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Colorado Department of
Health Care Policy and Financing
MMIS Contract
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Contract Routing Number 14-64254
STATE OF COLORADO
Department of Health Care Policy and Financing Contract with HP Enterprise Services for
Colorado interChange and Services
TABLE OF CONTENTS 1. PARTIES ............................................................................................................................ 2
2. EFFECTIVE DATE AND NOTICE OF NONLIABILITY ............................................... 3 3. RECITALS ......................................................................................................................... 3 4. DEFINITIONS .................................................................................................................... 3 5. TERM ................................................................................................................................. 6 6. STATEMENT OF WORK ................................................................................................. 7
7. PAYMENTS TO CONTRACTOR .................................................................................... 8
8. REPORTING NOTIFICATION ....................................................................................... 11
9. CONTRACTOR RECORDS ............................................................................................ 12 10. CONFIDENTIAL INFORMATION ................................................................................ 13
11. CONFLICTS OF INTEREST ........................................................................................... 15 12. REPRESENTATIONS AND WARRANTIES ................................................................ 16
13. INSURANCE.................................................................................................................... 17 14. BREACH .......................................................................................................................... 20 15. REMEDIES ...................................................................................................................... 21
16. NOTICES AND REPRESENTATIVES .......................................................................... 28 17. RIGHTS IN DATA, DOCUMENTS, AND COMPUTER SOFTWARE ........................ 29
18. GOVERNMENTAL IMMUNITY ................................................................................... 31 19. GENERAL PROVISIONS ............................................................................................... 32
20. ADDITIONAL GENERAL PROVISIONS ..................................................................... 35 21. COLORADO SPECIAL PROVISIONS .......................................................................... 42
HIPAA BUSINESS ASSOCIATE ADDENDUM
EXHIBIT A, STATEMENT OF WORK
EXHIBIT B, SAMPLE OPTION LETTER
EXHIBIT C, REQUIREMENTS
EXHIBIT D, PROJECT PHASE DOCUMENT
EXHIBIT E, COMPENSATION AND QUALITY MAINTENANCE PAYMENTS
EXHIBIT F, TERMINOLOGY
EXHIBIT G, PERFORMANCE STANDARDS
EXHIBIT H, STATE CYBERSECURITY POLICIES
1. PARTIES
This Contract (hereinafter called “Contract”) is entered into by and between HP Enterprise Services,
LLC (HPES), 5400 Legacy Drive, Plano, TX 75024 (hereinafter called “Contractor”), and the
STATE OF COLORADO acting by and through the Department of Health Care Policy and
Financing, 1570 Grant Street, Denver, Colorado 80203 (hereinafter called the “State” or
“Department”). Contractor and the State hereby agree to the following terms and conditions.
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2. EFFECTIVE DATE AND NOTICE OF NONLIABILITY
This Contract shall not be effective or enforceable until it is approved and signed by the Colorado
State Controller or designee (hereinafter called the “Effective Date”). The State shall not be liable
to pay or reimburse Contractor for any performance hereunder including, but not limited to, costs
or expenses incurred, or be bound by any provision hereof prior to the Effective Date.
3. RECITALS
A. Authority, Appropriation, and Approval
Authority to enter into this Contract exists in CRS 25.5-1-101 et seq., and funds
have been budgeted, appropriated and otherwise made available and a sufficient
unencumbered balance thereof remains available for payment. Required
approvals, clearance and coordination have been accomplished from and with
appropriate agencies.
B. Consideration
The Parties acknowledge that the mutual promises and covenants contained herein
and other good and valuable consideration are sufficient and adequate to support this
Contract.
C. Purpose
The purpose of this Contract is to develop and install the Colorado interChange, as
defined below, and provide the Services, as defined below and as set forth in this
Contract, including all Attachments and Exhibits. Contractor’s offer, submitted in
response to Request for Proposal Number HCPFRFPKC13COREMMIS was
selected by the State.
D. References
All references in this Contract to sections (whether spelled out or using the
§ symbol), subsections, exhibits or other attachments, are references to sections,
subsections, exhibits or other attachments contained herein or incorporated as a
part hereof, unless otherwise noted.
4. DEFINITIONS
The following terms when capitalized as used herein shall be construed and interpreted as
follows:
A. “Abandon” and “Abandonment” shall have the meaning set forth in §15.A.v.
B. “Addendum” shall have the meaning set forth in §10.B.
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C. “Business Day” regardless of whether capitalized or not, means any day in
which the Department is open and conducting business. Business Days shall
not include weekend days or any day on which the Department observes one
of the following holidays:
i. New Year’s Day.
ii. Washington-Lincoln Day (also referred to as President’s Day).
iii. Memorial Day.
iv. Independence Day.
v. Labor Day.
vi. Thanksgiving Day.
vii. Christmas Day.
D. Reserved.
E. “Colorado interChange” means the MMIS adapted for the State requirements and
all related components as set forth in this Contract.
F. “Contract” means this agreement, its terms and conditions, and including all attached
addenda, exhibits, documents incorporated by reference under the terms of this
agreement, and any future modifying agreements, exhibits, attachments or references
incorporated herein pursuant to this agreement, Colorado State law, Fiscal Rules, and
State Controller Policies.
G. “Contract Funds” means funds available for payment by the State to Contractor
pursuant to this Contract.
H. “Contractor Property” shall have the meaning set forth in §17.A.
I. “Days” regardless of whether capitalized or not, means Business Days unless
otherwise specified.
J. “Defect” shall mean an error, flaw, mistake, failure, or fault in a computer program
or system that produces an incorrect or unexpected result that differs from an agreed-
to Specification, or causes it to behave in unintended ways that differ from an agreed-
to Specification.
K. “Disabling Code” shall have the meaning set forth in §12.F.
L. Exhibits and other Attachments. The following documents are attached hereto and
incorporated by reference herein:
HIPAA Business Associate Addendum and Attachment A
Exhibit A, Statement of Work
Exhibit B, Sample Option Letter
Exhibit C, Requirements
Exhibit D, Project Phase Document
Exhibit E, Compensation and Quality Maintenance Payments
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Exhibit F, Terminology
Exhibit G, Performance Standards
Exhibit H, State Cybersecurity Policies
M. “Goods” means tangible material acquired, produced, or delivered by Contractor
either separately or in conjunction with the Services Contractor renders hereunder.
N. “HIPAA” shall have the meaning set forth in §10.B.
O. “including” or “includes”, regardless of whether capitalized or not, means “including,
without limitation”.
P. “MMIS” means an automated mechanized claims processing and information
retrieval system for Medicaid.
Q. “Ongoing Operations and Enhancement Contract Stage” is defined in Exhibit A,
Statement of Work.
R. “Operational Start Date” is defined in Exhibit F, Terminology, as the date on
which the Department authorizes Contractor to begin the Ongoing Operations and
Enhancement Contract Stage.
S. “Party” means the State or Contractor and Parties means both the State and
Contractor.
T. “Quarterly Milestones” will be as identified in Exhibit E, Compensation and Quality
Maintenance Payments.
U. “Record Retention Period” shall have the meaning set forth in §9.A.
V. “Review” means examining Contractor’s Work to ensure that it is adequate,
accurate, correct, and consistent with the provided Specifications, if any, and in
accordance with the standards described in this Contract.
W. “Services” means the required services to be performed by Contractor pursuant to
this Contract.
X. “Software And Data” means software, source code, information and data in any form
and fixed or stored in any manner.
Y. “State Fiscal Year” or “SFY” means the period which begins on July 1 of each
calendar year and ends on June 30 of the following calendar year.
Z. “State Property” shall have the meaning set forth in §17.A.
AA. “Subcontractor” means third-parties, if any, engaged by Contractor to aid in
performance of its obligations.
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BB. “Third Party Property” shall have the meaning set forth in §17.C.
CC. “Third Party Users” means persons or entities with whom the State contracts, other
than the Parties, to use or provide services in connection with the Colorado
interChange.
DD. “Work” means the tasks and activities Contractor is required to perform to fulfill
its obligations under this Contract, including the performance of the Services and
delivery of the Goods.
EE. “Work Product” means the tangible or intangible results of Contractor’s Work,
including, but not limited to, deliverables, software (including all computer
code, firmware, internal code, microcode and other forms of code, in any form),
research, reports, studies, data, photographs, negatives or other finished or
unfinished documents, drawings, models, surveys, maps, materials, or work product
of any type, including drafts.
Any terms used herein which are defined in the Exhibits shall be construed and interpreted as
defined therein.
5. TERM
A. Initial Term
The Parties’ respective performances under this Contract shall commence on
Effective Date. This Contract shall expire on October 31, 2018, unless sooner
terminated or further extended as specified elsewhere herein.
B. Two Month Extension
The State, at its sole discretion, upon written notice to Contractor as provided in
§16, may unilaterally extend the term of this Contract for a period not to exceed
two (2) months if the Parties are negotiating a replacement contract at or near the end
of any initial term or renewal term. The provisions of this Contract in effect when
such notice is given, including, but not limited to, prices, rates and delivery
requirements, shall remain in effect during the two month extension. The two (2)
month extension shall immediately terminate when and if a replacement contract is
approved and signed by the Colorado State Controller or an authorized designee.
C. First Option to Extend
The State may require continued performance for up to three additional years
starting on November 1, 2018 and ending no later than October 31, 2021 at
the same rates and same terms specified in the Contract. If the State exercises this
option, it shall provide written notice to Contractor at least thirty (30) days prior to
the end of the current Contract term in form substantially equivalent to Exhibit B,
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Sample Option Letter. If exercised, the provisions of the Option Letter shall
become part of and be incorporated into this Contract.
D. Second Option to Extend
Subject to approval of CMS and requisite State approvals, the State may request
continued performance for up to two additional years starting on November
1, 2021 and ending no later than October 31, 2023 at mutually agreed rates
and on the same terms specified in this Contract. If the State exercises this option,
it shall provide written notice to Contractor at least thirty (30) days prior to the end
of the current Contract term in form substantially equivalent to Exhibit B, Sample
Option Letter. If exercised, the provisions of the Option Letter shall become part of
and be incorporated into this Contract.
Any agreed increase in rates under this Section 5.D shall be limited as follows:
In no event will the rates agreed under this Section 5.D exceed the rates covering the
period from November 1, 2020 to October 31, 2021 as specified in this Contract plus
a maximum percentage increase equal to the mathematical mean of the annual
percent increase in the Consumer Price Index for All Urban Consumers (CPI-U) for
the Denver-Boulder-Greeley metropolitan area for calendar year 2018 and calendar
year 2019 as published by the US Department of Labor, Bureau of Labor Statistics.
If the CPI-U is for some reason not available as specified in this Section, the Parties will
use the CPI-U (U.S.) for the same period.
6. STATEMENT OF WORK
A. Completion
Contractor shall complete the Work and its other obligations as described in this
Contract, on or before the end of the term of this Contract. The State shall not be
liable to compensate Contractor for any Work performed prior to the Effective Date
or after the expiration or termination of this Contract.
B. Goods and Services
Contractor shall procure Goods and Services necessary to complete the Work. Such
procurement shall not increase the maximum amount payable hereunder by the State.
C. Independent Contractor
All persons employed by Contractor or Subcontractors to perform Work under
this Contract shall be Contractor’s or Subcontractors’ employee(s) for all
purposes hereunder and shall not be employees of the State for any purpose as a
result of this Contract.
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D. Performance
Contractor will provide Design, Development and Implementation of the Colorado
interChange and perform Services as described in this Contract.
E. Operational Start Date
The Operational Start Date is established through the Project Management Plan, as
described in Exhibit C, Requirements. The Operational Start Date may be changed
by the Parties as mutually agreed through a modification to the Project Management
Plan.
7. PAYMENTS TO CONTRACTOR
The State shall, in accordance with the provisions of this §7 and Exhibit E, Compensation and
Quality Maintenance Payments, and the State’s receipt of a correct invoice and the State’s exercise
of their remedies as provided in this Contract, pay Contractor in the amounts and using the methods
set forth below:
A. Maximum Amount
The maximum amount payable under this Contract to Contractor by the State is
shown in the following table, as determined by the State from available funds.
Payments to Contractor are limited to the unpaid obligated balance of the Contract at
the rates set forth in Exhibit E, Compensation and Quality Maintenance Payments.
The maximum amount payable by the State to Contractor is:
State Fiscal Year 2013-14 $9,201,096.00
State Fiscal Year 2014-15 $25,491,547.00
State Fiscal Year 2015-16 $25,792,494.00
State Fiscal Year 2016-17 $29,047,276.00
State Fiscal Year 2017-18 $21,705,383.00
State Fiscal Year 2018-19 $20,751,875.00
State Fiscal Year 2019-20 $20,582,019.00
State Fiscal Year 2020-21 $20,451,659.00
State Fiscal Year 2021-22 $6,831,706.33
Total for All State Fiscal Years $179,855,055.33
The State Fiscal Year amounts in the table in this section are based on State
appropriations. Based on the timing of the invoicing and payment, the Contractor may
receive amounts paid in a different State Fiscal Year than when the amounts were
actually earned by the Contractor.
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Any changes to the maximum amount payable under the Contract or Quality
Maintenance Payments Specified in Exhibit E, shall require a formal written
amendment, in accordance with State Fiscal Rules and State Controller Policies and
Guidelines
B. Payment
Payment pursuant to this Contract will be made as earned pursuant to the terms of
this Contract. Any advance payments allowed under this Contract shall comply with
State Fiscal Rules and be made in accordance with the provisions of this Contract.
Contractor shall initiate any payment requests by submitting invoices to the State in
the form and manner prescribed by the State. The State shall notify Contractor
within 30 days of receipt of the invoice related to any dispute. Invoice disputes
shall follow the Dispute Process in § 20.E. The State shall fully pay each invoice
within 45 days of receipt thereof if the invoice represents performance by Contractor
previously accepted by the State, subject to the limitations set forth in this Section.
C. Interest
Uncontested amounts not paid by the State within 45 days shall bear interest on the
unpaid balance beginning on the 46th day at a rate not to exceed one percent per month
until paid in full, provided, however, that interest shall not accrue on unpaid amounts
that are subject to a good faith dispute. Contractor shall invoice the State separately
for accrued interest on delinquent amounts. The billing shall reference the delinquent
payment, the number of day’s interest to be paid and the interest rate.
D. Available Funds-Contingency-Termination
The State is prohibited by law from making commitments beyond the term of the
State’s current Fiscal Year. Therefore, Contractor’s compensation beyond the State’s
current Fiscal Year is contingent upon the continuing availability of State
appropriations as provided in the Colorado Special Provisions, set forth below. If
federal funds are used to fund this Contract, in whole or in part, the State’s
performance hereunder is contingent upon the continuing availability of such funds.
Payments pursuant to this Contract shall be made only from available funds
encumbered for this Contract and the State’s liability for such payments shall be
limited to the amount remaining of such encumbered funds. If State or federal
funds are not appropriated, or otherwise become unavailable to fund this Contract,
the State may terminate this Contract by notice, with as much notice as reasonably
possible, in whole or in part, without further liability notwithstanding any notice and
cure period in §14.B. If the Contract is terminated for lack of appropriation, the
termination date cannot extend beyond the period of the then current appropriation
and the amount payable cannot exceed the existing appropriated funds.
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E. Erroneous Payments
At the State’s sole discretion, payments made to Contractor in error for any
reason, including, but not limited to, overpayments or improper payments, may be
recovered from Contractor by deduction from subsequent payments under this
Contract or other contracts, grants or agreements between the State and
Contractor or by other appropriate methods and collected as a debt due to the
State. Such funds shall not be paid to any party other than the State.
F. Closeout Payments
Notwithstanding anything to the contrary in this Contract, all payments for the
final month of the Contract shall be paid to Contractor no sooner than ten (10) days
after the Department has determined that Contractor has completed all of the
requirements of the Turnover Phase, as defined in Exhibit D, Project Phase
Document.
G. Recoupment of erroneous payments
All payments, adjustments, and other financial transactions made through the
Colorado interChange will be made on behalf of eligible members to active Enrolled
Providers for approved services and in accordance with the payment rules.
Contractor shall be liable for the actual amount of all detected erroneous payments
identified as a result of State or Federal claims reviews or as reported by Providers
or from other referrals that are a result of Contractor (i) staff action, (ii) inaccurate
system data, (iii) inaccurate processing or (iv) Colorado interChange malfunction.
Such liabilities may be withheld from Contractor payments. Contractor, however,
shall have the right to seek recovery on behalf of the State from Providers to whom
erroneous payments are made using voluntary refund, offset recovery, or other State-
approved methods. Contractor shall notify the State promptly upon discovery of any
erroneous payments, irrespective of cause, and prior to initiating appropriate recovery
action.
Contractor must pay to the State any portion of an erroneous payment not recouped
within one-hundred and eighty (180) calendar days of its receipt of the direction
initiating its recoupment. Contractor will make such payment to the State within
seven (7) calendar days of the expiration of the one-hundred and eighty (180)
calendar-day timeframe. The State shall not be liable to Contractor for any erroneous
payment due that is not recovered by recoupment from Providers. Contractor may
initiate independent recovery procedures and actions once the recoupment process
described herein has been completed and a repayment amount remains outstanding.
The State may review proposed independent recovery procedures. If the State
recovers any erroneous payments for which Contractor has reimbursed the State, the
State shall notify Contractor, who shall then submit an invoice for the returned
amount.
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H. Option to Increase or Decrease Statewide Quantity of Service
If the actual volume of claims/Encounters increases by greater than twenty percent
(20%) from the forecasted claims/Encounters estimate provided in Exhibit A,
Statement of Work, Contractor may request a change to the Contract pricing or
decreases in service level or scope, but the Department does not guarantee that
funding will be available to increase the Contract price or amend the Contract to
meet Contractor’s request. Any increase in the Contract price may require a formal
budget action that must be approved by the Department and the Colorado General
Assembly, so there is no guarantee that the Contract price will increase for any
reason, including those outside the control of Contractor. If the State agrees to an
increase in price and funding is not available, then the parties must negotiate scope
or service level agreement reductions as appropriate or other remedies as agreed.
Any dispute with regard to the appropriate remedy or change in Contract price will
be resolved through the Dispute Process in §20.E.
I. Pricing Review
In the second quarter of any calendar year, Contractor may annually request a pricing
review, by written notice to the Department, if the percent change in the prior calendar
year’s Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-
Boulder-Greeley metropolitan area (which is traditionally released in February) as
published by the US Department of Labor, Bureau of Labor Statistics, exceeds six
percent (6.0%). In the pricing review, Contractor may request a change to the Contract
pricing or decreases in service level or scope, but there is no guarantee that the
Department will have the available funding to increase the Contract price or amend the
Contract to meet Contractor’s request. Any increase in the Contract price may require
a formal budget action that must be approved by the Department and the Colorado
General Assembly, so there is no guarantee that the Contract price will increase for any
reason, including those outside the control of Contractor. If funding is not available,
then Parties must negotiate scope or service level agreements reductions as appropriate
or other remedies as agreed that are economically equivalent to the increase in the CPI-
U. Any dispute with regard to the appropriate remedy or change in Contract price will
be resolved through the Dispute Process in §20.E. If the CPI-U is for some reason not
available as specified in this Section, the parties will use a CPI-U (U.S.) for the same
time period.
8. REPORTING NOTIFICATION
Reports required under this Contract shall be in accordance with the procedures and in such
form as prescribed by the State and as described in Exhibit C, Requirements and the
Communication Management Plan.
A. Litigation Reporting
Within twenty (20) days after being served with any pleading in a legal action filed
with a court or administrative agency that is directly related to this Contract or which
may directly affect Contractor’s ability to perform its obligations hereunder,
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Contractor shall notify the State of such action and deliver copies of such pleadings
to the State’s principal representative as identified herein to the extent not prohibited
by law. If the State’s principal representative is not then serving, such notice and
copies shall be delivered to the Executive Director of the Department.
B. Noncompliance
Contractor’s failure to provide reports and notify the State in a timely manner in
accordance with this §8 may result in the delay of payment of funds and/or
termination as provided under this Contract.
9. CONTRACTOR RECORDS
A. Maintenance
Contractor shall make, keep, maintain, and allow inspection and monitoring by
the State of a complete file of all records, documents, communications, notes, and
other written materials, electronic media files and electronic communications,
pertaining in any manner to the Work or the delivery of Services or Goods hereunder
in order to verify the accuracy of Contractor’s invoices and shall not include
Contractor’s internal books and records. Contractor shall maintain such records until
the last to occur of: (i) a period of six (6) years after the date this Contract expires
or is sooner terminated, or (ii) a period of six (6) years after final payment is made
hereunder, or (iii) a period of six (6) years after the resolution of any pending Contract
matters, or (iv) if an audit is occurring, or Contractor has received notice that an
audit is pending, until such audit has been completed and its findings have been
resolved (collectively, the “Record Retention Period”). All such records, documents,
communications and other materials shall be the property of the State, and shall be
maintained by Contractor in a central location and Contractor shall be custodian on
behalf of the State.
B. Inspection
Contractor shall permit the State, the federal government and any other duly
authorized agent of a governmental agency to audit, inspect, examine, excerpt, copy
and/or transcribe Contractor's records related to this Contract during the Record
Retention Period, to assure compliance with the terms hereof or to evaluate
performance hereunder or to verify the accuracy of Contractor’s invoices. The State
reserves the right to inspect the Work with reasonable notice and at all reasonable
times and places during the term of this Contract, including any extensions or
renewals. If the Work fails to conform to the requirements of this Contract, the
State may require Contractor promptly to bring the Work into conformity with
Contract requirements, at Contractor’s sole expense. If the Work cannot be brought
into conformance by re-performance or other corrective measures, the State may
require Contractor to take necessary action to ensure that future performance
conforms to Contract requirements and exercise the remedies available under this
Contract, at law or in equity, in lieu of or in conjunction with such corrective
measures.
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C. Monitoring
Contractor shall permit the State, the federal government and any other duly
authorized agent of a government agency, in their sole discretion, to reasonably
monitor all activities conducted by Contractor pursuant to the terms of this
Contract using any reasonable procedure, including, but not limited to: internal
evaluation procedures, examination of program data, formal audit examinations, or
any other procedure, provided that such procedures do not unreasonably interfere
with Contractor’s performance hereunder and are not unreasonably burdensome as
to frequency, scope and duration. The State shall provide Contractor at least five
(5) Business Days written notice prior to any such monitoring.
D. Final Audit Report
If an audit is performed by any governmental agency on Contractor’s records for
any Fiscal Year covering a portion of the term of this Contract, Contractor shall
submit a copy of the final audit report to the State or its principal representative at
the address specified herein.
10. CONFIDENTIAL INFORMATION
Contractor shall comply with, and shall cause each of its Subcontractors and any other party
performing work under this Contract to comply with the provisions of this §10 if it becomes privy
to Confidential Information in connection with its performance hereunder. “Confidential
Information” means all information provided or made available to Contractor by the State or its
agents or employees that is marked or otherwise identified as confidential or proprietary or which
Contractor knows or reasonably should know is confidential or proprietary information.
Confidential Information also includes all State records, personnel records and information
concerning individuals and all other information subject to confidentiality obligations set forth in
§10.B below. Such information shall not include information required to be disclosed pursuant to
the Colorado Open Records Act, CRS §24-72-201, et seq.
A. Confidentiality
Contractor shall keep all Confidential Information confidential at all times and
comply with all laws and regulations concerning confidentiality of information. Any
request or demand by a third party for State records and information in the possession
of Contractor shall be immediately forwarded to the State’s principal representative.
B. Health Insurance Portability & Accountability Act of 1996 (“HIPAA”)
i. Federal Law and Regulations
Pursuant to federal law and regulations governing the privacy of certain
health information, Contractor, to the extent applicable, shall comply with the
Health Insurance Portability and Accountability Act of 1996, 42
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U.S.C. §1320d – 1320d-8 (“HIPAA”) and its implementing regulations
promulgated by the U.S. Department of Health and Human Services, 45
C.F.R. Parts 160 and 164 (the “Privacy Rule”) and other applicable laws, as
amended.
ii. Business Associate Contract
Federal law and regulations governing the privacy of certain health
information requires a “Business Associate Contract” between the State
and Contractor, 45 C.F.R. Section 164.504(e). Attached and incorporated
herein by reference and agreed to by the parties is a HIPAA Business
Associate Addendum (“Addendum”) for HIPAA compliance. Terms of the
Addendum shall be considered binding upon execution of this Contract and
shall remain in effect during the term of the Contract including any extensions
or amendments.
iii. Confidentiality of Records
Contractor shall protect the confidentiality of all records and other materials
containing personally identifying information that are maintained in
accordance with the Contract and comply with HIPAA rules and regulations.
Except as provided by law, no information in possession of Contractor about
any individual constituent shall be disclosed in a form including identifying
information without the prior written consent of the person in interest, a
minor’s parent, or guardian. Contractor shall have written policies governing
access to, duplication and dissemination of, all such information. Contractor
shall advise its employees, agents and subcontractors, if any, that they are
subject to these confidentiality requirements. Contractor shall provide its
employees, agents and subcontractors, if any, with a copy or written
explanation of these confidentiality requirements before access to
confidential data is permitted. No confidentiality requirements contained in
this Contract shall negate or supersede the provisions of HIPAA.
C. Notification
Contractor shall notify its agents, employees, Subcontractors and assigns who
may come into contact with State records or other Confidential Information that
each is subject to the confidentiality requirements set forth herein, and shall provide
each with a written explanation of such requirements before permitting them to access
such records and information.
D. Use, Security, and Retention
Confidential Information of any kind shall not be distributed or sold to any third
party or used by Contractor or its agents in any way, except as authorized by this
Contract or approved in writing by the State. Contractor shall provide and maintain
a secure environment that ensures confidentiality of all State records and other
Confidential Information wherever located. Confidential Information shall not be
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retained in any files or otherwise by Contractor or its agents, except as permitted in
this Contract or approved in writing by the State. All Confidential Information shall
be stored, processed, or transferred only in or to facilities located within the United
States.
E. Disclosure-Liability
Disclosure of confidential State records or other Confidential Information by
Contractor for any reason outside of the requirements of this contract may be cause
for legal action by third parties against Contractor, its Subcontractor(s), the State
or their respective agents. Subject to Section 19.P, Contractor shall indemnify, save,
and hold harmless the State, its employees and agents, against any and all third
party claims, damages, liability and court awards, including costs, expenses, and
attorney fees and related costs, incurred as a result of any act or omission by
Contractor, or its employees, agents, Subcontractors, or assignees in violation of the
terms and conditions of this §10, provided that the limitation set forth in Section 19.P
shall not apply to any fines imposed by the Department of Health and Human
Services for a violation of HIPAA, consistent with Section 7 of the Business
Associate Addendum.
11. CONFLICTS OF INTEREST
A. Conflict of Interest
Contractor shall not engage in any business or personal activities or practices or
maintain any relationships which conflict in any way with the full performance of
Contractor’s obligations hereunder. Contractor acknowledges that with respect to this
Contract, even the appearance of a conflict of interest is harmful to the State’s
interests. Absent the State’s prior written approval, Contractor shall refrain from any
practices, activities or relationships that reasonably appear to be in conflict with
the full performance of Contractor’s obligations to the State hereunder. If a conflict
or appearance exists, or if Contractor is uncertain whether a conflict or the
appearance of a conflict of interest exists, Contractor shall submit to the State a
disclosure statement setting forth the relevant details for the State’s
consideration. Failure to promptly submit a disclosure statement or to follow the
State’s direction in regard to the apparent conflict constitutes a breach of this
Contract.
B. Written Code of Standards
Contractor (and Subcontractors permitted under the terms of this Contract) shall
maintain a written code of standards governing the performance of its employees
engaged in the award and administration of contracts. No employee, officer or
agent of Contractor, or any Subcontractor shall participate in the selection, or in the
award or administration of a contract or subcontract supported by federal funds if a
conflict of interest, real or apparent, would be involved. Such a conflict would arise
when:
i. The employee, officer or agent;
ii. Any member of the employee's immediate family;
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iii. The employee's partner; or
iv. An organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. Contractor's or
Subcontractors’ officers, employees, or agents will neither solicit nor accept
gratuities, favors, or anything of monetary value from Contractors, potential
Contractors, or parties to subagreements.
12. REPRESENTATIONS AND WARRANTIES
Contractor makes the following specific representations and warranties, each of which was
relied on by the State in entering into this Contract.
A. Standard and Manner of Performance
Contractor represents and warrants that it shall perform its obligations hereunder in
a professional and workmanlike manner and in the sequence and manner set forth in
this Contract.
B. Legal Authority – Contractor Signatory
Contractor represents and warrants that it possesses the legal authority to enter into
this Contract and that it has taken all actions required by its procedures, and bylaws,
and/or applicable laws to exercise that authority, and to lawfully authorize
its undersigned signatory to execute this Contract, or any part thereof, and to bind
Contractor to its terms. If requested by the State, Contractor shall provide the
State with proof of Contractor’s authority to enter into this Contract within fifteen
(15) days of receiving such request.
C. Licenses, Permits, Etc.
Contractor represents and warrants that as of the Effective Date and at all times
thereafter have and maintain, at its sole expense, all licenses, certifications,
approvals, insurance, permits and other Authorizations required by law to perform its
obligations hereunder. Contractor warrants that it shall maintain all necessary
licenses, certifications, approvals, insurance, permits, and other Authorizations
required to properly perform this Contract, without reimbursement by the State or
other adjustment in Contract Funds. Additionally, all employees, agents, and
Subcontractors of Contractor performing Services under this Contract shall hold all
required licenses or certifications, if any, to perform their responsibilities. Contractor,
if a foreign corporation or other foreign entity transacting business in the State of
Colorado, further warrants that it currently has obtained and shall maintain any
applicable certificate of authority to transact business in the State of Colorado and
has designated a registered agent in Colorado to accept service of process. Any
revocation, withdrawal or non-renewal of licenses, certifications, approvals,
insurance, permits or any such similar requirements necessary for Contractor to
properly perform the terms of this Contract is a material breach by Contractor and
constitutes grounds for termination of this Contract.
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D. Disabling Code
Contractor represents and warrants that it will use up-to-date commercial anti-virus
software to detect and remove viruses and other malware from software before
delivering it to the State. Contractor will not introduce into the Colorado interChange
or any State system any virus, worm, trap door, back door, timer, clock, counter, or
other limiting routine, instruction, or design that would erase data or programming or
otherwise cause the Colorado interChange or any State system to become inoperable
or incapable of being used in the full manner for which it was designed and created
(collectively, “Disabling Code”). In the event a Disabling Code is introduced by
Contractor, Contractor shall take all steps necessary, at no additional cost to the State,
to remove or remedy the Disabling Code and to restore and/or reconstruct any and all
data lost by the State as a result of such Disabling Code. The foregoing shall not apply
to any Disabling Code introduced by the State or its employees or agents. In the
event that Disabling Code is introduced into the Colorado interChange or a related
State system in any manner other than by Contractor, if requested by the State,
Contractor shall take all steps necessary, through the Change Management Process,
to remove or remedy the Disabling Code and to restore and/or reconstruct any and all
data lost by the State as a result of such Disabling Code.
E. Third Party Warranties and Indemnities
For any third party software provided by Contractor to the State, to the extent
possible, Contractor hereby assigns to the State all end-user warranties and
indemnities relating to such third party software. To the extent that it is not possible
for Contractor to assign any of such end-user warranties and indemnities through to
the State, Contractor shall enforce such warranties and indemnities on behalf of the
State to the extent Contractor is permitted to do so under the terms of the applicable
third party agreements.
F. Open Source Software
Other than as specified in the Contract, Contractor will provide ten (10) days notice
to the State before introducing into the Colorado interChange any “open source,”
“free software,” or “freeware” of any kind or any programming or software that is
subject to licensing terms requiring any intellectual property owned or licensed by
the State to be generally (i) disclosed or distributed in source code or object code
form; (ii) licensed for the purpose of making derivative works; or (iii) redistributable.
13. INSURANCE
Contractor and its Subcontractors appropriate to the subcontractor’s activities within this Contract,
shall maintain insurance as specified in this section at all times during the term of this Contract.
All policies evidencing the insurance coverage required hereunder shall be issued by insurance
companies with an AM Best rating of not less than VII-.
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A. Contractor
i. Public Entities
If Contractor is a "public entity" within the meaning of the Colorado
Governmental Immunity Act, CRS §24-10-101, et seq., as amended (the
“GIA”), then Contractor shall maintain at all times during the term of this
Contract such liability insurance, by commercial policy or self-insurance, as
is necessary to meet its liabilities under the GIA. Contractor shall provide a
certificate of insurance to the State, if requested by the State. Contractor shall
require each contract with a Subcontractor that is a public entity, to maintain
the insurance requirements necessary to meet such Subcontractor’s liabilities
under the GIA appropriate to the subcontractor’s activities within this
Contract.
ii. Non-Public Entities
If Contractor is not a "public entity" within the meaning of the GIA,
Contractor shall maintain during the term of this Contract insurance coverage
meeting the requirements set forth in §13.B and with respect to
Subcontractors that are not “public entities,” Contractor shall require
subcontractors to maintain the insurance requirements as outlined below,
appropriate to the subcontractor’s activities within this Contract.
B. Contractors – Subcontractors
Contractor shall require Subcontractors other than those that are public entities,
providing Goods or Services in connection with this Contract, to maintain insurance
requirements substantially similar to the following, appropriate to the
subcontractors’ activities within this Contract:
i. Worker’s Compensation
Worker’s Compensation Insurance as required by State statute, and
Employer’s Liability Insurance with a limit of $1,000,000 per accident
covering all of Contractor’s employees acting within the course and scope
of their employment.
ii. General Liability
Commercial General Liability Insurance written on ISO occurrence form CG
00 01 or equivalent, covering premises operations, Damage to Premises
Rented to You, independent contractors, products and completed operations,
contractual liability, personal injury, and advertising liability with limits as
follows:
a. $1,000,000 each occurrence;
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iii. Reserved
iv. Automobile Liability
Automobile Liability Insurance covering any auto (including owned, hired
and non-owned autos) with a limit of $1,000,000 each accident combined
single limit.
v. Professional Liability Insurance
Professional Liability Insurance covering financial loss caused by an error,
omission or any negligent acts, including loss of Protected Health
Information data or claims based upon alleged violations of privacy rights
through improper use or disclosure of Protected Health Information, with
limits as follows:
a. $1,000,000 each claim; and
b. $1,000,000 general aggregate.
vi. Crime Insurance
Crime Insurance including Employee Dishonesty coverage with limits as
follows:
a. $1,000,000 each occurrence; and
b. $1,000,000 general aggregate.
vii. Additional Insured
The State shall be included as additional insured on all Commercial General
Liability and Automobile Liability Insurance policies required of Contractor
and any Subcontractors hereunder.
viii. Primacy of Coverage
General Liability coverage required of Contractor and Subcontractor shall be
primary over any insurance or self-insurance program carried by the State.
ix. Cancellation
The above insurance policies shall include provisions requiring notification
of cancellation or non-renewal to Contractor and Contractor shall forward
such notice to the State in accordance with §16 (Notices and
Representatives) within seven (7) days of Contractor's receipt of such notice.
x. Subrogation Waiver
To the extent available, the workers’ compensation insurance policy, the
general liability insurance policy and the auto insurance policy maintained
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by Contractor or its Subcontractors shall include a clause stating that it shall
waive all rights of recovery, under subrogation or otherwise, against
Contractor or the State, its agencies, institutions, organizations, officers,
agents, employees, and volunteers.
C. Certificates
Contractor and all Subcontractors shall provide certificates of all insurance showing
insurance coverage required hereunder to the State within seven (7) Business Days
of the Effective Date of this Contract. No later than seven (7) days after renewal of
any such coverage, Contractor and each Subcontractor shall deliver to the State or
Contractor certificates of insurance evidencing renewals thereof. In addition, upon
request by the State at any other time during the term of this Contract or any
subcontract, Contractor and each Subcontractor shall, within fifteen (15) days of such
request supply to the State a certificate of insurance evidencing compliance with the
provisions of this §13.
14. BREACH
A. Defined
In addition to any breaches specified in other sections of this Contract, the failure of
Contractor to perform any of its material obligations hereunder in whole or in part
consistent with the requirements set forth in this Contract, constitutes a breach.
Contractor shall have the right to dispute any such breach in accordance with the
Dispute Process in §20.E. The institution of proceedings under any bankruptcy,
insolvency, reorganization or similar law, by or against Contractor, or the
appointment of a receiver or similar officer for Contractor or any of its property,
which is not vacated or fully stayed within twenty (20) days after the institution or
occurrence thereof, shall also constitute a breach.
B. Notice and Cure Period
In the event of a breach, the State shall notify Contractor of such in writing in the
manner provided in §16. If such breach is not cured within thirty (30) calendar
days of receipt of written notice or an alternative cure period agreed upon by the
Parties prior to the end of such 30 calendar day period, the State may exercise any of
the remedies set forth in §15. Notwithstanding anything to the contrary herein, the
State, in its sole discretion, need not provide advance notice or a cure period and
may immediately terminate this Contract in whole or in part if reasonably necessary
to preserve public safety or to prevent immediate public crisis, or take such other
action as may be necessary to prevent irreparable harm. Contractor shall have the
right to dispute any breach notification in accordance with the Dispute Process in
§20.E.
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15. REMEDIES
A. Termination for Cause and/or Breach
If Contractor is in breach under any provision of this Contract, the State shall
have all of the remedies listed in this §15 in addition to all other remedies set forth in
other sections of this Contract, and without limiting its remedies otherwise available
at law or equity, following the notice and cure period set forth in §14.B. The State
may exercise any or all of the remedies available to it, in its sole discretion,
concurrently or consecutively. The State may terminate this entire Contract or any
part of this Contract. Exercise by the State of this right shall not be a breach of its
obligations hereunder.
i. Obligations and Rights
To the extent specified in any termination notice, Contractor shall not
incur further obligations or render further performance hereunder past the
effective date of such notice, and shall terminate outstanding orders and
subcontracts with third parties, except as provided below. However,
Contractor shall complete and deliver to the State all Work, Work Product,
Services and Goods not previously delivered and not cancelled by the
termination notice and may incur obligations as are necessary to do so within
this Contract’s terms. Such Work, Work Product, Services and Goods shall
be the property of the State. The State shall obtain good and clear title to all
such Work, Work Product, Services and Goods upon delivery, and
Contractor shall provide reasonable assistance to the State to establish,
confirm, evidence or enforce such good and clear title. Contractor shall
continue performance of this Contract up to the effective date of the
termination notice. To the extent the Contract is not terminated, if any,
Contractor shall continue performance until the expiration of this Contract.
At the sole discretion of the State, Contractor shall assign to the State if
possible or reasonably assist the State in the assignment to the State of all
right, title, and interest under such terminated orders or subcontracts. Upon
termination, Contractor shall take timely, reasonable and necessary action to
protect and preserve property in the possession of Contractor in which the
State has an interest. All materials owned by the State and all Confidential
Information of the State in the possession of Contractor shall be promptly
returned to the State or destroyed by Contractor if approved by the State
unless otherwise required by law. Contractor shall be obligated to return any
payment advanced under the provisions of this Contract. Any advanced
payments will be specifically identified in the Contract.
ii. Payments
Upon termination, and subject to the withholding provisions of this Contract,
the State shall reimburse Contractor for work performed and accepted in
conformance with the requirements specified in this Contract up to the
effective date of the termination. If, after termination by the State, it is
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determined that Contractor was not in breach or that Contractor's action or
inaction was excusable, such termination shall be treated as a termination
in the public interest and the rights and obligations of the Parties shall be the
same as if this Contract had been terminated in the public interest, as
described herein.
iii. Damages and Withholding
Notwithstanding any other remedial action by the State, Contractor shall
remain liable to the State for any damages sustained by the State by virtue of
any breach under this Contract by Contractor and the State may withhold
any payment to Contractor, after written notice, as reasonably necessary for
the purpose of mitigating the State’s damages, until such time as the exact
amount of damages due to the State from Contractor is determined or the
breach is cured and all damages to the State have been fully mitigated. If the
Contract is terminated for default, the State may withhold any amount that
may be due Contractor as the State deems reasonably necessary to protect the
State against loss, including loss as a result of outstanding liens, claims of
former lien holders, or for the reasonable excess costs incurred in procuring
similar goods or services related to the termination for default. Contractor
shall be liable for reasonable excess costs incurred by the State in procuring
from third parties replacement Work, Services or substitute Goods as cover
for such termination for default.
iv. Right to Set Off.
The State shall have the right to set off any amounts owed to Contractor
against any damages or charges assessed by the State against Contractor.
v. Abandonment
a. Contractor shall not “Abandon” the Work. For the purposes of this
Contract, “Abandon,” or “Abandonment” means: Contractor’s actual
willful non-performance of any material aspects of the Work in breach
of the Contract, and which results in a material adverse effect on (i)
the ability of the State to timely and properly receive and/or use the
Colorado interChange and Services, or (ii) critical aspects of the
State’s internal operations or financial reporting requirements. In the
event of an Abandonment, in addition to the other remedies it may
have, the State may seek specific performance in a court of competent
jurisdiction without the need to demonstrate irreparable harm. The
State shall not implement this remedy if the Dispute Process has been
completed by both parties and the State fails to make undisputed
payments in a timely manner in violation of the terms of this Contract.
b. In the event of an Abandonment, in addition to the other remedies it
may have, State may, but shall not be required to (a) terminate this
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Contract for cause upon notice to Contractor pursuant to Section §14;
or (b) seek specific performance of the Contract. In addition, in the
event of an Abandonment, upon request by the State, Contractor shall
provide, at no additional cost to State, all services and meet all
requirements for the Turnover Phase, as described in Exhibit D,
Project Phase Document, and all services and requirements contained
within Exhibit C, Requirements, that are related to the Turnover Phase
and Turnover Plan, which will last no more than twelve (12) months.
These requirements include all requirements of Exhibit C,
Requirements, Section 15, Colorado Interchange Project Phases,
Turnover Phase. The exercise of State’s rights under this section shall
not waive or release any rights, claims or remedies that State may have
for the Abandonment. The Contractor and the State shall mitigate any
damages that accrue as a result of Abandonment. Notwithstanding
anything contained herein to the contrary, Contractor expressly waives
and disclaims any right or remedy it may have to discontinue the
performance of the Work or any portion thereof.
B. Early Termination in the Public Interest
The State is entering into this Contract for the purpose of carrying out the public
policy of the State of Colorado, as determined by its Governor, General
Assembly, and/or courts. If this Contract ceases to further the public policy of the
State, the State, in its sole discretion, may terminate this Contract, in whole or in part.
Exercise by the State of this right shall not constitute a breach of the State’s
obligations hereunder. This subsection shall not apply to a termination of this
Contract by the State for cause or breach by Contractor, which shall be governed by
§15.A or as otherwise specifically provided for herein.
i. Method and Content
The State shall notify Contractor of such termination in accordance with
§16. The notice shall specify the effective date of the termination, and
whether it affects all or a portion of this Contract. The State shall provide
Contractor with as much notice as is reasonably possible under the
circumstances.
ii. Obligations and Rights
Upon receipt of a termination notice, Contractor shall be subject to and
comply with the same obligations and rights set forth in §15.A.i.
iii. Payments
If this Contract is terminated by the State pursuant to this §15.B,
Contractor shall be paid for work performed and accepted in accordance with
the requirements of this Contract. Additionally, if this Contract is less than
60% completed upon the effective date of such termination, the State may
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reimburse Contractor for actual out-of-pocket expenses (not otherwise
reimbursed under this Contract) incurred by Contractor prior to the effective
date of the termination in the public interest which are directly attributable to
the uncompleted portion of Contractor’s obligations hereunder; provided that
the sum of any and all reimbursement shall not exceed the maximum amount
payable to Contractor hereunder.
C. Additional Remedies
The State, in its sole discretion, may exercise one or more of the following remedies
in addition to other remedies available to it:
i. Suspend Performance
Suspend Contractor’s performance with respect to all or any portion of
this Contract, pending necessary corrective action as specified by the State
without entitling Contractor to an adjustment in price/cost or performance
schedule, based on Contractor’s failure to perform the suspended portions of
the Contract in accordance with the Contract’s requirements. Contractor
shall promptly cease performance and shall promptly cease incurring costs in
accordance with the State’s directive and the State shall not be liable for costs
incurred by Contractor after the suspension of performance under this
provision.
ii. Withhold Payment
Withhold payment to Contractor until Contractor’s performance or corrections
in Contractor’s performance are satisfactorily made and completed in
accordance with this Contract as reasonably necessary for the purpose of
mitigating the State’s damages, until such time as the exact amount of
damages due to the State from Contractor is determined or the breach is
cured and all damages to the State have been fully mitigated.
iii. Deny Payment
Deny payment for those obligations not performed or that cannot be
performed, to the extent due to Contractor’s actions or inactions; provided,
that any denial of payment shall be associated with only the obligations not
performed in accordance with this Contract.
iv. Removal
The State may request removal from work on the Contract of any of
Contractor’s employees, agents, or Subcontractors whom the State reasonably
determines to be incompetent, careless, insubordinate, unsuitable, or
otherwise unacceptable, or whose continued relation to this Contract is
deemed to be contrary to the public interest or the State’s best interest. For
any requested removal of Contractor’s employees, agents or Subcontractors,
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in a non-emergency situation, the State shall provide written notice to
Contractor identifying each element of dissatisfaction and Contractor shall
have ten (10) Business Days from receipt of such written notice to provide
the State with a written action plan to remedy each stated point of
dissatisfaction. In the event of an emergency, the Department’s Division
Director of the Claims Systems and Operations Division and Contractor’s
Account Manager will meet within 24 hours to determine an expeditious
resolution. In the event that completion of the action plan fails to reasonably
remedy all stated points of dissatisfaction, Contractor shall remove the
employees, agents or Subcontractors as requested by the State.
v. Equitable Relief
The State may seek immediate equitable remedies if believed necessary to
prevent irreparable harm, and the State is not required to provide notice and
opportunity to cure in such situations.
D. Multiple Remedies.
The State may exercise multiple remedies as provided in this Contract or by applicable
law, provided that the State shall not receive double recovery for actual damages.
E. Liquidated Damages
i. Contractor acknowledges that late or improper completion of the Colorado interChange will cause loss and damage to the State, and that it would be
impracticable and extremely difficult to determine the actual damage sustained
by the State as a result; it is for this reason that the Parties have agreed,
pursuant to this Section § 15.E, that liquidated damages will be imposed if
certain delays in Quarterly Milestones are experienced. The Parties agree that
the amount of liquidated damages specified in this §15.E represents a
reasonable estimation of damages that will be suffered by the State for late or
improper performance. Liquidated damages may be deducted by the State
from any money payable to Contractor pursuant to this Contract related to
Contractor’s failure to meet Quarterly Milestones as set forth below:
a. If a Quarterly Milestone is missed, then Contractor must analyze whether any changes are necessary to the mutually agreed timeline and
provide an updated timeline to the State for approval by the State.
b. The date when a Quarterly Milestone is due from Contractor and the
Operational Start Date in effect at the time when the Quarterly
Milestone is due are set forth in the Project Management Plan, as
described in Exhibit C, Requirements.
ii. If Contractor’s failure to meet a Quarterly Milestone increases the Operational
Start Date in effect at the time when the Quarterly Milestone is due, the State
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may assess damages in the amount of $4,000 per Business Day until the
Quarterly Milestone is met.
iii. If Contractor’s failure to meet a Quarterly Milestone does not increase the
Start Date, the State may assess damages in the amount of $1,000 per Business
Day until the Quarterly Milestone is met.
v. The deliverable and acceptance for a Quarterly Milestone shall be that as established in Exhibit A, Statement of Work, Section 5.
a. If Contractor does not deliver a Quarterly Milestone by the date established in the Project Management Plan then damages will be
assessed starting on the date that the Quarterly Milestone was due.
b. If the Department directs Contractor to make changes to the Quarterly Milestone deliverable or if the entire Quarterly Milestone deliverable
is rejected, and if Contractor makes changes such that Quarterly
Milestone deliverable is accepted by the State the within the timeframe
as specified in Exhibit A, Statement of Work, Section 5 then no
damages will be assessed.
c. If the Department directs Contractor to make changes to the Quarterly
Milestone deliverable or if the entire Quarterly Milestone deliverable
is rejected, and if Contractor does not make changes such that
Quarterly Milestone deliverable is accepted by the State the within the
timeframe as specified in Exhibit A, Statement of Work, Section 5
then damages will be assessed starting on the date that Contractor’s
timeframe has ended as specified in Exhibit A, Statement of Work,
Section 5.
d. Damages will not be assessed during the timeframe that a Quarterly
Milestone is being reviewed by the State.
iv. Contractor may dispute liquidated damages in accordance with §20.E if
Contractor believes it is not at fault or if the liquidated damages are not
assessed correctly (e.g., per Business Day amount, the number of Business
Days assessed under the liquidated damages) or that damages are the result of
acts or omissions of the State or its agents or events of Force Majeure.
vi. For any liquidated damages assessed under Section 15.E.ii:
a. If the Parties subsequently agree, or it is determined by the outcome of the Dispute Process, that the failure to meet the Quarterly Milestone
will not delay the Operational Start Date in effect at the time when the
Quarterly Milestone was due, any liquidated damages assessed for
such failure will be reduced to $1,000 per Business Day; and
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b. If Contractor meets the Operational Start Date in effect at the time
when the Quarterly Milestone was due, any liquidated damages that
were previously assessed under Section 15.E.ii and not reduced
pursuant to Section 15.E.v.a. above will be reduced to $1,000 per
Business Day.
For Example:
If the Quarterly Milestone is due on March 31st (assuming March 31st is a
Monday), is delivered on April 11th then there are 10 days of damages.
If the Quarterly Milestone is due on March 31st, is delivered on March 31st,
the State reviews for 10 days, and accepts, then no damages.
If the Quarterly Milestone is due on March 31st, is delivered on March 31st,
the State reviews for 10 days, and requests changes or rejects, Contractor has
10 days to fix with no damages.
If the Quarterly Milestone is due on March 31st, is delivered on March 31st,
the State reviews for 10 days, and requests changes orrejects, if Contractor
does not return a revised Quarterly Milestone, the damages start immediately
after Contractor’s 10 days ends. If Contractor returns the revised Quarterly
Milestone on day 12, then only two days of damages would be assessed.
If the Quarterly Milestone is due on March 31st, is delivered on March 31st,
the State reviews for 10 days and requests changes or rejects, Contractor has
10 days to fix with no damages. Then, the State has five days to review and
request changes again, and then Contractor has another five days to fix again,
then there begins a two day turn around for the State and Contractor to review
and fix. This can continue without any damages assuming that everyone
meets their timeline and the Quarterly Milestone is eventually fixed.
F. Other damages
i. Following November 1, 2017, damages shall be imposed if claims
processing is not fully operational and the Colorado interChange and Services
are not operational as described in Exhibit C, Requirements, and Contractor
is determined to be at fault for the delay based on the outcome resulting from
the Dispute Process (as described in §20.E). Damages will be assessed on
a monthly basis based on the increase in the incremental difference between
the amount that must be paid to the current MMIS contractor and the
contractual amount to be paid to Contractor. Contractor and the State will
in good faith mitigate, to the extent possible, any damages. Contractor will not
be paid any amount during such delay. This Section 15.F.i. may only be
modified through a formal Contract amendment under Section 19.H.i and the
date may not be extended through the use of the Project Management Plan.
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ii. If CMS certification is not granted within eighteen (18) months of the first day of the Ongoing Operations and Enhancements Contract Stage, and
Contractor is determined to be at fault for the delay based on the outcome
resulting from the Dispute Process (as described in Section §20.E)
Contractor will reimburse the Department an amount equal to the difference
between the 75% Federal Financial Participation rate for a CMS certified
system and the 50% Federal Financial Participation rate the Department
incurred for operating an non-CMS certified system during the period the
system is not certified by CMS. If CMS certifies the MMIS back to
Operational Start Date, then the State will equitably reimburse Contractor for
the amounts that were assessed under this Section (ii).
G. Damages Disputes
All damages will be assessed via the remedies Dispute Process (as described in
§20.E) for any BIDM or PBMS implementation delays or unmet contractual
obligations that impact the Colorado interChange and Services implementation.
H. Warranty Period
The first 365 calendar days beginning on the first day of the Ongoing Operations
and Enhancements Contract Stage shall be considered the “Warranty Period”. The
Warranty Period covers the agreed upon functionality and Contractor shall be
responsible to correct all Defects in order to allow the Colorado interChange to
operate according to Contract requirements and Specifications. Contractor does not
necessarily need to correct all Defects during the Warranty Period, but all Defects
identified by the Department or Contractor during the Warranty Period shall be
corrected by Contractor within a reasonable timeframe at its expense and at no
additional cost to the Department, or as agreed upon through the Change
Management Process. Contractor will maintain routine Colorado interChange
performance and Fiscal Agent Operations while correcting the Defects.
16. NOTICES AND REPRESENTATIVES
Each individual identified below is the principal representative of the designating Party. Unless
otherwise required by a specific provision of this Contract, all notices required to be given hereunder
shall be hand delivered with receipt required or sent by certified or registered mail to such
Party’s principal representative at the address set forth below. In addition to, but not in lieu of, a
hard-copy notice, notice also may be sent by e-mail to the e-mail addresses, if any, set forth below.
Either Party may from time to time designate by written notice substitute addresses or persons to
whom such notices shall be sent. Unless otherwise provided herein, all notices shall be effective upon
receipt.
For the State: Parrish Steinbrecher, Claims Systems and Operations Division Director
Department of Health Care Policy and Financing
1570 Grant Street
Denver, Colorado 80203
mailto:[email protected]
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For Contractor: Ruth Bryson, Account Executive
HP Enterprise Services, LLC
5400 Legacy Dr.
Plano, TX 75024
17. RIGHTS IN DATA, DOCUMENTS, AND COMPUTER SOFTWARE
A. Ownership.
All software, information and materials and all intellectual property rights in and to
such software, information and materials owned by Contractor prior to the Effective
Date (collectively “Contractor Property”) shall be the sole and exclusive property of
Contractor. All Work, Work Product and Goods shall be the property of the State.
The State shall obtain good and clear title to all such Work, Work Product and Goods
and Contractor shall provide reasonable assistance to the State to establish, confirm,
evidence or enforce such good and clear title. All Work, Work Product, Goods and
all intellectual property rights in and to such Work, Work Product, and Goods
developed or invented pursuant to this Contract, or otherwise resulting from this
Contract, (collectively “State Property”) shall be the sole and exclusive property of
the State. The Colorado interChange will be licensed in accordance with 42 CFR §
495.360, 45 CFR § 95.617, and 45 CFR § 92.34, software and ownership rights. To
the extent that any State Property may be considered a "work made for hire" within
the meaning of the Copyright Act of 1976, as amended (the “Copyright Act”), the
parties agree that such State Property shall be considered a work made for hire. If and
to the extent that any State Property may not be considered a "work made for hire"
within the meaning of the Copyright Act, Contactor agrees that all exclusive right,
title and interest in and to such State Property, and all copies thereof, are hereby
expressly assigned automatically to the State without further consideration. Any
agreement entered into by Contractor and a third party which may or does relate to
the creation, development, invention of any State Property shall include terms that
ensure that the State obtains the same rights in the State generated under such
agreement as those set forth in this §17.A. Contractor agrees to reasonably assist the
State in confirming, obtaining and enforcing all rights and other legal protections for
the State Property and to execute any and all documents that the State may reasonably
request in connection therewith, including without limitation any patent or copyright
assignment document(s), without additional cost to the State. To the extent that any
State Property constitutes a derivative work as defined in the Copyright Act, upon
request by the State, Contractor shall identify the nature of the preexisting work(s),
their owner and the source of Contractor’s authority to create the derivative work.
B. Licenses.
Contractor hereby grants to the State a perpetual, irrevocable, non-exclusive, royalty
free license, with the right to sublicense to Third Party Users, to make, use, reproduce,
distribute, perform, display, create derivatives of and otherwise exploit all Contractor
Property provided pursuant to this Contract that is incorporated in or necessary for the
use, development, installation, Maintenance and revision of the Colorado interChange
mailto:[email protected]
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and Services, except for Contractor Property identified in Exhibit E, Compensation
and Quality Maintenance Payments, Section 1.1.1.4.1. The State hereby grants to
Contractor a perpetual, non-exclusive, royalty free license to reproduce, publish, use,
copy and modify the deliverables under this Contract for the purpose of providing
services to its other customers that are similar to the services under this Contract.
Colorado interChange Source Code will be made available to the State upon request
with thirty (30) days previous notice and be made available quarterly to the State.
C. Third Party Property.
For any property or intellectual property rights of third parties, including without
limitation software, used in or incorporated in the Colorado interChange and Services
by Contractor, or necessary for the use of the Colorado interChange by the State,
(collectively “Third Party Property”) Contractor shall obtain and maintain, without
additional cost to the State, all necessary rights for Contractor and the State to use all
Third Party Property for the purposes contemplated by this Contract. For all Third
Party Property that comprises software, Contractor will provide copies of all licenses
applicable to such software to the State upon reasonable request by the State and at
the time of the Turnover Phase, as defined in Exhibit D, Project Phase Document.
D. Underlying Technology.
Nothing contained in this Contract will restrict either party from using any ideas,
concepts, know how, methodologies processes, technologies, algorithms, or
techniques that either party, individually or jointly, develops or discloses under this
Contract, provided that in doing so the party does not breach its confidentiality
obligations or infringe the intellectual property rights of the other party or third parties
who have licensed or provided materials to the other party. Nothing in this Contract
will prevent either party from independently developing any software or technology
that is the same or similar to any software or technology owned by the other party so
long as the developing party does not infringe or misappropriate any intellectual
property rights of the other party.
E. Avoidance of Infringement.
In performing under this Contract, Contractor agrees to avoid designing or developing
any items that infringe one or more patents or other intellectual property rights of any
third party. If Contractor becomes aware of any such possible infringement during in
the course of performing under this Contract, Contractor shall immediately inform the
State in writing.
F. Indemnification.
Contractor will defend, indemnify and hold the State harmless from and against any
and all claims, actions, losses, liability, damages, costs, and expenses (including
attorney’s fees, expert witness fees, and court costs) directly or indirectly arising from
or related to any actual or alleged infringement (including contributory infringement),
misappropriation, or violation of any third party’s patents, copyrights, trade secret
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rights, trademarks, or other intellectual property or proprietary rights of any nature in
any jurisdiction in the world, relating to any Contractor Property or State Property or
any portion thereof, or the use thereof by the State or its agents or employees. The
State shall: (i) give Contractor written notice within thirty (30) days of receipt by the
State of notice of such claim or action; and (ii) allow Contractor to control, and
provide reasonable assistance and cooperation to the Contractor in connection with
such claim or action and all related negotiations. Contractor shall keep the State
advised of any defense or settlement. Contractor shall not enter into any stipulated
judgment or settlement that purports to bind the State without the State’s express
written Authorization, which shall not be unreasonably withheld or delayed. The State
may, at its discretion, participate in any defense. The foregoing obligations shall not
apply to the extent such infringement results solely from or is based solely on (i) any
use of the product or service or modifications to the product or service by the State
that was not contemplated by Contractor or described in this Contract, or (ii) the
combination by the State of such product or service with any equipment, software or
other materials that were not provided or expressly approved by Contractor. For the
avoidance of doubt, the obligations of Contractor under this Section 17.F are not
subject to Section 19.P.
G. If any Contractor Property or State Property or any portion thereof, or the use thereof
by the State or its agents or employees, is found to infringe (including contributory
infringement), misappropriate, or violate a third party’s patent, copyright, trade secret
right, trademark, or other intellectual property or proprietary rights of any nature in
any jurisdiction in the world, and the completion, implementation or use pursuant to
this Contract of any such Contractor Property or State Property or any portion thereof
is impaired thereby, Contractor shall, at no charge to the State, and in addition to the
State’s other rights and remedies, (a) secure for the State and Contractor, to the extent
necessary, the right to complete, implement, and use such Contractor Property or State
Property as allowed under this Contract, (b) if (a) is not reasonably available, modify
or replace Contractor Property or State Property so that they are non-infringing and
provide similar features, functionality, or performance, or (c) if (b) is not reasonably
available, refund to the State all amounts paid for Contractor Property or State
Property under this Contract.
H. The obligations described in this section §17 shall survive the termination, expiration,
cancellation or non-renewal of this Contract. Contractor shall be liable for all costs
and expenses incurred by the State under §17. Subject to Section 19.P, Contractor
shall reimburse and indemnify the State or its insurers for any claim(s) not covered
by Contractor’s insurance including deductibles, retentions, self-insurance, co-
insurance, uninsured or excess amounts.
18. GOVERNMENTAL IMMUNITY
Liability for claims for injuries to persons or property arising from the negligence of the State of
Colorado, its departments, institutions, agencies, boards, officials, and employees is controlled and
limited by the provisions of the Colorado Governmental Immunity Act, CRS §24-10-101, et seq.,
and the risk management statutes, CRS §24-30-1501, et seq., as now or hereafter amended or as
otherwise provided by law.
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19. GENERAL PROVISIONS
A. Assignment and Subcontracts
Contractor’s rights and obligations hereunder are personal and may not be
transferred, assigned or subcontracted without the prior, written consent of the State.
Any attempt at assignment, transfer or subcontracting without such consent shall be
void. All assignments, subcontracts, or Subcontractors approved by Contractor and
the State are subject to all of the provisions hereof. Contractor shall be solely
responsible for all of the Work performed under this Contract, regardless
of whether Subcontractors are used and for all aspects of subcontracting
arrangements and performance. Copies of any and all subcontracts entered into by
Contractor to perform its obligations hereunder shall be in writing and submitted to
the State upon request. Any and all subcontracts entered into by Contractor related
to its performance hereunder shall require the Subcontractor to perform in accordance
with the terms and conditions of this Contract and to comply with all applicable
federal and state laws. Any and all subcontracts shall include a provision that such
subcontracts are governed by the laws of the State of Colorado.
B. Binding Effect
Except as otherwise provided in §19.A, all provisions herein contained, including the
benefits and burdens, shall extend to and be binding upon the Parties’ respective
heirs, legal representatives, successors, and assigns.
C. Captions
The captions and headings in this Contract are for convenience of reference only, and
shall not be used to interpret, define, or limit its provisions.
D. Counterparts
This Contract may be executed in multiple identical o