EXHIBIT 10.14
COMMONWEALTH OF VIRGINIA
CONTRACT FOR NETWORK MANAGER SERVICES
BETWEEN
THE VIRGINIA INFORMATION PROVIDERS NETWORK AUTHORITY
AND
VIRGINIA INTERACTIVE, LLC
This Contract is between the Commonwealth of Virginia, hereinafter
referred to as the "Commonwealth", operating by and through the Virginia
Information Providers Network Authority, hereinafter referred to as the
"Authority", a political subdivision created pursuant to Chapter 46, Code of
Virginia, by the Virginia General Assembly for the purpose of carrying out an
essential government function and matters of public necessity, and Virginia
Interactive, LLC, a Virginia limited liability company of which the National
Information Consortium, Inc., is the controlling member.
WHEREAS, on May 15, 1997, the Authority issued a request, hereinafter
referred to as the "Solicitation", to all interested vendors advising vendors
of the Authority's desire to execute its responsibilities through the
services of a Network Manager and seeking proposals that would help the
Authority structure a mutually advantageous relationship with a Network
Manager; and
WHEREAS, the National Information Consortium, Inc., submitted a
proposal, dated June 16, 1997, and a proposal addendum, dated July 16, 1997,
hereinafter referred to as the "Proposal", in response to the Solicitation,
and such Proposal was determined by the Authority to meet the requirements of
the Solicitation; and
WHEREAS, the Authority desires to enter into a contract with Virginia
Interactive, LLC., hereinafter referred to as "VI", for VI to serve as Network
Manager to establish, develop, operate, maintain, and expand the Virginia
Information Providers Network, hereinafter referred to as the "Network", as
outlined in the Code of Virginia, in the Solicitation, and in this Contract, for
the purpose of providing increased electronic access to public and other useful
and relevant information and electronic transactions with government as
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contemplated by the grant of authority issued by the Virginia General
Assembly to the Authority;
NOW THEREFORE, the parties agree as follows:
1. PURPOSE OF THE INFORMATION NETWORK.
The purpose of the Virginia Information Providers Network and this
Contract may be summarized as follows:
a. To create and provide a significant and aggressively promoted
public service to the citizens and businesses of Virginia by (1) increasing
accessibility to public information and other useful information and services
through electronic means, and (2) promoting economic development by
increasing ease of access to public information and other useful information,
and by promoting the sharing of that information through electronic
transactions.
b. To provide such public service through private capital and
management.
2. TERM OF CONTRACT.
The term "Contract" as used in this document shall mean the initial
term, together with any renewal term which is approved.
This Contract shall be for a term of five (5) years, commencing
September 1, 1997, and expiring at 12:00 a.m., August 31, 2002, unless
earlier terminated by the Authority. At the option of the Authority, the
Contract may be renewed for a period of five (5) additional years. By March
31, 2001, the Authority will inform VI of the Authority's decision on whether
or not to extend the contract period through August 31, 2007.
VI will be responsible during the term of this Contract for procurement,
installation, maintenance and testing, and production operation of Network
hardware and software.
If the Authority decides to extend the Contract through August 31, 2007,
the Authority shall be entitled to a perpetual for-use-only software license
with the right to modify, along with application software documentation and
source code, for no additional compensation to VI. The latest production
version of documentation and source code will be maintained in escrow by VI,
to the benefit of the Authority, throughout the life of this contract.
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Prior to August 31, 2002, the Authority reserves the right to negotiate
terms for licensure of software, which may include a perpetual for-use-only
software license with a right to modify software application documentation
and source code, notwithstanding the terms set forth in the section of this
Contract concerning Continuation of Operations During Transition Period.
3. INCORPORATION BY REFERENCE.
The provisions of the Solicitation and the Proposal are hereby
incorporated into this Contract and made a part hereof. If there is any
conflict among the provisions of the Solicitation, the Proposal, this
Contract, and the laws of the Commonwealth, then those conflicts will be
resolved in the following order of precedence:
a. Virginia law
b. This Contract
c. The Solicitation
d. The Proposal
This Contract may be amended only by mutual expressed written consent.
4. RELATIONSHIP OF PARTIES.
Notwithstanding any other provisions contained herein, it is expressly
agreed that VI is an independent contractor in the performance of each and
every part of this Contract. As such, VI is solely liable for all labor and
expenses in furtherance of such performance and for any and all damages which
may be occasioned on account of its performance hereunder.
VI may become an agent of the Authority only by the expressed written
consent of the Authority.
VI understands the role of the Authority in the policy making process
and agrees to be responsive to policy decisions of the Authority.
VI will not pledge any assets of the Authority or the Commonwealth in
its care, custody or control, or cause any type of lien to attach to such,
except with the express written permission of the Authority.
It is expressly agreed that VI and any subcontractors and agents,
officers, and employees of VI or any subcontractors in the performance of
this Contract shall act in an independent capacity and not as officers or
employees of the Commonwealth. It is further expressly agreed that this
Contract shall not be
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construed as a partnership or joint venture between the contractor or any
subcontractor and the Commonwealth.
5. HARDWARE AND SOFTWARE AGREEMENTS.
VI will provide hardware, and provide or develop software as enumerated
in the Proposal, and such other hardware and software as may be necessary to
make the Network operational.
All Network trademarks, tradenames, logos and other Network identifiers
(e.g. VIPNet), Internet uniform resource locators, Internet addresses, and
e-mail addresses obtained or developed pursuant to this Contract shall be the
property of the Authority. VI is hereby granted a full license to the same
for the duration of this Contract and any extensions thereof.
6. CONNECTIONS WITH STATE AGENCIES.
Costs associated with and maintenance of communication links from state
facilities to VI facilities for Network purposes, including but not limited
to leased circuits from telephone or cable companies, shall be paid as
expenses by VI.
7. INFORMATION NETWORK SERVICE.
On behalf of the Authority, VI shall negotiate with and obtain written
contracts from each separate data-providing entity, hereinafter referred to
as DPE, from which electronic access is desired.
All subscribers will be required to execute a contract for services.
All contracts with DPEs shall be subject to the approval of and review
by the Authority.
8. REGULATION OF RATES BY THE AUTHORITY
All rates and fees charged to Network users shall be subject to the
final approval of the Authority. The Authority may on its own motion review
and regulate any and all rates and fees for fairness, reasonableness, and
appropriateness. VI may at any time recommend changes in rates and fees to
the Authority.
9. FINANCIAL MANAGEMENT.
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The Network Manager shall operate in accordance with an annual
management and budget plan prepared and amended in consultation with the
Authority. The management and budget plan shall be approved by the
Authority and shall reflect the priorities for the Network established by the
Authority in consultation with the Network Manager. The Network Manager
shall ensure regular review by the Authority of progress made in relation to
the management and budget plan.
VI shall establish one or more accounts in Virginia financial
institutions which are federally insured for deposit of revenue from Network
operations and shall furnish the Authority with the names of the
institutions, the account numbers, and the names of those persons having
signatory authority.
The disbursement of funds received by the Network Manager as a result of
the operation of this Contract will be as follows:
a. Payment of all Network operating expenses.
b. Transfer of funds to the Authority in accordance with (i)
Interagency Agreements between the Authority and respective data providing
entities, and (ii) amounts for the reasonable and necessary expenses of the
Authority as determined by the Authority and stated in the budget plan.
c. All remaining funds will be retained by VI.
10. FINANCE INFORMATION AND RECORDS.
All VI documents and records pertaining to operation of the Network will
be available for inspection, auditing, and copying by the Authority, or other
authorized representatives designated by the Authority, at any reasonable
time. Monthly income statements and balance sheets for the Network will be
provided to the Authority by VI.
VI also agrees to comply with any recommendations made in any audit,
unless VI and the Authority otherwise mutually agree. Any such audit will be
performed by a competent and reputable CPA licensed in Virginia.
To the extent an audit report discloses any discrepancies in the VI
charges, xxxxxxxx, or financial records, and following a period for review
and verification of the amount by VI, VI will adjust the monthly xxxx as soon
as reasonably possible, but not to exceed 90 days. VI shall cooperate to
assure that verification is completed in a timely manner.
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The accounting system is to include a numbered chart of accounts, books
of original entry of all transactions, appropriate subsidiary ledgers, a
general ledger which includes to-date postings and an audit trail through
financial statements. Such books may either be maintained on paper or on
computer with appropriate backup. VI shall from the beginning of this
Contract adopt the calendar year ending December 31, for reporting purposes.
11. PERSONNEL PRACTICES.
The hiring, recruitment, management, training, and firing of VI
employees will be the responsibility of VI. The Authority's only involvement
in the personnel affairs of VI shall be limited to disclosure of the names
and positions of officers and employees of VI.
No officer, employee, director, or member of VI shall receive a salary,
except as and for services performed by such officer, employee, or director,
or member for VI on behalf of the Virginia Information Providers Network.
VI shall be responsible for all required employer costs attributable to
its officers and employees, including but not limited to, workers'
compensation premiums and deductible, unemployment compensation tax
withholding contributions, tax withholding contributions, and similar items.
12. CHANGES IN INFORMATION NETWORK.
Network operations and development shall be in accordance with the
Proposal, the Solicitation, and this Contract.
A planned material change in Network operations cannot be made by VI
without the prior written consent of the Authority. A "material change"
includes, but is not limited to, a change which is substantial and which
increases response time to inquiries, adds to the complexity of Network use,
diminishes services provided to users, or results in a comparable impact on
operations noticeable by users.
VI will provide to the Authority at least thirty (30) days prior written
notice of a planned material change in Network operations.
VI shall timely provide to the Authority such other management reports
as the Authority may reasonably request.
13. NOTICES.
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The Authority contact person shall be designated by the Authority in
writing no later than upon the execution of this Contract. The VI contact
person shall be the President of VI. Each party may change its designation
for notice following written notice to the other party to this Contract.
Notices by the parties to one another shall be given in writing to the
persons identified above or to such other persons as may be subsequently
identified in a written notice. Such notices shall be effective on the date
of receipt if sent by U. S. first-class or restricted delivery mail,
postpaid, or by any reputable overnight delivery service, prepaid.
14. APPROPRIATE USE MESSAGES.
Where appropriate within the website, the Network Manager shall display
an appropriate use message to all Network subscribers on a screen prior to
accessing the affected information. Each subscriber shall be required to
verify compliance with said message terms. Upon subsequent log-ons, such
message shall be displayed, without verification, only if prior verification
is logged in the user file.
The Network Manager shall provide DPEs the opportunity to include
additional wording if determined necessary by the DPE. The appropriate use
message may be approved by the Authority and updated to comply with any
amendments to the law, or as required by the Authority.
15. ACCESS BY DATA PROVIDING ENTITY.
a. DPEs furnishing information for which Network fees are charged shall
have terminal (read) access to the Network's computerized log of subscribers
using that DPE's data and their security status, without access cost to the
DPEs. The DPEs will be responsible for the cost of terminal(s) and the cost
of a dial-up or lease line, or Internet access, whichever is used.
b. Each respective DPE shall be able to sign on to the Network to audit
the dissemination of its records. On-line audit capability must be available
for the length of time specified by the data owning agencies after
transaction processing. At a minimum, the Network shall retain the following
data: name of subscriber, transaction date and time, type of inquiry and
access keys. After the on-line retention period has expired, VI shall, as
specified between VI and the DPEs, retain, destroy, or provide the record
information to the data owning agencies without cost.
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c. VI shall notify affected DPEs and the Authority within two (2) hours
of unauthorized attempts to gain access to data which is restricted by the
terms of the Interagency Agreement with the DPE. The notice shall contain
detailed information to aid the affected DPE in examining the matter.
d. Only information that is legally distributable will be included on
the Network. The DPE will remain the legal custodian of any data placed on
the Network. In accessing data on any DPE's host platform, the Network
Manager will comply with the DPE's security requirements or work with the DPE
to improve security procedures, if such action is deemed appropriate.
16. INSURANCE AND BONDS.
VI shall provide the Authority written proof of the following provided
by a qualified firm authorized/admitted to do business in Virginia:
a. Proof of a general comprehensive liability insurance policy in
the amount of at least $1,000,000.
b. VI shall maintain all workers' compensation insurance coverage
as required by law.
c. VI shall maintain Employers' Liability Insurance - Coverage B,
as required by law.
d. VI shall maintain a commercial automobile policy in the amount
of at least $1,000,000.
e. VI shall maintain a fidelity bond in the amount of at least
$100,000 per employee.
17. TERMINATION OF CONTRACT.
The Authority shall have the right to terminate this Contract for cause,
subject to cure, by providing written notice of termination to VI. Such
notice shall specify the time, the specific provision of this Contract or
"for cause" reason that gives rise to the termination, and shall specify
reasonable appropriate action that can be taken by VI to avoid termination of
the Contract. The Authority shall provide a period of up to sixty (60) days,
unless otherwise specified in this Contract, for VI to cure breaches and
deficiencies of its performance obligations under this Contract.
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The Authority may terminate this Contract at any time, and without
cause, if directed to do so by statute.
18. TERMINATION FOR CAUSE
For purposes of this Contract, the phrase "for cause" shall mean, but
not be limited to:
a. Any material breach or evasion by VI of the terms or conditions of
this Contract and its amendments, if any;
b. Ownership in VI by a member unacceptable to the Authority.
c. Substantial cessation of Network services by the Network.
d. Fraud, misappropriation, embezzlement, malfeasance, significant
misfeasance, or illegal conduct by VI, its officers, directors, or members.
e. Dissolution of VI or forfeiture of its company's existence.
f. Repeal of the Authority's enabling statutes. This is cause for
immediate termination, unless another agency is designated for oversight of
the Network within a reasonable time prior thereto.
g. Amendment of the Authority's enabling statue or an adverse judicial
decision by a court of competent jurisdiction, which has the effect of
rendering Network operations no longer feasible.
h. Insolvency of VI.
I. Material breach of an agreement with any DPE.
j. Intentional disclosure of any confidential information.
19. LIMITATION OF PURPOSE.
VI shall engage solely in the business or businesses expressly approved
by the Authority which shall initially be only and solely the start-up,
operation, maintenance and expansion of the Network.
20. PATENT, COPYRIGHT, TRADEMARK,TRADE SECRET INDEMNITY.
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VI warrants that its proposed operation of the Network does not and
shall not infringe on the United States patent, copyright, trademark or trade
secret right of any person or entity. The Authority shall be provided with
prompt notice of any such claim of infringement and VI shall have the
exclusive right to defend or settle such claim at VI's option. The Authority
shall cooperate with VI in its defense or settlement of such claim at no
expense and no liability to the Authority. VI and the National Information
Consortium, Inc., will be responsible for all expenses necessary to hold the
Authority or its members harmless from any claims arising from the subject of
this section.
21. LIABILITY.
The Commonwealth, its agents, and employees shall not be legally
responsible for errors due to Network problems.
VI agrees for itself, its agents, employees, and assigns to hold
harmless, indemnify and defend the Authority and the Commonwealth, its agents
and employees from any actions arising out of VI's negligence or material
failure to perform under the terms of this Contract.
VI agrees that it has no right of subrogation or contribution from the
Commonwealth for any judgment rendered against VI.
VI agrees to indemnify, defend, and hold harmless the Commonwealth and
Authority board members, its officers, agents and employees from claims
against VI.
22. APPROPRIATION AND LEGISLATION.
The Authority may cancel this Contract to the extent funds or regulatory
or statutory fees are no longer legally available for expenditures under this
Contract. In the event legislation alters the authority or duties of the
Authority, that legislation controls the terms and conditions of this
Contract.
VI may cancel this Contract in the event that (a) legislation
materially alters the authority or duties of the Authority to the extent that
operation of the Network, as currently envisioned, cannot be supported, or
(b) the financial base for the Network does not materialize or is removed in
the future.
23. ASSIGNMENT AND SUBCONTRACTING.
VI may not assign any of its rights or delegate any of its duties
hereunder unless done pursuant to prior written consent of the Authority.
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VI may subcontract portions of work to be performed by it under this
Contract with the written consent of the Authority.
24. CLAIMS.
This Contract shall be construed according to the laws of the
Commonwealth. Any legal proceedings against the Authority regarding this
solicitation or any resultant contract shall be brought in the Commonwealth's
administrative, legislative, or judicial forums.
25. CONTINUATION OF OPERATIONS DURING TRANSITION PERIOD.
If for any reason this Contract shall be terminated, or upon expiration
of the Contract without extension, or at the end of the extension, VI shall,
at the option of the Authority, continue to operate under this Contract as
Network Manager in accordance with all terms and conditions of this Contract,
together with any amendments or modifications in existence at such time, for
a period of up to twelve (12) months from the time of expiration or
notification of termination from the Authority to VI.
The intent of this provision is to insure continuation of Network
operations while a successor Network Manager is chosen and installed.
26. ENTIRE AGREEMENT.
This Contract, including any documents incorporated by reference,
constitutes the entire agreement of the parties and supersedes all other
prior written or oral contracts between the parties with respect to the
subject matter hereof. This Contract may be amended only by a writing signed
by the parties thereto.
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IN WITNESS to the agreement of the Authority and Virginia Interactive,
LLC., to all of the above terms and conditions, the respective governing
bodies or Boards of Directors of the two organizations have approved the same
and have authorized their chief executive officers and secretaries to affix
their signatures below indicating such.
VIRGINIA INTERACTIVE, LLC
/s/Xxxxxx X. Xxxxxxxx 7/30/97
----------------------- -------
Xxxxxx X. Xxxxxxxx Date
President, Virginia Interactive, LLC
ATTEST:
/s/Xxxxxxx X. Xxxxxxx, Xx 7/30/97
------------------------- -------
Date
VIRGINIA INFORMATION PROVIDERS NETWORK AUTHORITY
/s/ Xxxxx X. Xxxxxxxxxxxxxx 7/31/97
--------------------------- -------
Xxxxx X. Xxxxxxxxxxxxxx, Date
Chairman, VIPNet Board
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