Court Opinion

ID: 3788945
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:37:33.358587+00
Date Added: 2024-06-11T12:22:45.168047
License: Public Domain

** RE: PERFORMANCE SECURITY REQUIREMENTS FOR THE PENDING AD VALOREM TASK FORCE ASSESSOR BASED DIGITAL MAPPING SOFTWARE AND HARDWARE CONTRACT.
AFTER HAVING REVIEWED THE INVITATION TO BID ("ITB") AND ACCOMPANYING DOCUMENTS THAT YOU SUBMITTED FOR MY REVIEW IN THE ABOVE REFERENCED MATTER, IT APPEARS THAT THE CONCLUSIONS THAT YOU REACHED IN YOUR OCTOBER 23, 1991 MEMORANDUM ARE CORRECT. SEVERAL PROVISIONS WITHIN THE ITB PROVIDE PROTECTION TO THE STATE OF OKLAHOMA SHOULD THE MAPPING SYSTEM FAIL TO PERFORM AS PER THE SPECIFICATIONS. SEE, SPECIFICALLY:
    "1. 3.21 — PROGRESS PAYMENT RETAINAGE. DEPENDING ON THE COST OF THE SYSTEM, A SPECIFIC SUM OF MONEY WILL BE AVAILABLE TO THE AVTF UNTIL "INSTALLATION" HAS BEEN COMPLETED.
    2. 6.71 — WARRANTY PROVISION. WARRANTS FOR 1 YEAR ALL INSTALLED HARDWARE AND SOFTWARE.
    3. PROFESSIONAL LIABILITY INSURANCE. I HAVE DISCUSSED THIS MATTER WITH LAM NGUYEN, OF THE OKLAHOMA INSURANCE DEPARTMENT (SEE, HIS LETTER ATTACHED HERETO). IN HIS OPINION THE INSURANCE POLICY THAT YOU PROVIDED ME WOULD ADEQUATELY PROTECT THE AVTF. HOWEVER, MR. NGUYEN DID EXPRESS THE FOLLOWING CONCERNS:
    A. THIS IS A "CLAIMS MADE POLICY — ALL CLAIMS MUST BE MADE WITHIN THE POLICY TIME PERIOD AS REFLECTED IN THE POLICY DECLARATION PAGE UNLESS THE POLICY INCLUDES THE OPTIONAL EXTENSION."
    B. AVTF SHOULD CHECK WITH THE INSURANCE COMMISSION TO VERIFY THE FINANCIAL STABILITY OF THE UNDERWRITING COMPANY AS THIS TYPE OF POLICY IS WRITTEN BY SURPLUS LINES COMPANIES, WHICH MEANS THAT THE COMPANIES ARE NOT COVERED BY THE OKLAHOMA GUARANTY ACT, NOR ARE THEIR RATES, RULES OR FORMS REGULATED BY THE INSURANCE DEPARTMENT. THE AVTF SHOULD ALSO BE INCLUDED AS A CERTIFICATE HOLDER ON THE POLICY SO THAT THE INSURANCE COMPANY WILL NOTIFY THE AVTF SHOULD THE POLICY LAPSE."
UNDER THE EXCLUSION PROVISION, FOUND ON PAGE 3, (J) OF THE INSURANCE POLICY, ANYTHING EXPRESSLY WARRANTED UNDER THE ITB MAY BE EXCLUDED. A QUESTION MAY ARISE AS TO THE ITEMS WARRANTED IN THE ITB.
BASED ON THE FOREGOING, THE ITB AND THE ACCOMPANYING INSURANCE POLICY WILL PROVIDE ADEQUATE LEGAL REMEDIES FOR AT LEAST ONE YEAR AFTER "INSTALLATION" SHOULD THE SYSTEM FAIL TO PERFORM AS PER THE SPECIFICATIONS.
(JOSEPH L. MCCORMICK)