Origin_System_Maintenance_Contract_-_Smartplay.pdf

Contract

Contract No. CTR079107 Origin System Maintenance

Arizona Lottery 4740 E. University Drive

Phoenix, AZ 85034

Table of Contents

Scope of Work 1 Exhibit A - Pricing 5 Special Terms and Conditions 6 Addendum A to the Special Terms and Conditions 30 Addendum B to the Special Terms and Conditions 35 Uniform Terms and Conditions 10.5 40 Contract Signature Page 58

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Scope of Work

Arizona Lottery

1. Purpose and Background

1.1. Background. The mission of the Arizona Lottery (Lottery) is to support Arizona programs for the public benefit by maximizing net revenue in a responsible manner. With a governor-appointed Commission and Executive Director overseeing operations, the Lottery works with a retailer network to provide players with innovative and entertaining games.

1.2. Purpose: The Contractor shall provide maintenance on Origin Systems 1017557101, 1017557102, 1017557103, 1017557106 (collectively, the “Origin System”).

2. Definitions

2.1. Incident Report (IR): An official report prepared by the Contractor of a non-user error occurrence, error or software.

2.2. RNS: The Random Number Server within the Origin System is a standalone computer and software package that compiles and tests random numbers and makes them available for drawings.

2.3. UI: The inherent code of the Origin System that provides the User Interface.

3. Maintenance Requirements

3.1. Contractor shall provide 24/7 Telephone Support for Priority 1 incidents.

3.1.1. The contact number for support is (609) 880-1860.

3.1.2. The Contractor’s answering service shall take a message if the phone isn’t answered and relay a message to the Contractor for immediate attention.

3.1.3. Secondary/failsafe phones are:

3.1.3.1. Mike Rado: (484) 332-4565

3.1.3.2. Tom Markert (215) 768-7568

3.2. For Priority 2 and 3 incidents, the Lottery should submit a ticket at www.smartplaytechservices.com, however, the Lottery may still contact the Contractor through the telephone support line if preferred.

3.3. Contractor shall repair or replace Origin System’s components and all peripherals provided by Contractor in the event of a failure due to software programming errors, equipment failure due to normal use of the Origin System, or a manufactured defect in the Origin System.

3.4. Contractor shall provide on-site emergency service within two business days of notification for any service that requires seal removal.

3.5. Contractor shall complete one annual preventative maintenance service visit consisting of:

3.5.1. Inspection and verification that all security seals are intact;

3.5.2. Chassis and security seals will be opened in the presence of the Lottery’s contracted or internal auditing team, as determined by the Lottery and the internal components’ serial numbers will be compared against the Lottery and auditing team’s archival data;

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Arizona Lottery

3.5.3. Cleaning, tightening, and inspection of all switches and electrical connections;

3.5.4. Reseat of all cards and components;

3.5.5. Inspection and cleaning of all components, including filters and cooling fans;

3.5.6. Bios battery replacement and confirmation of security settings;

3.5.7. If desired, copying of archived data to flash drive.

3.6. When the Lottery notifies the Contractor of a system error, Contractor will attempt to confirm the existence of such error. Once the existence of an error is confirmed, Contractor shall correct the error, resolve the problem, or otherwise provide a workaround in a timely manner.

3.7. Contractor will not cover, or provide replacement of, consumable items, such as ink cartridges.

3.8. This Contractor does not cover damage or system failures caused by modification or tampering of the Origin System’s software of physical components by anyone other than Contractor approved technicians.

3.9. Peripherals, including, but not limited to, printers, monitors, keyboards, or mice, will be shipped to Contractor, at Lottery’s expense, for, at Contractor’s sole option, repair or replacement.

4. Documentation Requirements

4.1. Incident Reports (IR)

4.1.1. An IR shall be prepared for every Priority Incident reported to the Contractor.

Each report shall contain the following headings:

4.1.1.1. Reporter: The Contractor employee in charge of seeing the issue is corrected.

4.1.1.2. Customer Name: Arizona Lottery

4.1.1.3. Witness to the incident: The Arizona Lottery employee(s) and/or auditor who witnessed the incident

4.1.1.4. Date of Occurrence: When the incident first happened

4.1.1.5. Date Issue was reported: Date Contractor was contacted

4.1.1.6. Date issue was corrected and/or closed: If the issue is still “open” this shall be noted here

4.1.1.7. Priority Level: 1, 2, or 3

4.1.1.8. Description: A description of the incident from the Arizona

Lottery’s perspective.

4.1.1.9. Impact on customer: An Arizona Lottery impact statement which answers, are the system(s) capable of being used for a drawing?

4.1.1.10. Corrective Actions: Measures taken by the Contractor to correct or mitigate the incident.

4.1.1.11. Actions taken or recommended to prevent this or similar incidents in the future: Alternative procedures or measures, by Arizona

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Arizona Lottery

Lottery or Contractor, that may be taken to prevent this or similar incidents in the future.

4.1.2. Preventative Maintenance Checklist: An Origin Maintenance Checklist will be used during preventative maintenance site visits. Copies of this checklist will be kept for seven (7) years in the Arizona Lottery file by the Contractor. Upon request, copies can be made available to the Arizona Lottery with passwords redacted.

4.1.3. Submission Letters: Submission letters will be prepared for all certification submissions and software updates. Each will include the matrix of all games configured. For updates, letters will include the purpose of the update.

5. Service Level Requirements Priority Cause for Service Action needed Response time

1 Origin System is non-operational and requires or is likely to require seal removal to remedy

Contractor Technician responds to site. Technician responds as early as possible.

Typically within 24 hours of notification or as soon as commercial transportation accommodations can be made.

1 RNS/UI software error causing concern for game integrity

● Investigate and test as soon as humanly possible or accessible for remote troubleshooting.

● Notify senior management.

● Develop and test RNS update.

● Notify certification authority.

● Notify additional clients running the same RNS version or similar UI which may contain the same error.

● Dispatch technician to replace RNS flash card.

As soon as possible.

2 Peripheral failure. Printer, monitor, Portal, scan converter, DVD recorder fails

Send a replacement via two-day, trackable shipping and provide installation instructions and phone support

Within two (2) business days of notification

2 UI/RNS/Java software error which causes or potentially causes system instability

● Investigate and test current or next work day from notification.

● Notify senior Contractor management.

● Notify certification authority.

● Notify additional clients running the same RNS version or similar UI which may contain the same error.

● Develop and test updates.

Respond within two (2) business days and/or as dictated by client concern.

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Arizona Lottery

● Discuss w/ client the issue and vulnerability it causes.

● Provide the update to the client if requested. Otherwise, apply as part of the next software release

3 Preventative maintenance ● Technician responds to site Annual visit scheduled at a time that is mutually convenient to both the Lottery and the Contractor.

3 UI minor software issue

Driver, java update

● Investigate and test within five (5) days of notification.

● Notify additional clients running the same RNS version or similar UI which may contain the same error.

● Develop and test updates.

● Discuss with the Arizona Lottery the issue and vulnerability it causes.

● Provide the update to the Arizona

Lottery if requested. Otherwise, apply as part of the next software release

● Notify certification authority only if an update is applied.

Respond within ten (10) days and/or as requested by the Lottery.

3 Replace obsolete hardware

As approved by both Contractor and the Lottery. During preventative maintenance

6. Development Services

6.1. Contractor shall provide development services to support software changes, hardware changes, new games and features, and related services on an as-needed basis.

6.2. Any necessary software licensing changes or hardware changes shall be made as amendments to this Contract.

7. Arizona Lottery Requirements

7.1. The Lottery will maintain 24-hour video monitoring and physical security of the Origin System, at a level comparable to industry standards.

7.2. The Lottery shall maintain a provable chain of custody for all software updates to the Origin System.

8. Additional Goods/Services

8.1. Origin Portals Maintenance

8.1.1. The Lottery owns Origin Portals: 1017557104 and 1017557105. The Lottery may require maintenance on an as-needed basis.

8.2. Software/Hardware Refresh

8.2.1. The Lottery may require software and hardware refreshes on an as-needed basis.

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Exhibit A

Arizona Lottery

Exhibit A - Pricing

Contractor will be compensated based on the pricing provided for satisfactorily carrying out its obligations under the Contract. Pricing shall be defined by the table below:

Description Unit of Measure Cost

Origin System Maintenance Year $19,000

Total yearly cost will be distributed as follows:

Month 1 Each $6,000

Month 2 Each $3,000

Months 3-12 Each $1,000

Development Services

Developer Hour $150.00

Technician Hour $85.00

Additional Goods/Services

Origin Portal Maintenance. Pricing shall only apply if and when the Lottery requests that Contractor begin providing this service.

Month $84.00

Software/Hardware Refresh Each TBD at Time of Request

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Special Terms and Conditions

Arizona Lottery

1. Definition of Terms: As used in the Contract, the terms listed below are defined as follows:

1.1. Acceptance: The document titled “Offer and Acceptance Form” bearing the state contract number once Procurement Officer has signed it to signify (1) State’s formal acceptance of the Accepted Offer and (2) the formation of the Contract. For clarity of intent, the foregoing is not to be confused with the term “acceptance” used throughout the Contract in the context of delivery, inspection, etc., with respect to Materials or Services.

1.2. Accepted Offer:

1.2.1. If State did not request a Revised Offer, then “Accepted Offer” means the Initial Offer.

1.2.2. If State requested a Revised Offer but not a Best and Final Offer, then “Accepted Offer” means the latest Revised Offer.

1.2.3. If State requested a Best and Final Offer, then “Accepted Offer” means the Best and Final Offer.

1.3. “AI” means the science and engineering of making machines capable of performing tasks that are typically associated with human intelligence, such as learning and problem-solving, and includes without limitation: AI systems, classic AI, external AI, generative AI, and large language model (LLM) AI.

1.4. Arizona Procurement Code: The Arizona Procurement Code consists of Arizona Revised Statutes (A.R.S.) §§ 41-2501 et seq. and Arizona Administrative Code (A.A.C.)

R2-7-101 et seq. There is additional information in the Solicitation Instructions regarding how to access these state statutes and rules.

1.5. Arizona Risk and Authorization Management Program (AZRAMP): is used by the Arizona Department of Homeland Security to evaluate Cloud services and Contractors that will transfer, process, or store state data outside of state-managed or controlled networks, and has three levels of control review:

1.5.1. AZRAMP Level 1 Prerequisite: 35 Controls

1.5.2. AZRAMP Level 2 Low Impact: Public Data Classification

1.5.3. AZRAMP Level 3 Moderate Impact: Confidential Data Classification

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1.6. Arizona Transaction Privilege Tax (TPT): For information, refer to the Arizona

Department of Revenue (DOR) website at: https://azdor.gov/transaction-privilege-tax-tpt

1.7. Attachment. Any item that:

1.7.1. The Solicitation required Offeror to submit as part of the Offer (e.g., Initial Offer, Revised Offer, or Best and Final Offer);

1.7.2. Was attached to an Offer when submitted; and

1.7.3. Was included in the Accepted Offer.

1.8. Cloud Services: Cloud or Cloud Services means any Software as a Service (SaaS), Infrastructure as a Service (IaaS), or Platform as a Service (Paas) involving the transfer, processing, or storage of state Data outside the control of state-managed and controlled networks.

1.9. Contract Terms and Conditions: The Special Terms and Conditions and the Uniform Terms and Conditions taken collectively.

1.10. Contractor: The Person identified on the Accepted Offer who has entered into the Contract with the State.

1.11. Contractor Indemnitor: Contractor or any of its owners, officers, directors, agents, employees, or Subcontractors.

1.12. Co-Op Buyer: A member of the State Purchasing Cooperative that has entered into a “Cooperative Purchasing Agreement” with the Arizona Department of Administration State Procurement Office under A.R.S. § 41-2632. Unless there is an applicable Cooperative Purchasing Agreement in effect at the time, a State Purchasing Cooperative member cannot be a Co-Op Buyer. For reference, “Co-Op Buyer” is to be construed as encompassing an “eligible procurement unit” under A.A.C. R2-7-101(23).

NOTE: Membership in the State Purchasing Cooperative is open to all Arizona political subdivisions, including cities, counties, school districts, and special districts. Membership is also available to non-profit organizations, other state governments, the federal government and tribal nations. For reference, “non-profit organizations” are defined in A.R.S. § 41-2631(4) as any nonprofit corporation as designated by the I.R.S. under Section 501(c)(3) through 501(c)(6) of the tax code.

1.13. Data Breach: Data Breach is used herein as defined as stated in A.R.S. Title 18, chapter 5, article 4 (Data Security Breaches), or in any relevant state or federal standard, to indicate an unauthorized acquisition of and unauthorized access that materially compromises the security or confidentiality of unencrypted and unredacted computerized

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Arizona Lottery personal information maintained as part of a database of personal information regarding multiple individuals.

1.14. Eligible Agency:

1.14.1. If the Special Terms and Conditions indicate that the Contract is a “single-agency” contract, then “Eligible Agency” means the particular State of Arizona agency, university, commission, or board identified therein.

1.14.2. If the Special Terms and Conditions indicate that the Contract is a mandatory statewide contract, then “Eligible Agency” means any State of Arizona department, agency, university, commission, or board.

1.14.3. If the Special Terms and Conditions indicate that the Contract is a “cooperative” contract available for use by Co-Op Buyers, then “Eligible Agency” means any State of Arizona department, agency, university, commission, board, or any Co-Op Buyer.

1.15. Federal Risk and Authorization Management Program (FedRAMP): A federal government program that provides a standardized approach to security assessment, authorization, and continuous monitoring specifically for Cloud products and services relied upon by federal entities that store, process and transmit federal information.

1.16. NIST: NIST is the National Institute of Standards and Technology. For more information, see https://www.nist.gov/.

1.16.1. NIST Low Impact: If a Contractor may process, transmit, or store Public State Data (per State Data Classification Policy P8110), metadata, and/or Data that may be released to the public that requires no additional levels of protection during its work under the Contract, or as directed by the State Chief Privacy Officer (Arizona Department of Homeland Security Governance, Risk, and Compliance team), then the Contractor shall comply with NIST Low Impact security controls.

1.16.2. NIST Moderate Impact: If a Contractor may process, transmit, or store Confidential State Data (per State Data Classification Policy P8110) or metadata during its work under the Contract, then the Contractor shall comply with NIST Moderate Impact security controls.

1.17. Order: The instrument by which the Eligible Agency authorizes a Contractor to perform some or all of the Work. Whether the Contract will have one Order or many Orders depends on the scope of the Contract and how the State will use it. The Special Terms

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Arizona Lottery and Conditions provide that information. Any of the following are construed as an “Order”: “Purchase order,” “task order,” “service order,” or “job order”.

1.18. State’s eProcurement System: The State’s official electronic procurement system, established pursuant to A.A.C. R2-7-201 as set forth in the Arizona Department of Administration State Procurement Office policy document Technical Bulletin No. 020, The State’s eProcurement System–The Official State eProcurement System. Technical Bulletin No. 020 is available online at:

https://spo.az.gov/sites/default/files/documents/files/TB_020_APP_20181024.pdf

1.19. State: With respect to the Contract generally, “State” means the State of Arizona and its department, agency, university, commission, or board that has executed the Contract.

With respect to administration or rights, remedies, obligations and duties under the Contract for a given Order, “State” means each Eligible Agency or Co-Op Buyer who has issued the Order.

1.20. State Indemnitees: Collectively, the State of Arizona, its departments, agencies, universities, commissions, and boards and, and their respective officers, agents, and employees.

1.21. StateRAMP: A non-profit organization that provides a uniform approach to verifying that the cybersecurity of Cloud service providers (CSPs) meets the standards and regulations needed to do business with state and local governments.

1.22. Work: The totality of the Materials and the Services and all the acts of administration, creation, production, and performance necessary to fulfill and incidental to fulfilling all of Contractor's obligations and duties under the Contract in conformance with the Contract and applicable laws.

2. Contract Interpretations

2.1. Usage. Where the Contract:

2.1.1. assigns obligations to Contractor, any reference to “Contractor” is to be construed to be a reference to the Contractor and all Subcontractors, whether they are first-tier Subcontractors, sub-subcontractors, suppliers, sub-suppliers, consultants, or sub-consultants, as well as all of Contractor’s and the Subcontractor’s respective agents, representatives, and employees in every instance unless the context plainly requires that it is a reference only to Contractor as apart from Subcontractors.

2.1.2. uses the permissive “may” with respect to a party’s actions, determinations, etc., the terms is to be interpreted as in A.A.C. R2-7-101(32) [Definitions]. For

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Arizona Lottery clarity of intent, any right given to State using “State may” or a like construction denotes discretion and freedom to act so far as any regulatory or operative constraints permit in the relevant circumstances, provided that: (a) where written “may, at its discretion,” the discretion extends to whatever is most advantageous to State; and (b) where written only as “may,” the discretion is constrained by what is fair, reasonable, and as accommodating of the respective best interests of both parties as practicable under the circumstances;

2.1.3. uses the imperative “shall” with respect to a party’s actions, duties, etc., the term is to be interpreted as in A.A.C. R2-7-101(44) [Definitions]. Conversely, the phrase “shall not” is to be interpreted as an imperative prohibition.

2.1.4. uses the term “must” with respect to a requirement, criterion, etc., the term is to be interpreted as conveying compulsion or strict necessity;

2.1.5. uses the term “might” with respect to an event, outcome, action, etc., the term is to be interpreted as conveying contingency or non-discretionary conditionality; and

2.1.6. uses the term “will” or the phrases “is to be” or “are to be” with respect to an event, outcome, action, etc., the term or phrase is to be interpreted as conveying such certainty or imperativeness that “shall” is either unnecessary or irrelevant in that instance.

3. Contract Administration and Operation

3.1. Term of Contract. The term of the Contract will commence on the date indicated on the Acceptance and continue for one (1) years unless canceled, terminated, or permissibly extended.

3.2. Contract Extensions. State may at its discretion extend the initial Contract term in increments of one (1) or more months and do so one or more times, provided that the maximum aggregate term of the Contract including extensions cannot exceed the maximum aggregate term of five (5) years.

3.3. Notices and Correspondence

3.3.1. To Contractor. State shall address all Contract correspondence other than formal notices to the email address indicated as “Default for Type” for “General Mailing Address” in Contractor’s corresponding State’s eProcurement System Vendor Profile; and address any required notices to Contractor to the “Contact Name and Title” at the “Mailing Address” indicated

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Arizona Lottery on the Accepted Offer, as that address might have been amended during the term of the Contract.

3.3.2. To State. Contractor shall address all Contract correspondence other than formal notices to the email address indicated in “Contact Instructions” in the State’s eProcurement System Summary for State; and address any required notices to State via email to the Procurement Officer identified as “Purchaser” in the State’s eProcurement System and via mail to the following mailing address:

Arizona Lottery 4740 E. University Dr.

3.3.3. Changes. State may change the designated Procurement Officer, update contact information, or change the applicable mailing address.

3.4. Signing of Contract Amendments. Contractor’s counter-signature (or “approval” in the State’s eProcurement System, in the case of an amendment) is not required to give effect if the Contract Amendment only covers either:

3.4.1. extension of the term of the Contract within the maximum aggregate term; or

3.4.2. modifications of a clerical nature that have no effect on terms, conditions, price, scope, or other material aspect of the Contract.

In every case other than those listed in 3.4.1 and 3.4.2 above, both parties’ signatures (or “approval” in the State’s eProcurement System in the case of an Amendment) are required to give it effect.

3.5. Click-through Terms and Conditions. If either party uses a web-based ordering system, an electronic purchase order system, an electronic order acknowledgement, a form of an electronic acceptance, or any software based ordering system with respect to the Contract (each an “Electronic Ordering System”), the parties acknowledge and agree that an Electronic Ordering System is for ease of administration only, and Contractor is hereby given notice that the persons using Electronic Ordering Systems on behalf of State do not have any actual or apparent authority to create legally binding obligations that vary from the terms and conditions of the Contract. Accordingly, where an authorized State user is required to “click through” or otherwise accept or be made subject to any terms and conditions in using an Electronic Ordering System, any such terms and conditions are deemed void upon presentation. Additionally, where an authorized State user is required to accept or be made subject to any terms and

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Arizona Lottery conditions in accessing or employing any Materials or Services, those terms and conditions will also be void.

3.6. Books and Records

3.6.1. Retain Records. In addition to the audit rights detailed in the Uniform Terms and Conditions, State also requires that, pursuant to A.R.S. § 41-2548(B), Contractor shall retain and shall contractually require each Subcontractor to retain books and records relating to any cost and pricing Data submitted in satisfaction of § 41-2543 for the period specified in the statute.

3.6.2. Usage Information. Additionally, any and all information (including, but not limited to, documentation or Data) related to Eligible Agency and Co-Op Buyer usage retained solely within the Contractor’s system (for example, related to punch-out or Contractor catalog sales) shall be considered public information or information that can be shared with and distributed by the State freely and for any purpose under the State’s government purpose rights detailed in Section 3 of the Uniform Terms and Conditions [Ownership of Intellectual Property]. Any modifications to this Contract notwithstanding, the State shall have free use of any and all information related to Eligible Agency or Co-Op Buyer purchasing. Upon request by the State, Contractor shall promptly provide the State with any usage information requested and shall not attempt to limit the State's use in any way.

3.6.3. Right To Audit. The retained books and records are subject to audit by State during that period. Pursuant to A.R.S. § 41-2548(B), Contractor shall retain and shall contractually require each Subcontractor to retain books and records relating to performance under the Contract for the period specified in the statute and those retained books and records are subject to audit by State during that period.

3.6.4. Auditing. Contractor or Subcontractor shall either make all such books and records under subparagraphs 3.6.1 and 3.6.2 available to State at all reasonable times or produce the records at a designated State office on State’s demand, the choice of which being at State’s discretion. For the purpose of this paragraph, “reasonable times” are during normal business hours and in such a manner so as to not unreasonably interfere with normal business activities.

3.7. Subcontract

3.7.1. Initial list. At the time of Contract execution, Contractor’s candidate Subcontractors were identified in Attachment Proposed Subcontractors to the

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Accepted Offer [Proposed Subcontractors]. Agreeing to them being included in the Accepted Offer signified Procurement Officer’s advance consent for Contractor to enter into a Subcontract with each candidate, which Contractor shall do as promptly as necessary to ensure its ability to carry out the Work in a timely manner.

3.7.2. Additional names. Contractor shall not enter into a Subcontract to perform Work under the Contract, without first obtaining Procurement Officer’s written consent with any prospective Subcontractor that (a) was not listed on the Attachment Proposed Subcontractors at time of Contract execution or (b) is for any Materials or Services categories other than the ones for which they were previously consented. For either case (a) or (b), Contractor shall submit a written request sufficiently in advance of the need date for those materials or services so that performance under the Contract is not impaired.

Procurement Officer may request any additional information he or she determines is necessary to assess the submittal, and may withhold consent pending it. Approval of additional subcontractors shall be added to the Contract by a bilateral Contract Amendment.

3.7.3. Flow-down. Contractor shall incorporate the provisions, terms, and conditions of the Contract into every Subcontract by inclusion or by reference, as appropriate. When making any post-execution consent requests, Contractor shall include its warrant that it will do the same for the pending Subcontracts covered by the request. Entering into Subcontracts will not relieve Contractor of any of its obligations or duties under the Contract, including, among other things, the duty to supervise and coordinate the work of Subcontractors.

Nothing contained in any Subcontract will create or is to be construed as creating any contractual relationship between State and the Subcontractor.

3.8. Orders

3.8.1. Order Sufficiency. The Contract was awarded in accordance with the Arizona Procurement Code; the transactions and procedures required by the Arizona Procurement Code for competitive source selection have been met. An Order issued that cites the correct State contract number will suffice to authorize the Contractor to provide the Materials and perform the Services covered by that Order.

3.8.2. Order Terms. All Orders are subject to the Contract Terms and Conditions; an Order cannot modify the Contract Terms and Conditions. Any Contractor terms added to quotes or otherwise unilaterally added to Eligible Agency or Co-Op Buyer Orders are null and void.

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3.8.3. Orders are Obligatory. Until the expiration or earlier termination of the

Contract, State may issue and Contractor shall accept Orders that make proper reference to the Contract and are permissible hereunder, provided that, Contractor is not obliged to accept any Order that is not consistent with the then-current pricing, lead times, specifications, or payment provisions of the Contract. Contractor shall fulfill and complete any Orders that are begun but not yet completed as of expiration or earlier termination of the Contract unless State instructs otherwise at the time.

3.8.4. No Minimums or Commitments. (a) Contractor shall not impose any minimum dollar amount, item count, services volume, or services duration on Orders;

(b) State makes no commitment of any kind concerning the quantity or monetary value of activity actually initiated or completed during the term of the Contract; (c) Contractor shall only deliver or perform as authorized by Orders; and (d) State is not limited as to the number of Orders it may issue for the Contract. For clarity of intent, the foregoing applies equally whether an Eligible Agency issues the Order or, if applicable, a Co-Op Buyer issues it.

3.8.5. Non-contracted Materials or Services. Any attempt to knowingly represent for sales, marketing, or related purposes that Materials or Services not specifically awarded are under a State contract is a violation of the Contract and law.

3.9. Order Cancellations. State may cancel Orders within a reasonable period after issuance and at its discretion. The same method used for ordering will be used for cancellation.

3.9.1. If State cancels an Order, then State shall:

3.9.1.1. pay Contractor for any portion of the Materials and Services from that Order that have been properly delivered or performed as of the cancellation effective date; and

3.9.1.2. reimburse Contractor for actual, documented costs incurred in fulfilling the Order up to the cancellation effective date and the cost of any obligations incurred in fulfilling the Order up to the cancellation effective date that demonstrably cannot be canceled or that have pre-established cancellation penalties specified in the relevant Subcontracts, to the extent the penalties are reasonable and customary for the work in question.

3.9.2. Contractor shall not charge or be entitled to charge State for any new costs it incurs after receiving the cancellation notice; State is not liable for any

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Materials that were produced, shipped, or delivered, or Services that were performed before Contractor had acknowledged the corresponding Order.

3.9.3. State shall also be able to cancel Orders freely and without any further obligation at any time prior to Contractor’s formal acknowledgement of the Order.

3.10. The Contract is a single-agency contract for the sole use of the Arizona Lottery

3.10.1. Contractor shall acknowledge each Order from Eligible Agencies within one

(1) business day after receipt by either: (a) “approving” the Order electronically in the State’s eProcurement System, which will indicate Contractor’s unqualified acceptance of the Order as‑issued; or (b) “rejecting” the Order electronically in the State’s eProcurement System, with a concurrent explanation by email to relevant originator as to the reason for rejecting it. By way of reminder, the only grounds on which the Contractor may reject or refuse an Order are those set out in subparagraph 3.8.3 [Orders are Obligatory]. Unless and until Contractor has approved the Order in the State’s eProcurement System, it will have no effect under the Contract and will not oblige either State or Contractor. If the relevant Eligible Agency explicitly instructs at the time that a verbal acceptance is sufficient because of urgency or other unusual circumstances and Contractor duly gives its verbal acceptance, then Contractor will be deemed to have accepted the Order immediately upon commencing performance, provided that, Contractor must follow-up its verbal acceptance by accepting the Purchase Order electronically in the State’s eProcurement System within three (3) business days. Contractor shall thereafter be barred from subsequently rejecting the Order in the State’s eProcurement System and if it does so the rejection will be void.

3.11. Multiple-Use Provisions. Eligible Agencies may issue Orders for Services in several forms, all of which become final and effective by a Purchase Order in the State’s eProcurement System. Orders issued by Co-Op Buyers will be in whatever form the Co-Op Buyer normally uses. Regardless of origin, Orders must cite the State contract number to be valid. State may, at its discretion in each instance, determine the scope, schedule, and price for each Order in any of the following ways:

3.11.1. By choosing some or all of the Materials or Services items covered by the Contract for which a price is established in the Contract, then preparing an Order using those prices (e.g. filling out an order form), and sending it to the Contractor;

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3.11.2. By instructing Contractor to provide a comprehensive proposal of item quantities, combinations, etc., or services hours, personnel, etc., for a defined scope using those established prices as a basis, then validating and negotiating the proposal with Contractor and issuing an Order if and when reaching agreement;

3.11.3. As described in 3.11.2 above but requesting the proposal from both Contractor and other vendors who are contracted within the applicable scope categories and locations, either sequentially or concurrently, then selecting the proposal or proposals combination that is most advantageous to State; or

3.11.4. As described in 3.11.3 above but introducing ad-hoc commercial competition by making the selection and ordering conditional on obtaining more favorable prices than the contractually-established ones.

3.12. Work on State Premises

3.12.1. Compliance With Rules. Contractor is responsible for ensuring that its personnel comply with State’s rules, regulations, policies, documented practices, and documented operating procedures while delivering or installing Materials or performing Services on State’s grounds or in its facilities. For clarity of intent, the foregoing means that if Contractor is required to comply with certain security requirements in order to deliver, install, or perform at that particular location, then it shall do so nonetheless and without entitlement to any additional compensation or additional time for performance if those particular requirements are not expressly stated in the Contract. Contractor is reminded that violation of the prohibition under A.R.S. § 13-1502 against possession of weapons on State’s property by anyone for whom Contractor is responsible is a material breach of contract and grounds for termination for default.

3.12.2. Protection Of Grounds And Facilities. Contractor shall deliver or install the Materials and perform the Services without damaging any State grounds or facilities. Contractor shall repair or replace any damage it does cause promptly and at its own expense, subject to whatever instructions and restrictions State needs to make to prevent inconvenience or disruption of operations. If Contractor fails to make the necessary repairs or replacements in a timely manner, State will be entitled to exercise its remedies under paragraph 8.5 of the Uniform Terms and Conditions [Right of Offset].

3.13. Transitions

3.13.1. During commencement, Contractor shall attend transition meetings with any outgoing suppliers to coordinate and ease the transition so that the impact on

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State’s operations is kept to a minimum. State may elect to have outgoing suppliers complete some or all of their Work or Orders in progress, even if that Work could be covered under the incoming supplier’s Contract.

Conversely, the State may have a continued need for the same Materials and Services upon expiration or earlier termination of the Contract. Accordingly, Contractor shall work closely with any incoming supplier and State to ensure as smooth and complete a transition transfer as is practicable.

3.13.2. Eligible Agency or Co-Op Buyers representative will coordinate all transition activities and facilitate joint development of a comprehensive transition plan by both Contractor and the incoming supplier. As with the incoming transition, State may permit Contractor, when Contractor is outgoing, to complete work or orders in progress to ease the transition as is safest and most efficient in each instance.

3.13.3. RESERVED

4. Costs and Payments

4.1. Type of Pricing. Firm fixed pricing.

4.2. Pricing is all-inclusive, including any ancillary fees and costs required to accomplish the Scope of Work and all aspects of Contractor’s offer as accepted by State.

4.2.1. Details of service not explicitly stated in the Scope of Work or in Contractor’s Offer, but necessarily a part of, are deemed to be understood by Contractor and included herein. All administrative, reporting, or other requirements, all overhead costs and profit and any other costs toward the accomplishment of the requirements in the Contract are included in the pricing provided.

4.2.2. Additional Charges. Any charges or fees not delineated in the Contract shall not be added, billed, or invoiced under the Contract.

4.3. Price Increase. The State may review a fully documented request for a price increase.

The requested increase shall be in writing and be based upon a cost increase to the Contractor that was clearly unpredictable at the time of the offer and is directly correlated to the price of the product concerned. Contractor must provide conclusive evidence of a need for any price increases.

4.3.1. Initial Contract prices shall be honored for one year after award of Contract.

4.3.2. The State needs sufficient time to make a fair and equitable determination in response to any Contractor requests for price adjustments. As a result, the State requests that the Contractor provide ninety (90) days advance notice

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Arizona Lottery prior to any price adjustment whenever possible, and at a minimum, sixty

(60) days advance notice. Requests sent to the State with less than sixty

(60) days notice will be denied, unless the Contractor provides proper documentation demonstrating the urgency of the request. The State shall determine whether the price increase is in the best interest of the State.

4.3.3. All price adjustments will be implemented by a formal Contract Amendment.

State shall determine whether the requested price increase or an alternate option is in the best interest of the State.

4.3.4. State expects Contractors to use Lean Six Sigma principles to reduce costs in their supply chain, and not simply pass new costs on to the State. If a price increase is requested, State will ask for evidence that Lean Six Sigma principles and tools have been used by Contractor to attempt to reduce costs in advance of any request for a price increase under the Contract.

4.4. Price Reductions. Price reductions shall be immediately passed along to State and may be submitted in writing to State for consideration at any time during the Contract period.

The contractor shall offer State a price reduction on the Contract product(s) concurrent with a published price reduction made to other customers. The State at its own discretion may accept a price reduction. The price reduction request shall be in writing and include documentation showing the actual reduction of cost. Sales promotions requests shall include differences in pricing, begin, and end date of promotion along with the products covered.

4.5. Travel. Contractor shall request and receive written approval prior to any travel under the Contract in which reimbursement of expenses will be requested. Contractor will be reimbursed for actual expenses incurred in accordance with the current rates specified in the State's Travel Policy. Contractor shall itemize all per diem and lodging charges.

State Travel Policy, including State rates, may be located at https://gao.az.gov/travel/travel-information. Eligible Agency or State shall reject any claim for travel reimbursement for which Contractor did not receive prior written approval.

4.6. Funding

No particular funding considerations apart from Uniform Terms and Conditions Sections

4.5 [Availability of Funds for the Next State Fiscal Year] and 4.6 [Availability of Funds for the Current State Fiscal Year] have been identified as of the Solicitation publication date.

4.7. Invoicing

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4.7.1. Invoices Go To Ordering Entity. Contractor shall submit all billing notices or invoices to the ordering Eligible Agency or Co-Op Buyer at the address indicated on the applicable Order document or by utilizing the Ordering Entity’s purchasing tool/process.

4.7.2. Minimum Invoice Requirements. Every invoice shall include the following information:

4.7.2.1. Bill-to name and address;

4.7.2.2. Contractor name and contact information;

4.7.2.3. Remit-to address;

4.7.2.4. Invoice number and date;

4.7.2.5. State contract number;

4.7.2.6. Order number (APP PO number);

4.7.2.7. Material or Service description (itemized);

4.7.2.8. Date(s) Services were performed or Materials were delivered;

4.7.2.9. Applicable payment terms;

4.7.2.10. Quantity delivered or performed;

4.7.2.11. Line item unit of measure;

4.7.2.12. Item price;

4.7.2.13. Extended pricing;

4.7.2.14. Receipt for pass-through expenses (if applicable);

4.7.2.15. Taxes (as a separate invoice line item), including the percentage used to calculate taxes;

4.7.2.16. Mailing fees (if applicable); and

4.7.2.17. Total invoice amount due.

4.7.3. No Invoice Without Authorization. Contractor shall not seek payment for any:

4.7.3.1. Materials or Services that have not been authorized on an acknowledged Order;

4.7.3.2. Expediting, overtime, premiums, or upcharges absent State’s express prior approval; or

4.7.3.3. Materials or Services that are the subject of a Contract Amendment that has not been fully signed by the Procurement Officer.

4.7.4. Submitting Invoices. Contractor shall submit an invoice to the ordering

Eligible Agency or Co‑Op Buyer using the form and/or process required by the ordering Eligible Agency or Co-Op Buyer. Every invoice must be signed by Contractor’s authorized representative and accompanied by all

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Arizona Lottery supporting information and documentation required by the Contract and applicable laws.

4.7.5. Defective Invoices. Without prejudice to its other rights under the Contract or further obligation to Contractor, the ordering Eligible Agency or Co-Op Buyer may, at its discretion, reject any materially defective invoice.

4.7.5.1. The ordering Eligible Agency or Co-Op Buyer shall notify the Contractor within five (5) business days after receipt if it determines an invoice to be materially defective.

4.7.5.2. Invoices will be deemed automatically rejected upon delivery if they: are sent to an incorrect address, do not reference the correct State contract and Purchase Order number, or are payable to any Person other than the Contractor.

4.7.5.3. The ordering Eligible Agency or Co-Op Buyer shall have no obligation to pay against a defective invoice unless and until Contractor has re-submitted it free of defects.

4.8. Payments

4.8.1. Payment Deadline. State shall make payments in compliance with Arizona Revised Statutes Titles 35 and 41. Unless and then only to the extent expressly stated otherwise in the Pricing Section of the Special Terms and Conditions above, State shall make payment in full for Materials that have been delivered and accepted and Services that have been performed and accepted within the time specified in A.R.S. § 35-342, after both of the following occur: (a) all of the Materials being invoiced have been delivered or installed (as applicable) and accepted and all of the Services being invoiced have been performed and accepted; and (b) Contractor has provided a complete and accurate invoice in the form and manner called for in the Contract, provided that, State will not make or be liable for any payments to Contractor until Contractor has registered properly in the State’s eProcurement System and provided a current I.R.S. Form W-9 to State unless excused by law from providing one.

4.8.2. Payments Only To Contractor. Unless an assignment and assumption agreement has been reached between the Contractor and State pursuant to Section 5.1 of the Special Terms and Conditions [Assignment and Delegation] or the State has been otherwise compelled by operation of law or order of a court of competent jurisdiction, State will only make payment to Contractor

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Arizona Lottery under the federal tax identifier the Contract was awarded to within the eProcurement System.

4.8.3. Payment. The applicable Eligible Agency or Co-Op Buyer shall pay undisputed amounts due to Contractor within the time period specified in Section 4 Costs and Payments of the Uniform Terms and Conditions.

4.8.4. Joint Checks or Direct Pay. Applicable Eligible Agency or Co-Op Buyer may, but is under no obligation to, pay by joint check or to pay directly to any Subcontractor or other creditor to whom any portion of Contractor’s requested payment is owed.

4.8.5. Recovery of Overpayment. If applicable, Eligible Agency or Co-Op Buyer determines that an overpayment has been made to Contractor on any prior invoice, it shall inform Contractor of the amount and date of the overpayment and may deduct the overpaid amount from amounts then or thereafter due to Contractor.

4.8.6. Purchasing Card. Applicable Eligible Agency or Co-Op Buyer may pay invoices for some or all Orders using a purchasing card. Any and all fees related to payment using a purchasing card (also called a p-card) are the responsibility of the Contractor. Unless otherwise stated in the Contract, there will be no additional fees or increase in prices associated with this method of payment.

4.8.7. Automated clearing house. Applicable Eligible Agency or Co-Op Buyer may pay invoices for some or all Orders through an Automated Clearing House (ACH). In order to receive payments in this manner from Eligible Agencies, the Contractor must complete an ACH Vendor Authorization Form (form GAO-618) within 30 (thirty) days after the effective date of the Contract. The form is available online at: https://gao.az.gov/publications/forms.

4.9. Applicable Taxes

4.9.1. Contractor To Pay All Taxes. State is subject to Arizona Transaction Privilege Tax (TPT). Therefore, Arizona TPT applies to all sales under the Contract and Arizona TPT is Contractor’s responsibility (as seller) to remit. Contractor’s failure to collect Arizona TPT or any other applicable sales or use taxes from an Eligible Agency or Co-Op Buyer will not relieve the Contractor of any obligation to remit sales or use taxes that are due under the Contract or laws.

Unless clearly stated otherwise in the Contract, all prices therein include Arizona TPT as well as every other manner of transaction privilege or sales/use tax that is due to a municipality or another state or its political

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Arizona Lottery subdivisions. Contractor shall pay all federal, state, and local taxes applicable to its operations and personnel.

4.9.2. Tax Indemnity. Contractor shall hold State harmless from any responsibility for taxes or contributions, including any applicable damages and interest, that are due to federal, state, and local authorities with respect to the Work and the Contract, as well as any related costs; the foregoing expressly includes Arizona TPT, unemployment compensation insurance, social security, and workers’ compensation insurance.

5. Contract Changes

5.1. Assignment and Delegation

5.1.1. In Whole. Contractor shall not assign in whole its rights or delegate in whole its duties under the Contract without Procurement Officer’s prior written consent, which consent Procurement…