Connecticut Lottery Corporation

Transcription

1 Connecticut Lottery Corporation Request for Proposals #CLC Instant Games ADDENDUM #4 August 14, Please provide pricing for the additional base game tickets listed below. 3-Year Term 5-Year Term Base Game Name Ticket Size Pack Size Standard Order Qty Est. Order Frequency Cost Per Thousand (CPM) Cost Per Thousand (CPM) Pinball Wizard 8" x 4" 50 4,500,000 1 per year 10x Cash 8" x 4" 50 2,500,000 2 per year 10x Cash 8" x 4" 50 3,500,000 1 per year 10x Cash 8" x 4" 50 4,500,000 1 per year 20x the Cash 10" x 4" 25 2,000,000 1 per year *Pinball Wizard pricing was previously requested for a ticket of 10 length, which you provided. This request is for pricing for an 8 ticket. Page 1 of 2

2 2. To assist the CLC in the final step of the evaluation phase you are being asked to provide detailed information as to what modifications, if any, you would make to your Proposal if you were to be named as the Primary contractor for this RFP. The modifications may include, but are not limited to, the following: Pricing Existing Products or Services New Products Instant Tickets in Non-Traditional Formats Options For this purpose, the Primary contractor is defined as a corporation that receives 51% or more of the CLC s annual spend for instant ticket production. In fiscal year 13 the budget for instant ticket print production is $4,059,464. Future FY budgets are as yet undetermined. Answers to these questions must be submitted electronically to the Purchasing Officer, Janice.beckner@ctlottery.org, no later than 1:00 p.m. ET on Wednesday, August If your response contains Confidential Information you must mark them as such in accordance with the RFP. Page 2 of 2

3 Connecticut Lottery Corporation Request for Proposals #CLC Instant Games ADDENDUM #3 Response to Proposers Questions May 14, 2012 Proposals are due by 2:00 ET on May 30, Response to submitted questions are as follows:

4 RFP Reference RFP Page Question 1 n/a n/a Will the CLC please provide all current contract pricing for a) instant tickets; b) instant ticket printing options; c) licensed properties; and d) prices and descriptions (scope, composition, etc.) of i) any 2 nd chance drawings; ii) any social media, Internet, or interactive games; iii) rewards and loyalty programs; and iv) de-inking and processing of instant games? Additionally, will the CLC please provide the amounts paid for each of these services during FY 2011? CLC RESPONSE: No, not as a part of this RFP process. 2 n/a n/a Will the CLC please provide a copy of its launch schedule for FY 2011 and FY 2012 showing the price points, number of games at each price point, order quantity for each game, pack size, and any special options or features for each game? CLC RESPONSE: Yes. The instant game launch schedules for FY 2011 and FY 2012 are attached to this addendum. 3 Part 1, Introduction 4 We assume that 51 percent or more of the lottery s instant ticket printing business equals 51 percent of the Lottery s annual printing budget. Is this the correct assumption? If not, will the Lottery please define 51 percent or more of the CLC s instant ticket printing business? CLC RESPONSE: No. The statement 51 percent or more of the lottery s instant ticket printing business refers to 51% or more of the CLC s instant ticket printing spend for a fiscal year.

5 RFP Reference 4 Part III, Standard RFP Terms and Conditions; Section H, Required Contents and Order of Proposal RFP Page Question 8 Section 1, Proposal Package, lays out the structure of Proposers proposals with details on tabs and the required information. Only two sections within Part V, Technical Specifications, Section B, Ticket and Game Specifications, are identified for Proposers to respond to. Does the CLC expect compliance statements for all of the other sections in Part V or responses only where it is required (B.10 and B.20)? CLC RESPONSE: No. The CLC does not expect compliance statements for the other sections in Part V because, by signing and submitting the Proposer s Affidavit, each Proposer agrees to all of the provisions of the RFP (see paragraph 9 of the Proposer s Affidavit). 5 Part III, Standard RFP Terms and Conditions; Section I, Proposal Submission Instructions and Requirements 6 Part III, Standard RFP Terms and Conditions; Section K, Evaluation Process; Award Criteria; Preliminary Notice of Award; Contract Execution Under item 3, Proposal Submission, the RFP states that the Financial Package must contain one (1) original and three (3) copies of financial information. Due to the large volume of some financial statements, would the CLC consider allowing Proposers to submit electronic versions of the three copies on CD? CLC RESPONSE: Yes. The CLC will accept the three copies of the financials in an electronic format other than Will the CLC indicate the scores/weightings that will be assigned to the factors outlined in Phase II of the evaluation process? CLC RESPONSE: No. The CLC will first qualify Proposers based on relevant criteria and then evaluate pricing. The CLC will select the Proposer or Proposers it determines is/are in the CLC s best interest, including the possibility of a primary vendor (see response to question #3 above).

6 RFP Reference 7 Part III, Standard RFP Terms and Conditions; Section K, Evaluation Process; Award Criteria; Preliminary Notice of Award; Contract Execution 8 Part IV, Proposer Information; Section A, Proposer s Experience RFP Page Question Since the CLC is not asking for sample tickets, how will it evaluate ticket performance (ticket scratchability ) as described in this section? CLC RESPONSE: The CLC requires each Proposer to provide a total of 75 tickets for evaluation. The types are left to the discretion of the Proposer but should offer a broad range of examples of the Proposer s best efforts. These tickets are to be placed in a separate envelope that accompanies the Proposal Package. The envelope is to be labeled Sample Tickets and include the name of the Proposer. Only one (1) envelope containing 75 tickets is required. 13 Would the CLC please clarify what is meant by non-traditional instant ticket platforms? In addition, would the CLC please provide an example? CLC RESPONSE: Non-traditional instant ticket platforms could include internet, mobile or other current or future platforms where instant tickets or instant ticket products can be purchased and/or played.

7 RFP Reference RFP Page Question 9 Part IV, Proposers Information; Section D, Proposer s Financial Statements 15 The RFP requires that each Proposer must provide: 1. The Proposer s audited financial statements for the last three (3) fiscal years. If audited statements are unavailable, provide unaudited financial statements PLUS complete federal tax returns for the last three (3) tax filing years; and 2. If the Proposer is a subsidiary of another company, the financials for the parent company for the same periods must be provided with the Proposer s statements. In the event the Proposer s financial results are consolidated as part of its parent s audited financial statements and the Proposer is a subsidiary of another company, would it be sufficient to provide the CLC complete federal tax returns for the last three (3) tax filing years and the financials for the parent company for the last three fiscal years? Further, the RFP provides that the Proposer s Chief Financial Officer shall sign and date a statement that the financial statements provided were prepared in accordance with generally accepted accounting principles ( GAAP ) accepted in the United States of America and fairly represent the financial condition of the Proposer as of the Submission Date. To the extent the Proposer or its parent prepares financial statements in accordance with International Financial Reporting Standards ( IFRS ), will the CLC please confirm that such reporting standards are acceptable and that the Chief Financial Officer of the Proposer s parent may sign and date such financial statements if such statements are being provided? CLC RESPONSE: Yes, financial statements from the parent and complete tax returns for the subsidiary can be submitted. The Proposer s parent CFO may submit a statement relating to financial statements to indicate that they prepared in accordance with either generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS).

8 RFP Reference 10 Part V, Technical Specifications; Section B, Ticket and Game Specifications; Section 1.j, Scratch 2 Cash RFP Page Question 15 The RFP provides that all printed tickets must contain and include a Scratch 2 Cash data matrix barcode and be printed according to the specifications to be provided by the CLC to the successful Proposer. As the CLC is aware, the Scratch 2 Cash data matrix barcode as currently used today requires a license from Scientific Games to use its patented FailSafe technology. The CLC s current instant ticket vendor has a royalty-free license to use such patent through May 8, Will the CLC please confirm that it will again assist successful Proposers to obtain an extension to the term of its license agreement with Scientific Games for FailSafe (on existing terms) for the term of any contract that results from this RFP? If not, will the CLC consider an alternative solution to FailSafe so long as such solution: (1) uses a PDF417 barcode under the scratch-off material and, at a minimum, would be a functional substitute to FailSafe; (2) most likely will provide equal or greater protection than what is in place today with FailSafe; and (3) would be offered on a royalty-free basis? CLC RESPONSE: The CLC will assist successful Proposer(s) for this RFP in obtaining a license from the CLC s on-line vendor for the technology necessary to read the Scratch 2 Cash data matrix barcode or similar keyless validation feature. 11 Part V, Technical Specifications; Section B, Ticket and Game Specifications; Section 2, Ticket Quantities 16 In addition to Sample Tickets, Dispenser Inserts, and How to Win Cards, the CLC currently requires pack insert cards. Will the CLC continue this requirement under the new contract? CLC RESPONSE: Yes.

9 RFP Reference RFP Page Question 12 Part V, Technical Specifications; Section B, Ticket and Game Specifications; Section 10, Instant Tickets in Non-Traditional Formats 18 Would the CLC please clarify the term non-paper formats? Does this refer to e-tickets or e-scratch? CLC RESPONSE: The term non-paper formats refers to digital or other non-paper formats. E- tickets or e-scratch are considered non-paper formats. See also the response to question #8.

10 RFP Reference RFP Page Question 13 Part V, Technical Specifications; Section B, Ticket and Game Specifications; Sections 17, Ticket Concept Testing, 18, Annual Research Study, and 20, Options A.) Would the CLC kindly provide a copy of the results of its most recent focus groups? B.) Would the CLC please give an estimate of the anticipated yearly focus group expenditure that will be shared by all vendors? C.) Further, will Vendors be sharing in the cost based on each Vendor s percentage of the overall ticket supply to the CLC? Would the CLC please articulate how the responsibility for providing the services listed under Sections D)18 (Annual Research Study) and E) 20 (Options) would be apportioned across the primary contractor and other successful Proposers? CLC RESPONSE: A.) No. B.) No. Historically, the CLC has held 4-5 focus group events annually. A focus group event includes 1-2 days of testing. Each day of testing includes 1-2 sessions with participants. The annual average total cost for focus groups has been $48,000 - $60,000, divided by participating vendors. C.) Yes, successful Proposers will share in the cost. The percentage assigned to each successful Proposer has not yet been determined. The CLC does not anticipate significant changes in the focus group structure. D.) Each successful Proposer must provide the annual analysis described in Part V, section B, number 18, regardless of whether there is a primary or multiple vendors. E.) The CLC may or may not purchase options from any successful Proposers; this is true regardless of whether there is a primary or multiple vendors. As the RFP states, each Proposer must describe whether it can provide the listed optional services and, if so, what that Proposer s price is for providing each such service.

11 RFP Reference RFP Page Question 14 Part V, Technical Specifications; Section B, Ticket and Game Specifications; Section 18, Annual Research Study 20 Would the CLC please provide a copy of its most recent Segmentation Study and/or A&U Study? In addition, would the CLC please provide a copy of its most recent annual analysis of the instant game market? CLC RESPONSE: No.

12 RFP Reference RFP Page Question 15 Part VI, Bonds and Insurance; Section A, Insurance The second paragraph in Section A, Insurance, states: Before Contract execution, the successful Proposer shall provide the CLC s Purchasing Officer with Certificates of Insurance, in a form satisfactory to the CLC, reflecting the types and minimum limits specified below. Each Certificate of Insurance shall: (a) require the insurance company to provide thirty (30) calendar days advance written notice to the CLC, by certified mail, return receipt requested, of any change in, termination of, failure to renew, default, or cancellation of coverage; and (b) disclose any nonstandard exclusions for each required coverage. During a policy year there are changes to a policy; i.e., addition/deletions of property locations; minor policy changes that there would be no need for the CLC to be notified of; therefore, we respectfully request that the words of any change in be deleted. CLC RESPONSE: The CLC deletes the second paragraph of Section A of Part VI and replaces it with the following provision: Before Contract execution, the successful Proposer shall provide the CLC s Purchasing Officer with Certificate(s) of Insurance, in a form satisfactory to the CLC, reflecting the types and minimum limits specified below. Each Certificate of Insurance shall: (a) require the insurance company to provide thirty (30) calendar days advance written notice to the CLC, by certified mail, return receipt requested, of any change in the type or minimum amount of coverage required under the Contract, or termination of, failure to renew, default, or cancellation of coverage; and (b) attach a list of all endorsements (by endorsement number and name) for each required policy.

13 RFP Reference 16 Part VI, Bonds and Insurance; Section A, Insurance RFP Page Question In the second paragraph in Section A, Insurance, item (b) states disclose any nonstandard exclusions for each required coverage. Will the CLC please explain what is meant by a nonstandard exclusion as policies and forms vary from company to company? CLC RESPONSE: See the substitute provision set forth in the response to question # Part VI, Bonds and Insurance; Section A, Insurance The fourth paragraph in Section A begins with All insurance policies required below shall be primary and non-contributory with any insurance or self-insurance programs carried or administered by the CLC. This cannot apply to all policies, in particular to the Workers Compensation policy. Therefore, we respectfully request that the first sentence in the fourth paragraph be deleted. CLC RESPONSE: The CLC deletes the fourth paragraph of Section A of Part VI and replaces it with the following provision: Except for Workers Compensation coverage, all insurance policies required below shall be primary and non-contributory with any insurance or self-insurance programs carried or administered by the CLC. No insurance required or furnished hereunder shall in any way relieve or diminish the successful Proposer s responsibilities, obligations and liabilities to the CLC under the Contract. 18 Part VI, Bonds and Insurance; Section A, Insurance Section A, Section 2, Printer s Errors and Omissions, requires a sublimit of $250,000 for Products Recall. Since this is a small amount, and many insureds self-insure this exposure, will the CLC accept that the Products Recall sublimit may be covered through Self-Insurance? CLC RESPONSE: Yes.

14 RFP Reference RFP Page Question 19 Part VI, Bonds and Insurance; Section B, Performance Security 22 It is standard in the insurance industry that Surety companies require that bonds be annually renewable and that failure to non-renew language be included in the bond form and contract. The majority of lotteries have accepted these changes into their RFP and Contract. 1. Section B states that the bond shall be maintained in full force and effect during the term of the Contract and all extension(s) thereof. Surety Companies require that a bond be renewed on an annual basis. Will the CLC please amend this section to include that the Performance Bond can be renewed on an annual basis? 2. Also, in today s Bonding market, Surety Companies currently require specific wording on their bond forms. Will the CLC be agreeable to the following language being included on the bond form from the Surety? This bond may be renewed on an annual basis at the sole option of the Surety. If the Surety does not choose to renew this obligation, it will so notify the Obligee and Principal not later than 30 days prior to its expiration. Non renewal of the bond by the surety does not constitute an event of default by the contractor." CLC RESPONSE: The CLC cannot determine acceptable bond language in isolation i.e., without reviewing all of the terms of a bond and the instrument by which it is to be continued. Therefore, as a part of its Proposal Submission, each Proposer must submit a sample bond form and sample continuation certificate or other document by which it is proposed that a bond for a single annual term will be continued. The performance bond must contain the mandatory requirements set forth in the RFP and shall not permit the surety to assume the Contract in whole or in part, permit the surety to cure the default, exclude from coverage liquidated damages assessed against the principal, or provide that the bond s terms prevail in the event of a conflict with the Contract (the Contract must prevail). The bond may provide that its nonrenewal or cancellation is not an event of default under the bond (although such nonrenewal or cancellation, without the immediate provision of substitute security, will be an event of default under the Contract). The CLC will discuss with any Proposer(s) receiving a Preliminary Notice of Award any concerns about the proposed bond. As stated in the RFP, however, all Performance Security shall be in a form satisfactory and acceptable to the CLC in its sole discretion, including but not only the specific language of the security instrument and the institution issuing such instrument.

15 RFP Reference 20 Part VI, Bonds and Insurance; Section B, Performance Security RFP Page Question 22 Will the CLC please clarify that the $5,000,000 Performance Bond requirement would apply to the Primary Vendor? If a Secondary Vendor is chosen, would the CLC lower or eliminate the requirement? CLC RESPONSE: The amount of the Performance Bond is lowered to $250,000 applicable to each successful Proposer, even if there is a primary vendor.

16 RFP Reference RFP Page Question 21 Part VI, Bonds and Insurance; Section C, Litigation Bond 22 We note that the CLC states that a claim upon the Litigation Bond may be made by the CLC under the following conditions: a.) The Proposer sues the CLC, the State of Connecticut, or any of their directors, officers, officials agents, employees, or Retailers, including any of the foregoing sued as individuals (collectively, the Defendants ), regarding any matter relating to the RFP process or any resulting Contract; and b.) A Defendant is the prevailing party in such suit. It is a widely accepted practice in the lottery industry [and other industries undergoing public procurements] to include in such Litigation Bond a third condition that would need to be satisfied before the Bond may be drawn upon. This condition is as follows: A court determines that the action or any portion thereof was frivolous, or was brought in bad faith, or was not brought upon reasonable grounds. Will the Lottery please add this condition to conform to such industry standard? CLC RESPONSE: The CLC deletes Section C and replaces it with the following provision: Each Proposer must provide a litigation bond in the amount of One Hundred Thousand Dollars ($100,000) naming the CLC as the obligee. The CLC may make a claim against the bond if: a.) The Proposer sues the CLC, the State of Connecticut, or any of their directors, officers, officials, agents, employees, or Retailers, including any of the foregoing sued as individuals (collectively, the Defendants ), regarding any matter relating to the RFP process or any resulting Contract; b.) A Defendant is the prevailing party in such suit; and c.) A court determines that the action or any portion thereof was frivolous, or was brought in bad faith, or was not brought upon reasonable grounds. The bond allows the Defendants to recover monies, including reasonable attorneys' fees, expenses and court costs resulting from such litigation. The litigation bond shall remain in effect for a period of two (2) years from the Submission Date. After a Contract is signed with the successful Proposer, other Proposers may request a release of the litigation bond upon substitution of a covenant not to sue or other acceptable instrument. The CLC, in its sole discretion, shall determine whether to accept a substitution and the form thereof.

17 RFP Reference 22 Part VIII, Section HH RFP Page Question The RFP provides that all Intellectual Property Rights associated with any product or service provided or developed by the successful Proposer under the Contract are and will remain the property of the successful Proposer but that the successful Proposer agrees to grant the CLC a license to use any such Intellectual Property Rights on an indefinite basis with respect to the CLC s business activities. As the successful Proposer does not have an indefinite license to third party branded Intellectual Property, will the CLC amend this provision to provide that the length of any license to third party branded Intellectual Property shall be subject to the underlying rights the successful Proposer is entitled to grant? Further, with respect to Intellectual Property rights of the successful Proposer other than third party branded Intellectual Property, will the CLC amend the term of the license to be the length of the term of the contract rather than to be perpetual? Further, the RFP further departs from industry practice regarding trademark and copyright searches and legal opinions. In particular, the RFP requires the (1) successful Proposer obtain and pay for federal trademark and/or copyright searches, (2) deliver an opinion as to whether a name the CLC chooses has been "expressly determined" to infringe or violate a trademark or copyrighted idea in connection with a game as expressed and (3) the successful Proposer obtain a trademark or copyright, as the case may be, of each chosen game name. In connection with the above requirement, Proposer requests the following amendments: 1. Successful Proposer shall obtain and pay for federal trademark searches, not copyright searches - such approach is consistent with industry practice and further the successful Proposer is still obligated to indemnify for violation or infringement of a copyright. 2. Successful Proposer shall deliver an opinion as to whether a name the CLC chooses "poses a significant risk" of infringement or violation a trademark in connection with a game as expressed - this language (poses a significant risk) is consistent with opinion practice regarding trademark violation and infringement. 3. For any trademark developed by the CLC, the CLC (and not the successful Proposer) will register the trademark again, this is consistent with industry practice. CLC RESPONSE: The CLC deletes Part VIII, Section HH and replaces it with the following provision: Intellectual Property Rights: Title to, Use of, and Indemnification The successful Proposer shall defend, indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to any claims that any or all of the products or services the successful Proposer provides under the Contract violate or infringe, in whole or in part, the Intellectual Property Rights of a third party. The successful Proposer shall also be liable to the CLC and the State of Connecticut (the State ) for all direct and/or consequential damages, including but not limited to loss of revenue to the CLC and the State resulting from any such claim or suit. The successful Proposer

18 22 Continued RFP Reference Part VIII, Section HH RFP Page Question shall assume the defense of any and all such claims or suits and pay the costs and expenses incidental thereto, subject to the CLC and the State s right to provide additional legal counsel at their own expense. In addition, the CLC shall retain the right to approve the terms of any settlement or compromise that affects the CLC s rights under the Contract or impose any obligations on the CLC. The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance. The successful Proposer s obligations under this section shall not apply to any liability, damage, loss or expense to the extent that it is exclusively attributable to a claim that any Intellectual Property Rights developed solely by the CLC violate or infringe the Intellectual Property Rights of a third party. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. Except for Intellectual Property Rights owned by third parties or developed solely by the CLC, all Intellectual Property Rights associated with any product or service provided or developed by the successful Proposer under the Contract are and will remain the property of the successful Proposer. Nonetheless, the successful Proposer agrees to grant the CLC a license to use any such Intellectual Property Rights on an indefinite basis with respect to the CLC s business activities. To the extent that the successful Proposer utilizes or relies upon the Intellectual Property Rights of a third party in fulfilling its obligations under the Contract, the successful Proposer shall provide the CLC with whatever assurance the CLC, in its sole discretion, deems necessary that the use of such third party Intellectual Property Rights is permissible. In addition, if the successful Proposer fails to perform or breaches the Contract, it must ensure the CLC s continued right of use of the licensed Intellectual Property Rights of the third party. a. Trade/Service Marks and/or Names: The successful Proposer will obtain and pay for federal trademark searches, and state trademark searches within Connecticut, on names chosen for CLC games and obtain a written opinion from outside trademark counsel, at the successful Proposer s sole cost and expense, as to the advisability of the use of such game names. Outside trademark counsel means an attorney with experience in trademark matters who is associated or affiliated with, or employed by, an independent law firm. The CLC shall receive a complete copy of each such opinion prior to final determination of the name of each game and final approval of the final mechanical art for each game. If a name the CLC chooses has been expressly determined to infringe or violate a trademark or copyrighted idea in connection with a game as expressed in the opinion given by the successful Proposer s outside trademark counsel, then the successful Proposer shall be relieved of its defense, indemnification and hold harmless obligations under this section. The successful Proposer shall obtain a federal trademark registration for each chosen game name.

19 RFP Reference 23 Part VIII, Contract Terms; Section A, Defense, Indemnification and Hold Harmless RFP Page Question 25 The RFP provides that the successful Proposer shall indemnify, defend, and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to the successful Proposer s malfeasance, misconduct, negligence or failure to meet its obligations under the Contract (a Claim ). Will the CLC please confirm that such indemnity obligation is not intended to any Claim arising out of or related to: (1) any act or omission of an Indemnified Party which may give rise to the Claim; (2) a successful Proposer s actions or omissions requested by or in compliance with the CLC s requirements; or (3) any act or omission of a third party not a subcontractor of the successful Proposer. CLC RESPONSE: This section will not be amended. 24 Part VIII, Contract Terms; Section T, Liquidated Damages 28 It is well established by Connecticut case law, as well as in other U.S. jurisdictions, that where a valid clause for liquidated damages exists in a contract, a party may not retain the stipulated sum as liquidated damages and also recover actual damages. As such, will the CLC amend the fourth paragraph of Section T.1 to state that, where applicable, the assessment of Liquidated Damages will be the exclusive remedy available to the CLC? Further, consistent with the law regarding liquidated damages, would the CLC also amend the RFP to provide: (i) that a successful Proposer may furnish, and the CLC will consider, factual evidence where available to establish that the CLC s actual damages were less than the liquidated sum; (ii) that the CLC will not assess more than its actual damages for any incident where the evidence establishes to the CLC s reasonable satisfaction that its actual damages were less than the liquidated amount; and (iii) that the CLC will not assess liquidated damages in multiple categories for the same incident if to do so would amount to an unenforceable penalty under Connecticut law? CLC RESPONSE: This section will not be amended.

20 RFP Reference 25 Part VIII, Contract Terms; Section U.2, Termination For Cause RFP Page Question 29 We acknowledge that the CLC shall have the right to terminate a contract with the successful Proposer for cause, as set forth in this section. However, we ask whether the CLC would consider supplementing this section by adding the following language: "In the event successful Proposer commits any act set forth in this section, or any other act that results in triggering the CLC's right to terminate the Contract for cause, for those sections where a cure is possible, successful Proposers shall first have an opportunity to cure such failure, to the CLC's satisfaction, within thirty (30) days of notice from the CLC of successful Proposer s failure or breach. CLC RESPONSE: The CLC deletes the opening paragraph (before the lettered items) of Part VIII, Section U.2. and replaces it with the following provision: The CLC shall have the right, in its sole discretion, to terminate the Contract for cause upon written notice to the successful Proposer. The CLC, in its sole discretion, shall determine whether to afford the successful Proposer the opportunity to cure and, if so, the length of the cure period. Such termination shall be without prejudice to any and all rights, remedies, and causes of action the CLC may have against the successful Proposer. The CLC s right to terminate for cause includes, but is not limited to, the following events:

21 RFP Reference 26 Part VIII, Contract Terms; Section GG, Winner On Its Face Indemnification and Hold Harmless RFP Page 32 The RFP in Part VIII Section GG provides that: Question 1. The successful Proposer shall indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to a Winner on Its Face claim and any payment the CLC makes in connection with such a claim; 2. The CLC will pay a Winner on Its Face claim only after careful consideration and consultation with the successful Proposer; and 3. However, the CLC, in its sole discretion, shall make the final decision about payment of such a claim. Further, the RFP provides that: 1. A "Winner On Its Face" is a ticket that contains a legitimate winning configuration of game symbols and symbol captions, but that does not have the corresponding official winning ticket validation number; and 2. As is the case with all tickets, a "Winner On Its Face" will be void if it is unissued, illegible, mutilated, altered, blank or partially blank, counterfeit in whole or part, reconstituted, miscut, misregistered or incomplete; if display printing is irregular; if anything other than exactly one prize amount or symbol and corresponding caption appear in each of the prize amount boxes as specified in the executed Working Papers; if apparent symbols are inconsistent with their captions; or if the ticket fails any of the CLC s validation tests (except for having a winning validation number). While the CLC appears to have defined a Winner On Its Face to be a very narrow circumstance where there would be an indemnity obligation, the CLC has imposed an indemnity obligation and liability on the successful Proposer for a circumstance that the CLC is prohibited from paying under its rules. Specifically, rules as they pertain to the CLC in relevant part provides as follows:

22 26 Continued RFP Reference Part VIII, Contract Terms; Section GG, Winner On Its Face Indemnification and Hold Harmless RFP Page Question 32 Section a-17. Violations of rules and regulations. (e) Prohibition of prize payments for compromised tickets. The CLC shall insure that no prize shall be paid arising from claimed winning tickets that are stolen, counterfeit, altered, fraudulent, unissued, issued in error, unreadable, not received, unclaimed or not recorded by the CLC within applicable deadlines, lacking in captions that conform and agree with the play symbols appropriate to the lottery game involved, or not in compliance with specific rules and with the confidential validation and security tests of the CLC. Based on the foregoing, will the CLC please (1) delete such indemnity obligation for a Winner On Its Face claim, (2) confirm that the successful Proposer shall not be obligated to pay any amounts that the CLC itself is prohibited from paying and (3) confirm that, in the event the CLC determines that it is in the CLC s best interest to make a payment to a player in accordance with this section, any amounts for which successful Proposer shall be obligated to pay shall be mutually agreed upon by the CLC and successful Proposer. CLC RESPONSE: The CLC will not delete this provision. See the RFP, Part VIII, Section A. 27 Attachments A through I Would the CLC please provide all Attachments in Word? CLC RESPONSE: No.

23 RFP Reference 28 Phase II of Section K. EVALUATION PROCESS; AWARD CRITERIA; PRELIMINARY NOTICE OF AWARD; CONTRACT EXECUTION 29 Point J.) of Section B. TICKET AND GAME SPECIFICATIONS RFP Page Question Would the Lottery please detail the weighted scoring amounts of their specific evaluation criteria factors - price, experience, ticket performance (ticket scratchability ), ticket design ( graphic appearance ), key personnel, production capacity, financial viability, ticket control and security, market research and analysis, new game technology, and other. CLC RESPONSE: No. See response to question #6. 15 (To the extent that the inclusion of a Scratch 2 Cash data matrix barcode in all tickets relies upon the patented processes or other intellectual property of a third party vendor) has the CLC obtained the licenses necessary to permit the successful Proposer to use the patented processes or other intellectual property? If so, is there any additional license fee(s) payable by the successful Proposer to the third party vendor? If not, would the CLC confirm that a license to use the patented processes and/or other intellectual property will be negotiated between the CLC and the third party vendor at the CLC s expense? CLC RESPONSE: See response to question #10.

24 RFP Reference 30 Section B. PERFORMANCE SECURITY IN PART VI: BONDS AND INSURANCE RFP Page Question 22 The cost of issuing a performance guarantee of $5,000,000 can range from $50,000 to $85,000 per year for a Surety Bond, and between $100,000 and $200,000 per year for a Letter of Guarantee issued by a bank depending on the risk ratings of each supplier. Considering the size and risk that is assumed by the Lottery for its supplier, the $5,000,000 asked for by the Lottery can be considered excessive. The cost of the bond will end up being included in the price of the lottery tickets supplied to the Lottery. Will the Lottery consider lowering the value of the required performance guarantee and also will the Lottery consider negotiating the bond value when considering primary and secondary vendors? CLC RESPONSE: See response to question # General Would the Lottery please clarify the specific amount and type of ticket samples it prefers to be sent to them upon RFP submission? CLC RESPONSE: See response to question #7. 32 PART 1 Introduction 4 2 nd paragraph of the RFP states The Lottery reserves the right to select a primary contractor that, in that capacity, will receive 51% or more of the CLC s Instant Ticket printing business. Does the Lottery intend to award multiple contracts and then decide on a primary? Or is the intent to award to two vendors and split the business as a primary and secondary? Having at least an idea of the structure of the contract is needed to price deliverables asked for later in the RFP where it is said these deliverables (i.e. research) will be split among vendors. CLC RESPONSE: As the RFP states, the CLC will accept the Proposal or Proposals that, all things considered, the CLC determines to be in its best interest. Until the RFP evaluation process is completed, the CLC cannot know how many Proposers will be selected or whether the CLC will chose a primary vendor. Please also see response to question #13.

25 RFP Reference 33 PART V: TECHNICAL SPECIFICATIONS B. Ticket and Game Specifications, 5.Ticket Merchantability and Non- Conforming Tickets 34 B.1. Ticket Quality Requirements and Specifications RFP Page Question 17 Will the Lottery please provide details of what Test Requirements the DCP conduct in their ticket testing process? CLC RESPONSE: No, not as a part of this RFP process. 16 The RFP states if a Proposer uses a process to print its tickets that is its standard, it CANNOT be priced as an option on Attachment D. It may be identified separately but MUST be included in the base price for that ticket size i.e., the CLC cannot be charged extra for that standard printing process. Would the Lottery please elaborate on what is meant by this statement or provide an example of a standard process? CLC RESPONSE: Standard refers to something that is typically performed or utilized in printing instant tickets. For example, the symbols in the play area are typically printed in black ink; if they were to be printed in multiple colors that would not be standard. Furthermore, if due to improvements in technology, a non-standard method evolves into a standard, the CLC cannot be charged extra for that now-standard method.

26 RFP Reference 35 B. Ticket and Game Specifications, 17.Ticket Concept Testing RFP Page Question 20 This section refers to the Successful Proposer participating in focus groups, however, the last sentence of this paragraph states Each successful Proposer will share equally in the cost of each such testing, and the CLC shall have no liability therefore. In order to respond, will the Lottery please clarify if it is the Lottery s intent to split the cost of this across 2 or 3 vendors? Will the cost be a percentage of the business given? In other words, if there is a chance to be a 51% provider, does that mean that provider covers 51% of the cost of the focus groups? CLC RESPONSE: See response to question # B. Ticket and Game Specifications, 18.Annual Research Study 20 The RFP states the successful Proposer will provide an annual analysis of the Instant Game market in Connecticut to determine player profiles, trends and opportunities and sales potential. In order to respond, will the Lottery please clarify if it is the Lottery s intent that only a proposer getting 51% of the business will provide a study like this? Or is the intent that any and all qualified vendors will each provide a study? Or will the cost be split among all vendors? CLC RESPONSE: See response to question #13.

27 RFP Reference 37 Part VIII - CONTRACT TERMS Section VIII I. CLC Inspection Of Work And Workplaces 38 Section VIII GG. Winner On Its Face Indemnification And Hold Harmless 39 Section VIII HH. Intellectual Property Rights: Title To, Use Of, And Indemnification RFP Page Question 26 While we understand and agree with the terms of this provision, will the Lottery please incorporate the concept that such inspection shall be during normal operating hours (we operate 24/7/364) and subject to applicable safety and security procedures at such facility? CLC RESPONSE: The initial security certification will be done during normal business hours. However, random unannounced security inspections will be done at the discretion of the CLC and also by its regulator. 32 Regarding indemnification of the CLC for any ticket that is a Winner On Its Face, will the CLC please incorporate the requirement that the vendor has the opportunity to receive and analyze the ticket prior to any liability being imposed on it for indemnification? We can offer our expertise to that of the CLC to determine whether the ticket is genuine and valid. CLC RESPONSE: No. 32 Regarding the indemnification of CLC for intellectual property infringement, will the CLC please incorporate as a condition of the successful Proposer s obligation the right to select counsel and conduct the defense of the claim, provided that the CLC will have the right to obtain its own counsel at its own expense? Further, since the scope of intellectual property rights embodied in the tickets provided by the successful Proposer will include rights pertaining to certain printing, production and security, will the CLC please clarify that the intent and scope of the license granted under this Section is for the artwork and game name and other visible intellectual property and not to, for instance, the construction of the tickets? CLC RESPONSE: See response to question #22.

28 RFP Reference 40 Section VIII HH. (a) Intellectual Property Rights: Title To, Use Of, And Indemnification, Trade/Service Marks and/or Names 41 Section VIII HH. (b) Intellectual Property Rights: Title To, Use Of, And Indemnification Patents and/or Trademarks 42 Attachment C Base Game Pricing Proposal RFP Page Question 33 Regarding the indemnification of CLC for trademark/service mark infringement, will the CLC please incorporate as a condition of the successful Proposer s obligation the right to select counsel and conduct the defense of the claim, provided that the CLC will have the right to obtain its own counsel at its own expense? CLC RESPONSE: See response to question # Regarding the indemnification of CLC for patent infringement, will the CLC please incorporate as a condition of the successful Proposer s obligation the right to select counsel and conduct the defense of the claim, provided that the CLC will have the right to obtain its own counsel at its own expense? CLC RESPONSE: See response to question # There does not appear to be a pricing note indicated for $100,000 Cashword. Will the Lottery please confirm that the pricing note for #2 regarding the inclusion of the marking method also applies to $100,000 Cashword? CLC RESPONSE: The pricing note for #2 also applies to $100,000 Cashword.

29 RFP Reference 43 Attachment C Non-Base Game Pricing Proposal RFP Page Question The column for $5 ticket sizes D & E carries the reference to note #3, specifying that the price for these tickets must include 4c process printing on both sides. However, part V.B.1.c., page 15 specifies that tickets with price points of $10 or higher include 4c process ticket backs. Would the Lottery please specify the number of ticket back colors to be included in the price of Non-Base Game sizes D and E? CLC RESPONSE: The reference See NOTE #3 listed in the column header for Size D or E $5 tickets is listed in error. Size D or E tickets do not have 4c artwork on the back of the ticket. NOTE #3 only applies to tickets at the $10, $20 and $30 price points.

30 CLC FY 2011 Instant Game Launch Schedule Game # Game Name Planned Launch $ Ticket Qty (in Millions) Pack Size Ticket Size Actual Launch Q X CASH 4th edition as needed $ " x 4.0" 12-Jul $100,000 CASHWORD #2 as needed $ " x 4.0" 19-Jul Sparkling Diamonds 02-Aug- 10 $ " x 4.0" 2-Aug Sapphire Blue 7's 02-Aug- 10 $ " x 4.0" 02- Aug Ruby Red Bingo 02-Aug- 10 $ " x 4.0" 02- Aug NEW YORK GIANTS 31-Aug- 10 $ " x 4.0" 31- Aug NEW ENGLAND PATRIOTS 31-Aug- 10 $ " x 4.0" 31- Aug The Three Stooges 28-Sep- 10 $ " x 4.0" 28-Sep $100,000 Casino 28-Sep- 10 $ " x 4.0" 28-Sep- 10 Special Options or Features New York Giants and New England Patriots games were licensed and offered 2 nd Chance Drawings. The Three Stooges was a licensed game.

31 Q Money Jar 18-Oct- 10 $ " x 4.0" 18-Oct $500,000 Cash Bonanza 18-Oct- 10 $ " x 4.0" 18-Oct PINBALL WIZARD XVI as needed $ " x 4.0" 27-Oct HOLIDAY MAGIC 01-Nov- 10 $ " x 4.0" 1-Nov HOLIDAY DOUBLER 01-Nov- 10 $ " x 4.0" 1-Nov HOLIDAY CASH 01-Nov- 10 $ " X 4.0" 1-Nov COLD HARD CASH 15-Nov- 10 $ " x 4.0" 15- Nov LET IT SNOW 15-Nov- 10 $ " x 4.0" 15- Nov Diamonds and Sevens 15-Nov- 10 $ " x 4.0" 15- Nov Match & Win 2nd ed. 06-Dec- 10 $ " x 4.0" 6-Dec X The Cash 06-Dec- 10 $ " X 4.0" 6-Dec Vegas Cash 06-Dec- 10 $ " x 4.0" 6-Dec MEGA MONEY #21 as needed $ " x 4.0" 29-Dec- 10 Special Options or Features $500,000 Cash Bonanza offered a 2 nd Chance Drawing. Diamonds and Sevens featured special holographic-like paper ( Scratch FX )

32 Q Lucky 7's 04-Jan- 11 $ " x 4.0" 4-Jan Emerald 10s 04-Jan- 11 $ " x 4.0" 4-Jan I Love Lucy 01-Feb- 11 $ " x 4.0" 1-Feb BINGO Boxes 03-Feb- 11 $ " x 4.0" 3-Feb $100,000 CASHWORD #3 as needed $ " x 4.0" 24-Feb Dazzling 7s 28-Feb- 11 $ " x 4.0" 28-Feb Shamrock Tripler 28-Feb- 11 $ " x 4.0" 28-Feb Treasure 28-Feb- 11 $ " x 4.0" 28-Feb SUPER CASHWORD 14 as needed $ " x 4.0" 07- Mar CASHWORD 18 as needed $ " x 4.0" 25- Mar Spin Mar-11 $ " x 4.0" 28- Mar Money Machine 28- Mar-11 $ " x 4.0" 28- Mar Diamonds & Pearls 28- Mar-11 $ " x 4.0" 28- Mar-11 Special Options or Features I Love Lucy was a licensed game.

33 Q Roll 'Em 25-Apr- 11 $ " x 4.0" 25- Apr King's Ransom 25-Apr- 11 $ " x 4.0" 25- Apr Bingo Jewels 23- May-11 $ " x 4.0" 23- May Aces 23- May-11 $ " x 4.0" 23- May RED HOT 5s Doubler 23- May-11 $ " x 4.0" 23- May X CASH 5th edition 31- May-11 $ " x 4.0" 12-Jul $50,000 Connecticut Cash 02-Jun- 11 $ x 4.0" 02-Jun Fabulous 5s 20-Jun- 11 $ " x 4.0" 20-Jun Platinum 10s 20-Jun- 11 $ " x 4.0" 20-Jun- 11 KEY Base Games - to become available when stock of previous version is depleted or last top prize is claimed. Special Options or Features Red Hot 5s Doubler featured scratch-off play areas on both the front and back of the ticket. $50,000 Connecticut Cash offered a Connecticut Classic Lotto ticket as an instant win feature.

34 CLC FY 2012 Instant Game Launch Schedule Game # Game Name Planned Launch $ Ticket Qty (in Millions) Pack Size Ticket Size Actual Launch Q Sunny Money 18-Jul-11 $ " x 4.0" 18-Jul Hot Cash 18-Jul-11 $ " x 4.0" 18-Jul Casino Royale 18-Jul-11 $ " x 4.0" 18-Jul Money Multiplier 22-Aug-11 $ " x 4.0" 22-Aug Times Lucky 22-Aug-11 $ " x 4.0" 22-Aug X The Money 22-Aug-11 $ " x 4.0" 22-Aug $100,000 CASHWORD #4 06-Sep-11 $ " x 4.0" 06-Sep Triple Lucky Diamonds 12-Sep-11 $ " x 4.0" 12-Sep $200,000 Jewels 12-Sep-11 $ " x 4.0" 12-Sep Casino Kings 26-Sep-11 $ " x 4.0" 26-Sep CARD STUD 26-Sep-11 $ " x 4.0" 26-Sep-11 Special Options or Features $200,000 Jewels featured special holographic-like paper ( Scratch FX )

35 Q Royal Riches 17-Oct-11 $ " x 4.0" 17-Oct Fast Cash 17-Oct-11 $ " x " Oct Holiday Greetings 31-Oct-11 $ " x 4.0" 31-Oct Stocking Stuffer 31-Oct-11 $ " x 4.0" 31-Oct Holiday Gold 31-Oct-11 $ " x 4.0" 31-Oct Loteria 07-Nov-11 $ " x 4.0" 7-Nov Snowflake Cashword Limited ed. 07-Nov-11 $ " x 4.0" 7-Nov WIN FOR LIFE #18 14-Nov-11 $ " x 4.0" 14-Nov Cash Celebration 14-Nov-11 $ " x 4.0" 14-Nov Cool Cash 17-Nov-11 $ " x 4.0" 17-Nov BINGO CUBES 17-Nov-11 $ " x " Nov Winter Winfall 17-Nov-11 $ " x 4.0" 17-Nov ACES HIGH #22 05-Dec-11 $ X The Cash 5th ed. 05-Dec-11 $ " x 4.0" as needed 10.0" x 4.0" as needed Lucky Triple 7s 12-Dec-11 $ "x 4.0" 12-Dec Vegas Action 12-Dec-11 $ " x " Dec-11 Special Options or Features: Loteria was a licensed game.

36 Q Find The 9s 09-Jan-12 $ " x 4.0" 09-Jan Year Of The Dragon 09-Jan-12 $ " x 4.0" 09-Jan Connecticut Lottery Gold 30-Jan-12 $ " x 4.0" 30-Jan PINBALL WIZARD XVII 06-Feb-12 $ " x 4.0" as needed CASHWORD Feb-12 $ " x 4.0" as needed INK 27-Feb-12 $ " x 4.0" 27-Feb Crown Jewel 7s 27-Feb-12 $ " x 4.0" 27-Feb Red Hot 5 Doubler 2nd edition 05-Mar-12 $ "0 x 4.0" as needed X CASH 6th edition 12-Mar-12 $ " x 4.0" 12-Mar Joker's Wild Tripler 22-Mar-12 $ " x 4.0" 22-Mar High Roller 26-Mar-12 $ " x 4.0" 26-Mar $1,000,000 Jackpot 26-Mar-12 $ " x 4.0" 26-Mar MEGA MONEY #22 02-Apr-12 $ " x 4.0" as needed Special Options or Features Red Hot 5s Doubler 2 nd edition featured scratch-off play areas on both the front and back of the ticket.

37 Q X The Money 2nd edition 12-Apr-12 $ " x 4.0" 12-Apr Karat Cash 30-Apr-12 $ " x 4.0" 30-Apr Emerald 8's & Ruby Red 7's 30-Apr-12 $ " x " Apr SUPER CASHWORD May-12 $ " x 4.0" as needed $50,000 CLUBS 31-May-12 $ " x 4.0" 31-May $200,000 High Stakes Casino 31-May-12 $ " x 4.0" 31-May Lucky Gems 18-Jun-12 $ " x 4.0" 18-Jun BLACKOUT BINGO 18-Jun-12 $ " x " Jun-12 Base Games - to become available when stock of previous version is depleted or last top prize is claimed.

38 Connecticut Lottery Corporation Request for Proposals #CLC Instant Games ADDENDUM #2 REVISED DATE FOR RESPONSE TO QUESTIONS May 10, 2012 Pursuant to Part III, Standard RFP Terms and Conditions, Section A, Right to Amend, the CLC hereby amends the following dates in its RFP: CLC Responses to Proposer Questions - The CLC will post its responses to prospective vendor questions by the end of the day on Monday, May 14 th. Thank you for your patience. CLC Instant Games Addendum 2 May 10, 2012 Page 1 of 1

39 Connecticut Lottery Corporation Request for Proposals #CLC Instant Games ADDENDUM #1 REVISED TIMETABLE May 4, 2012 Pursuant to Part III, Standard RFP Terms and Conditions, Section A, Right to Amend, the CLC hereby amends the following dates in its RFP: CLC Responses to Proposer Questions - The Lottery will post its response to relevant written questions by Wednesday, May 9, Submission Date the Proposal due date is revised to Wednesday, May 30, 2012 at 2:00 PM Eastern time. This is a firm date and time. Preliminary Notice of Award the anticipated notice date is revised to Monday, July 9, Contract Execution the anticipated Contract Execution date is revised to Tuesday, July 31, CLC Instant Games Addendum 1 May 4, 2012 Page 1 of 1

40 Connecticut Lottery Corporation 777 Brook Street Rocky Hill, CT Request for Proposals RFP : CLC RFP Description: Instant Ticket Printing RFP Issue Date: April 10, 2012 Proposal Due Date: May 25, 2012 at 2:00 PM Eastern time RETURN SEALED PROPOSALS TO: Janice Beckner Associate Fiscal Administrative Officer (Purchasing Officer) Connecticut Lottery Corporation 777 Brook Street Rocky Hill, CT

41 Table of Contents PART I: INTRODUCTION... 4 PART II: DEFINITIONS AND KEY DATES... 4 A. Definitions... 4 B. Key Dates... 6 PART III: STANDARD RFP TERMS AND CONDITIONS... 6 A. Right to Amend or Terminate the RFP... 6 B. Obtaining the RFP Documents... 6 C. Questions and Answers... 6 D. Additional Information... 7 E. Costs For Preparing Proposal... 7 F. Ownership of Proposal... 7 G. Freedom of Information Act and Confidentiality of Information... 7 H. Required Contents and Order of Proposal... 8 I. Proposal Submission Instructions and Requirements J. Collaborative Proposals K. Evaluation Process; Award Criteria; Preliminary Notice of Award; Contract Execution L. Biznet Account M. Taxes N. Authority To Do Business O. Advertising P. Qualifications of Proposers PART IV: PROPOSER INFORMATION A. Proposer s Experience B. History of Contract Performance C. Proposer s Business Structure and Operation D. Proposer s Financial Statements PART V: TECHNICAL SPECIFICATIONS A. Background B. Ticket and Game Specifications PART VI: BONDS AND INSURANCE A. Insurance B. Performance Security C. Litigation Bond PART VII: SECURITY A. Approach to Security B. Building Security C. Game Security D. Laboratory Testing E. Breach of Security F. Security Evaluation G. Security Options H. Security Inspections

42 PART VIII: CONTRACT TERMS A. Defense, Indemnification and Hold Harmless B. Bonds and Insurance C. Loss of Statutory Authority D. Non-Exclusive Right E. Account Executive F. Approval Of Employees And Minimum Staffing Levels G. Integrity of The Successful Proposer H. Driver And Vehicle Safety I. CLC Inspection of Work and Workplaces J. Rejected Work or Materials K. Notices L. Prime Contractor Responsibility M. Subcontracting and Successful Proposer s Responsibility N. Equal Business Opportunity O. Equal Employment Opportunity and Affirmation Action P. Maintenance And Availability Records Q. Licenses And Permits R. No Assignment S. Waiver T. Liquidated Damages U. Termination Of Contract V. Warranties W. Force Majeure X. Amendment Y. Severability Z. Binding On Successors and Assigns AA. Authorization and Entire Agreement BB. Transition To New Vendor CC. Compliance With Federal, State And Local Laws DD. Connecticut Law And Courts EE. BizNet Account and Uploading of Affidavits and Nondiscrimination Forms FF. Independent Relationship GG. Winner on Its Face Indemnification and Hold Harmless HH. Intellectual Property Rights: Title to, Use of, and Indemnification II. Security Information ATTACHMENT A Vendor Information Form (2 pages) ATTACHMENT B Proposer s Affidavit (2 pages) ATTACHMENT C Pricing Proposal (6 pages) ATTACHMENT D Options Pricing Proposal (2 pages) ATTACHMENT E CT Consulting Agreement Affidavit (1 page) ATTACHMENT F CT Gift and Campaign Contribution Certification (2 pages) ATTACHMENT G Affirmation of Receipt of Ethics Summary (1 page) ATTACHMENT H Nondiscrimination Certification (1 page) ATTACHMENT I Campaign Contribution and Solicitation Limitations (3 pages)

43 PART I: INTRODUCTION The Connecticut Lottery Corporation (the CLC or the Lottery ), a quasi-public agency with the mission of generating revenues for the State of Connecticut s General Fund, issues this Request for Proposals for its exclusive use. The purpose of this solicitation is to obtain competitive, sealed proposals from qualified vendors to provide the Lottery with the design and printing of its Instant Tickets, including required marketing materials and associated marketing-related services, all as described more fully in Parts V and VII below. This Request for Proposals is not a contract offer, and no contract will exist unless and until a written contract is signed by the CLC and the successful Proposer(s). The Lottery reserves the right to select a primary contractor that, in that capacity, will receive 51% or more of the CLC s Instant Ticket printing business. The Contract will commence on approximately August 19, 2012 and be for an initial term of either three (3) or five (5) years, in the CLC s sole determination. The CLC may extend the Contract for up to two (2) additional one-year extensions, issued either separately or in whole, under the same terms and conditions as the original Contract. Interested parties may submit a Proposal in accordance with the requirements and directions of this Request for Proposals. Proposers are prohibited from contacting any Lottery employee or officer, or member of the Lottery Board of Directors, concerning this solicitation, except as set forth in Part III, Section C, below. A Proposer s failure to comply with this requirement may result in disqualification. PART II: DEFINITIONS AND KEY DATES A. DEFINITIONS The following terms shall have the following meanings: Business Day Monday through Friday, excluding Holidays. CLC or Lottery the Connecticut Lottery Corporation. Contract the written agreement between the successful Proposer and the CLC for the goods and services described in this RFP. Department or DCP the Connecticut Department of Consumer Protection, the CLC s regulatory agency. Dispenser Inserts 4.5 x 4 cards imaged with ticket-art on both sides that are inserted into Instant Ticket dispensers at Retailers, allowing customers to know what tickets are available for sale. Evaluation Committee the group of CLC employees who will review the Proposals and recommend one or more successful Proposer(s). First Read Rate -- a measure of bar code reader performance indicating what proportion of time the reader returns a successful read of a legitimate bar code on the first try. The first read event is the initial effort of an experienced Retailer in the field to read a bar code, occurring within approximately a three (3) second time window. High-Tier Claim Centers CLC Retailers who have been approved to cash winning tickets up to Five Thousand Dollars ($5,000) in value. High-Tier Prizes generally, the top prize in an Instant Game. However, the CLC will make a definitive determination as to what constitutes a High-Tier Prize as may be necessary in exceptional cases, and in such instances will indicate same in a separate notation within the executed Working Papers for such game(s). Holidays New Year s Day, Martin Luther King Day, Lincoln s Birthday, Washington s Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran s Day, Thanksgiving Day, and Christmas Day. The CLC may, in its sole discretion, change the number of Holidays and corresponding dates. How to Win Card an 8.5 X pound coated cover paper that displays descriptive information on the game for use by Lottery Retailers. Instant Game games, multi-jurisdictional or otherwise, that are sold to the public on pre-printed Instant Tickets. 4

44 Instant Ticket a scratch-off-covered Lottery product (also known as a scratch ticket ). Each Instant Ticket is constructed of recyclable cardboard stock upon which graphic design and scratch-off covering are imprinted. Removal of the coating by the customer reveals whether or not the customer is a winner. Instant Tickets also contain a unique bar code allowing them to be processed by on-line terminals. Instant Tickets are differentiated from other Lottery products in that the prize amount is known immediately upon removal of the scratch-off covering. Intellectual Property Rights any rights with respect to inventions, discoveries, or improvements, including patents, patent applications and certificates or inventions; trade secrets, know-how, or similar rights; the protection of works of authorship or expression, including copyrights and future copyrights; and trademarks, service marks, logos, and trade dress; and similar rights under any laws or international conventions throughout the world, including the right to apply for registrations, certificates, or renewals with respect thereto, and the rights to prosecute, enforce and obtain damages. Licensed Game an Instant Game offered by a successful Proposer that features an iconic look (for example, 3 Stooges, Cadillac) or unique playstyle (Lotteria), the rights of which are owned by the successful Proposer and offered for use by the CLC for a fee. Lottery Retailer, Retailer, or Agent a retailer, whether an individual or a business entity, that is authorized to sell and redeem Lottery tickets. Omitted Packs packs removed before final shipment to the CLC due to production flaws and/or to satisfy prize structure requirements for a specific Instant Game. Pack a book of Instant Tickets. Consecutively numbered individual tickets joined by perforations. ( Pack is CLC s customary usage.) Preliminary Notice of Award notice of the CLC s tentative selection of a successful Proposer. The CLC may rescind a Preliminary Notice of Award at any time and for any reason prior to execution of a Contract. President the Chief Executive Officer of the CLC. Proposal all materials, information and documents submitted by a Proposer in response to this RFP and any CLC requests for additional information. Proposer any individual or business entity submitting a Proposal in response to this RFP, including that business entity s parent corporation and each other subsidiary of that parent corporation. The term Proposer shall also include each and every independent contractor or subcontractor that the Proposer proposes to use in performing the Contract. RFP Request for Proposals (this document including its Attachments A through I and the two (2) envelopes of samples described in Part III, Section B, below, and all addenda). Spotlight Games an Instant Game featuring a large top prize typically annuitized and a much larger ticket print run as compared to other Instant Games at that price point. Spotlight Games typically also receive television advertising support in addition to traditional radio and POS efforts. Submission Date - May 25, 2012 at 2:00 P.M. Eastern time. Validation the process by which winning Instant Tickets are checked against computer files to ensure that the ticket presented is valid and that it has not been previously redeemed. Validation Code a security feature of Instant Tickets printed under the scratch-off coating. Voided Packs packs removed from sale by the CLC before distribution due to production flaws or other reasons. 5

45 B. KEY DATES RFP Issued April 10, 2012 Proposer Questions Due April 27, 2012 CLC Responses to Proposer Questions Due May 4, 2012 Proposal Submission Date May 25, :00 PM Eastern Time Preliminary Notice of Award July 3, 2012 Contract Execution July 27, 2012 The Preliminary Notice of Award and Contract Execution dates are anticipated, not certain dates. PART III: STANDARD RFP TERMS AND CONDITIONS A. RIGHT TO AMEND OR TERMINATE THE RFP The CLC may, before or after the Submission Date and in its sole discretion, clarify, modify, amend, alter or terminate this RFP when it is in the CLC s best interest. Any such action shall occur by posting a notice on the State of Connecticut, Department of Administrative Services Purchasing Portal, Bidder Notification System (the Portal ) at and on the Lottery s website at Each Proposer is responsible for checking the Portal and/or the Lottery s website to determine if the Lottery has issued any addenda and, if so, to complete its Proposal in accordance with this RFP as modified by the addenda. B. OBTAINING THE RFP DOCUMENTS This RFP includes two (2) envelopes containing sample information each Proposer needs in order to respond fully to this RFP: Instant Tickets, Dispenser Inserts, and How to Win Cards (Envelope # 1) Working Papers (Envelope # 2) Because the envelopes and their contents cannot be posted on either the Portal or the Lottery s website, interested parties are instructed to contact the CLC s Purchasing Officer (identified below) to obtain a copy of the envelopes. A Proposer bears sole responsibility for its failure to comply with this requirement, which failure may result in a Proposal that does not meet the requirements of this RFP. C. QUESTIONS AND ANSWERS All questions concerning the CLC s procurement process or this RFP must be submitted in writing (including by or fax) and directed only to: Janice Beckner (the Purchasing Officer ) Associate Fiscal Administrative Officer Connecticut Lottery Corporation 777 Brook Street Rocky Hill, CT Telephone Fax: address: Janice.beckner@ctlottery.org 6

46 Proposers are prohibited from contacting any other CLC employee, any CLC official, and any member of the CLC Board of Directors concerning this RFP or the goods or services to be provided under it. A Proposer may be disqualified for failure to comply with this requirement. The Purchasing Officer must receive questions no later than the date and time set forth in Part II, Section B (Key Dates). The Purchasing Officer will confirm receipt of a Proposer s questions by . While questions cannot be submitted by telephone, the Purchasing Officer will accept telephone calls to confirm receipt of a Proposer s questions if the Proposer has not received an confirmation. By the date and time set forth in Part II, Section B (Key Dates), the CLC will answer all relevant written questions by issuing one or more addenda, which shall be a part of this RFP and any resulting Contract. Any addenda will be posted on the Portal and on the Lottery s website. No oral statement of the CLC or any of its employees, officers or directors, including the Purchasing Officer, shall be effective to waive, change or otherwise modify any provision of this RFP, and no Proposer shall rely on any alleged oral statement. D. ADDITIONAL INFORMATION The CLC reserves the right, either before or after the Submission Date, to ask any Proposer to clarify its Proposal or to submit additional information that the CLC in its sole discretion deems desirable. E. COSTS FOR PREPARING PROPOSAL Each Proposer s costs incurred in developing its Proposal are its sole responsibility, and the CLC shall have no liability for such costs. F. OWNERSHIP OF PROPOSAL All Proposals become the CLC s property and need not be returned to Proposers. G. FREEDOM OF INFORMATION ACT AND CONFIDENTIALITY OF INFORMATION 1. Proposer Confidential Information All information submitted in and with a Proposal is subject to disclosure under the Connecticut Freedom of Information Act, as amended and judicially interpreted. A Proposal may contain financial, proprietary, trade secret or other data that a Proposer claims should not be public (the Proposer Confidential Information ). To protect such information from disclosure, a Proposer must identify specifically the pages and portions of its Proposal that contain the claimed Proposer Confidential Information. Such Proposer Confidential Information must be identified as follows: (a) each page containing Proposer Confidential Information must contain a footer with the word CONFIDENTIAL ; (b) the beginning of Proposer Confidential Information must be noted CONFIDENTIAL INFORMATION BEGINS HERE, and the end of Proposer Confidential Information must be noted CONFIDENTIAL INFORMATION ENDS HERE; and (c) the Proposer must provide a CD or other digital media containing its complete Proposal except for the Proposer Confidential Information. If the CLC receives a request for a copy of a Proposal, the CLC will make a copy of that CD or other digital media and provide it to the requester without notice to the Proposer and without review of the CD or other digital media s contents. Accordingly, each Proposer is solely responsible for, and the CLC shall have no liability to a Proposer for, the inclusion of any Proposer Confidential Information on the CD or other digital media or the provision of a copy of such to a third-party. If the CLC receives a request for Proposer Confidential Information, it will promptly notify the Proposer of such request and provide the Proposer with a copy of any written disclosure request. The Proposer may provide written consent to the disclosure, or it may object to the disclosure by notifying the CLC in writing of the basis for its objection, including the statutory, judicial or other legal exemption(s) from disclosure. The Proposer shall be solely responsible for defending any complaint or other legal proceeding related to the nondisclosure of claimed Proposer Confidential Information, including but not only replying to and appearing before the Connecticut Freedom of Information Commission, and providing appropriate witnesses and documents. Provided that the Proposer has fully complied with the requirements of and cooperates with the CLC as 7

47 described in this section, the CLC shall, to the extent permitted by law, protect the Proposer Confidential Information from unauthorized disclosure. 2. CLC Confidential Information Each Proposer shall protect from unauthorized use and disclosure all financial, statistical, technical and other data related to the Lottery and its operations that the CLC has made available to the Proposer and that the CLC has designated as confidential ( CLC Confidential Information ). A Proposer shall not release or discuss the CLC Confidential Information with any third party without the CLC s prior express written consent in each instance. A Proposer shall promptly return CLC Confidential Information to the CLC upon the CLC s written request. If a Proposer receives a request for disclosure of any CLC Confidential Information (for example only, by subpoena), the Proposer shall immediately notify the CLC of such request and provide the CLC with a copy of any written request. The CLC reserves the right to object to the disclosure of said information and to notify the Proposer to withhold disclosure of said information, identifying in such notice the basis for such objection, including the statutory exemption(s) from disclosure. Each Proposer agrees and warrants that it shall not use CLC materials or data, including but not limited to CLC Confidential Information, in any form in connection with any other procurement effort, whether public or private. Each Proposer shall indemnify and hold harmless the CLC from and against any and all costs, losses, damages and expenses, including attorneys fees, incurred in connection with any security breach or loss of any CLC data by the Proposer, its employees and/or subcontractors. These obligations shall survive the RFP process and the termination or expiration of the Contract. A Proposer is not be required under the provisions of this section to treat in a confidential manner any data or information that is or becomes publicly available, was rightfully in the Proposer s possession prior to the issuance of this RFP, is independently developed by the Proposer outside the scope of this RFP, or is lawfully obtained from third parties. H. REQUIRED CONTENTS AND ORDER OF PROPOSAL Proposals must be clearly written and legible. They must contain all of the information, documents and forms listed below, and be presented in the order and manner listed. All pages of the Proposal must be numbered at the right-hand bottom of the page. The original Proposal shall be signed by a person duly authorized to sign it on the Proposer s behalf. The CLC will reject an unsigned Proposal. The person signing the Proposal must initial errors, alterations or corrections on the original. Each copy of the Proposal must contain a copy of the signatures and, if any, the initials. If there is a conflict among the Proposals delivered to the CLC, the original shall prevail. The CLC appreciates conciseness and clarity of content. Submittals shall contain the following information, documents and forms in this order: 1. PROPOSAL PACKAGE The proposal package must be presented in 3-ring binders. Tabs denoting each section must be utilized. The following sections are mandatory for this proposal and should be tabbed as indicated and appear in this order: TAB: Digital Proposal (Two (2) CDs or other digital media to be included in original Proposal only and not in copies) A CD or other digital media containing the complete Proposal, except for the Proposer Confidential Information, as described in Part III, Section G.1. As described in that section, the purpose of this CD/other digital media is to provide a simple means for the CLC to provide a copy of a Proposal in response to a Freedom of Information Act request. Please label this CD/other digital media 2012 Instant Ticket Printing RFP Proposal, [company name], for FOIA use. 8

48 A CD or other digital media containing the complete Proposal, including the Proposer Confidential Information but excluding pricing proposals and financial information, as described in Part III, Section I.3. The purpose of this CD/other digital media is to provide the CLC with a simple means to search and locate information contained in the hard copy of the Proposal. Please label this CD/other digital media 2012 Instant Ticket Printing RFP Proposal, [company name], for CLC use. TAB: Collaborative Proposal If the Proposer is submitting a collaborative proposal, the information described in Part III, Section J (Collaborative Proposals) must appear here. If the Proposer is not submitting a collaborative proposal, the Proposer must indicate that here. TAB: Proposer s Experience The information/documents described in Part IV, Section A (Proposer s Experience) must appear here. TAB: History of Contract Performance The information/documents described in Part IV, Section B (History of Contract Performance) must appear here. TAB: Proposer s Business Structure and Operations The information/documents described in Part IV, Section C (Proposer s Business Structure and Operations) must appear here. TAB: Existing Products or Services A description of existing products or services that exceed the minimum requirements of the RFP as stated in Part V, Section A (Background, second sentence) must appear here. TAB: New Products A description of the Proposer s brand-new solutions or product opportunities that have not been specifically identified or requested in this RFP, including but not only expanded ways of increasing Instant Ticket sales, as stated in Part V, Section A (Background, third sentence) must appear here. TAB: Instant Tickets in Non-Traditional Formats A description of the Proposer s innovations in Instant Game technology that utilize non-paper formats as stated in Part V, Section B.10 (Instant Tickets in Non-Traditional Formats) must appear here. TAB: Options A description of the Proposer s ability and willingness to provide the optional services of 2 nd Chance Drawings, Social Media, Internet and Interactive Games, Rewards and Loyalty Program, Licensed Games and De-Inking and Processing Tickets as described in Part V, Section B.20 (Technical Specifications, Options) must appear here. This description shall not reference or refer in any way to pricing for each such option. TAB: Litigation Bond The Litigation Bond described in Part VI, Section C (Litigation Bond) must appear here. TAB: Approach to Security A description of the Proposer s approach to security, as described in Part VII, Section A (Approach to Security) must appear here. TAB: Building Security Both the building floor plans and the physical security plan described in Part VII, Section B (Building Security) must appear here. TAB: Game Security The information/documents described in Part VII, Section C (Game Security) must appear here. 9

49 TAB: Security Evaluation A description of the Proposer s past experience in providing data processing expertise to prevent pickout and other undesirable patterns, as described in Part VII, Section F (Security Evaluation) must appear here. TAB: Security Options A description of the Proposer s alternatives or options, if any, for the improvement of game security, as described in Part VII, Section G (Security Options) must appear here. TAB: Affirmative Action Plan Both a copy of the Proposer s affirmative action and equal employment opportunity policies, if required or if available, and a copy of the Proposer s current supplier diversity certification, if any, from any accrediting organization (for example only, a state, or the Greater New England Minority Supplier Development Council) must appear here. TAB: Disaster Recovery Plan A description of the Proposer s disaster recovery/contingency plan for its corporate headquarters and for each location at which any of the work is to performed under the Contract must appear here. TAB: Attachments Attachments A, B and E through I must appear here. 2. PRICING PACKAGE Attachments C and D (pricing proposals) must be included here. 3. FINANCIAL PACKAGE The information/documents described in Part IV, Section D (Proposer s Financial Statements) must be included here. I. PROPOSAL SUBMISSION INSTRUCTIONS AND REQUIREMENTS 1. Submission Date Proposals must be received in the Purchasing Officer s office on or before the Submission Date. Proposals postmarked prior to that date and time do NOT satisfy this requirement. The CLC will not accept submissions by or fax. Proposers are solely responsible for ensuring timely delivery. The CLC will reject, and may return unopened, Proposals received after the Submission Date. The CLC will NOT accept late Proposals. 2. Withdrawal of Proposal/Proposal Effectiveness A Proposer may withdraw a Proposal personally or in writing provided that the CLC s Purchasing Officer receives the withdrawal prior to the Submission Date. Proposals are considered valid, and may not be withdrawn, cancelled or modified, for one hundred twenty (120) calendar days after the Submission Date to allow the CLC to review and evaluate the Proposals, investigate a Proposer s qualifications, issue a Preliminary Notice of Award, and execute a Contract with the successful Proposer(s). 3. Proposal Submission The Proposal submittal shall contain three (3) separate packages with the information and documents described and marked as set forth below: Proposal Package must contain only one (1) original hard copy and seven (7) hard copies, along with each of the two separate CDs or other digital media (such CDs to be included with the original Proposal only) containing all of the information and documents listed in Section H.1, above. This Proposal Package shall NOT contain information or documents to be included in the Pricing Package or the Financial Package; 10

50 Pricing Package must contain only one (1) original hard copy of Attachments C and D. This package shall NOT include any other documents or information; and Financial Package must contain one (1) original plus three (3) copies of the financial information and documents listed in Part IV, Section D, below. A Proposer failing to submit Attachments C and D (pricing proposals) and other financial-related information separately as described above may be disqualified from further consideration. A Proposer must not mention, refer to, or quote pricing or cost figures anywhere other than in Attachments C and D; if it does so, its Proposal may be disqualified. 4. Package Labeling Packages must be addressed to the attention of the Purchasing Officer listed on the front page of this RFP and be labeled as follows: Proposal Package(s) must be sealed, contain the Proposer s name and address in the upper left-hand corner, and must be clearly labeled with the words RFP PROPOSAL RESPONSE BOX 1 of X, 2 of X, etc and the RFP Description, RFP, and Submission Date. Pricing Package (envelope) must be sealed, contain the Proposer s name and address in the upper left-hand corner, and must be clearly labeled with the words RFP PROPOSAL - PRICING and the RFP Description, RFP, and Submission Date. Financial Package(s) must be sealed, contain the Proposer s name and address in the upper left-hand corner, and must be clearly labeled with the words RFP PROPOSAL FINANCIAL DISCLOSURES BOX 1 of X, 2 of X, etc and the RFP Description, RFP, and Submission Date. The CLC will reject, and will not accept, any Proposal submitted in an unmarked package or envelope that the CLC opens in the normal course of its business. The CLC may, but shall not be required to, return such Proposal and inform the Proposer that the Proposal may be resubmitted as described above. J. COLLABORATIVE PROPOSALS A Proposer may partner with a third-party to submit a joint Proposal to provide the goods and services sought by this RFP. Any Proposer that submits a Proposal identifying a sharing or allocation of the responsibilities necessary to provide the goods or services required under this RFP must clearly designate the primary contractor and identify the manner in which the allocation of responsibilities will be assigned between the entities submitting the Proposal. The CLC shall determine, in its sole discretion, whether to accept such a collaborative proposal. K. EVALUATION PROCESS; AWARD CRITERIA; PRELIMINARY NOTICE OF AWARD; CONTRACT EXECUTION All Proposals will be publicly opened, and the name of each Proposer will be read aloud as received on the Submission Date. The public, including Proposers, may be present at the opening. The CLC reserves the right, in its sole discretion, to accept all or any part of a Proposal, reject a Proposal, and waive any informalities or non-material deficiencies in a Proposal. Any Contract resulting from this RFP will be non-exclusive, and the CLC reserves the right to award a Contract to one or more Proposers if, in its sole discretion, it determines such action to be in its best interest. Proposals will be evaluated in two phases. In Phase I, the Purchasing Officer will conduct a preliminary review of each Proposal to ascertain compliance with the required document and information requests of this RFP. Proposals that pass the required document and information review will proceed to the Phase II evaluation. In Phase II, the Evaluation Committee will evaluate and qualify the Proposals. The CLC will accept the Proposal or Proposals that, all things considered, the CLC determines to be in its best interest. Although price will be an important 11

51 factor, it will not be the only basis for award. Due consideration will also be given to factors such as, but not limited to, a Proposer s experience, ticket performance (ticket scratchability ), ticket design ( graphic appearance ), key personnel, production capacity, financial viability, ticket control and security, market research and analysis, new game technology, and other criteria relevant to the CLC s interests. The CLC may, but is not obligated to, allow a Proposer to correct any mistake in a Proposal that is obviously a clerical error, such as a price extension or decimal point error. If an error exists in an extension of prices, the unit price shall prevail. In the event of a discrepancy between the price quoted in words and in figures, the words shall control. The CLC will select the Proposal(s) that it deems to be in its best interest and issue a Preliminary Notice of Award(s). The making of a Preliminary Notice of Award(s) does not provide a Proposer with any rights and does not impose upon the CLC any obligations. The CLC is free to withdraw a Preliminary Notice of Award(s) at any time and for any reason. A Proposer has rights, and the CLC has obligations, only if and when a Contract is executed by the CLC and the Proposer. Because the successful Proposer and certain of its employees must be licensed by the Department, the CLC will require (and will notify the successful Proposer when to submit) the following information and documents prior to Contract execution: 1. An organizational chart containing the names and titles of all employees who will be associated with performance of the Contract; 2. A list of names, addresses, dates of birth, and Social Security numbers for employees and subcontractors; and 3. Authorizations (to be provided by the CLC) signed by the employees and subcontractors to allow law enforcement agencies to release relevant background information. The CLC and/or the Department reserve the right, in their sole discretion, to request additional information and documents. The CLC s issuance of a Preliminary Notice of Award is subject to further discussions with the Proposer as the CLC deems in its best interest. The CLC reserves the right to negotiate additional or modified Contract terms, to conduct any test it may deem advisable, and to further evaluate the Proposal. The Contract will commence on approximately August 19, 2012 and be for an initial term of either three (3) or five (5) years, in the CLC s sole determination. The CLC may extend the Contract for up to two (2) additional one-year extensions, issued either separately or in whole, under the same terms and conditions as the original Contract. The CLC reserves the right to select a primary contractor that, in that capacity, would receive 51% or more of the CLC s Instant Ticket printing business. L. BIZNET ACCOUNT Prior to Contract execution, the successful Proposer must create an account in the State Department of Administrative Services BizNet system ( and upload the signed, dated, and notarized documents available at the Affidavits & Nondiscrimination Forms tab in that system. The successful Proposer shall update such affidavits and forms as required by law. M. TAXES Pursuant to Section of the Connecticut General Statutes, the CLC is exempt from all state and certain federal taxation. Such taxes must NOT be included in Proposal prices. N. AUTHORITY TO DO BUSINESS If a Proposer is a corporation or other legal entity that is required to file or register with the Connecticut Secretary of the State s Office, it must have a current certificate of authority or registration to do business in the State of Connecticut that is on file with such office. The CLC may, in its sole discretion, request acceptable evidence of any Proposer s authority to do business prior to the execution of a Contract. 12

52 O. ADVERTISING A Proposer shall not, either directly or indirectly, name the CLC, use the CLC logo or otherwise make any reference of any kind to the CLC in its advertising, news releases, brochures or other materials, or on its website, without in each instance the CLC s prior written consent. P. QUALIFICATIONS OF PROPOSERS The CLC, in collaboration with the Department and the Connecticut State Police, may, at any time after submission of a Proposal, make any investigations deemed proper and necessary to determine the ability of a Proposer to perform the Contract. Such investigations may include, but not be limited to, financial and criminal background investigations on those individuals the CLC and the Department, in their sole discretion, determine to be key employees expected to be directly involved in the performance of the Contract. PART IV: PROPOSER INFORMATION A. PROPOSER S EXPERIENCE Each Proposer shall describe its experience in creative design, ticket production and imaging, security, marketing, market research, promotion, and validation of Instant Games of the type presently in general use by this or any other lottery, and furnish proof of experience with these types of games. Each Proposer must also demonstrate its understanding of non-traditional Instant Ticket platforms and provide guidance in the development and execution of tickets in these formats. B. HISTORY OF CONTRACT PERFORMANCE Each Proposer shall: 1. List all current contracts with U.S. lotteries and identify the contact person and contact information at each lottery from whom knowledgeable references may be obtained; 2. Specify production capacity at each of its North American plants; 3. Specify the number of its games produced and total number of tickets printed at its North American plants within the past two (2) years. Indicate if games were delivered on time and by deadline. For any instances where deadlines were not met, please explain fully, describing the reason for the failure to meet the deadline(s); 4. Identify all its games rejected by a U.S. lottery or withdrawn from public sale within the past two (2) years. Explain in detail the reason for rejection or withdrawal of each game; 5. List by name, case number and court where pending each lawsuit involving lottery tickets to which the Proposer is or was a party within the past five (5) years. Explain in detail the allegations and defenses, any judgment entered, and the status of the lawsuit; 6. State whether, during the last five (5) years, it has had any U.S. lottery contracts terminated by default or for cause. If so, identify the other contracting party and explain in detail the circumstances surrounding the contract termination; 7. State whether, during the last five (5) years, it has been assessed penalties or liquidated damages under any of its existing or past contracts with U.S. lotteries to print Instant Tickets. If so, for each instance when penalties or liquidated damages were assessed, explain the reason(s) and the amount of such penalty/liquidated damages. Summary data is permitted when per instance data would cause a large volume of data; however, the CLC reserves the right to request the per instance data, which must be available upon request; 8. State whether, during the last five (5) years, it, its parent, a subsidiary or other affiliate (collectively, Affiliates ) was the subject of any order, judgment or decree of any federal, state, or provincial authority barring, suspending or otherwise limiting the right of the Proposer or Affiliates to engage in any business, practice or activity. If so, provide a complete copy of such order, judgment or decree; 13

53 9. State whether, during the last five (5) years, trading in the stock of the Proposer or any of its Affiliates has been suspended. If so, provide a detailed explanation of the reasons, the inclusive dates of suspension, and a copy of the order of suspension or similar document; and 10. State whether it has ever been debarred or otherwise prohibited from contracting or submitting proposals or bids for contracts with: the State of Connecticut or any agency or political subdivision thereof; any other state, native American body or other governmental or quasi-governmental entity within the United States; or any lottery within the United States or Canada. If so, please fully identify the authority issuing the debarment prohibition, describe the reason(s) for debarment/prohibition, and state the inclusive dates thereof. C. PROPOSER S BUSINESS STRUCTURE AND OPERATION Each Proposer shall make the following disclosures with respect to its legal structure and business operations: 1. Full business name and address of its principal place of business; 2. Legal structure and key participants, including: a.) If a corporation: the names of all corporate officers and directors, and the names of all stockholders having ten percent (10%) or more equity in the corporation; b.) If a partnership, LLP, LLC or joint venture: the names of the general partners, the limited partners or members, and the owners of a ten percent (10%) or more equity interest; c.) If a trust: the names of the trustees and all persons entitled to receive income or benefits from the trust; d.) If an association: the names of the members, officers and directors; 3. All pending or threatened bankruptcy, reorganization, insolvency, administrative, regulatory, or other material proceedings, actions or litigation involving the Proposer or any of its Affiliates; 4. The details of all pleas, convictions, findings or judgments against the Proposer, its owners, officers, directors or primary members (regardless of place of employment) for any criminal offense, fraud, misrepresentation, or violation of any federal, state, or local ethics law, regulation, ordinance, code, policy or similar standard; 5. Any known related party relationships between the Proposer (or one of its Affiliates or their owners, officers, directors or primary members) and a CLC officer, director, or employee; 6. Resumes of all management and supervisory personnel, including the proposed account executive, who will be involved in the implementation and operation of the Contract and, further, for each such person if not otherwise provided in the resume: a.) b.) c.) d.) e.) Full name and current address; Five year employment history; A specific description of the person s relevant experience with the goods or services described in this RFP (limited to one page); A detailed narrative explaining the role the individual will have in performance of the Contract; Any additional helpful information to indicate the individual s ability to aid the Proposer in successfully performing the Contract (limited to one page); and 7. A current organizational chart, and an organizational chart for the proposed project team for this RFP, indicating lines of authority and including names, titles, and functions of individuals. If at any time during the RFP process the disclosures required by this section change, the Proposer shall, within three (3) Business Days of the event of change, notify the Purchasing Officer in writing of the change. The CLC reserves the right, in its sole discretion, to determine whether such changed disclosure warrants disqualification of the Proposal. 14

54 D. PROPOSER S FINANCIAL STATEMENTS The successful Proposer must be financially sound and stable and able to perform the terms and conditions of the Contract. Each Proposer must provide: 1. The Proposer s audited financial statements for the last three (3) fiscal years. If audited statements are unavailable, provide unaudited financial statements PLUS complete federal tax returns for the last three (3) tax filing years; and 2. If the Proposer is a subsidiary of another company, the financials for the parent company for the same periods must be provided with the Proposer s statements. The Proposer s Chief Financial Officer shall sign and date a statement that the financial statements provided were prepared in accordance with generally accepted accounting principles ( GAAP ) accepted in the United States of America and fairly represent the financial condition of the Proposer as of the Submission Date. PART V: TECHNICAL SPECIFICATIONS A. BACKGROUND The purpose of this RFP is to obtain competitive Proposals from Proposers qualified to design, print and deliver Instant Games for the CLC as described more fully below. The CLC welcomes a Proposer s description of its existing products or services that exceed the minimum requirements set forth below, including innovative or creative solutions. The CLC is also receptive to hearing about brand-new solutions or product opportunities that have not been specifically identified or requested in this RFP, including but not only expanded ways of increasing instant ticket sales. To ensure that Proposers understand the quality of the products and services requested in this RFP, the CLC is providing samples of the following materials, each of which is described in greater detail below: Instant Tickets, Dispenser Inserts, and How to Win Cards (Envelope # 1) Working Papers (Envelope # 2) B. TICKET AND GAME SPECIFICATIONS 1. Ticket Quality Requirements and Specifications a.) Ticket construction must be such that persons who have access to tickets prior to sale cannot, without changing the appearance of the tickets, identify winning tickets by any technique(s). b.) Inks shall not smear, run, or stain under normal handling or use by the consumer in normally encountered environmental conditions. All printed tickets must contain each of the following elements/characteristics: c.) Display printing shall be four (4) color process on the front and one (1) color on back (with the exception of tickets priced at $10 or higher that include colored graphics on the ticket back). d.) Four (4) colors on the overprint. If the CLC requests more than four (4) colors, it will pay for each additional color at the rate set forth in the Contract. e.) Paper stock shall be 10-point recyclable stock. In addition, printed Instant Tickets must be able to be deinked and processed/shredded such that they will be disposed of by recycling. f.) Full UV Coat. g.) Full Bleed colors from border to border. h.) Imaging that extends across 90% of the width of the ticket. i.) Price point screened on ticket back. j.) Scratch 2 Cash data matrix barcode to be included in all tickets and printed according to the specifications to be provided by the CLC to the successful Proposer. 15

55 All other printed materials shall be printed on recyclable paper stock. If a Proposer uses a process to print its tickets that is its standard, it CANNOT be priced as an option on Attachment D. It may be identified separately but MUST be included in the base price for that ticket size i.e., the CLC cannot be charged extra for that standard printing process. If there is a process that enhances the graphic appeal of the ticket and it costs the Proposer more to produce tickets in this manner, the process can be added as an option and priced accordingly. See Samples - CLC Sample Tickets (Envelope #1) Printed tickets must be of identical (or equivalent) quality and construction as the samples contained in Envelope # 1, such quality and construction to be determined by the CLC in its sole discretion. Specific details are included in the sample Working Papers (Envelope # 2). The sizes of sample tickets may not represent actual sizes requested in this RFP. Please refer to Attachment C for actual size. The CLC has the right, at its cost and at any time during the RFP process, to randomly select production tickets manufactured by a Proposer for testing by a laboratory of the CLC s choice for the purpose of confirming that the Proposer s production tickets meet all CLC security requirements. 2. Ticket Quantities The CLC anticipates ordering Instant Tickets in the quantities shown in Attachment C (page 6 of 6). However, the CLC does not guarantee any orders, order amounts or projections. Delivery of plus-or-minus five percent (5%) of the quantity ordered for each game shall be considered compliance with the CLC s requirements for that order set forth in the executed Working Papers, unless the CLC orders a specified minimum. See Samples - CLC Sample Tickets, Dispenser Inserts, and How to Win Cards (Envelope # 1) Sample tickets, dispenser inserts, and How to Win cards are required with each ticket order (excluding reorders with the same game number), as set forth in the sample Working Papers. Details and required quantities are listed below and detailed in the sample Working Papers (Envelope # 2). Cost per thousand tickets must include these required materials. All materials shall be printed on recyclable paper stock. 3. Ticket Delivery Sample Tickets Dispenser Inserts Qty: 6,000 How to Win Cards Qty: 4,000 Qty: 15,000 (5 tickets/pack) Tickets must be delivered FOB destination, freight prepaid, to either the CLC s main office or another location in the State of Connecticut, as the CLC will specify in the executed Working Papers. The successful Proposer will, at its sole cost and expense, pay for all delivery, freight, insurance and other expenses in connection with delivery. If the CLC requests delivery in any manner other than FOB destination, freight prepaid, or on a schedule other than that stated in the executed Working Papers, and such method costs more than the methods stated in the executed Working Papers, the CLC will pay at cost for such documented changes (including necessary security and insurance). The CLC s Instant Tickets shall not be comingled in transit with the products or goods of another entity. 4. Ticket Omissions or Voids Omitted Packs and Voided Packs shall be identified as ineligible to win any prize and shall not be considered as valid tickets in the game. The CLC will not be liable for the cost for such Omitted Packs or Voided Packs. Rather, the CLC will pay only for tickets actually available for sale. 16

56 5. Ticket Merchantability and Non-Conforming Tickets The CLC may reject a printed and delivered game if the result of any test or inspection of the game made by the CLC, the DCP, or an independent third party retained by the CLC and/or the DCP fails to meet the CLC s requirements and specifications contained in the executed Working Papers. If the quantity of tickets the CLC rejects is greater than or equal to 5% of all tickets received for that game, the successful Proposer shall, at no additional cost to the CLC, reprint the entire game within fifteen (15) Business Days of the CLC s notice to reprint, unless the CLC in writing permits a longer time period. The CLC shall not be liable for any costs related to any rejected tickets or games. The successful Proposer acknowledges that the CLC requires Instant Tickets for the particular purposes of issuance, distribution, and sale in the State of Connecticut. The CLC is relying on the successful Proposer s skill and judgment to furnish tickets suitable in all respects for those purposes, and the successful Proposer represents and warrants that its Instant Tickets provided under the Contract will in all respects be suitable and fit for such purposes. The successful Proposer also acknowledges that it deals in goods of the kind of Instant Tickets and holds itself out as having knowledge or skill specific to the production of Instant Tickets and Instant Games and systems, and that the Instant Tickets to be provided hereunder shall be merchantable. Instant Tickets and Instant Games produced hereunder shall remain in merchantable condition, regardless of the environment encountered in normal handling and usage, for a minimum period of twenty-four (24) months after delivery to the CLC. If the CLC finds that any individual delivery contains less than 95% conforming tickets, such delivery and Instant Games shall be deemed to be late and subject to liquidated damages put forth in Part VIII, Section T, below. 6. Ticket Art and Approval The successful Proposer will provide the CLC with initial rough art and final art for games in a mutually agreed upon format, consistent with the printing requirements and specifications approved by the CLC. The CLC s approval of such colors and final art shall be in writing, including . If the CLC requests changes after it has approved the final art and color key, the CLC will pay for the actual cost of such changes as an additional charge. It is understood that such changes may affect dates in the delivery schedule of a game. 7. Ticket Validation Information and Records The successful Proposer will provide ticket validation and inventory information and records as described in the executed Working Papers. It will also be responsible for the accuracy of validation and inventory CDs, or other media format acceptable to the CLC (collectively, the CD ), along with such documentation and information as may be required by the CLC and/or its on-line gaming system vendor to verify winning ticket CDs. Such materials include: a.) All-Tier Winners Report A validation CD of all winners seeded in a game. b.) Inventory Report A CD that details all Packs, their assigned carton and skid numbers, and Pack status (shipped-omit). c.) Game Report A letter of transmittal that lists the number of game CDs created for the production of tickets and the seal numbers of those CDs. d.) Omitted Pack Report A report of all Omitted Packs during ticket production. e.) Validation Upon the CLC s request, the successful Proposer will validate any ticket presented for such purposes. f.) End of Game Liability Report The CLC will provide the successful Proposer with an "End-of-Game" unsold inventory record of unsold and partially unsold Packs. The successful Proposer must produce a liability report of sold winners in a format to be determined by the CLC. The intent is to identify the actual liability for all sold inventory per game. g.) Short Packed Carton Report A listing, by carton number, of the shipped cartons with fewer than the required number of Packs, as set forth in the executed Working Papers. 17

57 8. Ticket Bar Code and Universal Product Code ( UPC ) The CLC requires bar code and UPC printing. Bar code print quality, by means of an appropriate qualityassurance device, is required so that an overall print quality grade of B or better be maintained, as defined in American National Standards Institute ( ANSI ) standards. Additionally, the bar code must be readable with the CLC s equipment at its retailer locations. The CLC will provide the successful Proposer with bar code specifications (which may be updated from time to time) with which the delivered Instant tickets must comply. Ticket Bar Code and UPC must comply with technical standards that the CLC will provide to the successful Proposer, which the CLC may update from time to time. Bar Code Testing bar code scanning equipment supplied by the CLC must be utilized for ticket testing purposes. The successful Proposer must provide hardware/software interface with such equipment for purposes of verifying readability of printed bar codes. The CLC reserves the right to change the number of characters, bar code symbology, composition of bar code to be scanned, and any other bar code aspects that it deems necessary and appropriate. If there is a change during the term of Contract, successful Proposer(s) will be sent updated equipment for the purposes of testing bar code quality. The successful Proposer must, during the Contract, be able to print tickets that allow for advances in technology. 9. Quick Response ( QR ) Codes A QR Code will be base printed on the back of Instant Tickets and on the front of Dispenser Inserts. While it is not anticipated that all tickets will carry the QR Code, the CLC reserves that right to make the final determination as to which Instant Tickets will require the QR Code feature and the hyperlink destination. 10. Instant Tickets in Non-Traditional Formats Please describe any innovations in Instant Game technology that utilize non-paper formats. 11. Ticket Pack Reconstruction The successful Proposer must reconstruct Packs and individual tickets as the CLC requests. This service will be provided at no cost to the CLC during the life of any Instant Game produced by the successful Proposer and for one (1) year thereafter. Reconstructions must be in a format the CLC prescribes and completed in a timely manner. Timely manner means: a.) b.) 12. Game Prize Structure In the case of the CLC s routine request made in writing, two (2) Business Days from the date of the written request. In the case of the CLC s urgent request made by telephone, twenty four (24) hours from the time of the telephone call, to be confirmed in writing within one (1) calendar week of that call. Facsimile and transmissions are permissible. The successful Proposer will develop a recommended prize structure for each game based on input received from the CLC. The CLC may order changes at its option, and the successful Proposer will develop new proposed prize structures based on the CLC s instructions or changes. This process shall continue until the CLC gives final approval by signing and dating a specific prize structure in the executed Working Papers. If the CLC requires any subsequent material changes to an approved prize structure, it will pay for the actual cost of such changes as an additional charge, which may also affect the delivery schedule of a game. The successful Proposer must assure prize structure integrity. It will use confidential methods to assure that delivered tickets meet all prize structure requirements as approved in the executed Working Papers. After production of a game is completed, the successful Proposer will generate and forward to the CLC an "End-of-Production Prize Liability Report for that game in a format approved by the CLC. 18

58 13. Game Audits and Certification/Game Testing Procedures The successful Proposer must, at its sole cost and expense for each Instant Game, engage a firm of Independent Certified Public Accountants or, if in Canada, Chartered Accountants (collectively, the Accountant ), acceptable to the CLC, to perform either: (a) Agreed-Upon Procedures in accordance with the American Institute of CPAs Professional Standards, U.S. Attestation Standards, or (b) an audit in accordance with Canadian generally accepted auditing standards. The purposes of the Agreed-Upon Procedures or audit are to provide the CLC with assurance that: i. the number, amount and distribution of prizes are as set forth in the executed Working Papers; ii. all game tickets have been produced in accordance with the executed Working Papers; and iii. and 100% of possible errors on the tickets would be detected through the procedures or audit. The successful Proposer s engagement letter with the Accountant firm must specifically identify, at a minimum, the above-described purposes of the Agreed-Upon Procedures or audit. The successful Proposer must provide the CLC with a draft of the proposed engagement letter with the Accountant and receive the CLC s prior written approval before retaining the Accountant, which approval the CLC shall not unreasonably withhold. The engagement letter must, at a minimum: a.) Require the Accountant s comment on each item in the section titled Parameters in the executed Working Papers; b.) Require that the Accountant send directly to the CLC the Accountants full report, along with all findings and recommendations for successful Proposer improvements. (This requirement is intended to preclude the successful Proposer from withholding or causing the withholding of information or reports from the CLC); c.) Permit the CLC, at its option, to witness the Agreed Upon Procedures or Audit process; and d.) Require the Accountant s report to confirm that: i. The data and programs under review were the actual data and programs used to produce the game tickets. This will be done by comparing data from randomly sampled tickets, uncovered, to the data on the production programs. The information, without exception, must match exactly; ii. Each program s contents conform to the specified prize structure required in the executed Working Papers; iii. The various denominations of prizes contained in each program sampled (per 2 above) are distributed randomly; and iv. In instances where certain denominations of prizes are distributed other than randomly, the Accountant applied procedures as necessary and appropriate to provide the CLC with assurance that prizes were distributed in accordance with the method utilized. The report shall detail such necessary and appropriate procedures. 14. Game Working Papers See Sample - CLC Working Papers (Envelope # 2) The required format and layout of Working Papers is substantively similar to the sample Working Papers contained in Envelope # 2. The CLC shall order the production of particular Instant Game Tickets by submitting draft Working Papers that, upon the signature of the CLC President or designee and of the successful Proposer, constitute executed Working Papers. After the CLC has reviewed proposed game design, ticket copy, prize structure, and method of production of any game and has reviewed the proposed prize structure, itemized ticket costs, and delivery schedules, it shall advise the successful Proposer that it is satisfied that the game complies with all such requirements by signing the draft Working Papers. 15. Attendance at Printing Plant During Production of Game In addition to all security measures, the CLC and/or the Department, each in its sole discretion, may send one or more representatives to the printing plant of the successful Proposer. The successful Proposer shall cooperate with the CLC and the Department to allow and coordinate previously agreed upon access to the 19

59 printing plant. The CLC or the Department shall determine the length of such visit(s). The cost for such visits (including but not limited to travel, lodging, and meals) shall be paid for by the CLC; however, to the extent any such visit extends beyond a pre-determined and agreed upon time due to production delays of the successful Proposer, the successful Proposer shall reimburse the CLC for all additional expenses the CLC reasonably incurs. 16. Consultation The successful Proposer must consult with the CLC on games, their performance, and sales objectives, through frequent telephone contacts. Additionally, the successful Proposer must, at its sole cost and expense, send a representative to the CLC s office as reasonably requested by the CLC. 17. Ticket Concept Testing The successful Proposer will participate in focus group or other agreed-upon research testing (webinars and other research methods) of Instant Ticket concepts. The focus group testing will occur at a testing facility in Connecticut chosen by the CLC. There will be approximately six (6) focus groups held each fiscal year (July June). The successful Proposer will be asked to provide several Instant Ticket concepts for testing that meet the theme and price point criteria that the CLC wishes to test. The theme and price point criteria will be provided to the successful Proposer approximately six (6) weeks prior to the focus group testing date(s). All Instant Ticket concepts are due to the CLC for review two (2) weeks prior to the focus group testing date(s). Each successful Proposer will share equally in the cost of each such testing, and the CLC shall have no liability therefor. 18. Annual Research Study The successful Proposer will provide an annual analysis of the Instant Game market in Connecticut to determine player profiles, trends, opportunities and sales potential. 19. Additional Elements During Contract Term The CLC and the successful Proposer may negotiate a change in any element of Contract performance or cost that results in lower costs, cost-efficiency, better value or that otherwise is in the CLC s best interest. 20. Options Each Proposer must separately state whether it can provide each of the following services and, if so, the price for providing each such service. The ability to provide each service and a description of the manner in which the Proposer provides it shall be set forth in the Proposal (each Proposer must fully answer this request, even if the answer is no, not available or no cost ). The pricing for each such service must be set forth separately in Attachment D, which must be placed in the Pricing Package (see Part III, Section I.3, above). a.) b.) Option 1-2 nd Chance Drawings Please describe the development (including consultation with the CLC) and management of a 2 nd Chance Drawing program, which will include but not be limited to the following: Design and development of 2 nd Chance Drawing registration website; Management of registration database, including those registrations received via the 2 nd Chance Drawing registration website, mail-in registrations, walk-up registrations, or other registration modes; Conducting 2 nd Chance Drawings at the successful Proposer s offices; and Fulfilling 2 nd Chance Drawing prizes. Option 2 Social Media, Internet and Interactive Games Please describe innovations to traditional Instant Games offered by your company that utilize social media, the Internet, and interactive features beyond 2 nd Chance Drawings. 20

60 c.) d.) e.) Option 3 Rewards and Loyalty Program Please describe in detail a Rewards and Loyalty Program that can be developed and executed for the CLC. The Rewards and Loyalty Program should be designed to enhance player enjoyment, improve player loyalty and grow revenue to the CLC. Option 4 Licensed Games Please provide a list of your current licensed games, along with an example of an Instant Ticket printed for each. Additionally, please provide a short description of any successful promotions that have been run in support of any licensed games (successful promotions being defined as those that have quantified results such as increased sales, high game indexing, improvements in player participation, etc.). Option 5 De-Inking and Processing Instant Tickets Please provide a description of your process for de-inking and shredding Instant Tickets at the conclusion of an Instant Game. Please include the details of the de-inking process and how the shredded tickets will typically be recycled. PART VI: BONDS AND INSURANCE A. INSURANCE The successful Proposer and each of its permitted subcontractors, at their sole cost and expense, shall obtain and maintain in force during the term of the Contract, including all extensions thereof, the following minimum insurance covering the successful Proposer, its subcontractors, and each of their officers, employees and agents. The required insurance policies shall be written by a company or companies licensed to issue insurance policies in the State of Connecticut, which company or companies shall have not less than an A- rating and a Class VI financial status as reported in the latest edition of Best s Insurance Guide. The CLC reserves the right to approve all insurance companies. The CLC also reserves the right to request, at any time, that the successful Proposer provide a complete, certified copy of each required insurance policy. Before Contract execution, the successful Proposer shall provide the CLC s Purchasing Officer with Certificates of Insurance, in a form satisfactory to the CLC, reflecting the types and minimum limits specified below. Each Certificate of Insurance shall: (a) require the insurance company to provide thirty (30) calendar days advance written notice to the CLC, by certified mail, return receipt requested, of any change in, termination of, failure to renew, default, or cancellation of coverage; and (b) disclose any nonstandard exclusions for each required coverage. If the successful Proposer is underwritten on a claims-made basis, the retroactive date shall be prior to or coincident with the date of the Contract, and the Certificate of Insurance shall state that the coverage is claims-made and also the retroactive date, if any. All insurance policies required below shall be primary and non-contributory with any insurance or self-insurance programs carried or administered by the CLC. No insurance required or furnished hereunder shall in any way relieve or diminish the successful Proposer s responsibilities, obligations and liabilities to the CLC under the Contract. 1. Workers Compensation and Employer s Liability. Workers Compensation coverage in the minimum amount required by the applicable law of the location where the work under the Contract will be performed. In addition, Employer s Liability coverage with minimum limits of $500,000 each accident, $500,000 per employee, and $500,000 disease policy limit. 2. Printer s Errors and Omissions. In the minimum amount of $10,000,000 with an aggregate minimum of $10,000,000 and a $250,000 sublimit for products recall. This coverage will indemnify the CLC, its directors, officers, officials agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, incurred by the 21

61 Indemnified Parties and arising out of or relating, directly or indirectly, to over-redemption, ticket take-back, or any other error or omission of the successful Proposer, its officers, employees, agents, and subcontractors in the performance of the Contract. This coverage (including products recall) shall remain in effect from the date the Contract is signed and continue for a period of eighteen (18) months after the CLC s final payment under the Contract, including any extension(s) thereof. B. PERFORMANCE SECURITY The successful Proposer shall provide either a surety performance bond or a clean, irrevocable letter of credit covering its faithful performance of the Contract (the Performance Security ). If the successful Proposer is in default under the Contract, the CLC shall have the right to call the Performance Security, in whole or in part. The Performance Security shall be in the amount of Five Million Dollars ($5,000,000) and shall be maintained in full force and effect during the term of the Contract and all extension(s) thereof. All Performance Security shall be in a form satisfactory and acceptable to the CLC in its sole discretion, including but not only the specific language of the security instrument and the insurance company or financial institution issuing such instrument. 1. Surety Performance Bond Any surety performance bond shall be written by a company or companies licensed to issue surety bonds in the State of Connecticut, which company or companies shall have not less than an A- rating and a Class VI financial status as reported in the latest edition of Best s Insurance Guide. Each bond shall require the surety to provide thirty (30) calendar days advance written notice to the CLC, by certified mail, return receipt requested, of any change in, termination of, failure to renew, default, or cancellation of coverage. 2. Clean, Irrevocable Letter of Credit C. LITIGATION BOND Any clean, irrevocable letter of credit shall be issued by a financial institution licensed to conduct business in the State of Connecticut. It shall be drawable upon presentation in the State of Connecticut and expressly provide for partial drawings. Each Proposer must provide a litigation bond in the amount of One Hundred Thousand Dollars ($100,000) naming the CLC as the obligee. The CLC may make a claim against the bond if: a.) The Proposer sues the CLC, the State of Connecticut, or any of their directors, officers, officials agents, employees, or Retailers, including any of the foregoing sued as individuals (collectively, the Defendants ), regarding any matter relating to the RFP process or any resulting Contract; and b.) A Defendant is the prevailing party in such suit. The bond allows the Defendants to recover monies, including reasonable attorneys' fees, expenses and court costs resulting from such litigation. The litigation bond shall remain in effect for a period of two (2) years from the Submission Date. After a Contract is signed with the successful Proposer, other Proposers may request a release of the litigation bond upon substitution of a covenant not to sue or other acceptable instrument. The CLC, in its sole discretion, shall determine whether to accept a substitution and the form thereof. PART VII: SECURITY A security program for the entire Instant Ticket process is very important to the CLC, and the successful Proposer s program will be subject to the prior approval of the CLC and the Department. This program is not limited to, but must include, at least the following minimum elements. 22

62 A. APPROACH TO SECURITY Each Proposer must demonstrate understanding of the overriding importance of security in all phases of design, materials procurement, production, transportation, storage, distribution, creation of game and validation tapes, and disposal of Instant Tickets. Such understanding shall be evident in its procedures, methods, controls, and accounting systems. The successful Proposer must make clear and specify precautions, safeguards, inspections, reporting and other measures that attend all aspects of ticket production. The CLC must be convinced in its sole discretion that a Proposer has the capability and integrity required to maintain constant vigilance against any breach of security. Failure to meet or to maintain any Department or CLC-approved security standards will be grounds for termination of the Contract. The Proposer must give full cooperation and disclosure, pursuant to authorized requests for information, relative to investigation of actual or perceived breaches in security or integrity of Instant Games. B. BUILDING SECURITY Each Proposer will supply the CLC with building floor plans of its facilities where the CLC production is likely to occur or has historically occurred, along with a detailed security plan that, at a minimum, will address the items set forth in this section. Stringent security measures must be in place to prevent unauthorized entry at the production site, as well as meeting all applicable federal, state and local fire and safety regulations. The CLC may conduct an annual on-site Certification Audit of the security plan to determine its effectiveness. The successful Proposer will reimburse the CLC and the Department for the cost of each Annual Security Certification Audit during the Contract. At a minimum, a physical security plan must: Prevent unauthorized persons from accessing production facilities; Upon demand, make available a record of all entries and exits from production facilities; Include access control, surveillance system, and intrusion detection system that will sound an alarm at a manned location on and off premises at each site; Operate a closed circuit television system to monitor and record all activities at entrance/exits, computer rooms, and other high security/sensitive areas; Provide a secured area within the facility for storage of completed or voided tickets prior to their final disposition; and Provide a security plan for the shipping of tickets from production facility to the CLC warehouse or other location specified in the executed Working Papers. All costs incurred as a result of implementing security measures shall be a Proposer s sole responsibility. The CLC reserves the right to require additional security measures it deems necessary. C. GAME SECURITY Each Proposer shall provide the CLC with a security plan by which it intends to produce Instant Tickets including game ticket construction security, anti-counterfeiting and validation security, redemption security (accuracy of barcodes on tickets, coupons and other promotional materials), game design security, and anything that may compromise security. Validation security shall include a description of the Proposer s method for creating files of unique random numbers. The CLC reserves the right to review a sample file. A Proposer must fully describe methods to be employed in the construction of tickets to avoid "pick-out" problems, including but not limited to protective measures against unauthorized invasion utilizing all types of known techniques, such as high-intensity light, laser, x-rays, photography, microscopes, optical fibers, cystoscopes, scanning laser microscopy, solvents, heat, freezing, and mechanical means, including cutting, peeling, electrostatics, etc. Also to be included is a description of measures that have been taken to minimize and detect ticket alteration and counterfeiting attempts. A Proposer shall identify potential security problems in the type of tickets proposed and specify its method of handling these problems. 23

63 A Proposer shall disclose any documented or known security breaches that have occurred with the Proposer over the last three (3) years. A Proposer shall disclose any changes to its printing plant(s) over the last three (3) years, including but not limited to major modifications to the plant; new security system added, or renovations made to the existing security system; and the addition/construction of a new plant. D. LABORATORY TESTING Upon the CLC s request, a Proposer shall submit copies of the most recent and applicable laboratory test reports and other certifications assuring security of Instant Tickets against practical compromise by reasonably comprehensive technical effort such as optical, mechanical, chemical and electrostatic techniques without a readily detectable indication of tampering being apparent. The CLC reserves the right to reject any game at any time, if the Proposer s or CLC s authorized tests show any representative sample of production tickets to be practically compromised. The CLC also reserves the right to determine if a particular method of breaching the security of a ticket meets its definition of "practical." Regardless of the type of ticket design, the final product must be tamper-proof by any practical means. During every press run of a CLC game, at least six (6) packs (2 each from the beginning, middle and end) of live production of Instant Tickets must be sent by the successful Proposer to the Department for security testing. The successful Proposer will confirm via to the CLC s Instant Games Department that it sent test packs to the Department. These packs must be omitted and the final prize structure balanced after they are pulled. The CLC, in its sole discretion, reserves the right to request additional tickets and to subject such tickets to any additional tests. The CLC will bear the cost of any additional testing it requests. E. BREACH OF SECURITY The successful Proposer must immediately report verbally to the CLC Director of Security any breach of its security, especially regarding theft or disappearance of paper stock, tickets, waste, printing plates, game play and validation tapes, software files, etc., with written details to follow promptly but in no event longer than three (3) Business Days. The CLC will provide appropriate instructions for expediting communication in such occurrences. F. SECURITY EVALUATION The overall security plan and procedures with respect to production of games, manufacture of tickets, game details, prize validation, etc., must meet the CLC s security needs and have absolute minimum possibilities of fraud, tampering, theft, counterfeiting, ticket alteration, or other security breaches. A Proposer must describe its past experience in providing data processing expertise to prevent pick-out and other undesirable patterns. G. SECURITY OPTIONS If a Proposer has alternatives for the improvement of game security, it should include a detailed explanation of the alternatives or options in its Proposal. H. SECURITY INSPECTIONS As determined by the CLC Director of Security and the Department, the successful Proposer will fully comply with and be subject to periodic unannounced security inspections to determine the effectiveness of the overall Security Plan. The CLC will bear the cost of travel, lodging and meals for such inspections. PART VIII: CONTRACT TERMS The following provisions, and such other provisions of the RFP that apply (for example only, confidentiality of information), will be mandatory minimum terms and conditions of the CLC s Contract with the successful Proposer. The CLC reserves the right to include such other terms and conditions as it, in its sole discretion, deems in its best interest. 24

64 A. DEFENSE, INDEMNIFICATION AND HOLD HARMLESS The successful Proposer shall indemnify, defend, and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to the successful Proposer s malfeasance, misconduct, negligence or failure to meet its obligations under the Contract (a Claim ). The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance or, in the case of a Claim brought against the Indemnified Parties by an employee of the successful Proposer or any of its contractors, by any limitation on the amount, type or availability of damages, compensation or benefits payable by the successful Proposer under applicable workers compensation, disability benefits, or other employee benefits laws. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. B. BONDS AND INSURANCE The successful Proposer shall, at its sole cost and expense, obtain and keep in force during the Contract the types and minimum amounts of bonds and insurance listed below. The CLC reserves the right to request from the successful Proposer a complete, certified copy of each required insurance policy. The CLC reserves the right, at any time, to require such additional types and limits of insurance and bonds as the CLC, in its sole discretion, deems necessary. The successful Proposer shall obtain and maintain such additional insurance and bonds at its sole cost and expense. C. LOSS OF STATUTORY AUTHORITY If the CLC loses its statutory authority to operate, then the Contract shall be null and void. D. NON-EXCLUSIVE RIGHT The successful Proposer does not have the exclusive right to provide the CLC with the goods and services described in the Contract. The CLC retains the right to contract for such services during the Contract term, including any and all extensions thereof, from any other vendor or vendors that the CLC, in its sole discretion, deems in its best interest. E. ACCOUNT EXECUTIVE The successful Proposer must assign a qualified account executive to the Contract who will oversee all contractual obligations. This person must be available for meetings, discussions and reviews and must ensure timely invoice preparation and performance reports as required. The account executive will serve as the liaison between the CLC and the successful Proposer and will follow through on all CLC requests. In general, the account executive will be the CLC s primary point of contact with the successful Proposer. F. APPROVAL OF EMPLOYEES AND MINIMUM STAFFING LEVELS The CLC and the Department reserve the right to review and, if necessary, disapprove any employee of the successful Proposer prior to the employee s assignment to duties under the Contract. The CLC also reserves the right to require the removal of any employee of the successful Proposer at any time if the CLC finds that such employee is not performing in the CLC s best interest. The CLC shall require the successful Proposer to maintain minimum staffing levels to meet the requirements of the Contract. G. INTEGRITY OF THE SUCCESSFUL PROPOSER Because of the extremely sensitive nature of the lottery industry, it is essential that the CLC s operations and reputation avoid any impropriety or appearance of impropriety. Therefore, the successful Proposer must meet the following criteria: 1. It must offer services of the highest standards; 2. It must use its best efforts to prevent the industry and the CLC from becoming involved in a controversy or conflict; 25

65 3. It must avoid promotions and endorsements that the CLC could interpret as improper or embarrassing to the CLC or the State of Connecticut; 4. It must, immediately upon detection, report actual or potential security or integrity problems to the CLC; and 5. It must ensure that its staff and any permitted subcontractors working on the Contract refrain from purchasing Lottery tickets in accordance with applicable Connecticut law and game rules. H. DRIVER AND VEHICLE SAFETY The successful Proposer must ensure that its employees, as well as any permitted independent contractors or subcontractors, maintain current driver s licenses and that these licenses are in good standing with the issuing authority. I. CLC INSPECTION OF WORK AND WORKPLACES The CLC may inspect the successful Proposer s work at any time. In addition, the CLC and/or the Department may at any time inspect the facilities where the work under the Contract is being performed. These rights of inspection are solely for the CLC s benefit and do not transfer to the CLC the responsibility for discovering patent or latent defects or any other problems or issues in the successful Proposer s performance of the Contract. The successful Proposer has the sole, complete and exclusive responsibility for performing the Contract in accordance with its terms. J. REJECTED WORK OR MATERIALS The successful Proposer shall, at its sole cost and expense, remove from the CLC s property all rejected items within five (5) Business Days of notice of rejection. K. NOTICES During the Contract the successful Proposer shall: 1. Provide the CLC and the Department with unfettered and unannounced access, inspection and evaluation privileges for all phases of performance and for all facilities used by the successful Proposer for the Contract; 2. Immediately notify the CLC in writing of employee terminations and resignations or change in driver license status of those individuals working on this account. This requirement is necessary to permit the CLC to accurately maintain its Ineligible Players Database. The successful Proposer shall also obtain written confirmation (on a form to be supplied by the CLC) from all employees and subcontractors assigned to the Contract that they are prohibited from buying and/or cashing Lottery tickets during the term of the Contract; 3. Notify the CLC in writing within ten (10) Business Days of a substantial change in its financial condition. For the purposes of this provision, a substantial change in financial condition means any loss or judgment that equals or exceeds ten percent (10%) of the successful Proposer s net worth or that would jeopardize the successful Proposer s ability to meet its obligations under the Contract. Failure to notify the CLC of such a change will be grounds terminating the Contract; and 4. Notify the CLC in writing within ten (10) Business Days of a substantial change in its ownership. For purposes of this provision, a substantial change in ownership is defined as any merger, acquisition, assignment or change in parties who comprise ownership greater than 49% of the successful Proposer or the parent company of the successful Proposer. Failure to notify the CLC of such a change will be grounds for terminating the Contract. L. PRIME CONTRACTOR RESPONSIBILITY The successful Proposer shall be solely responsible for providing the goods and services required by this RFP and for performing the Contract. The CLC shall consider the successful Proposer to be the sole point of contact for all issues under and requirements of the Contract. M. SUBCONTRACTING AND SUCCESSFUL PROPOSER S RESPONSIBILITY The successful Proposer shall not subcontract all or any portion of the printing of Instant Tickets. It may subcontract the remaining aspects of the Contract but only with the CLC s prior written consent in each instance. If the successful Proposer desires to enter into any subcontract agreement(s) for such work, the successful Proposer shall provide the 26

66 CLC with written notice of the identity of (full legal name, street address, mailing address (if different from street address), and telephone number), and a detailed description of the work to be performed by, the proposed subcontractor, as well as any other information the CLC requests. The CLC shall provide the successful Proposer with the CLC s position on the desired subcontracting within fifteen (15) Business Days of receipt of all requested information. If the CLC objects to the proposed subcontractor, the successful Proposer shall not use that subcontractor. The CLC also reserves the right at any time to require the removal of any employee of the successful Proposer or approved subcontractor if the CLC, in its sole discretion, determines that such employee is not performing in the CLC s best interest. All permitted subcontracting shall be subject to the same terms and conditions as are applicable to the successful Proposer. The successful Proposer shall remain fully and solely liable and responsible to the CLC for performance of the Contract and for the acts and omissions of its subcontractors and of persons, whether directly or indirectly employed by the subcontractor(s), as the successful Proposer is for acts and omissions of the persons it directly employs. N. EQUAL BUSINESS OPPORTUNITY It is the CLC s policy to contribute to the establishment, preservation and strengthening of small businesses and businesses owned by women and minorities in our procurement activities. Toward that end, the CLC encourages firms to provide for the participation of Connecticut small businesses and Connecticut businesses owned by women and minorities through partnerships, joint ventures, subcontracts, and other contractual opportunities. The CLC is committed to providing opportunity to a diverse group of vendors through both direct purchasing and procurement opportunities as well as Tier II opportunities through its contractors. In order to track the amount of funds spent with varied types of vendors, the CLC will request completion of a Direct Tier II Spending Report to be provided by the CLC from the successful Proposer within a reasonable time of Contract execution, which report the successful Proposer shall update annually at a time determined by the CLC. Payments by the successful Proposer to businesses that provide goods or services directly related to its ability to complete the Contract constitute Tier II spending. O. EQUAL EMPLOYMENT OPPORTUNITY AND AFFIRMATION ACTION The successful Proposer shall comply with all applicable laws pertaining to equal employment opportunity and affirmative action. P. MAINTENANCE AND AVAILABILITY RECORDS The successful Proposer must maintain financial records, books and all other documents and data pertaining to the Contract in accordance with Generally Accepted Accounting Principles. The successful Proposer will, upon request, make its records related to the Contract available to the CLC, its auditors, and the Department at all times during the Contract and for no less than five (5) full years from the date of Contract expiration or termination, whichever is later. Q. LICENSES AND PERMITS The successful Proposer shall obtain and pay for all licenses, permits, fees, etc. and to give all notices and comply with all requirements of each municipality in which the services are to be provided to the CLC. The CLC and the Department will require that the successful Proposer, its officers, employees and subcontractors who are assigned to carry out the responsibilities of the Contract be licensed by the Department. The successful Proposer shall pay all application fees associated with such licensing. Background investigations are part of the licensing process and may include fingerprint identification by the Connecticut State Police. The CLC reserves the right to require the removal of any and all successful Proposer employees from performing services under the Contract based upon the results of the background checks. R. NO ASSIGNMENT The successful Proposer shall not assign or otherwise dispose of any or all of its obligations under the Contract to any other person or entity without, in each instance, the CLC s prior written consent. S. WAIVER The failure of either party to enforce any term, condition or provision of the Contract is not a waiver of such or of any other term, condition or provision of the Contract. 27

67 T. LIQUIDATED DAMAGES 1. General The CLC and the successful Proposer agree that it will be extremely impractical and difficult to determine actual damages that the CLC will sustain for a late delivery because the goods and services to be provided under the Contract are not readily available on the open market. The successful Proposer s breach will delay and disrupt the CLC s operations and will lead to damages. Therefore, the parties agree that the liquidated damages set forth are reasonable and are not a penalty. The CLC s assessment of liquidated damages shall be in addition to, and not in lieu of, any and all other remedies available to it. The successful Proposer shall not be required to pay liquidated damages for delays due solely to a force majeure or for time delays that the CLC specifically and previously approved in writing. Nothing in this section shall relieve, or be deemed or construed as relieving, the successful Proposer of any of its performance obligations under the Contract, whether or not such obligations are identified below. Indeed, the CLC expressly reserves and does not waive any and all of its rights and remedies, legal or equitable, related to the successful Proposer s failure to perform the Contract. 2. Notification of Liquidated Damages The CLC President shall issue all assessments of liquidated damages in writing, which shall be sent to the successful Proposer. The CLC shall, in its sole discretion, determine whether liquidated damages shall be assessed. 3. Conditions for Termination of Liquidated Damages Except as waived in writing by the CLC President, no liquidated damages imposed shall be terminated or suspended until the successful Proposer issues a written notice verifying the correction of the condition(s) for which liquidated damages were imposed, and all of the successful Proposer s corrections have been subjected to verification at the President s discretion. The successful Proposer shall conduct testing of any correction as the CLC President deems necessary. Such testing shall be developed jointly by the CLC and the successful Proposer and approved by the CLC, including test script, test environment, and test result. The CLC President shall determine the documentation required for verification and approval. The CLC President shall be the sole judge of the accuracy of any documentation provided. The successful Proposer s notice of correction will not be accepted until the CLC verifies the correction. 4. Severability of Individual Liquidated Damages If any portion of the liquidated damages provisions is determined to be unenforceable in one or more applications, that portion remains in effect in all applications not determined to be invalid and is severable from the invalid application. If any portion of the liquidated damages provision is determined to be unenforceable, the other provision or provisions shall remain in full force and effect. 5. Waiver of Liquidated Damages The CLC s waiver of any liquidated damages shall constitute a waiver only as to such liquidated damages and not as a waiver of any other or any future liquidated damages. The CLC s failure to demand payment of or to collect liquidated damages within any period of time shall not constitute its waiver of such liquidated damages. 6. Payment of Liquidated Damages All assessed liquidated damages shall be paid within thirty (30) calendar days of the date of the written assessment notice by deducting such sum from any moneys the CLC owes the successful Proposer. If the amount due the successful Proposer is not sufficient to satisfy the amount of such assessment, then the CLC 28

68 shall afford the successful Proposer the opportunity to reimburse the CLC by check, wire transfer or such other means as the parties may agree. Thereafter the CLC may, at its sole option, collect such liquidated damages through one (1) or more claims against the Performance Security, through a claim against the successful Proposer s insurance, or in any other lawful way. 7. Late Delivery For each 1,000 tickets whose delivery is late by one Business Day from the date specified in the executed Working Papers for that game and which results in the delay of the scheduled start of sales of a game or in a shortage of tickets to distribute to Retailers, the successful Proposer may be assessed $5.00 for 1,000 tickets per Business Day as liquidated damages. U. TERMINATION OF CONTRACT 1. Termination Without Cause The CLC shall have the right, in its sole discretion, to terminate the Contract, in whole or in part, without cause. Any such termination shall be effected by the CLC sending written notice to the successful Proposer of its intent to terminate no less than thirty (30) calendar days prior to the termination date. In the event of such termination, the CLC shall pay the successful Proposer for the cost of any materials, services or other expenses reasonably and actually incurred at the time of the successful Proposer s receipt of the termination notice and not otherwise usable or recoverable by the successful Proposer. If the CLC terminates the Contract without cause, the CLC shall have no other liability or obligation to the successful Proposer, including but not limited to any obligation or liability for claims of lost profits or other consequential damages. Upon receipt of a termination notice, the successful Proposer shall take all steps necessary to mitigate the costs and expenses payable under this section. The CLC s termination of the Contract without cause shall not excuse the successful Proposer from any liquidated damages assessments or other liabilities that it may have incurred as a result of its failure to meet its obligations while the Contract was effective. 2. Termination For Cause The CLC shall have the right, in its sole discretion, to immediately terminate the Contract, in whole or in part, for cause upon written notice to the successful Proposer. Such termination shall be without prejudice to any and all rights, remedies, and causes of action the CLC may have against the successful Proposer. The CLC s right to terminate for cause includes, but is not limited to, the following events: a.) The successful Proposer materially fails to comply with any of its obligations and duties under the Contract; or b.) A receiver, conservator, liquidator, or trustee of the successful Proposer, or of any of its assets, is appointed by order or decree of any court or agency or supervisory authority having jurisdiction; or any order for relief is entered against the successful Proposer under the federal bankruptcy code; or the successful Proposer is adjudicated bankrupt or insolvent; or any material portion of the assets of the successful Proposer is sequestered by court order and such order remains in effect for more than thirty (30) calendar days after the successful Proposer obtains knowledge thereof; or a petition is filed against the successful Proposer under any state, reorganization, arrangement, insolvency, readjustment of debt, dissolution, liquidation, or receivership law of any jurisdiction, whether now or hereafter in effect, and such petition is not dismissed within sixty (60) calendar days; or c.) The successful Proposer files a case under the federal bankruptcy code or seeks relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, whether now or hereafter in effect, or consents to the filing of any case or petition against it under any such law; or d.) The successful Proposer makes any assignment for the benefit of its creditors, or admits in writing its inability to pay its debts generally as they become due, or consents to the appointment of a receiver, trustee, or liquidator of it or of all or any part of its property; or e.) The successful Proposer s financial condition deteriorates such that the CLC reasonably doubts the successful Proposer s ability to meet its obligations under the Contract; or f.) A writ or warrant of attachment or any similar process is issued by any court against all or any material portion of the Vendor s property, and such writ or warrant of attachment or any similar process is not released or bonded within thirty (30) calendar days after entry; or 29

69 V. WARRANTIES g.) Any of the successful Proposer s representations, warranties, certificates, or statements made or furnished in its Proposal or in the Contract is found by the CLC, in its sole discretion, to have been materially false, deceptive, incorrect, or incomplete; or h.) The successful Proposer or its subcontractor commits fraud or is involved in collusion, conspiracy or other unlawful or fraudulent activities, whether or not related to the Contract; or i.) The successful Proposer fails to adhere to the Department s licensing regulations and background checks; or j.) The Department revokes the successful Proposer s license; or k.) The successful Proposer fails to meet or maintain any Department or CLC-approved security standards; or l.) The successful Proposer fails to give notice, or to give such notice timely, of a substantial change in its financial condition as defined in Section ; or m.) The successful Proposer fails to give notice, or to give notice timely, of a substantial change in its ownership as defined in Section. The CLC s termination of the Contract does not excuse the successful Proposer from any liquidated damage assessments or other damages incurred or imposed while the Contract was in effect. Moreover, the successful Proposer s failure timely to deliver any goods or perform any services under the Contract constitutes immediate authority for the CLC to purchase such goods or services from other vendors and without the CLC s prior notice to the successful Proposer. For each such failure, the successful Proposer shall promptly and fully reimburse the CLC for the excess costs of the purchase(s). The CLC, in each instance and in its sole discretion, shall determine the manner of reimbursement, including but not limited to the successful Proposer s direct reimbursement to the CLC and/or the CLC s retention of monies due the successful Proposer under the Contract. 1. General Warranty The CLC is relying on the successful Proposer s skill, judgment and experience to furnish goods and services fit in all respects for the particular purpose of the Contract. In addition, the successful Proposer warrants and represents that the goods and services provided to the CLC under the Contract shall conform in all respects to the requirements of the Contract, including without limitation the technical specifications, will meet or exceed the representations contained in its Proposal, and will be of good quality and free from any defects in materials or workmanship. The successful Proposer further warrants that, during the term of the Contract, it will replace or correct at its own expense any such goods or services that do not meet these requirements. In addition, the successful Proposer will pass through to the CLC any and all warranties provided by any entity that the successful Proposer subcontracts with for the provision of goods or services under the Contract. 2. Warranty On High-Tier Prizes The successful Proposer warrants that only the number of High-Tier Prize tickets approved by the CLC based on the authorized prize structure will be in each specific game. The parties agree that the damages for claimed additional High-Tier Prize tickets (i.e., those not authorized by the CLC) will be the amount of the prize paid, per occurrence. Additionally, specific quantities of top-prizes, and any other prize level specified by the CLC, must be identified as guaranteed or proportional in language contained in executed Working Papers for each specific game. The language contained in executed Working Papers is as follows: For Guaranteed top prizes: It is guaranteed that the top prize will be seeded in accordance with the final approved prize structure. The exact quantity of ## top prizes of $XX,XXX must be included in the tickets delivered to the CLC. For Proportional top prizes: The number of $XX,XXX prizes will be proportional to the final approved prize structure within +/- 3%. The number of $XX,XXX prizes contained in the final quantity of tickets shipped will be the expected number of 30

70 top prizes based upon the odds of winning in the final approved prize structure applied to the final quantity actually delivered. The expected number of $XX,XXX prizes from the final approved prize structure will be applied to the ticket quantity actually delivered before the +/- 3% limit is calculated. 3. Warranty on Unique Validation s W. FORCE MAJEURE The successful Proposer warrants that all tickets will have a unique validation number within a game. The parties agree that damages for repetition of validation numbers, in any format, within a game will be the apparent prize value of the ticket per occurrence. Neither party shall be liable for delays or performance failures resulting from or caused by acts beyond the control of such party. Such acts shall include, but not be limited to, acts of God, acts of war or terrorism, epidemics, or acts of federal or state agencies. However, any such delay must be beyond the control and without the fault or negligence of the nonperforming party. X. AMENDMENT The Contract may not be altered or amended except by written agreement of both parties. Y. SEVERABILITY If any provision of the Contract is held to be invalid or unenforceable for any reason, the remaining portions will continue in full force and effect without being impaired or invalidated in any way. Z. BINDING ON SUCCESSORS AND ASSIGNS The Contract shall be binding on and inure to the benefit of each party s successors and assigns. AA. AUTHORIZATION AND ENTIRE AGREEMENT Each party represents and warrants that it has full power, authority and legal right to execute, deliver and perform the Contract. The Contract constitutes the entire agreement between the parties with respect to its subject matter, and it supersedes any prior agreements, oral or written, between them and/or their representatives in connection with such subject matter. BB. TRANSITION TO NEW VENDOR The successful Proposer shall cooperate fully and in good faith in the CLC s transition of the Contract (upon its termination or expiration) to a new vendor. Such cooperation shall include, but not be limited to, the sharing of pertinent information as it relates to the implementation of the new contract. CC. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS In performing the Contract, the successful Proposer shall comply with all applicable federal, state and local laws, regulations, ordinances, codes and orders. DD. CONNECTICUT LAW AND COURTS The Contract shall be governed in all respects by and construed in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State of Connecticut. The successful Proposer irrevocably submits in any suit, action or proceeding arising out of the Contract to the jurisdiction of the United States District Court for the District of Connecticut and the jurisdiction of the Connecticut Superior Court located in the Hartford Judicial District. EE. BIZNET ACCOUNT AND UPLOADING OF AFFIDAVITS AND NONDISCRIMINATION FORMS The successful Proposer shall keep its BizNet account current as required by law (see State Department of Administrative Services BizNet system ( documents available at the Affidavits & Nondiscrimination Forms tab in that system). 31

71 FF. INDEPENDENT RELATIONSHIP The CLC and the successful Proposer are independent parties. Nothing contained in the Contract shall create, or be construed or deemed as creating, the relationships of principal and agent, partnership, joint venture, employer and employee, and/or any relationship other than that of independent parties contracting with each other solely for the purpose of carrying out the terms and conditions of the Contract. GG. WINNER ON ITS FACE INDEMNIFICATION AND HOLD HARMLESS For purposes of this provision, a "Winner On Its Face" is a ticket that contains a legitimate winning configuration of game symbols and symbol captions, but that does not have the corresponding official winning ticket validation number. To qualify as a "Winner On Its Face," a ticket must meet all of the correct tests for a legitimate winner (except for having a winning validation number). As is the case with all tickets, a "Winner On Its Face" will be void if it is unissued, illegible, mutilated, altered, blank or partially blank, counterfeit in whole or part, reconstituted, miscut, misregistered or incomplete; if display printing is irregular; if anything other than exactly one prize amount or symbol and corresponding caption appear in each of the prize amount boxes as specified in the executed Working Papers; if apparent symbols are inconsistent with their captions; or if the ticket fails any of the CLC s validation tests (except for having a winning validation number). The successful Proposer shall indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to a Winner on Its Face claim and any payment the CLC makes in connection with such a claim. The CLC will pay a Winner on Its Face claim only after careful consideration and consultation with the successful Proposer. However, the CLC, in its sole discretion, shall make the final decision about payment of such a claim. The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. To the extent that the successful Proposer utilizes or relies upon the Intellectual Property Rights of a third party in fulfilling its obligations under the Contract, the successful Proposer shall provide the CLC with whatever assurance the CLC, in its sole discretion, deems necessary that the use of such third party Intellectual Property Rights is permissible. In addition, if the successful Proposer fails to perform or breaches the Contract, it must ensure the CLC s continued right of use of the licensed Intellectual Property Rights. HH. INTELLECTUAL PROPERTY RIGHTS: TITLE TO, USE OF, AND INDEMNIFICATION The successful Proposer shall defend, indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to any claims that any or all of the products or services the successful Proposer provides under the Contract violate or infringe, in whole or in part, the Intellectual Property Rights of a third party. The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. All Intellectual Property Rights associated with any product or service provided or developed by the successful Proposer under the Contract are and will remain the property of the successful Proposer. Nonetheless, the successful Proposer agrees to grant the CLC a license to use any such Intellectual Property Rights on an indefinite basis with respect to the CLC s business activities. 32

72 a. Trade/Service Marks and/or Names: The successful Proposer will obtain and pay for federal trademark and/or copyright searches, and state trademark searches within Connecticut, on names chosen for CLC games and obtain a written opinion from trademark counsel, at the successful Proposer s sole cost and expense, as to the advisability of the use of such game names. The CLC shall receive a complete copy of each such opinion prior to final determination of the name of each game and final approval of the final mechanical art for each game. If a name the CLC chooses has been expressly determined to infringe or violate a trademark or copyrighted idea in connection with a game as expressed in the opinion given by the successful Proposer s trademark counsel, then the successful Proposer shall be relieved of its defense, indemnification and hold harmless obligations under this section. The successful Proposer shall obtain a trademark or copyright, as the case may be, of each chosen game name. If a game name or any aspect of a game chosen by the CLC is the subject of a trademark or copyright held by the successful Proposer, the successful Proposer hereby grants the CLC a license to use said trademark or copyright in connection with such game name or other aspect of such game now and in the future. The successful Proposer shall defend, indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to alleged infringement or violation of a trade/service mark or name. The successful Proposer shall also be liable to the CLC and the State of Connecticut for all direct and/or consequential damages, including but not limited to loss of revenue to the CLC and the State resulting from such claim or suit. The successful Proposer shall assume the defense of any and all such claims or suits and pay the costs and expenses incidental thereto, subject to the CLC and the State s right to provide additional legal counsel at their own expense. The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. b. Patents and/or Trademarks: The successful Proposer shall defend, indemnify and hold harmless the CLC, its directors, officers, officials, agents, employees, Retailers, and the State of Connecticut, including any of the foregoing sued as individuals (collectively, the Indemnified Parties ), from and against all proceedings, suits, actions, claims, damages, injuries, awards, judgments, losses or expenses, including attorneys fees, arising out of or relating, directly or indirectly, to alleged infringement of any patent relating to such goods or for the use of any copyrighted composition. The successful Proposer s obligations under this section shall not be limited in any way by any limitation on the amount, type or availability of its insurance. The successful Proposer shall pay any and all attorneys fees and costs incurred by the Indemnified Parties in enforcing any of the successful Proposer s obligations under this section, all of which obligations shall survive the termination or expiration of the Contract. II. SECURITY INFORMATION The successful Proposer shall provide the following security elements, as well as additional security information as outlined in Section : 1. A list of names, addresses, dates of birth and Social Security numbers for all principals, key employees and subcontractors that are expected to be assigned to the Contract; 2. Authorizations signed by the employees and subcontractors to allow law enforcement agencies to secure relevant background information; 3. Assurance to the CLC that, as new personnel and subcontractors are assigned to the Contract, the information provided for above shall be reported to the CLC within ten (10) Business Days; and 4. Certification from all employees and subcontractors expected to be assigned to the Contract that they are prohibited from purchasing in any state lottery tickets for any game in which the CLC participates and from receiving a prize(s) from said tickets during the term of the Contract. Further, any spouse, domestic partner, child, sibling or parent residing in the same household of a person assigned to the Contract shall also be 33

73 prohibited from purchasing such lottery tickets and from receiving a prize(s) from any such tickets during the term of the Contract. This prohibition may, if the CLC or the Department determines it to be in the best interest to expand such prohibition, be expanded to include successful Proposer employees, independent contractors and subcontractors who are not directly assigned to the Contract. 34

74 ATTACHMENT A Vendor Information Form (2 pages) 35

75 The Connecticut Lottery Corporation is collecting vendor and supplier information in order to compile a list of available vendors and to track its compliance with supplier diversity goals. The CT Lottery considers commercial and financial information disclosed on this form to be confidential but, unless exempted from disclosure by the Connecticut Freedom of Information Act or other applicable law, information supplied to the Connecticut Lottery Corporation may be subject to disclosure under the Connecticut Freedom of Information Act. 36

76 ATTACHMENT B Proposer s Affidavit (2 pages) Proposal for: Instant Ticket Printing RFP : CLC (the RFP ) Proposer s Complete Legal Name and Street Address: PROPOSER S AFFIDAVIT I,, am over the age of eighteen (18) years, believe in, Print Name and understand the obligations of an oath. I am of sound mind, not acting under duress, and make this affidavit freely for the purpose of inducing the Connecticut Lottery Corporation to consider our Proposal and to make a Preliminary Notice of Award to the Proposer. I understand that all capitalized terms in this affidavit have the same meanings given them in the RFP. I am the of the Proposer and duly authorized to make this affidavit on its behalf. Print Title I, having fully informed myself regarding the accuracy of the statements made in this affidavit, do hereby state that: 1. The Proposal is genuine. It is not a collusive, sham or fraudulent proposal, and it was not made in the interest or on behalf of any person or entity not named or disclosed in this affidavit. 2. The Proposer developed the Proposal independently and submitted it without collusion with, and without any agreement, understanding, communication or planned common course or action with, any person or other entity designed to fix the Proposal price or otherwise limit independent competition. 3. The Proposer has not offered or received any kickbacks or inducements from any person or entity in connection with the Proposal. 4. The Proposer, its officers, employees and agents have not conferred or promised to any State of Connecticut or Connecticut Lottery Corporation official, officer, employee or member of the Board of Directors connected in any way to this RFP any payment, loan, subscription, advance, deposit of money, gift, service, or present unless consideration of substantially equal or greater value was exchanged and such consideration was not related to and was not intended to influence any decision regarding this RFP. 5. The Proposer, its officers, employees and agents have not communicated with any officer, member of the Board of Directors, or employee of the Connecticut Lottery Corporation, other than the Purchasing Officer, concerning this RFP and its Proposal. 6. The Proposer, its officers, employees and agents have not communicated the contents of its Proposal to any person not an officer, employee or agent of the Proposer and, further, the Proposer represents that it will not communicate the contents of its Proposal to any such person until the Submission Date. 7. To the best of my knowledge, information and belief, no CLC officer, official, employee or member of the Board of Directors of the Connecticut Lottery Corporation has any financial or other interest whatsoever, direct or indirect, in the Proposer or its business. 8. The Proposer has thoroughly examined and understood each and every provision of the RFP, including the sample envelopes, the technical specifications, and any and all addenda. 9. The Proposer agrees to all of the provisions of the RFP, including but not only the Contract Terms (Part VIII). 37

77 10. All information in the Proposal is complete, not misleading (including misleading by omission), and accurately and fully portrays all requested aspects of the Proposer and its goods and services. 11. The Proposer is not currently debarred or otherwise prohibited from contracting or submitting proposals or bids for contracts with the State of Connecticut or any agency or political subdivision thereof, any other state, native American body, or other governmental or quasi-governmental entity within the United States, or any lottery within the United States or Canada. 12. The Proposer is not an agent of any person or entity currently debarred or otherwise prohibited from contracting or submitting proposals or bids for contracts with the State of Connecticut or any agency or political subdivision thereof, any other state, native American body, or other governmental or quasi-governmental entity within the United States, or any lottery within the United States or Canada. The Proposer understands and agrees that any misinformation or misrepresentation in this affidavit may disqualify the Proposal and result in termination of any resulting Contract. Signature: Date: Subscribed and sworn to before me this day of, Notary Public My Commission Expires (Place Seal) 38

78 ATTACHMENT C Pricing Proposal (6 pages) Page 1 of 6 Instant Ticket Pricing for Initial 3-Year & 5-Year Terms with up to Two (2) Additional 1-Year Terms Pricing Parameters Pricing must be quoted on a cost-per-thousand (CPM) basis Prices should be extended in decimals and not in fractions Prices must be net of all trade discounts or allowances Prices shall include insurance, transportation and delivery charges fully prepaid by the Proposer to the destinations within the State of Connecticut to be determined by the CLC The successful Proposer may be the successful Proposer for one or several pricepoints and base game Submitting the lowest price for a pricepoint or base game does not guarantee exclusivity for that pricepoint or base game; the CLC reserves the right to act in its best interest. In the event of a discrepancy between the unit price and the extension, the unit price shall govern For an inclusive list of ticket printing parameters, please see PART V, Section B, TICKET AND GAME SPECIFICATIONS of this RFP. Reminder: If a Proposer uses a process to print its tickets and that process is its standard, that process CANNOT be priced as an option. The process may be identified separately, but MUST be included in the base price for that ticket size. 39

79 ATTACHMENT C Page 2 of 6 Ticket Size Specification Grid Please refer to the grid below to see ticket requirements. Please acknowledge (by entering YES or NO ) that you can meet these requirements. Please fill in the cost-per-thousand on the BASE GAME PRICING GRID and the NON-BASE GAME PRICING GRID on the following pages. Ticket Size A B C D E F G H I J Ticket Height 2.4" or 2.5" " " " 11.0 Ticket Width Pack Size Tickets Per Fold Proposer s Acknowledgement (YES / NO) Submitted by Company (Print Name) Signature Date 40

80 ATTACHMENT C Page 3 of 6 BASE GAME PRICING PROPOSAL 3-Year Term 5-Year Term Base Game Name Ticket Size Pack Size Standard Order Qty Est. Order Frequency Cost Per Thousand (CPM) Cost Per Thousand (CPM) Aces High A ,000,000 1 per year Mega Money B ,000,000 1 per year Bingo (See Note #1) E 100 2,500,000 4 per year Win for Life C ,000,000 1 per year Ca$hword (See Note #2) D ,000,000 1 per year Super Ca$hword (See Note #2) E ,000,000 1 per year Pinball Wizard (See Note #3) G 50 4,500,000 1 per year $100,000 Cashword H 50 4,000,000 1 per year The games listed in the grid below represent the eight (8) standard games ( base games ) that are continuously offered in the CLC product mix. The estimated annual order frequency is listed in the table below. However, the CLC does not guarantee the placement of any orders. Note #1: Cost-per-thousand pricing MUST include Proposer's marking method and ALL additional charges associated with printing Bingo tickets. Note #2: Cost-per-thousand pricing MUST include Proposer's marking method and ALL additional charges associated with printing Ca$hword/Cashword tickets. Note #3: Cost-per-thousand pricing MUST include four- color process printing on BOTH sides. Please refer to sample $10, $20 and $30 tickets in Sample Envelope #1 that is a part of this RFP. Submitted by Company (Print Name) Signature Date 41

81 ATTACHMENT C Page 4 of 6 NON-BASE GAME PRICING PROPOSAL Instant Ticket Pricing for Initial 3-Year Term with up to Two (2) Additional 1-Year Terms Refer to Fiscal 2013 Instant Games Launch Schedule (Page 6) for quantities and ticket sizes. Ticket Size A Size B Size C Size D or E Size F Size G Size H Size I Size J Quantity $1 tickets $2 tickets $3 tickets $5 tickets $10 ticket $20 and $30 $10 tickets $20 and $30 $20 and $30 (Millions) 200/pack 100/pack 100/pack 100/pack 50/pack 25/pack 50/pack 25/pack 25/pack See NOTE #3 See NOTE #3 See NOTE #3 See NOTE #3 See NOTE #3 See NOTE # Note #3: Shaded boxes represent quantities that the CLC is most likely to order. However, we are requesting pricing for all quantities listed in the grid above and make no guarantees of any orders. Not applicable. Cost-per-thousand pricing MUST include four-color process printing on BOTH sides. Please refer to sample $10, $20 and $30 tickets in Sample Envelope #1 that is a part of this RFP. Submitted by Company (Print Name) Signature Date 42

82 ATTACHMENT C Page 5 of 6 NON-BASE GAME PRICING PROPOSAL Instant Ticket Pricing for Initial 5-Year Term with up to Two (2) Additional 1-Year Terms Refer to Fiscal 2013 Instant Games Launch Schedule (Page 6) for quantities and ticket sizes. Ticket Size A Size B Size C Size D or E Size F Size G Size I Size I Size J Quantity $1 tickets $2 tickets $3 tickets $5 tickets $10 ticket $20 and $30 $10 tickets $20 and $30 $20 and $30 (Millions) 200/pack 100/pack 100/pack 100/pack 50/pack 25/pack 50/pack 25/pack 25/pack See NOTE #3 See NOTE #3 See NOTE #3 See NOTE #3 See NOTE #3 See NOTE # Note #3: Shaded boxes represent quantities that the CLC is most likely to order. However, we are requesting pricing for all quantities listed in the grid above and make no guarantees of any orders. Not applicable. Cost-per-thousand pricing MUST include four-color process printing on BOTH sides. Please refer to sample $10, $20 and $30 tickets in Sample Envelope #1 that is a part of this RFP. Submitted by Company (Print Name) Signature Date 43

83 ATTACHMENT C Page 6 of 6 Fiscal 2013 Instant Games Launch Schedule (Tentative) The list below details the tentative non-base game launch schedule for Fiscal The CLC makes no guarantee of actual production. Note: Some games listed below for the tentative FY13 schedule may have already been produced under a previous contract. Pricepoint Ticket Size Pack Size Ticket QTY of Games Total Tickets $1.00 A 200 4,000, ,000,000 $1.00 A 200 3,000, ,000,000 $1.00 A 200 2,000, ,000,000 $2.00 B 100 2,000, ,000,000 $2.00 B 100 1,500, ,000,000 $2.00 E 100 2,500, ,000,000 $3.00 D 100 2,000, ,000,000 $3.00 D 100 1,500, ,500,000 $5.00 D 100 1,500, ,500,000 $5.00 D 100 2,000, ,000,000 $5.00 D 100 3,000, ,000,000 $5.00 D ,000, ,000,000 $10.00 F 50 1,000, ,000,000 $10.00 F 50 10,000, ,000,000 $20.00 I 25 1,500, ,500,000 $30.00 J

84 ATTACHMENT D Options Pricing Proposal (2 pages) Page 1 of 2 OPTIONS PRICING SHEET NOTE: Proposer must designate the price parameter (i.e. one-time charge, cost-per-thousand, etc.) for each option / dollar amount. Attach additional sheets to explain pricing if needed. Pricing: 3-Year Term with up to Two (2) Additional 1-Year Terms Pricing: 5-Year Term with up to Two (2) Additional 1-Year Terms (1) Foil stock (2) Color-pulsing (3) Additional color on Overprint (more than 4) (4) Additional color on ticket back (5) Variable pack sizes not included in the base price quote (6) A stub feature attached to ticket (7) A stub with bar coding attached to ticket (8) One Additional color imaging (9) Four-color imaging (10) Multiple scenes (11) Special fonts (12) One additional fluorescent display color (13) Two additional fluorescent display colors (14) One Metallic base color (15) One Metallic Overprint color 45

85 ATTACHMENT D - Page 2 of 2 OPTIONS PRICING SHEET Pricing: 3-Year Term with up to Two (2) Additional 1-Year Terms Pricing: 5-Year Term with up to Two (2) Additional 1-Year Terms (16) Die Cut Tickets (17) Scented Tickets (18) Holographic Stock (19) Variations in ticket sizes and latex coverage areas (20) High Top Prize Insurance (prizes over $300,000) (21) Optimum Prize Delivery (22) Pricing differential for side-by-side Press Runs (23) Pricing differential for back-by-back Press Runs (24) Social Media, Internet, and Interactive Games (25) 2nd Chance Drawings (26) Rewards and Loyalty Program (27) Licensed Games (28) Cost to de-ink and process Instant Tickets at the conclusion of a game such that the successful Proposer will shred and process the tickets for recycling (29) Additional options as recommended by Proposer Submitted by Company (Print Name) Signature Date 46

86 ATTACHMENT E CT Consulting Agreement Affidavit (1 page) STATE OF CONNECTICUT CONSULTING AGREEMENT AFFIDAVIT Affidavit to accompany a bid or proposal for the purchase of goods and services with a value of $50,000 or more in a calendar or fiscal year, pursuant to Connecticut General Statutes 4a-81(a) and 4a-81(b). For sole source or no bid contracts the form is submitted at time of contract execution. INSTRUCTIONS: If the bidder or vendor has entered into a consulting agreement, as defined by Connecticut General Statutes 4a-81(b)(1): Complete all sections of the form. If the bidder or contractor has entered into more than one such consulting agreement, use a separate form for each agreement. Sign and date the form in the presence of a Commissioner of the Superior Court or Notary Public. If the bidder or contractor has not entered into a consulting agreement, as defined by Connecticut General Statutes 4a-81(b)(1): Complete only the shaded section of the form. Sign and date the form in the presence of a Commissioner of the Superior Court or Notary Public. Submit completed form to the awarding State agency with bid or proposal. For a sole source award, submit completed form to the awarding State agency at the time of contract execution. This affidavit must be amended if there is any change in the information contained in the most recently filed affidavit not later than (i) thirty days after the effective date of any such change or (ii) upon the submittal of any new bid or proposal, whichever is earlier. AFFIDAVIT: [ of Affidavits Sworn and Subscribed On This Day: ] I, the undersigned, hereby swear that I am a principal or key personnel of the bidder or contractor awarded a contract, as described in Connecticut General Statutes 4a-81(b), or that I am the individual awarded such a contract who is authorized to execute such contract. I further swear that I have not entered into any consulting agreement in connection with such contract, except for the agreement listed below: Consultant s Name and Title Name of Firm (if applicable) Start Date End Date Cost Description of Services Provided: Is the consultant a former State employee or former public official? YES NO If YES: Name of Former State Agency Termination Date of Employment Sworn as true to the best of my knowledge and belief, subject to the penalties of false statement. Printed Name of Bidder or Contractor Signature of Principal or Key Personnel Date Connecticut Lottery Corporation Awarding State Agency Printed Name (of above) Sworn and subscribed before me on this day of, 20. Commissioner of the Superior Court or Notary Public 47

87 ATTACHMENT F CT Gift and Campaign Contribution Certification (2 pages) STATE OF CONNECTICUT GIFT AND CAMPAIGN CONTRIBUTION CERTIFICATION Written or electronic certification to accompany a State contract with a value of $50,000 or more in a calendar or fiscal year, pursuant to C.G.S and 4-252(c); Governor M. Jodi Rell s Executive Orders No. 1, Para. 8, and No. 7C, Para. 10; and C.G.S (g)(2) INSTRUCTIONS: Complete all sections of the form. Attach additional pages, if necessary, to provide full disclosure about any lawful campaign contributions made to campaigns of candidates for statewide public office or the General Assembly, as described herein. Sign and date the form, under oath, in the presence of a Commissioner of the Superior Court or Notary Public. Submit the completed form to the awarding State agency at the time of initial contract execution and if there is a change in the information contained in the most recently filed certification, such person shall submit an updated certification either (i) not later than thirty (30) days after the effective date of such change or (ii) upon the submittal of any new bid or proposal for a contract, whichever is earlier. Such person shall also submit an accurate, updated certification not later than fourteen days after the twelve-month anniversary of the most recently filed certification or updated certification. CHECK ONE: Initial Certification 12 Month Anniversary Update (Multi-year contracts only.) Updated Certification because of change of information contained in the most recently filed certification or twelve-month anniversary update. GIFT CERTIFICATION: As used in this certification, the following terms have the meaning set forth below: 1) Contract means that contract between the State of Connecticut (and/or one or more of it agencies or instrumentalities) and the Contractor, attached hereto, or as otherwise described by the awarding State agency below; 2) If this is an Initial Certification, Execution Date means the date the Contract is fully executed by, and becomes effective between, the parties; if this is a twelve-month anniversary update, Execution Date means the date this certification is signed by the Contractor; 3) Contractor means the person, firm or corporation named as the contactor below; 4) Applicable Public Official or State Employee means any public official or state employee described in C.G.S (c)(1)(i) or (ii); 5) Gift has the same meaning given that term in C.G.S (1); 6) Principals or Key Personnel means and refers to those principals and key personnel of the Contractor, and its or their agents, as described in C.G.S (5) and 4-252(c)(1)(B) and (C). I, the undersigned, am the official authorized to execute the Contract on behalf of the Contractor. I hereby certify that, no gifts were made by (A) such person, firm, corporation, (B) any principals and key personnel of the person firm or corporation who participate substantially in preparing bids, proposals or negotiating state contracts or (C) any agent of such, firm, corporation, or principals or key personnel who participates substantially in preparing bids, proposals or negotiating state contracts, to (i) any public official or state employee of the state agency or quasi-public agency soliciting bids or proposals for state contracts who participates substantially in the preparation of bid solicitations or request for proposals for state contracts or the negotiation or award of state contracts or (ii) any public official or state employee of any other state agency, who has supervisory or appointing authority over such state agency or quasi-public agency. I further certify that no Principals or Key Personnel know of any action by the Contractor to circumvent (or which would result in the circumvention of) the above certification regarding Gifts by providing for any other principals, key personnel, officials, or employees of the Contractor, or its or their agents, to make a Gift to any Applicable Public Official or State Employee. I further certify that the Contractor made the bid or proposal for the Contract without fraud or collusion with any person. 48

88 CAMPAIGN CONTRIBUTION CERTIFICATION: I further certify that, on or after December 31, 2006, neither the Contractor nor any of its principals, as defined in C.G.S (g)(1), has made any campaign contributions to, or solicited any contributions on behalf of, any exploratory committee, candidate committee, political committee, or party committee established by, or supporting or authorized to support, any candidate for statewide public office, in violation of C.G.S (g)(2)(A). I further certify that all lawful campaign contributions that have been made on or after December 31, 2006 by the Contractor or any of its principals, as defined in C.G.S (g)(1), to, or solicited on behalf of, any exploratory committee, candidate committee, political committee, or party committee established by, or supporting or authorized to support any candidates for statewide public office or the General Assembly, are listed below: Lawful Campaign Contributions to Candidates for Statewide Public Office: Contribution Date Name of Contributor Recipient Value Description Lawful Campaign Contributions to Candidates for the General Assembly: Contribution Date Name of Contributor Recipient Value Description Sworn as true to the best of my knowledge and belief, subject to the penalties of false statement. Printed Contractor Name Printed Name of Authorized Official Signature of Authorized Official Subscribed and acknowledged before me this day of, 20. Commissioner of the Superior Court (or Notary Public) 49

89 ATTACHMENT G Affirmation of Receipt of Ethics Summary (1 page) STATE OF CONNECTICUT AFFIRMATION OF RECEIPT OF STATE ETHICS LAWS SUMMARY Written or electronic affirmation to accompany a large State construction or procurement contract, having a cost of more than $500,000, pursuant to Connecticut General Statutes 1-101mm and 1-101qq INSTRUCTIONS: Complete all sections of the form. Submit completed form to the awarding State agency or contractor, as directed below. CHECK ONE: I am a person seeking a large State construction or procurement contract. I am submitting this affirmation to the awarding State agency with my bid or proposal. [Check this box if the contract will be awarded through a competitive process.] I am a contractor who has been awarded a large State construction or procurement contract. I am submitting this affirmation to the awarding State agency at the time of contract execution. [Check this box if the contract was a sole source award.] I am a subcontractor or consultant of a contractor who has been awarded a large State construction or procurement contract. I am submitting this affirmation to the contractor. I am a contractor who has already filed an affirmation, but I am updating such affirmation either (i) no later than thirty (30) days after the effective date of any such change or (ii) upon the submittal of any new bid or proposal, whichever is earlier. IMPORTANT NOTE: Within fifteen (15) days after the request of such agency, institution or quasi-public agency for such affirmation contractors shall submit the affirmations of their subcontractors and consultants to the awarding State agency. Failure to submit such affirmations in a timely manner shall be cause for termination of the large State construction or procurement contract. AFFIRMATION: I, the undersigned person, contractor, subcontractor, consultant, or the duly authorized representative thereof, affirm (1) receipt of the summary of State ethics laws* developed by the Office of State Ethics pursuant to Connecticut General Statutes 1-81b and (2) that key employees of such person, contractor, subcontractor, or consultant have read and understand the summary and agree to comply with its provisions. * The summary of State ethics laws is available on the State of Connecticut s Office of State Ethics website. Signature Date Printed Name Title Firm or Corporation (if applicable) Street Address City St Zip Connecticut Lottery Corporation Awarding State Agency 50

90 ATTACHMENT H Nondiscrimination Certification (1 page) STATE OF CONNECTICUT NONDISCRIMINATION CERTIFICATION Affidavit By Entity For Contracts Valued at $50,000 or More Documentation in the form of an affidavit signed under penalty of false statement by a chief executive officer, president, chairperson, member, or other corporate officer duly authorized to adopt corporate, company, or partnership policy that certifies the contractor complies with the nondiscrimination agreements and warranties under Connecticut General Statutes 4a-60(a)(1) and 4a-60a(a)(1), as amended INSTRUCTIONS: For use by an entity (corporation, limited liability company, or partnership) when entering into any contract type with the State of Connecticut valued at $50,000 or more for any year of the contract. Complete all sections of the form. Sign form in the presence of a Commissioner of Superior Court or Notary Public. Submit to the awarding State agency prior to contract execution. AFFIDAVIT: I, the undersigned, am over the age of eighteen (18) and understand and appreciate the obligations of an oath. I am of, an entity Signatory s Title Name of Entity duly formed and existing under the laws of. Name of State or Commonwealth I certify that I am authorized to execute and deliver this affidavit on behalf of and that Name of Entity Name of Entity has a policy in place that complies with the nondiscrimination agreements and warranties of Connecticut General Statutes 4a-60(a)(1)and 4a-60a(a)(1), as amended. Authorized Signatory Printed Name Sworn and subscribed to before me on this day of, 20. Commissioner of the Superior Court/ Commission Expiration Date Notary Public 51

91 ATTACHMENT I Campaign Contribution and Solicitation Limitations (3 pages) 52

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