Attachment E - Addendum 2.pdf

Attachment E Addendum No. 2

BIDDER SHALL CONFORM TO THE FOLLOWING CHANGES AS SAME SHALL

BECOME BINDING UPON THE CONTRACT TO BE ISSUED IN RESPONSE TO THIS

SOLICITATION.

Reason for change: Upload of Attachment E Addendum No. 2

End of Addendum Stephanie Durr

Commonwealth Buyer

Attachment E Addendum No. 1

BIDDER SHALL CONFORM TO THE FOLLOWING CHANGES AS SAME SHALL

BECOME BINDING UPON THE CONTRACT TO BE ISSUED IN RESPONSE TO THIS

SOLICITATION.

Reason for change: To answer potential vendor questions and update Attachment B Cost Proposal Form.

RFP

Section / Requirement Number

Document Document Page Number

Vendor Questions Commonwealth Response

Section 3.2 RFP 10 Requirement - Contractor must provide a secure portal for use by wholesalers to submit their stamp orders and make corresponding payment". Is it acceptable that the Contractor issue an invoice electronically to the wholesaler when a DOR approved order is shipped with the invoice payment to be remitted directly by the wholesaler to the Commonwealth?

No, there must be an interface established with DOR's MyTaxes system that provides wholesalers with an electronic platform that allows purchase submittals, payments, and order status confirmation.

Section 3.1.c.

RFP 7 Requirement - Base paper must contain fibers. Question - As these fibers, or other paper security features, do not transfer with the Tax Stamp to the cigarette packs, this type of security feature is not able to be authenticated at retail sales locations. At these locations

This requirement refers to fibers and other paper security features that transfer w/ the stamp.

there are significant security features in the Tax Stamps themselves that can be authenticated by an Inspector to ensure only genuine Tax Stamps are being used. Additionally, as the base paper stock is discarded in a non-secure manner by Distributors and Stamping Agents after the Tax Stamps are transferred to packages of cigarettes any security contained in the base paper stock becomes available to potential counterfeiters and/or criminals who may search trash containers outside of a Distributor’s facility.

Will the State remove this requirement, or make it optional?

Cost Proposal

Attachment B 1 Item 1 refers to (See Section 50.6 of the RFP). Can the Commonwealth clarify the correct section of the RFP that is to be referenced for Item 1?

The reference in the cost proposal has been changed to section 3.1 scope of work, heat transfer cigarette tax stamp are defined throughout the terms and conditions.

Section 3.2 RFP 10 Shipping to Distributors - Questions

- Can the Commonwealth clarify the number of orders to wholesalers per month and the average sizes of the orders in number of rolls of tax stamps? Is there a minimum or maximum order size per wholesaler order?

There is no minimum nor maximum per wholesaler order.

There are 95 orders per month with an average of 7 stamp rolls in an order.

Average large orders range between 25-50 rolls (4 orders per month in this size range).

Largest order placed in the last year has been 150 rolls.

3.1 Scope of

Work/ Technical Requirements p.7 Can you confirm that 18 in leaders, which is used by most states and is compliant with stamping machines, is acceptable to the Agency?

Yes, we have confirmed with our licensed wholesalers that 18 inch leaders are acceptable.

3.2 Fulfillment

and Shipping to Distributor p.10–11 Please confirm that the Contractor is expected to provide a secure portal for wholesalers to order and process stamps upon DOR approval, and that no intermediate bulk shipment to a third-party distribution facility is required.

Yes, that is correct. The successful bidder must provide the stamp order portal and directly fulfill the stamp orders with direct shipment to the wholesaler.

3.2 Fulfillment

and Shipping to Distributor p.10–12 Please confirm that the Contractor’s secure direct-to-distributor online portal is required to enable and accept payment for stamp orders submitted by wholesalers.

Yes, the stamp order portal must have the feature to accept the stamp orders from the wholesalers, receive corresponding payment, and verify the order status.

3.2(a–c) Secure Online Portal / Deferred Payment p.10 Please confirm that the stamp order approval workflow, including

(1) any holds and overrides from KY DOR and (2) deferred-payment authorization tied to surety status, is required to be natively managed within the Contractor’s secure online portal.

Yes, the portal must have functionality allowing for KY DOR suspension of orders by a wholesaler and capacity to facilitate deferred-payment status as authorized by KY

DOR.

3.2(c) Deferred Payment Tracking p.10 For deferred-payment purchases, should the Direct to Distributor system enable KY DOR admin to enter the amount of and validate surety/bond limits for order approval process?

Yes, the deferred-payment feature must allow surety bond information to validate status.

3.1(l) Serial Number Listings & Interface p.8 Section 3.1(l) references providing serial listings “for interface with Kentucky’s current stamp fulfillment vendor’s system.” Please confirm that this interface requirement no longer applies given the Contractor now provides a secure portal for stamp order fulfillment.

Correct. The stamp fulfillment system of the approved contractor will be the system of record for serial number tracking of stamp orders.

3.2(r) Stamp Inventory Management p.11 Please confirm whether the two (2) to three (3) month finished-goods inventory reference in Section 3.2(r) is intended as a guideline under the direct-to-distributor model, with the Contractor responsible for managing inventory levels based on historical consumption and demand, and subject to Commonwealth audit reporting upon request.

Yes, the 2 to 3 month inventory is subject to the contractor's monitoring of historical consumption and estimated demand subject to DOR review and acceptance.

6.8(D) Inventory Commitment p.18 Section 3.2(r) / Section 6.8 – Inventory Requirements:

Section 6.8 references a minimum inventory of 2,500 rolls, while Section 3.2(r) describes inventory management under the Contractor’s fulfillment responsibility. Under the direct-to-distributor model, where the Contractor manages inventory to support direct shipment and order fulfillment, please confirm that the 2,500-roll minimum

The minimum inventory of 2,500 rolls is a placeholder to be negotiated further after execution of the contract in order to ensure that an adequate number of stamps will be on hand for immediate shipment in the event there is a quality production issue or other factor that suspends production of inventory requirement is no longer applicable.

acceptable stamps for an interim period.

3.2 (e) – Fulfillment and Shipping p.10 Please confirm that shipment insurance requirements are no longer applicable under the direct-to-distributor model, given that the Contractor is responsible for replacing any lost or damaged stamps at no cost to the Commonwealth.

Correct. Any insurance for shipments or other guarantees are the responsibility and prerogative of the Contractor who is responsible for replacing any lost or damaged stamps at no cost to the Commonwealth or the licensed wholesaler.

Section 3.2(d) – Fulfillment and Shipping to Distributor p.10 Please confirm that shipping services for stamp fulfillment will be provided via FedEx or UPS, and that ground shipping services are not required or applicable for the shipment of tax stamps under this contract.

Yes, shipping services for stamp fulfillment will be provided via FedEx or

UPS.

ATTACHMENT

B – Cost Proposal, Item 2:

Please confirm that Item 2 (Warehousing, Fulfillment, and Shipping Services) includes all costs associated with the order and fulfillment software interface, as well as standard shipping services (two-day shipment).

No, DOR intends to continue covering standard, 2-day shipping charges under its state-wide shipping contract.

These shipping charges should not be included in the cost proposal.

End of Addendum Stephanie Durr

Commonwealth Buyer