RFP_R002746__Scratchers_final_5-23-25_v1.1.docx

Request for Proposal (RFP) #R002746 Scratchers® Products and Related Services May 23, 2025

CALIFORNIA STATE LOTTERY

700 North 10th Street Sacramento, California 95811-0393

RFP R002746

Scratchers Printing Services i May 23, 2025 i

REQUEST FOR PROPOSAL

Notice to Prospective Proposers May 23, 2025 You are invited to review and respond to this Request for Proposal (RFP) entitled (RFP #R002746 Scratchers Products and Related Services). In submitting your proposal, you must comply with these instructions.

Note that all agreements entered into with the California State Lottery (Lottery) will include by attachment Terms and Conditions and Contractor Certification Clauses that are hereby included in this solicitation.

In the opinion of the Lottery, this RFP is complete and without need of explanation. However, if you have questions, or should you need any clarifying information, the contact person for this RFP is:

Kevin Blunt California State Lottery solicitations@calottery.com Please note that no verbal information given will be binding upon the Lottery unless such information is issued in writing as an official addendum.

Kevin Blunt Procurement Specialist

Table of Contents

RFP R002746

Scratchers Products and Related Services 3 May 23, 2025

GENERAL INFORMATION

Purpose This Request for Proposal (RFP) #R002746 (also referred to as “solicitation”) is for the California State Lottery (Lottery) to solicit proposals from qualified vendors for one to serve as Primary Contractor, and one or more to serve as Secondary Contractors to produce instant lottery tickets (Scratchers®) products and associated services, as well as other products identified herein, with the objective to maximize Lottery profits and contributions to California public schools.

The Lottery’s intent is to enter into contracts with one or more experienced contractors for printing and related services associated with Scratchers manufacturing. The Lottery intends to award contracts to both a Primary Contractor and Secondary Contractor(s). The Primary Contractor will not have exclusivity, but can expect to print the majority of the Lottery’s Scratchers.

The Lottery anticipates that the Primary Contractor will be assigned approximately 70% of the Lottery’s Scratchers games over the life of the Contract. Work assigned will be at the Lottery’s discretion.

Bidders must submit a proposal to be the Primary Contractor, as well as a Secondary Contractor. It is the Bidder’s responsibility to identify any differences in its proposal that would apply only where a specific type of contract is awarded. Where Bidder fails to identify such differences, the terms of Bidders proposal will be deemed applicable regardless of whether a Primary or Secondary Contract is awarded. The Lottery will select Primary and Secondary Contractors based on overall quality of proposals, competitive pricing, and best value to the Lottery.

The Primary Contractor will manufacture Scratchers and provide marketing and sales support services. The Lottery anticipates that the Primary Contractor will serve as a business partner and work closely with the Lottery to ensure that Scratchers sales and profits continue to increase in the future.

Secondary Contractor(s) will manufacture Scratchers and perform other tasks as required by the Lottery, which may include marketing and sales support services for a certain number of Scratchers games during the term of the Contract. While the Lottery anticipates that the Contracts that result from this Request for Proposals (RFP) will provide for all of the Lottery’s Scratchers ticket production requirements, the Lottery reserves the right to secure production and related services from other vendors at any time during the Contracts’ terms.

The base term of these Contracts will be six (6) years. The Lottery may unilaterally elect to extend any of these Contracts for a period of 3 years from the end of the initial term. Thereafter, the Lottery may unilaterally extend the contracts up to three additional times, for up to 1 year(s) each, provided that the Lottery notifies subject Contractor(s) at least four months prior to commencement of each extension period. All extension periods will be subject to the same terms and conditions that are applicable to the base term, including all pricing terms.

By submitting a proposal, the Proposer agree to the terms and conditions stated in this RFP. Read this document and any attachments in their entirety and carefully, as they may contain binding provisions that affect your rights and obligations. You must comply with the instructions contained in this document. Responses to this RFP must be submitted to the Lottery contact listed below.

Contact For questions regarding RFP #R002746, please email Kevin Blunt at solicitations@calottery.com. For all communications, subject line must include RFP #R002746 Scratchers® Products and Related Services.

California State Lottery Attention: Kevin Blunt 700 North 10th Street Sacramento, CA 95811

No contact or communications regarding this RFP shall be allowed between the Proposer or potential Proposers and members of the Lottery Evaluation Team, Lottery Commissioners, or Lottery staff during the RFP process with the exception of the Lottery contact person named above. Any such contact may disqualify a Proposer or potential Proposer from further consideration. Requests for clarification shall be allowed, provided such requests are made through the above contact person.

For additional information on RFP submissions, see Section IV.B.

Background The Lottery’s sole mission is to supplement funding for California’s public schools and colleges. Since we began in 1985, we’ve given schools more than $46 billion.

While the Lottery is a public agency, we receive no public funding. Instead, we raise all operating and administrative expenses through the responsible sales of our games. We give the community back 95 cents of every dollar spent on Lottery games through contributions to public schools and colleges, prizes and retail compensation.

The Lottery offers a full array of popular game styles in its portfolio, including multi-state games, in-state lotto, quick draw, daily games, and Scratchers. These games are available at the Lottery’s retail network of approximately 23,000 locations, ranging from national chain stores to independent neighborhood shops, supermarkets, liquor stores, tea rooms, restaurants, and more. The Lottery is consistently one of the top three lotteries in the United States in sales and typically leads in many categories, including multi-state and instant game sales. In Fiscal Year (FY) 2023-24, California was #2 in overall lottery sales in the U.S., as well as #1 in Powerball and Mega Millions sales, #2 for in-state lotto, and #3 in instants/Scratchers. The estimated contributions to its beneficiaries were #3 in the nation.

The Lottery remains focused on long-term objectives to expand the reach of its brand within the state to grow playership and strengthen brand affinities to drive sales, profits and brand loyalty. It is focused on innovation and continued relevance to Californians in an increasingly complex marketplace. Scratchers play a critical role in the Lottery’s product portfolio, representing over 70% of sales and providing more than $6.6 billion in sales (unaudited) during FY 23-24, and the Lottery is emphasizing strategies to grow Scratchers sales and profits responsibly.

The Lottery is leveraging a segmented view of California consumers that provides context and focus for developing messaging, products, and promotion strategies and tactics to position the California Lottery as a brand for fun and entertainment. This allows the Lottery to provide products and communication preferences that will enhance the “play” experience with the Lottery for California adults.

This strategy is also supported by the Scratchers Category Repositioning Effort, an integrated multi-year initiative launched in 2021 and designed to reposition the Scratchers product category and change consumer perceptions to address barriers to play for casual, lapsed and non-players, while continuing to engage and excite more frequent players. It seeks to elevate Scratchers by shifting player perceptions of the category away from solely being seen as a gambling product and showcasing the enjoyment of playing Scratchers, independent of whether a player wins. This effort positions Scratchers as small moments of fun and entertainment and is grounded in the insight that adults need more play in their lives. The Scratchers positioning is anchored by the fun and memorable tagline, “A Little Play Can Make Your Day” and encourages Californians to consider Scratchers as a perfect moment of play in their busy lives.

The Lottery also diversified its Scratchers portfolio to support this repositioning effort and reinforce this strategy by creating more games focused on casual and non-players with non-traditional gaming elements. The Lottery’s research and analysis reveal the initiative is resonating with players: playership and sales have increased, while player perceptions of the Lottery brand have also increased.

The Lottery has set multiple sales and profit records in the last four years, as well as improving player perceptions of the brand and reversing declining playership levels, which have increased to their highest levels in six years. In FY 2023-2024, the Lottery generated an estimated $9.28 billion in revenue from all Lottery games and contributed an estimated $2.3 billion to public schools, though growth has slowed after years of record-breaking sales and profits.

Innovation remains imperative to the Lottery; it is exploring new pilots, including digital in-store signage and cashless payments, while continuing to expand its footprint in digital and social media through its owned channels and new partnerships to reflect the evolving consumer landscape. Yet, the Lottery faces challenges moving forward in a rapidly changing marketplace, including consumer economic impacts, increased digital and mobile consumer consumption, shifts towards cashless retail, and barriers for casual players to play the Lottery. It also operates within a unique set of regulatory challenges, including its mandated pari-mutuel structure on games, and restrictions within the digital gaming space and mandated limitations on technology (link to California State Lottery Act here). As the Lottery continues its drive for innovation, this creates substantial potential for vendor partners to explore new solutions to assist the Lottery in reaching consumers in an increasingly mobile-first, digitally-focused world.

Lottery products are only available in physical brick and mortar locations, where they compete with consumer-packaged goods brands for valuable shelf space and consumer visibility. Lottery retailers also face challenges in the increasingly complex modern retail landscape with online competition, theft, inventory management and convenience, as consumers shift their buying behaviors out of traditional trade channels. The wide range and scope of the Lottery retailer network creates additional complexity to this fluid marketplace. In addition, Lottery vending machines are currently cash-only, and most Lottery retailers only accept cash for Lottery purchases.

1. Current Products and Distribution:

The Lottery prints about 1 billion Scratchers tickets each year, launching between 52-54 games. Annual Scratchers sales have increased by over $4 billion since FY 11-12, an increase of over 300%. Higher price points drive the largest sales volume; however, lower price points remain a key point of entry for new and casual players, making it imperative to create a balanced portfolio of games while understanding that prize payout levels across all Lottery games are optimized to ensure that funding for education is maximized annually.

During FY 24-25, 53 games will be offered between the price points of $1 to $40, with four or five games launched per month. Of these 53 games, five are $1 games, ten are $2 games, five are $3 games, ten are $5 games, eleven are $10 games, eight are $20 games, one is a $25 game, two are $30 games, and one is a $40 game. The following chart indicates total Scratchers sales (based on validation, or consumer, sales, based on what players have actually claimed or validated*) for the last three fiscal years by price point.

Total Scratchers Sales in Millions

2. Future Sales and Product Projections

The Lottery is committed to responsibly growing its playership, sales, and profits, while continuing its emphasis as a brand for fun and entertainment. The Lottery’s overall sales goal for FY 25-26 is $9.1 billion. The Scratchers sales goal is $6.82 billion.

3. Retailer Information

There are over 23,000 Lottery retailers in California, each with an average of 32 Scratchers facings at any given time. Lottery products are sold in locations like grocery chains, gas stations, convenience stores, restaurants, bars, and liquor stores.

The Lottery continues to expand the network by adding new retailers in different trade channels, upgrading self-service machines, and piloting new technologies throughout its networks using a more convenient and customer-focused experience for players.

At this time, the Lottery utilizes a combination of instant ticket vending machines, in-counter trays, and on-counter displays. It has a network of in-store devices as part of the gaming contract services with IGT, including Gemini Ultra, and GameTouch vending machines, and GT 1200 and Flex retailer terminals. There are also additional retail support items including check-a-ticket scanners and ePOS screens (19-, 22- and 32-inch monitors).

Most retailer partners merchandise their own games, utilizing the Lottery’s monthly planograms or customized neighborhood schematics. However, some retailers utilize the Lottery’s route model, where designated Lottery sales representatives manage inventory and out of stocks, notably in specific chain accounts.

Games are displayed in 20-, 24-, 28-, and 32-game configurations

4. Scratchers Distribution

The Lottery operates a “pick and pack” warehousing and distribution system and manages orders through two distribution centers in Northern and Southern California. Retailer orders are also managed through its internal Scratchers Inventory Management Center, utilizing IGT’s proprietary software and Lottery-developed algorithms. Lottery Scratchers vendors are responsible for product delivery to the distribution centers. Orders are then supplied to retailers throughout California via the Lottery’s contracted delivery vendor. Unsold Scratchers are returned to the nearest distribution center. Full packs of active games are placed back into the inventory to be redistributed, while partial packs and discontinued games are shredded.

The Lottery currently has contracts with the following Scratchers printing vendors:

• Scientific Games LLC (Primary vendor)

• Pollard Banknote Limited (Secondary vendor)

• IGT Global Solutions Corporation (Secondary vendor)

Lottery Point of Contact This RFP is issued by the Lottery’s Procurement Services and Support office. Issuance of this RFP does not constitute a commitment by the Lottery to award a contract. The issuing office is the sole point of contact regarding this RFP. All notices or questions pertaining to this RFP must be directed to:

California State Lottery Procurement Services and Support Attention: Kevin Blunt 700 North 10th Street Sacramento, California 95811 Email: solicitations@calottery.com No contact regarding this RFP will be allowed between Proposer or potential Proposer and members of the Lottery Evaluation Team, Lottery Commissioners, or Lottery staff after issuance of the RFP with the exception of the Lottery contact person named above. Any such contact may disqualify a Proposer or potential Proposer from further consideration. Requests for clarification will be allowed, provided such requests are made through the above contact.

Projected Timetable The following projected timetable is subject to change and is provided for informational and planning purposes only. The Lottery may change the dates after Proposals Due without further amending this RFP.

*Estimated dates; actual dates may differ.

Verbal Communication Any verbal communication with a Lottery employee concerning this RFP is not binding on the Lottery and will in no way alter a specification, term, or condition of this RFP or of any resulting agreement.

Examination of All Requirements The Proposer is strongly encouraged to examine this document thoroughly and become familiar with the RFP’s requirements, including but not limited to those set forth in Attachment 16, Proposed Contract Terms and Conditions, Exhibit A, Scope of Work, and Exhibit C, General Terms and Conditions. Proposals must be based solely on the information and materials contained in the RFP, any amendments thereto, and on other written communications regarding the RFP that are issued by the Lottery contact person named above. The Proposer must disregard all other information regarding the requirements of this solicitation, including draft material, newspaper advertisements or articles, and verbal representations.

If a Proposer discovers an error in this RFP but fails to notify the Lottery of that error, the Proposer submits a proposal at its own risk. If awarded the Agreement, the Proposer will not be entitled to additional compensation or time due to the error or its subsequent correction. Unless amended as part of a Response to Proposer Questions (see Sections I.E and I.I), the Agreement’s exhibits (Exhibit A, Scope of Work, Exhibit B, Budget and Payment Provisions, and Exhibit C, General Terms and Conditions) are non-negotiable. However, the Lottery reserves the right to adjust the language within the Scope of Work and the resulting Agreement awarded from this solicitation. Therefore, final Agreement language may deviate from the provisions provided in this solicitation.

The Lottery may, in its sole discretion, refuse to accept a proposal if it fails to furnish all required information or follow the format specified in this RFP.

Modifications to the RFP The Lottery may cancel or amend this RFP at any time by the issuance of a written addendum. Notice of amendment or cancellation will be sent to the Proposer that has submitted a written Intent to Bid if the amendment or cancellation occurs prior to proposal submission, and to the Proposer that has submitted a proposal if the amendment or cancellation occurs after proposal submission.

Written Questions Questions regarding the content of this RFP (including clarifications on bidding requirements, Scope of Work, or Price Sheet) must be submitted in writing via email to the Lottery Point of Contact specified in Section I.D by the due date and time specified in the Projected Timetable. It is the Proposer’s sole responsibility to verify receipt of submitted questions. The Lottery may, in its sole discretion, respond to written questions received after the specified due date and time. Questions and responses will be provided to Proposers that submitted a written Intent to Bid and will also be posted on the Lottery’s website and the California State Contracts Register (CSCR).

Written Intent to Bid An Interested Proposer may submit an Intent to Bid in writing via email to the Lottery contact person by the date and time specified in the Projected Timetable in order to receive direct communications from the Lottery about this RFP.

The written Intent to Bid must include the Proposer’s contact person’s name, email address, mailing address, and telephone number.

If a written Intent to Bid is not sent, a proposal may still be submitted. However, RFP notices and addendums issued by the Lottery will only be sent directly to the Proposer with a written Intent to Bid on file. After the proposal due date, only a Proposer that has submitted a proposal package in accordance with section II, Proposal Requirements, and section IV, Delivery of Proposal, to the Lottery Point of Contact specified in section I.D. will receive direct RFP communication and notices.

All interested parties may access such notices and addendums on the Lottery’s website and CSCR.

Property of the Lottery All proposals become the property of the Lottery upon receipt and will not be returned to the Proposer.

Proposals are Public Records Pursuant to the California Public Records Act, California Government Code Section 6250 et seq., all data, materials, information, and documents submitted to the Lottery by a Proposer may be incorporated into a publicly-available Agreement and may otherwise be subject to disclosure upon request by competitors and members of the public after the apparent successful Proposer has been announced. The Lottery will process all Public Records Act requests in accordance with the laws of the State of California. A Proposer’s labeling of any proposal materials as “confidential” or otherwise exempt from disclosure is not binding on the Lottery, and the Lottery will not be liable to the Proposer or to any other person or entity for disclosing information as required by law.

Acceptance Period As a condition of submission, each Proposer’s proposal constitutes an unconditional offer to the Lottery and is irrevocable for 180 days from the date submissions are due.

Rejection of Proposals The Lottery reserves the right to reject any or all proposals to this RFP. The Lottery may reject any proposal that is conditional, contains additions not called for, is incomplete, contains erasures or irregularities of any kind, or contains material deviations. Any provisions of this RFP that are defined as requirements will be considered mandatory. In the interest of promoting competition, the Lottery may allow a Proposer to correct an inaccuracy in its proposal. If all Proposers fail to meet one or more of the mandatory requirements, the Lottery reserves the right to continue evaluation of the proposals and to select the proposal that most closely meets the requirements specified in this RFP.

Conditions of Submission Proposals submitted in response to the RFP, along with any subsequent presentations, must include the Proposer’s best offer to fulfill the requirements outlined in Exhibit A, Scope of Work. A Proposer will be allowed to withdraw their proposals only when a written request for withdrawal is received by the Lottery prior to the deadline for final bid submission. Requests for bid withdrawal must be filed in the same manner as proposals. After the submission deadline, a Proposer cannot replace, change, or modify their proposals in any way, except as specified in this RFP or any subsequent addendum to this RFP.

Nonmaterial Deviation The Lottery may waive any deviation in a proposal that the Lottery determines to be nonmaterial. The Lottery’s waiver of a nonmaterial deviation in no way modifies the RFP’s requirements or excuses a Proposer from full compliance with the Agreement’s requirements.

Agreement Execution The Lottery Director or designee will make the final determination of Agreement award, subject to California Lottery Commission approval if applicable. In making this determination, the Lottery Director or designee may be assisted by an Evaluation Committee.

The Lottery, in its sole discretion, may treat failure or refusal by the intended awardee to begin performance within 10 state working days of execution as repudiation of the Agreement. The Lottery may then either (1) select another proposal which conforms to the requirements of this RFP and represents, in the Lottery’s sole discretion, the best value; or (2) reject all proposals. The Lottery may also seek compensation for any damages associated with repudiation of the Agreement.

The Lottery reserves the right to cancel all elements of this solicitation or rescind the announced award at any time before execution of the Agreement. Issuance of this RFP does not constitute a commitment by the Lottery to award an Agreement.

Hiring of Lottery Personnel At all times during the proposal evaluation period and continuing through award or rejection of all proposals, Proposers are prohibited from officially or unofficially making any employment offer or proposing any business arrangement whatsoever to any Lottery employee involved in the evaluation of proposals. A Proposer making such an offer or proposition will be disqualified from further consideration.

Bid Protests

1. Only an actual Proposer may protest a contract award, and only on the following grounds:

2. A notice of intent to protest must be received by the Lottery within 7 business days after the Lottery posts a notice of intent to award on its website. Notice is to be sent via email to solicitations@calottery.com. A timely notice of intent to protest is a prerequisite to any protest.

3. Provided that a timely notice of intent to protest has been filed with the Lottery, a protest must be filed within 12 business days after the Lottery posts its notice of intent to award on its website. A protest must include a complete and detailed explanation of how the facts support the protest.

4. All protest documents must be received by the Lottery via email to solicitations@calottery.com or mail at its Sacramento headquarters no later than 3:00 p.m. Pacific Time on the last day of the applicable protest period. The envelope containing protest documents or the cover page to a protest must be addressed to the attention of the Director and must be clearly labeled: “Protest to the (title and number of the solicitation), DO NOT OPEN IN MAILROOM.” Untimely protests will not be considered.

5. It is the protestor’s responsibility to ensure that the Director has all information and arguments that the protestor deems relevant and necessary to resolve the protest. The Director may request additional information in writing from the protestor or from other sources, including the apparent successful Proposer and Lottery staff, as he/she deems appropriate for resolution of the protest.

6. The Director will issue a written decision within 15 days of completion of his/her review of the record.

7. In his/her sole discretion, the Director may determine that it is in the best interest of the Lottery to proceed with contract award and performance, while a protest is pending, and may direct a Contractor to commence work.

Governing Law and Regulations The Lottery’s governing law and regulations, including the California State Lottery Act and the Lottery’s procedures for procurement of goods and services, are available on the Lottery’s website. It is each Proposer’s responsibility to be familiar with these laws and regulations.

PROPOSAL REQUIREMENTS

Proposals submitted in response to this RFP must comply with the requirements of this section. Failure to complete and submit the information listed in this section in the specified format may result in rejection of the Proposer’s proposal.

All Proposers must provide as much information as necessary in their proposal for the Lottery to award a Contract. At a minimum, proposals must be fully responsive to the specific requirements stated in this RFP. All Proposers must identify any requirements of this RFP they cannot satisfy.

All proposals will be deemed to apply to either a Primary or Secondary Contract. It is the Proposer's responsibility to identify any terms/sections/items in its Proposal that would only apply to either a Primary or Secondary Contract. Where Proposer fails to identify such differences, all terms of Proposer’s proposal will be deemed applicable, regardless of whether a Primary or Secondary Contract is awarded. The Lottery will select Primary and Secondary Contractors based on overall quality of proposals, competitive pricing, and best value to the Lottery.

All Proposers must identify any mandatory requirement of this RFP that they are unable to satisfy at the time the bid is submitted and explain how they would propose to address the requirement prior to executing a contract with the Lottery.

1. Mandatory Submittals All proposals submitted in response to this RFP must comply with the requirements of this section. All Proposers must respond to each requirement in this section, whether bidding for the Primary Contract or a Secondary Contract, except for Attachment 6, Small Business and Microbusiness Program Participation, which is optional. DVBE participation is mandatory and Attachment 5 must be completed. The Lottery retains the discretion to reject or accept proposals or request from a Proposer’s supplemental clarifying information related to these submittals at any time before contract award.

All Proposers must not alter the Lottery’s mandatory submittals. Any change made to the forms, including but not limited to exceptions, deletions, and additions, may be the basis for disqualification of a Proposer’s proposal. The required forms can be located at the Lottery’s website or by going onto the CSCR.

All Proposers must complete and submit the following as detailed below:

1. Transmittal Letter and Company Background (Attachment 1)

2. Required Attachment Checklist (Attachment 2)

3. Price Sheet (Attachment 3)

4. Certification (Attachment 4)

5. Disabled Veteran Business Enterprise Participation (DVBE) (Mandatory) (Attachment 5)

6. Small and Microbusiness Participation (SMP) – if applicable (Attachment 6)

7. Payee Data Record STD 204 (Attachment 7)

8. Guaranty (Attachment 8)

9. Lottery Account Personnel (Attachment 9)

10. Résumé Form (Attachment 10)

11. (Confidential) Major Contractor Disclosure (Attachment 11)

12. Ticket Samples, as described in Sections 2.3 and 4 in the Rated Submittals (Attachment 12)

13. Liquid Files Instructions (Attachment 13)

14. Rated Submittals (Attachment 14)

15. GenAI Impact Assessment Form (Attachment 15)

1. Required Transmittal Letter – (Attachment 1) All Proposers must submit a cover letter indicating that they are responding to the RFP and that all of the RFP requirements have been met. The letter must be signed by a representative identified in the Proposer Certification as legally authorized to contractually bind the Proposer.

All Proposers must disclose whether they consulted with others in the preparation of this proposal. If others were consulted, they must identify those with whom they consulted and provide contact information. Any change or addition to those consulted while this RFP is pending must be reported to the Lottery. Failure to do so may result in a decreased rating level or rejection of a Proposers proposal. The Lottery reserves the right to contact these consultants. Under no circumstances may a Proposer submitting or considering the submittal of a proposal consult with a competing Proposer.

All Proposers must also disclose any potential, actual or apparent conflicts of interest that may exist between any current client and the Lottery. Because of the complexities involved in defining conflicts of interest, the Lottery will make a final determination as to whether a disqualifying conflict exists. Note: If there are no conflicts, provide a statement to this effect.

2. Required Attachment Checklist (Attachment 2) All Proposers must submit the Required Attachment Checklist to confirm all required documents have been included in the proposal submittal package.

All Proposers must also indicate the services to which they are responding.

3. Price Sheet (Attachment 3) All Proposers must (1) complete and submit Price Sheet, Attachments 3-3F, and (2) submit the Pricing Grids in an active Excel worksheet via Liquid files (in addition to those required under Item 13) at the time of proposal submission.

4. Certification (Attachment 4) All Proposers must complete and submit the Certification form in their proposal package.

5. Disabled Veteran Business Enterprise Participation (DVBE) (Mandatory) (Attachment 5) All Proposers must complete and submit the Disabled Veteran Business Enterprise Participation forms when bids are due. DVBE participation is mandatory.

In order to receive DVBE cost preference, all Proposers must complete and submit the Disabled Veteran Business Enterprise Participation form in their proposal package. A preference of up to 5% may be applied based on the level of DVBE participation proposed. Additional details are provided in the DVBE form.

6. Small and Microbusiness Participation (SMP) – If applicable (Attachment 6) In order to receive SMP cost preference, all Proposers must complete and submit the Small and Microbusiness Participation forms in their proposal package. Based upon the nature of the goods and services to be utilized under this solicitation (as outlined in Exhibit A, Scope of Work), the Lottery has set a Small and Microbusiness Participation goal of 25% for utilization of small or microbusiness subcontractors under the contract resulting from this RFP. While not required for this solicitation, a preference of up to 25% will be applied, based on the level of SMP participation proposed. Additional details are provided in the SMP form.

7. Payee Data Record (STD 204) – (Attachment 7) All Proposers must complete and submit the Payee Data Record in the proposal package.

8. Guaranty (Attachment 8) All Proposers must complete and submit the Guaranty form at the time of proposal submission.

9. Lottery Account Personnel (Attachment 9) All Proposers must complete and submit the Lottery Account Personnel form at the time of proposal submission.

10. Résumé Form (Attachment 10) All Proposers must complete and submit the Résumé form at the time of proposal submission.

11. (Confidential) General Contractor Disclosure (Attachment 11) All Proposers must complete and submit the (Confidential) General Contractor Disclosure and, if applicable, Subcontractor Disclosures forms. The Lottery may request clarification of disclosures or accept supplemental disclosure information at any time during the solicitation process. This attachment is not required if the Proposer is currently cleared by the Lottery’s Security/Law Enforcement Division.

12. Ticket Samples (Attachment 12) Number of tickets submitted as requested in Section II.C.2.3, Special Production or Licensed Property Ticket Samples, and Section II.C.4, Ticket Samples and Packaging. Physical samples are to be delivered.

13. Liquid Files Instructions (Attachment 13) Proposer must submit all requested documents via Liquid Files as stated in Section IV. Delivery of Proposal. Instructions in doing so are provided as Attachment 13.

14. Rated Submittals (Attachment 14) See Section II.C below (starting page 17) for details of contents.

15. GenAI Language (Attachment 15) Proposers must complete and sign the GenAI Impact Assessment Form if: 1) the Proposer intends to provide Generative Artificial Intelligence (GenAI) as a Contract deliverable; or (2) the Proposer intends to utilize GenAI, including GenAI from third parties, to complete any portion of the Contract deliverables or services.

1. Evaluation of Mandatory Submittals The Lottery will validate that all mandatory submittals were received and are completed; where applicable, the Lottery will also confirm that minimum qualifications have been met for this solicitation.

Section II.A - Summary:

Mandatory Submittals: Pass/Fail Failure to submit the following forms will result in Proposer disqualification:

· Transmittal Letter (Attachment 1)

· Required Attachment Checklist (Attachment 2)

· Price Sheet (Attachment 3)

· Certification (Attachment 4)

· Payee Data Record (STD 204) (Attachment 7)

· Rated Submittals (Attachment 14)

· GenAI Impact Assessment Form (Attachment 15) Failure to submit the following forms will not result in Proposer disqualification but will render the Proposer ineligible to receive DVBE and/or SMP preference during the Price Sheet Assessment.

DVBE and SMP Assessment (Attachments 5 and 6)

· Disabled Veteran Business Enterprise Participation Incentive Program (if applicable). A preference of up to 5% will be applied, based on the level of DVBE participation proposed.

· Small & Micro Business Participation (if applicable). A preference of up to 5% will be applied, based on the level of SMP participation proposed.

B. Rated Submittals Rated Submittals and Evaluation Criteria Proposer’s response to this section of the RFP will be rated in comparison to other submitted proposals and will be given a rating using the scale set forth in section IV Evaluation of Proposals. The relative importance of each rated category or section is also set forth in section IV. Evaluation of Proposals, C. Best Value Evaluation.

1. Proposer Experience

Proposer must provide a list of its current North American instant ticket printing contracts from jurisdictions that are comparable in size and volume to California (to include: Arizona, Florida, Georgia, Michigan, New York, Ohio, Pennsylvania, and Texas) for the five years prior to proposal submission. The list should be in order of dollar value, high to low and include the following information for each contract:

a. Lottery jurisdiction or company name and the name/address/title/phone number/email of a contact person;

b. Total dollar value of contract and the total invoiced amount submitted under the contract;

c. Start and end dates of the contract;

d. Total current resident population of the lottery’s jurisdiction;

e. Type of contract and whether the proposer was/is primary or secondary, or other;

f. Total number of games and tickets printed annually for each contract, with an indication of how many would be considered special production tickets;

g. A list of services and/or products other than printing services provided;

h. Contractually-obligated delivery schedules for new games and reorders, including number of business days from Draft Working Papers/Game Specifications execution date to ticket delivery date;

i. Description and list of experiences in integrating Proposer’s products with lottery gaming systems.

Evaluation Criteria for Proposer Experience:

Quality, relevance, and breadth of Proposer’s stated experience with regard to lottery contracts, and integration with gaming systems.

2. Proposer Capabilities

In a written narrative of no more than 30 pages, Proposer must demonstrate how its capabilities and resources make it well-suited to service the Lottery account and build future growth in Lottery sales and profits. The narrative should discuss all subjects addressed in the following sections 2.1 through 2.7.

2.1 Ticket Production Capabilities

1. Proposer’s capacity to produce at least 100 million instant lottery tickets per game, while meeting all contractual obligations set forth in Exhibit A, Scope of Work.

1. Proposer’s total printing capacity to produce tickets that meet all contractual obligations set forth in the Exhibit A, Scope of Work.

1. Proposer’s timetable to quickly develop, print, finish, and deliver tickets is imperative for the Lottery. It is highly desirable that the Proposer provide shorter turnaround times than the minimums found in Exhibit A, Scope of Work. This timetable should include at a minimum, the number of business days needed to develop prize structure, artwork, draft working papers, and final working papers. Proposer’s ability to deliver tickets after execution of the Final Working Papers.

1. Proposer’s ability to conduct an instant ticket sign-off for press approval without a Lottery employee, while ensuring that tickets pass all security tests and comply with ticket design criteria. Proposer must describe how the press approval will occur without a Lottery employee available, onsite or virtually.

1. Description of any contract dispute relating to instant ticket contracts, printing, and/or delivery of instant tickets, that resulted in a financial assessment for the ten years prior to proposal submission. Include a description of the process utilized to reach a final resolution and any terms thereof.

2.2 Graphics and Creative Design Capabilities

a. Proposer’s capabilities for designing ticket graphics that are impactful and attention-grabbing as determined by consumer marketplace trends, design innovations, industry best practices, and/or via consumer research studies. This description should include the approach and philosophy to designing tickets, as well as the technical resources and expertise the Proposer has in order to produce high-quality and marketable designs.

b. Please explain how your philosophy in developing impactful common themes, as well as innovative games and concepts.

c. Proposer’s printing capabilities in terms of number of display colors and quality of graphics, overprint colors and graphics, as well as the library of imaged fonts and graphics used for the play symbols.

d. Proposer’s ability to produce unique marking systems for bingo, crossword, and other types of extended-play games with a variety of colors.

2.3 Special Production Capabilities

Describe and provide any unique, innovative, or proprietary tickets that ensure a positive, engaging experience resulting in repeated future purchase behavior. These may include special paper, special treatments, niche tickets, multi-page tickets, die cut tickets, folds, specialty inks, and other proprietary techniques unique to the Proposer. Proposer should describe its special vending capabilities, including any equipment designed to dispense special games.

2.4 Special Production or Licensed Property Ticket Samples

The Lottery would also like to see a sampling of tickets produced by the Proposer that involve special production techniques and/or licensed properties that illustrate the Proposer’s innovative and unique capabilities, while also meeting Lottery regulations. Examples might include but are not limited to:

· Tickets innovative to the industry;

· tickets trending in the industry;

· Tickets featuring engaging and modern licensed properties that have positive perception, and a list of vendor’s current licensed properties;

· Describe your strategy for obtaining relevant licensed properties

· Technologically-advanced tickets developed for specific target markets; and

· Tickets with special inks, special paper, unique treatments, unique shapes, play formats, prizes, or any other characteristics that set them apart from standard instant tickets (e.g. scented scratch-off material, die cuts, folds, unusual packaging, pouches, multi-page books, special imaging fonts, proprietary printing techniques, QR codes, and increased imaging), and tickets with play data on the back;

The samples above are to be produced by the Proposer and not computer generated, hand-made, or contrived.

2.5 Game Programming Capabilities

a. Proposer should describe its game programming capabilities and provide examples of programming an instant game that provides exciting play action and is not predictable to even the frequent player.

b. In particular, the Proposer should discuss how a game’s prize structure would be programmed to achieve the following:

1) Maximize the perception that mid-tier and high-tier winners are randomly seeded;

2) Prevent low-probability occurrences, such as a single pack including ten $40 winners, from occurring in a single pack;

3) Minimize the occurrence of discernible patterns of prize distribution (such as packs including no more than one winner above a certain prize level);

4) Facilitate cross-promotion of Lottery draw games with instant games (Scratchers);

5) Use the back of tickets for additional scratch-off play areas; and

6) Any additional unique prize structure configurations.

c. Proposer should also include a description of its capabilities to program extended play games like bingo and crossword so that very few tickets hold identical combinations of numbers or words. Additionally, describe any ability to create and provide seasonal or special word lists.

d. Proposer should describe how they maximize the ticket back available space for text printing and colored graphics, using a variety of colors, graphics, and QR codes. Proposer should describe how QR codes are being utilized and their functionality. Proposer should describe how scratch-off play areas on the back of tickets can be effectively programmed.

2.6 Other Proprietary Capabilities

Proposer should provide information about any proprietary capabilities it has that can: provide digital programs or extensions for the Lottery website, mobile application(s), and/or social media; drive players back to retail; and stay ahead of the industry with cutting-edge technologies and functionalities.

Proposer should describe capabilities for integration of products/ licensed properties with ancillary promotional extensions that create a superior player experience, widen the player base, and increase frequency of play.

2.7 Quality Control Plan

In addition to the above capabilities, the Proposer must provide a detailed plan for quality control that, at a minimum, includes the following:

a. A description of how and by whom (Proposer, subcontractor, other) numbering and lettering of instant tickets will be accomplished.

b. An explanation of how the numbering is to be controlled to ensure error-free results.

c. An explanation of the numbering, lettering or symbol printing which relates to how the game is to be played.

d. A description of the numbering of packs and instant tickets for use in controlling instant ticket distribution and accounting.

e. An explanation of the numbering and barcodes on instant tickets for claims validation, reconstruction of game ticket numbers, and letters and/or symbols for mutilated and/or unreadable tickets.

f. An explanation of the barcodes used by the check-a-ticket devices.

g. An explanation of the barcodes used by retailers for validating tickets.

h. An explanation of UPC (Universal Product Code) barcode.

i. A description of the procedure for 100% visual inspection of instant tickets, including visual observation of the application of the covering material, release coat, and game data.

j. An explanation of how the Proposer will provide the Lottery with subgame and omit production within the acceptable range of variance.

k. An explanation of procedures to ensure that game files’ submittals are accurate.

l. A description of the procedures in place to track and resolve any problems that arise.

m. A description of the quality assurance tests the Proposer may use to complete a remote sign-off for press approval, including the processes used to evaluate the colors in the graphic and scratch-off areas, conduct security-related tests, and proof writing on the ticket front and back.

2.8 Security Control

Identify and describe physical and logical security components, controls, processes, and procedures to ensure the security, honesty, and fairness of the design, development, and production of instant tickets including:

a. Security Plan

1) Security Organization, Policies, Awareness, and other administrative controls

2) Human Resources Security

3) Business Continuity Plan and Disaster Recovery Plan

b. Development Security

1) Game Design - identify physical, logical and game security components

2) Game Generation - identify controls and / or enhanced security measures for the development, quality control and security of programs, tables, and data and configuration files

3) Game Printing

4) Game Editing - identify controls for the physical delivery of games

5) Game Load Media

6…