INDEX NO: T1997
                                                                PAGE NO:      2



 Notice of Award (NOA)
 FOR
 MANAGED CARE WORKERS COMPENSATION SERVICES


 SPECIAL TERMS AND CONDITIONS

 Table of Contents

 1.0  Information for Bidders
 1.1  Purpose and Intent
 1.2  Background

 2.0  Reserved

 3.0  SCOPE OF WORK

 4.0  Reserved

 5.0  CONTRACTUAL TERMS AND CONDITIONS
 5.1  Precedence of Contractual Terms and Conditions
 5.2  Performance Bond
 5.3  Business Registration
 5.4  Contract Term and Extension Option
 5.5  Contract Transition
 5.6  Availability of Funds
 5.7  Contract Amendment
 5.8  Contractor Responsibilities
 5.9  Substitution of Staff
 5.10  Substitution or Addition of Subcontractor(s)
 5.11  Ownership of Material
 5.12  Data Confidentiality
 5.13  News Releases
 5.14  Advertising
 5.15  Licenses and Permits
 5.16  Claims and Remedies
 5.17  Late Delivery and Liquidated Damages
 5.18  Retainage
 5.19  State's Option to Reduce Scope of Work
 5.20  Suspension of Work
 5.21 Change in Law
 5.22  Additional Work and/or Special Projects
 5.23  Form of Compensation and Payment
 5.24 Year 2000 Compliance



 5.25 Contract Activity Report



 1.0  Information for Bidders

 1.1  Purpose and Intent

 This Notice of Award (NOA) is issued by the Purchase Bureau, Division
 of Purchase and Property, Department of the Treasury, on behalf of the
 State of New Jersey.  The purpose of this contract is to solicit
 proposals from qualified bidders for managed care workers compensation
 services.

 1.2  Background

 The Bureau of Risk Management's (BRM) philosophy for managed medical
 care services dictates that the organization providing these services
 should be "employee-oriented." The injured employee should be treated
 with dignity and respect and given the best medical care available.
 An HMO approach will not apply to managed medical care for workers'
 compensation claims.  The ideal managed care organization (MCO) works
 with their health care providers to develop informed, medically
 appropriate treatment protocols aimed at effectively treating the
 injury and returning the employee to a productive capacity at work.

 The MCO must be able to provide managed medical care services for the
 State of New Jersey's Statewide, self-funded and self-administered
 workers' compensation program, including the WorkFirst program,
 pursuant to N.J.S.A. 34:15 et. seq.  (The WorkFirst program provides a
 workers' compensation benefit to citizens who are transitioning from
 assistance programs to employment.)

 The MCO must be able to provide the services defined herein.

 Mandatory MCO responsibilities include:

   Operating a Statewide network consisting of a sufficient number of
 essential health care providersto meet all other performance
 requirements established in this RFP.  The phrase "essential
 healthcare providers" is defined to include physicians, physical
 therapists, pharmacists, psychiatrists, dentists, ophthalmologists,
 orthopedics, gastroenterologists, hospitals & related facilities and
 any other specialty provider as may be required to treat the injuries
 expected of State employees.

   Written Protocols dictating appropriate immediate treatment,
 treatment plans and the use of related diagnostic procedures for the
 injuries expected of State employees.

   Essential Health Care Providers who understand workers' compensation
 law and the implication of medical treatment on the handling of
 workers' compensation claims.

   Electronic access to all claim records, medical reports, nurse notes
 and other related documentation for every claim under this contract,
 both new and takeover.  All electronic data interchanges will be
 considered,  however,  Internet access is preferred.  Paper copies of
 medical records, nurses' notes and other file materials are
 unacceptable.

   Establish, operate and maintain an Electronic Interface for
 reporting of claims and the transfer of provider payments, subject to
 BRM & State IT specifications.  It is of critical importance that the
 communications interface, including all sub-systems, between the MCO
 and State's Risk Management Information System be initiated swiftly,
 tested rigorously and maintained accurately.

   Utilization Review for any medical services provided out of the MCO
 network.

   Return to Work Programs, with established policies and procedures to
 enable the BRM to return an injured employee to work as soon as
 medically permissible in light of the employee's medical condition and
 job requirements.


 3.0 SCOPE OF WORK

 At minimum, the MCO must provide the following:

 Statewide network consisting of a sufficient number of essential
 health care providers.  The phrase "essential healthcare providers" is
 defined to include physicians, physical therapists, pharmacists,
 psychiatrists, dentists, ophthalmologists, orthopedics,
 gastroenterologists, hospitals & related facilities and any other
 specialty provider as may be required to treat the injuries expected
 of State employees.

 Written protocols dictating appropriate immediate treatment, treatment
 plans and the use of related diagnostic procedures for the injuries
 expected of State employees.

 Essential Health Care Providers who understand workers' compensation
 law and the implication of medical treatment on the handling of
 workers' compensation claims.

 Electronic access to all claim records, medical reports, nurse notes
 and other related documentation for every claim under this contract,
 both new and takeover.  All electronic data interchanges will be
 considered,  however,  Internet access is preferred.  Paper copies of
 medical records, nurses' notes and other file materials are
 unacceptable.

 Establish, operate and maintain an Electronic Interface for reporting
 of claims and the transfer of provider payments, subject to BRM &
 State IT specifications.  It is of critical importance that the
 communications interface, including all sub-systems, between the MCO
 and State's Risk Management Information System be initialized swiftly,
 tested rigorously and maintained accurately.

 Utilization Review for any medical services provided out of the MCO
 network.

 Defined Return to Work Programs, with established policies and
 procedures to enable the BRM to return an injured employee to work as
 soon as medically possible in light of the employee's medical
 condition and job requirements.

 In addition, the Managed Care Organization (MCO) shall:

 Subject to BRM's special procedures as outlined herein, provide
 managed care services for all workers' compensation claims, under this
 contract, using the same procedures it typically uses for workers'
 compensation claims in the State of New Jersey.

 Provide the BRM with real time access to review claim status,
 financial records, nurses' notes, medical reports, bills and any other
 information as the BRM deems to be essential to the management of the
 program.

 Precertify all hospital admissions, certain diagnostic procedures (as
 identified by the BRM) and outpatient surgery.

 Provide an electronic call reporting interface with the BRM's current
 telephone reporting system.  Claims will be sent to the MCO via the
 Internet using FTP protocol, several times throughout the day.  MCO is
 responsible to build such interfaces as required to accept the State's
 transmissions of claims data.

 Require each participating health care provider to develop and submit
 a treatment plan for the individual to the MCO within 24 hours.  The
 MCO is required to immediately forward a copy of the plan to the BRM.

 The treatment plan must include the following elements:
       Accident Date
       Accident History as Given by Patient
       Pre-existing injury
       Physician Comments on Injury Relative to Accident Reported
       Modified Duty Specifications
       Restrictions-Temporary/Permanent
       Length of Time for Restrictions, if Temporary
       Job Title and Duties Given by Patient
       Prescriptions Given to Employee
       State Claim Number
       Claimant Name
       Claimant Social Security Number
       Claimant Date of Birth
       Claimant Address
       Department, Division and/or Bureau
       Diagnosis (ICD-9)
       Proposed Course of Treatment
       Name and Specialty of Any Referrals
       Type(s) of  Diagnostic Procedures Recommended
       Estimate of Return-to-Work Date
       Actual Returned to Work Date (if known)

 NOTE: All treatment plans must be made available to the State upon
 completion.

 Review the treatment plan, apply such protocols as may be appropriate
 and have the health care provider resolve any differences within 24
 hours.  The MCO must have the BRM's prior approval for any significant
 deviation from the treatment plan.

 Protocols are required for all work-related injuries that can be
 reasonably expected to occur within the various work environments of
 State operations.  These protocols will be available for review by the
 BRM upon request.  All operations of the essential health care
 providers and the staff of the MCO will be guided by the protocols.
 The MCO is responsible for any overpayment or incorrect payment made
 to a health care provider and any penalty or legal fees associated
 with an incorrect payment of bill(s).

 NOTE:  The BRM retains the right and responsibility to determine the
 compensability of any claim, in accordance with the existing workers'
 compensation statute.  The BRM retains the right not to refer any
 claim to the MCO it feels does not or will not benefit from managed
 care.

 Review all medical and hospital bills to ensure that all treatments
 for which a charge is made are for the compensable injury and that
 such charges are in accordance with established norms.  The MCO is
 responsible for any overpayment or incorrect payment made to a health
 care provider.

 Provide a comprehensive bill audit program which includes
 automatically auditing all bills greater than $20,000, screening bills
 between $1,000 and $20,000 and  routinely auditing an appropriate
 sampling of all other bills. Periodic reports of such activity,
 including any estimated savings, must be provided to the State of New
 Jersey.

 Require all health care providers to make recommendations to the BRM
 or a State representative, respecting the suitability of a claimant
 for alternate or light duty.  This may include functional capacity
 testing to determine an employee's capability to work.


 Identify a designated individual as the Account Manager, who will be
 available to the BRM and personnel managers at the various agencies
 and locations of the State to provide current information respecting
 the status of a claimant, updates on expected return-to-work dates and
 any other such information as may be required.  Such individual will
 be available on a daily basis to act as a liaison and to assist the
 BRM and troubleshoot claims issues.  The Account Manager will be
 required to visit the BRM offices several times each week, on a
 regularly scheduled basis.

 Assist the BRM and provide such medical and technical advice as may be
 required to enable the BRM to determine whether any further medical
 treatment is likely to improve the claimant's medical condition.  The
 MCO will furnish any documentation for such claims, as may be
 required.

 Conduct account-specific audits for the BRM to ensure 100% processing
 accuracy.  The results of the audits shall be furnished to the BRM on
 a quarterly basis.

 Maintain all individual employee records by employee Social Security
 Number.

 Provide on a daily basis, via an electronic data interchange, all
 medical claim transactions.

 Provide yearly cost projections and budget documents, as may be
 required, to the BRM.  These will be requested by the BRM on an annual
 basis and shall be provided within 30 days of the request.

 Establish an electronic interface for provider payments.  The
 interface will run through the BRM Risk Management Information System.
 The contractor will be solely responsible for monthly reconciliation
 of the account, for resolving outstanding items and for maintaining
 satisfactory controls/audits of the payment process.  The BRM will
 assume responsibility for the availability of funds sufficient to
 satisfy the obligations generated as a result of the medical
 treatment.

 Prepare any and all reports, which may be required by any governmental
 agency.  The MCO must send separate statements to providers of medical
 services, furnishing information as required by the IRS and
 regulations thereunder regarding amounts paid to those providers of
 services.

 The MCO is solely responsible to maintain, for all its essential
 health care providers, the necessary documents (i.e. W-9's) to enable
 each provider to be paid by the State.

 Deliver financial accounting reports each month at the Operations
 Meeting and cumulatively for the year, within 60 days of the close of
 the state's fiscal year. These reports include the basic claim
 activity reports, medical claim service reserve estimates and other
 reports that have been agreed upon, that summarizes annual claim and
 expense data.

 Maintain a claims data history for all claims, both open and closed on
 the MCO's computer system.  All claims data will be available to the
 Bureau.

 In the event the State transfers claim administration responsibilities
 to another vendor, the successful bidder agrees to provide, within 90
 days, claim history file, with certain data elements.  Including, but
 not limited to, claimant name, social security number, date of claim,
 authorized treating medical records, payment history and any other
 claims records deemed necessary by the State of New Jersey.  The MCO
 must agree to make every effort to cooperate with the successor and
 the BRM in order to facilitate the transition.

 The MCO is responsible for the professional quality, technical
 accuracy, timely completion and delivery of all deliverables and other
 services to be furnished under this contract.  The MCO shall, without
 additional compensation, correct or revise any errors, omissions, or
 other deficiencies in its services.

 The approval of services furnished here under shall not in any way
 relieve the MCO of responsibility for the technical adequacy of its
 work.  The review, approval, acceptance, or payment for any of the
 services shall not be construed as a waiver of any rights under the
 agreement or any cause for action arising out of the performance of
 this contract.

 The MCO's obligations under this clause are in addition to any
 expressed or implied obligation under State law and in no way will
 diminish any other rights that the State may have against the MCO for
 faulty materials, equipment or work.

 RIGHTS AND RESPONSIBILITIES OF THE BRM

 The following rights are reserved for the State of New Jersey.

 The State reserves the right to make the initial referral of the
 employee to a network physician.

 The MCO will be financially responsible for any overpayment made to
 any medical provider.  No right of recovery will exist against the BRM
 for an overpayment.

 The BRM reserves the right to audit, from time to time, all claims,
 files, data, medical reports, accounting and claims systems and
 related procedures to ensure claims are processed accurately, in
 accordance with the contract, N.J.S.A. 34 et seq. and the established
 protocols.  Audits may be performed by authorized State personnel or
 outside parties as directed by the BRM.  The MCO, at it own cost and
 expense, will provide all necessary data for such audits.

 All claim records and supporting documentation; including but not
 limited to claimant's authorized treating medical records, are and
 will remain the property of the BRM and will be made available as
 needed.  The BRM reserves the right to determine which records are
 needed and when.  The MCO agrees to provide the information within a
 reasonable time frame and at a reasonable cost.

 Installation

 The MCO will be solely responsible to conduct the installation
 process, also known as the Statewide rollout.  The BRM will endeavor
 to provide any and all assistance it can, however, cannot guarantee
 the availability of its staff for the rollout.  Each bidder must
 submit to the State details on all related administrative procedures,
 forms, IT equipment and supporting materials to be used in the
 installation of the managed care program and ongoing administration of
 the managed care program.  This document is due no later than three
 months before the effective date of this program.  July 1, 2002 is the
 targeted effective date of the program, therefore the plan is expected
 to be delivered by April 1, 2002 and rollout is anticipated to begin
 as soon as the plan is approved by BRM.

 Startup and Conversion

 The following functions are to be performed by the successful MCO as
 part of initial installation.  The descriptions are intended as
 clarifications of required work and not as definitions of the
 procedures to be used.  Part of the evaluation of responses will be
 the BRM's assessment of which MCO proposes the most efficient method
 of accomplishing the needed functions.  Within five (5) days of the
 award of the contract resulting from this RFP, the successful bidder
 will be required to meet with the BRM to review the implementation
 schedule outlined in the MCO's proposal.  The MCO must supply an
 Implementation Plan outlining the steps, which will be taken to
 convert data, perform programming, testing and audits as necessary.  A
 GANTT Chart must accompany the proposal, outlining all anticipated MCO
 and BRM man-hour requirements, covering the period from award of
 contract through two (2) months beyond implementation.

 Takeover Claims

 The MCO is expected to provide managed care services (as defined in
 this contract) for all claims incurred on and after the effective date
 of this contract and any and all open or re-opened claims held by the
 previous MCO including, but not limited to, claimants who require
 continuing medical treatment as a result of being judged 100%
 permanently and totally disabled by a Judge of Workers' Compensation.
 The current population of "takeover claims" totals approximately
 3,000.

 Documentation and Communication

 Staff appointed to the State account will be required to participate
 in Monthly Operations Meetings to be held either in Trenton or at the
 MCO location. Participants will include the account executive, and the
 supervisors for IT Network, Nursing and Claims.

 The contractor must also indicate what training and procedures manuals
 will be supplied for State Personnel with inquiry/update access to
 contractor systems.

 Performance Standards

 The BRM will include performance standards as part of their contract
 with the successful MCO.  The standards will define quantified
 mutually acceptable financial and account services.  The standards
 will include but not be limited to:

 Appropriate Staffing
 Financial Accuracy
 On Time Payments
 Statistical Coding/Procedural Accuracy
 Claims Processing Time
 Account Management Satisfaction

 Performance in these categories will be a determining factor in the
 granting of fee increases.

 Network

 Participating health care providers (PHCP) may not treat a State
 employee without a referral from the MCO.

 PHCPs are prohibited from treating an employee outside this contract
 and continuing such treatment after a compensable injury, to which
 this contract applies, has occurred.

 PHCPs must schedule all appointments on a timely basis and communicate
 any and all changes with the BRM.

 PHCPs are prohibited from treating employees after they have been
 released as maximum medical improvement.  Participating health care
 providers are prohibited from releasing employees in a "PRN" status.

 PHCPs may be expected to testify in court regarding appropriateness of
 treatment, if requested by the BRM.

 A PHCP must accept any legal decision regarding the appropriateness of
 treatment, regardless of medical condition of employee.

 All PHCP's are required to inform the BRM of any missed appointments.
 The PHCP is not permitted to reschedule or postpone any medical
 treatment without the expressed consent of the BRM, excepting a
 condition which is a recognized medical emergency.

 The BRM retains the exclusive right to accept or reject any physician,
 in the best interest of the State, regardless of the status of the
 physician within the MCO's network.  The State retains the right to be
 the final arbiter of any difference regarding use of providers.  The
 State reserves the right not to accept providers within the MCO
 network and the MCO is required to identify acceptable replacement
 providers, as soon as practicable.  Change of provider  is not an
 acceptable reason for a diminution in service levels.

 The MCO must have network coverage throughout the State of New Jersey.
 This contract does not contemplate network sharing, leasing or other
 such arrangements.  Any deviation from this plan must be in writing
 and submitted for approval.  The BRM retains the right to reject any
 network it feels is not comprehensive or is not in the best interests
 of the State.

 The BRM retains the right at all times to refer a claimant to a
 non-network provider.  The MCO, upon the request of the BRM, will
 provide utilization review services for out-of-network treatment.

 The MCO will furnish the BRM with a list of all providers
 participating in the network the MCO intends to use for the workers'
 compensation program.  The BRM, in its sole discretion, shall have the
 right to exclude any such provider from the network as it applies to
 the BRM.

 The contractor will consult with the BRM prior to any proposed changes
 in the network which could alter member access to providers or
 services, or in any way effect the BRM program, access to medical
 care, level of service or related matters.

 Hospital contracts, including details of payment arrangements, will be
 made available to the BRM upon request, after award of contract.  The
 Contractor will consult with BRM prior to changes in hospital contract
 provisions that could impact the BRM program, access to medical care,
 level of service or related matters.

 Provider contracts, including the details of payment arrangements,
 must be made available to the State of New Jersey upon award of
 contract. BRM reserves the right to approve any substantive changes to
 any applicable provider contract provisions.

 Data Processing Requirements

 The BRM's Risk Management Information System (RMIS) currently runs on
 an AlphaServer 2100A, utilizing Compaq's True64 UNIX 4.0G Operating
 System.  The primary programming language is ACCELL 4GL, and the Data
 Base, Data Server 7, are products of the Unify Corporation.  RMIS
 supports the business functions of the Bureau of Risk Management.

 The MCO must provide and maintain all communications links and upload
 and down load facilities between MCO's system and RMIS.

 The MCO, at its sole cost and expense,  is responsible to make any
 changes to its systems to accommodate BRM systems, including the BRM
 and the Attorney General's office.

 RMIS will, on a daily basis, except weekends and State holidays,
 electronically transfer newly received claims (frst_rpt.data) to the
 MCO's site for assignment and processing.  The MCO is responsible for
 any and all modifications and enhancements to systems to facilitate
 the processing and utilization of this file.  The MCO must support the
 internal and external requirements of RMIS.

 The MCO is responsible for the preparation of a weekly electronic
 download of all reimbursement requests for network vendor payments
 (CSTONJ.INP).  RMIS will acquire this file at the MCO's site.  The MCO
 is responsible for any and all modifications and enhancements to
 systems to facilitate the creation and transmission of this file.  The
 MCO must support the internal and external requirements of RMIS and
 the business requirements of the Bureau.

 The BRM will process requests for reimbursement through RMIS and the
 State's financial system NJCFS.  All payments will be transferred from
 NJCFS electronically through an ACH to the MCO's account.

 The MCO must indicate how it will ensure that only State originated
 information/changes will be reflected on State records contained in
 MCO's files.

 The MCO must provide edits/security to ensure the integrity of the
 data on any and all files under the MCO's control.

 The MCO must provide analysis/programming as needed to fulfill the
 processing requirements of the RFP.

 All programs and/or changes to programs, BRM or MCO, must be tested
 between the BRM and the MCO's systems prior to implementation.

 The MCO must resolve/accommodate all problems/changes required either
 by the BRM or changes in the process in a timely manner.

 BRM reserves the right to accept or reject all contractors or
 subcontractors assigned to this portion of the contract.

 The contractor must demonstrate ability to send and receive test files
 nightly.

 The contractor must provide edits/security to ensure the integrity of
 the data on the files.

 The contractor must provide analysis/programming as needed to fulfill
 processing requirements of the RFP.

 The Data Standards to be used are provided as Exhibit III Bureau of
 Risk Management Data Standards.


 4.0  Reserved

 5.0  CONTRACTUAL TERMS AND CONDITIONS

 5.1  Precedence of Contractual Terms and Conditions

 The contract shall consist of this RFP, addendum to this RFP, the
 contractor's bid proposal and the Division's Notice of Acceptance.

 Unless specifically noted within this RFP, the Standard Terms and
 Conditions take precedence over the Special Terms and Conditions.

 In the event of a conflict between the provisions of this RFP,
 including the Standard Terms and Conditions and the Special Terms and
 Conditions, and any addendum to the RFP, the addendum shall govern.

 In the event of a conflict between the provisions of this RFP,
 including any addendum to this RFP, and the bidder's proposal, the RFP
 and/or the addendum shall govern.

 5.2  Performance Bond

 This section supplements Section 3.3b of the Standard Terms and
 Conditions.  A performance bond is required.  The amount of the
 performance bond is noted on the RFP cover sheet.  The performance
 bond must be posted within 30 days of the effective date of the
 contract award.  The performance bond must remain in full force and
 effect for the term of the contract and any extension thereof.

 5.3  Business Registration

 Proof of valid business registration with the Division of Revenue,
 Department of the Treasury, State of New Jersey, should be submitted
 by the bidder and, if applicable, by every subcontractor of the
 bidder, with the bidder's bid.  No contract will be awarded without
 proof of business registration with the Division of Revenue.  Any
 questions in this regard can be directed to the Division of Revenue at
 (609) 292-1730.

 5.4  Contract Term and Extension Option

 The term of the contract shall be for a period of four years.  The
 anticipated "Contract Effective Date" is provided on the cover sheet
 of this RFP.  If delays in the bid process result in an adjustment of
 the anticipated Contract Effective Date, the bidder agrees to accept a
 contract for the full term of the contract.  The contract may be
 extended for all or part of an additional two years, by mutual written
 consent of the contractor and the Director.

 5.5  Contract Transition

 In the event services end by either contract expiration or
 termination, it shall be incumbent upon the contractor to continue
 services, if requested by the Director, until new services can be
 completely operational.  The contractor acknowledges its
 responsibility to cooperate fully with the replacement contractor and
 the State to ensure a smooth and timely transition to the replacement
 contractor.  Such transitional period shall not extend more than
 ninety (90) days beyond the expiration date of the contract, or any
 extension thereof.  The contractor will be reimbursed for services
 during the transitional period at the rate in effect when the
 transitional period clause is invoked by the State.

 5.6  Availability of Funds

 The State's obligation to pay the contractor is contingent upon the
 availability of appropriated funds from which payment for contract
 purposes can be made.  No legal liability on the part of the State for
 payment of any money shall arise unless funds are made available each
 fiscal year to the Using Agency by the Legislature.

 5.7  Contract Amendment

 Any changes or modifications to the terms of the contract shall only
 be valid when they have been reduced to writing and executed by the
 contractor and the Director.

 5.8  Contractor Responsibilities

 The contractor shall have sole responsibility for the complete effort
 specified in the contract.  Payment will be made only to the
 contractor.  The contractor shall have sole responsibility for all
 payments due any subcontractor.

 The contractor is responsible for the professional quality, technical
 accuracy and timely completion and submission of all deliverables,
 services or commodities required to be provided under the contract.
 The contractor shall, without additional compensation, correct or
 revise any errors, omissions, or other deficiencies in its
 deliverables and other services.  The approval of deliverables
 furnished under this contract shall not in any way relieve the
 contractor of responsibility for the technical adequacy of its work.
 The review, approval, acceptance or payment for any of the services
 shall not be construed as a waiver of any rights that the State may
 have arising out of the contractor's performance of this contract.

 5.9   Substitution of Staff

 If it becomes necessary for the contractor to substitute any
 management, supervisory or key personnel, the contractor will identify
 the substitute personnel and the work to be performed.

 The contractor must provide detailed justification documenting the
 necessity for the substitution.  Resumes must be submitted evidencing
 that the individual(s) proposed as substitution(s) have qualifications
 and experience equal to or better than the individual(s) originally
 proposed or currently assigned.

 The contractor shall forward a request to substitute staff to the
 State's Contract Manager for consideration and approval.  No
 substitute personnel are authorized to begin work until the contractor
 has received written approval to proceed from the State Contract
 Manager.

 5.10  Substitution or Addition of Subcontractor(s)

 This Subsection serves to supplement but not to supersede Section 3.11
 of the Standard Terms and Conditions of this RFP.

 If it becomes necessary for the contractor to substitute and/or add a
 subcontractor, the contractor will identify the proposed new
 subcontractor and the work to be performed.  The contractor must
 provide detailed justification documenting the necessity for the
 substitution or addition.

 The contractor must provide detailed resumes of the proposed
 subcontractor's management, supervisory and other key personnel that
 demonstrate knowledge, ability and experience relevant to that part of
 the work which the subcontractor is to undertake.

 In the event a subcontractor is proposed as a substitution, the
 proposed subcontractor must equal or exceed the qualifications and
 experience of the subcontractor being replaced.  In the event the
 subcontractor is proposed as an addition, the proposed subcontractor's
 qualifications and experience must equal or exceed that of similar
 personnel proposed by the contractor in its bid proposal.

 The contractor shall forward a written request to substitute or add a
 subcontractor to the State Contract Manager for consideration.  If the
 State Contract Manager approves the request, the State Contract
 Manager will forward the request to the Director for final approval.

 No substituted or additional subcontractors are authorized to begin
 work until the contractor has received written approval from the
 Director.

 5.11  Ownership of Material

 All data, technical information, materials gathered, originated,
 developed, prepared, used or obtained in the performance of the
 contract, including, but not limited to, all reports, surveys, plans,
 charts, literature, brochures, mailings, recordings (video and/or
 audio), pictures, drawings, analyses, graphic representations,
 software computer programs and accompanying documentation and
 print-outs, notes and memoranda, written procedures and documents,
 regardless of the state of completion, which are prepared for or are a
 result of the services required under this contract shall be and
 remain the property of the State of New Jersey and shall be delivered
 to the State of New Jersey upon 30 days notice by the State.  With
 respect to software computer programs and/or source codes developed
 for the State, the work shall be considered "work for hire", i.e., the
 State, not the contractor or subcontractor, shall have full and
 complete ownership of all software computer programs and/or source
 codes developed.

 5.12  Data Confidentiality

 All financial, statistical, personnel and/or technical data supplied
 by the State to the contractor are confidential.  The contractor is
 required to use reasonable care to protect the confidentiality of such
 data.  Any use, sale or offering of this data in any form by the
 contractor, or any individual or entity in the contractor's charge or
 employ, will be considered a violation of this contract and may result
 in contract termination and the contractor's suspension or debarment
 from State contracting.  In addition, such conduct may be reported to
 the State Attorney General for possible criminal prosecution.

 5.13  News Releases

 The contractor is not permitted to issue news releases pertaining to
 any aspect of the services being provided under this contract without
 the prior written consent of the Director.

 5.14  Advertising

 The contractor shall not use the State's name, logos, images, or any
 data or results arising from this contract as a part of any commercial
 advertising without first obtaining the prior written consent of the
 Director.

 5.15  Licenses and Permits

 The contractor shall obtain and maintain in full force and effect all
 required licenses, permits, and authorizations necessary to perform
 this contract.  The contractor shall supply the State's Contract
 Manager with evidence of all such licenses, permits and
 authorizations.  This evidence shall be submitted subsequent to the
 contract award.  All costs associated with any such licenses, permits
 and authorizations must be considered by the bidder in its bid
 proposal.

 5.16 Claims and Remedies

 5.16.1  Claims

 The following shall govern claims made by the contractor regarding
 contract award recision, contract interpretation, contractor
 performance and/or suspension or termination.

 Final decisions concerning all disputes relating to contract award
 recision, contract interpretation, contractor performance and/or
 contract reduction, suspension or termination are to be made in a
 manner consistent with N.J.A.C. 17:12-1.1, et seq.  The Director's
 final decision shall be deemed a final agency action reviewable by the
 Superior Court of New Jersey, Appellate Division.

 All claims asserted against the State by the contractor shall be
 subject to the New Jersey Tort Claims Act, N.J.S.A. 59:1-1, et seq.,
 and/or the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1, et
 seq.  However, any claim against the State relating to a final
 decision by the Director regarding contract award recision, contract
 interpretation, contractor performance and/or contract reduction,
 suspension or termination shall not accrue, and the time period for
 performing any act required by N.J.S.A. 59:8-8 or 59:13-5 shall not
 commence, until a decision is rendered by the Superior Court of New
 Jersey, Appellate Division (or by the Supreme Court of New Jersey, if
 appealed) that such final decision by the Director was improper.

 5.16.2  Remedies

 Nothing in the contract shall be construed to be a waiver by the State
 of any warranty, expressed or implied, or any remedy at law or equity,
 except as specifically and expressly stated in a writing executed by
 the Director.

 5.17  Late Delivery

 The contractor must immediately advise the State Contract Manager of
 any circumstance or event that could result in late completion of any
 task or subtask called for to be completed on a date certain.  If the
 contractor cannot meet the contract completion date for any task or
 subtask required to be completed by a date certain, the contractor
 shall be liable to the State for damages incurred.

 5.18  Retainage

 The amount of retainage is noted on the RFP cover sheet.  The Using
 Agency shall retain the stated percentage of each invoice submitted.
 At the end of each three (3) month period, the Using Agency shall
 review the contractor's performance.  If performance has been
 satisfactory, the Using Agency shall release 90% of the retainage for
 the preceding three-(3) month period.  Following certification by the
 State Contract Manager that all services have been satisfactorily
 performed, the balance of the retainage shall be released to the
 contractor.

 5.19  State's Option to Reduce Scope of Work

 The State has the option, in its sole discretion, to reduce the scope
 of work for any task or subtask called for under this contract.  In
 such an event, the Director shall provide advance written notice to
 the contractor.

 Upon receipt of such written notice, the contractor will submit,
 within five (5) working days to the Director and the State Project
 Manager, an itemization of the work effort already completed by task
 or subtask.  The contractor shall be compensated for such work effort
 according to the applicable portions of its cost proposal.

 5.20  Suspension of Work

 The State Contract Manager may, for valid reason, issue a stop order
 directing the contractor to suspend work under the contract for a
 specific time.  The contractor shall be paid until the effective date
 of the stop order.  The contractor shall resume work upon the date
 specified in the stop order, or upon such other date as the State
 Contract Manager may thereafter direct in writing.  The period of
 suspension shall be deemed added to the contractor's approved schedule
 of performance.  The Director and the contractor shall negotiate an
 equitable adjustment, if any, to the contract price.

 5.21  Change in Law

 Whenever an unforeseen change in applicable law or regulation affects
 the services that are the subject of this contract, the contractor
 shall advise the State Contract Manager and the Director in writing
 and include in such written transmittal any estimated increase or
 decrease in the cost of its performance of the services as a result of
 such change in law or regulation.  The Director and the contractor
 shall negotiate an equitable adjustment, if any, to the contract
 price.

 5.22  Additional Work and/or Special Projects

 The contractor shall not begin performing any additional work or
 special projects without first obtaining written approval from both
 the State Contract Manager and the Director.

 In the event of additional work and/or special projects, the
 contractor must present a written proposal to perform the additional
 work to the State Contract Manager.  The proposal should provide
 justification for the necessity of the additional work.  The
 relationship between the additional work and the base contract work
 must be clearly established by the contractor in its proposal.

 The contractor's written proposal must provide a detailed description
 of the work to be performed broken down by task and subtask.  The
 proposal should also contain details on the level of effort, including
 hours, labor categories, etc., necessary to complete the additional
 work.

 The written proposal must detail the cost necessary to complete the
 additional work in a manner consistent with the contract.  The written
 cost proposal must be based upon the hourly rates, unit costs or other
 cost elements submitted by the contractor in the contractor's original
 bid proposal submitted in response to this RFP.  Whenever possible,
 the cost proposal should be a firm, fixed cost to perform the required
 work.  The firm fixed price should specifically reference and be tied
 directly to costs submitted by the contractor in its original bid
 proposal.  A payment schedule, tied to successful completion of tasks
 and subtasks, must be included.

 Upon receipt and approval of the contractor's written proposal, the
 State Contract Manager shall forward same to the Director for the
 Director's written approval.  Complete documentation from the Using
 Agency, confirming the need for the additional work, must be
 submitted.  Documentation forwarded by the State Contract Manager to
 the Director must all include all other required State approvals, such
 as those that may be required from the State of New Jersey's Office of
 Management and Budget (OMB) and Office of Information and Technology
 (OIT).

 No additional work and/or special project may commence without the
 Director's written approval.  In the event the contractor proceeds
 with additional work and/or special projects without the Director's
 written approval, it shall be at the contractor's sole risk.  The
 State shall be under no obligation to pay for work done without the
 Director's written approval.

 5.23  Form of Compensation and Payment

 This Section supplements Section 4.5 of the RFP'S Standard Terms and
 Conditions.  The contractor must submit official State invoice forms
 to the Using Agency with supporting documentation evidencing that work
 for which payment is sought has been satisfactorily completed.
 Invoices must reference the tasks or subtasks detailed in the Scope of
 Work section of the RFP and must be in strict accordance with the
 firm, fixed prices submitted for each task or subtask on the RFP
 pricing sheets.  When applicable, invoices should reference the
 appropriate RFP price sheet line number from the contractor's bid
 proposal.  All invoices must be approved by the State Contract Manager
 before payment will be authorized.

 Invoices must also be submitted for any special projects, additional
 work or other items properly authorized and satisfactorily completed
 under the contract.  Invoices shall be submitted according to the
 payment schedule agreed upon when the work was authorized and
 approved.  Payment can only be made for work when it has received all
 required written approvals and has been satisfactorily completed.

 5.23

 Not applicable to this procurement.

 5.24

 Not applicable to this procurement.

 5.25  Contract Activity Report

 In conjunction with the standard record keeping requirements of this
 contract, as listed in paragraph 3.19 of this RFP'S standard terms and
 conditions, contractor(s) must provide, on a calendar quarter basis,
 to the Purchase Bureau buyer assigned, a record of all purchases made
 under their contract award resulting for this Request for Proposal.
 This includes purchases made by all using agencies including the State
 and political sub-divisions thereof. This reporting requirement
 includes sales to State using agencies and, if permitted under the
 terms of the contract, sales to counties, municipalities, school
 districts, volunteer fire departments, first aid squads and rescue
 squads, and independent institutions of higher education.  The
 requirement also includes sales to State and County Colleges and
 Quasi-State Agencies.  Quasi-State Agencies include any agency,
 commission, board, authority or other such governmental entity which
 is established and is allocated to a State department or any bi-state
 governmental entity of which the State of New Jersey is a member.

 This information must be provided in a tabular format such that an
 analysis can be made to determine the following:

 -Contractor's total sales volume under contract, subtotaled by
 product.
 -Contractor's total sales volume to each purchaser under the contract,
 subtotaled by product, including, if applicable, catalog number and
 description, price list with appropriate page reference and/or
 contract discount applied

 Submission of purchase orders, confirmations, and/or invoices do not
 fulfil this contract requirement for information.

 Contractors are strongly encouraged to submit the required information
 in electronic spreadsheet format.  The Purchase Bureau uses Microsoft
 Excel.

 Failure to report this mandated information will be a factor in future
 award decisions.

                                                                INDEX NO: T1997
                                                                PAGE NO:      3
                            VENDOR INFORMATION SHEET
                                                COOP *
   VENDOR NAME AND ADDRESS        SBE/MBE/WBE/PURCH
 ______________________________________________________________________________
 HORIZON CASUALTY SERVICES INC    NO /NO /NO /NO    CONTRACT #: 51467
 33 WASHINGTON ST/11TH FL                           EXPIRATION DATE: 12/31/09
 NEWARK, NJ 07102                                   TERMS: NONE
                                                    DELIVERY:  30 DAYS ARO

 CONTACT PERSON: ILEENE WACHS                       CONTACT PHONE: 973-622-0100
                                                    ORDER FAX #  : 973-622-7353


 * WILL VENDOR EXTEND CONTRACT PRICES TO COOPERATIVE PURCHASING PARTICIPANTS?

                                                                INDEX NO: T1997
                                                                PAGE NO:      4
                            CONTRACT ITEMS/SERVICES
                                  BY VENDOR
 ______________________________________________________________________________
 VNDR: HORIZON CASUALTY SERVICES INC                       CNTRCT #: 51467

 LINE#  DESCRIPTION/MFGR/BRAND  EST QUANTITY  UNIT  % DISCOUNT       UNIT PRICE
 00001  COMM CODE: 958-61-044147       1.000  EACH     N/A         $443.07000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  ANNUAL RATE YEAR 1.




 00004  COMM CODE: 948-46-045190       1.000  EACH     N/A         $419.00000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  ANNUAL RATE YEAR 2.
 00005  COMM CODE: 948-46-045191       1.000  EACH     N/A         $440.00000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  ANNUAL RATE YEAR 3.
 00006  COMM CODE: 948-46-045192       1.000  EACH     N/A         $462.00000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  ANNUAL RATE YEAR 4.
 00007  COMM CODE: 958-61-044147       1.000  EACH     N/A         $425.37000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  PRICE PER CLAIM FOR SIX MONTH
  CONTRACT EXTENSION FROM JULY 1, 2006
  THROUGH DECEMBER 31,2006. PRICE REFLECTS
  2.5% INCREASE.
 00008  COMM CODE: 958-61-044147       1.000  EACH     N/A         $454.15000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  PRICE PER CLAIM FOR SIX MONTH
  CONTRACT EXTENSION FROM JULY 1, 2007
  THROUGH DECEMBER 31,2007. PRICE REFLECTS
  2.5% INCREASE.
 00009  COMM CODE: 958-61-044147       1.000  EACH     N/A         $454.15000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  PRICE PER CLAIM FOR SIX
  MONTH CONTRACT EXTENSION FROM
  JULY 1, 2008 THROUGH DECEMBER 31, 2008
  PRICE CONTINUES TO REFLECT 2.5%
  INCREASE.
 00010  COMM CODE: 958-61-044147       1.000  EACH     N/A         $454.15000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  PRICE PER CLAIM FOR TWO

                                                                INDEX NO: T1997
                                                                PAGE NO:      5
                            CONTRACT ITEMS/SERVICES
                                  BY VENDOR
 ______________________________________________________________________________
 VNDR: HORIZON CASUALTY SERVICES INC                       CNTRCT #: 51467

 LINE#  DESCRIPTION/MFGR/BRAND  EST QUANTITY  UNIT  % DISCOUNT       UNIT PRICE
      00010     CONTINUED.....
  MONTH CONTRACT EXTENSION FROM
  JANUARY 1, 2009 THROUGH FEBRUARY
  28, 2009 PRICE CONTINUES TO
  REFLECT 2.5% INCREASE.
 00011  COMM CODE: 958-61-044147       1.000  EACH     N/A         $454.15000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  ANNUAL RATE YEAR 1.
  MONTH CONTRACT EXTENSION FROM
  MARCH 1, 2009 THROUGH MARCH 31,
  2009 PRICE CONTINUES TO
  REFLECT 2.5% INCREASE.
 00012  COMM CODE: 958-61-044147       1.000  EACH     N/A         $455.10000
  MANAGED CARE WORKERS' COMPENSATION
  SERVICES.  THIS IS A TWO-MONTH
  EXTENSION FOR THE PERIOD 8/1/2009
  THROUGH 9/30/2009. PLEASE USE THIS
  LINE FOR THIS EXTENSION PERIOD.
  THIS REFLECTS A .21% INCREASE FROM
  THE PREVIOUS AMOUNT ($454.15).