Hawthorne Race Course Pari-Mutuel SSJF SPO signed~1.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 6

Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Bureau of County Fairs and Horse Racing

Need Identified Date: Mar 12, 2019 Supply/Service Need By Date: Jul 1, 2019

Project Title: Illinois and DuQuoin State Fair Pari-Mutuel Harness Racing

Vendor: Hawthorne Race Course

Provide a description of the supplies or services required:

Pari-Mutuel wagering and race administration of harness racing. The IL and DuQuoin State fairs are critical to the mission of the Department of Agriculture, to hold successful fairs (20 ILCS 21/05) and to the mission to promote horse racing in the state (Horse Racing Act of 1975). Statute requires that funding is supplied to purses for races run at the IL and DuQuoin State Fairs. This procurement will also meet the objective of the Department of Agriculture and State of Illinois to promote the horse racing industry in the state through higher purses and giving horsemen a place to compete at both the IL and DuQuoin State Fairs. It will further enhance the two fairs by increasing attendance.

Value: Not to Exceed Value of Initial Term, this Change Order or Amendment: 202,538

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Jul 1, 2019

Estimated Contract End Date: Sep 30, 2019

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Hawthorne Race Course is the only standardbred race track in Illinois and only entity that can provide pari-mutuel wagering in Illinois.

Are there secondary justification(s) for this sole source? Yes No

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Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 Jul 2, 2018 Sep 30, 2018 174,250 Pari-Mutuel harness racing - State Fairs B-1462 Sole Source

2 May 1, 2017 Sep 30, 2017 174,250 Pari-Mutuel harness racing - State Fairs P4087 Sole Source

3 Jul 1, 2016 Sep 5, 2016 174,250 Pari-Mutuel harness racing - State Fairs 7705 Emergency

4 Jul 1, 2015 Jun 30, 2016 225,000 Pari-Mutuel harness racing - State Fairs 1031 Renewal

5 Jul 1, 2014 Jun 30, 2015 225,000 Pari-Mutuel harness racing - State Fairs 1031 Renewal

6 Jul 1, 2013 Jun 30, 2014 225,000 Pari-Mutuel harness racing - State Fairs 1031 IFB

7 Jul 2, 2012 Jun 30, 2013 225,000 Pari-Mutuel harness racing - State Fairs 1031 IFB

8 Aug 1, 2010 Jan 31, 2011 225,000 Pari-Mutuel harness racing - State Fairs 11526 IFB

9 Feb 2, 2009 Jan 31, 2010 185,000 Pari-Mutuel harness racing - State Fairs 22009521 Renewal

10 Feb 1, 2008 Jan 31, 2009 185,000 Pari-Mutuel harness racing - State Fairs 22009521 Renewal

If more than 10, or if other comments, explain:

The procurement was formally bid for the Illinois and DuQuoin State Fairs in 2016 two separate times with no bids submitted. The Dept. finally conducted an emergency procurement for the pari-mutuel harness racing with Hawthorne Race Course. The Dept conducted a sole source procurement for 2017 and 2018 State Fairs.

Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

The IL and DuQuoin State fairs are critical to the mission of the Department of Agriculture, to hold successful fairs (20 ILCS 21/05) and to the mission to promote horse racing in the state (Horse Racing Act of 1975). Statute requires that funding is supplied to purses for races run at the IL and DuQuoin State Fairs. These purses are enhanced by pari-mutuel wagering. The wagering helps offset the cost of putting on races at both fairs. According to the Illinois Horse Council, the horse industry in Illinois is responsible for 38,000 related jobs.

The State of Illinois faces competition in the horse industry from neighboring states whose governments provide more financial support to the industry through higher premiums and more opportunities for racing. This entices horsemen from Illinois to move and/ or race in these other states. Pari-mutuel harness racing has been conducted for over 75 years at the two fairs.

2. Provide a list and describe in detail the specifications required to satisfy the need:

Vendor is responsible for all facets of State Fair races including race administration and execution of pair-mutuel wagering with standard-bred harness racing. This includes hiring personnel for racing administration such as associated stewards, race charter, race clerk, blacksmith, veterinarians, outrider, starting car, starter and driver, racing secretary, paddock judge, stall manager, photo finisher, etc. The pari-mutuels vendor is responsible for hiring tote company, tellers (and training of tellers), placing judge, security in paddock, timer, mutual machines, money room, etc. (see attachment for breakdown in services.)

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

Hawthorne is the only pari-mutuel race track in Illinois that conducts standard-bred harness races, it is the only entity that understands the process and requirements necessary to administer these activities under the prescribed rules of the U.S. Trotting Association and the Illinois Race Board.

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Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

In order to provide wagering on races at the State Fairs; there are strict regulations that must be followed in administration the pari-mutuel, and in administering the races. For example, not only must the tote machines be tested thoroughly in order to compute accurately, but there must be drug testing of the winning horses that follow strict protocols per IL Racing Board rules. There are many other facets of race administration and pari-mutuel wagering that also must follow strict guidelines. Only a vendor that does this on a regular basis would understand these rules and be able to provide these services by moving their entire operation to Springfield and DuQuoin. Hawthorne is the only vendor in Illinois that provides standard-bred harness races.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

The procurement was formally bid for the Illinois and DuQuoin State Fairs in 2016 two separate times with no bids submitted. The Dept.

finally conducted an emergency procurement for the pari-mutuel harness racing with Hawthorne Race Course. The Dept had conducted a sole source procurement for 2017 fair and an Exempt procurement in 2018.

There are a total of three (3) Race Course parks in the State of Illinois; Hawthorne Race Course, Fairmount Park and Arlington International Racecourse. Hawthorne is the sole vendor who provides Standardbred harness racing. Arlington International discontinued Standard-bred racing in 1989 and Fairmount Park in 1999.

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

Both Arlington International Racecourse and Fairmount Park entertain the Thoroughbred Racing instead of the Harness racing.

The major difference between these two types of racing is that the harness racing, also known as standard bred racing uses a sulky, which is a lightweight cart with two wheels and is attached to the horse by use of a harness, it gives the race its name. Also, in Harness racing, the horses can trot or pace during the race. Pacing is faster than trotting. In trotting or pacing, there is a risk the horse might start to gallop; if this is the case, the horse must be slowed down in time to not face a DQ.

While in thoroughbred racing a jockey rides the horse during the race. These horses maintain a run/gallop, no matter what surface they are racing on. The ISF and DSF tracks are hard solid dirt surfaces which is required for the standardbred racing, if we were to utilize the other vendors, we would need to convert to thoroughbred racing and update our track with a softer thicker dirt surface.

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

The procurement was formally bid for the Illinois and DuQuoin State Fairs in 2016 two separate times with no bids submitted.

6. Are there resellers or distributors?

Yes No N/A

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Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

This service was procured utilizing an IFB with Maywood Race Course being the awarded vendor. At the time, Maywood was the only racing entity that conducted harness races in Illinois. Maywood closed due to bankruptcy and Hawthorne started business in harness racing. Using the last contract amount with Maywood, Hawthorne agreed to do the same work for $50,000.00 less than Maywood's amount. In 2018, Hawthornes price indicated a total value of $178,663. When ISF discussed the sole source contract for 2019, the price increased to $227,788.00, ISF $137,400.00 and DSF $95,388.00. Dept of Agriculture questioned the significant price increase from the previous year and asked for a break down of the line items, Hawthorne reduced the price to $202,538.00 (ISF $123,900.00 and DSF $81,638.00). See attached price breakdown between 2018, 2019 original quote and 2019 quote reduced.

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

It has been determined that no other vendors are able to provide this service within the State of Illinois. If its determined that this vendor is not a sole source, No pair-mutuel harness racing will be conducted at both Illinois and Du Quoin State Fairs since we must have harness racing.

10. Is there any additional information you would like to add to justify this sole source?

N/A

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Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date Apr 19, 2019

Printed Name Michelle Grimsley E-mail Address michelle.grimsley@illinois.gov

Phone Number (217) 524-7030

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address Shannon.Shymansky@illinois.gov

Phone Number (217)782-3256 Date Apr 22, 2019

Printed Name Shannon Shymansky

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217.993.1047 Date Apr 23, 2019

Printed Name Monique Wantland E-mail Address monique.n.wantland@illinois.gov

Version 7.01 Page 6 of 6

Bulletin Reference Number

Requesting Agency/University Illinois Department of Agriculture

Sole Source Justification Form - Part II Section I - General Information

Project Title Illinois and DuQuoin State Fair Pari-Mutuel Harness Racing

Vendor Hawthorne Race Course

Initial Date of Procurement Bulletin Posting

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone

Printed Name Date

CPO E-mail

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229

There are a total of three (3) Race Course parks in the State of Illinois; Hawthorne Race Course, Fairmount Park and Arlington International Racecourse. Hawthorne is the sole vendor who provides Standardbred harness racing. Arlington International discontinued Standard-bred racing in 1989 and Fairmount Park in 1999.

Q5bAnswer: Both Arlington International Racecourse and Fairmount Park entertain the Thoroughbred Racing instead of the Harness racing.

The major difference between these two types of racing is that the harness racing, also known as standard bred racing uses a sulky, which is a lightweight cart with two wheels and is attached to the horse by use of a harness, it gives the race its name. Also, in Harness racing, the horses can trot or pace during the race. Pacing is faster than trotting. In trotting or pacing, there is a risk the horse might start to gallop; if this is the case, the horse must be slowed down in time to not face a DQ.

While in thoroughbred racing a jockey rides the horse during the race. These horses maintain a run/gallop, no matter what surface they are racing on. The ISF and DSF tracks are hard solid dirt surfaces which is required for the standardbred racing, if we were to utilize the other vendors, we would need to convert to thoroughbred racing and update our track with a softer thicker dirt surface.