of the United States.
In addition, should the equipment, software, commodity, or service, or its operation, become or in the
State’s or Contractor’s opinion be likely to become the subject of a claim of infringement, the Contractor
must at the Contractor’s sole expense (i) procure for the State the right to continue using the equipment,
software, commodity or service or, if the option is not reasonably available to the Contractor, (ii) replace
or modify to the State’s satisfaction the same with equipment, software, commodity or service of
equivalent function and performance so that it becomes non-infringing, or, if the option is not reasonably
available to Contractor, (iii) accept its return by the State with appropriate credits to the State against the
Contractor’s charges and reimburse the State for any losses or costs incurred as a consequence of the
State ceasing its use and returning it.
Notwithstanding the foregoing, the Contractor has no obligation to indemnify or defend the State for, or to
pay any costs, damages or attorneys’ fees related to, any claim based upon (i) equipment developed
based on written specifications of the State; (ii) use of the equipment in a configuration other than
implemented or approved in writing by the Contractor, including, but not limited to, any modification of the
equipment by the State; or (iii) the combination, operation, or use of the equipment with equipment or
software not supplied by the Contractor under this Contract.
2.145

Continuation of Indemnification Obligations

The Contractor’s duty to indemnify under this Section continues in full force and effect, notwithstanding
the expiration or early cancellation of the Contract, with respect to any claims based on facts or conditions
that occurred before expiration or cancellation.
2.146

Indemnification Procedures

The procedures set forth below must apply to all indemnity obligations under this Contract.
(a)
After the State receives notice of the action or proceeding involving a claim for which it will seek
indemnification, the State must promptly notify Contractor of the claim in writing and take or assist
Contractor in taking, as the case may be, any reasonable action to avoid the imposition of a default
judgment against Contractor. No failure to notify the Contractor relieves the Contractor of its
indemnification obligations except to the extent that the Contractor can prove damages attributable to the
failure. Within 10 days following receipt of written notice from the State relating to any claim, the
Contractor must notify the State in writing whether Contractor agrees to assume control of the defense
and settlement of that claim (a “Notice of Election”). After notifying Contractor of a claim and before the
State receiving Contractor’s Notice of Election, the State is entitled to defend against the claim, at the
Contractor’s expense, and the Contractor will be responsible for any reasonable costs incurred by the
State in defending against the claim during that period.
(b)
If Contractor delivers a Notice of Election relating to any claim: (i) the State is entitled to
participate in the defense of the claim and to employ counsel at its own expense to assist in the handling
of the claim and to monitor and advise the State about the status and progress of the defense; (ii) the
Contractor must, at the request of the State, demonstrate to the reasonable satisfaction of the State, the
Contractor’s financial ability to carry out its defense and indemnity obligations under this Contract; (iii) the
Contractor must periodically advise the State about the status and progress of the defense and must
obtain the prior written approval of the State before entering into any settlement of the claim or ceasing to
defend against the claim and (iv) to the extent that any principles of Michigan governmental or public law

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may be involved or challenged, the State has the right, at its own expense, to control the defense of that
portion of the claim involving the principles of Michigan governmental or public law. But the State may
retain control of the defense and settlement of a claim by notifying the Contractor in writing within 10 days
after the State’s receipt of Contractor’s information requested by the State under clause (ii) of this
paragraph if the State determines that the Contractor has failed to demonstrate to the reasonable
satisfaction of the State the Contractor’s financial ability to carry out its defense and indemnity obligations
under this Section. Any litigation activity on behalf of the State, or any of its subdivisions under this
Section, must be coordinated with the Department of Attorney General. In the event the insurer’s
attorney represents the State under this Section, the insurer’s attorney may be required to be designated
as a Special Assistant Attorney General by the Attorney General of the State of Michigan.
(c)
If Contractor does not deliver a Notice of Election relating to any claim of which it is notified by the
State as provided above, the State may defend the claim in the manner as it may deem appropriate, at
the cost and expense of Contractor. If it is determined that the claim was one against which Contractor
was required to indemnify the State, upon request of the State, Contractor must promptly reimburse the
State for all the reasonable costs and expenses.
2.150
2.151

Termination/Cancellation

Notice and Right to Cure

If the Contractor breaches the Contract, and the State in its sole discretion determines that the breach is
curable, then the State will provide the Contractor with written notice of the breach and a time period (not
less than 30 days) to cure the Breach. The notice of breach and opportunity to cure is inapplicable for
successive or repeated breaches or if the State determines in its sole discretion that the breach poses a
serious and imminent threat to the health or safety of any person or the imminent loss, damage, or
destruction of any real or tangible personal property.
2.152

Termination for Cause

(a)
The State may terminate this Contract, for cause, by notifying the Contractor in writing, if the
Contractor (i) breaches any of its material duties or obligations under this Contract (including a Chronic
Failure to meet any particular SLA), or (ii) fails to cure a breach within the time period specified in the
written notice of breach provided by the State
(b)
If this Contract is terminated for cause, the Contractor must pay all costs incurred by the State in
terminating this Contract, including but not limited to, State administrative costs, reasonable attorneys’
fees and court costs, and any reasonable additional costs the State may incur to procure the
Services/Deliverables required by this Contract from other sources. Re-procurement costs are not
consequential, indirect or incidental damages, and cannot be excluded by any other terms otherwise
included in this Contract, provided the costs are not in excess of 50% more than the prices for the
Service/Deliverables provided under this Contract.
(c)
If the State chooses to partially terminate this Contract for cause, charges payable under this
Contract will be equitably adjusted to reflect those Services/Deliverables that are terminated and the
State must pay for all Services/Deliverables for which Final Acceptance has been granted provided up to
the termination date. Services and related provisions of this Contract that are terminated for cause must
cease on the effective date of the termination.
(d)
If the State terminates this Contract for cause under this Section, and it is determined, for any
reason, that Contractor was not in breach of contract under the provisions of this section, that termination
for cause must be deemed to have been a termination for convenience, effective as of the same date,
and the rights and obligations of the parties must be limited to that otherwise provided in this Contract for
a termination for convenience.
2.153

Termination for Convenience

The State may terminate this Contract for its convenience, in whole or part, if the State determines that a
termination is in the State’s best interest. Reasons for the termination must be left to the sole discretion

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of the State and may include, but not necessarily be limited to (a) the State no longer needs the Services
or products specified in the Contract, (b) relocation of office, program changes, changes in laws, rules, or
regulations make implementation of the Services no longer practical or feasible, (c) unacceptable prices
for Additional Services or New Work requested by the State, or (d) falsification or misrepresentation, by
inclusion or non-inclusion, of information material to a response to any RFP issued by the State. The
State may terminate this Contract for its convenience, in whole or in part, by giving Contractor written
notice at least 30 days before the date of termination. If the State chooses to terminate this Contract in
part, the charges payable under this Contract must be equitably adjusted to reflect those
Services/Deliverables that are terminated. Services and related provisions of this Contract that are
terminated for cause must cease on the effective date of the termination.
2.154

Termination for Non-Appropriation

(a)
The Contractor acknowledges that, if this Contract extends for several fiscal years, continuation
of this Contract is subject to appropriation or availability of funds for this Contract. If funds to enable the
State to effect continued payment under this Contract are not appropriated or otherwise made available,
the State must terminate this Contract and all affected Statements of Work, in whole or in part, at the end
of the last period for which funds have been appropriated or otherwise made available by giving written
notice of termination to Contractor. The State must give Contractor at least 30 days advance written
notice of termination for non-appropriation or unavailability (or the time as is available if the State receives
notice of the final decision less than 30 days before the funding cutoff).
(b)
If funding for the Contract is reduced by law, or funds to pay Contractor for the agreed-to level of
the Services or production of Deliverables to be provided by Contractor are not appropriated or otherwise
unavailable, the State may, upon 30 days written notice to Contractor, reduce the level of the Services or
the change the production of Deliverables in the manner and for the periods of time as the State may
elect. The charges payable under this Contract will be equitably adjusted to reflect any equipment,
services or commodities not provided by reason of the reduction.
(c)
If the State terminates this Contract, eliminates certain Deliverables, or reduces the level of
Services to be provided by Contractor under this Section, the State must pay Contractor for all Work-inProcess performed through the effective date of the termination or reduction in level, as the case may be
and as determined by the State, to the extent funds are available. This Section will not preclude
Contractor from reducing or stopping Services/Deliverables or raising against the State in a court of
competent jurisdiction, any claim for a shortfall in payment for Services performed or Deliverables finally
accepted before the effective date of termination.
2.155

Termination for Criminal Conviction

The State may terminate this Contract immediately and without further liability or penalty in the event
Contractor, an officer of Contractor, or an owner of a 25% or greater share of Contractor is convicted of a
criminal offense related to a State, public or private Contract or subcontract.
2.156

Termination for Approvals Rescinded

The State may terminate this Contract if any final administrative or judicial decision or adjudication
disapproves a previously approved request for purchase of personal services under Constitution 1963,
Article 11, § 5, and Civil Service Rule 7-1. In that case, the State will pay the Contractor for only the work
completed to that point under the Contract. Termination may be in whole or in part and may be
immediate as of the date of the written notice to Contractor or may be effective as of the date stated in the
written notice.
2.157

Rights and Obligations upon Termination

(a)
If the State terminates this Contract for any reason, the Contractor must (a) stop all work as
specified in the notice of termination, (b) take any action that may be necessary, or that the State may
direct, for preservation and protection of Deliverables or other property derived or resulting from this
Contract that may be in Contractor’s possession, (c) return all materials and property provided directly or
indirectly to Contractor by any entity, agent or employee of the State, (d) transfer title in, and deliver to,

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the State, unless otherwise directed, all Deliverables intended to be transferred to the State at the
termination of the Contract and which are resulting from the Contract (which must be provided to the
State on an “As-Is” basis except to the extent the amounts paid by the State in respect of the items
included compensation to Contractor for the provision of warranty services in respect of the materials),
and (e) take any action to mitigate and limit any potential damages, or requests for Contractor adjustment
or termination settlement costs, to the maximum practical extent, including terminating or limiting as
otherwise applicable those subcontracts and outstanding orders for material and supplies resulting from
the terminated Contract.
(b)
If the State terminates this Contract before its expiration for its own convenience, the State must
pay Contractor for all charges due for Services provided before the date of termination and, if applicable,
as a separate item of payment under this Contract, for Work In Process, on a percentage of completion
basis at the level of completion determined by the State. All completed or partially completed
Deliverables prepared by Contractor under this Contract, at the option of the State, becomes the State’s
property, and Contractor is entitled to receive equitable fair compensation for the Deliverables.
Regardless of the basis for the termination, the State is not obligated to pay, or otherwise compensate,
Contractor for any lost expected future profits, costs or expenses incurred with respect to Services not
actually performed for the State.
(c)
Upon a good faith termination, the State may assume, at its option, any subcontracts and
agreements for services and deliverables provided under this Contract, and may further pursue
completion of the Services/Deliverables under this Contract by replacement contract or otherwise as the
State may in its sole judgment deem expedient.
2.158

Reservation of Rights

Any termination of this Contract or any Statement of Work issued under it by a party must be with full
reservation of, and without prejudice to, any rights or remedies otherwise available to the party with
respect to any claims arising before or as a result of the termination.
2.160
2.161

Termination by Contractor

Termination by Contractor

If the State breaches the Contract, and the Contractor in its sole discretion determines that the breach is
curable, then the Contractor will provide the State with written notice of the breach and a time period (not
less than 30 days) to cure the breach. The Notice of Breach and opportunity to cure is inapplicable for
successive and repeated breaches.
The Contractor may terminate this Contract if the State (i) materially breaches its obligation to pay the
Contractor undisputed amounts due and owing under this Contract, (ii) breaches its other obligations
under this Contract to an extent that makes it impossible or commercially impractical for the Contractor to
perform the Services, or (iii) does not cure the breach within the time period specified in a written notice of
breach. But the Contractor must discharge its obligations under Section 2.190 before it terminates the
Contract.
2.170
2.171

Transition Responsibilities

Contractor Transition Responsibilities

If the State terminates this Contract, for convenience or cause, or if the Contract is otherwise dissolved,
voided, rescinded, nullified, expires or rendered unenforceable, the Contractor agrees to comply with
direction provided by the State to assist in the orderly transition of equipment, services, software, leases,
etc. to the State or a third party designated by the State. If this Contract expires or terminates, the
Contractor agrees to make all reasonable efforts to effect an orderly transition of services within a
reasonable period of time that in no event will exceed 45 days. These efforts must include, but are not
limited to, those listed in Sections 2.171, 2.172, 2.173, 2.174, and 2.175.

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2.172

Contractor Personnel Transition

The Contractor must work with the State, or a specified third party, to develop a transition plan setting
forth the specific tasks and schedule to be accomplished by the parties, to effect an orderly transition.
The Contractor must allow as many personnel as practicable to remain on the job to help the State, or a
specified third party, maintain the continuity and consistency of the services required by this Contract. In
addition, during or following the transition period, in the event the State requires the Services of the
Contractor’s subcontractors or vendors, as necessary to meet its needs, Contractor agrees to reasonably,
and with good-faith, work with the State to use the Services of Contractor’s subcontractors or vendors.
Contractor will notify all of Contractor’s subcontractors of procedures to be followed during transition.
2.173

Contractor Information Transition

The Contractor agrees to provide reasonable detailed specifications for all Services/Deliverables needed
by the State, or specified third party, to properly provide the Services/Deliverables required under this
Contract. The Contractor will provide the State with asset management data generated from the
inception of this Contract through the date on which this Contractor is terminated in a comma-delineated
format unless otherwise requested by the State. The Contractor will deliver to the State any remaining
owed reports and documentation still in Contractor’s possession subject to appropriate payment by the
State.
2.174

Contractor Software Transition

The Contractor must reasonably assist the State in the acquisition of any Contractor software required to
perform the Services/use the Deliverables under this Contract. This must include any documentation
being used by the Contractor to perform the Services under this Contract. If the State transfers any
software licenses to the Contractor, those licenses must, upon expiration of the Contract, transfer back to
the State at their current revision level. Upon notification by the State, Contractor may be required to
freeze all non-critical changes to Deliverables/Services.
2.175

Transition Payments

If the transition results from a termination for any reason, reimbursement must be governed by the
termination provisions of this Contract. If the transition results from expiration, the Contractor will be
reimbursed for all reasonable transition costs (i.e. costs incurred within the agreed period after contract
expiration that result from transition operations) at the rates agreed upon by the State. The Contractor
will prepare an accurate accounting from which the State and Contractor may reconcile all outstanding
accounts.
2.176

State Transition Responsibilities

In the event that this Contract is terminated, dissolved, voided, rescinded, nullified, or otherwise rendered
unenforceable, the State agrees to perform the following obligations, and any others upon which the State
and the Contractor agree:
(a)
Reconciling all accounts between the State and the Contractor;
(b)
Completing any pending post-project reviews.
2.180
2.181

Stop Work

Stop Work Orders

The State may, at any time, by written stop work order to Contractor, require that Contractor stop all, or
any part, of the work called for by the Contract for a period of up to 90 calendar days after the stop work
order is delivered to Contractor, and for any further period to which the parties may agree. The stop work
order must be identified as a stop work order and must indicate that it is issued under this Section 2.180.
Upon receipt of the stop work order, Contractor must immediately comply with its terms and take all
reasonable steps to minimize incurring costs allocable to the work covered by the stop work order during
the period of work stoppage. Within the period of the stop work order, the State must either: (a) cancel

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the stop work order; or (b) terminate the work covered by the stop work order as provided in Section
2.150.
2.182

Cancellation or Expiration of Stop Work Order

The Contractor must resume work if the State cancels a Stop Work Order or if it expires. The parties will
agree upon an equitable adjustment in the delivery schedule, the Contract price, or both, and the Contract
must be modified, in writing, accordingly, if: (a) the stop work order results in an increase in the time
required for, or in Contractor’s costs properly allocable to, the performance of any part of the Contract;
and (b) Contractor asserts its right to an equitable adjustment within 30 calendar days after the end of the
period of work stoppage; provided that, if the State decides the facts justify the action, the State may
receive and act upon a Contractor proposal submitted at any time before final payment under the
Contract. Any adjustment will conform to the requirements of Section 2.024.
2.183

Allowance of Contractor Costs

If the stop work order is not canceled and the work covered by the stop work order is terminated for
reasons other than material breach, the termination must be deemed to be a termination for convenience
under Section 2.150, and the State will pay reasonable costs resulting from the stop work order in
arriving at the termination settlement. For the avoidance of doubt, the State is not be liable to Contractor
for loss of profits because of a stop work order issued under this Section 2.180.
2.190
2.191

Dispute Resolution

In General

Any claim, counterclaim, or dispute between the State and Contractor arising out of or relating to the
Contract or any Statement of Work must be resolved as follows. For all Contractor claims seeking an
increase in the amounts payable to Contractor under the Contract, or the time for Contractor’s
performance, Contractor must submit a letter, together with all data supporting the claims, executed by
Contractor’s Contract Administrator or the Contract Administrator's designee certifying that (a) the claim is
made in good faith, (b) the amount claimed accurately reflects the adjustments in the amounts payable to
Contractor or the time for Contractor’s performance for which Contractor believes the State is liable and
covers all costs of every type to which Contractor is entitled from the occurrence of the claimed event,
and (c) the claim and the supporting data are current and complete to Contractor’s best knowledge and
belief.
2.192

Informal Dispute Resolution

(a)
All disputes between the parties must be resolved under the Contract Management procedures in
this Contract. If the parties are unable to resolve any disputes after compliance with the processes, the
parties must meet with the MDOC, for the purpose of attempting to resolve the dispute without the need
for formal legal proceedings, as follows:
(i)
The representatives of Contractor and the State must meet as often as the parties
reasonably deem necessary to gather and furnish to each other all information with respect to the
matter in issue which the parties believe to be appropriate and germane in connection with its
resolution. The representatives must discuss the problem and negotiate in good faith in an effort
to resolve the dispute without the necessity of any formal proceeding.
(ii)
During the course of negotiations, all reasonable requests made by one party to another
for non-privileged information reasonably related to the Contract will be honored in order that
each of the parties may be fully advised of the other’s position.
(iii)
The specific format for the discussions will be left to the discretion of the designated State
and Contractor representatives, but may include the preparation of agreed upon statements of
fact or written statements of position.
(iv)
Following the completion of this process within 60 calendar days, the MDOC, must issue
a written opinion regarding the issue(s) in dispute within 30 calendar days. The opinion regarding
the dispute must be considered the State’s final action and the exhaustion of administrative
remedies.

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(b)
This Section will not be construed to prevent either party from instituting, and a party is authorized
to institute, formal proceedings earlier to avoid the expiration of any applicable limitations period, to
preserve a superior position with respect to other creditors, or under Section 2.193.
(c)
The State will not mediate disputes between the Contractor and any other entity, except state
agencies, concerning responsibility for performance of work under the Contract.
2.193

Injunctive Relief

The only circumstance in which disputes between the State and Contractor will not be subject to the
provisions of Section 2.192 is where a party makes a good faith determination that a breach of the terms
of the Contract by the other party is the that the damages to the party resulting from the breach will be so
immediate, so large or severe and so incapable of adequate redress after the fact that a temporary
restraining order or other immediate injunctive relief is the only adequate remedy.
2.194

Continued Performance

Each party agrees to continue performing its obligations under the Contract while a dispute is being
resolved except to the extent the issue in dispute precludes performance (dispute over payment must not
be deemed to preclude performance) and without limiting either party’s right to terminate the Contract as
provided in Section 2.150, as the case may be.
2.200
2.201

Federal and State Contract Requirements

Nondiscrimination

In the performance of the Contract, Contractor agrees not to discriminate against any employee or
applicant for employment, with respect to his or her hire, tenure, terms, conditions or privileges of
employment, or any matter directly or indirectly related to employment, because of race, color, religion,
national origin, ancestry, age, sex, height, weight, marital status, physical or mental disability. Contractor
further agrees that every subcontract entered into for the performance of this Contract or any purchase
order resulting from this Contract will contain a provision requiring non-discrimination in employment, as
specified here, binding upon each Subcontractor. This covenant is required under the Elliot Larsen Civil
Rights Act, 1976 PA 453, MCL 37.2101, et seq., and the Persons with Disabilities Civil Rights Act, 1976
PA 220, MCL 37.1101, et seq., and any breach of this provision may be regarded as a material breach of
the Contract.
2.202

Unfair Labor Practices

Under 1980 PA 278, MCL 423.321, et seq., the State must not award a Contract or subcontract to an
employer whose name appears in the current register of employers failing to correct an unfair labor
practice compiled under Section 2 of the Act. This information is compiled by the United States National
Labor Relations Board. A Contractor of the State, in relation to the Contract, must not enter into a
contract with a Subcontractor, manufacturer, or supplier whose name appears in this register. Under
Section 4 of 1980 PA 278, MCL 423.324, the State may void any Contract if, after award of the Contract,
the name of Contractor as an employer or the name of the Subcontractor, manufacturer or supplier of
Contractor appears in the register.
2.203

Workplace Safety and Discriminatory Harassment

In performing Services for the State, the Contractor must comply with the Department of Civil Services
Rule 2-20 regarding Workplace Safety and Rule 1-8.3 regarding Discriminatory Harassment. In addition,
the Contractor must comply with Civil Service regulations and any applicable agency rules provided to the
Contractor. For Civil Service Rules, see http://www.mi.gov/mdcs/0,1607,7-147-6877---,00.html.

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2.210
2.211

Governing Law

Governing Law

The Contract must in all respects be governed by, and construed according to, the substantive laws of the
State of Michigan without regard to any Michigan choice of law rules that would apply the substantive law
of any other jurisdiction to the extent not inconsistent with, or pre-empted by federal law.
2.212

Compliance with Laws

Contractor shall comply with all applicable state, federal and local laws and ordinances in providing the
Services/Deliverables.
2.213

Jurisdiction

Any dispute arising from the Contract must be resolved in the State of Michigan. With respect to any
claim between the parties, Contractor consents to venue in Ingham County, Michigan, and irrevocably
waives any objections it may have to the jurisdiction on the grounds of lack of personal jurisdiction of the
court or the laying of venue of the court or on the basis of forum non conveniens or otherwise. Contractor
agrees to appoint agents in the State of Michigan to receive service of process.
2.220
2.221

Limitation of Liability

Limitation of Liability

Neither the Contractor nor the State is liable to each other, regardless of the form of action, for
consequential, incidental, indirect, or special damages. This limitation of liability does not apply to claims
for infringement of United States patent, copyright, trademark or trade secrets; to claims for personal
injury or damage to property caused by the gross negligence or willful misconduct of the Contractor; to
claims covered by other specific provisions of this Contract calling for liquidated damages; or to court
costs or attorney’s fees awarded by a court in addition to damages after litigation based on this Contract.
2.230
2.231

Disclosure Responsibilities

Disclosure of Litigation

(a)
Disclosure. Contractor must disclose any material criminal litigation, investigations or
proceedings involving the Contractor (and each Subcontractor) or any of its officers or directors or any
litigation, investigations or proceedings under the Sarbanes-Oxley Act. In addition, each Contractor (and
each Subcontractor) must notify the State of any material civil litigation, arbitration or proceeding which
arises during the term of the Contract and extensions, to which Contractor (or, to the extent Contractor is
aware, any Subcontractor) is a party, and which involves: (i) disputes that might reasonably be expected
to adversely affect the viability or financial stability of Contractor or any Subcontractor; or (ii) a claim or
written allegation of fraud against Contractor or, to the extent Contractor is aware, any Subcontractor by a
governmental or public entity arising out of their business dealings with governmental or public entities.
The Contractor must disclose in writing to the Contract Administrator any litigation, investigation,
arbitration or other proceeding (collectively, "Proceeding") within 30 days of its occurrence. Details of
settlements which are prevented from disclosure by the terms of the settlement may be annotated.
Information provided to the State from Contractor’s publicly filed documents referencing its material
litigation will be deemed to satisfy the requirements of this Section.
(b)
Assurances. If any Proceeding disclosed to the State under this Section, or of which the State
otherwise becomes aware, during the term of this Contract would cause a reasonable party to be
concerned about:
(i)
the ability of Contractor (or a Subcontractor) to continue to perform this Contract
according to its terms and conditions, or
(ii)
whether Contractor (or a Subcontractor) in performing Services for the State is engaged
in conduct which is similar in nature to conduct alleged in the Proceeding, which conduct would

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constitute a breach of this Contract or a violation of Michigan law, regulations or public policy,
then the Contractor must provide the State all reasonable assurances requested by the State to
demonstrate that:
(a)
Contractor and its Subcontractors will be able to continue to perform this
Contract and any Statements of Work according to its terms and conditions, and
(b)
Contractor and its Subcontractors have not and will not engage in conduct in
performing the Services which is similar in nature to the conduct alleged in the
Proceeding.
(c)

Contractor must make the following notifications in writing:
(1)
Within 30 days of Contractor becoming aware that a change in its ownership or officers
has occurred, or is certain to occur, or a change that could result in changes in the valuation of its
capitalized assets in the accounting records, Contractor must notify the MDOC.
(2)
Contractor must also notify the MDOC within 30 days whenever changes to asset
valuations or any other cost changes have occurred or are certain to occur as a result of a
change in ownership or officers.
(3)
Contractor must also notify the MDOC within 30 days whenever changes to company
affiliations occur.

2.232

Call Center Disclosure

Contractor and/or all Subcontractors involved in the performance of this Contract providing call or contact
center services to the State must disclose the location of its call or contact center services to inbound
callers. Failure to disclose this information is a material breach of this Contract.
2.233

Bankruptcy

The State may, without prejudice to any other right or remedy, terminate this Contract, in whole or in part,
and, at its option, may take possession of the “Work in Process” and finish the Works in Process by
whatever appropriate method the State may deem expedient if:
(a)
the Contractor files for protection under the bankruptcy laws;
(b)
an involuntary petition is filed against the Contractor and not removed within 30 days;
(c)
the Contractor becomes insolvent or if a receiver is appointed due to the Contractor's
insolvency;
(d)
the Contractor makes a general assignment for the benefit of creditors; or
(e)
the Contractor or its affiliates are unable to provide reasonable assurances that the
Contractor or its affiliates can deliver the services under this Contract.
Contractor will fix appropriate notices or labels on the Work in Process to indicate ownership by the State.
To the extent reasonably possible, materials and Work in Process must be stored separately from other
stock and marked conspicuously with labels indicating ownership by the State.
2.240
2.241

Performance

Time of Performance

(a)
Contractor must use commercially reasonable efforts to provide the resources necessary to
complete all Services and Deliverables according to the time schedules contained in the Statements of
Work and other Exhibits governing the work, and with professional quality.
(b)
Without limiting the generality of Section 2.241(a), Contractor must notify the State in a timely
manner upon becoming aware of any circumstances that may reasonably be expected to jeopardize the
timely and successful completion of any Deliverables/Services on the scheduled due dates in the latest
State-approved delivery schedule and must inform the State of the projected actual delivery date.
(c)
If the Contractor believes that a delay in performance by the State has caused or will cause the
Contractor to be unable to perform its obligations according to specified Contract time periods, the
Contractor must notify the State in a timely manner and must use commercially reasonable efforts to

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44

perform its obligations according to the Contract time periods notwithstanding the State’s failure.
Contractor will not be in default for a delay in performance to the extent the delay is caused by the State.
2.242

Service Level Agreements (SLAs)

Deleted – Not Applicable
2.243

Liquidated Damages

Deleted – Not Applicable
2.244

Excusable Failure

Neither party will be liable for any default, damage or delay in the performance of its obligations under the
Contract to the extent the default, damage or delay is caused by government regulations or requirements
(executive, legislative, judicial, military or otherwise), power failure, electrical surges or current
fluctuations, lightning, earthquake, war, water or other forces of nature or acts of God, delays or failures
of transportation, equipment shortages, suppliers’ failures, or acts or omissions of common carriers, fire;
riots, civil disorders; strikes or other labor disputes, embargoes; injunctions (provided the injunction was
not issued as a result of any fault or negligence of the party seeking to have its default or delay excused);
or any other cause beyond the reasonable control of a party; provided the non-performing party and its
Subcontractors are without fault in causing the default or delay, and the default or delay could not have
been prevented by reasonable precautions and cannot reasonably be circumvented by the nonperforming party through the use of alternate sources, workaround plans or other means, including
disaster recovery plans.
If a party does not perform its contractual obligations for any of the reasons listed above, the nonperforming party will be excused from any further performance of its affected obligation(s) for as long as
the circumstances prevail. But the party must use commercially reasonable efforts to recommence
performance whenever and to whatever extent possible without delay. A party must promptly notify the
other party in writing immediately after the excusable failure occurs, and also when it abates or ends.
If any of the above-enumerated circumstances substantially prevent, hinder, or delay the Contractor’s
performance of the Services/provision of Deliverables for more than 10 Business Days, and the State
determines that performance is not likely to be resumed within a period of time that is satisfactory to the
State in its reasonable discretion, then at the State’s option: (a) the State may procure the affected
Services/Deliverables from an alternate source, and the State is not be liable for payment for the
unperformed Services/ Deliverables not provided under the Contract for so long as the delay in
performance continues; (b) the State may terminate any portion of the Contract so affected and the
charges payable will be equitably adjusted to reflect those Services/Deliverables terminated; or (c) the
State may terminate the affected Statement of Work without liability to Contractor as of a date specified
by the State in a written notice of termination to the Contractor, except to the extent that the State must
pay for Services/Deliverables provided through the date of termination.
The Contractor will not have the right to any additional payments from the State as a result of any
Excusable Failure occurrence or to payments for Services not rendered/Deliverables not provided as a
result of the Excusable Failure condition. Defaults or delays in performance by Contractor which are
caused by acts or omissions of its Subcontractors will not relieve Contractor of its obligations under the
Contract except to the extent that a Subcontractor is itself subject to an Excusable Failure condition
described above and Contractor cannot reasonably circumvent the effect of the Subcontractor’s default or
delay in performance through the use of alternate sources, workaround plans or other means.
2.250
2.251

Approval of Deliverables

Delivery Responsibilities

Unless otherwise specified by the State within an individual order, the following must be applicable to all
orders issued under this Contract.

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45

(a)
Shipment responsibilities - Services performed/Deliverables provided under this Contract must be
delivered “F.O.B. Destination, within Government Premises.” The Contractor must have complete
responsibility for providing all Services/Deliverables to all site(s) unless otherwise stated. Actual delivery
dates will be specified on the individual purchase order.
(b)
Delivery locations - Services will be performed/Deliverables will be provided at every State of
Michigan location within Michigan unless otherwise stated in the SOW. Specific locations will be provided
by the State or upon issuance of individual purchase orders.
(c)
Damage Disputes - At the time of delivery to State Locations, the State must examine all
packages. The quantity of packages delivered must be recorded and any obvious visible or suspected
damage must be noted at time of delivery using the shipper’s delivery document(s) and appropriate
procedures to record the damage.
Where there is no obvious or suspected damage, all deliveries to a State Location must be opened by the
State and the contents inspected for possible internal damage not visible externally within 14 days of
receipt. Any damage must be reported to the Contractor within five days of inspection
2.252

Delivery of Deliverables

Where applicable, the Statements of Work/POs contain lists of the Deliverables to be prepared and
delivered by Contractor including, for each Deliverable, the scheduled delivery date and a designation of
whether the Deliverable is a document (“Written Deliverable”), a good (“Physical Deliverable”) or a
Service. All Deliverables must be completed and delivered for State review and written approval and,
where applicable, installed according to the State-approved delivery schedule and any other applicable
terms and conditions of the Contract.
2.253

Testing

(a)
Before delivering any of the above-mentioned Statement of Work Physical Deliverables or
Services to the State, Contractor will first perform all required quality assurance activities to verify that the
Physical Deliverable or Service is complete and conforms with its specifications listed in the applicable
Statement of Work or Purchase Order. Before delivering a Physical Deliverable or Service to the State,
Contractor must certify to the State that (1) it has performed the quality assurance activities, (2) it has
performed any applicable testing, (3) it has corrected all material deficiencies discovered during the
quality assurance activities and testing, (4) the Deliverable or Service is in a suitable state of readiness
for the State’s review and approval, and (5) the Deliverable/Service has all Critical Security
patches/updates applied.
(b)
If a Deliverable includes installation at a State Location, then Contractor must (1) perform any
applicable testing, (2) correct all material deficiencies discovered during the quality assurance activities
and testing, and (3) inform the State that the Deliverable is in a suitable state of readiness for the State’s
review and approval. To the extent that testing occurs at State Locations, the State is entitled to observe
or otherwise participate in testing.
2.254

Approval of Deliverables, In General

(a)
All Deliverables (Physical Deliverables and Written Deliverables) and Services require formal
written approval by the State, according to the following procedures. Formal approval by the State
requires the State to confirm in writing that the Deliverable meets its specifications. Formal approval may
include the successful completion of Testing as applicable in Section 2.253, to be led by the State with
the support and assistance of Contractor. The approval process will be facilitated by ongoing
consultation between the parties, inspection of interim and intermediate Deliverables and collaboration on
key decisions.
(b)
The State’s obligation to comply with any State Review Period is conditioned on the timely
delivery of Deliverables/Services being reviewed.

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46

(c)
Before commencement of its review or testing of a Deliverable/Service, the State may inspect the
Deliverable/Service to confirm that all components of the Deliverable/Service have been delivered without
material deficiencies. If the State determines that the Deliverable/Service has material deficiencies, the
State may refuse delivery of the Deliverable/Service without performing any further inspection or testing
of the Deliverable/Service. Otherwise, the review period will be deemed to have started on the day the
State receives the Deliverable or the Service begins, and the State and Contractor agree that the
Deliverable/Service is ready for use and, where applicable, certification by Contractor according to
Section 2.253.
(d)
The State will approve in writing a Deliverable/Service after confirming that it conforms to and
performs according to its specifications without material deficiency. The State may, but is not be required
to, conditionally approve in writing a Deliverable/Service that contains material deficiencies if the State
elects to permit Contractor to rectify them post-approval. In any case, Contractor will be responsible for
working diligently to correct within a reasonable time at Contractor’s expense all deficiencies in the
Deliverable/Service that remain outstanding at the time of State approval.
(e)
If, after three opportunities (the original and two repeat efforts), the Contractor is unable to correct
all deficiencies preventing Final Acceptance of a Deliverable/Service, the State may: (i) demand that the
Contractor cure the failure and give the Contractor additional time to cure the failure at the sole expense
of the Contractor; or (ii) keep the Contract in force and do, either itself or through other parties, whatever
the Contractor has failed to do, and recover the difference between the cost to cure the deficiency and the
contract price plus an additional sum equal to 10% of the cost to cure the deficiency to cover the State’s
general expenses provided the State can furnish proof of the general expenses; or (iii) terminate the
particular Statement of Work for default, either in whole or in part by notice to Contractor provided
Contractor is unable to cure the breach. Notwithstanding the foregoing, the State cannot use, as a basis
for exercising its termination rights under this Section, deficiencies discovered in a repeat State Review
Period that could reasonably have been discovered during a prior State Review Period.
(f)
The State, at any time and in its reasonable discretion, may halt the testing or approval process if
the process reveals deficiencies in or problems with a Deliverable/Service in a sufficient quantity or of a
sufficient severity that renders continuing the process unproductive or unworkable. If that happens, the
State may stop using the Service or return the applicable Deliverable to Contractor for correction and redelivery before resuming the testing or approval process.
2.255

Process For Approval of Written Deliverables

The State Review Period for Written Deliverables will be the number of days set forth in the applicable
Statement of Work following delivery of the final version of the Deliverable (and if the Statement of Work
does not state the State Review Period, it is by default five Business Days for Written Deliverables of 100
pages or less and 10 Business Days for Written Deliverables of more than 100 pages). The duration of
the State Review Periods will be doubled if the State has not had an opportunity to review an interim draft
of the Written Deliverable before its submission to the State. The State agrees to notify Contractor in
writing by the end of the State Review Period either stating that the Deliverable is approved in the form
delivered by Contractor or describing any deficiencies that must be corrected before approval of the
Deliverable (or at the State’s election, after approval of the Deliverable). If the State notifies the
Contractor about deficiencies, the Contractor will correct the described deficiencies and within 30
Business Days resubmit the Deliverable in a form that shows all revisions made to the original version
delivered to the State. Contractor’s correction efforts will be made at no additional charge. Upon receipt
of a corrected Deliverable from Contractor, the State will have a reasonable additional period of time, not
to exceed the length of the original State Review Period, to review the corrected Deliverable to confirm
that the identified deficiencies have been corrected.
2.256

Process for Approval of Services

The State Review Period for approval of Services is governed by the applicable Statement of Work (and if
the Statement of Work does not state the State Review Period, it is by default 30 Business Days for
Services). The State agrees to notify the Contractor in writing by the end of the State Review Period
either stating that the Service is approved in the form delivered by the Contractor or describing any
deficiencies that must be corrected before approval of the Services (or at the State’s election, after

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47

approval of the Service). If the State delivers to the Contractor a notice of deficiencies, the Contractor will
correct the described deficiencies and within 30 Business Days resubmit the Service in a form that shows
all revisions made to the original version delivered to the State. The Contractor’s correction efforts will be
made at no additional charge. Upon implementation of a corrected Service from Contractor, the State will
have a reasonable additional period of time, not to exceed the length of the original State Review Period,
to review the corrected Service for conformity and that the identified deficiencies have been corrected.
2.257

Process for Approval of Physical Deliverables

The State Review Period for approval of Physical Deliverables is governed by the applicable Statement of
Work (and if the Statement of Work does not state the State Review Period, it is by default 30 continuous
Business Days for a Physical Deliverable). The State agrees to notify the Contractor in writing by the end
of the State Review Period either stating that the Deliverable is approved in the form delivered by the
Contractor or describing any deficiencies that must be corrected before approval of the Deliverable (or at
the State’s election, after approval of the Deliverable). If the State delivers to the Contractor a notice of
deficiencies, the Contractor will correct the described deficiencies and within 30 Business Days resubmit
the Deliverable in a form that shows all revisions made to the original version delivered to the State. The
Contractor’s correction efforts will be made at no additional charge. Upon receipt of a corrected
Deliverable from the Contractor, the State will have a reasonable additional period of time, not to exceed
the length of the original State Review Period, to review the corrected Deliverable to confirm that the
identified deficiencies have been corrected.
2.258

Final Acceptance

Unless otherwise stated in the Article 1, Statement of Work or Purchase Order, “Final Acceptance” of
each Deliverable must occur when each Deliverable/Service has been approved by the State following
the State Review Periods identified in Sections 2.251-2.257. Payment will be made for Deliverables
installed and accepted. Upon acceptance of a Service, the State will pay for all Services provided during
the State Review Period that conformed to the acceptance criteria.
2.260
2.261

Ownership

Ownership of Work Product by State

The State owns all Deliverables as they are works made for hire by the Contractor for the State. The
State owns all United States and international copyrights, trademarks, patents or other proprietary rights
in the Deliverables.
2.262

Vesting of Rights

With the sole exception of any preexisting licensed works identified in the SOW, the Contractor assigns,
and upon creation of each Deliverable automatically assigns, to the State, ownership of all United States
and international copyrights, trademarks, patents, or other proprietary rights in each and every
Deliverable, whether or not registered by the Contractor, insofar as any the Deliverable, by operation of
law, may not be considered work made for hire by the Contractor for the State. From time to time upon
the State’s request, the Contractor must confirm the assignment by execution and delivery of the
assignments, confirmations of assignment, or other written instruments as the State may request. The
State may obtain and hold in its own name all copyright, trademark, and patent registrations and other
evidence of rights that may be available for Deliverables.
2.263

Rights in Data

(a)
The State is the owner of all data made available by the State to the Contractor or its agents,
Subcontractors or representatives under the Contract. The Contractor will not use the State’s data for
any purpose other than providing the Services, nor will any part of the State’s data be disclosed, sold,
assigned, leased or otherwise disposed of to the general public or to specific third parties or commercially
exploited by or on behalf of the Contractor. No employees of the Contractor, other than those on a strictly
need-to-know basis, have access to the State’s data. Contractor will not possess or assert any lien or
other right against the State’s data. Without limiting the generality of this Section, the Contractor must

Rev 7-11-08

48

only use personally identifiable information as strictly necessary to provide the Services and must
disclose the information only to its employees who have a strict need-to-know the information. The
Contractor must comply at all times with all laws and regulations applicable to the personally identifiable
information.
(b)
The State is the owner of all State-specific data under the Contract. The State may use the data
provided by the Contractor for any purpose. The State will not possess or assert any lien or other right
against the Contractor’s data. Without limiting the generality of this Section, the State may use personally
identifiable information only as strictly necessary to utilize the Services and must disclose the information
only to its employees who have a strict need to know the information, except as provided by law. The
State must comply at all times with all laws and regulations applicable to the personally identifiable
information. Other material developed and provided to the State remains the State’s sole and exclusive
property.
(c)

At the conclusion of the Contract, all data must be transferred to the MDOC.

2.264

Ownership of Materials

The State and the Contractor will continue to own their respective proprietary technologies developed
before entering into the Contract. Any hardware bought through the Contractor by the State, and paid for
by the State, will be owned by the State. Any software licensed through the Contractor and sold to the
State, will be licensed directly to the State.
2.270
2.271

State Standards

Existing Technology Standards

The Contractor will adhere to all existing standards as described within the comprehensive listing of the
State’s existing technology standards at http://www.michigan.gov/dit.
2.272

Acceptable Use Policy

To the extent that Contractor has access to the State computer system, Contractor must comply with the
State’s Acceptable Use Policy, see http://www.michigan.gov/ditservice. All Contractor employees must
be required, in writing, to agree to the State’s Acceptable Use Policy before accessing the State system.
The State reserves the right to terminate Contractor’s access to the State system if a violation occurs.
2.273

Systems Changes

The Contractor is not responsible for and not authorized to make changes to any State systems without
written authorization from the Project Manager. Any changes the Contractor makes to State systems with
the State’s approval must be done according to applicable State procedures, including security, access
and configuration management procedures.
2.280
2.281

Extended Purchasing

MIDEAL

Deleted – Not Applicable
2.282

State Employee Purchases

Deleted – Not Applicable

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49

2.290
2.291

Environmental Provision

Environmental Provision

Energy Efficiency Purchasing Policy – The State seeks wherever possible to purchase energy efficient
products. This includes giving preference to U.S. Environmental Protection Agency (EPA) certified
‘Energy Star’ products for any category of products for which EPA has established Energy Star
certification. For other purchases, the State may include energy efficiency as one of the priority factors to
consider when choosing among comparable products.
Environmental Purchasing Policy – The State of Michigan is committed to encouraging the use of
products and services that impact the environment less than competing products. The State is
accomplishing this by including environmental considerations in purchasing decisions, while remaining
fiscally responsible, to promote practices that improve worker health, conserve natural resources, and
prevent pollution. Environmental components that are to be considered include: recycled content and
recyclability; energy efficiency; and the presence of undesirable materials in the products, especially
those toxic chemicals which are persistent and bioaccumulative. The Contractor should be able to supply
products containing recycled and environmentally preferable materials that meet performance
requirements and is encouraged to offer such products throughout the duration of this Contract.
Information on any relevant third party certification (such as Green Seal, Energy Star, etc.) should also be
provided.
Hazardous Materials:
For the purposes of this Section, “Hazardous Materials” is a generic term used to describe asbestos,
ACBMs, PCBs, petroleum products, construction materials including paint thinners, solvents, gasoline, oil,
and any other material the manufacture, use, treatment, storage, transportation or disposal of which is
regulated by the federal, state or local laws governing the protection of the public health, natural
resources or the environment. This includes, but is not limited to, materials the as batteries and circuit
packs, and other materials that are regulated as (1) “Hazardous Materials” under the Hazardous Materials
Transportation Act, (2) “chemical hazards” under the Occupational Safety and Health Administration
standards, (3) “chemical substances or mixtures” under the Toxic Substances Control Act, (4) “pesticides”
under the Federal Insecticide Fungicide and Rodenticide Act, and (5) “hazardous wastes” as defined or
listed under the Resource Conservation and Recovery Act.
(a)
The Contractor must use, handle, store, dispose of, process, transport and transfer any material
considered a Hazardous Material according to all federal, State and local laws. The State must provide a
safe and suitable environment for performance of Contractor’s Work. Before the commencement of
Work, the State must advise the Contractor of the presence at the work site of any Hazardous Material to
the extent that the State is aware of the Hazardous Material. If the Contractor encounters material
reasonably believed to be a Hazardous Material and which may present a substantial danger, the
Contractor must immediately stop all affected Work, notify the State in writing about the conditions
encountered, and take appropriate health and safety precautions.
(b)
Upon receipt of a written notice, the State will investigate the conditions. If (a) the material is a
Hazardous Material that may present a substantial danger, and (b) the Hazardous Material was not
brought to the site by the Contractor, or does not result in whole or in part from any violation by the
Contractor of any laws covering the use, handling, storage, disposal of, processing, transport and transfer
of Hazardous Materials, the State must order a suspension of Work in writing. The State must proceed to
have the Hazardous Material removed or rendered harmless. In the alternative, the State must terminate
the affected Work for the State’s convenience.
(c)
Once the Hazardous Material has been removed or rendered harmless by the State, the
Contractor must resume Work as directed in writing by the State. Any determination by the Michigan
Department of Community Health or the Michigan Department of Environmental Quality that the
Hazardous Material has either been removed or rendered harmless is binding upon the State and
Contractor for the purposes of resuming the Work. If any incident with Hazardous Material results in
delay not reasonable anticipatable under the circumstances and which is attributable to the State, the
applicable SLAs for the affected Work will not be counted in Section 2.242 for a time as mutually agreed
by the parties.

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(d)
If the Hazardous Material was brought to the site by the Contractor, or results in whole or in part
from any violation by the Contractor of any laws covering the use, handling, storage, disposal of,
processing, transport and transfer of Hazardous Material, or from any other act or omission within the
control of the Contractor, the Contractor must bear its proportionate share of the delay and costs involved
in cleaning up the site and removing and rendering harmless the Hazardous Material according to
Applicable Laws to the condition approved by applicable regulatory agency(ies).
Michigan has a Consumer Products Rule pertaining to labeling of certain products containing volatile
organic compounds. For specific details visit http://www.michigan.gov/deq/0,1607,7-135-3310_4108173523--,00.html
Refrigeration and Air Conditioning:
The Contractor shall comply with the applicable requirements of Sections 608 and 609 of the Clean Air
Act (42 U.S.C. 7671g and 7671h) as each or both apply to this Contract.
Environmental Performance:
Waste Reduction Program - Contractor shall establish a program to promote cost-effective waste
reduction in all operations and facilities covered by this Contract. The Contractor's programs shall comply
with applicable Federal, State, and local requirements, specifically including Section 6002 of the
Resource Conservation and Recovery Act (42 U.S.C. 6962, et seq.).

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51

Attachment A, Price Proposal

Incoming Electronic Mail
The following are costs for the messaging service. Typically, JPay strives to price each message under
that of a US postal stamp. See below:
Monthly Subscription

Total Messages

$ 5.00 monthly fee
$ 7.50 monthly fee
$ 10.00 monthly fee

20 messages
32 messages
50 messages

Price Per
Message
$ 0.25/message
$ 0.23/message
$ 0.20/message

Characters Per
Message
5,000 characters
5,000 characters
5,000 characters

* When setting up an account, friends and family can choose to purchase the prisoner’s subscription as
well at such time outbound mail is added.
* The billing cycle begins at the beginning of each month. New users are prorated for their first month.
Both the monthly fee and the total messages are prorated according to the date the user sets up the
account.
Electronic Deposit
Paid for by family and friends.
Sending Money With a Credit/Debit Card
Deposit Amount

Internet Fee

Phone Fee

$0.01 - $20.00

$3.95

$4.95

$20.01 - $100.00

$6.95

$7.95

$100.01 - $200.00

$8.95

$9.95

$200.01 - $300.00

$10.95

$11.95

Sending Money With Cash
Deposit Amount

Lobby Kiosk

MoneyGram

Ace Cash Express

$0.01 - $5,000.00*

$3.00

$6.95

$5.00

* Limit depends on cash location. Lobby Kiosks accept up to $300.00 per transaction.
*Sending Money With a Money Order
Deposit Amount

Lock Box

$0.01 - $5,000.00

$3.00

*Upon possible implementation by MDOC.

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52

Debit Card
Fees are assessed to the released prisoner for transactions listed below. There is no activation fee for
the card and no cost to the State of Michigan.
Domestic
$2.00

Decline*
($0.50)

International
$4.00

Decline*
($1.50)

Purchases PIN & Signature
All Point of Sale Purchases where
MasterCard transactions are
accepted (i.e., Wal-Mart,
Convenience Store).

$0.70

($0.50)

$3.00

($1.50)

IVR Balance Inquiry
Automated Balance Inquiry
retrieved from toll-free number.

$0.50

ATM Withdrawal
* Decline: Transactions attempted
but declined for Insufficient Funds,
etc.

IVR/Automated Customer Service
Automated access to cardholder
account information via toll-free
number.
Live Agent Customer Service
24 Hour Live Operator assistance.
Monthly Service Charge

$1.50

$0.25/minute

$1.00/call

$0.50

This fee is charged at the end of the
month following the month the card
was loaded. The fee is assessed to
maintain the account.
Inactivity Fee
After 90 days of inactivity.
Paper Statement

$2.99/monthly

$1.50

If the cardholder does not have
access to the Internet to view
account information for free, the
cardholder can contact a customer
service representative to request an
account statement to be faxed or
mailed to them. If so, this fee is
assessed.

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53

Replacement Card

$5.00

If the cardholder has lost/misplaced
the card, this fee is charged to the
account for a replacement card to
be shipped to the cardholder.
Expedited Card Replacement

$30.00

Same as above, but the
replacement card will be shipped to
the cardholder via overnight delivery
(i.e. FedEx).
Account Closure/Refund Balance
Charged if a check is issued to
cardholder for funds.

Rev 7-11-08

$9.95

54