State Government Classification and Compensation Modernization

1 Department of Buildings and General Services Office of Purchasing and Contracting 133 State Street, 5th Floor | Montpelier VT 05633-8000 802-828-2211 phone |802-828-2222 fax http://bgs.vermont.gov/purchasing SEALED BID REQUEST FOR PROPOSAL Department of Human Resources (DHR) Classification Division Full Modernization of the Vermont State Government Classification and Compensation System ISSUE DATE January 16, 2024 QUESTIONS DUE January 29, 2024– 3:00 PM (EST) RFP RESPONSES DUE BY February 20, 2024 – 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 WEBPAGEFOR ANY AND ALL NOTIFICATIONS, RELEASES AND ADDENDUMS ASSOCIATED WITH THIS RFP. STATE CONTACT: KYLE EMERSON E-MAIL: kyle.emerson@vermont.gov USE EMAIL SUBJECT LINE: CLASSIFICATION AND COMPENSATION http://bgs.vermont.gov/purchasing http://www.bgs.state.vt.us/pca/bids/bids.php mailto:kyle.emerson@vermont.gov Page 2 of 29 1. OVERVIEW: Through this Request for Proposal (RFP) the Agency of Administration/Human Resources (hereinafter the “State”) is seeking qualified consultants to provide professional services to modernize the Classification and Compensation systems of the Executive Branch of the State of Vermont, to provide competitive employee compensation based on job content evaluation, internal equity, and external competitiveness in order to recruit, retain, reward and motivate and engaged workforce for the purpose of providing efficient and effective services to Vermonters, while being fiscally responsible and financially sustainable. Note: The State will be involved in several large complex projects that will result in limited staff resources for this project. Project Goals: 1. Classification: Develop new classification structure based on occupational groups and job families. Develop new job specifications. 2. Classification: Implement a modern approach to work measurement/position leveling 3. Compensation: Develop a modern compensation structure and pay which considers internal equity and external competitiveness. 4. Administration: Implement the administration of the Classification and Compensation Plan according to best practices, with appropriate collective bargaining agreement, statutory and policy changes, and staffed appropriately. BACKGROUND: Vermont statute requires the Department of Human Resources (DHR) to adopt a “uniform and equitable plan of classification for each position in state service...” (3 V.S.A. § 310(a). https://legislature.vermont.gov/statutes/section/03/013/00310. The broad aim of classification or job evaluation is to maintain comparable pay grade assignments for comparable work across all agency lines. DHR uses the Willis Position Evaluation Method/Tool, “Willis,” to rate all classified jobs. It is a common misconception within the Vermont Legislature and Executive Branch that Willis IS the classification system. However, this is not the case. The “classification system” is a blend of both Willis and the collective bargaining agreements (CBAs), as described below. DHR has been unable to develop a proactive process for managing the classification system due to the reactive nature of the current system, leading to a lack of controls for managing the workload. Vermont currently has approximately 1,800 active classified job titles, and 7,200 classified employees. While some job titles have been essentially unchanged since 1986 when the current classification system (Willis in combination with terms of the CBAs) was implemented, there is a regular but unpredictable volume of job titles reviewed each year. The average number of classification reviews performed each year is 700 to 1,000, with an impact currently on over 1,200 positions. There are currently three full-time classification analysts managing this workload. The State of Vermont uses the Willis point factor system to rate and compare classified jobs within the Executive Branch. The Collective Bargaining Agreements state that a point-factor system will be used for job classification/evaluation. DHR maintains the classification system, and classification reviews are conducted either independently by one of the three DHR Classification Analysts or by one of eight classification committees which include and are supported by one of the three DHR Classification Analysts. Limited classification analyst resources will require considerable reliance on/ and collaboration with vendor resources to achieve objectives throughout this project. When the job evaluation process is complete, and if a new higher pay grade is assigned, the incumbent employees in the job (either a single position or an entire class) will receive a pay adjustment because of an increase in pay grade. Pay adjustments are governed by the pertinent collective bargaining unit agreement https://humanresources.vermont.gov/labor-relations/labor-relations-policies/collective-bargaining-agreements (CBA) The CBAs require pay adjustments for a 1 or 2 pay grade increase to be no less than 5% and for adjustments of 3 or more pay grades to be no less than 8%. Pay adjustments resulting from classification actions are implemented retroactively, to the date the DHR Classification Division received the request for classification review. Pursuant to the CBAs, employees subject to a classification action have the right to request an informal meeting, and if the position was determined to be properly classified or was reallocated to a lower pay grade, the employee can grieve the classification decision. Employees who are ascertained to be properly classified following a grievance hearing can appeal to the Vermont Labor Relations Board. https://legislature.vermont.gov/statutes/section/03/013/00310 Page 3 of 29 The CBAs allow employees to submit requests for a “single position classification review request” for their individual position at any time, and as often as they wish. Management may also submit requests for classification review at any time for any single-position job class, filled or vacant, and may also submit as often as they wish. Only management, DHR, and the unions (Vermont State Employees Association (VSEA) and the Vermont Troopers Association (VTA)) may initiate requests for classification review of multiple position job classes, referred to as a “class action request.” The request forms used for single and multiple position reviews are known as “RFRs” (Request for Review). Pursuant to the CBAs, class action requests are submitted only during July and August of each year, and classification analysts must complete the evaluations by December 31. Employees, management, VSEA, or VTA are not required to provide DHR with advance notice or plans to submit single position classification review requests or class action requests. A pre-approval process is not required before initiating such requests, and there is no mechanism in place for addressing the budget impact prior to initiating these requests. The only budget oversight required is if a class action request has an impact of 1% or greater on the submitting department’s salary and wage portion of the personal services budget (per the CBAs). The pay structure/compensation system is almost entirely driven by the CBA. There is a single pay schedule used for most jobs (a separate pay schedule is used for the Vermont State Police (VSP). The pay structure is a grade and step system with 28 pay grades and 15 steps. The average range width is an average of approximately 55%. Structural changes to the compensation structure are not made. General increases (across the board increases) that are collectively bargained and not market based increase each cell in the pay chart, typically annually. Pay movement is primarily via step increase which is dictated by a time in grade plan outlined in the CBA, which ranges from an average of approximately 4.5% to 2.7% depending on the grade and step. It takes 24.5 years to move through the range, except for the VSP. There is no pay for performance program. Currently compensation is staffed by approximately 0.5 FTE and is organizationally separate from the classification division. 1.2 CONTRACT PERIOD: Contracts arising from this RFP will be for a period of two (2) years with an option to renew for up to two (2) additional twelve-month periods. The State anticipates the start date for such contract(s) will be June 11, 2024. Action Due Date Issue Date January 16, 2024 Questions Due January 29, 2024 – 3:00 PM EST Proposal Due February 20, 2024 – 4:30 PM EST Finalists Presentation, if necessary March 05, 2024 Vendor Selected March 26, 2024 First Draft Contract Presented by the State April 9, 2024 Final Draft of Contract Completed April 23, 2024 Contract Completed May 16, 2024 Contract Effective Date June 11, 2024 The above timetable may be changed or modified by the State at its discretion. 1.3 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. 1.4 QUESTION AND ANSWER PERIOD: Any bidder requiring clarification of any section of this RFP or wishing to comment on any requirement of the RFP must submit specific questions in writing no later than the deadline for question indicated on the first page of this RFP. Questions may be e-mailed to the point of contact on the front page of this RFP. Questions or comments not raised in writing on or before the last Page 4 of 29 day of the question period are thereafter waived. At the close of the question period a copy of all questions or comments and the State's responses will be posted on the State’s web site http://www.bgs.state.vt.us/pca/bids/bids.php . Every effort will be made to post this information as soon as possible after the question period ends, contingent on the number and complexity of the questions. 1.5 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. 1.6 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. DETAILED REQUIREMENTS/DESIRED OUTCOMES: 2.1 The State is interested in obtaining bids to meet the following business needs: Develop a modern classification and compensation system for the Executive Branch to replace the current system, which is outdated, cumbersome, and fiscally unpredictable. The system will support the goals of fiscal predictability and financial sustainability, pay equity including in relation to gender, race and ethnicity, and competitiveness in recruitment and retention of a high-quality workforce. The system will address a variety of issues including, but not limited to the following. (See also Section 6.4, Attachment A - Statement of Work): 1. Assess configuration of the Department of Human Resources’ staff resources/organizational structure and recommend changes to appropriate staff classification and compensation work. 2. Articulate and adopt a compensation philosophy. No formal compensation philosophy is currently utilized. 3. Consolidate the current 1,800 job classes into appropriate groupings, while considering career progression within a classification structure. 4. Address issues of how pay moves to ensure State of Vermont (SOV) compensates employees using a modern compensation philosophy and system instead of using classification to move pay. 5. Provide less formulaic mechanisms for automatic pay movement with a more modern approach, combined with maintaining focus on structure and workforce flexibility to allow for movement of position (and people) in an efficient, equitable, and productive manner. 6. Integrate market analysis into compensation, as opposed to ad hoc approach to market-related determinations. 7. Ensure there are mechanisms in place to assess pay equity. 8. Make the forms used for position review more simple, transparent, and easier to understand than the current “Request for Review” form that the State uses (Vermont’s version of a position description form). 9. Explore multiple pay structures to consider fundamental differences among major occupational groups. (e.g. health care workers using a different structure than administrative staff), compared to the current one-size-fits- all approach. 10. Utilize pay for performance as part of pay movement, to the extent possible. 11. Reduce the number of current job evaluation committees. 12. Create efficient appeal/grievance process. 13. Develop a classification and compensation system that is fiscally predictable from year to year, for budget purposes, and financially sustainable. 14. Assess configuration of the Department of Human Resources’ staff resources/organizational structure and recommend changes to appropriate staff classification and compensation work. http://www.bgs.state.vt.us/pca/bids/bids.php http://www.bgs.state.vt.us/pca/bids/bids.php http://www.bgs.state.vt.us/pca/bids/bids.php Page 5 of 29 2.2 The State of Vermont seeks to achieve the following Business Value(s): 2.2.1 Fiscal Predictability: Over the lifecycle of the modern Classification and Compensation Plan, the total annual cost of salaries will be predictable to better budget pay movement. 2.2.2 Pay Equity: The modern Classification and Compensation Plan will include a lens on pay equity in relation to gender, race and ethnicity. 2.2.3 Compliance: The modern Classification and Compensation Plan will be in compliance with the new Compensation Philosophy 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. If applicable, all equipment pricing is to include F.O.B. delivery to the ordering facility. No request for extra delivery cost will be honored. All equipment shall be delivered assembled, serviced, and ready for immediate use, unless otherwise requested by the State. 3.1.1 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. 3.1.2 Cooperative Agreements. Bidders that have been awarded similar contracts through a competitive bidding process with another state and/or cooperative are welcome to submit the pricing in response to this solicitation. 3.1.3. Retainage. At the discretion of the State, a contract resulting from this RFP may provide that the State withhold a percentage of the total amount payable for some or all deliverables, such retainage to be payable upon satisfactory completion and State acceptance in accordance with the terms and conditions of the contract. 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. 3.2.1 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. 3.2.2 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 WORKER CLASSIFICATION COMPLIANCE REQUIREMENTS: In accordance with Section 32 of The Vermont Recovery and Reinvestment Act of 2009 (Act No. 54), Bidders must comply with the following provisions and requirements. 3.3.1 Self-Reporting: For bid amounts exceeding $250,000.00, Bidder shall complete the appropriate section in the attached Certificate of Compliance for purposes of self-reporting information relating to past violations, convictions, suspensions, and any other information related to past performance relative to coding and classification of workers. The State is requiring information on any violations that occurred in the previous 12 months. Page 6 of 29 3.3.2 Subcontractor Reporting: For bid amounts exceeding $250,000.00, Bidders are hereby notified that upon award of contract, and prior to contract execution, the State shall be provided with 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). This requirement does not apply to subcontractors 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 available online at http://bgs.vermont.gov/purchasing- contracting/forms. The subcontractor reporting form is not required to be submitted with the bid response. 3.4. EXECUTIVE ORDER 05-16: CLIMATE CHANGE CONSIDERATIONS IN STATE PROCUREMENTS: For bid amounts exceeding $25,000.00 Bidders are requested to complete the Climate Change Considerations in State Procurements Certification, which is included in the Certificate of Compliance for this RFP. After consideration of all relevant factors, a bidder that demonstrates business practices that promote clean energy and address climate change as identified in the Certification, shall be given favorable consideration in the competitive bidding process. Such favorable consideration shall be consistent with and not supersede any preference given to resident bidders of the State and/or products raised or manufactured in the State, as explained in the Method of Award section. But such favorable consideration shall not be employed if prohibited by law or other relevant authority or agreement. 3.5. 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 if such award is deemed to be in the best interest of the State. All other considerations being equal, preference will be given first to resident bidders of the state and/or to products raised or manufactured in the state, and then to bidders who have practices that promote clean energy and address climate change, as identified in the applicable Certificate of Compliance. 3.5.1 Evaluation Criteria: Consideration shall be given to the Bidder’s project approach and methodology, qualifications and experience, ability to provide the services within the defined timeline, cost, and/or success in completing similar projects, as applicable, and to the extent specified below. 3.6. 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. 3.7. COST OF PREPARATION: Bidder shall be solely responsible for all expenses incurred in the preparation of a response to this RFP and shall be responsible for all expenses associated with any presentations or demonstrations associated with this request and/or any proposals made. Max Points Quality of Proposal, project approach relative to the requirements of this RFP 30 Price 20 Qualifications and Experience with Classification and Compensation System redesign/implementations, especially in state government, or with a public-sector focus. Record of similar projects. Experience with pay equity analysis in system design. 30 Availability (accessibility to contractor especially post implementation) and capacity (proposed staffing pre and post implementation) 10 Proposed Schedule 10 Page 7 of 29 3.8. CONTRACT TERMS: The selected bidder(s) will be expected to sign a contract with the State, including the Standard Contract Form and Attachment C as attached to this RFP for reference. 3.8.1 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 http://www.sec.state.vt.us/tutor/dobiz/forms/fcregist.htm and must obtain a Contractor’s Business Account Number issued by the Vermont Department of Taxes http://tax.vermont.gov/ . 3.8.2 The contract will obligate the bidder to provide the services and/or products identified in its bid, at the prices listed. 3.8.3 Payment Terms. Percentage discounts may be offered for prompt payments of invoices; however, such discounts must be in effect for a period of 30 days or more in order to be considered in making awards. 3.8.4 Quality. If applicable, all products provided under a contract with the State will be new and unused, unless otherwise stated. Factory seconds or remanufactured products will not be accepted unless specifically requested by the purchasing agency. All products provided by the contractor must meet all federal, state, and local standards for quality and safety requirements. Products not meeting these standards will be deemed unacceptable and returned to the contractor for credit at no charge to the State. 4. CONTENT AND FORMAT OF RESPONSES: The content and format requirements listed below are the minimum requirements for State evaluation. These requirements are not intended to limit the content of a Bidder’s proposal. Bidders may include additional information or offer alternative solutions for the State’s consideration. However, the State discourages overly lengthy and costly proposals, and Bidders are advised to include only such information in their response as may be relevant to the requirements of this RFP. 4.1 The bid should include a Cover Letter and Technical Response and Price Schedule. 4.2 COVER LETTER: 4.2.1 Confidentiality. The State is not seeking confidential information of bidders, nor does it believe that such information is necessary to respond to this RFP. Bidders are thus strongly discouraged from including confidential information in their proposals. To the extent your bid contains information you consider to be proprietary and confidential, you must comply with the following requirements concerning the contents of your cover letter and the submission of a redacted copy of your bid (or affected portions thereof). 4.2.2 All responses to this RFP will become part of the contract file and will become a matter of public record under the State’s Public Records Act, 1 V.S.A. § 315 et seq. (the “Public Records Act”). If your response must include material that you consider to be proprietary and confidential under the Public Records Act, your cover letter must clearly identify each page or section of your response that you consider proprietary and confidential. Your cover letter must also include 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, you must include a redacted copy of your response for portions that are considered 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 may your entire response be marked confidential, and the State reserves the right to disqualify responses so marked. 4.2.3 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. http://www.sec.state.vt.us/tutor/dobiz/forms/fcregist.htm http://tax.vermont.gov/ Page 8 of 29 4.3 TECHNICAL RESPONSE. In response to this RFP, a Bidder shall: 4.3.1 Provide details concerning your form of business organization, company size and resources. 43.2 Describe your capabilities and particular experience relevant to the RFP requirements. 4.3.3 Identify all current or past State projects. 4.3.4 Identify the names of all subcontractors you intend to use, the portions of the work the subcontractors will perform, and address the background and experience of the subcontractor(s), as per RFP section 3.3.2 above. 4.4. REFERENCES. Provide the names, addresses, and phone numbers of at least three companies with whom you have transacted similar business in the last 12 months. You must include contact names who can talk knowledgeably about performance. 4.5. REPORTING REQUIREMENTS: Provide a sample of any reporting documentation that may be applicable to the Detailed Requirements of this RFP. 4.6. PRICE SCHEDULE: Bidders shall submit their pricing information in the Price Schedule attached to the RFP. 4.7. CERTIFICATE OF COMPLIANCE: This form must be completed and submitted as part of the response for the proposal to be considered valid. 5. SUBMISSION INSTRUCTIONS: 5.1 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. 5.1.1 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. 5.1.2 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. 5.2 BID DELIVERY INSTRUCTIONS: 5.2.1 ELECTRONIC: Bids must be submitted electronically via email submission to SOV.ThePathForward@vermont.gov. USE EMAIL SUBJECT LINE: CLASSIFICATION AND COMPENSATION Bids must consist of a single email with a single, digitally searchable PDF attachment containing all components of the bid. Multiple emails and/or multiple attachments will not be accepted. 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 the subject line to clearly describe the subject name of this RFP. 6. ATTACHMENTS: 6.1 Certificate of Compliance 6.2 Price Schedule 6.3 Worker Classification Compliance Requirement; Subcontractor Reporting Form 6.4 Standard State Contract with its associated attachments https://bgs.vermont.gov/content/opc-bid-tabulation-sheets-0 mailto:SOV.ThePathForward@vermont.gov Page 9 of 29 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. Page 10 of 29 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: _____________________________________________________________________________ ____________________________________________________________________________ _____________________________________________________________________________ Page 11 of 29 RFP/PROJECT: DATE: Page 3 of 3 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 Page 12 of 29 PRICE SCHEDULE A. Fixed Price Deliverables: Deliverable Description Fixed Price Deliverable 1 Process and implementation $ Deliverable 2 Occupational Groups & Job Families $ Deliverable 3 Assign positions to new class structure $ I. Job Documentation and Classification Total $ Deliverable 1 Planning $ Deliverable 2 Project Design $ Deliverable 3 Job Evaluation $ Deliverable 4 Statutory, policy, CBA assistance $ II. Work Measurement Methodology & Process Total $ Deliverable 1 Grade Levels $ Deliverable 2 Statutory, policy, CBA assistance $ III. Grade Structure Total $ Deliverable 1 Define market(s) $ Deliverable 2 Collect/analysis $ Deliverable 3 Salary Structure $ Deliverable 4 Statutory, policy, CBA assistance $ IV. Salary Structure Total $ Deliverable 1 Pay movement factors $ Deliverable 2 Statutory, policy, CBA assistance $ V. Pay Movement Mechanics Total $ Deliverable 1 Plan administration $ Deliverable 2 Change Management $ Deliverable 3 Statutory, policy, CBA assistance VI. Plan Administration Total $ Deliverable 1 Bi-weekly status reports $ Contract Administration Total $ Total $ Name of Bidder: Signature of Bidder: Date: Page 13 of 29 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 Page 14 of 29 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 12/07/2023) Attachment D - Other State Provisions (if applicable) 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 (if applicable) (3) Attachment C (Standard Contract Provisions for Contracts and Grants) (4) Attachment A (5) Attachment B Page 15 of 29 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: Page 16 of 29 ATTACHMENT A - STATEMENT OF WORK Needs Statement, Project Goals and Objectives of the Agreement/Deliverables Needs statement (Philosophy): Seeking qualified consultants to provide professional services to modernize the Classification and Compensation systems of the Executive Branch of the State of Vermont, to provide competitive employee compensation based on job content evaluation, internal equity, and external competitiveness in order to recruit, retain, reward and motivate and engaged workforce for the purpose of providing efficient and effective services to Vermonters, while being fiscally responsible and financially sustainable. Project Goals: A. Classification: Develop new classification structure based on occupational groups and job families. Develop new job specifications. B. Classification: Implement modern approach to work measurement/position leveling C. Compensation: Develop a modern compensation structure and pay which considers internal equity and external competitiveness. D. Administration: Implement the administration of the Classification and Compensation plans according to best practices, with appropriate collective bargaining agreement, statutory and policy changes, and staffed appropriately. Objectives of the Agreement/Deliverables Develop a work plan that follows a modern classification and compensation plan to ensure pay moves using the right tools. The final plan should have six separate components and processes that inter-relate to each other and include policies, procedures, recommended changes to collective bargaining agreements and recommended statutory changes in order to implement the plan. The components include: • Compensation Philosophy • Job Documentation and Classification – the description of work • Work Measurement/Job Evaluation – The measurement of work, and associated grade structure. • Pricing – Pay Structure • Pay Delivery – how pay moves. • Plan Administration I. Job Documentation and Classification (4-6 months) Job documentation and classification is the basis of the classification structure and extent to which employees are appropriately classified. Task: Develop and implement the “description of work” into a format that accurately and succinctly describes current job content, and groups like-content into a job classification. Develop the structure by which position classification decisions are made. Limited state personnel resources are available to assist with this task. In regard to staffing this task, DHR does not have sufficient staff resources to substantially contribute to the effort and will rely on the vendor to provide appropriate resources to accomplish the task. 1. Develop a process and implement a reduction in the number of job classifications. This is to be conducted primarily by the contractor. One approach could be to slot existing Page 17 of 29 classifications into a standard classification structure. 2. Develop the basis for differentiating Occupational Groups and Job Families a. Develop levels of work in Job Families b. Develop Role Summaries (vocational, professional / supervisory/manager) c. Develop new Job Specifications 3. Assign positions to new classification structure. Note: Current, existing job classifications will not change until final implementation (step VII, below). Review and recommend changes that will be required associated with finalizing this task. See Statutory, Policy and CBA Appendix II. Work Measurement Methodology and Process (8-12 months) Upon completion of Classification and Job Documentation component, implement modern and equitable approach to work measurement/position leveling. Task: Develop and Deliver a methodology and process that is objective, equitable, and defensible as how to differentiate job content and provide a means by which to establish internal relativity of jobs across the organization. Deliverable 1: Planning • In consultation with the state of Vermont this phase should include but not be limited to, identify needs of work measurement methodology and process, define and agree on approach, develop project planning, define roles of team members, identify stakeholders and how they will be involved in this phase of the project, governance, communicating plan for the new evaluation approach. Deliverable 2: Project Design • This phase should include but is not limited to job content approach and analysis, document process, job titling criteria, benchmarks, governance, decision rights and responsibilities, exceptions, communication approach. Deliverable 3: Job Evaluation • This phase should include but is not limited to job documentation and organization charts, data collection, slotting and calibration guidelines, training, evaluating remaining roles, final approvals. Deliverable 4: Review and recommend changes that will be required associated with finalizing this task. See Statutory, Policy and CBA Appendix. III. Grade Structure (1 month) Develop equitable and modern approach to the development of grade structure based on outcome of the work measurement component. Task: Development of grades that are designed to: • reflect differences in job content. • facilitate career progression. Deliverable: 1. Development of a grade structure that reflects the differences in levels of work as identified in the job families and work measurement process and differences in knowledge for most positions in a class. 2. Review and recommend changes necessary associated with the outcome of this phase of the project. See Statutory, Policy and CBA Appendix Page 18 of 29 IV. Salary Structure (3 months) Review salary structures in context of equity and market data and develop new structures or determine the extent to which new salary structures can be developed. Task: The definition of the market(s) and the extent to which compensation decisions are based on base pay or total compensation (base salary and benefits). Develop tool(s) to ensure decisions are fair and equitable. The development of salary structures and pay ranges set pay at a level consistent with SOV’s Compensation Philosophy and the relative market. Deliverable: 1. Definition of the market or markets. 2. Fair and equitable analytical tool(s). 3. Collection and analysis of market data based on the definition of the market (s). 4. Development of salary structure and ranges. 5. Review and recommend changes necessary associated with the outcome of this phase of the project. See Statutory, Policy and CBA Appendix. V. Pay Movement Mechanics (2 months) Guide the development of how pay delivery is set. Task: Articulate the basis by which pay changes for an employee Deliverable 1. Develop the following factors for pay movement and their inter-relationships: a. Bargained pay movement b. Pay for tenure. c. Pay for changes in job content. d. Pay for skill and education. e. Pay for performance. f. Pay associated with changes in relevant market. g. Fair and equitable pay, for example a pay audit process 2. Review and recommend changes necessary associated with the outcome of this phase of the project. See Statutory, Policy and CBA Appendix. VI. Plan Administration and Implementation Assist with development and best practices to include brief and generic statutory language and CBA language where HR Policy is the primary driver. All policies and procedures should be flexible, dynamic, readily maintained, easily understood by employees and managers and the unions, meet legal requirements, and provide the State with optimal return on human resources investment. Task: Document who is accountable for what in terms of roles and responsibilities, assess DHR staffing needs and changes, assist with implementation internally and externally to DHR, culture change, and business transformation. Assist in any reconfiguration of DHR human resource needs. Provide estimated annual costs including contracts or licensing. Page 19 of 29 Concerning Implementation. The State of Vermont is transitioning the Human Capital Management platform currently in use (PeopleSoft 9.1) to an upgraded HCM, Payroll, Compensation, Performance Management, and Financial Management. The Work Measurement Methodology and Process, Grade Structure, Salary Structure, and Pay Movement Mechanics outcomes from this project will need to be implemented into the new upgraded Platform in the future. Deliverable: (TBD) 1. Development of plan administration documents and processes that meet the criteria for effective plan administration including in the following areas: 1. Executive Branch leadership 2. Central HR 3. Field Operations 4. Legislative Branch 5. Collective Bargaining Agreements a. Non-Management b. Supervisory c. Corrections d. VTA e. Judiciary f. Defender General 2. Assess staffing at DHR and recommend staffing changes. 3. Assist with change management. 4. Review and recommend changes necessary associated with the outcome of this phase of the project. See Statutory, Policy and CBA Appendix 5. Estimated annual costs for plan administration. VII. Administration of this contract The vendor will issue monthly status reports and hold monthly telephone conferences to discuss status of required deliverables, outstanding items and all issues related to Contractors’ work. Related Deliverables i. Submit biweekly status reports relating to each deliverable required under this contract to the state’s project manager. Schedule and initiate approximately one-hour monthly conference calls with the state’s project manager to review deliverables in detail and to manage tasks and address actual and potential issues. ii. Submit monthly invoices for work completed (with % of deliverable complete) to be approved by DHR. Page 20 of 29 Page 21 of 29 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: _____________ Page 22 of 29 ATTACHMENT C: STANDARD STATE PROVISIONS FOR CONTRACTS AND GRANTS Revised December 7, 2023 “Attachment C: Standard State Provisions for Contracts and Grants” (revision version dated December 7, 2023) constitutes part of this Agreement and is hereby incorporated by reference as if fully set forth herein and shall apply to the purchase of all goods and/or services by the State under this Agreement. A copy of this document is available online at: https://bgs.vermont.gov/purchasing-contracting/forms. https://bgs.vermont.gov/purchasing-contracting/forms Page 23 of 29 ATTACHMENT D INFORMATION TECHNOLOGY PROFESSIONAL SERVICES TERMS AND CONDITIONS (rev. 03/10/2023) 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 Page 24 of 29 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 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 Page 25 of 29 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. 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”). 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. Page 26 of 29 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 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 available to the State upon request. In the event of any actual security breach or reasonable belief of an actual security breach the Contractor either suffers or learns of that either compromises or could compromise State Data (a “Security Breach”), the Contractor shall notify the State within 24 hours of its discovery. Contractor shall immediately determine the nature and extent of the Security Breach, contain the incident by stopping the unauthorized practice, recover records, shut down the system that was breached, revoke access and/or correct weaknesses in physical security. Contractor shall report to the State: (i) the nature of the Security Breach; (ii) the State Data used or disclosed; (iii) who made the unauthorized use or received the unauthorized disclosure; (iv) what the Contractor has done or shall do to mitigate any deleterious effect of the unauthorized use or disclosure; and (v) what corrective action the Contractor has taken or shall take to prevent future similar unauthorized use or disclosure. The Contractor shall provide such other information, including a written report, as reasonably requested by the State. Contractor shall analyze and document the incident and provide all notices required by applicable law. In accordance with Section 9 V.S.A. §2435(b)(3), the Contractor shall notify the Office of the Attorney General, or, if applicable, Vermont Department of Financial Regulation (“DFR”), within fourteen (14) business days of the Contractor’s discovery of the Security Breach. The notice shall provide a preliminary description of the breach. The foregoing notice requirement shall be included in the subcontracts of any of Contractor’s subcontractors, affiliates or agents which may be “data collectors” hereunder. Page 27 of 29 The Contractor agrees to fully cooperate with the State and assume responsibility at its own expense for the following, to be determined in the sole discretion of the State: (i) notice to affected consumers if the State determines it to be appropriate under the circumstances of any particular Security Breach, in a form recommended by the AGO; and (ii) investigation and remediation associated with a Security Breach, including but not limited to, outside investigation, forensics, counsel, crisis management and credit monitoring, in the sole determination of the State. The Contractor agrees to comply with all applicable laws, as such laws may be amended from time to time (including, but not limited to, Chapter 62 of Title 9 of the Vermont Statutes and all applicable State and federal laws, rules or regulations) that require notification in the event of unauthorized release of personally- identifiable information or other event requiring notification. In addition to any other indemnification obligations in this Contract, the Contractor shall fully indemnify and save harmless the State from any costs, loss or damage to the State resulting from a Security Breach or the unauthorized disclosure of State Data by the Contractor, its officers, agents, employees, and subcontractors. 4. CONTRACTOR’S REPRESENTATIONS AND WARRANTIES 4.1 General Representations and Warranties. The Contractor represents, warrants and covenants that: (i) The Contractor has all requisite power and authority to execute, deliver and perform its obligations under this Contract and the execution, delivery and performance of this Contract by the Contractor has been duly authorized by the Contractor. (ii) There is no pending litigation, arbitrated matter or other dispute to which the Contractor is a party which, if decided unfavorably to the Contractor, would reasonably be expected to have a material adverse effect on the Contractor’s ability to fulfill its obligations under this Contract. (iii) The Contractor will comply with all laws applicable to its performance of the services and otherwise to the Contractor in connection with its obligations under this Contract. (iv) The Contractor (a) owns, or has the right to use under valid and enforceable agreements, all intellectual property rights reasonably necessary for and related to delivery of the services and provision of the services as set forth in this Contract; (b) shall be responsible for and have full authority to license all proprietary and/or third party software modules, including algorithms and protocols, that Contractor incorporates into its product; and (c) none of the services or other materials or technology provided by the Contractor to the State will infringe upon or misappropriate the intellectual property rights of any third party. (v) The Contractor has adequate resources to fulfill its obligations under this Contract. (vi) Neither Contractor nor Contractor’s subcontractors has past state or federal violations, convictions or suspensions relating to miscoding of employees in NCCI job codes for purposes of differentiating between independent contractors and employees. 4.2 Contractor’s Performance Warranties. Contractor represents and warrants to the State that: (i) Each and all of the services shall be performed in a timely, diligent, professional and skillful manner, in accordance with the highest professional or technical standards applicable to such services, by qualified persons with the technical skills, training and experience to perform such services in the planned environment. (ii) Any time software is delivered to the State, whether delivered via electronic media or the internet, no portion of such software or the media upon which it is stored or delivered will have any type of software routine or other element which is designed to facilitate unauthorized access to or intrusion upon; or unrequested disabling or erasure of; or unauthorized interference with the Page 28 of 29 operation of any hardware, software, data or peripheral equipment of or utilized by the State. Without limiting the generality of the foregoing, if the State believes that harmful code may be present in any software delivered hereunder, Contractor will, upon State’s request, provide a new or clean install of the software. Notwithstanding the foregoing, Contractor assumes no responsibility for the State’s negligence or failure to protect data from viruses, or any unintended modification, destruction or disclosure. (iii) To the extent Contractor resells commercial hardware or software it purchased from a third party, Contractor will, to the extent it is legally able to do so, pass through any such third party warranties to the State and will reasonably cooperate in enforcing them. Such warranty pass-through will not relieve the Contractor from Contractor’s warranty obligations set forth herein. 5. PROFESSIONAL LIABILITY AND CYBER LIABILITY INSURANCE COVERAGE In addition to the insurance required in Attachment C to this Contract, before commencing work on this Contract and throughout the term of this Contract, Contractor agrees to procure and maintain (a) Professional Liability insurance for any and all services performed under this Contract, with minimum third party coverage of $1,000,000 per claim, $1,000,000 aggregate. To the extent Contractor has access to, processes, handles, collects, transmits, stores or otherwise deals with State Data, Contractor shall maintain first party Breach Notification Coverage of not less than $1,000,000. Before commencing work on this Contract the Contractor must provide certificates of insurance to show that the foregoing minimum coverages are in effect. 6. REMEDIES FOR DEFAULT. In the event either party is in default under this Contract, the non- defaulting party may, at its option, pursue any or all of the remedies available to it under this Contract, including termination for cause, and at law or in equity. 7. TERMINATION 7.1 Contractor shall reasonably cooperate with other parties in connection with all services to be delivered under this Contract, including without limitation any successor provider to whom State Data, State Intellectual Property or other State information and materials are to be transferred in connection with termination. Contractor shall assist the State in exporting and extracting any and all State data, in a format usable without the use of the Services and as agreed to by State, at no additional cost. Any transition services requested by State involving additional knowledge transfer and support may be subject to a contract amendment for a fixed fee or at rates to be mutually agreed upon by the parties. If the State determines in its sole discretion that a documented transition plan is necessary, then no later than sixty (60) days prior to termination, Contractor and the State shall mutually prepare a Transition Plan identifying transition services to be provided. 7.2 Return of Property. Upon termination of this Contract for any reason whatsoever, Contractor shall immediately deliver to State all State Intellectual Property and State Data (including without limitation any Deliverables for which State has made payment in whole or in part), that are in the possession or under the control of Contractor in whatever stage of development and form of recordation such State property is expressed or embodied at that time. 8. DESTRUCTION OF STATE DATA. At any time during the term of this Contract within thirty days of (i) the State’s written request or (ii) termination or expiration of this Contract for any reason, Contractor Page 29 of 29 shall securely dispose of all copies, whether in written, electronic or other form or media, of State Data according to National Institute of Standards and Technology (NIST) approved methods, and certify in writing to the State that such State Data has been disposed of securely. Further, upon the relocation of State Data, Contractor shall securely dispose of such copies from the former data location according to National Institute of Standards and Technology (NIST) approved methods and certify in writing to the State that such State Data has been disposed of securely. Contractor shall comply with all reasonable directions provided by the State with respect to the disposal of State Data. 9. SOV Cybersecurity Standard Update 2023-01: Contractor confirms that all products and services provided to or for the use of the State under this Agreement shall be in compliance with State of Vermont Cybersecurity Standard 2023-01, which prohibits the use of certain branded products in State information systems or any vendor system that is supporting State information systems, and is available on-line at: https://digitalservices.vermont.gov/cybersecurity/cybersecurity-standards-and-directives https://digitalservices.vermont.gov/cybersecurity/cybersecurity-standards-and-directives