Attachment_3_-_Price_Sheet_final.docx

ATTACHMENT 3

PRICE SHEET

Price Sheet Terms & Instructions

The rates set forth in the Price Sheet shall be fixed for the six-year base term. All extension periods will be subject to the same terms and conditions that are applicable to the base term, including all pricing terms.

Pricing must be submitted for all elements.

Any changes made to the Price Sheet format, including but not limited to exceptions, deletions, conditions and additions may be the basis for rejecting a proposal.

1. Pricing Proposals

Primary Contract

The Lottery expects that the Primary Contractor will be assigned approximately 70% of the Lottery’s Scratchers manufacturing over the life of the Contract. Proposers submitting a proposal for the Primary Contract must submit a Core Price Proposal based solely on percent of sales. The percent of sales proposal must specify the amount per price point, including tickets up to $100, on Attachment 3[footnoteRef:1], Price Sheet. Primary Contract Proposers must also submit a Secondary Contract pricing proposal, as set forth below. [1: References to Attachment 3 hereinafter are inclusive of Attachments 3A-3G.]

The percent of sales pricing option must be based on the actual sale of Scratchers games produced by the Proposer, with sales defined as net settlements which are net of returns but not net of free tickets. Free tickets issued are not counted as sales by the Lottery. Historically, the Lottery has issued most games with a 10% to 12% seeding of free tickets. However, the Lottery may raise or lower the seeding of free tickets.

Secondary Contract

Secondary Contract pricing proposals must include a Core Price Proposal based on price per thousand for each price point, including tickets up to $100, on Attachment 3, Price Sheet.

1.1 Core Price Proposal

The Core Price Proposal for both percent of sales and price per thousand pricing includes all mandatory ticket printing requirements and specifications set forth in Exhibit A, Scope of Services and Service Specifications, including but not limited to the following:

· Ten point recyclable card stock

· Seven display colors

· Five overprint colors

· Four color process

· Alternating scenes within a pack

· Different scenes within a game

· Continuous scenes

· Specialty inks: metallic, fluorescent, and any others offered

· Multiple color imaging of play symbols

· Marking system (e.g. Bingo, Crossword)

· Full varnish gloss coating

· Spot varnish gloss coating

· U.V. spot coverage

· U.V. full coverage

· Color pulsing

· In addition to black, at least two colors on the ticket back

· Screens of color on display and scratch-off areas of tickets

· Multiple color full-bleed washes on ticket

· Created colors on display side or scratch-off area of the ticket

· Graphic design techniques such as use of photography, integrated scratch-off, or unusually shaped scratch-off areas

· At least seven separate game play areas

· Custom fonts/characters

· 2nd Chance Program files (Hash Files) for non-winning ticket codes, for all games

· Up to 150,000 Void samples per game

· Electronic-Point-of-Sale (ePOS) art file developed for monitor display

· Instant ticket vending equipment or in-counter tray insert card art file; Insert card dimensions of 4” x 4” size, which is subject to change, details to be provided in customer specifications.

· The Contractor must reimburse the Lottery for the cost of travel and per diem for one Lottery staff member to visit vendor facilities or attend vendor-sponsored conference(s) regarding industry innovations, and/or technology developments for every four (six games possibly, look at other states?) games printed. If the Lottery attends fewer than the specified number of trips the Lottery will receive a $5,000 credit per person per occasion.

· Marketing Financial Support (Primary Contractor only; Primary Contractor will provide a minimum of $120,000/month for marketing financial support, or the amount specified by the Proposer, whichever is higher).

1.2 Credits

Proposers should provide a list of any monetary credits that are given to the Lottery when specific Core Price Proposal services are not utilized in a particular game. These should include, but not be limited to, credits for non-use of void samples, register toppers, instructional how-to-play games, and on-site press checks. Proposer must identify the amount of the credit and the service to which it applies on Attachment 3.

1.3 Pricing Grid and Discounts

Price amounts must be submitted for each of the ticket sizes and order quantities listed in the price grid in Attachment 3.

Pricing for reorders may be lower than, but may not exceed, the cost of the original order, regardless of whether the game includes special features or services. (Reorder is defined as an order for a game that the Lottery has previously sold, which is reprinted with the same graphics and prize structure; the game number may or may not be the same.) Though not required, any pricing discounts/rebates for reorders, and color changes permitted on reorders at no cost to the Lottery will reflect favorably on the Proposer and should be identified on Attachment 3.

If the Proposer provides discounts upon reaching a specific quantity of tickets ordered within a fiscal year, the Proposer may submit additional price per thousand grids to reflect these discounts, which should be broken down based on single size ticket units. Single size ticket units are based on a 2” x 4” ticket size and calculated as follows:

(Height” x Width” / 8 square inches) x Quantity = total equivalent single size units

Example:

Order of 20,000,000 tickets of a 6” x 4” size (6” x 4” / 8) x 20,000,000 = 60,000,000 equivalent single size units

1.4 Special Features and Other Services

The Lottery may occasionally request additional features and services, including specialty techniques, beyond those included in the Core Price Proposal. The Lottery makes no commitment to order any of these features or services. At a minimum, special features and other services pricing must include the following:

(1) Additional display color (beyond 7 colors)

(2) Additional overprint color (beyond 5 colors)

(3) Specialty Paper/Proprietary Paper

(4) Die cutting

(5) Folds

(6) Pouches

(7) Multi-page books

(8) Alternative ticket stock (12 pt.)

(9) Accelerated delivery

(10) Additional regular sized samples/voids (beyond 150,000)

(11) Pack Inserts

(12) Additional scratch-off play area on ticket back

(13) Insert cards for instant ticket vending equipment and in-counter trays

(14) Holographic or specialty paper insert cards for instant ticket vending equipment and in-counter trays

(15) Coupons (non-digital)

(16) Coupons (digital)

(17) How-to-Play videos

(18) 360° Extended Marketing Support - which may include, but is not limited to: player engagement strategies, interactive and innovative programs, and consumer/retailer promotions.

1.5 Special Features/Services Pricing

In Attachment 3, Proposer must provide pricing for the special features and services set forth above. Proposer may choose to provide pricing either as a flat fee per game or cost per thousand tickets, except in connection with the 360° Extended Marketing Support feature. If Proposer intends to offer any special features or services at no additional cost above the Core Price Proposal, Proposer must identify these features/services in Attachment 3 and specify “No Cost” or “$0”.

Certain Special Features/Services listed above require Proposer to provide additional information on Attachment 3. With respect to these items, Proposer must include: 1) a detailed description of the feature; 2) technical specifications, if appropriate; and 3) pricing (flat fee or cost per thousand).

III. ADDITIONAL OFFERS

Proposers are encouraged, but are not required, to propose Additional Offers that provide innovative features, services, and solutions related to the production, marketing, distribution, or sale of Scratchers, which are not otherwise specified but fall within the Scope of the Contract. The Lottery is particularly interested in features, services, and solutions that will result in growth of product sales and player base, improved customer service to retailers and Scratchers players, improved operational efficiency, increased diversity and quality of Scratchers products and technological advances reflecting consumer behavior in the marketplace.

Proposers must provide a specific description of each Additional Offer. Each option should not exceed three single-sided, typed pages. Proposals exceeding the desired length may be disregarded. Each description should include (1) the offer and its features, (2) how the offer is designed to benefit the Lottery, (3) the value of derived benefits, (4) specific pricing[footnoteRef:2], and (5) any limitations. [2: Proposers that submit Additional Offers should provide any applicable pricing information on Attachment 3G - Additional Offers Price Sheet (to be submitted in the Additional Offers Package).]

Additional Offers will not be rated, but may be considered as part of the Lottery’s best value evaluation.

ATTACHMENT 3A

PRIMARY CONTRACTOR – CORE PRICING

Percent of Sales Pricing Grid*:

* The Percent of Sales (%) compensation to be paid to the Contractor is inclusive of all labor, materials, equipment, administrative expenses, shipping, travel, per diem, all applicable taxes, and any other costs, excluding those set forth in Attachments 3B, 3C, 3D, 3E associated with the performance of this Contract.

** The pack size may change and the compensation will be proportionately adjusted accordingly.

Marketing Financial Support[footnoteRef:3]: $___________/month [3: Exhibit A, section 1.3 Marketing Financial Support states:

In addition to providing assistance with the marketing of Scratchers products, the Primary Contractor is expected to contribute financial support for the Lottery’s own marketing efforts in connection with sale of Scratchers products. The Primary Contractor must provide the Lottery with Scratchers marketing support funds in the amount of $120,000 per month, or the amount specified in the Primary Contractor’s Proposal in Response to RFP #R002746, whichever is greater. ]

(minimum of $120,000 or the amount listed herein, whichever is higher)

ATTACHMENT 3B

SECONDARY CONTRACTOR – CORE PRICING

Price Per Thousand Pricing Grid:

Quantity Order in Millions

** The pack size may change and the compensation will be proportionately adjusted accordingly.

Costs for different order quantities will be prorated within cost ranges by assuming a linear relationship between order quantity and cost between ranges. Costs for different size tickets which do not match the values shown on the cost table will also be prorated based on surface area.

ATTACHMENT 3C

Price Sheet - Credits

Credits (Primary and Secondary)

List specific dollar amount credits given for any of the services not utilized by the Lottery per game including but not limited to:

Describe below other Credits given for any of the services not utilized by the Lottery. If additional sheets are necessary, please label “Attachment 3C (continued)” and attach to the price sheet package.

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ATTACHMENT 3D

PRIMARY/SECONDARY CONTRACTOR

SPECIAL FEATURES AND OTHER SERVICES (MANDATORY)

Submit one price only for each feature/service, either Cost Per 1,000 Tickets OR Flat Fee (Primary and Secondary Contractors).

(20)

· In addition, list any other feature/service, a short description as needed, and its pricing in the same format as shown above.

ATTACHMENT 3E

ADDITIONAL OFFERS

PRICE SHEET

Proposers submitting Additional Offers must include Attachment 3E, Additional Offers Price Sheet. Attachment 3E is evaluated separately from the Price Sheet (Attachments 3A-3E).

ATTACHMENT 3F

Price Sheet Certification

I, ___________________________________ (type or print name), certify that I am authorized to sign the Price Sheet, which incorporates Attachments 3A-3E, and warrant that the prices set forth are accurate and unconditional. I further certify that these prices constitute an irrevocable offer which the Lottery may, at its option, accept or reject at any time up to 270 days from the date that responses to this RFP were due.