BO-110-10-00

SUBJECT: GENERAL CONDITIONS (FOR BIDS AND CONTRACTS WITH THE

COMMONWEALTH OF KENTUCKY)

The following general conditions shall become a part of each invitation For Bid and Contract for commodities and services issued by the Commonwealth of Kentucky:

1. Every person submitting a bid to the Commonwealth shall be deemed to have assented to these conditions by the act of bidding.

2. These general conditions though not repeated in each Invitation For Bid, shall be an integral part of each invitation and resulting contract. The general conditions shall be transmitted to all vendors upon their application to be placed on the source list and thereafter shall form an integral part of each Invitation.

3. Additional conditions may be incorporated in specific Invitations and Contracts and shall be termed "Special Conditions". Special conditions shall in no way operate to alter or nullify the general conditions, and each bidder shall be responsible for compliance with both the general and special conditions.

I. BID SUBMISSION COMPLIANCE AND PROVISIONS: When submitting bids on any item to be purchased by the Commonwealth of Kentucky, the bidder shall:

a. Submit each bid or quotation in legible form on the "Invitation For Bid" or "Request For Quotation" form respectively.

b. Have the bid signed by a proper agent of the firm prior to the bid opening. No bid shall be considered valid unless filled out in ink or typewritten and signed in ink in the space provided on the bid form. Approved electronic format may also be accepted.

c. Specify brand name or trademark and model and catalog number for each item bid.

d. Offer only one price for each item bid and offer only one product for each item of the Invitation, unless the Invitation specifically states that more than one product may be bid on for a single item of the contract. Offering more than one product for any item of the Invitation is multiple bidding and shall automatically disqualify the entire bid except when multiple bids are expressly invited by the Invitation For Bid.

e. Extend prices for items if applicable and provide an extended total and a grand total if appropriate. If an error is made in an extension of prices the unit price shall govern.

f. Quote prices on a delivered prepaid basis F.O.B. destination shown in the shipping instructions of the Invitation, unless otherwise stated in the Invitation. "F.O.B. Factory-Freight Allowed" or other such terms shall not be quoted.

g. Provide technical specifications together with any other data the Division of Material & Procurement Services needs to evaluate properly those brands of products offered as equal to those specified in the Invitation prior to the date the bid is to be opened and state clearly, on the bid proposal, or in an attached letter, any way(s) in which the brand offered deviates from the brand specified.

h. Refrain from including Federal Excise Taxes in the bid, since the Commonwealth is exempt from such taxes.

i. Provide new and current commodities (latest models) unless otherwise specified in the Invitation.

j. Provide firm prices unless otherwise stated in the Invitation.

k. Submit bids in such a way as to ensure that they arrive in the Division of Material & Procurement Services before the time set for opening the bid or quotation. The time shown on the recording clock in the Bid Receipt Room in the Division of Material & Procurement Services shall be considered the correct time. To be considered for an award of contract, a late bid shall be postmarked before the bid opening date and shall be the only responsive bid received. Hand-delivered bids shall not be considered unless they are delivered before the bid opening time and date.

l. Maintain as a firm offer all bids with respect to price, terms and conditions after bids are opened. After opening, bids may be withdrawn prior to an award only if evidence is presented to the Director of the Division of Material & Procurement Services which clearly demonstrates that the bidder has made a bona fide error in the preparation of the bid and that the error will result in a substantial loss to the bidder if he is forced to perform under the contract. Prior to opening, a bid shall be withdrawn at the vendor's request.

m. Accept any contracts awarded on the price, terms and conditions stated in the bid.

n. Submit a bid bond or check, as specified in the Special Conditions of the Invitation. Any bid may be rejected for failure to comply with conditions or specifications regarding both bonds or checks.

o. Comply with the Solicitation Instructions and all requests regarding the submission of samples, and pay all shipping costs for samples either sent to or returned from the Division of Material & Procurement Services. Title to any sample shall rest in the Division of Material & Procurement Services, if within 30 days after award, the bidder does not request return.

p. Make available records, papers, books, or other documents, whether during performance or in connection with a preliminary investigation of bidder's financial status. Such information shall be limited to the information generally available to the public, provided it satisfactorily indicates the bidder's ability to perform as specified in the contract. If the initial investigation does not reasonably satisfy the Division of Material & Procurement Services that the contract can be performed, the Division may request additional information before a contract is awarded. If so requested, the bidder shall furnish the Division of Material & Procurement Services with a list of names of several users of the bidder's products. The bidder shall also make available to the Commonwealth of Kentucky for a period of five years after acceptance of equipment, both spare parts and maintenance service at current user prices, in the event of equipment malfunction requiring said service or spare parts.

q. File a performance bond if requested by the Division of Material & Procurement Services whether or not a bond was required by the Invitation for Bid. The bidder shall sign the bond as principal and in addition shall have the bond signed by a surety company authorized to do business in the State of Kentucky. If the surety has its authority to do business in Kentucky revoked or withdraws from doing business in the Commonwealth, the bidder shall promptly obtain another surety on the bond. All bonds furnished shall be conditioned upon the full performance of all obligations imposed on the bidder by his contract with the Commonwealth and shall provide for recovery by the Commonwealth of all damages suffered by it by reason of the bidder's failure to perform any of his contract obligations. Recovery shall be permissible from the bidder and the surety or either of them.

r. Obtain a bond meeting the requirements of the Invitation For Bid from the bidder's source of supply if requested to do so by the Division of Material & Procurement Services. If a bond is required, it shall be made in favor of the Commonwealth of Kentucky and shall be conditioned on the source of supply making available to the bidder such equipment or products as will enable him to fulfill his obligations under his contract with the Commonwealth.

s. Submit the required bonds in a form approved by the Division of Material & Procurement Services.

t. Refrain from assigning any interest, right or duty in any contract with the Commonwealth to any other person without the prior written consent of the Division of Material & Procurement Services, except that claims for sums due or to become due under a contract may be assigned to a bank, trust company or other person and may then be reassigned. Notice of any assignment shall be given by the vendor or his assignee to the using agency and the Division of Accounts, Office of the Controller, Capitol Annex, Frankfort, Kentucky 40601, immediately after the assignment is made, and the invoice or voucher submitted by the vendor shall clearly show both the vendor name and address and the assignee's name and address. The warrant issued by the Division of Accounts shall be payable in such case jointly to the vendor and the assignee and shall be forwarded to the assignee. Any assignee shall be subject to the set-off rights of the Commonwealth provided in Kentucky Revised Statutes. See KRS 371.040 and KRS 44.030.

u. Use the self-addressed return envelopes which may be included with an Invitation For Bid or indicate the Invitation number, opening date and time on the lower left corner of the response envelope.

If state offices are closed on days other than scheduled holidays, bid openings scheduled for that day shall be held on the next normal working day at the scheduled hour.

If opening hours of state offices are delayed, morning bid openings shall be delayed by the same amount of time. (i.e. If offices open two hours late, morning bids shall be opened two hours late.) Afternoon bids shall be opened as scheduled.

II. COMPLIANCE WITH STATE AND FEDERAL LAW: In addition to any other remedies at law or in equity, the Division of Material & Procurement Services may cancel any contract if there is sufficient evidence to show that:

a. The contract was obtained by fraud, collusion, conspiracy or other unlawful means, or

b. The contract conflicts with any statutory or Constitutional provision of the Commonwealth of Kentucky or of the United States.

III. COMPENSABLE DAMAGES FOR BREACH: The following items shall be included as compensable damages to the Commonwealth of Kentucky for any breach of contract with the Commonwealth of Kentucky:

a. Replacement costs.

b. The cost of repeating the competitive bidding procedures.

c. Expenses incurred as the result of delay in obtaining replacements.

The enumeration of compensable damages contained in this section is not intended to be exclusive and shall not operate to bar recovery by the Commonwealth for any other damages occasioned by the vendor's breach of contract. However, if the contract provides for liquidated damages, said liquidated damages shall be in lieu of all other damages, including those enumerated.

IV. DELIVERY, TRANSPORTATION AND PACKAGING: If awarded a contract, the bidder shall:

a. Make deliveries as stated in the contract. All deliveries shall be made by the end of the state's fiscal year in which the contract is awarded unless otherwise specified in a specific contract.

b. Make deliveries during normal working days and hours to the point or points specified in the Invitation For Bid (normal working hours being 8:00 a.m. to 4:30 p.m., Monday through Friday, except holidays).

c. Pay all transportation charges to the delivery point utilized by the using agency even though the contract document specified prices F.O.B. to a point other than the agency utilizes. The vendor is entitled to reimbursement for any increased cost of transportation from the F.O.B. point shown in the contract document to the delivery point utilized by the agency.

d. Adequately pack all commodities and equipment, according to accepted commercial practice and the packaging and marketing instructions in the contract document. No charges shall be made for packing cases, bailing, crating, barrels, drums, bags or other containers, except that if the bid so specifies, the vendor may make a memorandum charge and require the using agency either to return the containers for credit (with transportation costs paid by the vendor) or pay for said containers if not returned in a reasonable length of time.

V. CONTRACT PROVISIONS BY REFERENCE: The Commonwealth's acceptance of the bidder's offer by the issuance of a contract shall create a contract between the parties thereto containing the following:

a. All specifications, terms and conditions in the Invitation For Bid and the Bid Form, except as amended in the contract.

b. All terms, special conditions and specifications.

c. The General Conditions stated herein.

Any contract agreement entered into with the Commonwealth of Kentucky or any of its agencies, shall be governed by the laws of the Commonwealth of Kentucky.

No contract shall be binding on the Commonwealth of Kentucky until an encumbrance of funds has been made in the Finance and Administration Cabinet for payment of the sums due under the provision of the contract.

VI. CONTRACT CHANGES: The Commonwealth may, at any time by a written order and without notice to the sureties, make changes within the general scope of the contract. If any change causes an increase or decrease in the cost of, or the time required for, the performance of any part of the work under the contract, an equitable adjustment shall be made in the contract price or delivery schedule, or both, and the contract shall be modified in writing accordingly. Any claim by the contractor for adjustment under this clause shall be asserted, by the contractor, within 30 days from the date of receipt of the notification of changes, except, that if the Commonwealth decides that the facts justify such action, the Commonwealth may receive and act upon any such claim asserted at any time prior to final payment under this contract. If the cost of property may be obsolete or excess as a result of a change included in the contractor's claim for adjustment, the Commonwealth shall have the right to prescribe the manner of disposition of such property. Failure to agree to any adjustment may be disputed pursuant to the clause of this contract entitled "Disputes." However, nothing in this clause shall excuse the contractor from proceeding with the contract as changed.

VII. CONTRACT DISPUTES: Except as otherwise provided in the contract, any dispute concerning a question of fact arising under the contract which is not disposed of by agreement shall be decided by the Secretary of the Finance and Administration Cabinet or a designated purchasing official, who shall reduce the decision to writing and mail or otherwise furnish a copy thereof to the contractor. The decision of the purchasing official shall be final unless, within 30 days from the date of receipt of the decision, a written appeal is received, addressed to the Secretary of the Finance and Administration Cabinet. The decision of the Secretary of the Finance and Administration Cabinet or his duly authorized representative for the determination of such appeals shall be final unless fraudulent. Pending final decision of a dispute, the contractor shall proceed diligently with the performance of the contract and in accordance with the state officer's decision.

VIII. EQUAL EMPLOYMENT COMPLIANCE: During the performance of each contract, the contractor or vendor shall:

a. Not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, handicap, or national origin.

b. Take affirmative action in regard to employment, upgrading, demotion, transfer, recruitment, recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and selection for training, so as to ensure that applicants are employed and that employees during employment are treated without regard to their race, color, religion, sex, age, handicap, or national origin; however, if layoffs occur, employees shall be laid off according to seniority with the most recently hired employee being laid off first. Employees shall be recalled in the reverse of the way the employees were laid off.

c. State in all solicitations or advertisements for employees placed by or on behalf of the contractor that all qualified applicants shall receive consideration for employment without regard to race, color, religion, sex, age, handicap, or national origin.

d. Post notices in conspicuous places, available to employees and applicants for employment, setting forth the provision of the nondiscrimination clauses required by this section.

e. Send a notice to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding advising the labor union or worker's representative of the contractor's commitments under the nondiscrimination clauses.

IX. REPORTING COMPLIANCE OR BREACH: Upon being declared the successful bidder, the contractor or vendor shall submit, in a manner as prescribed by the Finance and Administration Cabinet and on forms devised and supplied by the contracting agency, a breakdown of the bidding party's existing workforce, indicating the race, sex, age, position held, county, and state of residence, and date of employment of each employee.

Additionally, a successful bidder shall submit data as required by KRS 45.550 to 45.640 and a statement of intent to comply in full with all requirements of the Kentucky Civil Rights Act.

If a determination is made that the bidding party's workforce information shows compliance with the law, the bidder shall be certified and thereby qualified to bid on any contract covered by KRS 45.550 to 45.640 without filing additional data for a six month period. If the workforce information shows an under utilization of minorities, the bidding party shall be required to submit an affirmative action plan indicating goals and timetables for recruiting and hiring minorities in the contractor's workforce.

X. FAILURE TO COMPLY: Failure to comply with any provisions of KRS 45.550 to 45.640 shall constitute a material breach of contract.

XI. ADDITIONAL EQUAL EMPLOYMENT PROVISIONS UNDER CONTRACTS UTILIZING FEDERAL FUNDS: The contractor shall comply with all provisions of Presidential Executive Order 11246 (41 CFR, Part 60-1.4) as amended.

XII. TERMINATION OF CONTRACTS:

a. Termination for Default

1. Any contractor determined in writing by the purchasing official to be in breach of any of the terms and conditions of a contract with the Commonwealth of Kentucky may, in the discretion of the purchasing official, be declared in default and such contract may be terminated as a result of such default.

2. A default in performance by a contractor for which a contract may be terminated shall include, but shall not necessarily be limited to, failure to perform the contract according to its terms, conditions and specifications; failure to make delivery within the time specified or according to a delivery schedule fixed by the contract; late payment or nonpayment of bills for labor, materials, supplies, or equipment furnished in connection with a contract for construction services as evidenced by mechanics' liens filed pursuant to the provision of KRS Chapter 376, or letters of indebtedness received from creditors by the purchasing agency; failure to diligently prosecute the work under a contract for construction services.

3. The Commonwealth shall not be liable for any further payment to a contractor under a contract terminated for the contractor's default after the date of such default as determined by the purchasing official except for commodities, supplies, equipment or services delivered and accepted on or before the date of default and for which payment had not been made as of that date. The contractor, and his surety, if a performance or payment bond was required under the contract, shall be jointly and severally liable to the Commonwealth for all loss, cost or damage sustained by the Commonwealth as a result of the contractor's default; except that a contractor's surety liability shall not exceed the final sum specified in the contractor's bond.

b. Termination for Convenience

The Commonwealth may terminate for its own convenience all contracts for the procurement of supplies and services if the purchasing official has determined that such termination will be in the Commonwealth's best interests. If it has been determined that a contract shall be terminated for the convenience of the Commonwealth, the purchasing agency may negotiate a settlement with the contractor according to terms deemed just and equitable by the purchasing agency. Compensation to a contractor for lost profits on a contract terminated for convenience of the Commonwealth shall not exceed an amount proportionate to the sum that the contractor's total expected margin of profit on the contract bore to the contract price, based on the total out-of-pocket expense incurred by the contractor as of the date of termination of the contract. If a contract is terminated for the convenience of the Commonwealth, the contractor shall have the burden of establishing the amount of compensation to which he believes himself to be entitled by the submission of complete and accurate cost data employed in submitting his bid or proposal for the contract and evidence of expenses paid or incurred in performance of the contract from the date of award through the date of termination. Payment of the sum agreed to in settlement of a contract terminated for convenience of the Commonwealth shall be made from the same source of funds or account as the original contract.

XIII. COMPLIANCE WITH FEDERAL REQUIREMENTS: If a procurement involves the expenditure of federal assistance or contract grant funds, the awarded contractor shall comply with such federal law and authorized regulations which are mandatorily applicable and which are not presently set forth elsewhere in the solicitation. Reference: Office of Management and Budget Circular A-102, Appendix "O".

XIV. TERMS FOR PROMPT PAYMENT: KRS 45.451 to 45.458 require that all bills shall be paid within 30 working days of either the receipt of correct invoice, or receipt of goods or services in satisfactory condition. A penalty payment of 1% per month shall be added to the amount due the vendor for each full or partial month that the payment exceeds 30 working days. As an incentive for earlier payment, bidders for state contracts are encouraged to offer discounts for payments made in less than the prescribed 30 days.

(end of General Conditions)