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23 Knightbeam May 15 2000.doc - THIS AGREEMENT, made in duplicate

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13 The Consultant represents and warrants that it has installed or willIt is acknowledged and agreed thatMBS may require that the Consultant

THIS AGREEMENT, made in duplicate, for Project Management Services as of the th15 day of May, 2000

BETWEEN:

    HER MAJESTY THE QUEEN in right of

    Ontario as represented by the Chair of

    the Management Board of Cabinet

    (referred to as “MBS”)

AND:

    KNIGHTBEAM ASSOCIATES INC.

    (referred to as the “Consultant”)

    In consideration of the mutual covenants and obligations contained in this Contract for Services, the parties covenant and agree as follows:

1.0 DEFINITIONS

    1.1_ Defined Terms - When used in the Contract, the following words or expressions have

    the following meanings:

    “Authority” means any government authority, agency, body or department, whether

    federal, provincial or municipal, having or claiming jurisdiction over the Contract; and

    “Authorities” means all such authorities, agencies, bodies and departments;

    "Business Day" means any working day, Monday to Friday inclusive, excluding statutory

    and other Ontario Provincial Government holidays, namely: New Year's Day; Good Friday;

    Easter Monday; Victoria Day; Canada Day; Civic Holiday; Labour Day; Thanksgiving

    Day; Remembrance Day; Christmas Day; Boxing Day and any day which the Government

    of the Province of Ontario has elected to be closed for business;

    "Business Hours" mean 9:00 a.m. to 5:00 p.m. of any Business Day;

    “Change Order” means a change to the Services as authorized by MBS, that may include

    altering, adding to or deleting any of the Services, as further described in Article 2.0 of

    this Agreement;

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“Commencement Date” mean May 15, 2000;

    “Consultant Representative” means each of the persons named as such in Article 1, who shall be legally authorized to bind the Consultant for the purpose of this Agreement;

“Contract” means the aggregate of:

    (a) this Agreement, including Schedules 1 (Schedule of Services), 2 (Contract

    Price and Rates), 3 (Assignment of Copyright) and 4 (Confidentiality

    Agreement);

    (b) the Request for Resources, including any addenda;

    (c) the Proposal; and,

    (d) any and all Change Orders and addenda issued after the execution of the

    Contract pursuant to this Agreement;

    “Contract Price” means the total compensation to be paid to the Consultant for the performance of the Services based on the Rates;

Deliverables” means any and all deliverables, concepts, techniques, ideas, information,

    documentation and other materials, however recorded, developed for or provided to MBS by the Consultant or its employees, volunteers, agents or Subcontractors in the course of performing the Services;

    “Expiry Date” means October 13, 2000, unless extended by MBS in accordance with Section 2.8 of this Agreement, in which case the Expiry Date shall mean such extended date;

“FIPPA” means the Freedom of Information and Protection of Privacy Act, R.S.O. 1990,

    c. F.31, as amended;

    Intellectual Property Right” means any intellectual or industrial property right including without limitation, any copyright, patent, trademark or trade secret;

    MBS Confidential Information” means all information or material of MBS that is of a proprietary or confidential nature, regardless whether it is identified as proprietary or confidential or not, including but not limited to information and material of every kind and description which is communicated to or comes into the possession or control of the Consultant at any time, but MBS Confidential Information shall not include information that:

    (1) is or becomes generally available to the public without fault or breach on the part

    of the Consultant, including without limitation without breach of any duty of

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    confidentiality owed by the Consultant to MBS or to any third party, but only after

    that information becomes generally available to the public;

    (2) the Consultant can demonstrate to have been rightfully obtained by the Consultant

    from a third party who had the right to transfer or disclose it to the Consultant free

    of any obligation of confidence;

    (3) the Consultant can demonstrate to have been rightfully known to or in the

    possession of the Consultant at the time of disclosure free of any obligation of

    confidence; or

(4) is independently developed by the Consultant without use of any MBS

    Confidential Information;

    “MBS Representative” means each of the persons named as such in Article 1, for the purpose of administering this Contract;

“Per Diem” means a rate based upon a minimum of 7.25 hours per day;

    “Person” if the context allows, includes any persons, firms, partnerships or corporations or any combination thereof.;

“Personal Information” has the same definition as in subsection 2(1) of FIPPA, and

    includes an individual’s name, address, age, date of birth, sex and religion, whether

    recorded in printed form, on film, by electronic means or otherwise, and disclosed to the Consultant pursuant to this Agreement;

    “Proposal” means all the documentation submitted by the Consultant in response to the Request for Resources which has been accepted by MBS, in whole or in part, as set out in Schedule 1;

    "Rates" means the applicable rate or price to be charged for the Services, as set out in Schedule 2 to this Agreement, which Rates are inclusive of all labour, materials, overhead and insurance.

    “Requirements of Law” mean all applicable requirements of all laws, statutes, codes, acts, ordinances, orders, decrees, injunctions, by-laws, rules, regulations, official plans, permits, licences, authorizations, directions and agreements of all Authorities that now or at any time hereafter may be applicable to either the Contract or the Services or any part of them;

    “RFR” means the Request for Resources, dated May 1, 2000, issued by MBS for the Services and any addenda to it;

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    “Services” mean the services to be provided by the Consultant pursuant to Schedule 1 of the Contract;

    “Subcontractor” means any Person having a contract with the Consultant for the performance of a part or parts of the Services;

    “Term” means the period of time between the Commencement Date and the Expiry Date, as same may be extended pursuant to Section 2.8 of this Agreement;

    “Work Plan” means the work plan attached as Appendix 1 to Schedule 1 of this Agreement.

    1.2 Address for Services of Notice on MBS, and Name of MBS Representative:

    All notices to MBS under this Agreement shall be in writing and shall be sent to the MBS

    Representative:

Management Board Secretariat th8 Floor, Ferguson Block

    77 Wellesley Street West

    Toronto, Ontario

    M7A 1N3

Attention: Ms. Angela Longo

     Assistant Deputy Minister

     Smart Card Project

    Facsimile No: 416-327-4748

    Telephone No: 416-327-6267

    1.3. Address for Service of Notice on Consultant, and Name of Consultant Representative - All notices to the Consultant under this Agreement shall be in writing and shall be sent to the Consultant Representative:

Knightbeam Associates Inc.

    Suite 500, 1240 Bay Street

    Toronto, Ontario

    M5R 2A7

Attention: Mr. Peter Kee

     Partner

    Facsimile No: 416-922-5667

    Telephone No: 416-324-1730

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    The Consultant represents that the Consultant Representative has the authority to legally

    bind the Consultant.

    Either party may designate a different person as its representative by notice in writing to

    the other party specifying the name, address and telephone and facsimile numbers of such

    person.

2.0 SERVICES

    2.1 Non-exclusivity of Contract, No Representation Regarding Volume of Work -

    The Consultant acknowledges and agrees that MBS has made no representations,

    warranties or agreements that any volume of Services shall be purchased from the

    Consultant and the Consultant further acknowledges and agrees that the Consultant shall

    not be the exclusive provider of the Services to MBS.

    2.2 Service Requirements - All Services shall be performed by the Consultant at Toronto,

    Ontario and in accordance with:

    (1) the Contract;

    (2) the Work Plan; and

    (3) Requirements of Law.

2.3 Commencement of Services - The Consultant shall commence the Services upon

     receipt of written instructions from MBS.

    2.4 Performance - The Consultant shall do everything that the Contract requires it to do,

    including the provision of any and all labour, supplies, equipment and services that are

    necessary, and can reasonably be understood or inferred to be included within the scope

    of the Contract. It shall also supply all labour, supplies, equipment and services as are

    customarily furnished by Persons supplying Services of the type provided hereunder in

    similar situations in Ontario. The Consultant shall report to and take direction from the

    MBS Representative.

2.5 Equipment -

    (12) The Consultant must obtain the written authorization of the MBS Representative

    prior to the installation or attachment of any equipment, software or devices in,

    on or to any equipment owned or leased by MBS, the use of any software owned

    or licensed by MBS or connecting to or using any MBS communications

    networks, at any time during the Term. If any such installation, attachment or

    connection creates or causes any problems with any MBS equipment, software or

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    communications networks, the Consultant shall be solely responsible for all costs,

    charges and expenses to correct any such problems and for any damages of any

    nature or kind suffered by MBS as a result thereof.

    (13) The Consultant represents and warrants that it has installed or will install on its

    computer equipment, prior to any installation, attachment or connection thereof in,

    on or to any MBS equipment, the latest anti-viral software available, from a

    recognized vendor in the industry acceptable to MBS, will maintain and update,

    from time to time as new versions become available, such anti-viral software

    during the Term of this Agreement and will run such anti-viral software on a

    continuous basis. The Consultant covenants to run such anti-viral software for

    the purpose of testing software programs prior to their use on MBS equipment or

    on any equipment the Consultant installs, attaches or connects in, on or to MBS

    equipment.

    (14) In no event shall MBS be responsible for any assistance, support or costs of any

    nature or kind relating to any equipment, software or devices of the Consultant.

    (15) The Consultant shall comply with all directives and operating procedures of the

    Government of Ontario relating to information and information technology,

    copies of which directives and operating procedures may be obtained from the

    MBS representative.

    (16) The Consultant shall be entitled to access such information, data and software of

    the Government of Ontario as is necessary for the purposes of carrying out the

    Consultant’s obligations pursuant to this Agreement but only with the prior

    written consent of the MBS Representative. In no event shall the Consultant

    copy or remove any such information or data from the offices of the Government

    of Ontario.

    (17) Prior to removing from the offices of the Government of Ontario any equipment

    or devices installed, attached or connected by the Consultant in on or to MBS

    equipment, the Consultant shall erase all Government of Ontario information and

    data from its equipment and devices using such methods and procedures as may

    be required by MBS in its sole discretion.

    (18) The Consultant hereby agrees to indemnify and save harmless MBS, its directors,

    officers, employees and agents, from and against any and all claims, demands,

    expenses, actions, causes of action, liabilities and any incidental, indirect or

    consequential damages, or any loss of use, revenue or profit, by any person, entity

    or organization, including MBS, arising out of or resulting from a breach of this

    Section by the Consultant or arising out of or resulting from any deliberate act of

    the Consultant which is intended to create or cause any problems with any MBS

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    equipment, software or communications networks or to result in infection thereof

    with any viruses, worms, trojan horses, trap doors, logic bombs or other code that

    manifest contaminating or destructive properties, and this indemnity shall survive

    the expiration or termination of this Agreement.

    (19) A breach of this Section by the Consultant shall entitle MBS to terminate this

    Agreement, in addition to any other remedies that MBS has in the Contract, at

    law or in equity.

    2.6 Quality of Performance - If any of the Services, in the opinion of MBS, are

    inadequately performed or require corrections, the Consultant shall forthwith make the necessary corrections at its own expense within the time limit specified by MBS.

    If any of the Services are inadequately performed by the Consultant or unduly delayed, in the opinion of MBS, MBS will determine the amount that, in its sole determination, is the value of the Services that has been performed by the Consultant, and the Consultant shall be paid accordingly and the Consultant shall accept as full payment the amount so determined.

    2.7 Representation Regarding Performance - The Consultant hereby represents that the

    Services shall be provided in a professional and competent manner.

     2.8 Notification of MBS - During the Term, the Consultant shall advise MBS’

    Representative promptly of:

    i) any contradictions, discrepancies or errors found or noted in the Contract; ii) supplementary details, instructions or directions that do not correspond with those

    contained in the Contract; and

    iii) any omissions or other faults that become evident and which should be corrected in

    order to perform the Services in accordance with good standard work practices.

    2.9 MBS Issuance of Change Order - MBS may order changes to the Contract, which

    may include altering, adding to, or deleting any of the Services by issuing a Change Order. The Change Order shall set out the change(s) requested by MBS, with the corresponding Rates. The Consultant shall perform such services in accordance with the Change Order as if they had appeared in and had been part of the Contract. No changes shall be carried out unless the Change Order has been authorized in writing and signed by MBS. If the Consultant has insufficient resources to perform such services required by the Change Order in accordance with the MBS’ time requirements set out in the Change Order, the Consultant shall so notify MBS. MBS may make alternative time arrangements for the performance of such services, or may have another person perform such services. If MBS requests in such Change Order that the Consultant supply services for which the Contract has not included a corresponding Rate, the Consultant shall

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    perform and provide such Services, and the rate therefor shall be negotiated between MBS and the Consultant within a reasonable period of the date that MBS submits the particular Change Order to the Consultant provided that such rate shall not exceed the normal rate being charged by the Consultant at such time for providing similar services to its other customers. In no event shall a Change Order be issued by MBS or carried out by the Consultant which shall have the effect of making the Contract Price exceed the maximum Contract Price specified in Schedule 2 of this Agreement.

    2.10 Extension of Contract - MBS shall have the option, on written notice to the Consultant specifying the extended date, to extend the Contract for such period(s) of time as in MBS’ sole opinion may be necessary in order for the Services to be completed to MBS’ satisfaction provided that such extension(s) may not exceed a period of six (6) months in total. Any such extension(s) shall be on the same terms including the Contract Price, conditions and covenants contained in the Contract, excepting the option to renew, and except that in no event shall the maximum Contract Price set forth in Schedule 2 hereof be increased or be permitted to be exceeded as a result of any such extension(s) of time.

    2.11 Services to be Performed by Specified Individual Only - The Consultant agrees that

    the individual or individuals named in Schedule 1 shall be the only individual or individuals providing the Services provided that such individual or individuals execute(s) a Confidentiality Agreement in the form of Schedule 4 attached for delivery to MBS. The Consultant shall not be permitted to replace or substitute any named individual with any other individual without the prior written approval of MBS, which MBS may arbitrarily or unreasonably withhold. Should the Consultant wish MBS to consider a replacement for an individual named in Schedule 1, it is understood and agreed that such proposed replacement must possess similar or greater qualifications than the individual named in Schedule 1. The Consultant shall not claim additional fees or costs, even if the proposed replacement has a greater hourly/daily rate than the named individual in Schedule 1.

    2.12 Substitution of Personnel - In the event that MBS is of the opinion that any individual performing any of the Services on behalf of the Consultant is unacceptable, or if any such individual terminates its employment with the Consultant or otherwise becomes unavailable to provide services, MBS may require substitution of an appropriately qualified person on the Consultant’s staff within a reasonable time and subject to MBS’ consent, which consent shall not be unreasonably withheld. In the event that the Consultant fails to supply any of the individuals named in Schedule 1 or if MBS refuses any proposed substitute pursuant to this Section, MBS may, at MBS’ sole option, obtain replacement personnel and the Consultant agrees that the Consultant shall bear the cost of obtaining such replacement personnel for the remainder of the Term of this Agreement.

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3.0 PAYMENTS, CHARGES AND TAXES

    3.1 Payment of Consultant - MBS shall, subject to the fulfillment of the provisions of the

    Contract, pay the Consultant, based upon actual hours worked and based upon a 7.25-

    hour day when per diem rates are used, up to the maximum Contract Price specified in

    Schedule 2 for the Services performed by the Consultant at the Rates calculated in

    accordance with the Contract.

3.2 Monthly Billing Statement - The Consultant shall provide the MBS Representative with

    a monthly billing statement which, in addition to the fees charged for the prior month,

    references this Agreement, indicates either the unbilled balance or the maximum Contract

    Price under this Agreement or the total amount billed by the Consultant to date and

    contains a brief, point form narrative relating to the amounts set out in the billing

    statement, no later than ten (10) Business Days after the end of each month of the Term.

    It is acknowledged and agreed that MBS may require that the Consultant include

    additional information in the billing statement, upon notice provided to the Consultant.

    The Consultant shall maintain and provide, upon request by the MBS Representative,

    detailed records to support its billing statements.

3.3 Monthly Billing Statement - Review - Within ten (10) Business Days of receipt of a

    billing statement, MBS shall approve, amend or reject the amount for payment of the

    particular billing statement. MBS shall advise the Consultant promptly in writing of any

    dispute MBS has with the billing statement.

3.4 Monthly Billing Statement - Payment - Each billing statement must be approved by

    MBS before any payment is released to the Consultant. Except where agreed to

    expressly by MBS in the request, approved billing statements are payable on a net-thirty

    (30)-day basis from the date of receipt by MBS of such billing statements. The

    Consultant shall give MBS a five percent (5%) discount off any invoice in respect of

    which the Consultant receives payment within fifteen (15) days of receipt thereof by MBS.

    3.5 Hold Back or Set Off - MBS shall have the right to hold back or set-off part of any

    payment if, in the opinion of MBS, the Consultant has failed to comply with the

    requirements of the Contract.

    3.6 Additional Expenses - The Consultant shall obtain the written approval of MBS before

    incurring any travel, accommodation, meal or other expenses in relation to the Services.

    Travel, meal and accommodation expenses, if any, shall be charged in accordance with

    the Management Board Secretariat’s Corporate Operating Policy for Travel

    Management and General Expenses, as amended from time to time and accommodation

    arrangements shall be made with those facilities listed in the OPS Travel Accommodation

    Directory, as amended from time to time. Pre-approved expenses shall be invoiced

    separately by the Consultant at cost and paid by MBS provided that receipts therefor are

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    provided with the invoice.

3.7 Payment of Taxes, Duties - Unless otherwise stated, the Consultant shall pay all

    applicable taxes, including excise taxes, incurred by or on the Consultant's behalf with

    respect to the Contract.

    3.8 GST - MBS hereby certifies that the Services are required for the use of the Crown in

    Right of Ontario and are therefore not subject to the federal Goods and Services Tax.

3.9 Taxes Separated on Billing Statement - Taxes shall be identified and shown as separate

    items on each billing statement, at the rates then in effect.

    3.10 Withholding Tax - MBS shall withhold any applicable withholding tax from amounts

    due and owing to the Consultant from MBS under this Agreement and shall remit it to

    the appropriate government in accordance with applicable tax laws.

4.0 CONSULTANTS AND THIRD PARTIES

4.1 Responsibility of Consultant - The Consultant agrees that it is fully responsible and

    liable for the acts and omissions of its Subcontractors and any of its or its Subcontractors’

    directors, officers, employees, agents, volunteers or assigns pursuant to this Agreement

    including, without limitation, any breach of any obligation of the Consultant pursuant to

    this Agreement caused by any one or more of them.

4.2 MBS Approval for Assignment, Subcontracting - The Consultant shall neither

    subcontract the whole or any part of the Agreement nor assign this Agreement or any

    monies due under it, without the prior written consent of MBS, which consent shall be in

    MBS’ sole discretion and subject to the terms and conditions that may be imposed by

    MBS.

4.3 No Contractual Relationship Between MBS and Subcontractors - Nothing contained

    in the Contract shall create any contractual relationship between any Subcontractor or its

    employees and with MBS.

    4.4 Terms of Subcontract - Every subcontract entered into by the Consultant shall adopt all

    of the terms and conditions of this Contract as far as applicable to the Subcontractor’s

    services.

5.0 MBS’ RIGHT TO TERMINATE CONTRACT

5.1 Termination of Contract - Immediate - MBS reserves the right to terminate the

    Contract immediately upon giving notice to the Consultant if:

    (1) the Consultant is adjudged bankrupt or makes a general assignment for the benefit

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