updated sole source.pdf

Sole Source Justification Form

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

Department/Bureau/Section: Illinois Department of the Lottery- Operations and Technology.

Need Identified Date: Oct 7, 2026 Supply/Service Need By Date: Oct 29, 2026

Project Title: Lottery Internal Control System

Vendor: Elsym Consulting, Inc.

Provide a description of the supplies or services required:

The Lottery requires an upgrade of its existing Retail Internal Control System (ICS) configured for Intralot’s LOTOS gaming system and its iLottery ICS configured for Allwyn’s gaming system to run on Windows Server 2025, together with migration of ICS hosting to Amazon Web Services (AWS).

Elsym’s September 14, 2026 proposal states that ICS functionality and reporting will remain the same. Project services include licensing, hardware and other software, implementation, testing, production launch, acceptance testing, training, documentation, data conversion, live-run coaching, online and instant ICS, lockdown alternative, and MUSL reporting. The proposal also covers ongoing ICS maintenance and support, balancing and testing, AWS support and maintenance, and estimated AWS hosting. The ICS operates separately from the Central Gaming System (CGS), reprocesses CGS transaction-log data, compares reports, and supports identification and reconciliation of anomalies and draw-related controls.

Value: Estimated Value of Initial Term, this Change Order or Amendment:

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

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

Type: New Sole Economically Feasible Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Oct 29, 2026

Estimated Contract End Date: Oct 28, 2027

Number of Potential Renewals: 0

Length of Each Renewal in Months:

Total Value of All Renewals:

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

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

Section IV - Sole Source Justification

247484

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

Items are Copyrighted or Patented and the Items are Only Available from the Holder

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

Section V - Purchase History

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

Term Term From Term To Value Description Contract Number Type

1 06/30/2011 01/17/2021 1,406,300 Development, Implementation and Maintenance of IL Lottery Internal Control System.

LOT12M4000 RFP

2 06/30/2011 08/29/2022 21,200 Emergency Internal Control System Contract. Maintenance of IL Lottery Internal Control System.

21-458LOT-LOTTE-P- Emergency

3 08/30/2021 08/29/2022 127,200 nternal Control System Maintenance 21-458LOT-LOTTE-P- Sole Source

4 08/30/2022 08/29/2023 145,200

Internal Control System Maintenance 22-458LOT-LOTTE-P-3 Sole Source

5 08/30/2023 08/29/2024 159,000 Internal Control System Maintenance 23-458LOT-LOTTE-B- Sole Source

6 08/30/2024 08/29/2025 164,088 Internal Control System Maintenance 25-458LOT-LOTTE-P- Sole Source

7 08/30/2025 08/29/2026 169,008 Internal Control System Maintenance 26-458LOT-LOTTE-B-4 Sole Source

8 08/30/2026 09/29/2026 14,507 Internal Control System Maintenance 27-458LOT-LOTTE-P- Small Purchase

9 09/30/2026 10/29/2026 14,507 Internal Control System Maintenance 27-458LOT-LOTTE-P- Small Purchase

10 Amendment

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

Section VI - Business Rationale

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

The Illinois Department of the Lottery requires a reliable, secure, and independent Internal Control System (ICS) to verify the accuracy and integrity of gaming transactions and reports generated by the Lottery’s Central Gaming System (CGS). The CGS is the primary system that processes Lottery gaming transactions, while the ICS operates independently as a separate control and verification system.

The ICS receives transaction information from the CGS, independently reprocesses that information, and compares its results to reports generated by the CGS. This independent verification allows the Lottery to identify and reconcile discrepancies or anomalies and provides an important control over the integrity of Lottery gaming activity.The ICS also supports critical Lottery functions involving online and instant games, draw activity, prize and liability calculations, daily balancing, system monitoring, and Multi-State Lottery Association (MUSL) reporting requirements. Because the ICS operates independently from the CGS, the Lottery is not relying solely on the same system that originally processed the transactions to confirm their accuracy.The Lottery currently utilizes Elsym Consulting, Inc.’s ICS to support both the Retail ICS for Intralot’s LOTOS gaming system and the iLottery ICS for Allwyn’s gaming environment. These existing ICS environments require an upgrade to Windows Server 2025 and migration to an Amazon Web Services (AWS) hosted environment to maintain their continued security, supportability, reliability, and operation. The proposed work modernizes the underlying infrastructure while preserving the established ICS functionality and reporting currently relied upon by the Lottery.The Lottery also requires continued maintenance, balancing and testing, system monitoring, security updates, backups, technical support, new game and promotion development, quality assurance and acceptance testing, documentation, training, and production support.

These services are necessary to ensure the ICS remains secure, operational, and capable of adapting to changes in the Lottery’s games, gaming systems, technology, and security requirements. Maintaining a functioning and independently operated ICS is a continuing and fundamental requirement of Lottery operations.

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

The vendor proposal includes $20,200 in one-time costs consisting of Initial Project Software Fees: ICS License Software Hardware and other software.

$15,000 for four ICS software licenses and $5,200 for hardware and other software.

Recurring costs include:

$12,700 per month for Internal Control System- Monthly Maintenance Expenditure $1,807 per month for Monthly Balancing Testing Fee $1,000 per month for AWS support and maintenance- AWS support and maintenance: (Perform ongoing management and administrative duties to support the proper functioning of both the test and production ICS instances. Items include - monitoring the systems to ensure servers are operational and performing as expected, ensuring backups are performed to allow rolling 180 days of recovery, performing all necessary OS patching and security updates on a quarterly basis, performing periodic server reboots to ensure optimal performance, performing any recovery actions needed in case of anomaly, maintaining security controls including whitelisting of allowed IP's) $3000 per month AWS Monthly hosting cost.

The Lottery requires the continued licensing, upgrade, migration, hosting, maintenance, testing, and technical support of its existing Retail and iLottery Internal Control Systems. The required work includes upgrading both ICS environments to Windows Server 2025 while maintaining the functionality, calculations, interfaces, reporting, and control processes currently used by the Lottery. The proposed environment includes four ICS software licenses, four ICS servers, and two AWS-hosted jumpboxes used to provide controlled administrative access to the hosted environment. The production infrastructure will also be regionally separated to support system availability and resiliency.The scope includes server and software configuration, AWS implementation, data conversion as required, implementation and acceptance testing, quality assurance and customer acceptance testing support, production launch assistance, training, documentation, and continued support for online, instant, and MUSL reporting functions. The Lottery also requires ongoing ICS maintenance and technical support, balancing and testing services, new game and promotion development, security and operating system updates, system monitoring, backups, recovery support, and up to 250 annual hours of new development, internal quality assurance testing, and customer acceptance testing. These requirements are necessary to ensure the ICS remains secure, supported, recoverable, and capable of performing its independent verification function.

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

The requested services are economically available from Elsym Consulting, Inc. because the procurement involves the continued licensing, modification, upgrade, migration, and support of the Lottery’s existing proprietary and customized Elsym ICS. Elsym developed and implemented the existing ICS and its proprietary source code and customized the system specifically for the Illinois Lottery’s gaming environment. The system is configured to independently process gaming information and perform the calculations, reconciliation, reporting, and control functions relied upon by the Lottery.A different vendor could not simply assume responsibility for the existing system without the necessary intellectual property rights, source-code access, licenses, and technical authority to modify and support Elsym’s proprietary software. A replacement vendor would instead need to develop or provide a separate ICS and recreate the Lottery-specific interfaces, calculations, reports, and control functions currently performed by the existing system. The replacement system would then require implementation, integration, data conversion, and extensive testing to validate its accuracy and reconciliation with the CGS.Continuing with Elsym allows the Lottery to upgrade the existing ICS to Windows Server 2025 and migrate the infrastructure to AWS while preserving the established functionality and reporting already in use. Replacing the existing system solely to obtain these services would duplicate implementation efforts and costs already incurred by the State and create additional schedule, testing, and operational risks.

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

The unique feature of this procurement is that it involves Elsym’s proprietary ICS source code and the Lottery-specific configuration that Elsym developed and implemented for the Illinois Lottery. The ICS is not commercially interchangeable software that can simply be transferred to another maintenance provider. It has been specifically configured to interface with the Lottery’s gaming environment and independently process and reconcile gaming transactions and reports. The system also maintains sensitive gaming information and supports Lottery-specific functions, including prize and liability calculations and applicable Multi-State Lottery Association reporting requirements.The current scope is also specific to the existing Elsym environment and includes four ICS software licenses, four Windows Server 2025 ICS servers, two AWS-hosted jumpboxes, regionally separated production infrastructure, implementation and acceptance testing, training, documentation, production support, continued maintenance, balancing and testing, and up to 250 annual hours of development and testing support. Elsym’s ownership and knowledge of its proprietary software, combined with its familiarity with the Lottery-specific interfaces, configurations, calculations, and reporting requirements, make these services specific to the existing Elsym ICS.

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

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

A replacement or independently developed system would need to replicate Lottery-specific interfaces, reports, transaction reprocessing, reconciliation controls, and draw-related functions, and would require implementation and validation testing.

6. Are there resellers or distributors?

Yes No N/A

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

The Lottery reviewed Elsym’s proposed pricing against the historical cost of maintaining the existing ICS, the services included in the current maintenance arrangement, and the additional scope required for the Windows Server 2025 upgrade and AWS migration. The proposal separately identifies one-time implementation costs and recurring maintenance, testing, AWS support, and hosting costs, allowing the Lottery to evaluate the individual components of the proposed pricing.The proposal includes $20,200 in one-time costs consisting of $15,000 for four ICS software licenses and $5,200 for hardware and other software. Recurring costs include $12,700 per month for ICS maintenance and development support, $1,807 per month for balancing and testing, $1,000 per month for AWS support and maintenance, and estimated AWS hosting of $3,000 per month billed in arrears at actual cost. Based on the estimated hosting amount, recurring costs are approximately $222,084 annually, resulting in an estimated first-year total of $242,284.The maintenance scope also includes up to 250 annual hours of new development, internal quality assurance testing, and customer acceptance testing.

The Lottery considers the pricing fair and reasonable based on historical ICS costs, the defined services included in the proposal, the additional infrastructure and hosting requirements, Elsym’s experience with the existing proprietary system, and the substantial cost and effort that would otherwise be required to develop, implement, test, and validate a replacement ICS.

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

Yes No

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

The Lottery has a continuing operational need for an independent ICS and will require ongoing software maintenance, licensing, technical support, balancing and testing, security and operating system updates, AWS support, and hosting for as long as the existing Elsym ICS remains in operation. The Windows Server 2025 upgrade and AWS migration modernize the infrastructure supporting the ICS but do not eliminate the need to maintain, monitor, secure, test, and update the system.Current recurring costs include $12,700 per month for ICS maintenance and support, $1,807 per month for balancing and testing, $1,000 per month for AWS support and maintenance, and estimated AWS hosting of approximately $3,000 per month billed at actual cost. Future development may also be required as Lottery games, promotions, gaming systems, technology, or security requirements change. These future obligations result from the Lottery’s continuing operational need for the ICS and the ongoing maintenance required to keep the system functional and secure.

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

If this sole source is not approved, the Lottery would need to determine whether another vendor could legally and technically modify and support the existing proprietary Elsym ICS. If another vendor cannot perform that work, the Lottery would need to procure and implement a replacement ICS capable of independently performing the calculations, reconciliation, reporting, security, and control functions currently provided by the Elsym system.A replacement would require development or configuration, implementation, integration, data conversion, testing, training, and validation to ensure that transactions and calculations accurately reconcile with the CGS. The Lottery has previously incurred approximately $400,000 in implementation and upgrade costs associated with the existing ICS, exclusive of recurring maintenance. While this historical amount is not a current estimate for a replacement system, it demonstrates the significant cost associated with implementing an ICS. Replacing the existing system would therefore duplicate substantial implementation efforts and costs already incurred by the State.There would also be significant operational and scheduling risk. The ICS supports the independent verification and reconciliation required for Lottery draw-game operations, including applicable multi-state lottery requirements. A delay in implementing and validating a replacement system could affect the Lottery’s ability to support Powerball, Mega Millions, and Illinois draw-game operations and could consequently affect associated Lottery revenues and transfers to State-supported programs. Continuing with the existing Elsym ICS avoids unnecessary replacement costs and reduces the technical, financial, and operational risks associated with transitioning to a new system.

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

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

Section VII

Requesting Department Representative

Requesting Department Signature Required

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

Date Oct 14, 2026

Printed Name Ryan Schone E-mail Address ryan.schone2@illinois.gov

Phone Number 2175570242

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

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

E-mail Address Harold.Mays@illinois.gov

Phone Number 3127933030 Date Oct 14, 2026

Printed Name Harold Mays

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

SPO Approval and Signature Required

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

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

State Purchasing Officer Signature Phone Number 217-970-0598 Date 10/14/2026

Printed Name Heather Crain E-mail Address heather.crain@illinois.gov

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Bulletin Reference Number 27-458LOT-LOTTE-B-53658

Requesting Agency/University Illinois Department of the Lottery

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

Project Title

Vendor

Initial Date of Procurement Bulletin Posting

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

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

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

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

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

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

Other

CPO Signature CPO Phone

Printed Name Date

CPO E-mail

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

If yes, what was the original contract value?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5c. Explain how the market evaluation was conducted?

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

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

6. Are there resellers or distributors?

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

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

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

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

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

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

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

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

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

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229

testing, training, documentation, data conversion, live-run coaching, online and instant ICS, lockdown alternative, and MUSL reporting. The proposal also covers ongoing ICS maintenance and support, balancing and testing, AWS support and maintenance, and estimated AWS hosting. The ICS operates separately from the Central Gaming System (CGS), reprocesses CGS transaction-log data, compares reports, and supports identification and reconciliation of anomalies and draw-related controls.

Maintenance of IL Lottery Internal Control System.

Contract. Maintenance of IL Lottery Internal Control System.

Internal Control System Maintenance

$15,000 for four ICS software licenses and $5,200 for hardware and other software.

Recurring costs include:

$12,700 per month for Internal Control System- Monthly Maintenance Expenditure $1,807 per month for Monthly Balancing Testing Fee $1,000 per month for AWS support and maintenance- AWS support and maintenance: (Perform ongoing management and administrative duties to support the proper functioning of both the test and production ICS instances. Items include - monitoring the systems to ensure servers are operational and performing as expected, ensuring backups are performed to allow rolling 180 days of recovery, performing all necessary OS patching and security updates on a quarterly basis, performing periodic server reboots to ensure optimal performance, performing any recovery actions needed in case of anomaly, maintaining security controls including whitelisting of allowed IP's) $3000 per month AWS Monthly hosting cost.

The Lottery requires the continued licensing, upgrade, migration, hosting, maintenance, testing, and technical support of its existing Retail and iLottery Internal Control Systems. The required work includes upgrading both ICS environments to Windows Server 2025 while maintaining the functionality, calculations, interfaces, reporting, and control processes currently used by the Lottery. The proposed environment includes four ICS software licenses, four ICS servers, and two AWS-hosted jumpboxes used to provide controlled administrative access to the hosted environment. The production infrastructure will also be regionally separated to support system availability and resiliency.The scope includes server and software configuration, AWS implementation, data conversion as required, implementation and acceptance testing, quality assurance and customer acceptance testing support, production launch assistance, training, documentation, and continued support for online, instant, and MUSL reporting functions. The Lottery also requires ongoing ICS maintenance and technical support, balancing and testing services, new game and promotion development, security and operating system updates, system monitoring, backups, recovery support, and up to 250 annual hours of new development, internal quality assurance testing, and customer acceptance testing. These requirements are necessary to ensure the ICS remains secure, supported, recoverable, and capable of performing its independent verification function.