Cigarette Tax Stamp Specifications Revised.docx

Reference No. R-7237

ILLINOIS DEPARTMENT OF REVENUE

SPECIFICATIONS AND INSTRUCTIONS FOR HEAT APPLIED CIGARETTE TAX STAMPS AND APPLICATION SYSTEM

GENERAL INFORMATION:

These procedures and specifications contained herein are requirements of the solicitation. Attention specifically is directed to the requirement of maintaining production worksheets and inventory reports plus the notification to the Illinois Department of Revenue dealing with any irregularities.

Bidders must comply with all the conditions in these specifications and instructions. Bidder’s response shall address each section of the specifications. No proposal will be considered which is not complete.

Bidders will be required to furnish evidence satisfactory to the Department of Revenue of their ability to successfully comply with all the provisions and conditions of these specifications and instructions and of the possession of the necessary facilities, equipment, machinery, tools and resources, pecuniary and otherwise, necessary to properly and efficiently carry out the terms of the contract.

Careful, neat and workmanlike printing will be required and demanded. The Department of Revenue reserves the right to pass final judgment on what constitutes satisfactory work.

The contractor must be prepared and equipped to do and perform all the work contracted for within the contractor’s own premises. No part of the work contracted for stamp production may be sublet or performed in any other plant or establishment nor shall any assignment of contract in part or in whole be permitted in the event of an emergency, the contractor may request a temporary waiver from the Department of Central Management Services.

STAMP TYPE AND APPLICATIONS:

Stamps must be heat-applied stamps consisting of five impressions or layers, including safety tint lettering. The stamps shall be produced by the gravure process or equivalent and be suitable for positive application with heat to the receiving surface such as polypropylene.

STIPULATE: Yes No

Comments: ______________________________________________

Contractors must guarantee that stamps for machine use will apply in a secure and precise manner and at a minimum operating rate of speed of 60 cartons per minute.

STIPULATE: Yes No

Comments: ______________________________________________

Bidders must furnish with bid, samples of stamps and list the states currently using the bidder’s stamps.

SIZE, DESIGN AND COLOR:

Each stamp is to be of irregular shape and outline. Stamps for machine application shall measure approximately ½” x ½”. The colors and design of the stamps are to be approved by the Department of Revenue or appropriate agency.

STIPULATE: Yes No

Comments: ______________________________________________

The stamps shall contain a secret mark known only to the manufacturer and the Director of Revenue or his representative. Bidder must submit sample designs.

STIPULATE: Yes No

Comments: ______________________________________________

The design of the stamp and safety tint, when approved by the Department of Revenue shall be, for the exclusive use of the State of Illinois.

STIPULATE: Yes No Comments: ______________________________________________

Each stamp shall contain not less than two distinctive colors. Half-tones, Ben-Day effects, shades, tints, or tones of a color will not be acceptable or considered as separate and distinctive colors. The safety tint lettering shall not be considered as one of the stamp colors.

STIPULATE: Yes No

Comments: ______________________________________________

The colors selected will be used only for the State of Illinois stamps and will not be assigned to a municipality within Illinois or a surrounding state. Successful bidder must notify the Department if the colors selected are in use by a surrounding state or are assigned to a municipality within Illinois.

STIPULATE: Yes No

Comments: ______________________________________________

The Illinois Department of Revenue may elect to change color, stamp design, or stamp roll numbers prior to printing. Successful bidder shall, within five (5) days after the award notice is published, contact the Illinois Department of Revenue for the new stamp designs and color determination.

STIPULATE: Yes No

Comments: ______________________________________________

PAPER:

Stamps shall be made on unique, safety tinted, mill-controlled color paper furnished by the contractor and must be so arranged and so printed that it cannot be photographed on the colored paper. The name of the manufacturer of the paper stock is to be furnished with the bid and contractor must render an accurate accounting of all paper used in the production of machine applied stamps, including spoilage, and verify such accounting records by affidavit to the State.

STIPULATE: Yes No

Comments: ______________________________________________

All paper must be processed with a special safety tint. The safety tint lettering must be so printed as to appear on the face of the stamp and also must appear on the paper between the stamps. The safety tint shall transfer with the stamps and the lettering extending beyond the edges of the stamp must also transfer with the stamps. Bidder must also supply other plans of similar protection or identification to include a minimum of two (2) interchangeable chemical reaction field tests or other security features.

STIPULATE: Yes No

The Department of Revenue reserves the right to determine whether or not such security features give the State the required protection against counterfeiting.

All spoiled paper and stamps are to be strictly accounted for and kept in a secure area and destroyed in the presence of a duly authorized agent of the State. All stock will be controlled by a serial number on each roll, giving the Department of Revenue accuracy regarding waste plus finished product to equal paper purchased by bidder.

STIPULATE: Yes No

Comments: ______________________________________________

The bidder shall furnish the name of the paper supplier and samples of paper to be used. Paper stock shall be watermarked in such form as the State of Illinois may approve.

If bidder offers any paper other than this type, the Department of Revenue reserves the right to determine whether or not such paper gives the State the required security features that afford the State of Illinois the maximum protection against counterfeiting.

All stock will be controlled by a serial number on each roll, giving the Department of Revenue accuracy regarding waste plus finished product to equal paper purchased by bidder.

STIPULATE: Yes No

Comments: ______________________________________________

SERIAL NUMBERING:

After primary printing, a unique readable two-line 10 digit alpha- numeric will be printed on each stamp indicating the stamp roll number on the first line i.e. A1234 and the individual consecutive stamp number on the second line 00001 through 30,000. Stamp numbers would not be repeated for 10 years based on an annual volume of 450,000,000 stamps.

STIPULATE: Yes No

Comments: ______________________________________________

This roll number will also appear on the roll label and the cardboard mailer box.

STIPULATE: Yes No

Comments: ______________________________________________ Rolls shall be coded in sequential order. Spoiled rolls shall be identified as “not in circulation.” A certified listing of all rolls “not in circulation” shall be provided to the State.

STIPULATE: Yes No

Comments: ______________________________________________

Any case where numbers are missing due to production process must be identified by the operator and confirmed by production supervisor prior to shipment. Missing roll numbers must be provided to the Department on CD ROM or USB flash drive in a format acceptable by the Department.

STIPULATE: Yes No

Comments: ______________________________________________

LAYOUT AND PACKING:

Heat Applied Serial Numbered “20" Cigarette Tax Stamps (15 per row) are to be furnished in rolls of exactly 30,000 stamps with ascending and descending numbers at 300 stamp intervals to provide an exact count of stamps remaining and stamps used on the roll. Each roll will be packed in cardboard mailer box. Twenty-five boxes are to be packed in a suitable securely sealed corrugated container.

STIPULATE: Yes No

Comments: ______________________________________________

Each roll will be packed in a serially numbered cardboard mailer box that is securely sealed with a label containing a printed description of the state, stamp denomination, the quantity of stamps on the roll, the roll number, a unique design number that changes with each new design and a universal code 39 or 2D barcode that also contains this information.

The type of barcode used on the cardboard mailer box must be the same type barcode that is used on the stamp roll label and must contain the same data layout.

STIPULATE: Yes No

Comments: ______________________________________________

Each cardboard mailer box will be packed in a suitable securely sealed corrugated container that contains a label showing a printed description of the state, stamp denomination, quantity of stamps in the case, a unique design number that changes with each new design, and the beginning and ending roll numbers within the case. For example: “Roll #1 - Roll #26.” A universal code 39 or 2D barcode that also contains this information must also be on the outside of the case. The type of barcode used on the corrugated containers (cases) must be the same type barcode that is used on the stamp roll label and must contain the same data layout.

STIPULATE: Yes No

Comments: ______________________________________________

The roll numbers contained in each box (case) must be provided to the Department on CD ROM or USB flash drive in a format acceptable by the Department.

STIPULATE: Yes No

Comments: ______________________________________________

The type of barcode used on the corrugated container box must be the same type barcode that is used on the stamp roll label, card board mailer box, and must contain the same data layout.

STIPULATE: Yes No

Comments: ______________________________________________

STAMP APPLYING MACHINES:

Contractor must warrant that, during the contract period, he will make available to authorized State of Illinois licensed cigarette distributors by means of a lease or sale, machines designed to apply contractors’ stamps. The said machines and stamps will be designed and manufactured so as to assure proper adhesion and high-speed application of stamps.

STIPULATE: Yes No

Comments: ______________________________________________

Contractor agrees to provide a sufficient number of machines designed to apply contractor’s stamps, so as to ensure completion of the stamping process in the time frame agreed upon by both the vendor and the Department of Revenue.

STIPULATE: Yes No

The price charged by the awarded vendor to lease, sell, or repair the machines used to apply the cigarette tax stamps must be competitive and may not exceed those prices charged for similar services and/or machinery in contiguous states.

STIPULATE: Yes No

Comments: ______________________________________________

The manufacturer must furnish the Department of Revenue with a list containing the name of the distributor leasing the machine, the address where the machine will be used, and the serial number of the machine. The list must be updated when changes occur.

STIPULATE: Yes No

Comments: ______________________________________________

Machines and related equipment must meet with the approval of the Department of Revenue and be acceptable to the tobacco distributors and operate satisfactorily and with a precision of application at a minimum rate of 60 cartons per minute for duration of 30 minutes. No bid will be considered unless the bidder is able to satisfactorily demonstrate his stamp applying machine to the Department of Revenue. Location of demonstration to be arranged by contacting Connie Withers, Illinois Department of Revenue, MC 6-100, 101 West Jefferson St., Springfield, Illinois, 62702; phone: 217-782-2294.

STIPULATE: Yes No

Comments: ______________________________________________

Successful bidder must warranty that the tax stamps and the stamp applying machines, including related equipment that bidder proposes to furnish, and their sale and use will not infringe upon any United States patent. Bidder shall defend, protect and hold harmless the State, and all persons, firms or concerns using or applying the tax stamps and using the stamp applying machines on its behalf, against, all legal actions and from all damages claims, demands, expenses and attorney's fees, for actual or alleged infringement of any United States patent by reason of the purchase and use of the tax stamps and use of the stamp applying machines.

STIPULATE: Yes No

When a distributor who leases a machine from the successful bidder discontinues business, the Department of Revenue will notify the contractor. The contractor will retrieve the machine within seven (7) days and notify the Department of Revenue in writing that said machine has been recovered; such notice shall include a bill of lading, waybill, freight bill, reflecting shipment of the machine.

STIPULATE: Yes No

Comments: ______________________________________________

The contractor shall not sell or make available a machine to anyone in Illinois that does not hold an active Illinois Cigarette Distributors license.

STIPULATE: Yes No

Comments: ______________________________________________

During such period as the State shall utilize contractors’ stamps for machine application, the contractor will make available service and preventive maintenance for the machines in such manner and upon such reasonable conditions that mechanical failure will not substantially disrupt stamping by the distributors and receipt of revenue by the State.

STIPULATE: Yes No

Comments: ______________________________________________

Contractor must have sufficiently trained personnel to properly maintain, service and repair stamping machines. Servicemen must be available during normal working hours and respond to a wholesaler’s service call typically within twenty-four hours Monday through Friday. Contractor must instruct the tobacco distributors’ employees in the proper operation of the stamp applying machine for correct application of stamps during initial installation.

STIPULATE: Yes No

Bidders must furnish with bids, samples of the type of stamps specified herein.

PROTECTION:

Bidder shall submit a separate confidential detailed statement, explaining fully their system for the protection of the State against unlawful reproduction and the method by which such reproduction can be detected by inspectors of the State. This confidential statement shall be included with the bid, package separately in a seal envelope marked “Confidential”. All stamps must contain proven protective features to guard against illegal reproduction. A minimum of two overt and two covert security features must be incorporated into each stamp. Bidder will provide tools to authenticate security features.

The confidential statement shall be given to the Director of Revenue, State of Illinois or his representative who in turn will notify the Director of Central Management Services or his designee verifying that bidders have submitted acceptable security features.

STIPULATE: Yes No

Comments: ______________________________________________

ACCOUNTING:

A complete and accurate accounting of each and every stamp and all paper and any other material used in the production of these stamps must be given to authorized representatives of the State upon demand at any time.

STIPULATE: Yes No

Comments: ______________________________________________

Stamp designs and cylinders will be used solely for this order and subsequent orders, if any. At the completion of this order, or at the termination of this contract, or at any time, if the State so desires, all such stamp designs and cylinders will be destroyed and disposed of as directed by the State.

STIPULATE: Yes No

Comments: ______________________________________________

Inspection of the plant and all records and books of account will be allowed by the contractor at any time upon demand of authorized representatives of the State.

STIPULATE: Yes No

At all times the contractor will supervise closely the production of these stamps. Security measures should be employed to assure that all finished goods and production materials are properly accounted for. Every precaution will be taken to make certain that these stamps are not counterfeited or produced anywhere for any other purpose than the use of the State.

STIPULATE: Yes No

Comments: ______________________________________________

The accounting controls must include all pertinent data to enable auditors or representatives from the Department of Revenue and the Department of Central Management Services to account for all stamp productions, good stamps and spoilage, resulting from the manufacturing process.

STIPULATE: Yes No

Comments: ______________________________________________

1. PRODUCTION WORKSHEETS

Production worksheets are to be maintained in the same format as indicated in Annex "A". After completion of each production roll of tax stamps, work papers must be prepared within 24 hours. These production work papers must be tendered to any authorized Department of Revenue representative on demand.

STIPULATE: Yes No

Comments: ______________________________________________

2. PRODUCTION CONTROL:

Vendors must ensure they have sufficient measures in place to prevent loss of stamps during the process of manufacture as well as during storage.

All work under this contract must be performed wholly within the premises of the contractor. No part of this contract may be sublet or performed in any other establishment. No assignment of this contract in whole or in part may be made without the consent of the State. The successful bidder will establish to the satisfaction of the State that it possesses the necessary plant, equipment and facilities to properly and satisfactorily discharge the responsibility imposed by these specifications.

STIPULATE: Yes No

Comments: ______________________________________________

Vendors system of control of the process of manufacture shall guarantee stamps are carefully guarded during the process of manufacture. The bidder must certify to the Internal Affairs Division, Department of Revenue, that the engraving of plates, and cylinders, all mechanical devices and electronic files used in the process bearing the stamp design are compliant with respect to security. These security measures are to safeguard against counterfeiting or other fraudulent reproduction of stamps.

STIPULATE: Yes No

Comments: ______________________________________________

An authorized agent of the Illinois Department of Revenue shall upon presentation of proper credentials be afforded full access to inspect all departments of the contractor's factory, to inspect records and books, methods of control, process of manufacture of inventory of stamps manufactured under this contract.

STIPULATE: Yes No

Comments: ______________________________________________

All Cigarette Stamps, including spoilage must be stored in the main vault or in a supplemental vault in the Printing/Rewind area at the end of the normal work day. While cigarette tax stamps are stored on the premises they must be stored in such a manner that carton labels showing quantity, denomination, roll numbers and code numbers or serial numbers of stamps contained are conveniently accessible to Revenue Auditors or Revenue Representatives in order to maintain an accurate daily inventory record.

STIPULATE: Yes No

Comments: ______________________________________________

The main vault, the supplemental vault and the facilities where stamps are printed and rewound must be protected with state of the art security systems to include, but not limited to, alarm systems, cameras, and biometric authentication devices or other systems that provide equal or greater security protection.

STIPULATE: Yes No

3. CYLINDERS:

a. Any work related to the engraving of the cylinders to be used in the production of stamps must be witnessed by an Illinois Department of Revenue employee.

STIPULATE: Yes No

Comments: ______________________________________________

b. All cylinders are to be locked in a secure location under dual control. Access to the cylinders must require a representative of the production company and a designated Department of Revenue employee in order to gain access. The proposed secure container must meet the approval of the Department of Revenue.

STIPULATE: Yes No

Comments: ______________________________________________

c. All cylinders must be engraved in the contractor’s secure facility.

STIPULATE: Yes No

Comments: ______________________________________________

d. Upon initiation of a production run, the production foreman is to notify the Illinois Department of Revenue and the necessary cylinders will be jointly removed from the secure container and placed on the press.

STIPULATE: Yes No

Comments: ______________________________________________

e. Contractor must guarantee that all cylinders, and all mechanical devices and electronic files used in the process, bearing the stamp design are accounted for, have not been copied and that security cannot be breached to obtain files containing the stamp design.

STIPULATE: Yes No

4. LINEAR FOOTAGE METER CONTROLS

a. The press is to be equipped with a certified linear revolution meter and a certified accumulated linear footage meter. Each meter shall have a restricted reset key controlled by the production foreman. Only the linear revolution meter is to be reset for each new production roll.

STIPULATE: Yes No

Comments: ______________________________________________

b. Upon completion of such production roll, the current meter readings are to be recorded on the production worksheet for the corresponding roll number and the weight of each roll is to be recorded on the production worksheet less the weight of the core.

STIPULATE: Yes No

Comments: ______________________________________________

c. The linear footage through the press shall be divided by the printed roll weight to arrive at the footage per pound. The footage per pound is to be recorded on the production worksheet.

STIPULATE: Yes No

d. The linear feet per rewound roll are to be multiplied by the total number of rewound rolls produced. The total linear feet of the rewound rolls are to be recorded on the production work papers.

STIPULATE: Yes No

Comments: ______________________________________________

e. The weight of the spoilage for each corresponding roll less any unused paper and hard core is to be recorded on the production worksheet. The net spoilage weight is to be multiplied by the calculated linear feet per pound to arrive at the total linear feet of spoilage.

STIPULATE: Yes No

f. The total linear feet of the rolls produced plus the total linear feet of scrap is to be compared to the total linear footage through the press.

STIPULATE: Yes No

Comments: ______________________________________________

g. On a shortage of 50 feet or more or an overage of 100 feet or more, a Department of Revenue auditor or representative will prepare and submit an Exception Report. Any irreconcilable differences must be reported to the Illinois Department of Revenue within 12 hours after discovery of the difference.

STIPULATE: Yes No

Comments: ______________________________________________

h. As a security precaution, a recording must be made of the production meters at the end of the production workday and compared at the beginning of the next production workday.

STIPULATE: Yes No

Comments: ______________________________________________

5. PAPER ROLL PRODUCTION

a. The contractor's accounting record must include an inventory record of the numbers of rolls received and used. Also, all rolls received from the paper mill must be put under control immediately, that is, they are to be consecutively serially numbered by the contractor as part of the receiving operation.

STIPULATE: Yes No

Comments: ______________________________________________

b. The necessary rolls of paper to be used in production are to be requisitioned from inventory in writing. The appropriate number of rolls to be delivered to the production site and numbered. The rolls of paper are to be counted and verified against the requisition.

STIPULATE: Yes No

c. Each roll is to be weighed. The roll number, roll weight and code numbers to be produced are recorded on a production worksheet.

STIPULATE: Yes No

Comments: ______________________________________________

d. At the beginning of each production workday a physical inventory must be taken and compared to the ending inventory from the previous workday.

STIPULATE: Yes No

Comments: ______________________________________________

e. All inventory information will be maintained on record as indicated in Annex "B" and "C". Any discrepancies must be reported to the Illinois Department of Revenue immediately.

STIPULATE: Yes No

Comments: ______________________________________________

f. At the end of each production workday a physical inventory must be taken. An inventory schedule must account for all production including completed production, rolls in process, rolls at the rewinders, boxed rolls and scrap.

STIPULATE: Yes No

Comments: ______________________________________________

g. The inventory schedule is to be compared to the production records to disclose any discrepancies. Any inventory discrepancies must be reported to the Illinois Department of Revenue immediately, but not longer than 12 hours.

STIPULATE: Yes No

Comments: ______________________________________________

h. Any unaccountable loss of 50 feet or more of waste on a roll of 30,000 Serialized Cigarette Tax Stamps must be immediately reported to the Illinois Department of Revenue. Vendor shall reimburse or credit the State of Illinois for amounts paid by the State.

STIPULATE: Yes No

Comments: ______________________________________________

i. Any unused paper and the hard core of the production roll are to be weighed and subtracted from the original roll weight to arrive at the net weight. The net weight is to be recorded on the production worksheet by the contractor. Scales used for computing the amount of the spoilage must be certified by an independent 3rd party as to accuracy. The unused paper and hard core are to be placed in a "spoilage box" separated by roll number.

STIPULATE: Yes No

Comments: ______________________________________________

j. Printed production rolls are to be rewound using a hard core into smaller rolls of 30,000 stamps per roll representing the finished product.

STIPULATE: Yes No

Comments: ______________________________________________

k. The total number of rewound rolls produced, and their corresponding serial numbers are to be recorded on the production work papers.

STIPULATE: Yes No

Comments: ______________________________________________

l. Rewound rolls are to be taken to a packing area to be packed in pre-numbered boxes. A signature card is required to release each roll from the rewinding process to move the rewound rolls to the packing area.

STIPULATE: Yes No

Comments: ______________________________________________

m. Any spoilage occurring at the rewinding process is to be added to the corresponding spoilage box for that roll.

STIPULATE: Yes No

Comments: ______________________________________________

n. All products on rolls in process, rewound rolls, boxed rolls of production and scrap must be stored at the end of a production day in a secure location. Security of stored production must meet the approval of the Illinois Department of Revenue.

STIPULATE: Yes No

Comments: ______________________________________________

o. When each production roll is completed and rewound, the corresponding spoilage box is to be sealed and initialed. Each spoilage box must be stored until approval is received by the Illinois Department of Revenue to dispose of the scrap. Prior to destruction the manufacturer will:

1) Prepare a schedule of the scrap to be destroyed by roll number. This schedule must be retained and must be tendered to the Department of Revenue Representative on demand.

2) Inventory the scrap to be destroyed at the destruction site.

STIPULATE: Yes No

Comments: ______________________________________________

p. The means of disposal for scrap must be approved by the Department of Revenue and must be witnessed by a designated Department of Revenue employee.

STIPULATE: Yes No

Comments: ______________________________________________

DISTRIBUTOR AFFILIATION:

The successful bidder must not be affiliated with an Illinois licensed distributor and agrees that no representative of the successful bidder’s company will call on any Illinois Licensed Distributor for the purpose of discussing Cigarette Tax Stamps for the State of Illinois.

STIPULATE: Yes No

Comments: ______________________________________________

SECURITY:

All bidders will be subject to a security survey conducted by the Department of Revenue Internal Affairs Division prior to contract award. The Internal Affairs Division will issue a report to Illinois Department of Revenue Account Processing Program Administration management related to security measures referred to throughout the bidder’s specifications. Bidders must certify in writing that all deficiencies will be corrected, at bidder’s sole expense, prior to an award of contract.

Please define the security measures implemented at the above referenced facility:

Methods of security and protection in design, manufacturing and storage of finished and raw materials shall be developed with and approved by the Director of Revenue of the State of Illinois, or his representative.

The successful bidder on Cigarette Tax Stamps must satisfy the Department of Revenue before the contract is awarded that he is qualified and in a position to manufacture the stamps in strict conformity with the above specification and that he will perform all operations in the manufacture of Cigarette Tax Stamps with the utmost care, safety and security to the State of Illinois.

STIPULATE: Yes No

Comments: ______________________________________________

QUANTITY AND PRICE:

All bids shall be at the rate of one thousand (1,000) stamps, which shall include cost of manufacturing the stamps including original drawings, engravings, security readers, and delivery. Bid price per one thousand (1,000) stamps net F.O.B. destination to be computed on the following basis:

For a four year initial period beginning September 15, 2018 or date of execution (whichever is later) and ending September 14, 2022, or 4 years after date of exection:

· One billion, six hundred twenty million, (1,620,000,000) Serialized Stamps, in individual rolls of 30,000 stamps for the complete term of the contract. (405 million stamps per year)

· The Department requires the vendors’ pricing to include the cost to supply and maintain 25 functional readers for the duration of the contract.

Delivery must occur the last week of each of the following months:

October, December and March.

Quantity delivered each month noted above: 135,000,000 stamps per delivery (180 cases of 25 rolls, 30,000 stamps per roll). 405,000,000 stamps per year, for a total of 1,620,000,000 over the term of the contract.

LENGTH OF CONTRACT:

The length of the contract will be for a four (4) year Initial Term beginning September 15, 2018 or date of execution (whichever is later) and ending September 14, 2022, or 4 years after date of execution.

STIPULATE: Yes No

Comments: ______________________________________________

UNREASONABLE DELAY:

If, in the opinion of the Department of Central Management Services, the contractor for printing Cigarette Tax Stamps has failed, refused or neglected to perform or cannot perform within the time required by the necessities of the State any particular order or orders for Cigarette Tax Stamps and machines, then the contractor shall deliver to the Department, or its agent all drawings, engravings, master stones, which shall become the property of the State of Illinois under this contract. The Department will make reasonable effort to place the work elsewhere at contract cost. The contractor's charge for that portion of the work satisfactorily completed will be approved by the Department of Revenue. In the event the State incurs additional cost by reassigning the work elsewhere, that excess amount shall be charged against the contractor. The Department may offset such excess charges against any amounts due, or to become due, and/or against the bond of the contractor.

STIPULATE: Yes No

Comments: ______________________________________________

PAYMENT:

Each shipment of stamps shall be invoiced separately on or after delivery.

All invoices must be sent to:

Invoices may also be submitted via email at REV.Procure@illinois.gov.

All invoices and shipping documents must include the appropriate P.O. number. Failure to include the purchase order number on these documents could result in delay of payment.

DELIVERY:

The initial shipment of stamps will be delivered within 42 days of receipt of purchase order and artwork approval. Subsequent shipments of stamps will be made within 30 days of notice. The contractor will deliver all work as directed by the Department of Revenue. All shipments must be made by bonded carrier, insured and prepaid. The contractor will be responsible for safe and proper delivery.

Failure on the part of the successful bidder to deliver Cigarette Tax Stamps to the Department or its authorized agent as provided in this contract for whatever reason, other than an Act of God or some unforeseen circumstance over which said successful bidder has no control (control being subject to the interpretation of the Department), will result in liability on the part of said successful bidder to provide the stamps not delivered and replace stamps delivered that do not meet these specifications or that arrive damaged. Such stamps must be in conformance with all provisions embodied in this contract as if said stamps were the original issue.

Said stamps will be made at the expense of the successful bidder and without any additional cost to the Department.

Note: Both Revenue facilities are secure facilities that require vendors to schedule deliveries prior to shipment. The successful vendor shall contact Philip James at (217) 524-2764 to schedule all deliveries.

The contractor will deliver the amount of cases of stamps as specified by the Illinois Department of Revenue to the Springfield and Chicago offices the last week of October, December and March for each year covered by the contract. The Illinois Department of Revenue may adjust the months of delivery when necessary.

STIPULATE: Yes No

Comments: ______________________________________________

SPECIAL REQUIREMENTS:

If a Department of Revenue Representative identifies any discrepancies in the production work papers or determines that provisions of the contract are not being met, an Exception Report (See Annex D) will be tendered to the manufacturer. The manufacturer must complete the Exception Report (Form RC-131) responding to the Department of Revenue within 24 hours. This written response must detail what corrective action has been taken or will be taken, the cause of the exception and what steps have been taken to insure the exception will not reoccur. Failure to respond to an Exception Report within 24 hours or a submission of a response that the Department of Revenue finds unacceptable will be cause for the Department of Revenue to initiate an investigation of the exception. The manufacturer will be responsible for all costs of the investigation including, but not limited to, the reimbursement to the Department for salaries, transportation and administrative costs.

STIPULATE: Yes No

Comments: ______________________________________________

PERFORMANCE BOND:

A. The successful bidder shall file a performance bond in the designated amount with the Department of Central Management Services. It will require that the bond be filed within ten (10) days after notice of award has been posted to the Illinois Procurement Bulletin. The contract shall be cancelled and the vendor shall be liable for any damages caused the state by his or her failure to file the bond.

B. Such performance bond is required in the amount of ten percent (10%) of the total amount of the contract.

C. The bond shall be conditioned on a full performance of all obligations imposed on the successful bidder by the contract with the state. It shall provide that if the bidder fails to perform any such obligations, the state of Illinois may recover from bidder and the surety (or either) any and all damages suffered because of breach of contract.

D. The bond must be executed by a surety company licensed to do business as a surety company in the State of Illinois. The resulting contract will not be executed by the Department of Central Management Services until receipt of such bond.

Bond must be sent to:

IMPORTANT: PRICES INCLUDE ALL COSTS

NOTE:

Each bidder must submit an Emergency Contingency Plan stipulating how the bidder plans to timely provide cigarette tax stamps per our order in the event of equipment failure, lack of printing supplies, internal fires, etc. or an Act of God that would disrupt the normal production operation.

Annex A

Annex B

Annex C

Annex D image2.emf image3.emf image4.emf image5.emf image1.emf