ESBD_File_349386_2024 Lottery Products Testing Services RFP Final.pdf

TEXAS LOTTERY COMMISSION

REQUEST FOR PROPOSALS

FOR

LOTTERY PRODUCTS TESTING SERVICES

ISSUED FEBRUARY 6, 2024, 4:00 P.M. CENTRAL TIME

Request for Proposal No. 362-2024-0002

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REQUEST FOR PROPOSALS FOR TABLE OF CONTENTS

TABLE OF CONTENTS

TABLE OF CONTENTS ...................................................................................................................... I

GLOSSARY OF TERMS

1. GENERAL INFORMATION

1.1. Purpose

1.2. Our Vision and Mission

1.3. Our Core Values

1.4. Schedule of Events

1.5. Successful Proposer’s / Lottery Relationship

1.6. Procurement Authority

1.7. Proposals Subject to The Texas Public Information Act

1.8. Misunderstanding or Lack of Information

1.9. Rejection of Proposals and Cancellation of RFP

1.10. Ownership of Proposals

1.11. Incurred Expenses

1.12. Proposal Tenure

1.13. No Texas Lottery Obligations

1.14. Successful Proposer’s Obligations

1.15. Captions

1.16. Parts Incorporated

2. PROPOSAL PROCESS

2.1. Contact Person

2.2. Prohibition Against Unauthorized Contact

2.3. Pre-Proposal Conference

2.4. Questions

2.5. Submission of Proposal

2.6. Response Format & Contents

2.7. Letter of Transmittal

2.8. Executive Summary

2.9. Proposer’s Contracting Authority

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2.10. Proposer’s Cost Proposal

2.11. Multiple Proposals

2.12. Changes, Modifications and Cancellation

2.13. Updates to Information Supporting a Proposal

2.14. Additional Information

2.15. Proposal Evaluation and Contract Award

2.16. Site Visits and/or Oral Presentations

2.17. Protest Procedure

3. CONTRACTUAL TERMS AND CONDITIONS

3.1. Introduction

3.2. Governing Law and Venue

3.3. Contract Elements

3.4. Amendments

3.5. Non-Waiver

3.6. Clarification of Texas Lottery’s Intent

3.7. Relationship of the Parties

3.8. Payment

3.9. Assignments

3.10. Subcontracting

3.11. Lottery Approval of Staffing

3.12. Background Investigations

3.13. Compliance

3.14. Term of Contract

3.15. Termination at Will

3.16. Termination for Cause

3.17. Termination Related to Availability of Legislative Appropriations

3.18. Termination Without Penalty

3.19. No Liability Upon Termination

3.20. Warranties

3.21. Licenses and Permits

3.22. Successful Proposer Site Visits

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3.23. Intellectual Property Rights

3.24. Pre-Existing and Third-Party Rights

3.25. Remediation

3.26. Accounting Records

3.27. Right to Audit

3.28. Indemnification

3.29. Insurance

3.30. Self-Insurance

3.31. Commercial General Liability Insurance

3.32. Workers’ Compensation & Employer’s Liability Insurance

3.33. Professional Liability (Errors and Omissions) Insurance

3.34. Crime Insurance

3.35. Performance Bond

3.36. Disclosure of Litigation

3.37. Changes in Ownership

3.38. Force Majeure / Delay of Performance

3.39. Taxes, Fees and Assessments

3.40. Media Releases

3.41. Advertising

3.42. Hiring of Texas Lottery Personnel

3.43. Hiring of Lobbyist, Consultant and/or Advisor; Supplemental Information

3.44. Notices

3.45. Non-Disclosure

3.46. Usufruct

3.47. Ticket Purchase

3.48. Liquidated Damages

3.49. Sanctions and Remedies Schedule

3.50. Dispute Resolution

3.51. Certifications

3.52. Preferences

3.53. Deceptive Trade Practices; Unfair Business Practices

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3.54. Immigration

3.55. Electronic and Information Resources Accessibility Standards, as Required by 1 TAC Chapters 206 and 213 (Applicable to State Agency and Institution of Higher Education Purchases Only)

3.56. Cybersecurity Training, Prohibited Technologies, Cloud Computing and Data Protection

3.57. False Statements; Breach of Representations

3.58. Limitation on Authority; No Other Obligations

3.59. Proposer Assignment

3.60. Code of Conduct

3.61. Contact with Texas Lottery Commission

3.62. Incidents and Anomalies

3.63. U.S. Department of Homeland Security’s E-Verify System

3.64. Non-Exclusive Contract

3.65. Survival

4. REQUIRED INFORMATION

4.1. Experience of Proposer

4.2. Experience of Key Personnel

4.3. Proposer References

4.4. Contact Person

4.5. Conflict of Interest

4.6. Financial Soundness

4.7. Background Investigations

4.8. Disclosure of Interested Parties

5. HISTORICALLY UNDERUTILIZED BUSINESS (HUB) PARTICIPATION

5.1. HUB Requirement

5.2. HSP Submission and Texas Lottery Review

5.3. Assistance for Preparation of HSP

5.4. Requirements for Completing the HSP Forms

5.5. Subcontracting Opportunities

5.6. Post-Contract Award

6. SCOPE OF SERVICES

6.1. Introduction

6.2. Scratch Ticket Game Testing

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6.3. Standard Tests for Scratch Ticket Games

6.4. Scratch Ticket Game Reports

6.5. Rating Methodology for Scratch Ticket Games

6.6. Draw Game Paper Stock Testing

6.7. Reports for Draw Game Paper Stock

6.8. Notification for Scratch Ticket Games and Draw Game Paper Stock

6.9. Tests for Other Texas Lottery Products (Non-Standard Ticket items)

6.10. Successful Proposer’s Contact with the Texas Lottery’s Primary Vendors

6.11. Security Specifications

6.12. Business Resumption Plan

6.13. Offered Options

ATTACHMENT A PROPOSER’S COMMITMENT

ATTACHMENT B FINANCIAL COMMITMENT AND RESPONSIBILITY

ATTACHMENT C HUB SUBCONTRACTING PLAN

ATTACHMENT C-1 HSP QUICK CHECK LIST

ATTACHMENT C-2 HUB SUBCONTRACTING OPPORTUNITY NOTIFICATION FORM

ATTACHMENT D TEXAS GOVERNMENT CODE §466.155

ATTACHMENT D-1 BACKGROUND INFORMATION CERTIFICATION

ATTACHMENT E SAMPLE PERFORMANCE BOND

ATTACHMENT F SCORING MATRIX

ATTACHMENT G COST PROPOSAL

ATTACHMENT H TEXAS GOVERNMENT CODE CHAPTER 552 SUBCHAPTER J. ADDITIONAL

PROVISIONS RELATED TO CONTRACTING INFORMATION

REQUEST FOR PROPOSALS FOR GLOSSARY OF TERMS

GLOSSARY OF TERMS

This Glossary assigns definitions to the listed terms. The definition given to a term listed in this

Glossary applies whenever the term appears in this Request for Proposals (RFP) and in any response, including a Proposal, to this Request for Proposals.

Term Definition

Apparent Successful

Proposer

The Proposer recommended by the evaluation committee and approved by the Executive Director, subject to the execution of a completed

Contract.

Business Hours The Texas Lottery’s business hours are 8:00 a.m. to 5:00 p.m. CT, Monday through Friday, except State holidays.

Contract The agreement entered into by the Texas Lottery and the Successful

Proposer, which will incorporate the contents of this RFP and the

Successful Proposer’s Proposal, except as specifically provided to the contrary in the Contract and any amendments to the Contract

Contract Award The day of the contract announcement after the signing of a Contract between the Texas Lottery and the Successful Proposer.

Contract Term The time period when the Contract is in effect, which unless otherwise indicated includes any renewal/extension period.

CPA Texas Comptroller of Public Accounts.

Day A calendar day.

Draw Game Ticket A computer-generated ticket issued to a player as a receipt for the combination of numbers a player has selected, and generated on a

Terminal (as defined herein) on official Texas Lottery paper stock, by either selecting his or her own numbers or selecting Quick Pick, which is a random number generator operated by the computer. That ticket shall be the only acceptable evidence of the combination of digits, numbers, or symbols selected. Draw Game Tickets may be purchased only from licensed Retailers.

Draw Game Paper Stock Paper stock for Draw Game Tickets.

Executive Director The Executive Director of the Texas Lottery Commission or an employee of the Texas Lottery Commission authorized to act on behalf of the Executive Director.

Executive Management The Executive Director of the Texas Lottery Commission and the

Charitable Bingo Operations Director.

Fiscal Year The Texas Lottery’s fiscal year, which begins on September 1 and ends on August 31 of the following year.

Historically Underutilized

Business (HUB)

A Historically Underutilized Business is a business that is certified by the State of Texas that (1) is at least 51% owned by an Asian Pacific

American, Black American, Hispanic American, Native American, American women, and/or Veteran (as defined by 38 U.S.C. Section

101(2)) who have suffered at least a 20 percent service-connected disability as defined by 38 U.S.C. Section 101(16); (2) is a for-profit entity that has not exceeded the size standards prescribed by 34 Texas

Administrative Code (TAC) §20.294, and has its principal place of business in Texas; and (3) has an owner residing in Texas with a proportionate interest who actively participates in the control, operations and management of the entity's affairs. For further explanation, see the Comptroller of Public Accounts (CPA) HUB rule definitions at 34 TAC §20.282.

HSP The Historically Underutilized Business Subcontracting Plan (HSP) required by Chapter 2161 of the Texas Government Code and by Texas

Lottery Commission Rule, 16 TAC §403.301 (See Attachment C.).

Incident An event or occurrence.

Intellectual Property Rights

The worldwide legal rights or interests evidenced by or embodied in:

(i) any idea, design, concept, personality right, method, process, technique, apparatus, invention, discovery, enhancement or improvement, including any patents, trade secrets, and know-how; (ii) any work of authorship, including any copyrights, moral rights, reversionary rights or neighboring rights; and any derivative work thereto (iii) any trademark, service mark, trade dress, trade name, or other indicia of source or origin; (iv) domain names (v) any other proprietary or similar rights, and (vi) any applications, provisionals, registrations, renewals, continuations, continuations-in-part, or divisionals relating thereto. The Intellectual Property Rights of a party include all worldwide legal rights or interests that the party may have acquired by assignment or license with the right to grant sublicenses.

Major and Prime Contracts

The following Texas Lottery contracts are considered major or prime contracts: lottery operations and services, scratch (instant) ticket manufacturing and services, advertising media services, lottery drawings certified public accounting services, drawings studio and production services, promotional products, TLC warehouse lease, internal control system and services, security management system and monitoring services, risk review and compliance monitoring services, internal audit services, website hosting services, Houston claim center lease, retailer bonus payment management services, trademark license and promotional agreements with the Dallas Cowboys and the Houston

Texans, Medal of Honor Museum Foundation. The Texas Lottery may add or delete major or prime contracts at its sole option.

Offered Option

Offered Options are not requested in the response to this RFP, but may be identified by the Proposer and included in its Proposal. A Proposer is not obligated to include an Offered Option in the Proposal. This is an opportunity for Proposers to offer options that the Texas Lottery may not have been aware of at the time the RFP was written. The Texas

Lottery makes no commitment to quantity or timing for acquisition of

Offered Options and offered options are not considered during evaluation of Proposals.

Pack A shrink-wrapped package of scratch tickets.

Proposal

All information and materials submitted by a Proposer in response to this RFP. This includes the sealed Cost Proposal, Technical Proposal, and other information and materials provided to the Texas Lottery by the Proposer prior to Contract Award.

Proposer

An individual or entity that submits a Proposal. The term includes anyone acting on behalf of the individual or entity that submits a

Proposal, such as agents, employees and representatives.

Responsive Proposal A Proposal submitted which conforms in all material respects to the

RFP, as determined solely by the Texas Lottery.

RFP This Request for Proposals.

Scratch Ticket

As defined in Texas Lottery Commission Rule 16 TAC 401.301(47), a scratch ticket lottery game, developed and offered for sale to the public in accordance with commission rules, that is played by revealing the ticket play symbols. Sometimes, scratch ticket games are called

“instant games.”

Shelf Game

A game that is received by the Texas Lottery, tested by the contracted

Lottery Products Testing Services vendor, and then stored in the Texas

Lottery warehouse to be released for sale at a future date.

SPD

Statewide Procurement Division (SPD) is a division of the Texas

Comptroller of Public Accounts.

State The State of Texas and its agencies, boards and commissions, officers and employees.

Subcontractor

A person who contracts with the Successful Proposer to work, to supply commodities, or contribute toward completing work for the Texas

Lottery.

Successful Proposer The Proposer with whom the Texas Lottery executes a Contract to provide the goods and services that this RFP requires.

Texas Lottery Commission, Texas Lottery, Lottery or

TLC

That agency created by Chapters 466 and 467, Texas Government

Code. The Texas Lottery Commission may be referred to as the Texas

Lottery, Lottery or TLC throughout this document.

Working Days

Business days occurring Monday through Friday except for the legal holidays observed by the State of Texas. The terms “Working Days” and “Business Days” may be used interchangeably.

Works

Any tangible or intangible items or things that have been or will be prepared, created, maintained, serviced or developed by a Successful

Proposer (or such third parties as the Successful Proposer may be permitted to engage) at any time following the effective date of the

Contract, for or on behalf of TLC under the Contract, including but not limited to any (i) works of authorship (such as literary works, musical works, dramatic works, choreographic works, pictorial, graphic and sculptural works, motion pictures and other audiovisual works, sound recordings and architectural works, which includes but is not limited to lottery games, game names, game designs, ticket format and layout, manuals, instructions, printed material, graphics, artwork, images, illustrations, photographs, computer software, scripts, object code, source code or other programming code, HTML code, data, information, multimedia files, text web pages or web sites, other written or machine readable expression of such works fixed in any tangible media, and all other copyrightable works and any derivative works thereto), (ii) trademarks, service marks, trade dress, trade names, logos, or other indicia of source or origin, (iii) ideas, designs, concepts, personality rights, methods, processes, techniques, apparatuses, inventions, formulas, discoveries, enhancements or improvements, including any patents, trade secrets and know-how, (iv) domain names,

(v) any copies, and similar or derivative works to any of the foregoing,

(vi) all documentation and materials related to any of the foregoing,

(vii) all other goods, services or deliverables to be provided to TLC under the Contract, and (viii) all Intellectual Property Rights in any of the foregoing.

REQUEST FOR PROPOSALS FOR PART 1

LOTTERY PRODUCTS TESTING SERVICES GENERAL INFORMATION

1. GENERAL INFORMATION

1.1. Purpose

The Successful Proposer shall be responsible for conducting tests and evaluations to ensure the security, integrity and “playability” of Texas Lottery products, which include Scratch

Ticket games, Draw Game Paper Stock and other lottery products. Also, at the Texas

Lottery’s request, the Successful Proposer shall advise the Texas Lottery on any technological advances and on security features and improvements in lottery products.

Texas Lottery Scratch Ticket games are produced by third-party vendors in Packs ranging from ten (10) to two hundred fifty (250) tickets. The Packs are shipped directly by the vendors to the Texas Lottery’s lottery operator. The Texas Lottery currently has Scratch Tickets at various price points. The Texas Lottery's Scratch Ticket game plan changes to accommodate the demands of the market. The number of games, overall ticket production and the expansion of price points may fluctuate to meet these demands.

The Texas Lottery anticipates, but does not warrant, that there will be an average of eighty-five (85) to ninety-five (95) standard games produced annually during the Contract Term.

However, the Texas Lottery does not warrant all Scratch Ticket games will be submitted for testing under the Contract resulting from this RFP. The Texas Lottery may submit multiple

Packs of tickets for testing for any given game. Submission of multiple Packs of tickets for any given game shall be deemed one submission, regardless of the number of Packs. The

Texas Lottery generally will send a minimum of four (4) Packs of tickets per game, per submission depending on Pack size. The Successful Proposer shall be required to report, in writing, to the Texas Lottery any differences in the quality or security of the Packs of tickets submitted for each game.

The Successful Proposer shall test and evaluate Texas Lottery products to assess durability, security and alterability using standards developed by the Successful Proposer and approved by the Texas Lottery. The Successful Proposer shall provide all equipment, chemicals, labor, materials, and services necessary to test and evaluate the products.

The Successful Proposer shall be required to test all Texas Lottery products at the agency’s request, although the primary focus will be testing Scratch Ticket games. The Texas Lottery’s

Scratch Ticket game manufacturers produce tickets that are printed on paper stock, recycled paper stock, recyclable paper, foil stock, plastic stock and holographic paper stock in various sizes (e.g., 2.4” x 4” -12”x 4”). Each manufacturer uses its own type of chemical formulas which may include solvent- or water-based chemicals, or a combination of the two. The

Successful Proposer’s test standards shall cover all Scratch Ticket game variations and be adaptable to address advances in Scratch Ticket game manufacturing during the Contract

Term.

The Successful Proposer shall test lottery products until a conclusive result is reached.

Additional tests, including re-tests, conducted as a result of inconclusive test results will be performed at no additional cost to the Texas Lottery.

The Texas Lottery currently has a variety of retailer sales terminals, including traditional lottery and retailer point of sale (in-lane) terminals in the Texas marketplace. At the Texas

Lottery’s request, the Successful Proposer shall test and evaluate various types of paper stock used by the sales terminals. If paper stock and/or terminal types change during the Contract, the Texas Lottery may ask the Successful Proposer to analyze and test the materials used against the current paper stock.

At the agency’s request, the Successful Proposer may be required to test other Lottery products (e.g., non-standard tickets) or conduct miscellaneous testing services for new and emerging products. These services may also include testing services requested by one of the

Texas Lottery’s Scratch Ticket manufacturers with the agency’s prior approval (See Section

6.9).

Proposers shall provide the Texas Lottery with information, and evidence in their Proposal to demonstration their ability to meet the specifications of the RFP, and that will permit awarding a contract in a manner that provides the best value to the Texas Lottery. Proposers shall propose on all components and submit a single proposal for all services in response to this RFP.

1.2. Our Vision and Mission

Vision – To be the preeminent Lottery and Charitable Bingo agency through innovative leadership.

Texas Lottery Mission – The Texas Lottery is committed to generating revenue for the State of Texas through the responsible management and sale of entertaining lottery products. The

Texas Lottery will incorporate the highest standard of security, integrity and responsible gaming principles, set and achieve challenging goals, provide quality customer service and utilize a TEAM approach.

Charitable Bingo Mission – Provide authorized organizations the opportunity to raise funds for their charitable purposes by conducting bingo. Determine that all charitable bingo funds are used for a lawful purpose. Promote and maintain the integrity of the charitable bingo industry throughout Texas.

1.3. Our Core Values

Integrity and Responsibility — The Texas Lottery Commission works hard to maintain the public trust by protecting and ensuring the security of our lottery games, systems, drawings, and operational facilities. We value and require ethical behavior by our employees, licensees, and vendors. We promote the integrity of charitable bingo in Texas for the benefit of charitable organizations.

Innovation — We strive to incorporate innovation into our products to provide the citizens of Texas with the best entertainment experience available through our products. We pursue the use of technology that enhances the services that we provide to our customers and reduces our operating expenses. All proposed innovations must be authorized by Texas law, and do not include video lottery, casino gaming, internet-based lottery sales, fantasy sports, or any other activities not authorized by law.

Fiscal Accountability — We emphasize fiscal accountability by ensuring that all expenditures directly or indirectly generate revenue, enhance security, fulfill regulatory requirements, improve customer service and/or boost productivity. We recognize our responsibility in generating revenue for the State of Texas without unduly influencing players to participate in our games. We maximize benefits to charities through the continual examination and review of charitable bingo operations.

Customer Responsiveness — The Texas Lottery Commission takes pride in providing exemplary service to the people of Texas through the courteous dissemination of clear and accurate information about our products, services and regulatory functions. We seek and respond to feedback expressed by our employees, retailers, licensees and the playing and non-playing public. We apply this feedback in the development of our products and in the services that we provide.

Teamwork — We are committed to creating an environment of mutual respect where open, honest communication is our cornerstone. We embrace the diversity of our team and individual perspectives in working together to achieve our common goals.

Excellence — We strive for excellence by taking a position of leadership on issues that impact the Texas Lottery Commission and achieve challenging goals by focusing on our core values.

1.4. Schedule of Events

The following time periods are set forth for informational and planning purposes only.

The Texas Lottery reserves the right to change any of the time periods and will post all changes on the Electronic State Business Daily, https://www.txsmartbuy.com/esbd, and/or the Texas Lottery website, https://www.texaslottery.com/ (Click on About, Doing

Business with TLC, Procurement).

Date Event

February 6, 2024

(4:00 p.m., CENTRAL TIME)

Issuance of RFP https://www.txsmartbuy.com/esbd https://www.texaslottery.com/

February 21, 2024

(1:30 p.m., CENTRAL TIME)

Pre-Proposal Conference (Virtual conference see Section 2.3)

February 28, 2024

(4:00 p.m., CENTRAL TIME)

(Late Questions will not be answered)

Written Questions Due

On or before

March 7, 2024

Responses to Written Questions Issued

March 11, 2024

(4:00 p.m., CENTRAL TIME)

Final date for submission of draft HSP forms and final date to conduct one-on-one workshops (Zoom, TEAMS or telephone conference)

March 25, 2024

(4:00 p.m., CENTRAL TIME)

(Late Proposals will not be considered)

Deadline for Proposals

On or before

May 10, 2024

(or as soon as possible thereafter)

Announcement of Apparent Successful

Proposer

1.5. Successful Proposer’s / Lottery Relationship

The Texas Lottery Commission is a part of the Executive Branch of Texas State

Government. The Texas Lottery will not relinquish control over lottery operations. The

Successful Proposer shall function under the supervision of the Texas Lottery. Its operations will be subject to the same scrutiny and oversight that would apply if all operations were performed by Texas Lottery employees. Accordingly, all operations shall be conducted in adherence to applicable statutes and the highest ethical standards.

1.6. Procurement Authority

This RFP and all activities leading toward the execution of a written contract under this

RFP are being conducted in accordance with the State Lottery Act (Tex. Gov't Code. §§

466.001, et seq.), as amended; the Texas Lottery's administrative regulations (16 TAC

§§ 401.101, et seq.); and other applicable laws of the State of Texas. All Proposers should read and be familiar with the State Lottery Act and 16 TAC §401.101-103.

1.7. Proposals Subject to The Texas Public Information Act

The Texas Lottery is subject to the Texas Public Information Act (Act) (Chapter 552, Government Code). Proposals submitted to the Texas Lottery in response to this RFP are subject (in their entirety) to release by the Texas Lottery as public information. A Proposal, or specific parts thereof, may, however, be shown by the Proposer to fall within one or more of the exceptions to disclosure provided in the Act, the State Lottery Act or other applicable law. Marking an entire Proposal as “confidential” or “copyrighted” is unacceptable. If a Proposer believes that parts of its Proposal are confidential under the Act, it should specify the confidential information by marking “Confidential” on each page or by each paragraph containing such information prior to submitting the Proposal to the Texas Lottery. In response to this section, Proposers shall provide the Texas Lottery with specific and detailed reasons for each item marked “Confidential”. Vague and general claims to confidentiality are not acceptable. This detail is necessary so that the Texas Lottery will have sufficient information to provide to the Attorney General of Texas, if a ruling regarding the confidentiality of such information is requested. Failure of a Proposer to respond to such notification may result in the release of all or part of the Proposal as public information. It is the Proposer’s obligation to submit briefing to the Attorney General setting forth the basis upon which the requested information should remain confidential. The Attorney General may determine all or part of a

Proposal to be public information even though parts of the Proposal were marked

“Confidential” by the Proposer. Additionally, see Section 552.0222 of the Act relating to contracting information that is considered public and shall be released.

The Texas Lottery assumes no responsibility for asserting legal arguments to the Attorney

General on behalf of Proposers.

Proposers are advised to consult with their legal counsel concerning disclosure issues resulting from this procurement process and to take precautions to safeguard trade secrets and other proprietary information.

The requirements of Subchapter J of the Act may apply to this Proposal and the Proposer, contractor, or vendor agrees that the contract can be terminated if the Proposer, contractor or vendor knowingly or intentionally fails to comply with a requirement of that subchapter. See

Attachment H.

1.8. Misunderstanding or Lack of Information

By submitting a Proposal, a Proposer agrees that it fully understands and will abide by the terms and conditions of the RFP and it will not make any claims for, or have any rights to, cancellation or relief without penalty because of any misunderstanding or lack of information. The Executive Director reserves the right to accept Proposals by waiving minor technicalities if the Executive Director, within his or her sole discretion, determines it to be in the best interests of the Texas Lottery. The decision of the Executive

Director shall be conclusive, and subject to protest under Section 2.17 of this RFP.

1.9. Rejection of Proposals and Cancellation of RFP

Issuance of this RFP and/or retention of Proposals does not constitute a commitment on the part of the Texas Lottery to award a Contract. The Texas Lottery maintains the right to reject any or all Proposals, and to cancel this RFP, if the Texas Lottery, in its sole discretion, considers it to be in its best interests to do so.

1.10. Ownership of Proposals

All materials submitted by a Proposer will become the property of the Texas Lottery and may be used as the Texas Lottery deems appropriate.

1.11. Incurred Expenses

The Texas Lottery accepts no obligations for costs incurred in preparing and submitting a Proposal. Proposals shall be submitted at the sole expense of the Proposer. All

Proposals shall be prepared simply and economically, providing a straightforward, concise delineation of the Proposer’s capabilities to satisfy the requirements of this RFP.

1.12. Proposal Tenure

All Proposals shall be valid for a period of one hundred and eighty (180) Days from the deadline for submitting Proposals.

1.13. No Texas Lottery Obligations

The Texas Lottery reserves the right to select qualified Proposals to this RFP without discussion of the Proposals with Proposers. It is understood that all Proposals will become a part of the Texas Lottery’s official procurement files after the Contract has been awarded or the procurement has been terminated and will be available for public inspection except for portions that the Proposer has designated as proprietary and confidential (see Sections 552.110 and 552.305 of the Public Information Act and RFP

Section 1.7 above).

1.14. Successful Proposer’s Obligations

The Successful Proposer shall always be responsible for the performance of any contractual obligations that may result from the award of the Contract and shall be liable for the non-performance of any or all Subcontractors.

1.15. Captions

The captions to the sections of this RFP are for convenience only and are not part of the

RFP’s substantive terms.

1.16. Parts Incorporated

All attachments listed in the Table of Contents are incorporated into and expressly made a part of this RFP.

REQUEST FOR PROPOSALS FOR PART 2

LOTTERY PRODUCTS TESTING SERVICES PROPOSAL PROCESS

2. PROPOSAL PROCESS

2.1. Contact Person

The sole point of contact for communications concerning this RFP will be Tammy Williams, whose mailing address and email address, are as follows:

Tammy Williams CTCD, CTCM

Contracts Specialist

Texas Lottery Commission

P. O. Box 16630

Austin, TX 78761-6630

Phone (512) 344-5351 contracts@lottery.state.tx.us

The Texas Lottery Headquarters’ physical address for deliveries is:

Tammy Williams CTCD, CTCM

Contracts Specialist

George H.W. Bush State Office Building

Texas Lottery Commission

1801 N. Congress Avenue

Austin, TX 78701

2.2. Prohibition Against Unauthorized Contact

The Texas Lottery is committed to a procurement process that maintains the highest level of integrity. Accordingly, Proposers, as well as their agents, liaisons, advocates, lobbyists, “legislative consultants,” representatives or others promoting their position, are limited to those communications authorized by and described in this RFP. Any attempt to influence any of the participants, whether that attempt is oral or written, formal or informal, direct or indirect, outside of this RFP process is strictly prohibited.

Should allegations of improper contact be made prior to Contract Award, the Executive

Director may investigate those allegations and, in his sole discretion, disqualify a Proposer.

2.3. Pre-Proposal Conference

Prospective Proposers should plan to attend a virtual Pre-Proposal Conference. See the

Schedule of Events for the date and time. The Pre-Proposal Conference will include an overview of the RFP and a presentation on the HUB Subcontracting Plan (HSP) requirements. A question-and-answer session will also take place regarding general, technical and HSP questions. Attendance at the Pre-Proposal Conference is recommended, but not mandatory. A link to the virtual Pre-Proposal Conference will be posted on the Texas Lottery website at https://www.texaslottery.com/ and on the

Electronic State Business Daily (ESBD), https://www.txsmartbuy.com/esbd in advance of the day and time listed in the Schedule of Events. The Texas Lottery intends to use

Microsoft TEAMS for the conference. A video of the Pre-Proposal Conference will be posted on the Texas Lottery website. All prospective Proposers are highly encouraged to view the video.

2.4. Questions

Written questions concerning this RFP will be accepted and responses posted on the

Electronic State Business Daily (ESBD), https://www.txsmartbuy.com/esbd, and the Texas

Lottery website, https://www.texaslottery.com/, according to the timetable established in the

Schedule of Events. Questions received after the deadlines set in the Schedule of Events may be reviewed by the Texas Lottery but will not be answered. Any addenda or amendments, whether made as a result of a prospective Proposer’s written questions or otherwise, will be posted on the ESBD and the Texas Lottery website. It is the responsibility of the Proposer to check these websites for any additional information regarding this RFP.

Questions shall be submitted by email by the questions submission deadline to:

contracts@lottery.state.tx.us

A Proposer shall submit questions in writing and is responsible for obtaining clarification as to any ambiguity, conflict, discrepancy, exclusionary specification, omission or error in this

RFP (collectively, errors) prior to submitting a Proposal, but in no event shall be entitled to additional compensation, relief or time by reason of any error or its later correction. If a

Proposer fails to obtain written clarification of any errors, the Proposer shall submit a

Proposal at its own risk; and, if awarded the Contract, the Proposer shall be deemed to have waived any claim to contest the Texas Lottery’s interpretation thereof.

2.5. Submission of Proposal

Electronic Delivery Submission. Electronic responses shall be sent via email to

Procurement@lottery.state.tx.us. Proposers shall place the RFP Name and Number, along with the Proposer Name into the subject line of their email. Electronic responses shall be received no later than the deadline established in the Schedule of Events. Late Proposals will not be considered. No exceptions will be made. For electronic submissions, Proposers shall submit one (1) signed original of its Proposal, one (1) copy of evidence of Financial

Soundness, one (1) signed original of its Cost Proposal and one (1) signed original of its Part

5, that shall be in a searchable and unprotected portable document format (PDF). Each PDF file attachment shall be a separate document and clearly named. TLC takes no responsibility for electronic submissions that are captured, blocked, filtered, quarantined or otherwise prevented from reaching the proper destination server by any TLC anti-virus or other security https://www.texaslottery.com/ https://www.txsmartbuy.com/esbd https://www.txsmartbuy.com/esbd https://www.texaslottery.com/ mailto:Procurement@lottery.state.tx.us software. To confirm receipt of all electronic submissions, Proposers should request confirmation by e-mail.

If a Proposer submits multiple versions of the proposal document to ensure receipt the last received version that arrives before the Proposal deadline will be considered the official version designated for evaluation by the Evaluation Committee.

All Proposals shall be organized and arranged to correspond directly with the numbered sections of this RFP, and all pages shall be numbered. For Parts 1, 2 and 3 only, Proposers may provide a blanket acknowledgment and acceptance in lieu of a section-by-section response, unless a section requires a specific detailed answer from the Proposer. For Parts 4 and 6 only, Proposers shall provide a section-by-section response to the RFP. For Part 5, Proposers shall follow the instructions for completing and submitting an HSP.

If a Proposer is claiming any part(s) of its Proposal is confidential, the Proposer shall provide a detailed response to Section 1.7 and mark the material as “Confidential”.

A Proposer may not amend a commitment to comply with a specific section of this RFP by a later reference back to that section.

The Proposer’s Commitment (Attachment A) and the Background Information Certification

(Attachment D-1) shall be signed by an officer or agent of the Proposer with authority to contractually bind the Proposer, and the attachment shall be included with the original

Proposal.

Proposers are required to propose a complete solution to the Texas Lottery’s requirements in their Proposal. Any items not specifically requested, but integral to the requested services, shall be included in the Proposal and identified in the appropriate sections thereof.

Proposers responding to this RFP shall fully and completely address all goods, services and other requirements described in this RFP. Incomplete or partial Proposals will not be considered. The Proposer shall provide all information that the Proposer believes would be helpful to the Texas Lottery in evaluating the Proposer’s ability to fulfill the RFP requirements.

Proposals that have been copyrighted, in whole or in part, by any Proposer are unacceptable and may be rejected as non-responsive.

2.6. Response Format & Contents

The Proposer shall demonstrate its understanding of the requested goods and services, and shall address specifically in writing the Proposer’s approach to providing each requirement in this RFP. Each Proposal shall be organized in the manner described below:

a. Letter of Transmittal;

b. Executive Summary;

c. Section-by-section response to the RFP (see Section 2.5.3 above);

d. Evidence of Financial Soundness (one (1) separate PDF);

e. HUB Subcontracting Plan (one (1) separate PDF);

f. Cost Proposal (one (1) separate PDF));

g. Proposer’s Commitment (Attachment A); and

h. Background Information Certification (Attachment D-1).

2.7. Letter of Transmittal

Proposers shall submit a Letter of Transmittal that identifies the entity submitting the

Proposal and includes a commitment by that entity to provide the goods and services required by the Texas Lottery in this RFP. The Letter of Transmittal shall state that the Proposal is valid for one hundred and eighty (180) Days from the Day after the deadline for submitting

Proposals. Any Proposal containing a term of less than one hundred and eighty (180) Days for acceptance shall be rejected. The Letter of Transmittal shall be signed by a person(s) legally authorized to bind the Proposer to the representations in the Proposal. The Proposer should also indicate, in its Letter of Transmittal, why it believes it is the most qualified

Proposer to provide the goods and services required by the Texas Lottery in this RFP.

The Letter of Transmittal shall include a statement of acceptance of the terms and conditions set forth in Part 3 of this RFP that will be included in the Contract. If the Proposer takes exception to any of the proposed terms and conditions, those exceptions shall be noted in the

Letter of Transmittal. Proposers shall provide specific and detailed reasons for each exception, together with suggested alternative language. Vague and general exceptions are not acceptable. Proposers should realize, however, that failure to accept the terms and conditions specified in Part 3 of the RFP may result in disqualification of the Proposal.

2.8. Executive Summary

Proposers shall provide an executive summary of their Proposal (excluding cost information) that asserts that the Proposer is providing, in its Proposal, all the requirements of this RFP. If the Proposer is providing goods or services beyond those specifically requested, those goods or services shall be identified. If the Proposer is offering goods or services that do not meet the specific requirements of this RFP, but in the opinion of the Proposer are equivalent or superior to those specifically requested, any such differences shall be noted in the Executive

Summary. The Proposer should realize, however, that failure to provide the goods and services specifically requested may result in disqualification.

The Proposer shall demonstrate its understanding of the requested goods and services and shall address specifically, in writing, the Proposer’s approach to providing each requirement in this RFP.

The Executive Summary shall not exceed five (5) pages and should represent a full and concise summary of the contents of the Proposal.

2.9. Proposer’s Contracting Authority

The Proposer warrants and represents that the person named on the Proposer’s

Commitment (Attachment A) has the full right, power and is legally authorized to execute the Contract resulting from this RFP on behalf of the Proposer. Commitments shall be unqualified, not limited, and fully commit the Proposer to provide the goods and services required under this RFP.

2.10. Proposer’s Cost Proposal

The Proposer shall state its pricing for all goods and services rendered during the course of the proposed Contract, including any and all costs involved that are to be paid or reimbursed by the Texas Lottery. The pricing for the required goods and services is to be presented only in the format set forth in Attachment G of the RFP. Pricing information shall include all costs associated with providing the required goods and services and shall be submitted in a separate

PDF clearly marked as such. No reimbursement is available to the Successful Proposer beyond the amount agreed to be paid for the goods and services provided. Pricing agreed to in any resulting Contract shall be firm and remain constant through the life of the Contract unless amended pursuant to the terms of the Contract under Section 3.4 of the RFP.

The Proposer shall not disclose its Cost Proposal or other cost information in the body of its written Proposal. Including cost information in the written Proposal may be cause for disqualification.

2.11. Multiple Proposals

Each Proposer may submit only one (1) Proposal. If a Proposer submits more than one

Proposal, all Proposals from that Proposer may be rejected.

2.12. Changes, Modifications and Cancellation

The Texas Lottery reserves the right to make changes to and/or cancel this RFP and will post all changes and modifications, whether made as a result of a potential Proposer’s written inquiries or otherwise, and cancellation notices on the Electronic State Business

Daily and the Texas Lottery websites. It is the responsibility of the Proposer to check these websites for any additional information regarding this RFP. If the Proposer fails to monitor the ESBD and TLC websites for any changes or modifications to the RFP, such failure will not relieve the Proposer of its obligation to fulfill the requirements as posted.

2.13. Updates to Information Supporting a Proposal

Following the submission of Proposals and prior to the signing of a Contract, the

Proposer is under a continuing obligation to notify the Texas Lottery in writing of any updates or changes to information offered in support of its Proposal that might reasonably be expected to affect the Texas Lottery’s consideration of the Proposal. Nothing in this section shall be interpreted to permit unilateral modification by a Proposer of its commitment to provide goods and services described in its Proposal as filed for the cost stated therein.

2.14. Additional Information

By submitting a Proposal, the Proposer grants the Executive Director the right to obtain any information from any lawful source regarding the past history, practices, conduct, ability and eligibility under the State Lottery Act of the Proposer to supply goods, services and to fulfill requirements under this RFP, and the past history, practices, conduct, ability and eligibility of any director, officer or key employee of the Proposer.

By submitting a Proposal, the Proposer generally releases from liability and waives all claims against any party providing information about the Proposer at the request of the

Executive Director. Such information may be taken into consideration in evaluating

Proposals.

2.15. Proposal Evaluation and Contract Award

The Texas Lottery Commission intends to conduct a fair, comprehensive and impartial evaluation of all Proposals received in response to this RFP using an evaluation committee.

The evaluation committee will be selected by the Executive Director and may consist of

Texas Lottery employees or outside individuals with expertise in particular areas. In addition, the Texas Lottery’s General Counsel, other in-house legal counsel, and outside legal counsel may assist by advising the evaluation committee. Texas Lottery employees and consultants may also assist in the process as technical non-voting members of the evaluation committee.

Each member of the evaluation committee will independently score each Proposal responsive to this RFP. Evaluation committee members may seek, obtain and consider the opinions of other committee members or subject matter experts (including Texas Lottery staff, staff from other Texas agencies and consultants retained by the Texas Lottery) when evaluating and independently scoring particular areas of the Proposals.

The evaluation committee may request clarification of information or representations in a

Proposal before completing the initial evaluation. Requests for clarification and responses to requests for clarification will be in writing and will become part of the evaluation record.

The procurement process will be conducted in accordance with 16 TAC §401.101.

At a minimum, the factors to be considered by the evaluation committee in evaluating

Proposals shall include:

(i) the proposer’s price to provide the goods or services;

(ii) the probable quality of the offered goods or services;

(iii) The agency’s evaluation of the likelihood of the proposal to produce the desired outcome for the agency, considering, among other criteria:

(I) the quality of the proposer’s past performance in contracting with the agency, with other state entities, or with private sector entities;

(II) the qualifications of the proposer’s personnel;

(III) the experience of the proposer in providing the requested goods or services;

(IV) the financial status of the proposer; and

(iv) whether the proposer performed the good faith effort required by the HUB subcontracting plan, when the agency has determined that subcontracting is probable.

The evaluation committee also may consider vendor performance reviews maintained by the Texas Comptroller of Public Accounts under Tex. Gov’t Code §2262.055.

A copy of the scoring matrix is included as Attachment F.

A written notice of Contract Award will be posted on the ESBD, and sent to all Proposers immediately following execution of the Contract.

2.16. Site Visits and/or Oral Presentations

The Texas Lottery, in its sole discretion, reserves the right to conduct site visits and/or to require Proposers to make oral presentations prior to the Contract Award and may consider such presentations and visits when evaluating Proposals. Proposers will be notified in writing and will be provided with equal advance notification of site visits and/or oral presentation assignments and guidelines.

2.17. Protest Procedure

Any protest shall be governed by Tex. Gov’t Code §466.101 and 16 TAC §§ 401.102-

103.

REQUEST FOR PROPOSALS FOR PART 3

LOTTERY PRODUCTS TESTING SERVICES CONTRACTUAL TERMS AND CONDITIONS

3. CONTRACTUAL TERMS AND CONDITIONS

3.1. Introduction

This part sets forth terms and conditions applicable to the procurement process as well as terms and conditions that will become part of the Contract. The Texas Lottery reserves the right to incorporate additional provisions in the Contract in the best interest of the

Texas Lottery.

3.2. Governing Law and Venue

The procurement process, the award procedure, and the Contract shall be governed by, and construed and interpreted in accordance with the applicable laws of the State of

Texas. Any and all actions or suits brought by a Proposer or any related party regarding this RFP or the Contract shall be brought in the state district court located in Austin, Travis County, Texas. By submitting a Proposal, a Proposer is deemed to waive the right to bring any action in any other court. This section is purely a venue provision and shall not be deemed a waiver of sovereign immunity.

3.3. Contract Elements

The Contract between the Texas Lottery and the Successful Proposer will follow the general format specified by the Texas Lottery. The Texas Lottery reserves the right to negotiate provisions in addition to those stipulated in this RFP. The contents of this RFP, as modified by published addenda or amendments, and the Successful Proposer’s Proposal, will be incorporated into the Contract. In the event of any conflict or contradiction between or among these documents, the documents shall control in the following order of precedence: the written Contract, the RFP, and the Successful Proposer’s Proposal. Specific exceptions to this general rule may be noted in the Contract.

The Texas Lottery has determined that subcontracting opportunities are probable under this

RFP. Therefore, the Texas Lottery requires the submission of an HSP as a part of each

Proposal, as discussed further in Part 5 of this RFP. The HSP, if accepted by the Texas

Lottery, will become a provision of the Contract.

If any term or provision of this RFP or the Contract is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the RFP or Contract shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

3.4. Amendments

The Contract may be amended only by written agreement signed by both parties.

3.5. Non-Waiver

The failure of the Texas Lottery to object to, or to take affirmative action with respect to, any conduct of the Successful Proposer which is in violation or breach of the terms of the Contract shall not be construed as a waiver of the violation or breach, or of any future violation or breach. Nothing in this RFP, or the Contract, shall constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to the Texas Lottery Commission, as an agency of the State of Texas.