Inquiries and Responses Round 1.pdf

Department of Revenue

Questions/Answers for RFP # DOR17002/Scratch, Round 1

This document contains all inquiries submitted by offerors regarding the RFP.

Q1. Vendor appreciates the opportunity to respond to the Colorado Lottery’s RFP

#DOR17002 for Scratch Ticket Production. In order to ensure that our team has sufficient time to review the RFP thoroughly and generate potential questions, we respectfully request an extension of the Inquiry process. This period is crucial in helping construct a proposal response that satisfies the goals of the Lottery. We kindly ask for an extension of five (5) business days. Your consideration is greatly appreciated.

A1. A second round of inquiries has been added and the proposal due date has been modified. See

Appendix A, RFP Administrative Information V2.

Q2. RFP DOR17002/Scratch states that offeror inquiries are due via email by November 2 nd

However, the RFP did not arrive to our office until the afternoon of October 28 th

In order to prepare a proposal for the scope requested and determine questions that can affect our response, we have asked our departments to thoroughly review the detailed information and respond with questions for clarification. However, allowing only a couple of days to compile questions can result in missing important details that can impact a vendor's ability to properly bid, offer the best price possible or risk disqualification. We request that the deadline for submitting inquiries in reference to this RFP be extended by a minimum of two days, to Friday November 4 th

Please let us know if you can accommodate this request. We are looking forward to submitting a thorough, engaging response and would appreciate a few more days to fully vet the RFP and compile meaningful inquiries.

A2. A second round of inquiries has been added and the proposal due date has been modified. See

Appendix A, RFP Administrative Information V2.

Q3. General Question:

Will the Lottery please provide a Lottery logo and game logos in vector format for use in our proposal?

A3. Please email Sherri.Gibson@state.co.us if you would like this information sent to you.

Q4. General Question:

Will the Lottery please share market research study results from the previous three years, including any recent player tracking and/or segmentation study results?

A4. A sampling of Colorado Lottery research can be found here:

https://www.coloradolottery.com/en/about/scratch-rfp/

Q5. RFP Section I. B. Page 5:

Will the Lottery please clarify the definition of the terms “Low Tier” and “High Tier,” and provide a definition for the term “Mid-Tier?”

mailto:Sherri.Gibson@state.co.us

A5. For prize structure development: low-tier means prizes under $50, mid-tier means prizes between $51-$599 and high-tier means prizes over $600. For prize validation: low-tier means up to $49, there is no mid-tier, and high-tier means over $50.

Q6. RFP Section III A. Page 14 and E. Page 50:

On page 14, the table shows that Critical Support Services for all marketing services, with the exception of just E.1.b.3 and E.2.a-d, are to be handled by both Primary and Secondary Contractors. However, on page 50 E., the RFP states that the costs of Critical Support Services are to be included in the base ticket price of the Primary Contractor only.

Will the Lottery please specify the responsibilities of the Primary Contractor and the Secondary Contractor as they relate to Critical Support Services?

A6. RFP Section III A. Page 14 has been updated to reflect the responsibility of critical support services for both primary and secondary offerors.

Q7. RFP Section III 2. Q15 Page 23:

This section refers to “Unusual prize insurance for prizes exceeding $25,000.”

Will the Lottery please explain the meaning of the term “unusual prize insurance?”

A7. It is the State’s intent that this would insure the prizes. This requirement would only apply if the

Contractor determines the need.

Q8. RFP Section III C.6 Page 42:

The RFP States “The Lottery may elect to have tickets tested, not more than twice annually, by a Lottery-designated independent testing laboratory at the expense of the Contractor”. Who does the lottery plan to use and what is the expected cost for each test?

A8. The independent testing laboratory will be determined in the future. Costs of these tests will be determined at the time of the test.

Q9. RFP Section III Q64 Page 42:

Does this question pertain to North American lottery jurisdictions only, or does the Lottery want this information from worldwide customers as well?

A9. This question pertains to the North American lottery jurisdictions only.

Q10. RFP Section III Q66. Page 43:

Due to the fact that not all vendors may have produced a $50 ticket, would the Lottery be willing to accept samples of other high-priced tickets in lieu of $50 tickets?

A10. Yes.

Q11. RFP Section III 5. Page 49:

The RFP states that, at the request of the Lottery, the Primary Contractor will be required to provide emergency ticket storage and distribution for all lottery tickets.

Will the Lottery please specify how many games would likely fall into this category, and the duration of the storage?

Also, will the Primary Contractor be responsible for distributing the tickets to the Lottery’s warehouses, or is it expected to deliver them directly to the Lottery’s retailers?

A11. The number of games will vary from time to time – the maximum amount of games should not exceed 50. Also, distribution may be required to Lottery locations as well as to retailers. This will only apply to the Primary Contractor.

Q12. RFP Section III E.2.a Q82 Page 52-53:

Will the Lottery please clarify the definition of “community research software application?” That is, does the Lottery see this as an application geared specifically toward acquiring and maintaining a panel of lottery players, non-players and other defined member types for the purposes of planned and ad hoc research?

Further, will the community research software application be housed and managed by the vendor, or is it intended to be a dedicated resource that the vendor provides for the Lottery’s in-house use?

Also, if the community research is intended to be panel research, where will the ownership of the panel reside? Will the vendor be able to canvass the panel as part of other research efforts (e.g., U.S. player tracking studies, omnibus research, etc.)?

Finally, with regard to the consumer research being geared toward non-players as well as players, do those non-players need to be incorporated into the Lottery’s player panel?

A12. Community research software application refers to the software used to conduct Marketing

Research Online Communities (MROC). The Lottery is interested in either 1) having the contractor house and manage the community research program in collaboration with the Lottery or 2) contract with a research provider that will house and manage the program in collaboration with the Lottery.

The Lottery will work with the contractor’s assigned Research Specialist to assist in the design and development of planned and ad hoc research. The ownership of any panels created will be under the Lottery’s jurisdiction, however, the Lottery will permit panels to be utilized for specific research objectives including player tracking studies.

Panels can be long-term. Long-term panels will have to be engaged with frequently to keep them motivated and active participants. Short-term panels can be created to meet specific research objectives. At present, we do not see the panels being used for inclusion in omnibus research since we don’t have a good understanding of exactly how that would work.

Depending on the research objective, panels may consist of non-players, only; players only; or players and non-players. The panels should not be confused with the MyLottery loyalty program, though player panels can be created by reaching out to MyLottery members and inviting them to participate.

Various community research software applications can be seen here:

http://www.capterra.com/market-research-software/

Q13. RFP Section III E.2.d Page 55:

http://www.capterra.com/market-research-software/

Will the Lottery please clarify if the Primary Contractor is required to provide tracking analysis from an existing, ongoing tracking study, or to also provide/fund the tracking study research as part of its analysis deliverables obligation?

A13. The offeror is to include the costs associated with conducting a minimum of four tracking studies per year. Data from past tracking studies (crosstabs) will be provided to maintain the research.

Tracking study questions are mostly consistent from study to study with minor variations to test awareness of specific campaigns. For two presentations that glean information from tracking studies, visit:

Q14. RFP Section III G Page 55:

The Lottery has requested information and pricing for Ticket Vending Machines (TVMs) that may become the subject of future orders pursuant to the Future Technology provisions of the proposed contract (Contract Sec. 20 [LL]). Vendor assumes, but would the Lottery please confirm, that, should any TVMs be ordered, title to such TVMs would transfer to the Lottery upon acceptance, pursuant to RFP Appendix A, Item 23, State Ownership of Contract Products/Services?

A14. At this time, your assumption is correct. However, the issue of title transfer could be negotiated at a later date.

Q15. Appendix A – Section 23 Page 7:

Will the Lottery please confirm that proprietary intellectual property, belonging to the

Contractor or a third party, used in connection with the products/services produced by the Contractor under a contract resulting from this RFP, shall not become the property of the State of Colorado?

A15. The Contractor or third party will retain proprietary intellectual property not created under this

Contract. See definition of Work Product on page 5 of the draft contract.

Q16. Appendix B Page 24

Is the Lottery willing to permit offerors to include and price additional items not listed in either item 2, Product and Production Services, or 3, Separately Price Ticket/Game Features and Services in the price proposal following the pricing for Extended Play Marking System?

A16. Offerors are encouraged to provide pricing for additional items not listed in item 2 Production and Production Services, or 3, Separately Price Ticket/Game Features. However, only items requested in this proposal will be taken into consideration scoring of the contract.

Q17. Appendix C Page 4

This appendix requests pricing for item 6, Instant Ticket Vending Machines, but does not request pricing for item 7, Ticket Distribution/Cooperative Services.

Should item 7, Ticket Distribution/Cooperative Services, be included in the Secondary

Contractor Pricing?

A17. It is up to the offeror to include pricing for this item.

Q18. Contract Signature and Cover Page; Section 2 Contract, Appendix A – Section 5 Page 2

Both the “Signature and Cover Page of the Contract and Section 5 of Appendix A of the

Contract indicate a six-year “initial” Contract term beginning on July 1, 2017, and ending on June 30, 2023.

Section 2.B states that the Contract “shall terminate on the Initial Contract Expiration

Date shown on the Cover Page for this Contract (the ‘Initial Term’) unless sooner terminated or further extended in accordance with the terms of this Contract.”

Section 2.C states that “the total duration of this Contract, including the exercise of any options to extend, shall not exceed 5 years from the Effective Date absent prior approval from the State Purchasing Director in accordance with Colorado Procurement Code.

The Colorado Procurement Code and Procurement Rules (24-103-503-MULTI-YEAR

CONTRACTS and R-24-103-503) do not limit the duration of a Contact term; rather, they require written permission of the State Purchasing Director for a contract period exceeding five years.

Since the initial Contract term exceeds this maximum period by one year, does the

Lottery intend to obtain the State Purchasing Director’s approval for the sixth year before entering into the Contract(s) resulting from this procurement?

A18. The Colorado Department of Revenue/Lottery has received permission for the initial term and possible extensions of the Contract(s) resulting from this RFP.

Q19. Contract Section 14 Page 14

This section states, in relevant part, that “If Contractor is in breach under any provision of this Contract and fails to cure such breach, the State…shall have all of the remedies listed in this §14.A” including (i) Termination for Breach.”

Would the Lottery be willing to revise this section by adding the word “material” after

“any” in the foregoing quoted text, thereby assuring the Contractor that the Lottery will not terminate the Contract for any non-material performance failure?

A19. The offeror’s signature on the Request for Proposal - Confirmation of Offer (see attachment labeled Confirm) is confirmation that the offeror understands and acknowledges that any award will require a contract between the State and the offeror containing the terms and conditions in the attached contract. Offeror agrees to all terms and conditions of the contract and, if awarded, agrees to sign the contract as is, with no modifications. If the Offeror submits any contractual modifications with its proposal, DOR, DOR may deem that as non-acceptance of the contract and may disqualify the Offeror from consideration. DOR, at its sole discretion, may propose contract modifications.

Q20. Contract Section 17

Section 17 of the Contract provides that Work Product shall be assigned by the

Contractor to the State, including copyright, moral rights and patent rights in the Work Product. The Contract further provides that the Contractor shall not use Work Product for any purpose other than performance of Contractor’s obligations under the Contract without prior written consent of the State.

Would the Lottery be willing to amend the definition of Work Product and/or Section 17 to specify that the State shall have ownership of Work, and the intellectual property rights thereto, only to the extent that such Work (a) first originated under the Contract; (b) is unique to the State; and (c) was paid for by the State?

Further, given that this Contract is not a “work made for hire” contract, would the Lottery confirm that Contractor shall own and continue to own any copyright, patent or other rights of Contractor included in the Work that was conceived, created, or developed prior to any work performed pursuant to this Agreement or conceived, created, or developed independently from the Contract (“Contractor Materials”) and that the Contractor shall have the unfettered right to use its Contractor Materials?

A20. The definition of Work Product on page 5 of the Contract specifically excludes material that was developed prior to the Effective Date. The offeror’s signature on the Request for Proposal - Confirmation of Offer (see attachment labeled Confirm) is confirmation that the offeror understands and acknowledges that any award will require a contract between the State and the offeror containing the terms and conditions in the attached contract. Offeror agrees to all terms and conditions of the contract and, if awarded, agrees to sign the contract as is, with no modifications. If the Offeror submits any contractual modifications with its proposal, DOR, DOR may deem that as non-acceptance of the contract and may disqualify the Offeror from consideration. DOR, at its sole discretion, may propose contract modifications.

Q21. Contract Section 20 L. Order of Precedence Page 19

Does the Lottery intend for the RFP to be included as a Contract document and, if so, will it please indicate the priority of that document in terms of resolving conflicts?

A21. The State does not intend to include the awarded contractors’ entire proposal as an exhibit to the resulting contract. Upon award, the State reserves the right to request any or all of the awarded contractors to resubmit specific portions of their proposal relative to the needs of the contract and performance of services. This process may require redaction and/or rewrite of proposals in accordance with the RFP process and the resulting contracts.

Q22. Contract Section 20 EE. Bonds i. Fidelity Bond Page 23

It is industry standard to have a 30-day Notice of Cancellation on bonds; therefore, would the Lottery be willing to amend the last sentence of Section I Fidelity Bond to state:

“This bond agreement shall contain a provision indicating that any modifications or cancellation of such bond cannot occur until after sixty (60) thirty (30) days written notice to the State and the State Lottery Director?”

A22. The offeror’s signature on the Request for Proposal - Confirmation of Offer (see attachment will require a contract between the State and the offeror containing the terms and conditions in the attached contract. Offeror agrees to all terms and conditions of the contract and, if awarded, agrees to sign the contract as is, with no modifications. If the Offeror submits any contractual modifications with its proposal, DOR, DOR may deem that as non-acceptance of the contract

Q23. Contract Section 20 EE. Bonds ii. Primary Contractor iii. Secondary Contractor Pages 23-

As stated above, it is industry standard to have a 30-day Notice of Cancellation on bonds; therefore would the Lottery be willing to amend Section ii Primary Contractor to state:

“This bond agreement shall contain a provision indicating that any modifications or

And Section iii Secondary Contractor to state:

“This bond agreement shall contain a provision indicating that any modifications or

A23. The offeror’s signature on the Request for Proposal - Confirmation of Offer (see attachment will require a contract between the State and the offeror containing the terms and conditions in the attached contract. Offeror agrees to all terms and conditions of the contract and, if awarded, agrees to sign the contract as is, with no modifications. If the Offeror submits any contractual modifications with its proposal, DOR, DOR may deem that as non-acceptance of the contract

Q24. Contract Section 20 GG. Trademarks, Trade Names, Patents, and Copyrights Pages 24-25

The final paragraph of this section states that “The Contractor shall not be liable for any such claims or suits arising out of or as a result of any claims resulting or arising out of any acts or actions of a third party that is not a subcontractor, employee, or agent of the Contractor which were taken by the third party acting on its own volition or on or at the direction of or on behalf of the State.”

From time to time, the Lottery may request that the Contractor acquire intellectual property from a third party for use by the Lottery, acquire such third-party intellectual property directly, and require the Contractor to print tickets or feature games incorporating such third-party intellectual property.

Since the Contractor is acting solely as a printer in this case, it will have no control over the intellectual property or ability to confirm or ensure that the materials are non-infringing. Additionally, the Lottery will be in the position of requiring the third party that owns such intellectual property to indemnify the Lottery for any intellectual property infringement, as is proper for the third party, rather than the Contractor, to be responsible for such indemnification.

Therefore, would the Lottery be willing to revise this section to reflect that:

(i) In the event that the Contractor acquires or prints third party intellectual property specifically at the Lottery’s request, the Contractor will not be obligated to indemnify the Lottery for intellectual property infringement relating to such third party intellectual property; and

(ii) The Contractor will not be required to acquire or print any third party intellectual property unless reasonable safeguards are put in place to protect that Contractor (including a requirement that the third party indemnify the Contractor in relation to infringement claims) relating to the third party’s intellectual property.

A24. The offeror’s signature on the Request for Proposal - Confirmation of Offer (see attachment labeled Confirm) is confirmation that the offeror understands and acknowledges that any award will require a contract between the State and the offeror containing the terms and conditions in the attached contract. Offeror agrees to all terms and conditions of the contract and, if awarded, agrees to sign the contract as is, with no modifications. If the Offeror submits any contractual modifications with its proposal, DOR, DOR may deem that as non-acceptance of the contract

Q25. Contract Section 20 II. LIQUIDATED DAMAGES RFP Pages 26-29

This section states, in relevant part, that “Under each of the circumstances set forth [in this section], the Parties acknowledge and agree that the State would suffer substantial economic damages arising from the delayed or incomplete or degraded performance specified” and that “the State shall be entitled to recover liquidated damages under each section applicable to any given incident.” Also, several LD provisions in this section provide for damage assessments based on a daily rate.

Notwithstanding the provisions of Section 20.II, and consistent with Colorado law regarding liquidated damages, would the Lottery be willing to amend the Contract to provide:

(i) that Contractor may furnish, and the Lottery will consider, factual evidence where available to establish that the Lottery’s actual damages were less than the liquidated sum;

(ii) that the Lottery will not assess more than its actual damages for any incident wherein the evidence establishes to the Lottery’s reasonable satisfaction that its actual damages were less than the liquidated amount;

(iii) that the Lottery will not assess liquidated damages in multiple categories for the same incident if to do so would amount to an unenforceable penalty under Colorado law;

and

(iv) that the Lottery will prorate LD assessments for periods of delay that extend for less than a full day so as to assure the Contractor will only be assessed LDs that bear a reasonable relationship to the Lottery’s actual loss?

A25. The State will specify conditions that trigger Liquidated Damages upon award of the contract.

Q26. Contract Section 20 HH. Indemnification iii. Intellectual Property Indemnification Page 26

Will the Lottery please confirm that the Contractor should only be required to indemnify and hold harmless the Indemnified Parties to the extent that the goods or services provided by the Contractor infringed upon the rights of a third party, and not to the extent that any infringement resulted from acts of the State?

A26. This is correct.

Q27. General Question

Will the Lottery please provide a breakdown of the percentage points/score that will be associated with the seven factors for basis of award, as stated in Section V. C of the

RFP?

A27. The Lottery will not be disclosing this information at this time.

Q28. General Question

Would the Lottery please provide FY 14, 15, 16 launch schedules (including theme, game quantities and price points) with vendors identified for each game?

A28. The Scratch Game Launch Schedule has been added to VSS.

Q29. General Question Would the Lottery please provide price schedules for all its instant ticket vendors, both primary and secondary?

A29. Contact Sherri.Gibson@state.co.us for questions regarding current price schedules.

Q30. Sections III. G, H and I, Pages 55-57

Will the Lottery please confirm that the items listed in Sections III.G, H, and I of the RFP will not be included in any component of the evaluation process?

A30. The items in Sections III G, H, and I will not be included in the evaluation process.

Q31. Section II.B.2, Scratch Game Development, Page 10

Question: Will the Lottery please define the term “shelf games” as it is used in the fourth bullet in this section?

A31. The Colorado Lottery prints games at several price points $1, $2, and $5 several months in advance of the games being launched to ensure product availability at all times. These games are considered “shelf” games. Games printed at other price points are usually delivered and shipped to retailers shortly after being delivered to the Lottery’s warehouse.

Q32. Section II.B.4, Product Distribution, Page 12

In this section of the RFP, the Lottery states that it currently has 28 sales routes state wide.

Question: Will the Lottery please provide the number of retailers by sales route?

A32.

District Route # of Retailers Major area of coverage

1 104 110 Central Colorado Springs

1 108 80 Pueblo, Lamar, La Junta, Springfield, Southeastern Plains

1 110 103 Northern Pueblo, Central Colorado Springs, Canon City, Salida

1 112 84 Pueblo, Alamosa, Trinidad, Walsenburg

1 114 112 Northern Colorado Springs, Monument, Falcon, Calhan

1 116 117 Parker, Castlerock, Highlands Ranch, South Denver

1 170 81 Western Slope, Durango, Cortez, Monte Vista, Pagosa Springs

2 139 115 Downtown Denver, Northwest Denver

2 141 112 Denver

2 145 118 Commerce City, DIA, Brighton, Montbello, Fort Lupton

2 147 108 North Aurora

2 164 118 Longmont, Lyons, Loveland, Estes Park

2 165 123 Boulder, Lafayette, Louisville, Broomfield

2 168 105 Sterling, Brighton, Ft. Morgan, Brush, Yuma, Akron

3 103 99 Southwest Colorado Springs,Woodland Park,Fountain,Security

3 120 109 Southeast Denver, Limon, Burlington, Bennett, Byers

3 140 114 Southeast Aurora

3 163 129 Northglenn, Thornton

3 166 116 Ft. Collins, Loveland, Wellington, Laporte

3 173 89 Montrose, Delta, Telluride, Gunnison, Paonia

3 174 92 Grand Junction, Steamboat Springs, Craig, Aspen

4 118 122 Highlands Ranch, Littleton

4 121 118 Lakewood, Littleton

4 125 111 Morrison, Evergreen, Bailey, Conifer, Idaho Springs, Breckenridge

4 127 114 Wheatridge, Arvada, Lakewood

4 161 104 Arvada, Westminster, Granby, Walden, Winter Park

4 167 116 Greeley, Eaton, Ault

4 175 93 Rifle, Glenwood Springs, Vail, Clifton, Grand Junction

Total 3012

Q33. Section II.B.4, Product Distribution, Page 12

Per the RFP…”the Lottery distributes the majority of tickets through a full courier delivery system that handles the initial and replenishment of all ticket stock.” Will the Lottery please provide the following information:

Question 1: How often are new games launched?

Question 2: What is the average number of orders for an initial new game launch?

Question 3: What is the current method of generating replenishment orders for instant games?

Question 4: Will the Lottery please provide the total number of initial launch packages shipped from January 1 – September 30, 2016 and for calendar 2015?

Question 5: Will the Lottery please provide the total number of replenishment order packages shipped from January 1 – September 30, 2016 and for calendar 2015?

Question 6: Will the Lottery please clarify whether ‘ticket stock’ refers to instant ticket stock or ticket stock for draw games?

A33. Question 1 -- Games are launched on an as needed basis. For example, if we run low or out of inventory for a $5 game, then we will launch a new $5 game. We do not plan out new game releases based on a pre-determined schedule (e.g. every 4 to 5 weeks).

Question 2 -- Average order amount is 2,653 per initial new game launch.

Question 3 -- We have an Auto Reorder system that generates replenishment orders Monday through Friday. On the retailer’s order day (which is once a week) the system generates their replenishment order based on sales history for their Scratch game mix.

Question 4 -- Initial launch package orders shipped for 1/1/16 through 9/30/16 were 82,475.

Initial launch package orders shipped for calendar year 2015 were 119,207.

Question 5 -- Replenishment package orders shipped for 1/1/16 through 9/30/16 were 101,457.

Replenishment package orders shipped for calendar year 2015 were 133,359.

Question 6 – Instant ticket stock.

Q34. Section III, A.1.a., Primary Contractor, Page 15

Question: In this section it states that the Primary Contractor “will receive a payment based on price per thousand.” Considering the wide variety of ticket sizes specified, will the Lottery please accept Separately Priced Features on a per square inch of ticket area per one thousand tickets basis?

A34. Yes.

Q35. Section III.B.1.a (4), Ticket Stock, Page 16

Question: Can the Lottery please provide specifications or additional information regarding Ticket Vending Machine ticket constraints/limitations such as paper thickness, perforation length (over size tickets), pouch ticket packaging, die cut limitations etc.

A35. The Lottery’s vending machines currently accept ticket stock and specifications as listed in each contractor’s customer specification documents. The longest/widest tickets that can be dispensed are 4” x 12”. Oversized tickets and pouch tickets cannot be dispensed from the Lottery’s vending machines. The Lottery may be able to dispense die cut tickets that meet the current Scratch ticket parameters from vending machines.

Q36. Section III, B.2.a.(9), Ticket/Game Features and Services, Page 23

Question: Item 9 specifies that “one card/insert is to be included in each pack of tickets for all games. This includes inserts for unique color/name pulse as required by individual game.” Will the Lottery please specify the number of colors required on each side of the insert cards?

A36. The inserts are a representation of the Scratch games associated with the inserts therefore, the number of colors should be consistent with the requirements of the ticket art (the breakdown for ticket art is a minimum of 14 colors -- 6 spot display, 6 overprint, and 2 on the back of the ticket).

An example of a current insert card has been added to VSS.

Q37. Section III.B.3.a(25), Page 25

Question: Are virtual Instant Ticket trials intended to be demos of digital versions of printed games or are they meant to be more engaging games that are played for fun?

A37. The Colorado Lottery is looking to incorporate future technology and innovation into its Scratch product line. In response to your question, the Lottery is looking for ways to encourage players to take their current playing experiences to another level by incorporating “Play for Fun” interactive games to current Scratch games. However, in the future, if the State of Colorado allows the Lottery to market electronic products via the Internet, digital versions of current Scratch games is a possibility.

Q38. Section E.1.a, Scratch Game Support, Question 76(a) and Section E.1.b, Marketing

Support, Question 80, Pages 50-52

Question: Will the Lottery please clarify if the “three sample tickets per price point” required in Q80 are in addition to the ten (10) games requested in Q76(a).

A38. Yes, this is an opportunity for offerors to demonstrate unique game ideas that will boost the Lottery Scratch product line

Q39. Section III.G.1, Ticket Vending Machines, Page 55

Question: Will the Lottery please confirm that specialty games such as pouch and oversize games and not required to be dispensed by the required Ticket Vending Machines?

A39. Specialty games will not be required to be dispensed by the required TVMs.

Q40. Section III.G, Ticket Vending Machines, Page 55

Question 1: Is the Lottery looking for a price for Ticket Vending Machine hardware only or for a price for hardware and software to integrate with the Lottery’s Gaming System (items 4, 5 and 6)?

Question 2: If integration is required, will the Lottery please provide detailed information on communication protocols and message formats required to integrate with the Lottery’s Gaming System. This information is necessary in order to determine the scope of work for pricing. If this information is not available at this time, will the Lottery please allow To-Be-Negotiated pricing for Ticket Vending Machines?

A40. At this time, the Colorado Lottery is only looking for pricing for TVM hardware. If the Lottery decides to pursue this option in the future, software integration pricing will be negotiated at that time.

Q41. Section III.H, Ticket Distribution/Cooperative Services, Page 56

Question 1: Will the Lottery please clarify if the pricing for Scratch ticket inventory management, sales analysis, research, warehousing, telemarketing, and ticket delivery should include contractor sales, warehousing and distribution facility with contractor provided staffing?

Question 2: Does the Lottery require that any proposed telemarketing, warehousing or distribution center be located in Colorado?

A41. Question 1 – Yes, Question 2 – No, as long as the offeror can meet the needs of distribution and cooperative services the Lottery would not require the location of these services to be in Colorado

Q42. Appendix B - Primary Contractor Pricing, #2 Ticket Reorders, Page 2 of 5

Question: In the bottom table, there are two blank spaces in the Ticket Size row. Will the

Lottery please confirm that the first blank cell (where Pack Size is 60) should read Size F 4.00” x 8.00” and the second blank cell (where Pack Size is 60) should read Size G 4.00” x 10.00”?

A42. That is correct, the first cell is size F and the second is size G.

Q43. Section III.6.a., Account Team and Management Representative, Page 35

Question: In regards to the Account Team – specifically the Research Specialist position, would the Lottery provide more information on what activities and projects this position will assist with? For example, will the research projects this person works on be dedicated to the instant product only or cover both instant and draw? Are there any specific background qualifications this person should have?

A43. The Research Specialist would be involved in the projects outlined in the RFP if the Lottery requests them. They may include geo-mapping, attribute analysis, state-of-the-state planning meetings, economic and optimization research, segmentation studies (2 per contract term), tracking studies (4 per year) and their involvement in offering their expertise in developing research for online communities.

Research will focus on the Scratch product and may, in some instances, include Jackpot games but to a much lesser extent.

In general, tasks include:

Meeting and liaising with us to negotiate and agree on research projects;

Preparing briefs and commissioning research;

Liaising with and managing third-party research vendors;

Monitoring focus groups;

Monitoring the progress of research projects;

Analyzing and interpreting data to identify patterns and solutions;

Advising senior management on how to best use research findings.

Background qualifications preferred include:

Good interpersonal skills, with strong communication skills;

Good analytical and numerical skills;

Good understanding of research methodologies;

Accuracy and attention to detail;

The ability to use initiative;

Excellent organizational skills;

Business awareness;

Creativity and problem-solving skills;

Teamwork and negotiation skills;

Flexibility and drive;

An interest in psychology and behavior.

Q44. General Questions: We would like to respectfully request the Lottery’s tax ID number for the purposes of our courier shipment of the response to this RFP. Per our courier company, UPS, our understanding is that US Customs and Border Protections and US Homeland Security requires that this number be provided on documentation when the Lottery is deemed to be ‘importing’ anything i.e. the proposal response. If this number is not provided on UPS’ shipping paperwork that we fill out when we ship the boxes then it must be found and added to the paperwork by those agencies. When the tax ID number is left out, delays have been caused in the past. In order to ensure that there are no issues at customs and to expedite delivery, please provide the tax ID number.

A44. FEIN for the Colorado Lottery is 84-0897311

Q45. Page 15, III. Statement of Work, A. Overview, 1. Primary Contractor:

Question: Will the Lottery assign a minimum of work for the primary vendor each year or will it solely be tallied over the life of the contract?

A45. The amount of work will be on a yearly basis.

Q46. Page 12, II. Background, Overview and Goals, B. Overview, 4. Product Distribution:

Question: Would the Lottery please provide the number of TVMs currently in the market?

Question: Would the Lottery please provide average sales per TVM?

Question: Does the Lottery use menu boards?

Question: Can the Lottery please provide the percentage of on-counter vs. in-counter dispensers used at retail locations across the state?

Question: Can the Lottery please provide the average number of facings at retail?

Question: Would the Lottery please provide detail on its field sales rep call schedule (i.e.

do they see each retailer once a month, or is it tiered)?

A46. Question 1 -- 630 TVMs are currently in the market.

Question 2 -- $33,848 is the average Scratch sales per TVM. Average total sales (Scratch plus jackpot) per TVM is $38,600.

Question 3 – Yes

Question 4 -- 65% of retailers have in-counter units and 35% have on-counter units.

Question 5 -- 70% of retailers have 24 facings. The average number of facings overall is 21.

Question 6 -- Sales reps visit retailers every two weeks.

Q47. Page 12, II. Background, Overview and Goals, B. Overview, 5. Retail Network:

Question: What is the ratio of corporate vs. independent retailers?

A47. 61% of our retail base is corporate retailers and 39% are independent retailers.

Q48. Page 12, II. Background, Overview and Goals, B. Overview, 6. POS, Promotion and

Advertising:

Question: Has the Lottery conducted any retailer promotions in the last year? If so, would the Lottery please provide the number of promotions and details of each?

Question: Does the Lottery have a separate budget for retail promotions/incentives? If so, what is the budget amount and what percentage of the budget is allocated to instants?

A48. Question 1 -- 28 Sales Reps have conducted the following 2016 promotions at the store level:

8 promotions tied to the TVM redemption feature. Customers who redeem their Lottery winning ticket through the TVM, received a free $1 Scratch ticket.

4 promotions tied to the Lucky for Life Game. Buy a $6 Lucky for Life ticket, receive a free $1 Scratch ticket.

7 Sales reps have conducted the following 2016 promotions at the store level:

3 prize wheel promotions – customers who purchase $20 in Scratch tickets can spin the Lottery wheel for a prize (free Scratch tickets or a free Lottery premium item).

3 Sell, Sign and Win promotions. Sell a $50 ticket, sign a square and the clerk can win free Scratch tickets.

In addition – the Lottery also conducts Jackpot game promotions via the Lottery’s Jackpot terminals

Question 2 -- The FY17 budget for retail promotions is $494,500. 54.5% ($269,500) is budgeted for Scratch tickets

Q49. Page 14, III. Statement of Work, A. Overview:

Question: In the table provided within this section, sections are identified that outline the services required to be provided by the Primary Contractor and Secondary Contractor.

Would the Lottery allow Vendor’s to bid on a Secondary contract ONLY and if so, would the Vendor then only be responsible for responding to those sections identified as services to be provided by the Secondary Contractor within the table provided (ie. all section with the exception of D.5, E.1b.3, and E.2 a-d)? Also, please confirm that only Secondary Contractor Pricing would be required in this scenario?

A49. It is up to the offeror to determine if they want to bid on either or both primary and secondary portions of this RFP. The Lottery recommends bidding on both.

Q50. Page 16, III. Statement of Work, B. Product and Production Services, 1. Product

Specifications, b. Ticket Size:

Question: Our understanding is that the pack height cannot exceed 10”, this section indicates that Ticket Size H is 4” x 12” which exceeds 10”. Can the Lottery please clarify?

A50. The Colorado Lottery currently offers games as large 4” x 12” and all current dispensers including TVMs can dispense this ticket size.

Q51. Page 18, III. Statement of Work, B. Product and Production Services, 1. Product

Specifications, f. Ticket Ink:

“The Contractor will be able to produce a minimum of fourteen (14) colors, including display, overprint, and ticket back colors. Colors must be consistent from one surface to the other (ie., display and overprint colors). The printing method (or process) will be submitted for pre-approval by the Lottery.”

Question: Can the Lottery please clarify if those 14 colors include security ink/layers?

A51. The breakdown is 6 spot display, 6 overprint, and 2 on the back of the ticket. The colors do not include security/ink layers.

Q52. Page 22, III. Statement of Work, B. Product and Production Services, 1. Product

Specifications, q. Display and Overnight Printing, (1):

“Contractor will be capable of full-bleed graphic designs by applying up to fourteen (14) colors (i.e, spot, display and overprint) on top of the scratch-off material on each ticket front. Spot colors may be specified by the Lottery as (PMS) Pantone Matching System colors or equivalent.”

Question: Does the Lottery expect PMS colors instead of CMYK at the same price?

Furthermore, is this a total of 14 separate colors/printing stations, or a combination of, for example, process colors to create the 14 colors?

A52. The offerors can choose between PMS and CMYK. The 14 colors does not refer to 14 separate color stations it refers to a combination of process colors. The breakdown of the 14 colors is as follows -- 6 spot display, 6 overprint, and 2 on the back of the ticket. The colors do not include security/ink layers.

Q53. Page 23, III. Statement of Work, B. Product and Production Services, 1. Product

Specifications, Display and Overprint Printing, (1):

Question: In the Lottery’s 2010 Q&A color were defined as 6 spot display, 6 overprint, and 2 on the back of the tickets. Is this the same breakdown listed here, for 2016?

A53. Yes

Q54. Page 23, III. Statement of Work, B. Product and Production Services, 2. Ticket/Game

Features and Services, a. Ticket Games/Features and Services, (4):

“Unusual prize insurance for prizes exceeding $25,000.”

Question: Can the Lottery please define ‘unusual prize insurance’?

A54. It is the State’s intent that this would insure the prizes over $25,000. The term “unusual” is used to signify prizes equaling sums higher than $25,000 since it is unusual to win such prize amounts.

Q55. Page 23, III. Statement of Work, B. Product and Production Services, 2. Ticket/Game

Features and Services, a. Ticket Games/Features and Services, (9) Retailer Display Cards:

One card/insert placed in each pack of tickets for all games. This includes inserts for unique color/name pulse as required by individual game (currently 4” wide by 3.5” high).”

Question: Would the Lottery please clarify the insert size for 4” x 4.5” tickets. Will the

Lottery consider less than 4” wide in order to allow proper placement in the books?

Please provide further detail regarding the specifications for the Retailer Display Cards.

A55. The size of the inserts needs to remain at this size to fit our display units. All books of tickets are 4” wide so the inserts should always fit in the book.

Q56. Page 24, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (2):

Question: Will the Lottery please define metallic ink in relation to simulated foil (12) of this same section.

A56. Metallic ink is an ink while simulate foil is a paper color process.

Q57. Page 24, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (7) Multiple Color Ink Imaging:

Question: Please provide numbers of colors included in multiple color ink imaging.

Also, please provide samples of multiple color ink imaging.

A57. Multiple color ink imaging could require up to 6 colors in the spot display. The Lottery does not have samples however, this is a standard printing technique used across the industry.

Q58. Page 24, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (11) Printing on Shrink Wrap:

Question: Please provide samples. Also, please provide the specs for shrink wrapping-sizes, colors, etc.

A58. Shrink wrapping is a standard industry requirement. All vendors have produced and delivered games for the Lottery where the games have been shrink-wrapped. The Lottery does not have samples of colored/printing on shrink-wrapping. If this feature is not available please note this in your response.

Q59. Page 24, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (12) Simulated Foil:

Question: Due to printing variations between Vendors, please provide samples to indicate expectations of the Lottery.

A59. The Colorado Lottery does not have samples of simulated foil. Simulated foil is printing that has a look of foil paper.

Q60. Page 24, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (13) Pearlescent Ink:

Question: Please provide samples of tickets with pearlescent ink.

A60. Pearlescent ink is a standard printing technique with ink featuring a “sparkling” characteristic.

The Lottery does not have samples of this ink.

Q61. Page 25, III. Statement of Work, B. Separately Priced Ticket/Game Features and Services,

a. Additional Ticket/Game Features and Services, (24) Oversized Tickets:

Question: Please provide samples and specs for oversized tickets.

A61. Oversized tickets are tickets sizes greater than those measuring 4” x 12”. The Lottery does not have samples of oversized tickets.

Q62. Page 25, III. Statement of Work, B. Product and Production Services, 3. Separately Priced

Ticket/Game Features and Services, a. Additional Ticket/Game Features and Services,

(17) Retailer Games:

Question: Can the Lottery please clarify how it defines ‘Retailer Games’?

A62. Retailer games are games specifically designed for individual retailers and would be used to support co-promotions. This type of game may include an “every ticket is a winner feature.”

Q63. Page 26, III. Statement of Work, B. Product and Production Services, 3. Separately Priced

Ticket/Game Features and Services, b. Bar Coded Coupons/Lottery Bucks:

“To accomplish its Scratch ticket marketing objectives, the Lottery may wish to utilize direct mail coupons; Lottery generated coupons, e-coupons or other promotion materials. Each coupon and/or Lottery buck must have a unique bar code that meets the validation specifications outlined in this RFP.”

Question: Can the Lottery please clarify the quantities required for these types of coupons and can it also provide details on size and colors, as well as samples?

A63. The Lottery has not offered a Scratch related coupon ticket; however, this may be a product the

Lottery would like to introduce in the future. Future coupons could have a play area with scratch-off material. Security and printing specifications would be similar to those used for traditional Scratch games.

Q64 Page 26, Q18:

“Identify your patented processes and provide no more than five (5) ticket samples to demonstrate those processes.” In contrast, Page 43, Q66 states: “Provide twenty (20) Scratch tickets from each price point and twenty (20) Scratch tickets utilizing each patented process as described in your respond to Q18.”

Question: Will the Lottery please clarify the difference in samples? Can the Lottery please confirm that only those samples required within Q66 will be used for security evaluation?

A64. This is correct. The samples required in Q66 will be used for all evaluation purposes. The RFP has been updated to reflect this.

Q65. Page 26, Q20. “Provide limited samples, if available.”

Question: Can the Lottery please clarify the quantity of samples preferred for each ticket feature/design?

A65. The samples required in Q66 will be used for all evaluation purposes – the RFP has been updated to reflect this.

Q66. Page 28, III. Statement of Work, B. Product and Production Services, 4. Production

Services Specifications, c. Mechanical Art:

“For each game, the Contractor will provide final mechanical art and a color sample for the front and back of the ticket for approval by the Lottery.”

Question: Is the requirement for a color sample for the back of the ticket a new requirement?

A66. The Lottery has always required mechanical art of both the front and ticket back prior to printing approval.

Q67. Page 29, III. Statement of Work, B. Product and Production Services, 4. Production

Services Specifications, e. Test Games:

“The Contractor will provide test games immediately as requested by the Lottery…that are printed using the actual printed process…”

Question: Can the Lottery please clarify this expectation and what timeline is expected for emergency tickets printed?

A67. The production of test games follows the same guidelines as regular “real” Scratch games.

Once the working papers are finalized, the Lottery will send a print authorization to the contractors who then have 30 days to deliver the game to the Lottery.

Q68. Page 29, III. Statement of Work, B. Product and Production Services, 4. Production

Services Specifications, f. Ticket Production and Delivery Timeline:

“The Contractor will provide weekly updates of all printing and production schedules…”

Question: In contrast with this statement, on Page 32, Q32 the Lottery asks for samples of bi-weekly schedules of the same type. Can the Lottery please clarify the exact timeframe it requires?

A68. The Lottery would prefer weekly updates. Page 32, Q32 of the RFP has been updated to reflect these requirements.

Q69. Page 33, III. Statement of Work, B. Product and Production Services, 5. Technology

Specifications and Services, a. Computer System Compatibility:

“Contractors must maintain media compatibility with the Lottery’s computer and online systems and all peripherals…” followed by Q40 which states: “Identify alternative methods by which Lottery personnel can approve production of Scratch games.”

Question: Can the Lottery please explain the connection between this first paragraph and the following question?

A69. This question was…