02 230000002409 - Schedule A1 - Instant Game Tickets.docx

Michigan.gov/MiProcurement

Contractor must enter company name here.

Michigan.gov/MiProcurement Schedule a1 – Instant Game tickets statement of work contract activities Request for Proposal (RFP) No. 230000002409 Lottery Instant Game Tickets This schedule identifies the anticipated requirements of any Contract resulting from this RFP. The term “Contractor” in this document refers to a bidder responding to this RFP, as well as the Contractor who is awarded the contract. The term “bidder” is used to identify where specific responses to the RFP are required.

The Contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

IMPORTANT NOTE TO CONTRACTORS/BIDDERS: There are specific requirements for which acceptance must be simply acknowledged through a checkbox(es), and others that require further explanation. Click one checkbox and complete the entries as identified.

Background The Michigan Bureau of State Lottery (Bureau) is seeking proposals from qualified contractors to provide services, printing, and supplies associated with instant game tickets. The contractor shall produce Instant Game Tickets for the Bureau in accordance with the contract. The Contractor shall provide dedicated marketing staff to interface with the Lottery Marketing Division.

Scope The Bureau introduces 35-45 instant games annually with a total quantity of approximately 350 million tickets. The annual number of tickets is an estimate, and the Bureau is neither committed to nor limited by the estimated quantities when making purchase orders. The Bureau will use its discretion when determining the number of tickets needed in each purchase order.

The Bureau anticipates awarding an instant game ticket contract to a primary and a secondary printer. The primary printer would anticipate fulfilling most orders (approx. 90%). The secondary printer would anticipate fulfilling the remaining orders as well as instances where the primary printer is unable or unwilling to fulfill the order. The foregoing estimates are examples only and do not set any minimum guarantee or minimum order requirement.

Any contract awarded will be based on best value to the Bureau. Best value is not limited to the lowest price or highest proposal score. The concept of best value encompasses a wide array of factors, including but not limited to pricing, strength and versatility of the proposal, bidder experience, ease of administration over one or multiple contracts, and/or local economic benefits.

The contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

1. General Requirements The Bureau intends to enter a contract with an experienced and qualified vendor capable of the following:

a. Providing graphic design, prize structure development, computer programming, product printing and computer-imaged game design development prior to moving to working papers.

b. Capable of utilizing lottery computerized accounting, allocating or validating sub-systems.

c. Providing control over and securing inventory to protect the integrity of the game.

d. Providing various marketing and sales support functions.

e. Providing a coupon database for second chance games which will include prize structure, coupon database management, tracking, managing, and providing coupon and coupon outcomes.

f. Providing Independent third-party focus group testing when requested by the Bureau.

g. Furnishing one licensed property per contract year at no cost to the Bureau.

h. Providing flexibility to the Lottery to procure other goods or services deemed necessary to produce the best games and/or promote sales.

Program Manager - Instant Game Tickets:

Name TBD Email: TBD Phone: TBD

1.1. Instant Game Product Specifications

Specifications for the individual tickets, group of tickets or ticket projects includes:

a. A print vendor capable of developing game specifications under the direction of the Program manager or designee for each game.

b. Game specifications with the final art and color keys or digital content proof of the front and back of the ticket.

c. Detailed programming parameters, prize structures, packaging and shipping information; production and delivery schedule for tickets.

d. Game data files and other required data including deliverables; ticket order quantity; any optional products, features, or services requested by the program manager or designee: and detailed pricing.

e. Formal documentation of the game specifications (working papers).

f. Working papers for the games generated by the contractor in a format provided by the Bureau.

g. Schedules established in cooperation with the program manager and working papers executed to facilitate the orderly process for the production and delivery of tickets.

h. Base ticket price that includes the cost or creating and revision working papers. Any revision shall be included in the base ticket price.

i. The contractor must use its best efforts to produce working papers that accurately reflect each game.

j. Approval from the program manager before any game is produced and a purchase order is issued. The design and production of any game will not proceed until all approvals are obtained from the program manager or designee and a purchase order issued.

k. Approval from the program manager or designee before ticket manufacturing begins.

l. The manufacturing and delivery of tickets according to the working papers.

m. Working papers for each game will become part of the contract.

n. Electronic files of approved ticket and book insert art for promotional use by the Bureau.

o. High-resolution digital images of each game and/or artwork associated with each game in a format designated by the Bureau including but not limited to JPG, PDF, PNG, AI, and PSD, for use in display and promotion through digital channels.

p. Technical support, consultation, assistance in diagnosing problems provided by the contractor between 8 AM and 5 PM EST.

q. Analysis of instant game strategies or techniques employed in the industry provided by the contractor.

r. Upon request by the Director of Security and at no added cost to a game, the contractor shall provide tickets printed and programmed to appear as winners, losers, or winners and losers, but are not within the game matrix. Lottery Security typically referred to these tickets as decoy tickets.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.2. Scene/Color Pulsing

Where a game order includes scene pulses, color pulses, or other changes in the appearance of tickets contained in the same print run, all such changes are presumed to be provided by contractor at no additional charge unless and only if the total costs for such changes are expressly identified and itemized on the front page of the associated working papers.

List all exception(s):

1.3. Prize Structure

Contractor will produce games using the Guaranteed Low-End Prize Structure (GLEPS) method of winning ticket dispersion and randomization. Each book of Instant Game Tickets produced for a game shall contain the same total value of low tier winning tickets, but each will have varying numbers of winners of various denominations. Multiple configurations of low-tier prizes shall be incorporated at random into books of tickets.

The contractor will furnish to the Bureau a preliminary prize structure for each game prior to receiving final approval to proceed with the manufacture of tickets.

The contractor will, at no additional expense to the Bureau, guarantee the following:

a. Winning tickets are distributed with no discernible pattern throughout the entire game production.

b. The total value of prizes will constitute no more than the percentage of gross revenue as determined by the State prior to production.

c. Prizes designated as “guaranteed” in the game prize structure are all present in the delivered tickets within tolerances agreed to in the working papers.

No later than 60 calendar days prior to a game launch the Contractor shall furnish to the Bureau an “End of Production” prize structure for each game taking into consideration omitted tickets, damaged tickets, under-printing tickets, overprinting of tickets, etc. The “End of Production” prize structure must include the actual number of saleable winning tickets of each prize.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.4. Trademark and Service Mark Searches

During the term of the contract, no less than 60 calendar days in advance of game production or promotion, Contractor will conduct trademark and service mark searches for all printed product and digital instant game names, or any promotional names associated with these games that are not owned by the contractor.

The contractor must provide the Bureau with a written legal opinion as to the permissible use of each game name based upon a search of registrations and applications of registration filed with the United States Patent and Trademark office. The contractor must also provide the legal opinion, along with any required registration documentation, to other applicable state agencies and appropriate sources as determined necessary by the Bureau.

Where contractor does not own or have licensed use of any game name or artwork, it is understood that: Contractor’s indemnification obligations outlined in the contract apply, the Bureau is under no obligation to undergo an independent inquiry, and agreement to the working papers or any other approval by the Bureau does not waive, diminish, or otherwise limit contractor’s indemnification obligations. The Bureau relies on the contractor to perform a diligent inquiry into the permissible use of all artwork associated with a game, even if employees of the Bureau are involved in the general design or review of such artwork, and it is agreed that contractor’s indemnification obligations can only be waived or limited by a written amendment to the contract that is specific to the game, the name or artwork at issue, and signed by both the contract administrator and Program manager. Anything less, such as emails or statements on working papers are ineffective.

a. New trademarks and service marks developed for the Bureau will be the property of the State of Michigan. The contractor will register new trademarks and service marks in the name of the State of Michigan, at its discretion.

b. The contractor shall be responsible for renewing all trademark or service marks on behalf of the Bureau, as required.

c. For trademarks and service marks owned by the contractor, the contractor will provide a letter warranting its ownership and provide the Bureau with a non-exclusive, non-transferable, non-sub-licensable license to use the trademark or service mark.

d. Upon approval of denial of trademark, the contractor shall provide the Program Manager or designee with a copy of the signed registration or denial.

e. All costs relating to the above shall be the contractor’s responsibility, as part of the contract.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.5. Licensed Properties

The contractor shall have exclusive licensing agreements, or agreements with a third party or other licensed property, which grant the contractor rights to the products and services required in this contract. Subject to the terms and conditions of the license agreements, the licensed properties must be available for sublicense to the Bureau for use in producing instant game tickets and in any advertising/promotions for the tickets.

The Bureau reserves the right to acquire licensed properties from other third-party sources at its own expense for incorporation into instant games printed by the contractor during the term of the contract. The contractor agrees that it must print such games and in doing so shall not be deemed to have agreed with or otherwise acquiesced to the legitimacy of the underlying license or ownership claim.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.6. Randomization

The contractor must randomly distribute winning tickets throughout the game and throughout each control unit (pool) without any determinable pattern. Each pool must be produced using a randomization program unique from all other control units produced for a single game. The number of tickets per pool will be specified in the working papers for each game. Each game must be produced using randomization programs unique from another game. Number randomization programs used for printing tickets should be organized such that winning tickets are scattered among or between non-winning tickets.

The contractor will not be permitted to produce winning and non-winning tickets or achieve randomization of winning and non-winning through separate production or manual or mechanical assembly of tickets into books.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.7. Certification

The contractor shall engage a certified public accounting firm/auditor to certify the randomization of winning tickets and the odds of winning in each prize category as specified in the executed game specifications. The contractor shall deliver the auditor’s report of observations and findings to the Program Manager or designee within seven days after completion of each ticket production.

The auditor shall also audit a sufficient sampling of game production files along with a representative sample of books of actual finished tickets selected at random to ensure compliance with the contract and working papers. The auditor’s report shall be delivered to the Program Manager or designee within seven days prior to the start of sales.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.8. Game, Book, Ticket and Validation Numbers

Each instant game ticket shall contain a format-game-book-ticket number sequence which is to appear on the front and back of each ticket and each detachable stub when applicable. The game number will consist of four-digits with leading zeros if necessary. The six-digit book number will be consecutive and begin with 000001. The ticket number will be three digits with the first number in a book being 001 and the last ticket sequence number determined by the book size order. The format of the numbers sequence will be GGGG-BBBBBB-TTT.

There must be a black box imaged adjacent to the ticket number on the front and back of the ticket for the first and last ticket of each book. The box is intended to ensure the correct separation of the books.

Each ticket must also contain a unique validation number applied by a non-impact imager. The ten-digit validation number will be located under the scratch-off material on the front of the ticket with the exact location specified in the working papers for each game. The format of the validation number must be VVVVVVVVVC.

List all exception(s):

1.9. Bar Coding

Each instant game ticket will include three distinct bar codes:

a. Interleaved I 2 of 5 Validation Bar Code – The back of each instant game ticket must include a bar code printed in the I 2 of 5 format containing 14 numeric characters consisting of the game number, book number, ticket number and check digit.

The numbers described above must be displayed on the tickets in the following manner:

*All 14 numeric characters must also be printed directly below each bar code.

b. PDF 417 Validation Bar Code – Each instant game ticket must include a bar code printed in the PDF 417 format containing 27 numeric characters consisting of the format code, game number, book number, ticket number, first three digits of the validation number, the two-digit MOD 100 check formula, and the last five digits of the validation number. The bar code will be printed under the scratch-off material with the exact location specified in the working papers for each game. The numbers described above will be displayed on the tickets in the following manner:

c. Universal Product Code (UPC) – Each instant game ticket must include the UPC as assigned to the State of Michigan. The UPC must be printed within the tolerances required by the Uniform Code Council, Inc. The contractor will procure the actual code on behalf of the Bureau. The location of the UPC will be on the back of the ticket and will include the human readable numbers directly below the bar code.

List all exception(s):

1.10. Data Processing Requirements

The contractor must furnish the minimum data processing requirements for each instant game at no additional cost, including, but not limited to:

a. Serialized inventory file An electronic file containing data required for the instant game tracking and distribution activities of the Bureau and its designated vendors. Each data record must contain information pertaining to a single book of instant game tickets, including, but not limited to: the book number, the carton number, and the disposition of the book at the end of the printing process. The Bureau requires this file 60 calendar days prior to the beginning of public sales for an instant game.

b. High-tier winner validation file An electronic file, ASCII format, containing validation data for all winning tickets in a game with prize amounts greater than $25.00 or other threshold determined by the Bureau. Each data record contains, but is not limited to, the winning validation number and prize level for a single high-tier ticket. The data records shall be sorted in validation number order. The Program Manager or designee requires this file 60 calendar days prior to the beginning of public sales for an instant game.

c. Low-tier winner validation file An electronic file, ASCII format, containing validation data for all winning tickets in a game with prize amounts of $25.00 or below, or other threshold determined by the Bureau. Each individual record contains, but is not limited to, the low tier winning validation numbers and prizes for a single book of tickets. The data records are sorted in book number order. The Program Manager or designee requires this file 60 calendar days prior to the beginning of public sales for an instant game.

d. End-of-production prize structure A document containing the breakdown of winning tickets, by prize amount, which is used by the Bureau to verify the validation data on both winning validation files. The prize structure will list the number of winners for every possible combination of an individual prize (i.e., when a $4 prize could be won as $1 X 4, $2 X 2, or $4 X 1, each of the three combinations would have a line in the breakdown) by pool and game, along with dollar totals and percentages of the total prize payout. Should the Bureau request additional shipments of a game, the vendor will supply two versions of the EOP Prize Structure. The first document will show the breakdown of the new shipment while the second prize structure will detail the entire game. This document should accompany, if possible, or closely follow the winner validation files.

e. End-of-distribution void validation file An electronic file containing all winning validation numbers (both high and low tier) from instant game ticket books which the Program Manager or designee has deemed to be void and no longer available for sale. The Program Manager or designee will supply an electronic file of voided book numbers from a single game to the vendor. Each record on the resulting file will contain only the game number and the validation number for a single void ticket – no connection should be made to the book number. The file will be sorted in validation number order.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.11. Test files

Should the need arise – for application changes, file format changes, QA, etc. – the Program Manager or designee may request any or all the above items for the purposes of testing. Program Manager or designee may request a specific production game to be used or request the vendor to provide a test game using parameters set forth by the Bureau. Test materials will be delivered by the vendor within 14 calendar days of receipt of the request.

List all exception(s):

1.12. Encrypted Validation Code File

For specific games designated by the Lottery, an encrypted electronic file containing the 8-digit validation number (VIRN) for all non-winning tickets will be required. The file will be encrypted using an algorithm of the State’s choosing. The file will be used to facilitate the State’s promotions that require players to submit non-winning tickets through Michiganlottery.com and will enable the State to verify proof of purchase in real time and therefore alleviates players from having to mail-in entries. The Program Manager or designee requires this file three weeks prior to the beginning of public sales for an instant game.

All load files should be delivered on the SFTP server in ASCII format.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.13. Validation Information and Records

The contractor shall provide the Program Manager or designee with electronic data files containing winning ticket validation data.

a. The contractor will maintain complete records of the contents of every book of tickets, page by page, ticket by ticket, and spot-by-spot for 15 months from the announced end of sale to retailers or will have computer programs capable of reconstructing such records.

b. The contractor shall only reconstruct tickets manufactured for the Bureau which have been requested by the Michigan Lottery Commissioner, the Director of Security, or a designee of the Director of Security.

c. The contractor shall secure the capability to reconstruct tickets. The Bureau will review the contractor’s reconstruction security to determine acceptability to the Bureau. The contractor shall deliver a written response to all requests for ticket reconstruction, to the Program Manager or designee, no later than three working days from receipt of such request. The Bureau may require expedited responses in certain cases and the contractor shall answer no later than the next working day.

d. The contractor shall maintain a log of all requests for ticket or book reconstruction indicating, at minimum, the date of request, the requestor’s name, the ticket information requested, and a reference number that will identify the specific data requested.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.14. Disposition of Data File

The contractor must store all computer data files containing game information in a secure storage area for a period of three years after the expiration date of the game or until notified in writing by the Bureau that these data files may be destroyed sooner. The contractor must certify that the method of storing active game files and the process used to destroy obsolete game files will prevent the accidental or malicious release of any game information during and after the life cycle of a game.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.15. Warranties

Contractor warrants that tickets will remain readable and scratchable for up to 36 months from the delivery date to the Bureau provided the Bureau stores the tickets in a climate-controlled environment and have not sustained damage. In the event of warranty, the Bureau will contact the Contractor Representative to arrange for replacement.

Bidder must provide detailed information requested below:

Describe any warranties included in the bid (if none, write N/A):

Provide the length of the warranty:

Explain the process for reporting warranty issues:

Explain how any repairs or replacements are made, including timing, etc.:

If the warranty is provided through a third-party or manufacturer, the Contractor must confirm that the manufacturer’s warranty passes through to the State.

Provide the name, address, contact name, phone number and email address of the party responsible for the warranty:

1.16. Recall Requirements and Procedures

If it is determined that a deficiency or defect has occurred, the Contractor will identify the extent of the potential defect to the Program Manager or designee and to any supplier that reported the defect.

For large-scale defect that impacts a shipment, the contractor will plan for stock pick-up and, if requested, will replace the stock within two weeks of written request.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.17. Quality Assurance

a. Ticket Production Standards To maintain public and retailer confidence in the integrity and security of the instant game, and to provide maximum marketability of the instant game tickets, the Bureau requires tickets be printed with the highest quality standards. A book of tickets with any of the following characteristics shall not be considered acceptable, and the books shall be rejected as part of the Contractor’s quality control and listed as an omitted book.

1. Perforations between tickets that are so deep as to cause tickets to separate while handling.

2. Tickets out of sequential order within a book.

3. An incorrect number of tickets within a book.

4. Tickets that are not trimmed straight.

5. Display print designs that are not clearly and crisply oriented.

6. Scratches across or holes in scratch off coverings which expose portions of hidden play symbols or game play area.

7. Rough, uneven scratch off coverings.

8. Scratch off covering that drip onto display printing, smear, fail to come off cleanly and completely when rubbed with a coin or are off register.

9. Overprint designs that are off register or that are not clear and crisply printed.

10. Offsetting of inks on scratch off coverings from one ticket to another.

11. Play symbols or other data that peak out or can be seen from under the scratch off covering.

12. Play symbols that are unclear, clipped or incomplete.

13. Play symbols that smear with slight moisture or normal handling.

14. Captions that are not clear or do not correctly describe the play symbol.

15. Foil that rips away when the ticket is rubbed, delaminates from the paper stock or that contains tears.

16. Bar code and symbol contrast and clarity not in accordance with specified standards and or is removed during standard scratching process.

17. Ghosted image of play symbols underneath latex.

18. Any other degradations of ticket or packaging quality not specified above, but which constitutes unacceptable quality.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

b. Press Approval The Bureau may elect, at its discretion, to send representatives to attend press approvals at the contractor’s printing plant for purposes of review and inspection of game production. If the Bureau elects not to attend press approvals, the contractor may proceed with production based on previous Program Manager approval of ink draw downs and other representative color facsimiles of final tickets. As described in section 11, the contractor agrees to provide transportation costs in the event the Bureau would like an onsite visit.

List all exception(s):

c. Ticket Testing

1. The Bureau shall arrange for security and bar code quality testing of tickets by an independent laboratory selected by the Bureau at the time of the initial production of tickets and as deemed necessary thereafter.

2. Every game produced by the contractor will be tested by a third-party lab contracted by the Bureau. The Bureau will pay the third-party for the cost of testing and the contractor will deduct that amount from its printing invoice. The contractor shall provide the third-party lab with a minimum of two (2) voided books from each channel at least 60 calendar days prior to the game launch for testing purposes.

3. The contractor shall provide the Bureau or designee with a minimum of six (6) voided books from each channel at least 60 calendar days prior to the game launch for testing purposes. The contractor shall be responsible for all costs of the initial testing of each game and for any additional testing necessary as the result of deficiencies identified through the initial test.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

d. Omitted/Defective Ticket Program and Reporting

1. Omitted books are not printed or are rejected by the contractor or the Program Manager or designee and have been removed from the contractor’s shipment. Omitted books may not be “made-up” without the express written approval of the Program Manager.

2. All tickets which are rejected and removed from production due to inadequate quality will be immediately removed from the production line area, placed in sealed cartons and stored in a locked area within the contractor’s premises.

3. The contractor will destroy all rejected tickets and ticket stock by shredding, pulverizing, burning, or dissolving such rejected tickets.

4. Such tickets will be destroyed at the end of each day’s ticket production provided the finished saleable books of tickets, carton labels and all related production documents affected by the rejected books have been reconciled to accurately account for each omitted or rejected book of tickets. In the event such reconciliation cannot be completed during the production day the rejected tickets are removed from production, such rejected tickets must remain in a secure locked area, accessible only to the contractor’s plant supervisor, and destroyed immediately upon the completion of the necessary reconciliation.

5. The contractor will prepare a list of omitted books for each ticket shipment to the Bureau. The contractor will deliver the list of omitted books with the shipment from which the omitted books occurred. A list of destroyed tickets shall also accompany the ticket shipment. This list will describe the method of destruction and will contain the signatures of the persons performing the destruction, the dates of destruction and the signature of the plant supervisor attesting to the destruction.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

1.18. Transition

a. Post-Contract Transition:

Invoices must be sent within 45 calendar days after expiration of contract. Any invoices received after 45 calendar days will result in a non-payment of invoice.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

2. Service Requirements

2.1. Timeframes

Unless stated otherwise, the contractor will adhere to the following game delivery schedule:

a. Within two weeks of the Bureau notifying the contractor that the prize structure, play style, and artwork for a particular game have been approved, the contractor will deliver to the Program Manager or designee a set of draft Working Papers for the Program Manager’s review and comment.

b. Within one week after receipt of comments from the Program Manager, the contractor will deliver to the Program Manager the final working papers for signature (execution). Final ticket art will accompany the final working papers.

c. The contractor shall produce and deliver the quantity of tickets specified in the approved purchase order and deliver no later than 60 calendar days prior to the start of the game(s).

List all exception(s):

2.2. Delivery

Unless stated otherwise, the contractor shall have tickets available to the Bureau by the date defined in the executed working papers. Tickets are to be delivered to Lottery’s distribution center no less than 8 weeks prior to an instant ticket game launch date. Ticket delivery will be on a per call basis. Tickets are not to be shipped by the contractor unless prior authorization to ship is given by the Program Manager or designee.

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2.3. Reporting

The contractor must submit to the Contract Administrator a Usage/Sales Report in excel format, on an annual basis minimum, within 10 calendar days of written request.

Contractor must also submit to Program Manager or designee written reports of the type and frequency as listed below unless stated otherwise within delivery order(s).

For each game produced, the contractor must submit, to the Program Manager or designee, the following written reports according to the contract and as specified in the working papers at least 60 calendar days prior to the games launch:

a. Ticket Validation Information/ Report

b. Randomization Certification/ Auditor Report

c. Data Processing Files

d. “End of Production” price structure report

e. Omitted Books Report/List

f. Shipping Reports

g. Any other reports specified in the game’s working papers.

The State reserves the right to request additional reports, which must be at no charge.

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2.4. Meetings

The contractor must attend a kick-off meeting within 30 calendar days of the contract effective date. The Bureau may request other meetings as it deems appropriate.

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2.5. Marketing Services, Promotions, and Merchandising

a. At no additional cost, Contractor shall provide high-resolution images of all instant tickets and associated artwork in any file format designated by the Bureau for display and promotional uses.

b. Where merchandise, travel, or other non-cash prizes are part of an Instant Ticket, contractor shall obtain and facilitate fulfillment of such merchandise, travel, or other prizing for the Bureau without markup or additional charge.

c. Contractor shall prepare and provide the Bureau with market research and analysis at no additional cost, including:

1. Monthly sales analysis including game indexes and comparison to similar price points;

2. Quarterly review of instant ticket sales in Michigan as compared to other jurisdictions;

3. Annual review of instant ticket sales including comparison of price points over five-year period;

4. Regular updates on strategies and techniques being used in the industry;

5. Other sales data and comparisons as requested by the Bureau.

d. At the Bureau’s request, Contractor shall retain a third-party research company or companies to conduct qualitative and quantitative research such as focus groups and online surveys, and:

1. Retention of third-party researchers must be subject to approval by the Bureau;

2. Costs of third-party research must be passed to the Bureau without any additional markup or charge;

3. Third-party research agreements must be between contractor and the third party and must not include any minimum number of projects or work orders.

e. Contractor shall cover the first $50,000 in third-party research expenses incurred each contract year. This credit applies only to the primary Contractor and does not apply to any secondary Contractor.

f. Contractor shall, at the Bureau’s request, retain a third-party consultant or consultants to review and advise game design and structure, and:

1. All third-party consultants are subject to Bureau approval.

2. All contracts with third-party consultants must be between contractor and the third party.

3. Contractor shall pass the costs of all third-party consultants to the Bureau without any markup or additional charge.

4. Contractor shall cover all costs associated with a third-party consultant up to a total of $100,000 per each contract year. This credit applies only to the primary Contractor and does not apply to any secondary Contractor.

g. Contractor shall, at the Bureau’s request and at an agreed upon price, solicit bids for merchandise associated with a particular game or the Bureau.

1. Any contract for the purchase of merchandise must be between contractor and the third-party merchandiser.

2. Contractor shall pass merchandise costs to the Bureau without additional markup or charge.

h. Where an instant ticket order by the Bureau includes a second chance drawing or other second change game, contractor shall, at no additional cost to the Bureau:

1. Work with the Bureau to integrate such second-chance games onto any website or mobile application identified by the Bureau.

2. Secure and provide all necessary licenses and permissions for use by the Bureau;

3. Provide high-resolution images in PDF, JPEG, Adobe, and any additional file format designated by the Bureau for use with the second chance game or promotion.

i. It is presumed that all second chance games will be offered on websites and mobile applications designated by the Bureau, and:

1. Contractor shall clearly identify any second chance game that must be hosted on a website or application other than those designated by the Bureau;

2. Contractor shall cover all costs associated with either:

a. moving a second chance game functionality to the website and applications identified by the Bureau, or

b. operating a second chance game that must be hosted on a website or application other than those identified by the Bureau.

j. Contractor shall provide or subcontract for the provision of other marketing and sales support as agreed upon by the parties.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

2.6. New Game Capabilities

The contractor shall work with the Bureau to design and produce games which are different from standard instant games. The contractor shall assist in developing tickets for specific target markets, games with unusual tickets, shapes or play formats, games with out-of-the-ordinary prizes or any other characteristics which set them apart.

Where any ticket will be printed in a height, width, or density that differs from the standard sizes used in the Bureau’s dispensers and vending machines, contractor shall print the statement “DIFFERS FROM KNOWN STANDARD TICKET SIZE” in bold and all capital letters on the first page of the associated working papers.

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3. Staffing

3.1. Contractor Representative

The contractor must appoint a dedicated Contractor Representative specifically assigned to State of Michigan accounts, that will work with the State Program Manager regarding the ticket program, including coordinating development.

The contractor must notify the Program Manager and Contract Administrator at least 60 calendar days before removing or assigning a new Contractor Representative.

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3.2. Key Personnel

The contractor must appoint individuals who will be directly responsible for the day-to-day operations of the contract (key personnel). Key personnel must be assigned to the Bureau account, be knowledgeable on the contractual requirements, and respond to Bureau inquires within 8 hours.

Contractor’s key personnel or their designees must be available during the following times: 8:00 am through 5:00 pm EST.

The contractor may not remove or assign key personnel without the prior consent of the Bureau. Prior consent is not required for reassignment for reasons beyond the contractor’s control, including illness, disability, death, leave of absence, personal emergency circumstances, resignation, or termination for cause. The Bureau may request a résumé and conduct an interview before approving a change. The Bureau may require a 30-calendar day training period for replacement personnel.

The contractor must identify the key personnel, indicate where they will be physically located, describe the functions they will perform, and provide current chronological résumés.

List all exception(s):

1) Key Personnel

- Program Manager:

- Contractor Representative:

- Attorney(s):

- Trainer(s):

2) Physical Location of Key Personnel:

3) Functions each Key Personnel will perform:

4) Current Chronological Résumés (attach):

3.3. Non-Key Personnel

The contractor must notify the Contract Administrator at least 10 calendar days before removing or assigning non-key personnel.

List all exception(s):

3.4. Disclosure of Subcontractors

If the Contractor intends to utilize subcontractors, the Contractor must disclose the following:

· The legal business name; address; telephone number; a description of subcontractor’s organization and the services it will provide; and information concerning subcontractor’s ability to provide the Contract Activities.

· The relationship of the subcontractor to the Contractor. Of the total bid, the price of the subcontractor’s work. Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

· A complete description of the Contract Activities that will be performed or provided by the subcontractor.

· Identify Any Geographically Disadvantaged Business Enterprise (GDBE) Sub-Contractors:

GDBE definition: "Geographically-Disadvantaged Business Enterprise" means a person or entity that satisfies one or more of the following: (i) Is certified as a HUBZone Small Business Concern by the United States Small Business Administration. (ii) Has a principal place of business located within a Qualified Opportunity Zone within Michigan. (iii) More than half of its employees have a principal residence located within a Qualified Opportunity Zone within Michigan, or both.

Additional information on GDBEs can be found here:

Michigan Qualified Opportunity Zone (QOZ) Map Michigan Supplier Community (MiSC) Page Bidder must provide detailed information as requested in the above requirement(s).

The legal business name, address, telephone number of the subcontractor(s).

A description of subcontractor’s organization and the services it will provide and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Bidder.

Whether the Bidder has a previous working experience with the subcontractor.

If yes, provide the details of that previous relationship.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

Of the total bid, the price of the subcontractor’s work.

Bidder must provide information based on the work performed by all subcontractors

Total percentage of work that will be performed by subcontractors:

Total percentage of subcontracted work that will be performed by GDBE subcontractors:

3.5. Security

a. Plant Storage Contractor must preclude persons who are not authorized from accessing facilities, equipment and information utilized in the production of tickets. The contractor must provide secure, exclusive storage space, in the printing plant or other facility for the storage of finished tickets, for up to 90 calendar days, prior to delivery to the Bureau. Space must also be provided for the storage of paper stock and other supplies needed to produce the games. The contractor is responsible for monitoring the availability of all materials to ensure that sufficient supplies are on hand to meet the delivery schedule in the Working Papers. Contractor shall notify the Bureau within 24 hours in the event of a security breach.

List all exception(s):

Bidder must describe how they comply with the above requirement(s):

b. Secured Shipping The Bureau requires exclusive use of the delivering vehicle.

1. The contractor must place security seals and padlocks on all cargo doors of the delivery vehicle. Each seal must bear a unique number and the contractor will record the number on the Bill of Lading and Shipping Report for that shipment.

2. The contractor will place key(s) to the padlock(s) on the cargo doors in a sealed envelope and deliver unopened to the receiver at the distribution center.

3. The Bureau will reject deliveries that arrive with broken seals.

List all exception(s):

c. Security Program Prior to operations under the contract, the contractor shall establish and maintain an approved security program for the entire system, subject to the written approval of the Bureau. The Bureau will update, review and approve the program annually. As part of this requirement the contractor must maintain an approved Operations Security Plan.

The security program shall include the following procedural, administrative, and physical elements:

1. Methods and procedures for conducting background checks on all personnel and compliance with requirements for compilation of information for background checks by the Bureau.

2. Inspection by personnel authorized by the Bureau of the premises of the contractor or any subcontractor where work under this contract occurs, to determine the degree of compliance with security and operational requirements. Such inspection may be unannounced.

3. Security measures and systems which preclude unauthorized persons from accessing all facilities and supplies, and equipment within the facilities. The Bureau reserves the right to prohibit physical access to operations areas by non-operations personnel.

4. Security measures which preclude the unauthorized use of equipment and materials, without written authorization from the Bureau.

5. Security measures that ensure the integrity of the preparation, storage, distribution, or use of any data or documentation relating to player information or any personal identifying information.

List all exception(s):

Bidder must include a copy of its…