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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 17, 1998
F.Y.I. INCORPORATED
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-27444 75-2560895
--------------- ---------------- ------------------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
---------------------------------------- -------------
(Address of Principal Executive Offices) (Zip Code)
(214) 953-7555
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. Other Events.
In March 1998, the Company was awarded a five-year, $30 million contract by New
York State to provide document imaging services to the New York Workers'
Compensation Board in support of processing workers' compensation claims for
the entire state.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
10.38 Agreement between New York State Workers' Compensation Board and
QCSinet Acquisition Corp.
99. Press release dated March 17, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: March 20, 1998
F.Y.I. INCORPORATED
By: /s/ ED H. BOWMAN, JR.
-------------------------------------
Ed H. Bowman, Jr.
President and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.38 Agreement between New York State Workers' Compensation Board
and QCSinet Acquisition Corp.
99. Press release dated March 17, 1998.
</TABLE>
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EXHIBIT 10.38
AGREEMENT
Contract No. C-140162
------------------------
Agreement dated the 21st day of January, 1998 between the New York
State Workers' Compensation Board (Board) and QCSinet Acquisition Corp.
(hereinafter "QCSinet" or "Contractor"), a corporation with its principal place
of business located at 1150 NW 72d Avenue, Suite 600, Miami, Florida 33126.
Whereas the Board has issued a Request for Proposal dated September 9,
1997 and entitled Request for Proposal For Paper to Image Conversion Services
(hereinafter "RFP"); and
Whereas, in response to this RFP, QCSinet has submitted a proposal
which includes a Volume 1 Technical Proposal and Volume 2 Cost Proposal; and
Whereas, by letter dated December 30, 1997 the Board has awarded
QCSinet the within described contract;
NOW THEREFORE, in consideration of the foregoing, and the mutual
promises and covenants contained herein, it is mutually agreed as follows:
1 GENERAL CONTRACTOR DUTIES AND OBLIGATIONS
1.1 GENERAL CONTRACTOR DUTIES
The Contractor shall:
1.1.1 Assume responsibility for the cost, delivery of services, and timely
accomplishment of all obligations and duties required by the Agreement
whether or not such obligations or duties are performed by the
Contractor, its subcontractor, or its supplier. Subcontracting
assignments are allowed under this contract under the terms set forth
in section 12 of this Agreement. The Contractor shall carry out its
obligations and duties in a competent and timely manner.
1.1.2 Be the sole point of contact with regard to contractual matters.
1.1.3 Maintain a dedicated administrative organization sufficient to
discharge its contractual duties, obligations and responsibilities.
1.1.4 Maintain a level of liaison and cooperation with the Board necessary
for proper performance of all contractual responsibilities.
1.1.5 Provide access to its main operation team through key personnel such
as Managing Executive and Operation Manager.
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1.1.6 Maintain operation staffing levels and personnel as required for
performance of its duties under this Agreement.
1.1.7 Notwithstanding the circumstances under which the employment of a "key
personnel" is terminated with the Contractor, subject to prior
approval of the Board, designate an equally qualified alternate with
full authority to act in that "key position" for full performance
under this Agreement. Such designee will have no authority to alter
or modify any of the terms and conditions of the Agreement.
1.1.8 Agree that, except as specified in this Agreement and section 2-3 of
the RFP, no aspect of Contractor performance under this Agreement will
be contingent upon Board personnel or the availability of Board
resources.
1.1.9 Immediately notify the Board upon learning of any situation which can
reasonably be expected to adversely affect the operation of this
project. If such notification was verbal, then submit within three
(3) days of learning of the circumstance, a written description of the
situation and a recommendation for its resolution.
1.1.10 Cooperate fully with any other contractors that may be engaged by the
Board.
1.1.11 Refrain from honoring any requests to perform work outside the scope
of the Agreement unless such request(s) are pursuant to the Scope of
Work Alteration procedures set forth in section 13 of this Agreement.
1.1.12 Cooperate with the Board, any other authorized State agency, and any
law enforcement authority, in the investigation, documentation and
litigation of any alleged illegal act, misconduct or unethical
behavior related to this contract or which may affect the Board's
operations.
1.1.13 Perform in accordance with the Performance Standards set forth in the
RFP or as otherwise required in this Agreement.
1.1.14 Modify, at its own cost, the application or technical configuration to
meet the Performance Standards set forth in this RFP or as otherwise
required in this Agreement.
1.1.15 Honor any written commitment within the scope of this Agreement and
the Contractor's proposal. Failure of the Contractor to fulfill any
such commitment shall render the Contractor liable under the default
provisions for damages due to the Board under the terms of this
Agreement. For the purpose of this Agreement, a written commitment by
the Contractor includes commitments specified by this Agreement, the
proposal submitted by the Contractor, and specific written amendments
to its proposal. Written commitments by the Contractor are further
defined as including: (1) any warranty or representation made by the
Contractor in a proposal as to performance; (2) any warranty or
representation made by the Contractor described in (1) above, made in
any literature descriptions, drawings, or specifications accompanying
or referred to in a proposal; and (3) any modification of or
affirmation or representation as to the above which is made by the
Contractor in or during the course of negotiations, whether or not
incorporated into a formal amendment to the proposal.
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2 SPECIFIC CONTRACTOR DUTIES AND OBLIGATIONS
2.1 SPECIFIC CONTRACTOR DUTIES
The Contractor shall:
2.1.1 Convert the Board's paper-based claims documents to electronic-based
claims documents; and deliver the images and their associated indices
as accurate reproductions of the original documents to the Board, as
described in the Contractor's proposal. Contractor specifically
agrees to:
(a) provide a paper-to-image conversion operation and maintain at
its expense, all facility(ies) necessary to perform required
services within New York State, with space adequate to house
all staff, equipment, materials and supplies and paper
documents to support the operational needs of the system as
specified in section 2-5 of the RFP;
(b) obtain, maintain, and pay for all permits and licenses legally
required to transact business and pay all fees and comply with
all laws, rules and regulations applicable to the
paper-to-image conversion operations at no additional cost to
the Board;
(c) provide all hardware and software necessary to perform the
required services;
(d) provide all staff required to manage and operate the
paper-to-image conversion facility(ies);
(e) establish and demonstrate that controls are in place to
monitor the accuracy and authenticity of data, the reliability
of hardware and software, and the integrity and security of
the system before any paper-to-image conversion operations are
commenced, as specified in section 2-8.3 of the RFP;
(f) provide "backfile" paper-to-image conversion services to
convert all claims documents associated with open case folders
and reopened case files, from each district office of the
Workers' Compensation Board, and deliver the images and their
associated indices as accurate reproductions of the original
documents to the Board within seven (7) calendar days of
receipt;
(g) convert "no-claims" documents from paper to images from each
district office and deliver images and their associated
indices as accurate reproductions of the original documents to
the Board within seven (7) calendar days of receipt;
(h) store paper case folders, no-claims documents, and incoming
claims documents for at least six (6) months after conversion;
(i) provide secured destruction of the paper documents after
completion of statewide conversion in accordance with a plan
and schedule developed by the Board;
(j) correct any defects identified by the Board's quality control
process;
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(k) complete the duties specified in paragraphs f - j of section
2.1.1 herein as quickly as possible, with completion no later
than December 31, 1998;
(l) convert all incoming claims documents to generate images from
the paper documents and deliver the images and their
associated indices as accurate reproductions of the original
documents to the Board within twenty-four (24) hours after
receipt of the daily documents.
2.1.2 Accept responsibility for full knowledge of the Office for Technology
Policy 96-10, titled Guidelines for the Legal Acceptance of
Electronically Stored Documents; State Archives and Records
Administration brochure titled Guidelines for the Acceptance of Public
Records in an Emerging Electronic Environment.
2.1.3 Provide reliable systems and processes which are capable of producing
trustworthy records, and manage the paper-to-image conversion
facility, the operations, the functional areas and staff in a manner
that will ensure the legal admissibility of the image records in a
court of law in accordance with the guidelines listed in section 2.1.2
herein and provide for complete documentation of all operational
procedures.
2.1.4 Design, develop, install, implement, maintain and manage the systems
as required by this Agreement and the RFP, and provide all staff,
hardware, software and facilities necessary to perform required
services at the prices stated in Contractor's Cost Proposal, Volume 2.
2.1.5 Maintain confidentiality of documents through appropriate
non-disclosure agreements with employees.
2.1.6 Permit Board staff to be present when Board documents are being
converted.
2.1.7 Warrant that Product(s) furnished pursuant to this Agreement shall,
when used in accordance with the Product documentation, be able to
accurately process date/time data (including, but not limited to,
calculating, comparing, and sequencing) from, into, and between the
twentieth and twenty-first centuries, and the years 1999 and 2000,
including leap year calculations. Where a purchase requires that
specific Products must perform as a package or system, this warranty
shall apply to the Products as a system.
In the event of any breach of this warranty, Contractor shall restore
the Product to the same level of performance as warranted herein, or
repair or replace the Product with conforming Product so as to
minimize interruption to the Board's ongoing business processes, time
being of the essence, at Contractor's sole cost and expense. This
warranty does not extend to correction of the Board's errors in data
conversion.
For the purposes of this warranty, the following definitions shall
apply: "PRODUCT" shall include, without limitations: any piece or
component of equipment, hardware, firmware, middleware, custom or
commercial software, or internal components or subroutines therein
which perform any date/time data recognition function, calculation,
comparing or sequencing. Where services are being furnished, e.g.
consulting, systems integration, code or data conversion or data
entry, the term "Product" shall include resulting deliverables.
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"CONTRACTOR'S PRODUCT" shall include all Product delivered under this
Agreement by Contractor other than Third Party Product.
"THIRD PARTY PRODUCT" shall include product manufactured or developed
by a corporate entity independent from Contractor and provided by
Contractor on a non-exclusive licensing or other distribution
Agreement with the third party manufacturer. "Third Party Product"
does not include product where Contractor is: a) a corporate
subsidiary or affiliate of the third party manufacturer/developer;
and/or b) the exclusive re-seller or distributor of product
manufactured or developed by said corporate entity.
This warranty shall survive beyond termination or expiration of the
Agreement.
Nothing in this warranty shall be construed to limit any rights or
remedies otherwise available under this agreement.
2.1.8 Meet the performance standards specified in section 2-6 of the RFP for
each of the paper-to-image conversion operations defined in section
2-4 of the RFP.
2.1.9 Restore the paper-to-image conversion functions as specified in
section 2-7 of the RFP, at the performance levels specified in section
2-6 of the RFP, within seventy-two (72) hours of a disaster.
"Disaster" shall include, but not be limited to: theft, fire and
smoke damage, water damage, damage or unauthorized destruction caused
by employees, and fatal system problems (such as non-functioning
critical hardware, internal personnel- induced disasters (hacking
and/or sabotage)).
2.1.10 Ensure that the images and indices produced by contractor on behalf of
the Board can be confidently used as the Board's primary record,
enabling the elimination of paper records, as specified in section 2-8
of the RFP. Convert paper documents so that the delivered documents
are retrievable, readable and clear enough that reasonable hardcopy
output can be obtained at a later point.
2.1.11 Receive, protect and preserve all original documents transferred
possession of by the Board and safeguard such documents from damage or
destruction until completion of paper-to-image conversion and,
further, until such time as the Board authorizes the secure
destruction of such documents.
2.1.12 Provide 100 percent (100%) retrievability of paper documents prior to
their secured destruction pursuant to section 2.1.1(i) herein.
2.1.13 Return to the Board, at Contractor's expense, sample numbers of open
case folders and original paper documents transferred to Contractor by
the Board, upon the Board's request, within five (5) days of the
request.
2.1.14 Provide training and regular retraining of staff as specified in
section 2-8.2 of the RFP before any paper-to- image conversion
operations are commenced by Contractor.
2.1.15 Closely supervise employees and inspect employees' work to detect
deficiencies including the
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use of unauthorized procedures, employees in need of additional
training, any inefficiencies in existing hardware and software, and to
receive ideas as to how to improve the system.
2.1.16 Keep complete logs to trace the activities of employees,
subcontractors and intruders to enable the thorough investigation of
any suspicious activity as part of monitoring the accuracy and
authenticity of data, the reliability of hardware and software, and
the integrity and security of the system.
2.1.17 Establish and follow employee exit procedures for all employees with
access to Board documents which include all of the following:
(a) unambiguous notice of termination;
(b) an exit interview;
(c) signed and dated records of communications between the
overseeing supervisor and employee;
(d) reminder of confidentiality and nondisclosure of Board
information and a copy of confidentiality agreement for
employee's use;
(e) retrieval of property, documents, keys, ID cards in the
employee's possession;
(f) escort of employee to his or her workstation to obtain
personal effects;
(g) escort out of building; and
(h) immediate disablement of all employee's access codes,
passwords and authorizations.
2.1.18 Provide management reports as specified in section 2-9 of the RFP.
2.1.19 Attend formal weekly status meetings with the Board's management team,
as specified in section 2-9 of the RFP.
2.1.20 Permit Board and Office of State Comptroller (OSC) audit staff access
to records and computer resources as specified in section 2-10 of the
RFP.
3 GENERAL BOARD DUTIES AND OBLIGATIONS
The Board shall:
3.1 Provide reasonable accommodation at the Board's premises to enable
Contractor to carry out its work under this Agreement.
3.2 Provide responses to reasonable requests for information; provide
data, documentation and staff cooperation as appropriate.
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4 SPECIFIC BOARD DUTIES AND OBLIGATIONS
4.1 Identify all incoming claims documents to be directed for
paper-to-image conversion; manually count the mail and complete a
transmittal slip.
4.2 Pull the no-claims documents, prepare a transmittal slip, and provide
all no-claims documents and transmittal slip to the Contractor on the
first day of conversion.
4.3 Pull open case folders, prepare a transmittal slip, and provide the
open case folders and transmittal slip to the Contractor at a rate
mutually agreed upon by the parties, commencing no later than May 1998
and finishing no later than December 31, 1998. .
4.4 Provide for transportation of all incoming claims documents from all
district offices to the Contractor. The Board may elect to contract
with the Contractor for transportation of the incoming claims
documents at the prices stated in Contractor's Cost Proposal, Volume
2.
4.5 Implement a quality control process prior to the end of six (6) months
from the date documents are received by the Contractor to ensure that
all performance standards are met, including, but not limited to,
those relating to accuracy, quality and volume.
4.6 Refer problems immediately to the Contractor for identification and
corrective action.
5 BOARD ADMINISTRATION
5.1 The parties acknowledge that joint administration and control is
essential to the success of the Board operation. Therefore, the
parties shall use agreed upon processes and forms to report progress
and to identify, track and resolve problems and issues associated with
the operation.
5.2 Each party shall, within five (5) days after this Agreement becomes
effective pursuant to section 18.1 herein, appoint a Managing
Executive and Operation Manager.
5.3 The Operation Managers may clarify, explain, provide further details,
handle necessary technical matters, implement technical changes,
develop administrative procedures, and act as the primary contact
persons between the entities, but shall have no authority to affect,
change, alter, amend or modify any of the terms and conditions of this
Agreement.
5.4 The Managing Executive shall be authorized to: (a) receive and
resolve issues regarding this operation as escalated by the Operation
Manager(s), and (b) negotiate amendments affecting the contract price
and the terms and conditions of the Agreement subject to final
approval by the Board and the Comptroller of the State of New York.
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5.5 Any good faith dispute arising under the terms of this Agreement which
is not resolved within a reasonable period of time by the Operation
Managers shall be brought to the attention of the representatives of
the parties as set forth below:
<TABLE>
<CAPTION>
ESCALATION
TIMETABLE CONTRACTOR BOARD
(BUSINESS DAYS) REPRESENTATIVE REPRESENTATIVE
<S> <C> <C>
Not to exceed 2 days Operation Manager Operation Manager
Not to exceed 5 days Managing Executive Deputy Executive
Director
Not to exceed 10 days To be named Chair
</TABLE>
Both the Board and the Contractor agree that this dispute resolution
process shall precede the assertion of any legal rights, including the
Board's right to assess liquidated damages, and the parties will
continue without delay all their respective responsibilities under
this Agreement.
6 BILLINGS TO THE BOARD
6.1 The Contractor shall bill the Board using invoices satisfactory to the
Board and the Office of the State Comptroller of the State of New
York. Billings will be based on the actual volume of pages converted
by the Contractor at the per-page price designated in Contractor's
proposal for each of the three categories. A single invoice will be
submitted for each month of the contract. All charges for a month
shall be billed during the month immediately following the month in
which the charges took place. Payments, minus any liquidated damages
as stated in section 8 of this Agreement, shall be made in accordance
with Article XI-A of the New York State Finance Law.
6.2 The Contractor is responsible for all travel, meals, and lodging costs
for their staff associated with delivery of services under this
Agreement.
7 ASSURANCES/LETTER OF CREDIT
Prior to the adoption of this Agreement by the parties, the Contractor
shall demonstrate proof of financial responsibility by filing with the
Chair of the Workers' Compensation Board an irrevocable letter of
credit from a New York State or federally chartered bank qualified to
do business in New York State and insured by the Federal Deposit
Insurance Corporation. In the event of damages occurring as a result
of disaster, default, abandonment, or nonperformance, and/or in the
event of breach of this Agreement resulting in liquidated damages, as
per the terms identified elsewhere in this Agreement, the Board may
demand disbursement of all or any portion(s) of the face value of the
letter of credit to recover said damages and/or liquidated damages.
Such disbursements, pursuant to the demand of all or any portion(s) of
the face value of this letter of credit, may be effected by the
Board's submission of a written demand for payment to the institution
that issued the letter of credit on behalf of the Contractor. Partial
disbursement(s), pursuant to demand, shall not terminate the letter of
credit, but the balance shall
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be diminished by any amounts disbursed and shall otherwise remain in
effect. The Board shall follow the dispute escalation procedures
contained in section 5.5 of this Agreement prior to making any demand
for disbursement of all or any portion of the letter of credit.
The letter of credit shall name the Chair of the Workers' Compensation
Board as beneficiary and be in the amount of ten million dollars
($10,000,000). If, in the Board's discretion, the Contractor has
satisfactorily performed its duties during the first year of the
contract, such letter of credit may be reduced in the second year to
the amount of five million dollars ($5,000,000). The letter of credit
shall authorize the New York State Workers' Compensation Board to draw
a draft on sight, when accompanied by a Certificate from the New York
State Workers' Compensation Board certifying that the amount demanded
is due because of the failure of Contractor to perform under this
Agreement as specified in sections 8, 9, 11, and/or 14 of this
Agreement; and authorize partial drawings from the face of the letter
of credit.
The letter of credit shall not be canceled, revoked, or terminated
during the term of the Agreement between the Workers' Compensation
Board and the Contractor and for a period of ninety (90) days
thereafter.
8 CONTRACTOR FAILURE TO MEET WORK PERFORMANCE STANDARDS
In the event the Contractor fails, in the reasonable judgment of the
Board, to properly achieve the performance standards for each of the
areas below, the following specific actions may be taken.
8.1 FAILURE TO MEET QUALITY AND/OR TECHNICAL PERFORMANCE STANDARDS
(a) As used in this provision and consistent with section 2.6 of
the RFP, the term "batch" is defined as follows:
(1) A "batch" of incoming daily mail consists of all incoming
claims documents transferred from the Board to the
Contractor each day.
(2) A "batch" of no-claims documents consists of all
no-claims documents transferred from the Board to the
Contractor on the first day of conversion.
(3) A "batch" of open case folders consists of all folders
transferred from the Board to the Contractor each day.
(b) If any information which is readable and recognizable in an
original document cannot be read and recognized on the digital
image at the quality and technical capabilities specified in
section 2-6 of the RFP, Contractor shall, at the Board's
request, reconvert the document.
(c) If the number of documents from a batch which reveal missing
documents, poor image quality, poor retrievability, or
technical non-compliance exceeds 5 percent (5%) of the batch,
Contractor shall, at Contractor's expense, reconvert the
entire batch. Failure by the Board to timely review, accept
or reject a batch shall not constitute acceptance of a
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batch by the Board. If, in such circumstance, the Board
subsequently requires material changes to the delivered
images, the parties shall fairly consider and mutually agree
as to the effect of the untimely rejection or acceptance on
the delivery or implementation schedules. In no event shall
the Contractor be entitled to any price increase due to the
need to correct deficient deliverables. The Board shall not
assess liquidated damages greater than one day until such time
as the Board has provided notice to the Contractor of the
failure to achieve a performance standard. Liquidated damages
as provided in section 8.2 herein shall only be assessed for
that period of time subsequent to providing such notice.
8.2 FAILURE TO MEET VOLUME AND ACCESSIBILITY PERFORMANCE STANDARDS
The Board will be committing considerable financial and personnel
resources to meet the time frames specified in this Agreement and the
RFP. Contractor agrees to pay liquidated damages proportionate to the
extent of the failure to meet volume and accessibility performance
standards as specified below. Liquidated damages are not limited to
the amount of the monthly billing. Liquidated damages will be
recovered solely against either the current month's billing, or
subsequent monthly billings, or, if such billings are insufficient to
cover such damages, from the face value of the letter of credit upon
the Board's written demand for payment, as authorized in section 7 of
this Agreement.
8.2.1 LATE DELIVERY OF CONVERTED INCOMING DAILY DOCUMENTS
Contractor shall convert all pages of incoming daily mail and deliver
the file images and indices to the Board within twenty-four (24) hours
to achieve 100 percent (100%) performance. For each day that
performance falls below the quantity or time frame standard for
transmission, liquidated damages shall be assessed as follows:
<TABLE>
<S> <C>
More than twenty-four (24) hours, one thousand dollars ($1,000) per day.
More than forty-eight (48) hours, two thousand dollars ($2,000) per day.
More than seventy-two (72) hours, three thousand dollars ($3,000) per day.
More than ninety-six (96) hours, four thousand dollars($4,000) per day.
</TABLE>
8.2.2 LATE DELIVERY OF CONVERTED OPEN CASE FOLDERS
Contractor shall complete the paper-to-image conversion of open case
folders and older cases which are reopened, from each of the district
offices, and deliver the images and associated indices to the Board
within seven (7) calendar days of Contractor's receipt of the folders
to achieve 100 percent (100%) performance. For each day that
performance falls below the time standard for delivery of the images
and indices to the Board, liquidated damages shall be assessed as
follows:
<TABLE>
<S> <C>
More than seven (7) days, one thousand dollars ($1,000) per day.
More than fourteen (14) days, two thousand dollars ($2,000) per day.
More than twenty-one (21) days, three thousand dollars ($3,000) per day.
More than twenty-eight (28) days, four thousand dollars ($4,000) per day.
</TABLE>
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8.2.3 LATE DELIVERY OF CONVERTED NO-CLAIMS DOCUMENTS
Contractor shall complete the paper-to-image conversion of the 1997
and 1998 no-claims documents from each of the district offices and
deliver the images and associated indices to the Board within seven
(7) calendar days of Contractor's receipt of the documents to achieve
100 percent (100%) performance. For each day that performance falls
below the time standard for delivery of the images and indices to the
Board, liquidated damages shall be assessed as follows:
<TABLE>
<S> <C>
More than seven (7) days, one thousand dollars ($1,000) per day.
More than fourteen (14) days, two thousand dollars ($2,000) per day.
More than twenty-one (21) days, three thousand dollars ($3,000) per day.
More than twenty-eight (28) days, four thousand dollars ($4,000) per day.
</TABLE>
8.3 FAILURE TO MEET DISASTER RECOVERY STANDARDS
The Board commits considerable financial and personnel resources to
maintain its on-going operations. Failure to maintain routine,
on-going operations results in downtime. Downtime results in loss of
productivity and is costly to the Board. Contractor agrees to pay
liquidated damages proportionate to the extent of the failure to meet
disaster recovery standards as specified in section 2-7 of the RFP.
Liquidated damages are not limited to the amount of the monthly
billing. Liquidated damages will be recovered solely against either
the current month's billing, or subsequent monthly billings, or, if
such billings are insufficient to cover such damages, from the face
value of the letter of credit upon the Board's written demand for
payment, as authorized in section 7 of this Agreement.
For each day there is an inability to restore the paper-to-image
conversion functions at the performance levels specified in section
2-6 of the RFP within seventy-two (72) hours of a disaster, liquidated
damages shall be assessed as follows:
<TABLE>
<S> <C>
More than seventy-two (72) hours, one thousand dollars ($1,000)
More than eighty-four (84) hours, two thousand dollars ($2,000).
More than ninety-six (96) hours, five thousand dollars ($5,000).
More than one hundred eight (108) hours, ten thousand dollars ($10,000).
More than one hundred twenty (120) hours, fifteen thousand dollars ($15,000).
More than one hundred forty-eight (148) hours, twenty thousand dollars($20,000).
</TABLE>
8.4 FAILURE TO MEET MANAGEMENT REPORTING REQUIREMENTS
The Board will be committing considerable financial and personnel
resources to meet the time frames specified in this Agreement and the
RFP. Reliance on timely management reports is crucial to meeting
timely completion of this operation. Contractor agrees to pay
liquidated damages proportionate to the extent of the failure to meet
the management reporting requirements as specified in section 2-9 of
the RFP. Liquidated damages are not limited to the amount of the
monthly billing. Liquidated damages will be recovered solely against
either the current month's billing, or subsequent monthly billings,
or, if such billings are insufficient to cover such damages, from the
face value of the letter of credit upon the Board's written demand for
payment, as authorized in section 7 of this Agreement.
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The amount of liquidated damages for failure to meet the management
reporting requirements will amount to three thousand dollars ($3,000)
multiplied by the quantity of management reports not delivered within
three (3) days of the end of a reporting period divided by the total
management reports due.
8.5 FAILURE TO CURE
If the Contractor continues to be deficient for ten (10) days beyond
the due date of any performance standard, or in the case of any
ongoing or recurring failure to meet a performance standard, then ten
(10) days after the end of the calendar month in which the deficiency
is manifest, the Board shall notify the Contractor in writing that the
Contractor has ten (10) days from receipt of the notice to comply.
The ten (10) days shall be designated as the "cure" period.
Liquidated damages of five thousand ($5,000) dollars per day for each
day or part thereof beyond the cure period shall accrue against the
Contractor if the Contractor fails to comply within the "cure" period.
Liquidated damages are not limited to the amount of the monthly
billing. Liquidated damages will be recovered solely against either
the current month's billing, or subsequent monthly billings, or, if
such billings are insufficient to cover such damages, from the face
value of the letter of credit upon the Board's written demand for
payment, as authorized in section 7 of this Agreement.
9 CONFIDENTIALITY OF BOARD-RELATED DOCUMENTS
9.1 CONFIDENTIALITY OF BOARD-RELATED INFORMATION
The Contractor, its officers, agents and employees and subcontractors,
shall treat all workers' compensation documents and information, with
particular emphasis on information relating to claimants, their
employers, and their insurance carriers, which is obtained by it
through its performance under this Agreement, as confidential
information to the extent required by the laws of the State of New
York and the United States and any regulations promulgated thereunder.
Unauthorized disclosure of personal, confidential, and/or medical
information may result in civil and/or criminal penalties under New
York State and Federal laws.
9.1.1 Except as provided in section 9.1.2 herein, all individual
identifiable information relating to any claimant, employer, or
insurance carrier shall be held confidential and shall not be
disclosed by the Contractor, its officers, agents and employees or
subcontractors without the prior written approval of the Executive
Director of the Workers' Compensation Board or a designee.
9.1.2 The use of information obtained by the Contractor in the performance
of its duties under this Agreement shall be limited to purposes
directly connected with such duties.
9.1.3 Contractor agrees its officers, agents, employees and subcontractors
shall not disclose, show or otherwise make available any portion of
the materials or their contents to any one other than its employees
and subcontractors in connection with the performance of its duties
under this Agreement.
9.1.4 The Contractor shall be responsible for assuring that any agreement
between the Contractor and any of its officers, agents, and employees
or subcontractors contains a provision which strictly comports to the
provisions of this section 9 herein.
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9.1.5 The Contractor shall advise the Board of all requests made to
Contractor for information described in section 9 herein within
twenty-four (24) hours of such request.
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9.2 CONTRACTOR BREACH OF CONFIDENTIAL INFORMATION
9.2.1 Contractor shall, at its expense, defend and satisfy the amount of any
final judgment for the unauthorized disclosure of workers'
compensation data brought against the State or the Board resulting in
violation of privacy or injury to a claimant, employer or insurer
arising from the actions of Contractor, its officers, agents, and
employees or subcontractors. The Board shall give Contractor written
notice of such claim or suit.
9.2.2 In addition to any penalties as authorized by law, Contractor shall
pay liquidated damages to the Board for the unauthorized disclosure of
workers' compensation data at the rate of ten thousand dollars
($10,000) per instance per claim.
10 PRESERVATION AND SAFEGUARDING OF BOARD DOCUMENTS
10.1 Contractor agrees to locate its paper-to-image conversion
facilities/off-site work area(s) used for the performance of
activities specified under this Agreement within the State of New York
and apprise the Board of the location and address of such facilities.
10.2 If files and/or documents are lost due to the negligence or wrongdoing
of Contractor or subcontractors in failing to preserve or safeguard
such documents prior to their secure destruction as authorized by the
Board, Contractor shall bear the cost of replacing lost files and/or
lost documents therefrom, including the cost of making the Board
and/or claimant whole.
11 DATA TAMPERING
11.1 Contractor acknowledges that "data tampering" is the alteration or
destruction of computerized information without proper authority and
purpose.
11.1.2 Contractor acknowledges that a false record is a misrepresentation.
11.1.3 Contractor agrees not to alter, modify, forge, eliminate information
from or add information to, or otherwise tamper with Board documents.
Contractor further agrees not to destroy documents without proper
authority and purpose from the Board.
11.1.4 Contractor agrees its officers, agents, employees and subcontractors
shall not alter, modify, forge, eliminate information from or add
information to, or otherwise tamper with Board documents. Contractor
further agrees its officers, agents, employees and subcontractors
shall not destroy documents without proper authority and purpose from
the Board.
11.1.5 Contractor shall be responsible for assuring that any agreement
between the Contractor and any of its officers, agents, and employees
or subcontractors contains a provision which strictly comports to the
provisions of this section 11 herein.
11.2 Contractor shall, at its expense, defend and satisfy the amount of any
final judgment for data tampering of workers' compensation data
brought against the State or the Board. The Board shall give
Contractor written notice of such claim or suit.
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11.3 Contractor shall pay liquidated damages to the Board for data
tampering of workers' compensation data at the rate of ten thousand
dollars ($10,000) per instance per claim.
12 SUBCONTRACTING
12.1 Prior written approval of the Board shall be required for all
subcontracts. This requirement does not apply to individual
employer-employee contracts, or management incentives for same, or
subcontracts executed prior to the date of release of the RFP. Any
subcontract related to performance of this Agreement shall be subject
to the provisions of law set forth in sections 220, 220-d, and 220-e
of the Labor Law of the State of New York, Article 15 of the Executive
Law of the State of New York and to the provisions set forth herein.
The Board reserves the right to request information about any
subcontracting relationship.
12.2 All subcontracts shall be in writing and shall contain provisions
which are consistent with the provisions of this Agreement. All
subcontracts shall contain a provision for assignment of the
subcontract to the Board or its successor contractors.
12.3 A copy of any subcontract, once approved by the Board and executed by
the Contractor and the subcontractor, shall be furnished to the Board
within thirty (30) days of execution.
12.4 The Contractor shall give the Board immediate notice in writing of any
legal action or suit filed, and prompt notice of any claim made,
against the Contractor by any subcontractor or vendor which may result
in litigation related in any way to this Agreement or which may affect
the performance of duties under this Agreement.
12.5 The requirement of prior approval of any subcontract by the Board
under this Agreement shall not make the State of New York a party to
any subcontract or create any right, claim or interest in or by the
subcontractor or proposed subcontractor against the State.
12.6 The Contractor shall be considered the prime contractor and sole point
of contact in regard to any contractual items specified or required in
this Agreement or RFP. Contractor is not to be relieved in any way of
any responsibility, duty or obligation of this Agreement by a
subcontract.
13 SCOPE OF WORK ALTERATION
13.1 The parties agree that the Agreement, including the RFP and the
Proposal, fairly delineates the Scope of Work to be performed under
the Agreement at the prices named in Contractor's Cost Proposal,
Volume 2. However, they further agree that events may occur which
could alter the scope of the operation. If an alteration in scope is
desired by the Board, the Board shall issue a change request in
writing on an Operation Change Request Form. The Board shall then
provide the Operation Change Request Form to the Contractor Operation
Manager. Such change request must include a description of the
proposed change and a statement of why the change is desired.
Contractor will review the change request and provide, at no
additional charge to the Board, a proposal setting forth the impact of
the change request.
13.2 It is recognized that Change Order requests may cause changes in
price. The parties will enter into good faith negotiations in order
to reach agreement on the actions, if any, to be taken in
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order to achieve an equitable adjustment to the Agreement terms. The
Contractor's Proposal shall be used as the basis for negotiating any
proposed changes in cost related to a Scope of Work Alteration. The
Contractor's rates for such services shall conform to the rates
included in this Agreement.
13.3 Contractor shall implement an operation change request only upon
written agreement of the parties in a Memorandum of Understanding
signed by the Managing Executives specifying the changes, related
prices and revisions to timetables. All substantive changes to the
Statement of Work contained in a Memorandum of Understanding shall
require an Amendment to this Agreement approved by the Comptroller of
the State of New York.
14 BASIS FOR TERMINATION
14.1 The Agreement may be terminated:
(a) By mutual written agreement of the contracting parties.
(b) By the Board, whenever the Contractor shall default in
performance of the Agreement in accordance with its terms and
shall fail to cure such default within a period of ten (10)
days after receipt from the Board of a written notice
specifying the default. If it is subsequently determined for
any reason that the Contractor was not in default or that the
Contractor's failure to perform or make progress in
performances was due to causes beyond the control and without
the fault or negligence of the Contractor, either in part or
in full, the Board shall have the option to either deem the
Notice of Termination to have been issued under section 14.2
herein as a termination for convenience and the rights and
obligations of the parties shall be governed accordingly, or
allow the Contractor to resume performance under this
Agreement. In the event of a termination for default, the
Contractor shall be paid the following:
(1) the per-page cost for the number of pages converted to
images, indexed, and delivered in specified format to the
Board (calculated monthly and not previously paid) minus
any liquidated damages assessed;
(2) costs allowable in the discretion of the Board of
settling and paying subcontractor and supplier claims
arising out of the termination of work when costs were
incurred prior to termination and such claims are
properly chargeable to the terminated portion of the
Agreement.
14.2 The Agreement may be terminated by the Board for any reason. Such
termination shall be referred to herein as "termination for
convenience." Upon receipt of sixty (60) days written notice of
termination for convenience, the Contractor shall be paid the
following:
(a) the per-page cost for the number of pages converted, indexed,
and delivered in specified format to the Board (calculated
monthly and not previously paid) to the date of termination;
(b) costs allowable in the discretion of the Board of settling and
paying subcontractor and
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supplier claims arising out of the termination of work when
costs were incurred prior to termination and such claims are
properly chargeable to the terminated portion of the
Agreement.
(c) reasonable costs arising from the settlement process,
including accounting, legal, clerical and other justifiable
expenses, necessary for the preparation of settlement claims
and supporting data with respect to the terminated portion of
this Agreement, and for the termination and settlement of
subcontracts thereunder.
14.3 Upon filing of a petition in bankruptcy or insolvency by or against
the Contractor or subcontractor, if such petition is not vacated
within thirty (30) days of its filing, the Board shall deem the
Agreement terminated without termination services or costs, but
payments for services rendered, subject to the status of the Board as
a creditor in possession, shall be made as provided in section 14
herein. The Board shall not be precluded during the thirty (30)-day
vacatur period from terminating the Agreement under other bases
provided for in section 14 herein.
14.4 Should State funds for this Agreement become unavailable, the Board
may deem this Agreement terminated.
15 PROCEDURES FOR TERMINATION
Upon receipt of a written notice of termination, the Contractor shall:
15.1 Make provision for turning over any remaining records to the Board
which are held after the completion of the final accounting as
provided in this section 15 herein. Additionally, the Contractor
shall assist the Board or a successor contractor in completing any
activities undertaken before the termination of the Agreement
including, without limitation, any judicial and administrative
proceedings.
15.2 Stop work under this Agreement on the date and to the extent specified
in the notice of termination.
15.3 Place no further orders or subcontracts for materials, services or
facilities, except as may be necessary for completion of such portion
of the work under this Agreement as is not terminated.
15.4 Terminate all orders and subcontracts to the extent that they relate
to the performance of work terminated by the notice of termination.
15.5 Assign to the Board, in the manner and to the extent directed by the
Board, all of the rights, title and interests of the Contractor under
the orders of subcontracts so terminated, in which case the Board
shall have the right, in its reasonable judgment, to settle or pay any
or all claims arising out of termination of such orders and
subcontracts.
15.6 With the approval or ratification of the Board, to the extent it may
require, which approval or ratification shall be final and conclusive
for all purposes of this clause, settle all outstanding liabilities
and all claims rising out of such termination or orders or
subcontracts, the cost of which would be reimbursable in whole or in
part, in accordance with the provisions of this
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Agreement.
15.7 Complete the performance of such part of the work as shall not have
been terminated by the notice of termination.
15.8 Take such action as may be necessary, or as the Board may direct, for
the protection and preservation of the property related to the
Agreement which is in the possession or control of the Contractor and
in which the Board has or may acquire an interest.
15.9 After receipt of a notice of termination, the Contractor shall submit
to the Board its termination claim in the form and with the
certification prescribed by the Board. Such claim shall be submitted
promptly but in no event later than two (2) months from the effective
date of termination. Upon failure of the Contractor to submit its
termination claims within the time allowed, the Board may, subject to
any review required by the State's procedures in effect as of the date
of execution of the Agreement, determine, on the basis of information
available to it, the amount, if any, due to the Contractor by reason
of the termination and shall thereupon cause to be paid to the
Contractor the amount so determined.
15.10 Subject to the provisions of section 15.9 herein, and subject to any
review required by the Board's procedures in effect as of the date of
execution of this Agreement, the Contractor and the Board may agree
upon the whole or any part of the amount or amounts to be paid to the
Contractor by reason of the total or partial termination of work
pursuant to section 15 herein. This Agreement shall be amended
accordingly, and the Contractor shall be paid the agreed amount.
15.11 In the event of the failure of the Contractor and the Board to agree
in whole or in part, as provided in section 15.9 herein, as to the
amounts with respect to charges to be paid to the Contractor in
connection with the termination of work pursuant to section 15 herein,
the Board shall determine, on the basis of information available to it
and as provided in section 14, the amount, if any, due to the
Contractor by reason of termination and shall pay to the Contractor
the amount so determined.
15.12 The Contractor shall have the right to appeal under section 19 of the
Agreement, entitled "Disputes," from any such determination made by
the Board, except that, if the Contractor has failed to submit its
claim within the time provided in section 15.9 herein, it shall have
no such right of appeal.
15.13 In any case where the Board has made such determination of the amount
due, the Board shall pay to the Contractor the following:
(a) If no timely appeal has been taken, the amount so determined
by the Board; or
(b) If an appeal has been timely taken, the amount finally
determined on such appeal.
15.14 In arriving at the amount due the Contractor under section 15 herein,
there shall be deducted:
(a) All payments theretofore made to the Contractor, applicable to
the terminated portion of
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this Agreement and
(b) Any claim which the Board may have against the Contractor in
connection with this Agreement.
15.15 The Board may from time to time, under such terms and conditions as it
may prescribe, make partial payments and payments on account against
costs incurred by the Contractor in connection with the termination
portion of this Agreement whenever, in the opinion of the Board, the
aggregate of such payments shall be within the amount to which the
Contractor will be entitled hereunder. If the total of such payments
is in excess of the amount finally determined to be due under section
15 herein, such excess shall be payable by the Contractor to the Board
upon demand, together with simple interest computed at the rate of
twelve percent (12%) per year, for the period from the date excess
payment is received by the Contractor to the date on which such excess
is repaid to the Board.
16 PARTICIPATION OF CERTAIN BUSINESS ENTERPRISES
In accordance with Article 15-A of the New York State Executive Law,
the Contractor shall ensure that certified minority and women-owned
business enterprises (M/WBEs) are provided the opportunity for
meaningful participation in the performance of the Agreement.
The Board has established a goal of four and one-half percent (4 1/2%)
participation by NYS Certified Minority Business Enterprises on this
contract. The participation goals are expressed as a percentage of
the total bid price of the contract. As set forth in detail in
Appendix J of the RFP, the Contractor shall secure participation in
the work of the contract by M/WBEs in satisfaction of the goals or
document good-faith efforts taken to fulfill the goals. This
participation may be as suppliers of goods. As a monitoring measure,
the contractor shall submit a Contractor utilization report on forms
provided by the Board, as set forth in Appendix J of the RFP. Any
goal percentages established herein are subject to the requirements of
Article 15-A of the Executive Law and regulations adopted pursuant
thereto. The Board and Contractor agree as a condition of the State
contract to be bound by the provisions of section 316 of Article 15-A
of the Executive Law.
17 MACBRIDE FAIR EMPLOYMENT PRINCIPLES
The Contractor must comply with section 165 of the State Finance Law
(MacBride Fair Employment Principles) wherein the Contractor agrees to
stipulate that they have no business in Northern Ireland or, if they
do have business in Northern Ireland, they shall comply with the
MacBride Fair Employment Principles, and shall permit independent
monitoring of such principles.
18 AGREEMENT DURATION
18.1 TERM OF THE AGREEMENT
The effective date of this Agreement shall be the date upon which the
signatures of authorized State officials from the Department of Law
and the Office of the State Comptroller shall be duly
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affixed to the face of this Agreement, as required under section 33
herein. The term of this Agreement shall be for five (5) years from
such effective date.
19 DISPUTES
This Disputes provision shall apply to any dispute of the parties
relating to performance under the Agreement except liquidated damages.
Any dispute concerning any question of fact or law arising under the
Agreement which is not disposed of by mutual agreement of the parties
shall be initially decided by the designee of the Chair of the Board.
A copy of the written decision shall be furnished to the Contractor.
Upon issuance of such decision, the parties shall proceed diligently
with the performance of the Agreement and shall comply with the
provisions of such decision and continue to so comply pending further
resolution of any such dispute as provided herein. The decision of
the designee of the Chair shall be final and conclusive unless, within
ten days from the receipt of such decision, the Contractor furnishes
the Chair a written appeal. In the event of an appeal, the Chair
shall promptly review the initial decision, and confirm, annul, or
modify it. The decision of the Chair shall be final and conclusive
unless it is overruled or modified by a court of competent
jurisdiction. In connection with any appeal as provided herein, the
Contractor shall be afforded an opportunity to be heard de novo and to
offer evidence in support of its appeal. Pending final decision of
any legal action or proceeding hereunder by a court of competent
jurisdiction, both parties shall proceed diligently with the
performance of the Agreement in accordance with the Chair's decision.
20 ACCESS REQUIREMENTS
20.1 ACCESS TO PREMISES
20.1.1 To assure compliance with this Agreement and for any other reason the
Board deems appropriate for the effective and continuing operation of
the paper-to-image conversion and indexing operation, the Board, the
Office of the State Comptroller, or other State officials, and their
authorized representatives and designees, shall at all times have the
right to enter into any premises of the Contractor used in performance
of this Agreement or such other place where duties under the Agreement
are being performed, to inspect, monitor or otherwise evaluate the
work performed or being performed therein, or to elicit information
concerning the functions and management of this operation. Provisions
shall be made by the Contractor to provide permanent identification
cards for all on-site personnel and a limited number of other State
personnel. No additional access requirements will be imposed on State
personnel that are not required of the Contractor's employees. The
Board shall have final authority in determining the extent of access
to the Contractor's facilities for all on-site personnel, State
personnel, key personnel and any other individuals whom the Board
deems appropriate. For any such instance of access by authorized
representatives or designees of any State agency or successor
contractor, the Contractor shall provide, and shall require any
subcontractor to provide, all reasonable facilities, cooperation and
assistance to such representatives or designees in the performance of
their duties. All such instance of access shall be undertaken in such
a manner as will not unduly disrupt the Contractor's operations or
performance under the Agreement. The right of access provided for
herein shall include on-site visits, as directed and limited by the
Board, by representatives of competitors in the process or procurement
of a successor contractor.
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20.1.2 Contractor shall give the Board advance notice of all visits to or
tours of the paper-to-image conversion and indexing operations
site(s) by other than Contractor staff.
20.1.3 The Contractor shall be responsible for assuring that the provisions
of this section 20 shall apply to any subcontract related to
performance under this Agreement.
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21 RECORDS RETENTION
21.1 The Contractor agrees to preserve all Agreement-related records for
the term this Agreement is in effect and for six (6) years thereafter,
with disposal by the Contractor of any records during said period
permitted only upon prior written approval by the Board. Records
involving matters in litigation shall be kept for a period of not less
than three (3) years following the termination of the litigation.
Open-case folders, no-claims documents, reopened cases, and incoming
daily documents do not constitute "Agreement-related records."
Microfilm or imaged copies of any Agreement-related documents may be
substituted for the originals with the prior written approval of the
Board, provided that the microfilming or imaging procedures are
accepted by the Board as reliable and are supported by an adequate
retrieval system.
21.2 The Contractor shall be responsible for assuring that the provisions
of section 21.1 herein shall apply to any subcontract related to
performance under this Agreement.
22 INDEMNIFICATION
The Contractor shall indemnify, defend and save harmless the Board,
the State, its officers, agents or employees from any and all claims
and losses accruing to or resulting from any and all contractors,
subcontractors, materialmen, laborers, and any other person, firm, or
corporation furnishing or supplying work, services, materials, or
supplies in connection with the performance of the Agreement, and from
all claims and losses accruing to or resulting from any person, firm,
or corporation who may be injured or damaged by the Contractor, its
officers, agents, or employees or subcontractors in the performance of
the Agreement and against any liability, including costs and expenses,
for violation of rights of privacy, arising out of the publication,
translation, reproduction, delivery, performance, use or disposition
of any data furnished under the Agreement or based on any libelous or
otherwise unlawful matter contained in such data.
23 GENERAL PROVISIONS
23.1 DOCUMENT INCORPORATION AND ORDER OF PRECEDENCE
23.1.1 The Agreement consists of:
(a) The body of this Agreement;
(b) The appendices attached to the Agreement body;
(c) The Request for Proposal issued by the Board dated September
9, 1997 and entitled Request For Proposal For Paper to Image
Conversion Services as modified by the Board and by official
Board responses to questions (i.e., Questions and Answers),
the foregoing being herein incorporated by reference; and
(d) The Contractor's Proposal submitted to the Board consisting of
a Technical Proposal, Volume 1, and a Cost Proposal, Volume 2,
the foregoing proposal elements being herein incorporated by
reference.
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23.1.2 In the event of any inconsistency in or conflict among the document
elements of the Agreement identified in section 23.1.1 herein, such
inconsistency or conflict shall be resolved by giving precedence to
the document elements in the following order:
(a) First, Appendix A, Standard Clauses for All New York State
Contracts, attached to the Agreement;
(b) Second, body of the Agreement;
(c) Third, appendices other than Appendix A, attached to the body
of the Agreement;
(d) Fourth, the RFP, as amended; and
(e) Fifth, the Contractor's Proposal.
23.2 INDEPENDENT CAPACITY OF CONTRACTOR
The parties hereto agree that the Contractor is an independent
contractor, and the Contractor, its agents, officers and employees, in
the performance of the Agreement, shall act in an independent capacity
and not as officers or employees of the State or the Board.
23.3 NO THIRD-PARTY BENEFICIARIES
Nothing contained in the Agreement, expressed or implied, is intended
to confer upon any person, corporation or other entity, other than the
parties hereto and their successors in interest and assigns, any
rights or remedies under or by reason of the Agreement.
23.4 NONASSIGNABILITY
In accordance with section 138 of the State Finance Law, this contract
may not be assigned by the Contractor or its right, title, or interest
therein assigned, transferred, conveyed, sublet or otherwise disposed
of without the previous consent, in writing, of the State, which shall
not be unreasonably withheld, and any attempts to assign the contract
without the State's written consent are null and void. The Contractor
may, however, assign its right to receive payment without the State's
prior written consent unless this contract concerns Certificates of
Participation pursuant to Article 5-A of the State Finance Law.
23.5 CONTRACTOR PERSONNEL
The Board reserves the right to require the Contractor to discharge,
from performance of any or all duties under the Agreement, specified
Contractor employees. The Board will not exercise this authority
unreasonably. The Contractor agrees to replace any employee so
discharged with an employee of equal or better qualifications. If the
Board exercises its right under this provision, it agrees to provide
written notice to the Contractor setting forth its reasons with
specificity.
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23.6 EMPLOYMENT PRACTICES
23.6.1 The Contractor shall comply with the nondiscrimination clause
contained in Federal Executive Order 11246, as amended by Federal
Executive Order 11375, relating to Equal Employment Opportunity for
all persons without regard to race, color, religion, sex or national
origin, and the implementing rules and regulations prescribed by the
Secretary of Labor and with 41 Code of Federal Regulations, Chapter
60. The Contractor and any of its subcontractors shall comply with
the Executive Law of the State of New York, sections 290-299 thereof
and any rules or regulations promulgated in accordance therewith.
23.6.2 The Contractor shall comply with the provisions of the Federal
Americans with Disabilities Act ("ADA"), Public Law 101-336, 42 U.S.C.
12101 et seq., and implementing regulations by the Federal Government
including 29 CFR Part 1630 (equal employment opportunity for
individuals with disabilities), 29 CFR Parts 1602 and 1627 (record
keeping and reporting under Title VII of the Civil Rights Act of 1964
and the ADA), 28 CFR Part 35 (nondiscrimination on the basis of
disability in state and local government services) and 28 CFR Part 36
(nondiscrimination on the basis of disability by public accommodations
and in commercial facilities) as well as regulations issued by the
Secretary of Labor of the United States at 41 CFR Part 60, pursuant to
the provisions of Executive Order 11758 and its Federal Rehabilitation
Act of 1973. The Contractor shall likewise be responsible for
compliance with the above-mentioned regulations by subcontractors with
whom the Contractor enters into a contractual relationship in
furtherance of this Agreement.
23.6.3 The Contractor shall comply with regulations issued by the Secretary
of Labor of the United States in 41 Code of Federal Regulations,
Chapter 60, pursuant to the provisions of Executive Order 11758 and
the Federal Rehabilitation Act of 1973. The Contractor shall likewise
be responsible for compliance with the above- mentioned regulations by
subcontractors with whom the Contractor enters into a contractual
relationship in furtherance of this Agreement.
Employment practices of the Contractor shall be consistent with
corporate personnel policy and shall be uniformly applied to all
contract staff.
23.6.4 The Contractor agrees to cooperate in implementing Board policies
intended to achieve equal opportunity employment and, accordingly,
warrants that it will not discriminate against employees or applicants
for employment because of race, creed, color, national origin, sex,
age, disability, sexual preference or marital status. The Contractor
will state, in all solicitations, or advertisements for employees
placed by or on behalf of the Contractor, that all qualified
applicants will be afforded equal employment opportunities without
discrimination because of race, creed, color, national origin, sex,
age, disability, sexual preference or marital status.
23.6.5 The Contractor agrees to undertake or continue existing programs of
affirmative action to ensure that minority group members and women are
afforded equal employment opportunities without discrimination because
of race, creed, color, national origin, sex, disability or marital
status. For these purposes, affirmative action shall apply in the
areas of recruitment, employment, job assignment, promotion,
upgradings, demotion, transfer, layoff or termination and rates of pay
or other forms of compensation.
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23.6.6 The Contractor's affirmative action program shall be specified in an
Affirmative Action Plan which shall contain but not be limited to
goals and time frames for employment of protected classes, and
procedures for preparation and submission of periodic affirmative
action reports.
24 LEGAL ASSURANCE OF AUTHORITY TO PERFORM
In consideration of the within premises, the Contractor represents to
the Board that:
(a) The Contractor has corporate authority to perform all duties
required of it by the Agreement; and
(b) The Contractor is qualified to do business in the State of New
York.
The Contractor shall give immediate notice to the Board of any event
or circumstance which may affect the validity of the representations
herein contained and shall take any and all actions required to
preserve its legal authority to perform the Agreement.
25 FORCE MAJEURE
Neither party shall be liable or deemed to be in default for any delay
or failure in performance under the Agreement resulting directly or
indirectly from acts of God, civil or military authority, acts of
public enemy, wars, riots, civil disturbances, insurrections,
earthquakes, the elements, acts or omissions of public utilities, or
strikes, work stoppages, slow downs or other labor interruptions due
to labor/management disputes involving entities other than the parties
to the Agreement, or any other causes not reasonably foreseeable or
beyond the control of a party. The parties are required to use best
efforts to eliminate or minimize the effect of such events during
performance of the Agreement and adhere to the performance standards
as specified in section 2.1.9 of this Agreement.
26 NOTIFICATION
Any notice required by the Agreement to be given between the
Contractor and the Board shall be sent to the Board's Deputy Executive
Director for this operation or the Contractor's designated Operation
Director by registered or certified mail, return receipt requested, or
shall be delivered in hand and a receipt granted.
27 DELEGATIONS OF AUTHORITY
Whenever, by any provision of the Agreement, any right, power or duty
is imposed or conferred on the Board, the right, power or duty so
imposed or conferred shall be possessed and exercised by the Chair of
the Board unless any such right, power or duty is specifically
delegated to the duly appointed agents or employees of the Board. Any
such delegation of authority shall be reduced to writing by the Chair
and a copy thereof furnished to the Contractor.
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28 PATENT OR COPYRIGHT INFRINGEMENT
28.1 The Contractor, solely at its expense, shall defend any claim or suit
which may be brought against the Board or the State for the
infringement of United States patents or copyrights arising from the
Contractor's or the Board's use of any equipment materials or
information prepared, developed or furnished by the Contractor in
connection with performance of the Agreement, and in any such suit
shall satisfy any final judgement for such infringement. The Board
will give the Contractor written notice of such claim or suit and full
right and opportunity to conduct the defense thereof, together with
full information and all reasonable cooperation.
28.2 If principles of governmental or public law are involved, the State
may participate in the defense of any action identified in section
28.1 herein, but no costs or expense shall be incurred upon the
account of the Contractor without the Contractor's written consent.
28.3 If, in the Contractor's opinion, any equipment, materials or
information mentioned in section 28.1 herein is likely to or does
become the subject of a claim of infringement of a United States
patent or copyright, then, without diminishing the Contractor's
obligation to satisfy final award, the Contractor may, with the
Board's prior written approval, substitute other equally suitable
equipment, materials and information, or at the Contractor's option
and expense, obtain the right for the Board to continue the use of
such equipment, materials and information.
28.4 In the event that an action at law or in equity is commenced against
the State arising out of claim that the State's use of the software
under the Agreement infringes on any patent, copyright or proprietary
right, and such action is forwarded by the State to the Contractor for
defense and indemnification pursuant to section 28 herein, the Board
shall send copies of all pleadings and documents forwarded to the
Contractor, together with the forwarding correspondence, to the Office
of the Attorney General of the State of New York, together with a copy
of the Agreement. If upon receipt of such request for defense, or at
any time thereafter, the Contractor is of the opinion that the
allegations in such action, in whole or in part, are not covered by
the indemnification set forth in section 28 herein, the Contractor
shall immediately notify the Board and the Office of the Attorney
General of the State of New York in writing and shall specify to what
extent the Contractor believes they are and are not obligated to
defend and indemnify under the terms and conditions of the Agreement.
The Contractor shall in such event protect the interests of the State
of New York and secure a continuance to permit the State of New York
to appear and defend its interests in cooperation with the Contractor
as is appropriate, including any jurisdictional defenses which the
State shall have.
29 CONFLICT OF INTEREST
If during the term of the Agreement and any extension thereof the
Contractor becomes aware of an actual or potential relationship which
may be considered a conflict of interest, the Contractor shall notify
the Board in writing immediately. Should the Contractor engage any
current or former New York State Workers' Compensation Board employee
as its own employee or as an independent contractor because of such
employee's knowledge of New York State finances, operations or
knowledge of the Workers' Compensation Board program, or any current
or former New York State Workers' Compensation Board employee who in
the course of his or her State employment had frequent contact with
management level Contractor employees, the Contractor
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shall notify the Board, in writing, immediately. Should the Board
thereafter determine that such employment is inconsistent with State
or Federal Law, the Board shall so advise the Contractor, in writing,
specifying its basis for so determining, and may request that the
employee's relationship with the Board with respect to matters set
forth in this Agreement be terminated.
In addition, the Contractor shall not offer any Board employee or
agent of the Board any gratuity or benefit without prior written
approval of the Board.
30 STANDARD OF INTERPRETATION
This Agreement shall be subject to liberal interpretation to
accomplish the parties' evident purpose. The Contractor and the Board
shall perform under this Agreement in a manner to fully ensure smooth,
non-disruptive paper-to-image conversion operations of the Board's
documents, whether such operation by the Contractor or by the Board or
a successor contractor, consistent with the terms of this Agreement.
Performance by the Contractor and the Board, under this Agreement
shall at all times be consistent with those fundamental premises and
this Agreement shall be construed accordingly. Disagreement between
the parties concerning interpretation of this Agreement shall be
subject to the "Disputes" provisions set forth in section 19 herein.
31 WAIVER OF BREACH
No term or provision of this Agreement shall be deemed waived and no
breach excused, unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented. Any consent
by a party to, or waiver of, a breach under this Agreement shall not
constitute a consent to, a waiver of, or excuse for any other,
different or subsequent breach.
32 TAXES
It shall be understood that the Board, as an agency of the State of
New York, is not liable for the payment of any sales, use, excise or
other form of tax, however designated, levied or imposed and shall
agree to reimburse the Contractor for same only if taxes would have
been incurred through the Board's normal business operations.
33 AGREEMENT APPROVAL
The State Finance Law of the State of New York, section 112, requires
that any contract made by a State department which exceeds ten
thousand dollars in amount be first approved by the Office of the
State Comptroller before becoming effective. The parties recognize
that the Agreement is wholly executory and not binding until and
unless approved by the Office of the State Comptroller, and the
Department of Law.
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34 CONTRACT EXTENSION WITHIN THE STATE
Contractor acknowledges and agrees that by entering this Agreement, it
grants the State of New York the option to extend this Agreement and
the terms and conditions contained herein to any other state agency
or authorized purchasers pursuant to Article XI of the New York State
Finance Law.
35 CHOICE OF LAW
The parties agree that the Agreement shall be interpreted according to
the laws of the State of New York. The Contractor shall be required
to bring any legal proceeding against the Board or the State arising
from the Agreement in New York State courts.
36 STANDARD NEW YORK STATE CONTRACT CLAUSES
Appendix A, Standard Clauses for all New York State Contracts,
attached hereto, is hereby fully incorporated into the Agreement.
37 SEVERABILITY
Should any provision of the Agreement be declared or found to be
illegal, unenforceable, ineffective or void, then each party shall be
relieved of any obligation arising from such provision; the balance of
the Agreement, if capable of performance, shall remain in full force
and effect.
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================================================================================
================================================================================
IN WITNESS WHEREOF, THE PARTIES HERETO EXECUTE THIS AGREEMENT THE DAY AND YEAR
WRITTEN BELOW, AND HEREBY ACKNOWLEDGE THAT THEY HAVE REVIEWED THE TERMS AND
CONDITIONS SET FORTH HEREIN AND AGREE TO BE LEGALLY BOUND BY THE SAME.
SIGNATURES
CONTRACT NO. C-140162
-------------------
BOARD CERTIFICATION (IN ADDITION TO THE ACCEPTANCE OF THIS CONTRACT, I ALSO
CERTIFY THAT ORIGINAL COPIES OF THIS SIGNATURE PAGE WILL BE ATTACHED TO ALL
OTHER EXACT COPIES OF THIS CONTRACT).
PRINCIPAL PLACE OF BUSINESS IS THE LOCATION OF THE PRIMARY CONTROL, DIRECTION
AND MANAGEMENT OF THE ENTERPRISE.
STATE OF FLORIDA
-------------------------------
QCSINET's PRINCIPAL PLACE OF BUSINESS
NEW YORK STATE WORKERS' CONTRACTOR
COMPENSATION BOARD
/s/ MICHELLE M. SCHULTZ /s/ EDUARDO A. LEAL
- ---------------------------------- ---------------------------------------
SIGNATURE SIGNATURE
Michelle M. Schultz Eduardo A. Leal
- ---------------------------------- ---------------------------------------
PRINT NAME PRINT NAME
Office Service Mgr. President
- ---------------------------------- ---------------------------------------
TITLE TITLE
01/30/98 QCSINET ACQUISITION CORP.
- ---------------------------------- ---------------------------------------
DATE COMPANY
1150 NW 72 Ave. Sixth Floor
---------------------------------------
ADDRESS
MIAMI, FL 33126
---------------------------------------
CITY STATE/ZIP
305-591-4119, EXT 103
---------------------------------------
TELEPHONE NUMBER
65-0765299
---------------------------------------
FEDERAL I.D. NUMBER
JANUARY 21, 1998
---------------------------------------
DATE
DEPARTMENT OF LAW OFFICE OF THE STATE COMPTROLLER
DENNIS C. VACCO H. CARL MCCALL
new YORK STATE NEW YORK STATE
ATTORNEY GENERAL COMPTROLLER
BY: /s/ PETER FAVRETTO BY: /s/ DOUGLAS E. BOETTNER
------------------------------- ------------------------------------
2/2/98 3/11/98
- ---------------------------------- ---------------------------------------
DATE DATE
<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE
FROM F.Y.I. INCORPORATED
F.Y.I. FINALIZES $30 MILLION CONTRACT
DALLAS, March 17, 1998 --- F.Y.I. Incorporated (Nasdaq: FYII), one of
the nation's fastest growing providers of document and information outsourcing
solutions, today announced the final and signing of a five-year, $30 million
imaging contract from New York State's Workers' Compensation Board to perform
its paper-to-electronic media conversion services. F.Y.I. announced the
preliminary award of the contract in early January subject to successful
contract negotiations and approval by the New York State attorney general and
comptroller.
QCS Inet, F.Y.I.'s subsidiary, won the contract utilizing the imaging,
data capture/indexing, and records storage/destruction capabilities of three
other F.Y.I. subsidiaries and the project management experience and financial
strength of F.Y.I. Under the contract, QCS Inet will convert to digital images
and index a paper backlog of 10 million workers' compensation claims, as well as
image and index all new claims within 24 hours of receipt. The contract also
specifies that QCS Inet determine where and how to store the records, how to
retrieve them, and where and how to dispose of the records at the appropriate
time.
"To win the contract, F.Y.I. drew upon the skills and expertise
residing in various F.Y.I. companies," said Ed H. Bowman Jr., president and CEO
of F.Y.I. "We believe that this contract, the largest we have signed to date,
demonstrates that our strategy to cross-sell multiple services is being
implemented successfully."
"We have already made great strides in assembling the project
organization needed to implement this contract," said Thomas C. Walker,
chairman and chief development officer of F.Y.I. "The successful fulfillment of
this contract will make us the clear leader in this service segment."___
F.Y.I. Incorporated (www.fyii.com) was founded in September 1994. With
more than 3,900 employees, the company now provides document and information
outsourcing solutions in 32 states with major operations in Arizona,
California, Colorado, Florida, Louisiana, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, New York, North Carolina, Ohio, Oregon,
Pennsylvania, South Carolina, Texas, Virginia, Washington and Wisconsin.
The statements in this press release which are not historical fact are
forward-looking statements that involve risks and uncertainties including, but
not limited to, developments of the risks detailed in F.Y.I. Incorporated's
filings with the Securities and Exchange Commission.
-30-
Contacts: Ed Bowman, CEO (214) 953-7550
Barbara Hyman, Hopkins & Associates, (214) 754-0990
