Appendix 6 - RFP 2026 Liquidated Damages other than MBE (1).docx

REQUEST FOR PROPOSALS (RFP) 2026-XX

LOTTERY CENTRAL MONITORING AND CONTROL SYSTEM AND RELATED SERVICES

APPENDIX 6

LIQUIDATED DAMAGES (Other than MBE)

A. SYSTEM CONVERSION PERIOD

1. Condition The Contractor shall complete all key milestone dates as agreed upon in the Conversion Plan as described in the plan and comply with all other Contractual requirements in effect during the Conversion Period.

2. Damages

a. $10,000 per day for each missed key milestone date, as agreed upon in the Conversion Plan, prior to Start-up date.

b. $150,000 per day following the planned Start-up date for each Day of delay in completion of all agreed upon milestone dates in the Conversion Plan.

c. $500 per day for each and every failure to provide a deliverable or resolve an acceptance test problem pursuant to the agreed upon schedule or to comply with all other contractual requirements in effect, until such requirement is provided or performed.

B. RETAILER INSTALLATION – CONVERSION PERIOD

0. Condition The Contractor shall install all Terminals, Monitors, and associated Hardware in accordance with the schedule, which shall be agreed to by the Contractor and the MLGCA. The only exception to this timeframe would be for installations awaiting work to be done by a Retailer. A Retailer shall be considered to be installed and operational when required equipment has been installed at the designated location, is in good running and working order, connected to the PDC and BDC, and is capable of processing wagers and issuing Tickets in conjunction with the LCMCS, and the Retailer has received training which is deemed satisfactory and verified by the MLGCA. If the LCMCS fails to support any or all Terminals, then said Terminal(s) shall not qualify as being operational.

0. Damages In the event that the Contractor fails to install Retailer Terminals, Monitors and associated Hardware as specified, up to $700 per Day per Terminal or Monitor until installed. For any Terminal/Monitor that is not installed after fifteen (15) Days from the scheduled installation date, up to $1,500 per Day per Terminal/Monitor for each subsequent Day.

C. RETAILER INSTALLATION – ONGOING

1. Condition The Contractor shall install all Terminals, Monitors, and associated Hardware within 14 days of notice from the Lottery. The only exception to this timeframe would be for installations awaiting work to be done by a Retailer. A Retailer shall be considered to be installed and operational when required equipment has been installed at the designated location, is in good running and working order, connected to the PDC and BDC, and is capable of processing wagers and issuing Tickets in conjunction with the LCMCS, and the Retailer has received training which is deemed satisfactory and verified by the MLGCA.

2. Damages In the event that the Contractor fails to install Retailer Terminals, Monitors and Associated Hardware as specified, up to $700 per Day per Terminal or Monitor until installed. For any hardware not installed after fifteen (15) Days from the scheduled installation date, up to $1,500 per Day per Terminal/Monitor for each subsequent Day.

D. TIMELY AND ACCURATE REPORTS OR FILES

1. Condition Reports, files and export data shall be created and available on a pre-defined, scheduled and ad hoc basis according to the schedule approved by the MLGCA. This condition applies to the primary LCMCS, back-up LCMCS, BI system, data warehouse, and export data.

2. Damages $5,000 per Day for each late or inaccurate report, file or data export, until the required report or file is provided or corrected.

E. RETAILER OUTAGE

1. Condition For any Retailer who is completely unable to sell and cash Tickets the Contractor shall make the repairs necessary to make the Retailer operational within three business (3) hours of notification of the outage during a Retailer’s sales hours. In all cases, the determination as to whether or not a Retailer is operational shall be made solely by the MLGCA.

2. Damages If there has been a maintenance delay beyond the allowable three (3) hour repair time as set forth above, liquidated damages shall be based upon the average dollar value of lost revenue to the State. Lost revenue is determined by multiplying the current Revenue Contribution Rate (which is 26.0%) times the Retailer's average daily sales for the same day of the week for the thirteen (13) weeks immediately prior*. For a Retailer where multiple Terminals or Monitors are installed, if at least one Terminal or Monitor (as applicable) remains operational then liquidated damages may not be assessed under this Section.

*Example – Retailer with only one Terminal and/or Monitor averages $1,000 per day in sales on Tuesday for prior 13 weeks. On the day of the service call sales are $350, indicating lost sales equal to $650 and lost revenue equal to $169.

F. RETAILER TERMINAL PREVENTATIVE MAINTENANCE

1. Condition

All Retailer Terminals are to be serviced during the required 120-day preventative maintenance cycle. Components of the required service will be as described in the Offeror’s maintenance plan, but in general are required to assure all features and peripherals are operating correctly and the terminal is clean and undamaged. Preventative maintenance will be considered completed whenever there is a service call at the Retailer location.

2. Damages If a Terminal has not been serviced for a period of 150 days, damages of $25 per day for each day beyond 150 days will be assessed. Damages may be waived when the Retailer is seasonal or open less than 5 days per week.

G. RETAILER TROUBLE REPORTING AND HOTLINE

3. Condition The Contractor shall employ sufficient resources to meet the performance standards of the Retailer Trouble Reporting Hotline. Ninety Nine percent (99%) of calls to the Hotline shall be answered by a live representative within thirty (30) seconds. Average wait times shall not exceed one (1) minute for any 30-minute period on any Business Day. The Contractor shall provide weekly call statistics for the Retailer Trouble Reporting Hotline within five (5) days of the end of each Business Week. Within two (2) Business Days after notification from the Director that a performance standard is not being met, the Contractor shall employ additional resources as necessary to meet the performance standard as set forth by the MLGCA. The Hotline shall be available 99.99% of the Business Day excluding scheduled maintenance times.

4. Damages For each day the Contractor staff fails to answer 99% of calls within 30 seconds, damages of $1,000 will apply. If the Contractor does not bring deficient performance up to the standards within two (2) Days of notification, up to $10,000 per Day thereafter, for each specific corrective action required by the Director that the Contractor has not taken.

H. WINNING NUMBERS HOTLINE

1. Condition The Contractor shall employ sufficient resources to meet the performance standards of Winning Numbers Hotline. Ninety Nine percent (99%) of calls to the Hotline within a twenty-four (24) hour period shall be answered on the first call attempt. The Contractor shall provide weekly call statistics for the Winning Numbers Hotline within five (5) days of the end of each month. Within two (2) Business Days after notification from the Director that a performance standard is not being met, the Contractor shall employ additional resources as necessary to meet the performance standard as set forth by the MLGCA. The Hotline shall be available 99.99% of the day, defined as 24 hours, excluding scheduled maintenance times.

2. Damages If the Contractor does not bring deficient performance up to the standards within two (2) Days of notification, up to $1,000 per Day thereafter, for each specific corrective action required by the Director that the Contractor has not taken.

I. FAILURE TO MODIFY GAMES, TO INSTALL ADDITIONAL GAMES OR IMPLEMENT REQUESTS FOR SYSTEM CHANGES

1. Condition The Contractor shall modify games, install additional games, or implement requests for LCMCS changes within the agreed upon time frame. For Fast Play games, each game scheduled shall be considered separately for purposes of calculation of liquidated damages. In addition, the Contractor shall complete acceptance testing of the required modification or addition to the LCMCS, and receive the Director's written approval of such test, within the time frame specified.

2. Damages Up to $50,000 per Day per game that the modification of a game, installation of an additional game, or implementation of a request for an LCMCS change exceeds the required completion date.

J. UNAUTHORIZED SOFTWARE/HARDWARE MODIFICATIONS

1. Condition The Contractor shall not modify any software or hardware without the prior written consent of the Director or his designee.

2. Damages Up to $50,000 per violation or occurrence.

K. UNAUTHORIZED ACCESS

1. Condition The Contractor shall preclude unauthorized persons, that is, personnel who are not authorized by the Director or a designee, from accessing any Facility or the LCMCS.

2. Damages Up to $10,000 for each person for each occurrence in violation. An occurrence shall be defined as each and every act that permits access by an unauthorized person.

L. FAILURE TO SUPPORT AN INSTANT TICKET GAME

1. Condition The LCMCS shall handle Instant Ticket transactions and produce reports for all games ordered by the MLGCA from its Instant Ticket suppliers.

2. Damages Up to $10,000 per Day per game for any Instant Game for which the Contractor does not provide timely and/or correct Instant Ticket transaction handling and reporting.

M. SECURITY/PROBLEM NOTIFICATION – FAILURE TO TIMELY REPORT

1. Condition The Contractor shall comply with the reporting requirements of Section 3.27.9.

2. Damages Up to $5,000 per each reportable event for which the Contractor does not provide timely and/or correct notification and reporting.

N. INVALID WINNING TICKETS

1. Condition The Contractor shall be liable for all winning tickets issued by the LCMCS and presented for redemption that are not identified as valid, winning saleable tickets on the validation files, for which the MLGCA becomes liable for payment.

2. Damages Equal to the amount of the liability incurred by the MLGCA for each ticket.

O. RETAILER WEBSITES UNAVAILABILITY

1. Condition The websites shall be unavailable for access and unable to perform functions no more than two (2) minutes total from the time an issue is detected or reported to the Contractor during any Business Day, excluding scheduled maintenance time as approved by the MLGCA.

2. Damages Up to $1,000 per day or portion thereof when a Retailer website is not accessible and/or performing its functions.

P. PERFORMANCE

1. Condition The Send-to-Cut time for any Retailer Terminal, PSST or other device capable of producing or validating Tickets shall not exceed four (4) seconds, from the Terminal or device to the LCMCS and back. This time includes the total round-trip communications time and the processing of the transaction by the LCMCS(s). The Send-to-Cut time shall be under three (3) seconds 99% of the time. At no time shall the Send-to-Cut time exceed four (4) seconds.

2. Damages $5,000 per hour or portion thereof when the Send-to-Cut time exceeds three (3) seconds for over one (1) % of the Retailer Network.

Q. BACK OFFICE FUNCTIONALITY

1. Condition All Back-Office Functionality, not specified elsewhere within this section, shall be available on the LCMCS at all times. At no time shall any of this functionality be unavailable for more than one (1) hour in any twenty-four (24) hour period.

2. Damages $5,000 per hour for each hour, for each Back-Office Function, in excess of one (1) hour that any Back-Office function as defined in Section 2.3.13 is unavailable.

R. SYSTEM OUTAGE

1. Condition The LCMCS shall be “down” no more than two (2) minutes total during any Business Day. When cumulative downtime extends beyond two (2) minutes during any Business Day, liquidated damages may be imposed.

2. Damages

a. The dollar value of sales data during the five-minute period just prior to the LCMCS outage will be used to calculate damages. (If the LCMCS outage occurs at the beginning of game day or game “cut off” time, sales data for the same day and time of the previous week data will be used to calculate damages. If the previous week falls on a holiday or is an unusual occurrence, the MLGCA will compare sales data for the same day and time of the previous two to three weeks to calculate damages.)

b. The MLGCA will determine the extent of LCMCS outage, as specified above, and will divide the sales data for the five-minute period by five to determine the dollar value of loss sales per minute that shall be imposed for LCMCS outage.

c. The total dollar value of loss sales per minute will be multiplied by the total number of minutes of LCMCS outage minus two minutes to determine the total lost sales during the outage period.

d. The MLGCA will multiply the current Revenue Contribution Rate by the total lost sales during the outage period to determine the total liquidated damage penalty.

e. For each minute of downtime, or fraction thereof, beyond two (2) minutes, the Director may impose liquidated damages of up to the amount as determined above.

S. SYSTEM DEGRADED PERFORMANCE

The MLGCA shall be solely responsible for determining, through existing reporting programs, the degraded performance described herein.

1. Condition The LCMCS shall have “degraded performance” no more than two (2) minutes total during any Business Day. The LCMCS shall be considered as having degraded performance when the LCMCS cannot process transactions from a significant percentage of the installed and operational Terminals or when transactions are unable to be processed for an individual game or multiple games. The extent of degraded performance shall be determined by using existing game activity reports. Whenever the LCMCS has “degraded performance” which collectively exceeds two (2) minutes during any Business Day, the Director may impose liquidated damages as determined below.

2. Damages

a. The total number of wagers processed during the same day and time period just prior to the onset of degraded performance will be used to calculate an average number of wagers per minute. (If degraded performance occurs at the beginning of game day or game “cut off” time, wager data for the same day and time of the previous week will be used to calculate the average number of wagers per minute. If the previous week falls on a holiday or is an unusual occurrence, the MLGCA will compare wager data for the same day and time for the previous two to three weeks to determine an average number of wagers per minute.)

b. The actual number of wagers processed during the total number of minutes of degraded performance will be used to calculate an average number of wagers per minute during the period of degraded performance.

c. The average number of wagers processed per minute during degraded performance shall be divided by the average number of wagers processed per minute during the same day and time period just prior to the onset of degraded performance to determine the percentage of performance for each minute of degraded performance.

d. The dollar value of sales during the same day and time period just prior to the degraded performance will be used to calculate damages. (If the degraded performance occurs at the beginning of game day or game “cut off” time, sales data for the same day and time of the previous two-three weeks will be used to calculate damages. If the previous week falls on a holiday or is an unusual occurrence, the MLGCA will compare sales data for the same day and time for the previous two-three weeks to calculate damages.)

e. The MLGCA will determine the extent of degraded performance, as specified above, and will multiply the actual percentage of degraded performance by the sales data to determine the dollar value of lost sales.

f. The MLGCA will determine average dollar value of lost sales per minute by dividing the dollar value of lost sales by the total number of minutes of degraded performance to determine the average dollar value of lost sales per minute that shall be imposed for degraded performance. (If degraded performance occurs at the beginning of game day or game “cut off” time, wager data for the same day and time of the previous week will be divided by sales data to determine the dollar value of lost sales per minute that shall be imposed for degraded performance. If the previous week falls on a holiday or is an unusual occurrence, the MLGCA will compare sales data for the same day and time for the previous two-three weeks to determine the dollar value of lost sales per minute that shall be imposed for degraded performance.)

g. The average dollar value of lost sales per minute will be multiplied by the total number of minutes of degraded performance, minus two minutes, to determine the total sales lost.

h. The MLGCA will multiply the current Revenue Contribution Rate by the total lost sales to determine the total liquidated damage penalty.

T. EQUIPMENT PROVIDED FOR LOTTERY USE

1. Condition The Contractor shall have staff physically present to address equipment issues experienced by Lottery staff during the Lottery’s normal operating hours – Monday through Friday from 07:00 until 18:00 including Sales Force Automation tools, Warehouse systems, and checkwriter systems at casinos, the Lottery Customer Resource Center, and Finance.

2. Damages Up to $100 per hour or portion thereof when staff functions are delayed because of equipment issues.