Kentucky Cigarette Tax Stamps, Fulfillment and Distribution

The Commonwealth of Kentucky Finance and Administration Cabinet, on behalf of the Department of Revenue, is soliciting a Request for Proposal (RFP) for the manufacturing, fulfillment, and distribution of Kentucky Cigarette Tax Stamps. The procurement seeks qualified vendors to design, produce, and deliver heat transfer cigarette tax stamps that are counterfeit-resistant, manufactured using the Gravure process or industry standard equivalent, with multiple security features including safety tint lettering and ultraviolet-reactive fibers capable of high-speed application. Deliverables include stamps produced in rolls of 30,000 units with serial numbering, comprehensive inventory warehousing and fulfillment services, shipping to licensed wholesalers, and a secure online portal enabling wholesalers to submit orders and process payments. Key requirements include maintaining a two to three-month inventory of stamps, fulfilling orders submitted by 10:00 AM Eastern Time on the same business day and those after 10:00 AM the next business day, replacing all stamps lost, stolen, damaged, or defective in transit at no additional cost, and implementing comprehensive security measures and disaster recovery plans with access granted to Department of Revenue inspectors during manufacturing. The initial contract term is two years from the effective award date, from August 2026 through August 2028, with options for four additional two-year renewal periods by mutual agreement. Critical deadlines include written questions due by May 21, 2026, Commonwealth responses by May 25, 2026, and proposals due by June 11, 2026, at 3:30 PM Eastern Time. Evaluation criteria include vendor qualifications, technical compliance with security and production specifications, pricing competitiveness (with pricing expressed per unit of one thousand stamps), and the ability to meet fulfillment and shipping timelines.

The solicitation documents do not explicitly identify set-aside designations or restrictions limiting responses to specific enterprise categories, though all bidders must comply with Kentucky statutes regarding taxes, employment, safety, and nondiscrimination. Vendors are required to submit a notarized affidavit confirming compliance with Kentucky campaign finance laws and must obtain Commercial General Liability Insurance of $1,000,000 per occurrence and $2,000,000 aggregate. The RFP does not indicate an incumbent vendor or reference existing infrastructure requiring integration, suggesting this represents a new competitive procurement for these services. Pricing shall exclude federal excise tax and Kentucky sales or use tax, with price increases prohibited during the first twelve months of the contract; any subsequent increases require written justification and Commonwealth approval based on industry-wide price changes. While specific budget ranges are not disclosed in the available documentation, the initial procurement involves 450,000 units of heat transfer cigarette tax stamps over the two-year contract period, with the Commonwealth bearing all shipping costs except expedited next-day delivery billed to the wholesaler's carrier account, providing vendors with the framework to develop comprehensive cost proposals covering all production, warehousing, fulfillment, and standard shipping expenses.