Actuarial Services

1 Office of the State Treasurer 133 State Street, 4th Floor | Montpelier VT 05609-6200 802-828- 5182 phone SEALED BID REQUEST FOR PROPOSAL VERMONT RETIREMENT SYSTEMS’ ACTUARIAL SERVICES ISSUE DATE February 28, 2023 QUESTIONS DUE March 15, 2023 – 4:30 PM (EST) RFP RESPONSES DUE BY March 29, 2023 – 4:30 PM (EST) PLEASE BE ADVISED THAT ALL NOTIFICATIONS, RELEASES, AND ADDENDUMS ASSOCIATED WITH THIS RFP WILL BE POSTED AT: http://www.bgs.state.vt.us/pca/bids/bids.php THE STATE WILL MAKE NO ATTEMPT TO CONTACT INTERESTED PARTIES WITH UPDATED INFORMATION. IT IS THE RESPONSIBILITY OF EACH BIDDER TO PERIODICALLY CHECK THE ABOVE WEBPAGE FOR ANY AND ALL NOTIFICATIONS, RELEASES AND ADDENDUMS ASSOCIATED WITH THIS RFP. STATE CONTACT: Kyle Emerson, State Purchasing Agent TELEPHONE: 802-249-7394 E-MAIL: kyle.emerson@vermont.gov USE SUBJECT : VT

RETIREMENT ACTUARIAL SERVICES http://www.bgs.state.vt.us/pca/bids/bids.php mailto:kyle.emerson@vermont.gov Revised: July 28, 2022 Page 2 of 38 1. OVERVIEW: 1.1. SCOPE AND BACKGROUND: The Office of the State Treasurer and the Boards of Trustees of the Vermont State Employees’ Retirement System, Vermont State Teachers’ Retirement System and Vermont Municipal Employees’ Retirement System (hereafter known as the Vermont Retirement Systems [VRS] or State) are seeking proposals from qualified actuaries to provide a full range of actuarial services to the three retirement systems including, but not limited to, annual pension valuations, GASB Reports (including 67, 68, 74, and 75), experience studies, and consulting on various benefit proposals related to pension and other postemployment benefits. Proposal specifications are set forth in Section 2, “Scope of Services.” 1.2. MINIMUM BIDDER QUALFICATIONS: The bidder shall demonstrate a minimum of 10 years of experience in providing actuarial services to other states or public entities with similar pension programs. 1.3. PLAN SPECIFICATION: There are three pension plans and two other post-employment benefit (OPEB) plans associated with the requested services as outlined below. The Vermont State Employees’ Retirement System (VSERS) is a single-employer public employee defined benefit retirement system which covers substantially all State employees and State Police, except employees hired in a temporary capacity. An OPEB plan is also provided for retirees in the VSERS System. Membership in the system is a condition of employment. This plan has a number of different Groups, each with its own benefit level, eligibility criteria, etc. • The governing statutes outlining the VSERS system can be found in 3 V.S.A. Chap. 16, available here. • Membership data and plan comparisons can be found here. • Information pertaining to the VSERS OPEB plan can be found here. • Actuarial Reports, experience studies, and other reports pertaining to the VSERS pension and OPEB plans can be found here. The Vermont State Teachers’ Retirement System (VSTRS) is a cost-sharing, multi-employer, public employee defined benefit retirement system with a special funding situation. It covers nearly all public day school and nonsectarian private high school teachers and administrators as well as teachers in schools and teacher training institutions within and supported by the State that are controlled by the State board of education. An OPEB plan is also provided for retirees in the VSTRS System. Membership in the system for those covered classes is a condition of employment. The Plan has two groups, but active teachers are all in one Group, with the other closed. • The governing statutes outlining the VSTRS system can be found in 16 V.S.A. Chap. 55, available here. • Membership data and plan comparisons can be found here. • Information pertaining to the VSTRS OPEB plan can be found here. • Actuarial Reports, experience studies, and other reports pertaining to the VSTRS pension and OPEB plans can be found here. The Vermont Municipal Employees’ Retirement System (VMERS) is a cost-sharing, multiple- employer public employees’ retirement system that is administered by the State Treasurer and its Board of Trustees. There is no employer funding by the State and the Net Pension Liability (NPL) is not included on the State’s financial statements, although disclosure information is included in the ACFR. https://legislature.vermont.gov/statutes/chapter/03/016 https://www.vermonttreasurer.gov/content/retirement/state https://www.vermonttreasurer.gov/content/retirement/state/vsers-health-insurance-information https://www.vermonttreasurer.gov/content/retirement/state/vsers-pension-and-system-reports https://legislature.vermont.gov/statutes/chapter/16/055 https://www.vermonttreasurer.gov/content/retirement/vermont-state-teachers-retirement-system-vstrs https://www.vermonttreasurer.gov/content/retirement/vermont-state-teachers-retirement-system-vstrs/vstrs-group-health-insurance https://www.vermonttreasurer.gov/content/retirement/teacher/teacher-pension-and-system-reports Revised: July 28, 2022 Page 3 of 38 The Plan has four groups, all of which are currently open. There is no OPEB plan associated with VMERS. • The governing statutes outlining the VMERS system can be found in 24 V.S.A. Chap. 125, available here. • Membership data and plan comparisons can be found here. • Actuarial Reports, experience studies, and other reports pertaining to the VMERS pension plan can be found here. Please note that in 2022, the State of Vermont enacted significant reforms to the VSERS and VSTRS systems. Those reforms are in the process of being implemented. Prior reports do not reflect these new changes. The text of the 2022 legislation is in two session laws: Act 114, which can be found here; and Act 173, which can be found here. 1.4. CONTRACT PERIOD: Contracts arising from this request for proposal may possibly be for a period from two years up to five years with an option to renew for two additional two-year periods. Proposed start date will be July 1, 2023. 1.5. SINGLE POINT OF CONTACT: All communications concerning this RFP are to be addressed in writing to the State Contact listed on the front page of this RFP. Actual or attempted contact with any other individual from the State concerning this RFP is strictly prohibited and may result in disqualification. 1.6. CHANGES TO THIS RFP: Any modifications to this RFP will be made in writing by the State through the issuance of an Addendum to this RFP and posted online at http://www.bgs.state.vt.us/pca/bids/bids.php . Modifications from any other source are not to be considered. 2. SCOPE OF SERVICES: The State is seeking proposals from qualified actuaries to provide a full range of actuarial services to the three retirement systems. The scope of the services includes, but is not limited to: 2.1. Annual Pension Valuations Annual preparation of the valuation reports must be completed based on a mutually agreed upon schedule so as to meet the statutory requirements for the Boards of Trustees to make an annual recommendation to the Governor and the Legislature on the actuarially required contribution and to complete disclosures included in the State’s Annual Comprehensive Financial Report (ACFR). An annual actuarial valuation report for each defined benefit system (three systems) must be completed for each year of the contract. For all three pension plans, the actuary will complete two separate actuarial valuation reports: one for funding purposes and one in compliance with GASB 67. For the “funding” actuarial reports, an actuarially determined employer contribution (ADEC) will be determined by the actuarial method prescribed by statute. • The reports shall contain the following:  Characteristics of covered active members, inactive participants, terminated vested participants, and pensioners and beneficiaries.  Pension fund assets.  A cash flow projection of contributions, benefits payments, investment income, and other receipts or disbursements.  Recommended funding levels (actuarially determined employer contribution).  Funding progress. • The funding valuations will be based on annual retirement system data for the fiscal years ending June 30, with final results reported to the Retirement Boards no later than the third week of October. The State https://legislature.vermont.gov/statutes/chapter/24/125 https://www.vermonttreasurer.gov/content/retirement/municipal https://www.vermonttreasurer.gov/content/retirement/municipal/municipal-employee-pension-system-reports https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT114/ACT114%20As%20Enacted.pdf https://legislature.vermont.gov/Documents/2022/Docs/ACTS/ACT173/ACT173%20As%20Enacted.pdf http://www.bgs.state.vt.us/pca/bids/bids.php Revised: July 28, 2022 Page 4 of 38 expects to provide participant data by the end of August and provide unaudited financial statements no later than September 30th. • Copies of our existing actuarial reports are included on our web site as noted above. Prospective bidders are encouraged to review these reports. • The selected bidder will be expected to present its findings at a meeting of each of the VRS Boards in October of each year, and to prepare a summary of the report for presentation to the Vermont Pension Investment Commission (VPIC) and the Legislature. In addition to the funding valuations, the selected firm will complete annual valuations in compliance with GASB 67 and 68 for all three systems. In implementing GASB 67 and 68 the state elected the following for the initial GASB 68 reports: • Measurement Date = June 30, 2014 • Reporting Date = June 30, 2015 • Using a Measurement date twelve months prior to the Reporting Date for July 1 fiscal employers permitted employers to have the VRS-supplied portion of their GASB 68 reporting information, including supporting certifications, in as timely a manner as is possible under the new standards. • The current actuaries for the plan valued the net pension liability as of 6/30/2013, then applied roll forward procedures to determine the liability as of 6/30/2014. • This pattern will continue in subsequent valuation reports. For the VMERS system, GASB 68 reports incorporate reporting for approximately 370 entities participating in the system. Allocations are based on the future contribution effort and employer contributions are made by participating entities. VSTRS reporting includes approximately 130 entities. Due to school consolidation planning and implementation, some entities will be combined in future years. With exception of some payments made by municipalities for teachers paid through federal grants, VSTRS has a special funding situation with the state acting as the non-employer contributing entity. The selected bidder will provide a separate all-encompassing fee for each funding report and for the GASB 67 and 68 reports. The annual valuation services cost estimate must include preparation, presentation to boards, staff, legislative committees, follow-up on revisions/issues, and responding to inquiries from the State Auditor of Accounts and any independent auditors employed by the State. 2.2 ANNUAL OPEB REPORTS: The preparation of an annual actuarial valuation of the other post employment benefits of the VSTRS and VSERS systems as of June 30th of each year containing information required under GASB Statements 74 and 75 on a pre-funded basis with a closed amortization period. All reports must comply with the applicable Actuarial Standards of Practice and GASB. The VMERS system does not offer health care coverage to its members but did establish the VMERS RHS Plan on July 1, 2007. This is a tax-advantaged savings plan that assists retirees in paying for healthcare costs after retirement. No OPEB reports are required for this system at present. Both VSERS and the VSTRS plans are administered through trusts in which contributions are irrevocable and trust assets are dedicated to providing benefits to plan members. The State has recently implemented a pre- funding system for VSERS and VSTRS OPEB and continues to explore ways to more efficiently hold and invest these assets. Some advisory work on these topics should be expected. 2.3 EXPERIENCE STUDIES: Experience studies for each system must be completed every three years (or earlier if determined by the state that changes benefit plans or investment strategies would warrant such a change). The next experience studies are due to be completed after the FY23 valuations. Each report must include a) an analysis of the economic and demographic experience of the retirement system over the defined study period; b) the development of a set of actuarial assumptions based on the study results, including a Revised: July 28, 2022 Page 5 of 38 financial analysis of the proposed changes; and c) a review of the existing actuarial funding method and asset valuation method. Please refer to links above for the most recent experience studies. The Vermont Pension Investment Commission, the entity charged with investing the assets of the three pensions plans, is solely responsible to set/approve the rate of return assumption and will provide that assumption to the respondent. The Actuarial Consultant may be asked to receive and critically evaluate the recommended rates of investment returns and provide recommendations on its reasonableness. All other economic, demographic and experience must be developed pursuant to this contract. The services would include preparation, presentation to boards, VPIC, staff, legislative committees, follow-up on revisions/issues, and responding to inquiries from the State Auditor of Accounts and any independent auditors employed by the State. The cost proposal (separate statement) should incorporate all of these services in the all-encompassing fee. 2.4 INFORMATION ASSISTANCE FOR ASSET-LIABILITY STUDY: The Vermont Pension Investment Commission (VPIC) investment consultant periodically conducts an asset-liability study in order to formulate asset allocation recommendations for each of the three Vermont Retirement Systems. This study requires receipt by the investment consultant of appropriately formatted actuarial data from the actuarial consultant for each Vermont Retirement System, including active and inactive census data, decrement tables, projections of benefit payments, current and required contributions, actuarial accrued liability, present values of future benefits and salaries, development of actuarial value of assets, and future benefits increases and COLAs. Accounting information relating to the pension liability, broken out by groups, is required. In addition, the asset-liability study requires projections of liabilities, benefit payments, contributions and accounting data, and any expected changes to plan benefits or actuarial assumptions. Respondents to this RFP are asked to affirm the ability to meet the above study information needs (if and as required) and to provide a separate cost bid for doing so. 2.5 DATA FROM STATE TREASURER’S OFFICE TO ACTUARY: Upon award of a contract from this RFP, the Treasurer’s Office will work with the selected actuarial firm to agree upon the format of the data to be provided from the Vermont Pension Administration System (VPAS). 2.6 PENSION RELATED DISCLOSURES IN STATE DEBT FINANCING DOCUMENTS Annually, the State of Vermont issues one or more series of General Obligation new money and/or refunding bonds. Systems’ pension data including actuarial liabilities, actuarial values of pension assets, funded ratios, unfunded liabilities and their amortizations, actuarial recommended contributions and other data are critical components of the disclosure contained in the Official Statements relating to these bond offerings. The Actuarial Consultant may be asked to assist in reviewing pension schedules for accuracy and/or to provide schedules for inclusion. Respondents to this RFP are asked to affirm their ability to meet the needs for this Official Statement disclosure support and to provide a separate cost bid for doing so. 2.7 ADDITIONAL DUTIES: The following is a list of potential additional services (this list may be augmented) required throughout the term of the contract. • Preparation of actuarial and fiscal impact studies of proposed state or federal legislation. • Preparation of risk assessments as determined to be appropriate. • Preparation of cross-over analyses as requested. • Review and update of all actuarial factors utilized by the Systems. • Preparation of special reports using existing data. • Actuarial development of past service cost for municipalities interested in joining the VMERS system. • Attendance at Retirement Board or subcommittee meetings to present relevant actuarial reports (not including annual valuations or OPEB reports described above) and related findings. • Special projects assigned by VRS. Revised: July 28, 2022 Page 6 of 38 • Routine consultations with the VRS and the Treasurer’s Office regarding fiscal, legal, and regulatory issues relating to the retirement plans. 3. GENERAL REQUIREMENTS: 3.1. PRICING: Bidders must price the terms of this solicitation at their best pricing. Any and all costs that bidder wishes the State to consider must be submitted for consideration. The proposer must be aware that the State wants the most effective combination of price, performance, and quality possible within the constraints of its budget. Pricing must be a firm fixed price, including all expenses. The State will not accept any open-ended, time and materials bids. There may be no best and final offer procedure. Therefore, the proposal shall be submitted on the most favorable terms that the proposer can provide. Prices and/or rates shall remain firm for the initial term of the contract. The pricing policy submitted by bidder must (i) be clearly structured, accountable, and auditable and (ii) cover the full spectrum of materials and/or services required. 3.2. STATEMENT OF RIGHTS: The State shall have the authority to evaluate Responses and select the bidder(s) as may be determined to be in the best interest of the State and consistent with the goals and performance requirements outlined in this RFP. The State of Vermont reserves the right to obtain clarification or additional information necessary to properly evaluate a proposal. Failure of bidder to respond to a request for additional information or clarification could result in rejection of that bidder's proposal. To secure a project that is deemed to be in the best interest of the State, the State reserves the right to accept or reject any and all bids, in whole or in part, with or without cause, and to waive technicalities in submissions. The State also reserves the right to make purchases outside of the awarded contracts where it is deemed in the best interest of the State. Best and Final Offer (BAFO). At any time after submission of Responses and prior to the final selection of bidder(s) for Contract negotiation or execution, the State may invite bidder(s) to provide a BAFO. The state reserves the right to request BAFOs from only those bidders that meet the minimum qualification requirements and/or have not been eliminated from consideration during the evaluation process. As noted above, however, not every contracting process will include a BAFO and bidders should therefore present their best pricing and terms in the initial bid. Presentation. An in-person or webinar presentation by the Bidder may be required by the State if it will help the State’s evaluation process. The State will factor information presented during presentations into the evaluation. Bidders will be responsible for all costs associated with providing the presentation. 3.3. DURATION OF PROPOSAL OFFER: Proposals submitted in response to this RFP are irrevocable for 120 days following the closing date of proposals. This period may be extended at the request of the State, and with the bidders’ written approval. 3.4. INCURRED EXPENSES: The cost of developing and submitting the proposal is entirely the responsibility of the proposer. This includes costs to determine the nature of this engagement, preparation of the proposal, submitting the proposal, negotiating for the contract, and other costs associated with this RFP. 3.5. DOCUMENTS, REPORTS, AND OTHER: All documents, reports, computer software, paper, and other materials (“Papers”), except for those generally available to the public, which are provided by the State, and any copies of any such Papers that may be reproduced or otherwise procured and all information contained in such Papers, shall be deemed and shall remain property exclusively of the State and shall be available to the State's representatives upon their request. No Papers may be reproduced or otherwise used by for purposes unrelated to the subsequent contract. 3.6. REQUIREMENTS RELATED TO CONFLICTS OF INTEREST AND INDEPENDENCE: Bidders shall identify all existing or potential conflicts of interest that would prevent the bidder from fully performing the tasks described in this RFP. Such disclosure will be a continuing requirement subsequent to award of a Contract and for the life of the Contract. In all matters relating to work required by the State, the bidder shall remain free from personal and external impediments to independence, and shall Revised: July 28, 2022 Page 7 of 38 verify that the organization is independent and will maintain an independent attitude and appearance with respect to the services required. 3.7. INSURANCE COVERAGE: The Selected bidder shall maintain an errors and omissions insurance policy which provides a prudent amount of coverage for the willful negligent acts or omissions of any shareholder, employee, or agents thereof. The Selected bidder shall also maintain policies pursuant to the State’s Standard Contract Provisions as defined in Attachment C. 3.8. WORKER CLASSIFICATION COMPLIANCE REQUIREMENT: The Department of Buildings and General Services in accordance with Act 54, Section 32 of the Acts of 2009 and for total projects costs exceeding $250,000.00, requires bidders comply with the following provisions and requirements. 3.8.1. Self Reporting: Worker Classification Compliance Requirement: • (a) (1) Bidder is required to self report detailed information including information relating to past violations, convictions, suspensions, and any other information related to past performance and likely compliance with proper coding and classification of employees requested by the applicable agency. • The bidder is required to report information on any violations that occurred in the previous 12 months. • This form must be completed and submitted as part of the response for the proposal to be considered valid. 3.8.2. Subcontractor Reporting: Worker Classification Compliance Requirement: • Upon award of contract, and prior to contract execution, the successful bidder agrees to comply with Subcontractor Reporting requirements in accordance with Act 54, Section 32 of the Acts of 2009 and for total projects costs exceeding $250,000.00 as follows: • Provide a list of subcontractors to be used on the job along with lists of subcontractor’s subcontractors and by whom those subcontractors are insured for workers’ compensation purposes. This is not a requirement for subcontractor’s providing supplies only and no labor to the overall contract or project. This list MUST be updated and provided to the State as additional subcontractors are hired. A sample form is included in the bid package. • Failure to adhere to Act 54, Section 32 of the Acts of 2009 and submit Subcontractor Reporting: Worker Classification Compliance Requirement will constitute non-compliance and may result in cancellation of contract and/or forfeiture of future bidding privileges until resolved. 3.9. INVOICING: All invoices are to be rendered by the Contractor on the vendor's standard billhead and forwarded directly to the institution or agency ordering materials or services and shall specify the address to which payments will be sent. 3.10. CANCELLATION: The State specifically reserves the right to cancel the contract, or any portion thereof, if, in the opinion of the Office of the State Treasurer, the services or materials supplied by the contractor are not satisfactory or are not consistent with the terms of the contract 3.11. METHOD OF AWARD: Awards will be made in the best interest of the State. The State may award one or more contracts and reserves the right to make additional awards to other compliant bidders at any time during the first year of the contract if such award is deemed to be in the best interest of the State. 3.11.1. Evaluation Criteria: Fees and compensation will be an important factor in the evaluation of responses. Consideration shall be given to: • RFP Understanding o Approach o Clarity o Creativity of proposal Revised: July 28, 2022 Page 8 of 38 o Responsiveness to Scope of Services • General Experience and Qualifications of Firm o Experience o Assigned personnel o Any other resources assigned to State • Financial and Information Security of Firm • Cost to the State The Office of the State Treasurer reserves the right to seek clarification of any proposal submitted, request oral or written presentations, and select the proposal considered to best promote the public interest. 3.12. CONFIDENTIALITY: The successful response will become part of the contract file and will become a matter of public record, as will all other responses received. If the response includes material that is considered by the bidder to be proprietary and confidential under the State’s Public Records Act, 1 V.S.A. § 315 et seq., the bidder shall submit a cover letter that clearly identifies each page or section of the response that it believes is proprietary and confidential. The bidder shall also provide in their cover letter a written explanation for each marked section explaining why such material should be considered exempt from public disclosure in the event of a public records request, pursuant to 1 V.S.A. § 317(c), including the prospective harm to the competitive position of the bidder if the identified material were to be released. Additionally, the bidder must include a redacted copy of its response reflecting portions that it believes are proprietary and confidential. Redactions must be limited so that the reviewer may understand the nature of the information being withheld. It is typically inappropriate to redact entire pages, or to redact the titles/captions of tables and figures. Under no circumstances can the entire response be marked confidential, and the State reserves the right to disqualify responses so marked. All information provided by the selected actuarial firm during the term of this contract will be deemed to be public information, subject to be released to members of the public in accordance with Vermont Statutes not more than three (3) days following a written request. The selected firm will be notified as soon as practicable upon receipt of such a request, and must respond within 24 hours if it believes any such information to be proprietary. The State shall then decide, in its sole discretion, whether to release such information. 3.13. MEMBER CONFIDENTIALITY: The State wants to ensure the confidentiality of its members’ and retirees’ records. Therefore, a bidder may be required to execute a Corporate Agreement of Confidentiality in the event that the bidder is selected to perform services. All bidder staff members assigned to the project in any capacity may also be required to sign statements of confidentiality in order to participate in the project. 3.14. CONTRACT TERMS: The selected vendors will sign a contract with the State to provide the items named in their responses, at the prices listed. Minimum support levels, terms, and conditions from this RFP, and the vendor’s response will become part of the contract. The contract will be subject to review throughout its term. The State will consider cancellation upon discovery that a vendor is in violation of any portion of the agreement, including an inability by the vendor to provide the products, support, and/or service offered in their response. 3.15. DEFAULT: In case of default of the contractor, the State may procure the materials or supplies from other sources and hold the contractor responsible for any excess cost occasioned thereby, provided, that if public necessity requires the use of materials or supplies not conforming to the specifications they may be accepted and payment therefore shall be made at a proper reduction in price. 3.16. STATEMENT OF RIGHTS: The State of Vermont reserves the right to obtain clarification or additional information necessary to properly evaluate a proposal. Vendors may be asked to give a verbal presentation of their proposal after submission. Failure of vendor to respond to a request for additional information or clarification could result in rejection of that vendor's proposal. To secure a project that is deemed to be in the best interest of the State, the State reserves the right to accept or reject any and all bids, in whole or in Revised: July 28, 2022 Page 9 of 38 part, with or without cause, and to waive technicalities in submissions. The State also reserves the right to make purchases outside of the awarded contracts where it is deemed in the best interest of the State. 3.17. TAXES: Most state purchases are not subject to federal or state sales or excise taxes and must be invoiced tax free. An exemption certificate will be furnished upon request covering taxable items. The contractor agrees to pay all Vermont taxes which may be due as a result of this order. If taxes are to be applied to the purchase it will be so noted in the response. 3.18. SPECIFICATION CHANGE: Any changes or variations in the specifications must be received in writing from the Office of Purchasing & Contracting. Verbal instructions or written instructions from any other source are not to be considered. 3.19. AMENDMENTS: No changes, modifications, or amendments in the terms and conditions of this contract shall be effective unless reduced to writing, numbered, and signed by the duly authorized representative of the State and Contractor. 3.20. NON-COLLUSION: The State of Vermont is conscious of and concerned about collusion. It should therefore be understood by all that in signing bid and contract documents they agree that the prices quoted have been arrived at without collusion and that no prior information concerning these prices has been received from or given to a competitive company. If there is sufficient evidence to warrant investigation of the bid/contract process by the Office of the Attorney General, all bidders should understand that this paragraph might be used as a basis for litigation. 3.21. CONTRACT NEGOTIATION: Upon completion of the evaluation process, the State may select one or more bidders with which to negotiate a contract, based on the evaluation findings and other criteria deemed relevant for ensuring that the decision made is in the best interest of the State. In the event State is not successful in negotiating a contract with a selected bidder, the State reserves the option of negotiating with another bidder, or to end the proposal process entirely. 3.22 BUSINESS REGISTRATION. To be awarded a contract by the State of Vermont, a bidder (except an individual doing business in his/her own name) must be registered with the Vermont Secretary of State’s office https://sos.vermont.gov/corporations/registration/ and must obtain a Contractor’s Business Account Number issued by the Vermont Department of Taxes http://tax.vermont.gov/. The contract will obligate the bidder to provide the services and/or products identified in its bid, at the prices listed. 4.1 BIDDER’S PROPOSAL – The following must be included in the bidder’s Proposal: 4.1.1 COVER LETTER 4.1.1.1 The cover letter must contain the following statement: “We have read the State’s Request for Proposals (RFP) for Actuarial Services and fully understand its intent. We certify that we have adequate personnel, equipment, and facilities to provide the State’s requested services that we have indicated we can meet. We understand that our ability to meet the criteria and provide the required services shall be judged solely by the Office of the State Treasurer.” 4.1.1.2 A person authorized to bind the firm to all commitments made in its response shall sign this letter. 4.1.1.3 In addition, the cover letter must certify that: • The response is genuine and is not collusive or a sham. https://sos.vermont.gov/corporations/registration/ http://tax.vermont.gov/ Revised: July 28, 2022 Page 10 of 38 • The response is not made in the interest of or on the behalf of any person not named therein. • The bidder has not directly or indirectly induced or solicited any person to submit a false or sham response or to refrain from submitting a proposal. • The bidder has not in any manner sought by collusion to secure an advantage over any other respondent. • The bidder has thoroughly examined the RFP requirements, and the proposed fees cover all the services that the State has requested. • The bidder acknowledges and accepts all terms and conditions included in the RFP. • The bidder agrees to provide services in a manner acceptable to the State, and as stipulated in the RFP and subsequent contract. • The bidder and key professionals do not have or anticipate a potential conflict of interest with the Office of the State Treasurer or the Retired Employees’ Committee on Insurance. • The bidder and key professionals do not accept fees and derive no benefit from relationships with any persons involved in the RFP. • The bidder has completed and submitted, with the RFP response, the Vermont Tax Certificate, provided in this RFP. NOTE: Upon request, the bidder may be required to submit financial information. Publicly owned businesses may be requested to provide their most recent annual report, current balance and income statement, and D&B report. Privately owned businesses may be requested to provide company financials. 4.1.1.4 Exceptions to Contract Terms and Conditions. If a bidder wishes to propose an exception to any terms and conditions set forth in the Standard Contract Form and its attachments, such exceptions must be included in the cover letter to the RFP response. Failure to note exceptions when responding to the RFP will be deemed to be acceptance of the State contract terms and conditions. If exceptions are not noted in the response to this RFP but raised during contract negotiations, the State reserves the right to cancel the negotiation if deemed to be in the best interests of the State. Note that exceptions to contract terms may cause rejection of the proposal. 4.1.2 TECHNICAL RESPONSE: The Technical Response shall include all of the information required in this RFP, as set forth in the Technical Response Attachment. 4.1.3 COST PROPOSAL – Bidder cost proposals shall be presented in sufficient clarity and detail to enable the State to validate the costs. The Cost Proposal shall include all of the information required in this RFP, as set forth in the Cost Proposal Attachment. NOTE: This part of the proposal must separate from the technical proposal and be labeled “Cost Proposal.” Cost information is NOT to be provided in any other part of the bidder’s proposal. 4.1.4. CERTIFICATE OF COMPLIANCE: This form must be completed and submitted as part of the response for the proposal to be considered valid. 4.2 SUBMISSION INSTRUCTIONS: Revised: July 28, 2022 Page 11 of 38 4.2.1 CLOSING DATE: Bids must be received by the State by the due date specified on the front page of this RFP. Late bids will not be considered. The State may, for cause, issue an addendum to change the date and/or time when bids are due. If a change is made, the State will inform all bidders by posting at the webpage indicated on the front page of this RFP. There will not be a public bid opening. However, the State will record the name, city and state for any and all bids received by the due date. This information will be posted as promptly as possible following the due date online at: https://bgs.vermont.gov/content/opc-bid-tabulation-sheets-0. Bidders are hereby notified to review the information posted after the bid opening deadline to confirm receipt of bid by the State. Any bidder that submitted a bid, and is not listed on the bid tabulation sheet, shall promptly notify the State Contact listed on the front page of this RFP. Should a bidder fail to notify the State Contact listed on the front page of this RFP within two weeks of posting the bid tabulation sheet, the State shall not be required to consider the bid. 4.2.2 BID DELIVERY INSTRUCTIONS: 4.2.2.1 ELECTRONIC: Only electronic bids will be accepted. 4.2.2.2 E-MAIL BIDS. Emailed bids will be accepted. Bids will be accepted via email submission to SOV.ThePathForward@vermont.gov. There is an attachment size limit of 40 MB. It is the Bidder’s responsibility to compress the PDF file containing its bid if necessary, in order to meet this size limitation. USE SUBJECT : VT RETIREMENT ACTUARIAL SERVICES 4.2.2.3 FAX BIDS: Faxed bids will not be accepted. 4.2.2.4 4.3.3.U.S MAIL or EXPRESS DILIVERY OR HAND DELIVERY WILL NOT BE ACCEPTED. 5 ATTACHMENTS: 5.1 Certificate of Compliance 5.2 Subcontractor Reporting Form 5.3 Technical Response Attachment 5.4 Price Schedule 5.5 State of Vermont Standard Form of Contract https://bgs.vermont.gov/content/opc-bid-tabulation-sheets-0 Revised: July 28, 2022 Page 12 of 38 Attachment 5.1: Certificate of Compliance RFP/PROJECT: DATE: Page 1 of 3 CERTIFICATE OF COMPLIANCE For a bid to be considered valid, this form must be completed in its entirety, executed by a duly authorized representative of the bidder, and submitted as part of the response to the proposal. A. NON-COLLUSION: Bidder hereby certifies that the prices quoted have been arrived at without collusion and that no prior information concerning these prices has been received from or given to a competitive company. If there is sufficient evidence to warrant investigation of the bid/contract process by the Office of the Attorney General, bidder understands that this paragraph might be used as a basis for litigation. B. CONTRACT TERMS: Bidder hereby acknowledges that is has read, understands and agrees to the terms of this RFP, including Attachment C: Standard State Contract Provisions, and any other contract attachments included with this RFP. C. WORKER CLASSIFICATION COMPLIANCE REQUIREMENT: In accordance with Section 32 of The Vermont Recovery and Reinvestment Act of 2009 (Act No. 54), the following provisions and requirements apply to bidder when the amount of its bid exceeds $250,000.00. Self-Reporting. Bidder hereby self-reports the following information relating to past violations, convictions, suspensions, and any other information related to past performance relative to coding and classification of workers, that occurred in the previous 12 months. Summary of Detailed Information Date of Notification Outcome Subcontractor Reporting. Bidder hereby acknowledges and agrees that if it is a successful bidder, prior to execution of any contract resulting from this RFP, bidder will provide to the State a list of all proposed subcontractors and subcontractors’ subcontractors, together with the identity of those subcontractors’ workers compensation insurance providers, and additional required or requested information, as applicable, in accordance with Section 32 of The Vermont Recovery and Reinvestment Act of 2009 (Act No. 54), and bidder will provide any update of such list to the State as additional subcontractors are hired. Bidder further acknowledges and agrees that the failure to submit subcontractor reporting in accordance with Section 32 of The Vermont Recovery and Reinvestment Act of 2009 (Act No. 54) will constitute non-compliance and may result in cancellation of contract and/or restriction from bidding on future state contracts. Revised: July 28, 2022 Page 13 of 38 RFP/PROJECT: DATE: Page 2 of 3 D. Executive Order 05 – 16: Climate Change Considerations in State Procurements Certification Bidder certifies to the following (Bidder may attach any desired explanation or substantiation. Please also note that bidder may be asked to provide documentation for any applicable claims): 1. Bidder owns, leases or utilizes, for business purposes, space that has received:  Energy Star® Certification  LEED®, Green Globes®, or Living Buildings ChallengeSM Certification  Other internationally recognized building certification: ____________________________________________________________________________ 2. Bidder has received incentives or rebates from an Energy Efficiency Utility or Energy Efficiency Program in the last five years for energy efficient improvements made at bidder’s place of business. Please explain: _____________________________________________________________________________ 3. Please Check all that apply:  Bidder can claim on-site renewable power or anaerobic-digester power (“cow-power”). Or bidder consumes renewable electricity through voluntary purchase or offset, provided no such claimed power can be double-claimed by another party.  Bidder uses renewable biomass or bio-fuel for the purposes of thermal (heat) energy at its place of business.  Bidder’s heating system has modern, high-efficiency units (boilers, furnaces, stoves, etc.), having reduced emissions of particulate matter and other air pollutants.  Bidder tracks its energy consumption and harmful greenhouse gas emissions. What tool is used to do this? _____________________  Bidder promotes the use of plug-in electric vehicles by providing electric vehicle charging, electric fleet vehicles, preferred parking, designated parking, purchase or lease incentives, etc..  Bidder offers employees an option for a fossil fuel divestment retirement account.  Bidder offers products or services that reduce waste, conserve water, or promote energy efficiency and conservation. Please explain: ____________________________________________________________________________ ____________________________________________________________________________ 4. Please list any additional practices that promote clean energy and take action to address climate change: _____________________________________________________________________________ ____________________________________________________________________________ _____________________________________________________________________________ Revised: July 28, 2022 Page 14 of 38 RFP/PROJECT: DATE: Page 3 of 3 E. Executive Order 02 – 22: Solidarity with the Ukrainian People  By checking this box, bidder certifies that none of the goods, products, or materials offered in response to this solicitation are Russian-sourced goods or produced by Russian entities. If bidder is unable to check the box, it shall indicate in the table below which of the applicable offerings are Russian-sourced goods and/or which are produced by Russian entities. An additional column is provided for any note or comment that you may have. Provided Equipment or Product Note or Comment Bidder Name: Contact Name: Address: Fax Number: Telephone: E-Mail: By: Name: Signature of Bidder (or Representative) (Type or Print) END OF CERTIFICATE OF COMPLIANCE Revised: July 28, 2022 Page 15 of 38 Attachment 5.2: Subcontractor Reporting Form RFP/PROJECT: DATE: SUBCONTRACTOR REPORTING FORM This form must be completed in its entirety and submitted prior to contract execution and updated as necessary and provided to the State as additional subcontractors are hired. The Department of Buildings and General Services in accordance with Act 54, Section 32 of the Acts of 2009 and for total project costs exceeding $250,000.00 requires bidders to comply with the following provisions and requirements. Contractor is required to provide a list of subcontractors on the job along with lists of subcontractor’s subcontractors and by whom those subcontractors are insured for workers’ compensation purposes. Include additional pages if necessary. This is not a requirement for subcontractor’s providing supplies only and no labor to the overall contract or project. Subcontractor Insured By Subcontractor’s Sub Insured By Date: Name of Company: Contact Name: Address: Title: Phone Number: E-mail: Fax Number: By: Name: Failure to adhere to Act 54, Section 32 of the Acts of 2009 and submit Subcontractor Reporting: Worker Classification Compliance Requirement will constitute non-compliance and may result in cancellation of contract and/or forfeiture of future bidding privileges until resolved. Send Completed Form to: Office of Purchasing & Contracting 133 State Street, 5th Floor Montpelier, VT 05633-8000 Revised: July 28, 2022 Page 16 of 38 Attachment 5.3: Technical Response Attachment Section I – Summary/Overview: In this section, the bidder shall provide a summary/overview of its proposal in no more than 2 pages. Section II – General: In this section, the bidder shall provide basic information about its firm and staff, including the following: 1. Please provide a description of the ownership and structure of the firm, which includes the parent company and any affiliated companies and/or joint ventures. 2. Are any near-term changes to the firm’s corporate or organizational structure anticipated? If yes, please specify. 3. Please list all office locations and the number of individuals working in each office. Please specify which office would be the primary relationship office. 4. List the owners of the firm (from largest to smallest with respect to ownership) and their ownership percentages. Please include individuals and all other entities. 5. Please list all principals of the firm and their backgrounds, including credentials and certifications for those staff members to be assigned to this relationship. 6. Please provide the most recently completed audited financial statements for your firm. 7. Please provide information regarding whether your firm has had any litigation, arbitration, or regulatory proceedings, either pending, adjudicated, or settled, within the last five years. 8. Please provide information regarding whether your firm has had any regulatory, state, or federal agency investigations within the last five years. Section III – Experience Summary: In this section, the bidder must describe its current and historical experience of the firm in providing services of a similar nature for other clients. Particular emphasis shall be placed on any experience in supporting public sector clients especially for public employee retirement systems. This part of the proposal must demonstrate a minimum of at least 10 years of experience conducting similar comprehensive actuarial services for similar size/type plans. This Section should include, at minimum, the firm’s number of years in business, its ownership (i.e., public or private), and a representative client list. Specifically, please provide the following information pertaining to your current actuarial clients: Number of Clients Plan Participants Public Sector Other Tax-Exempt Other Total 0 – 20,000 20,001 – 40,000 40,001 – 60,000 60,001 and above Total Section IV – Technical Approach: This section shall address the following: 1. Technical Proposal Understanding, please describe your ability to provide the requirements listed in the Scope of Services section, including your organization’s ability to provide actuarial consulting, methodology, and any technical software you would use in providing the requested services (e.g., computer models, software, and hardware). Please provide any other information that you believe would be helpful in our decision-making process. 2. Proposed Project Staffing including résumés and verification of credentials and certifications for those staff members to be assigned to this relationship. Revised: July 28, 2022 Page 17 of 38 3. Proposed Value-Added Options – VRS will consider any option proposed by the bidder as a value-added option that will substantially reduce costs and/or improve efficiency of operations. This Section is optional (but desirable) in the bidder’s proposal. 4. Assumptions and Exceptions – Identification of all assumptions that the bidder made in preparing its proposal as well as any exceptions that the bidder takes with regard to the requirements expressed in the RFP or the standard contract. This section must contain a list of all assumptions and exceptions, with a cross-reference to the specific section of the RFP to which the assumption or exception applies. Failure to abide by this requirement (i.e., failure to include a single, consolidated list of assumptions and a single consolidated list of exceptions) may be grounds for disqualification of the bidder. Further, any assumptions or exceptions distributed within the body of the proposal but not summarized in this Section will not be binding upon or honored by the State. Please also identify any assumptions you may have regarding VRS staffing, requirements and deliverables. 5. Reports – Please provide one example of each of the requested reports prepared by the Bidder for a public system of reasonable comparable size (to the extent possible). Section V – Bidder References: The bidder shall demonstrate a minimum of 10 years of experience in providing actuarial services to other states or public entities with similar pension programs for similar size/type plans and provide at least four (4) references. Greater weight may be given to references wherein the bidder provides services for similar size/type plans in the public arena. References from governmental agencies, especially public employees’ retirement systems, are of particular interest to VRS. For each reference, the bidder must include the name, address, e-mail address, and telephone numbers of individuals qualified to provide information from both the management and technical viewpoints. For each reference, the bidder must specify: 1. The length of time during which actuarial services were performed for that Plan, 2. The number of participants in the Plan, 3. Statistics such as number and types of groups within a Plan, etc., and 4. A description of the specific services provided. Revised: July 28, 2022 Page 18 of 38 Attachment 5.4: Price Schedule Bidder cost proposals shall be presented in sufficient clarity and detail to enable VRS to validate the costs. 1. The bidder shall provide an all-inclusive, fixed cost per system or an hourly rate or other (such as an hourly rate with a ceiling), for each of the items below: Service category Flat Fee/Fixed Cost* Hourly Fee Other (specify) Annual Pension Funding Valuations GASB 67 Report GASB 68 Report GASB74 Report GASB 75 Report Experience Studies Pension Disclosures/Debt Financing Documents Asset-Liability Studies Additional Duties *The bidder may provide a different fixed fee by system (VSERS, VSTRS, and VMERS). The costs should be all inclusive, including expenses and time for presentation to the VRS Boards. 2. Please identify all services, if any, included in “additional duties” that would be included in the fixed costs above. 3. Please identify any services not included in the fixed fees above, and provide either a fixed fee or proposed hourly rate. 4. For services where an hourly fee is proposed, please provide either an overall hourly rate or a fee by position type (principals, directors, senior consultants, consultants, other supervisory, clerical, etc.). 5. All costs, whether hourly or fixed fee, should be all inclusive, reflecting all travel and labor costs, expenses, and all incidental costs. Revised: July 28, 2022 Page 19 of 38 Attachment 5.5: State of Vermont Standard Form of Contract STANDARD CONTRACT FOR SERVICES 1. Parties. This is a contract for services between the State of Vermont, _____________ (hereinafter called “State”), and _____________, with a principal place of business in _____________, (hereinafter called “Contractor”). Contractor’s form of business organization is _____________. It is Contractor’s responsibility to contact the Vermont Department of Taxes to determine if, by law, Contractor is required to have a Vermont Department of Taxes Business Account Number. 2. Subject Matter. The subject matter of this contract is services generally on the subject of _____________. Detailed services to be provided by Contractor are described in Attachment A. 3. Maximum Amount. In consideration of the services to be performed by Contractor, the State agrees to pay Contractor, in accordance with the payment provisions specified in Attachment B, a sum not to exceed $________.00. 4. Contract Term. The period of Contractor’s performance shall begin on _____________, 20__ and end on _____________, 20__. 5. Prior Approvals. This Contract shall not be binding unless and until all requisite prior approvals have been obtained in accordance with current State law, bulletins, and interpretations. 6. Amendment. No changes, modifications, or amendments in the terms and conditions of this contract shall be effective unless reduced to writing, numbered and signed by the duly authorized representative of the State and Contractor. 7. Termination for Convenience. This contract may be terminated by the State at any time by giving written notice at least thirty (30) days in advance. In such event, Contractor shall be paid under the terms of this contract for all services provided to and accepted by the State prior to the effective date of termination. 8. Attachments. This contract consists of ___ pages including the following attachments which are incorporated herein: Attachment A - Statement of Work Attachment B - Payment Provisions Attachment C – “Standard State Provisions for Contracts and Grants” a preprinted form (revision date 12/15/2017) Attachment D - Other Provisions Attachment E- Standards of Conduct Additional attachments may be lettered as necessary 9. Order of Precedence. Any ambiguity, conflict or inconsistency between the documents comprising this contract shall be resolved according to the following order of precedence: (1) Standard Contract (2) Attachment D (3) Attachment C (Standard Contract Provisions for Contracts and Grants) (4) Attachment A Revised: July 28, 2022 Page 20 of 38 (5) Attachment B (6) Attachment E List other attachments, if any, in order of precedence WE THE UNDERSIGNED PARTIES AGREE TO BE BOUND BY THIS CONTRACT By the State of Vermont: By the Contractor: Date: Date: Signature: Signature: Name: Name: Title: Title: Revised: July 28, 2022 Page 21 of 38 ATTACHMENT A – STATEMENT OF WORK The Contractor shall: __________ DELETE THESE INSTRUCTIONS All State contracts must describe the work to be performed in clear, concise and complete statements. Attachment A of the Standard State Contract should be used to detail the work to be performed or products to be delivered by the contractor. A well written description will include the schedule for performance, identification of project deliverables, deliverable milestones, and standards by which the contractor’s performance will be measured. This description of the work may also be referred to as the Statement of Work, Specifications of Work, or Subject Matter. Please refer to Appendix II for further guidance. The deliverables and milestones should be used to inform the payment terms in Attachment B. Attaching RFPs and RFP responses to contracts is not permitted. RFP responses can be long and complicated and may include both unnecessary information and introduce internally inconsistent terms within the contract. The level of required contract compliance monitoring, if applicable, should be based on the assessment of the risk for delay or failure to deliver the services. In assessing the risk, agencies should consider factors such as: amount of funds involved; contract duration; contract complexity; history of the Contractor with State government; amount of subcontracting involved; and other relevant issues. Whether or not liquidated damages, service credits and/or retainage are part of the contract, the document should include a section that describes specifically how the Agency will monitor the contract for compliance. Types of compliance monitoring processes and steps may include: (i) periodic contractor reports; (ii) invoice reviews; (iii) on-site visits; (iv) scheduled meetings; (v) audits; (vi) independent performance reviews; (vii) surveys of users/clients; and (viii) post-contract audit or review. This section may also describe a process for identification, discussion, and resolution of disputes between the Contractor and the State, both during the contract duration and after expiration. NOTE: Additional guidance for drafting Attachment A is provided in Bulletin 3.5, Appendix II Revised: July 28, 2022 Page 22 of 38 ATTACHMENT B – PAYMENT PROVISIONS The maximum dollar amount payable under this contract is not intended as any form of a guaranteed amount. The Contractor will be paid for products or services actually delivered or performed, as specified in Attachment A, up to the maximum allowable amount specified on page 1 of this contract. 1. Prior to commencement of work and release of any payments, Contractor shall submit to the State: a. a certificate of insurance consistent with the requirements set forth in Attachment C, Section 8 (Insurance), and with any additional requirements for insurance as may be set forth elsewhere in this contract; and b. a current IRS Form W-9 (signed within the last six months). 2. Payment terms are Net 30 days from the date the State receives an error-free invoice with all necessary and complete supporting documentation. 3. Contractor shall submit detailed invoices itemizing all work performed during the invoice period, including the dates of service, rates of pay, hours of work performed, and any other information and/or documentation appropriate and sufficient to substantiate the amount invoiced for payment by the State. All invoices must include the Contract # for this contract. 4. Contractor shall submit invoices to the State in accordance with the schedule set forth in this Attachment B. Unless a more particular schedule is provided herein, invoices shall be submitted not more frequently than monthly. 5. Invoices shall be submitted to the State at the following address: ________________ 6. The payment schedule for delivered products, or rates for services performed, and any additional reimbursements, are as follows: _____________ DELETE THESE INSTRUCTIONS The above language up through section 5 is standard and should be included in all services contracts. Section 6 is merely a prompt for completion of the particular payment terms necessary to the contract, such as the schedule and/or rates of pay. Sample language is provided below, if helpful, but there is no required format. Revised: July 28, 2022 Page 23 of 38 ATTACHMENT C: STANDARD STATE PROVISIONS FOR CONTRACTS AND GRANTS REVISED DECEMBER 15, 2017 ATTACHMENT C: STANDARD STATE PROVISIONS FOR CONTRACTS AND GRANTS REVISED DECEMBER 15, 2017 1. Definitions: For purposes of this Attachment, “Party” shall mean the Contractor, Grantee or Subrecipient, with whom the State of Vermont is executing this Agreement and consistent with the form of the Agreement. “Agreement” shall mean the specific contract or grant to which this form is attached. 2. Entire Agreement: This Agreement, whether in the form of a contract, State-funded grant, or Federally-funded grant, represents the entire agreement between the parties on the subject matter. All prior agreements, representations, statements, negotiations, and understandings shall have no effect. 3. Governing Law, Jurisdiction and Venue; No Waiver of Jury Trial: This Agreement will be governed by the laws of the State of Vermont. Any action or proceeding brought by either the State or the Party in connection with this Agreement shall be brought and enforced in the Superior Court of the State of Vermont, Civil Division, Washington Unit. The Party irrevocably submits to the jurisdiction of this court for any action or proceeding regarding this Agreement. The Party agrees that it must first exhaust any applicable administrative remedies with respect to any cause of action that it may have against the State with regard to its performance under this Agreement. Party agrees that the State shall not be required to submit to binding arbitration or waive its right to a jury trial. 4. Sovereign Immunity: The State reserves all immunities, defenses, rights or actions arising out of the State’s sovereign status or under the Eleventh Amendment to the United States Constitution. No waiver of the State’s immunities, defenses, rights or actions shall be implied or otherwise deemed to exist by reason of the State’s entry into this Agreement. 5. No Employee Benefits For Party: The Party understands that the State will not provide any individual retirement benefits, group life insurance, group health and dental insurance, vacation or sick leave, workers compensation or other benefits or services available to State employees, nor will the State withhold any state or Federal taxes except as required under applicable tax laws, which shall be determined in advance of execution of the Agreement. The Party understands that all tax returns required by the Internal Revenue Code and the State of Vermont, including but not limited to income, withholding, sales and use, and rooms and meals, must be filed by the Party, and information as to Agreement income will be provided by the State of Vermont to the Internal Revenue Service and the Vermont Department of Taxes. 6. Independence: The Party will act in an independent capacity and not as officers or employees of the State. 7. Defense and Indemnity: The Party shall defend the State and its officers and employees against all third party claims or suits arising in whole or in part from any act or omission of the Party or of any agent of the Party in connection with the performance of this Agreement. The State shall notify the Party in the event of any such claim or suit, and the Party shall immediately retain counsel and otherwise provide a complete defense against the entire claim or suit. The State retains the right to participate at its own expense in the defense of any claim. The State shall have the right to approve all proposed settlements of such claims or suits. After a final judgment or settlement, the Party may request recoupment of specific defense costs and may file suit in Washington Superior Court requesting recoupment. The Party shall be entitled to recoup costs only upon a showing that such costs were entirely unrelated to the defense of any claim arising from an act or omission of the Party in connection with the performance of this Agreement. Revised: July 28, 2022 Page 24 of 38 The Party shall indemnify the State and its officers and employees if the State, its officers or employees become legally obligated to pay any damages or losses arising from any act or omission of the Party or an agent of the Party in connection with the performance of this Agreement. Notwithstanding any contrary language anywhere, in no event shall the terms of this Agreement or any document furnished by the Party in connection with its performance under this Agreement obligate the State to (1) defend or indemnify the Party or any third party, or (2) otherwise be liable for the expenses or reimbursement, including attorneys’ fees, collection costs or other costs of the Party or any third party. 8. Insurance: Before commencing work on this Agreement the Party must provide certificates of insurance to show that the following minimum coverages are in effect. It is the responsibility of the Party to maintain current certificates of insurance on file with the State through the term of this Agreement. No warranty is made that the coverages and limits listed herein are adequate to cover and protect the interests of the Party for the Party’s operations. These are solely minimums that have been established to protect the interests of the State. Workers Compensation: With respect to all operations performed, the Party shall carry workers’ compensation insurance in accordance with the laws of the State of Vermont. Vermont will accept an out-of-state employer's workers’ compensation coverage while operating in Vermont provided that the insurance carrier is licensed to write insurance in Vermont and an amendatory endorsement is added to the policy adding Vermont for coverage purposes. Otherwise, the party shall secure a Vermont workers’ compensation policy, if necessary to comply with Vermont law. General Liability and Property Damage: With respect to all operations performed under this Agreement, the Party shall carry general liability insurance having all major divisions of coverage including, but not limited to: Premises - Operations Products and Completed Operations Personal Injury Liability Contractual Liability The policy shall be on an occurrence form and limits shall not be less than: $1,000,000 Each Occurrence $2,000,000 General Aggregate $1,000,000 Products/Completed Operations Aggregate $1,000,000 Personal & Advertising Injury Automotive Liability: The Party shall carry automotive liability insurance covering all motor vehicles, including hired and non-owned coverage, used in connection with the Agreement. Limits of coverage shall not be less than $500,000 combined single limit. If performance of this Agreement involves construction, or the transport of persons or hazardous materials, limits of coverage shall not be less than $1,000,000 combined single limit. Additional Insured. The General Liability and Property Damage coverages required for performance of this Agreement shall include the State of Vermont and its agencies, departments, officers and employees as Additional Insureds. If performance of this Agreement involves construction, or the transport of persons or hazardous materials, then the required Automotive Liability coverage shall include the State of Vermont and its agencies, departments, officers and employees as Additional Insureds. Coverage shall be primary and non-contributory with any other insurance and self-insurance. Notice of Cancellation or Change. There shall be no cancellation, change, potential exhaustion of aggregate limits or nonrenewal of insurance coverage(s) without thirty (30) days written prior written notice to the State. 9. Reliance by the State on Representations: All payments by the State under this Agreement will be made in reliance upon the accuracy of all representations made by the Party in accordance with this Agreement, including but not limited to bills, invoices, progress reports and other proofs of work. 10. False Claims Act: The Party acknowledges that it is subject to the Vermont False Claims Act as set forth in 32 V.S.A. § 630 et seq. If the Party violates the Vermont False Claims Act it shall be liable to the State for civil penalties, treble damages and the costs of the investigation and prosecution of such violation, including attorney’s fees, except as the same may be reduced by a court of competent jurisdiction. The Party’s liability to the State under the False Claims Act shall not be limited notwithstanding any agreement of the State to otherwise limit Party’s liability. Revised: July 28, 2022 Page 25 of 38 11. Whistleblower Protections: The Party shall not discriminate or retaliate against one of its employees or agents for disclosing information concerning a violation of law, fraud, waste, abuse of authority or acts threatening health or safety, including but not limited to allegations concerning the False Claims Act. Further, the Party shall not require such employees or agents to forego monetary awards as a result of such disclosures, nor should they be required to report misconduct to the Party or its agents prior to reporting to any governmental entity and/or the public. 12. Location of State Data: No State data received, obtained, or generated by the Party in connection with performance under this Agreement shall be processed, transmitted, stored, or transferred by any means outside the continental United States, except with the express written permission of the State. 13. Records Available for Audit: The Party shall maintain all records pertaining to performance under this agreement. “Records” means any written or recorded information, regardless of physical form or characteristics, which is produced or acquired by the Party in the performance of this agreement. Records produced or acquired in a machine readable electronic format shall be maintained in that format. The records described shall be made available at reasonable times during the period of the Agreement and for three years thereafter or for any period required by law for inspection by any authorized representatives of the State or Federal Government. If any litigation, claim, or audit is started before the expiration of the three-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved. 14. Fair Employment Practices and Americans with Disabilities Act: Party agrees to comply with the requirement of 21 V.S.A. Chapter 5, Subchapter 6, relating to fair employment practices, to the full extent applicable. Party shall also ensure, to the full extent required by the Americans with Disabilities Act of 1990, as amended, that qualified individuals with disabilities receive equitable access to the services, programs, and activities provided by the Party under this Agreement. 15. Set Off: The State may set off any sums which the Party owes the State against any sums due the Party under this Agreement; provided, however, that any set off of amounts due the State of Vermont as taxes shall be in accordance with the procedures more specifically provided hereinafter. 16. Taxes Due to the State: A. Party understands and acknowledges responsibility, if applicable, for compliance with State tax laws, including income tax withholding for employees performing services within the State, payment of use tax on property used within the State, corporate and/or personal income tax on income earned within the State. B. Party certifies under the pains and penalties of perjury that, as of the date this Agreement is signed, the Party is in good standing with respect to, or in full compliance with, a plan to pay any and all taxes due the State of Vermont. C. Party understands that final payment under this Agreement may be withheld if the Commissioner of Taxes determines that the Party is not in good standing with respect to or in full compliance with a plan to pay any and all taxes due to the State of Vermont. D. Party also understands the State may set off taxes (and related penalties, interest and fees) due to the State of Vermont, but only if the Party has failed to make an appeal within the time allowed by law, or an appeal has been taken and finally determined and the Party has no further legal recourse to contest the amounts due. 17. Taxation of Purchases: All State purchases must be invoiced tax free. An exemption certificate will be furnished upon request with respect to otherwise taxable items. 18. Child Support: (Only applicable if the Party is a natural person, not a corporation or partnership.) Party states that, as of the date this Agreement is signed, he/she: A. is not under any obligation to pay child support; or B. is under such an obligation and is in good standing with respect to that obligation; or Revised: July 28, 2022 Page 26 of 38 C. has agreed to a payment plan with the Vermont Office of Child Support Services and is in full compliance with that plan. Party makes this statement with regard to support owed to any and all children residing in Vermont. In addition, if the Party is a resident of Vermont, Party makes this statement with regard to support owed to any and all children residing in any other state or territory of the United States. 19. Sub-Agreements: Party shall not assign, subcontract or subgrant the performance of this Agreement or any portion thereof to any other Party without the prior written approval of the State. Party shall be responsible and liable to the State for all acts or omissions of subcontractors and any other person performing work under this Agreement pursuant to an agreement with Party or any subcontractor. In the case this Agreement is a contract with a total cost in excess of $250,000, the Party shall provide to the State a list of all proposed subcontractors and subcontractors’ subcontractors, together with the identity of those subcontractors’ workers compensation insurance providers, and additional required or requested information, as applicable, in accordance with Section 32 of The Vermont Recovery and Reinvestment Act of 2009 (Act No. 54). Party shall include the following provisions of this Attachment C in all subcontracts for work performed solely for the State of Vermont and subcontracts for work performed in the State of Vermont: Section 10 (“False Claims Act”); Section 11 (“Whistleblower Protections”); Section 12 (“Location of State Data”); Section 14 (“Fair Employment Practices and Americans with Disabilities Act”); Section 16 (“Taxes Due the State”); Section 18 (“Child Support”); Section 20 (“No Gifts or Gratuities”); Section 22 (“Certification Regarding Debarment”); Section 30 (“State Facilities”); and Section 32.A (“Certification Regarding Use of State Funds”). 20. No Gifts or Gratuities: Party shall not give title or possession of anything of substantial value (including property, currency, travel and/or education programs) to any officer or employee of the State during the term of this Agreement. 21. Copies: Party shall use reasonable best efforts to ensure that all written reports prepared under this Agreement are printed using both sides of the paper. 22. Certification Regarding Debarment: Party certifies under pains and penalties of perjury that, as of the date that this Agreement is signed, neither Party nor Party’s principals (officers, directors, owners, or partners) are presently debarred, suspended, proposed for debarment, declared ineligible or excluded from participation in Federal programs, or programs supported in whole or in part by Federal funds. Party further certifies under pains and penalties of perjury that, as of the date that this Agreement is signed, Party is not presently debarred, suspended, nor named on the State’s debarment list at: http://bgs.vermont.gov/purchasing/debarment 23. Conflict of Interest: Party shall fully disclose, in writing, any conflicts of interest or potential conflicts of interest. 24. Confidentiality: Party acknowledges and agrees that this Agreement and any and all information obtained by the State from the Party in connection with this Agreement are subject to the State of Vermont Access to Public Records Act, 1 V.S.A. § 315 et seq. 25. Force Majeure: Neither the State nor the Party shall be liable to the other for any failure or delay of performance of any obligations under this Agreement to the extent such failure or delay shall have been wholly or principally caused by acts or events beyond its reasonable control rendering performance illegal or impossible (excluding strikes or lock-outs) (“Force Majeure”). Where Force Majeure is asserted, the nonperforming party must prove that it made all reasonable efforts to remove, eliminate or minimize such cause of delay or damages, diligently pursued performance of its obligations under this Agreement, substantially fulfilled all non-excused obligations, and timely notified the other party of the likelihood or actual occurrence of an event described in this paragraph. Revised: July 28, 2022 Page 27 of 38 26. Marketing: Party shall not refer to the State in any publicity materials, information pamphlets, press releases, research reports, advertising, sales promotions, trade shows, or marketing materials or similar communications to third parties except with the prior written consent of the State. 27. Termination: A. Non-Appropriation: If this Agreement extends into more than one fiscal year of the State (July 1 to June 30), and if appropriations are insufficient to support this Agreement, the State may cancel at the end of the fiscal year, or otherwise upon the expiration of existing appropriation authority. In the case that this Agreement is a Grant that is funded in whole or in part by Federal funds, and in the event Federal funds become unavailable or reduced, the State may suspend or cancel this Grant immediately, and the State shall have no obligation to pay Subrecipient from State revenues. B. Termination for Cause: Either party may terminate this Agreement if a party materially breaches its obligations under this Agreement, and such breach is not cured within thirty (30) days after delivery of the non-breaching party’s notice or such longer time as the non-breaching party may specify in the notice. C. Termination Assistance: Upon nearing the end of the final term or termination of this Agreement, without respect to cause, the Party shall take all reasonable and prudent measures to facilitate any transition required by the State. All State property, tangible and intangible, shall be returned to the State upon demand at no additional cost to the State in a format acceptable to the State. 28. Continuity of Performance: In the event of a dispute between the Party and the State, each party will continue to perform its obligations under this Agreement during the resolution of the dispute until this Agreement is terminated in accordance with its terms. 29. No Implied Waiver of Remedies: Either party’s delay or failure to exercise any right, power or remedy under this Agreement shall not impair any such right, power or remedy, or be construed as a waiver of any such right, power or remedy. All waivers must be in writing. 30. State Facilities: If the State makes space available to the Party in any State facility during the term of this Agreement for purposes of the Party’s performance under this Agreement, the Party shall only use the space in accordance with all policies and procedures governing access to and use of State facilities which shall be made available upon request. State facilities will be made available to Party on an “AS IS, WHERE IS” basis, with no warranties whatsoever. 31. Requirements Pertaining Only to Federal Grants and Subrecipient Agreements: If this Agreement is a grant that is funded in whole or in part by Federal funds: A. Requirement to Have a Single Audit: The Subrecipient will complete the Subrecipient Annual Report annually within 45 days after its fiscal year end, informing the State of Vermont whether or not a Single Audit is required for the prior fiscal year. If a Single Audit is required, the Subrecipient will submit a copy of the audit report to the granting Party within 9 months. If a single audit is not required, only the Subrecipient Annual Report is required. For fiscal years ending before December 25, 2015, a Single Audit is required if the subrecipient expends $500,000 or more in Federal assistance during its fiscal year and must be conducted in accordance with OMB Circular A133. For fiscal years ending on or after December 25, 2015, a Single Audit is required if the subrecipient expends $750,000 or more in Federal assistance during its fiscal year and must be conducted in accordance with 2 CFR Chapter I, Chapter II, Part 200, Subpart F. The Subrecipient Annual Report is required to be submitted within 45 days, whether or not a Single Audit is required. B. Internal Controls: In accordance with 2 CFR Part II, §200.303, the Party must establish and maintain effective internal control over the Federal award to provide reasonable assurance that the Party is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Revised: July 28, 2022 Page 28 of 38 Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). C. Mandatory Disclosures: In accordance with 2 CFR Part II, §200.113, Party must disclose, in a timely manner, in writing to the State, all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. Failure to make required disclosures may result in the imposition of sanctions which may include disallowance of costs incurred, withholding of payments, termination of the Agreement, suspension/debarment, etc. 32. Requirements Pertaining Only to State-Funded Grants: A. Certification Regarding Use of State Funds: If Party is an employer and this Agreement is a State-funded grant in excess of $1,001, Party certifies that none of these State funds will be used to interfere with or restrain the exercise of Party’s employee’s rights with respect to unionization. B. Good Standing Certification (Act 154 of 2016): If this Agreement is a State-funded grant, Party hereby represents: (i) that it has signed and provided to the State the form prescribed by the Secretary of Administration for purposes of certifying that it is in good standing (as provided in Section 13(a)(2) of Act 154) with the Agency of Natural Resources and the Agency of Agriculture, Food and Markets, or otherwise explaining the circumstances surrounding the inability to so certify, and (ii) that it will comply with the requirements stated therein. (End of Standard Provisions) Revised: July 28, 2022 Page 29 of 38 ATTACHMENT D INFORMATION TECHNOLOGY PROFESSIONAL SERVICES TERMS AND CONDITIONS (rev. 07/14/2022) 1. OWNERSHIP AND LICENSE IN DELIVERABLES 1.1 Contractor Intellectual Property. Contractor shall retain all right, title and interest in and to any work, ideas, inventions, discoveries, tools, methodology, computer programs, processes and improvements and any other intellectual property, tangible or intangible, that has been created by Contractor prior to entering into this Contract (“Contractor Intellectual Property”). Should the State require a license for the use of Contractor Intellectual Property in connection with the development or use of the items that Contractor is required to deliver to the State under this Contract, including Work Product (“Deliverables”), the Contractor shall grant the State a royalty-free license for such development and use. For the avoidance of doubt, Work Product shall not be deemed to include Contractor Intellectual Property, provided the State shall be granted an irrevocable, perpetual, non-exclusive royalty-free license to use any such Contractor Intellectual Property that is incorporated into Work Product. 1.2 State Intellectual Property. The State shall retain all right, title and interest in and to (i) all content and all property, data and information furnished by or on behalf of the State or any agency, commission or board thereof, and to all information that is created under this Contract, including, but not limited to, all data that is generated under this Contract as a result of the use by Contractor, the State or any third party of any technology systems or knowledge bases that are developed for the State and used by Contractor hereunder, and all other rights, tangible or intangible; and (ii) all State trademarks, trade names, logos and other State identifiers, Internet uniform resource locators, State user name or names, Internet addresses and e-mail addresses obtained or developed pursuant to this Contract (collectively, “State Intellectual Property”). Contractor may not use State Intellectual Property for any purpose other than as specified in this Contract. Upon expiration or termination of this Contract, Contractor shall return or destroy all State Intellectual Property and all copies thereof, and Contractor shall have no further right or license to such State Intellectual Property. Contractor acquires no rights or licenses, including, without limitation, intellectual property rights or licenses, to use State Intellectual Property for its own purposes. In no event shall the Contractor claim any security interest in State Intellectual Property. 1.3 Work Product. All Work Product shall belong exclusively to the State, with the State having the sole and exclusive right to apply for, obtain, register, hold and renew, in its own name and/or for its own benefit, all patents and copyrights, and all applications and registrations, renewals and continuations thereof and/or any and all other appropriate protection. To the extent exclusive title and/or complete and exclusive ownership rights in and to any Work Product may not originally vest in the State by operation of law or otherwise as contemplated hereunder, Contractor shall immediately upon request, unconditionally and irrevocably assign, transfer and convey to the State all right, title and interest therein. “Work Product” means any tangible or intangible ideas, inventions, improvements, modifications, discoveries, development, customization, configuration, methodologies or processes, designs, models, drawings, photographs, reports, formulas, algorithms, patterns, devices, compilations, databases, computer programs, work of authorship, specifications, operating instructions, procedures manuals or other documentation, technique, know-how, secret, or intellectual property right whatsoever or any interest therein (whether patentable or not patentable or registerable under copyright or similar statutes or subject to analogous protection), that is specifically made, conceived, discovered or reduced to practice by Contractor, either solely or jointly with others, pursuant to this Contract. Work Product does not include Contractor Intellectual Property or third party intellectual property. To the extent delivered under this Contract, upon full payment to Contractor in accordance with Attachment B, and subject to the terms and conditions contained herein, Contractor hereby (i) assigns to State all rights in and to all Revised: July 28, 2022 Page 30 of 38 Deliverables, except to the extent they include any Contractor Intellectual Property; and (ii) grants to State a perpetual, non-exclusive, irrevocable, royalty-free license to use for State’s internal business purposes, any Contractor Intellectual Property included in the Deliverables in connection with its use of the Deliverables and, subject to the State’s obligations with respect to Confidential Information, authorize others to do the same on the State’s behalf. Except for the foregoing license grant, Contractor or its licensors retain all rights in and to all Contractor Intellectual Property. The Contractor shall not sell or copyright a Deliverable without explicit permission from the State. If the Contractor is operating a system or application on behalf of the State of Vermont, then the Contractor shall not make information entered into the system or application available for uses by any other party than the State of Vermont, without prior authorization by the State. Nothing herein shall entitle the State to pre-existing Contractor Intellectual Property or Contractor Intellectual Property developed outside of this Contract with no assistance from State. 2. CONFIDENTIALITY AND NON-DISCLOSURE; SECURITY BREACH REPORTING 2.1 For purposes of this Contract, confidential information will not include information or material which (a) enters the public domain (other than as a result of a breach of this Contract); (b) was in the receiving party’s possession prior to its receipt from the disclosing party; (c) is independently developed by the receiving party without the use of confidential information; (d) is obtained by the receiving party from a third party under no obligation of confidentiality to the disclosing party; or (e) is not exempt from disclosure under applicable State law. 2.2 Confidentiality of Contractor Information. The Contractor acknowledges and agrees that this Contract and any and all Contractor information obtained by the State in connection with this Contract are subject to the State of Vermont Access to Public Records Act, 1 V.S.A. § 315 et seq. The State will not disclose information for which a reasonable claim of exemption can be made pursuant to 1 V.S.A. § 317(c), including, but not limited to, trade secrets, proprietary information or financial information, including any formulae, plan, pattern, process, tool, mechanism, compound, procedure, production data, or compilation of information which is not patented, which is known only to the Contractor, and which gives the Contractor an opportunity to obtain business advantage over competitors who do not know it or use it. The State shall immediately notify Contractor of any request made under the Access to Public Records Act, or any request or demand by any court, governmental agency or other person asserting a demand or request for Contractor information. Contractor may, in its discretion, seek an appropriate protective order, or otherwise defend any right it may have to maintain the confidentiality of such information under applicable State law within three business days of the State’s receipt of any such request. Contractor agrees that it will not make any claim against the State if the State makes available to the public any information in accordance with the Access to Public Records Act or in response to a binding order from a court or governmental body or agency compelling its production. Contractor shall indemnify the State for any costs or expenses incurred by the State, including, but not limited to, attorneys’ fees awarded in accordance with 1 V.S.A. § 320, in connection with any action brought in connection with Contractor’s attempts to prevent or unreasonably delay public disclosure of Contractor’s information if a final decision of a court of competent jurisdiction determines that the State improperly withheld such information and that the improper withholding was based on Contractor’s attempts to prevent public disclosure of Contractor’s information. The State agrees that (a) it will use the Contractor information only as may be necessary in the course of performing duties, receiving services or exercising rights under this Contract; (b) it will provide at a minimum the same care to avoid disclosure or unauthorized use of Contractor information as it provides to protect its own similar confidential and proprietary information; (c) except as required by the Access to Records Act, it will not disclose such information orally or in writing to any third party unless that third party is subject to a written confidentiality agreement that contains restrictions and safeguards at least as restrictive as those contained in this Contract; (d) it will take all reasonable precautions to protect the Contractor’s information; and (e) it will not otherwise appropriate such information to its own use or to the use of any other person or entity. Revised: July 28, 2022 Page 31 of 38 Contractor may affix an appropriate legend to Contractor information that is provided under this Contract to reflect the Contractor’s determination that any such information is a trade secret, proprietary information or financial information at time of delivery or disclosure. 2.3 Confidentiality of State Information. In performance of this Contract, and any exhibit or schedule hereunder, the Party acknowledges that certain State Data (as defined below), to which the Contractor may have access may contain individual federal tax information, personal protected health information and other individually identifiable information protected by State or federal law or otherwise exempt from disclosure under the State of Vermont Access to Public Records Act, 1 V.S.A. § 315 et seq (“State Data”). [In addition to the provisions of this Section, the Contractor shall comply with the requirements set forth in the State’s HIPAA Business Associate Agreement attached hereto as Attachment __]. Before receiving or controlling State Data, the Contractor will have an information security policy that protects its systems and processes and media that may contain State Data from internal and external security threats and State Data from unauthorized disclosure, and will have provided a copy of such policy to the State. State Data shall not be stored, accessed from, or transferred to any location outside the United States. The Contractor agrees that (a) it will use the State Data only as may be necessary in the course of performing duties or exercising rights under this Contract; (b) it will provide at a minimum the same care to avoid disclosure or unauthorized use of State Data as it provides to protect its own similar confidential and proprietary information; (c) it will not publish, reproduce, or otherwise divulge any State Data in whole or in part, in any manner or form orally or in writing to any third party unless it has received written approval from the State and that third party is subject to a written confidentiality agreement that contains restrictions and safeguards at least as restrictive as those contained in this Contract; (d) it will take all reasonable precautions to protect the State’s information; and (e) it will not otherwise appropriate such information to its own use or to the use of any other person or entity. Contractor will take reasonable measures as are necessary to restrict access to State Data in the Contractor’s possession to only those employees on its staff who must have the information on a “need to know” basis. The Contractor shall not retain any State Data except to the extent required to perform the services under this Contract. Contractor shall not access State user accounts or State Data, except in the course of data center operations, response to service or technical issues, as required by the express terms of this Contract, or at State’s written request. Contractor may not share State Data with its parent company or other affiliate without State’s express written consent. The Contractor shall promptly notify the State of any request or demand by any court, governmental agency or other person asserting a demand or request for State Data to which the Contractor or any third party hosting service of the Contractor may have access, so that the State may seek an appropriate protective order. 3. SECURITY OF STATE INFORMATION. 3.1 Security Standards. To the extent Contractor has access to, processes, handles, collects, transmits, stores or otherwise deals with State Data, the Contractor represents and warrants that it has implemented and it shall maintain during the term of this Contract the highest industry standard administrative, technical, and physical safeguards and controls consistent with NIST Special Publication 800-53 (version 4 or higher) and Federal Information Processing Standards Publication 200 and designed to (i) ensure the security and confidentiality of State Data; (ii) protect against any anticipated security threats or hazards to the security or integrity of the State Data; and (iii) protect against unauthorized access to or use of State Data. Such measures shall include at a minimum: (1) access controls on information systems, including controls to authenticate and permit access to State Data only to authorized individuals and controls to prevent the Contractor employees from providing State Data to unauthorized individuals who may Revised: July 28, 2022 Page 32 of 38 seek to obtain this information (whether through fraudulent means or otherwise); (2) industry-standard firewall protection; (3) encryption of electronic State Data while in transit from the Contractor networks to external networks; (4) measures to store in a secure fashion all State Data which shall include multiple levels of authentication; (5) dual control procedures, segregation of duties, and pre-employment criminal background checks for employees with responsibilities for or access to State Data; (6) measures to ensure that the State Data shall not be altered or corrupted without the prior written consent of the State; (7) measures to protect against destruction, loss or damage of State Data due to potential environmental hazards, such as fire and water damage; (8) staff training to implement the information security measures; and (9) monitoring of the security of any portions of the Contractor systems that are used in the provision of the services against intrusion on a twenty-four (24) hour a day basis. 3.2 Security Breach Notice and Reporting. The Contractor shall have policies and procedures in place for the effective management of Security Breaches, as defined below, which shall be made