RFP No. 240000002705 - SCHEDULE A - STATEMENT OF WORK.docx

Michigan.gov/MiProcurement RFP No. 240000002705 Schedule A – Statement of Work Request for Proposal (RFP) No. 240000002705 Certification of Lottery Drawing Equipment This schedule identifies the anticipated requirements of any Contract resulting from this RFP. The term “Contractor” in this document refers to a bidder responding to this RFP, as well as the Contractor who is awarded the contract. The term “bidder” is used to identify where specific responses to the RFP are required.

The Contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

IMPORTANT NOTE TO CONTRACTORS/BIDDERS: There are specific requirements for which acceptance must be simply acknowledged through a checkbox(es), and others that require further explanation. Click one checkbox and complete the entries as identified.

BACKGROUND

The Michigan Lottery has 14 sets of drawing balls for use for its televised and non-televised Daily Game drawings, which are conducted at the WDIV-TV studios in Detroit, Ml. Each ball set contains ten (10) balls numbered "O" through "9". The Daily Game drawings are conducted twice a day, midday and evening, seven days a week and use air-driven draw machines to mix the drawing balls. A winning 3-digit number and a winning 4-digit number is selected for each drawing, midday, and evening. Each ball set produces one digit in the winning number; therefore, three ball sets produce a 3-digit number and four ball sets produce a 4-digit number. In addition to the official drawing, five test draws and a rehearsal drawing (televised drawings only) are conducted prior to the official drawing. Drawing ball sets and ball drawing machines are supplied by Michigan Lottery. The ball drawing machines are the Skipjack model machine manufactured by Garron.

Seven of the 14 ball sets are used for each of the Daily Game drawings which include testing and rehearsals. The seven ball sets are selected in each drawing using a program that creates a random sequence of the numbers "1" through "14". The first seven numbers in the random sequence represent the seven ball sets to be used for that drawing.

In addition to the ball sets, there are two sets of ball drawing equipment in use for the Daily Game drawings. Each set of drawing equipment includes one draw machine to select a 3-digit number, one draw machine to select a 4-digit number, and a remote-control panel. The function of the remote-control panel is to drop each ball set into the mixing chamber, mix the balls, and select balls to the winning position on the drawing machine.

SCOPE

The Michigan Lottery seeks to contract with a qualified, independent Contractor to physically inspect, test, and certify the drawing equipment which includes drawing balls and ball drawing machines in use for the Daily Game drawings. The certification process will be used to evaluate the randomness of the drawing equipment used in drawings.

Requirements The Michigan Lottery seeks to contract with a qualified, independent Contractor to physically inspect, test, and certify the drawing equipment which includes drawing balls and ball drawing machines in use for the Daily Game drawings. The certification process will be used to evaluate the randomness of the drawing equipment used in drawings. The contract resulting from this RFP will have a term of three (3) years with two (2) one-year options. Certification of all drawing equipment will be conducted annually.

Certification will be performed at the WDIV-TV studios where the drawing equipment is housed and will be observed by the Michigan Lottery and an independent witness. However, under special circumstances, as determined solely by the Michigan Lottery, certification of drawing balls may take place at the Contractor's location. If certification takes place at the Contractor's location, Michigan Lottery's Security department will ship ball sets to the Contractor in their respective ball cases. The ball cases will be sealed with a security seal. If a ball case is received by the Contractor and the seal is not intact, the Contractor will photograph the ball set in its present state and immediately contact the Lottery Security Director.

The Contractor will provide to the Lottery information pertaining to the type of equipment used for weighing and measuring drawing balls and any scales used for weighing balls will be calibrated prior to start of the certification process.

The Lottery will provide the Contractor with all weight and dimension measurement information provided to the Lottery by the drawing ball supplier prior to certification of a new ball set. The Lottery will provide the Contractor with all information regarding ball machine operation, usage and maintenance provided to the Lottery by the ball machine supplier prior to certification of new ball machines.

The certification process will verify drawing balls meet uniform weight and diameter specifications which ensure randomness and enhance the overall integrity of the drawings. The certification process will include, but is not limited to the following:

1. Each ball will be physically inspected for cracks, signs of wear or other irregularities that may affect randomness.

2. Each ball will be weighed to ensure it conforms to standard weight specifications.

3. Each ball will be measured to ensure it conforms to standard diameter measurements.

The certification process will evaluate each ball machine to verify its ability to randomly produce outcomes and enhance the overall integrity of the drawings. The certification process will include, but is not limited to the following:

1. Each machine will be physically inspected for signs of wear or other irregularities that may affect randomness.

2. Measurements will be taken on each machine to confirm uniformity of all machines.

3. Air pressure will be tested in each machine's chambers to ensure a uniform airflow for all ball machines.

4. Testing of ball machines will include at least 300 draws per machine.

General Requirements Performance Measure The following sections will detail the specific tests, reviews, and deliverables that the Michigan Lottery requires the vendor to provide.

Testing requirements of the Michigan Lottery will include physical measurements and inspection of the Lottery's four ball drawing machines and their associated drawing ball sets. Additionally, mathematical analysis will be performed on collected draw sample data and/or historical draw data maintained by the Lottery from these devices. This analysis will include testing for statistical randomness against industry standard test criteria.

Ball Set Evaluation and Inspection

Ball set examination can be performed on-site at the Michigan Lottery's designated location or at the Contractor’s Location utilizing the following equipment:

· Laboratory scale, capable of measuring weight in grams with a resolution and accuracy of 0.001g (1/1000).

· Digital electronic caliper calibrated in accordance with ISO 17025 and traceable to NIST/NVLAP.

· Applicable electronic balance calibration weight(s), calibrated in accordance with ISO 17025 and traceable to NIST/NVLAP.

Submitted lottery ball sets will be held to the manufacturer specifications and tolerances as provided, where available. If no specifications are available, the Contractor will outline all deviations in diameter and weight as correlates to each ball set overall.

Each ball set will also be carefully examined for physical condition including but not limited to cracks, physical defects, lacquer/printing anomalies, or any other physical attribute which may affect the operation of the ball drawing equipment. Any such anomalies noted will be brought to the attention of the Lottery, and noted in the Contractor’s subsequent report.

Ball Drawing Equipment Inspection

Evaluation of ball drawing devices can be performed at the Michigan Lottery's designated location. In the event that alternate arrangements are required, as determined by the Michigan Lottery, the Contractor will coordinate with the Michigan Lottery to perform required testing, subject to the Michigan Lottery's security protocols noted above.

In order to ensure proper traceability and consistency in testing, the Michigan Lottery will provide the following to the Contractor:

Drawing ball set(s) to be certified:

Identification - Each drawing ball set must contain unique identification as required for certification. This may be a set identifier, printed set serial numbers, or other format as provided by the manufacturer.

· Manufacturer ball set specification documentation.

Ball Drawing Devices to be evaluated:

Access to the ball drawing devices in a functional state for evaluation. Each device should be configured in the same manner as used for live drawing operations.

Manufacturer documentation (if available) regarding ball drawing device operation, maintenance items, maintenance schedules, as well as any additional information required for fielded operations.

Randomness Evaluation The outcome tests are an assessment of the distribution and independence of the random output as it pertains to the game types submitted. The Contractor will test for the following game parameters:

The specific testing methodology will be determined once all submission materials have been provided.

The Contractor expects to collect 300 drawings from each of the ball drawing machines.

Note: The statistical power from testing such data is necessarily limited to testing for significant biases in the system. As such, the resulting report will contain a statement regarding the limitations of such testing.

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Bidder must describe how they comply with the above requirement(s):

Service Requirements Timeframes All Contract Activities must be delivered within the timeframe agreed upon at the time-of-service request for contract services. The receipt of order date is pursuant to Section 2, Notices, of the Standard Contract Terms.

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Bidder must describe how they comply with the above requirement(s):

Reporting The Contractor must submit to the Program Manager written reports as agreed upon at the time-of-service request.

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The Contractor must explain any reporting that is included in its proposal and any additional reporting capabilities:

Staffing Contractor Representative The Contractor must appoint one Contractor Representative/ Key Personnel, specifically assigned to State of Michigan accounts, that will respond to State inquiries regarding the Contract Activities, answering questions related to ordering and delivery, be knowledgeable on the contractual requirements, , etc. (the "Contractor Representative / Key Personnel"). The Contractor must notify the Contract Administrator at least 30 calendar days before removing or assigning a new Contractor Representative / Key Personnel.

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Key Personnel The Contractor must appoint one individual who will be directly responsible for the day-to-day operations of the Contract (“Key Personnel”). Key Personnel must be specifically assigned to the State account, be knowledgeable on the contractual requirements, and respond to State inquiries within 24 hours.

The Contractor may not remove or assign Key Personnel without the prior consent of the State. Prior consent is not required for reassignment for reasons beyond the Contractor’s control, including illness, disability, death, leave of absence, personal emergency circumstances, resignation, or termination for cause. The State may request a résumé and conduct an interview before approving a change. The State may require a 30-calendar day training period for replacement personnel.

The bidder must identify the Key Personnel, indicate where they will be physically located, describe the functions they will perform, and provide current chronological résumés.

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Key Personnel

- Program Manager:

- Contractor Representative:

- Attorney(s):

- Trainer(s):

Physical Location of Key Personnel:

Functions each Key Personnel will perform:

Current Chronological Résumés (attach):

Non-Key Personnel The Contractor must notify the Contract Administrator at least 10-calendar days before removing or assigning non-key personnel.

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Organizational Chart The Bidder must provide an overall organizational chart that details staff members, by name and title, and subcontractors - either in this response box or identified here as an attachment to this RFP labelled as Organizational Chart.

Disclosure of Subcontractors If the Contractor intends to utilize subcontractors, the Contractor must disclose the following:

· The legal business name; address; telephone number; a description of subcontractor’s organization and the services it will provide; and information concerning subcontractor’s ability to provide the Contract Activities.

· The relationship of the subcontractor to the Contractor. Of the total bid, the price of the subcontractor’s work. Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

· A complete description of the Contract Activities that will be performed or provided by the subcontractor.

GDBE definition: "Geographically Disadvantaged Business Enterprise" also known as GDBE, is a Michigan-based business that satisfies one or more of the following: (i) Is certified as a Michigan HUBZone Small Business Concern by the United States Small Business Administration. (ii) Has a principal place of business located within a Qualified Opportunity Zone within Michigan. (iii) More than half of its employees either work at a secondary location or have a principal residence located within a Qualified Opportunity Zone within Michigan, or both.

Additional information on GDBEs can be found here:

Michigan GDBE Website Bidder must provide detailed information as requested in the above requirement(s).

The legal business name, address, telephone number of the subcontractor(s).

A description of subcontractor’s organization and the services it will provide and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Bidder.

If yes, provide the details of that previous relationship.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

Of the total bid, the price of the subcontractor’s work.

Bidder must provide information based on the work performed by all subcontractors

Total percentage of work that will be performed by subcontractors:

Total percentage of subcontracted work that will be performed by GDBE subcontractors:

Security Prior to operations under the Contract, the Contractor may be asked to provide Lottery with a written description of Contractor's security program for Lottery approval. As part of this requirement the Contractor must maintain an approved operations security plan.

The security program shall include the following procedural, administrative, and physical elements:

A. Methods and procedures for conducting background checks on all personnel and compliance with requirements for compilation of information for background checks by the Lottery.

B. Security measures and systems which preclude unauthorized persons from accessing all facilities and supplies, and equipment within the facilities. The Lottery reserves the right to prohibit physical access to operations areas by non-operations personnel.

C. Security measures which preclude the unauthorized use of equipment and materials, without written authorization from the Lottery.

D. Security measures that ensure the integrity of the preparation, storage, distribution, or use of any data subject to privacy laws.

E. Personnel Security. The Lottery may initiate investigations into the backgrounds of any officers, principals, investors, owners, Subcontractors, employees, or any other associates of the Contractor it deems appropriate.

Such background investigations may include fingerprint identification by Michigan State Police, Federal Bureau of Investigation, and any other appropriate public or private agencies selected by the Lottery.

Personnel who will be performing services under the Contract and as determined by the Lottery will be required to undergo a background investigation by the Lottery. This Lottery background check does not relieve the Contractor of their responsibility to conduct their own background investigations. After an employee being considered for work on the Lottery Contract has been cleared by the Contractor's background checks, the person shall be submitted to Lottery for clearance. The results of the background check by the Contractor shall be shared with Lottery.

The Contractor consents to cooperate with such investigations, and to instruct its employees to cooperate. The Lottery may terminate the Contract or require the Contractor to remove an employee from the Lottery project based upon adverse results of background checks if the Lottery determines that its integrity, security, or goodwill may be in jeopardy. The Lottery may disapprove any employee or Subcontractor of the Contractor who is assigned to this project, either at Contract inception or at any time during the Term of the Contract.

The Contractor shall not allow the engagement of unfit or unqualified persons not skilled in the tasks assigned to them with respect to the Contract and shall always employ sufficient personnel for carrying out work to full completion in the manner and time prescribed by the Contract. The Contractor shall be responsible to the Lottery for the acts and omissions of the Contractor's employees or Subcontractors.

Any person employed by the Contractor shall, at the written and reasonable request of the Lottery, be removed forthwith by the Contractor from work relating to the Contract. The Contractor's Subcontractors are in this respect considered employees of the Contractor.

The ability to conduct such investigations is a continuing right of the Lottery throughout the Contract.

The Contractor shall at the start of the Contract, and for each new employee prior to their assignment on Michigan Contract work, submit to the Lottery the name, address, date of birth, social security number, driver license number, or fingerprint cards and/or other release forms bearing the person's signed authorization to allow criminal justice agencies to release to the Lottery any criminal history that pertains to such person, of all officers and employees of the Contractor and of any Subcontractor, who are involved in any phase or aspect of the Contract Activities. The Lottery reserves the right to review and approve or disapprove any persons prior to or during their assignment to this Contract. No employee is to be given access to facilities or assigned to work on this Contract until the employee has been cleared by the Lottery. The Lottery reserves the right to review all security clearances and to disapprove any Contractor or Subcontractor employee.

The Contractor shall notify the Lottery of departures of persons who are involved in the Contract and shall provide a roster of current employees to the Lottery at least every six (6) months during the term of the Contract.

F. Security Violation Reporting. The Contractor shall immediately report to the Lottery any security procedural violation, System compromise, potential violation of law, or compromises of equipment, software, or materials used or to be used in the performance of this Contract.

G. Security Information (Disclosure) Updates. The Contractor shall report any change in, addition to, or deletion from, the information disclosed to the Lottery. The report shall be in the form of a letter addressed to the Lottery and shall be delivered to the Lottery's Security Director immediately but no longer than thirty (30) days from the effective date of the change, addition, or deletion. In particular the Contractor must report the involvement of any of the Contractor's employees, owners, or agents in any known criminal arrest (exclusive of minor traffic violations) or investigation.

H. Disclosure. The Contractor must disclose any criminal litigation, investigations or proceedings involving the Contractor (and each Subcontractor) or any of its officers or directors or any litigation, investigations or proceedings under the Sarbanes-Oxley Act. In addition, each Contractor (and each Subcontractor) must notify the Lottery of any civil litigation, arbitration or proceeding which arises during the Term of the Contract and extensions thereto, to which the Contractor (or, to the extent the Contractor is aware, any Subcontractor hereunder) is a party, and which involves: (i) disputes that might reasonably be expected to adversely affect the viability or financial stability of the Contractor or any Subcontractor hereunder; or (ii) a claim or written allegation of fraud against the Contractor or, to the extent the Contractor is aware, any Subcontractor hereunder by a governmental or public entity arising out of their business dealings with governmental or public entities. Any such litigation, investigation, arbitration or other proceeding (collectively, "Proceeding") must be disclosed in a written statement to the Lottery Security Director within thirty (30) days of its occurrence. Details of settlements which are prevented from disclosure by the terms of the settlement may be annotated as such. Information provided to the Lottery from the Contractor's publicly filed documents referencing its litigation will be deemed to satisfy the requirements of this section.

I. Assurances. In the event that any such Proceeding disclosed to the Lottery pursuant to this section, or of which the Lottery otherwise becomes aware, during the Term of this Contract would cause a reasonable party to be concerned about:

a. The ability of the Contractor ( or a Subcontractor hereunder) to continue to perform this Contract in accordance with its terms and conditions.

b. Whether the Contractor (or a Subcontractor hereunder) in performing services for the State is engaged in conduct which is similar in nature to conduct alleged in such Proceeding, which conduct would constitute a breach of this Contract or a violation of Michigan law, regulations or public policy, then the Contractor shall be required to provide the State all reasonable assurances requested by the State to demonstrate that (a) the Contractor and/or its Subcontractors hereunder will be able to continue to perform this Contract and any Statements of Work in accordance with its terms and conditions, and (b) the Contractor and/or its Subcontractors hereunder have not and will not engage in conduct in performing the services similar in nature to the conduct alleged in such Proceeding.

J. Notifications. The Contractor shall make the following notifications in writing:

a. Within thirty (30) days of the Contractor becoming aware that a change in its ownership or officers has occurred, or is certain to occur, the Contractor shall notify the Lottery Contract manager.

b. The Contractor shall notify the Lottery Contract manager within thirty (30) days whenever changes to company affiliations occur.

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Bidder must describe how they comply with the above requirement(s):

Pricing Price Term Pricing is firm for the entire length of the Contract.

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Price Changes Adjustments will be based on changes in actual Contractor costs. Any request must be supported by written evidence documenting the change in costs. The State may consider sources, such as the Consumer Price Index; Producer Price Index; other pricing indices as needed; economic and industry data; manufacturer or supplier letters noting the increase in pricing; and any other data the State deems relevant.

Following the presentation of supporting documentation, both parties will have 30 days to review the information and prepare a written response. If the review reveals no need for modifications, pricing will remain unchanged unless mutually agreed to by the parties. If the review reveals that changes are needed, both parties will negotiate such changes, for no longer than 30 days, unless extended by mutual agreement.

The Contractor remains responsible for Contract Activities at the current price for all orders received before the mutual execution of a Change Notice indicating the start date of the new Pricing Period.

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Ordering Authorizing Document The appropriate authorizing document for the Contract will be a Direct Order (DO).

Invoice and Payment Invoice Requirements All invoices submitted to the State must include: (a) date; (b) direct order; (c) quantity; (d) description of the Contract Activities; (e) unit price; (f) shipping cost (if any); (g) vendor-generated invoice number and (h) total price.

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Payment Methods The State will make payment for Contract Activities via EFT.

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Bidder must explain their process for accepting the PCard payment method. If an account needs to be created on your purchasing platform, please submit documentation that shows the steps for completing this process.

Licensing Agreement The Contractor must provide a copy of any applicable licensing agreement.

Bidder must provide a copy of any applicable licensing agreement either in this response box or identified here as an attachment to this RFP.

Required Functionality Relating to Data Retention, Disposal, and Retrieval The State has legal obligations to retain, dispose, and retrieve State Data along with obligations to manage and secure State Data. To meet these obligations, the Solution must allow the State to:

1) retain all data for the entire length of the Contract.

2) delete its data or request the deletion of its data, even data that may be stored offline or in backups.

3) transfer its data back to the State or to a new vendor or new solution.

4) transfer its data to the Archives of Michigan as may be required by a retention and disposal schedule.

5) retrieve data, even data that may be stored offline or in backups.

Except as otherwise stated in the Contract, Contractor will not dispose of, delete, or destroy State Data without the prior written approval of the State.

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Bidder must review and explain how the data retention, disposal, and retrieval requirements will be met by the solution and describe its data management capabilities (storage limitations, duration, etc.). If the Solution does not allow the State to perform these activities itself, the bidder must explain how it will support the State’s compliance with these requirements.

Service-Level Agreements (SLAs) A. The Contractor will be held accountable to meet the requirements and the service level requirements established in this Contract.

B. The State reserves the right to reconsider or amend SLA amounts for split awards should they occur.

C. All orders must be delivered within 5 calendar days of receipt of order.

D. Please Note: Should bidders require clarification or have any questions with regard to the SLAs, they should submit them during the Question and Answer Period of this solicitation; please see the Proposal Instructions for the timeline.

Service Level Agreements for this Contract will be as follows:

Throughout the life of this contract, the SOM will require meetings and reports provided timely. Deadlines will be established and agreed upon by the SOM and the Contractor.

The Contractor must meet all deadlines for meeting attendance, reporting, and document review. Depending on the selected pricing structure for this RFP, the Contractor must provide Service Level Credits for delays for which they are responsible.

1. The Contractor will provide a credit of five (5) % of their next invoice when deadlines are exceeded by five (5) business days.

2. For each business day beyond five (5), the Contractor will provide an additional credit of 1% per day.

Established deadlines will be recorded via correspondence between the SOM and the Contractor.

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