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Table of Contents Amendments November 21
 

Table of Contents Amendments November 21

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    Table of Contents Amendments November 21 Table of Contents Amendments November 21 Document Transcript

    • Request for Proposal Table of Contents Amendments November 21st, 2007 PART 1 – PROPOSAL SUBMISSION INFORMATION............................................................. 1 1.0 Introduction, Mission Statement and Values .................................................................. 1 1.15.1 VOLUME I – Technical (Non-Price) Proposal ...................................................... 2 PART 2 – SPECIAL TERMS AND CONDITIONS...................................................................... 5 2.15 Maintenance Standards of Performance for Central System(s)...................................... 5 2.23 Title to, Use of, and Compensation for, Intellectual Property ........................................ 5 2.27 Performance/ Payment Bond .......................................................................................... 6 2.29.6 Applicability of Liquidated Damages and Pro-Rata Liquidated Damages............. 7 PART 3 – SPECIFICATIONS........................................................................................................ 8 3.0.1 Current Environment ..................................................................................................... 8 3.1.3 OSL Acceptance Testing System............................................................................ 9 3.1.5 Gaming System Quantitative Performance Criteria ............................................... 9 3.2.1 Retailer Online Terminal Hardware...................................................................... 10 3.4.7 Instant Ticket Order Fulfillment: Telemarketing System..................................... 21 3.6.1 Primary Data Center Specifications...................................................................... 22 3.7.6 OSL Staff Training ............................................................................................... 22 3.7.7 Retailer Equipment Maintenance Program........................................................... 24 3.8.1 Conversion Strategy.............................................................................................. 26 3.9.8.1 Telecommunications Capabilities......................................................................... 26 3.9.8.2 Research and Development Program.................................................................... 27 PART 4 - PRICING ...................................................................................................................... 28 4.4.4 Price Proposal Quotation Sheet ............................................................................ 28 APPENDIX C: STANDARD CONTRACT TERMS AND CONDITIONS......................... 33 Ohio State Lottery i Lottery Gaming System RFP Amendment November 21st, 2007 Table of Contents
    • Request for Proposal PART 1 – PROPOSAL SUBMISSION INFORMATION 1.0 Introduction, Mission Statement and Values The Ohio State Lottery (“OSL”) is issuing this Request for Proposal (“RFP”) to invite interested Vendors to submit Proposals for the implementation of a Lottery Gaming System (the “System”) including a communications network, associated gaming products and support services. It is the mission of the OSL to regulate and conduct lottery games within the state of Ohio for the benefit of public education and to abide by the values as set forth: 1. To adhere to all legal and ethical standards of the state of Ohio. 2. To protect the integrity of the OSL with employees, Sales Retailers (“Retailers”), and most importantly, the players. 3. To honor and maintain the annual commitment to the Lottery Profits Education Fund (“LPEF”). 4. To continue to offer to players only games which are fair and equitable in terms of quality, quantity and value of awarded prizes. 5. To promote accessibility of lottery games among all the citizens of the state of Ohio. 6. To evaluate Retailers not only on the basis of revenues generated but with consideration to their location and the population they serve. 7. To maximize the excess of revenues over expenses, to judge all expenditures solely on the basis of their contribution to producing profits for the OSL, and to make every effort to evaluate and improve operational efficiency. 8. To be always worthy of the public’s trust and respect. The Responding Vendor is required as a minimum to have one (1) or more current U.S. client(s) to whom it has supplied a Lottery Gaming System with both Instant & Online components. The System and services under this RFP include, but are not limited to: • Online games capability; • Instant Ticket validation capabilities, Instant Games management system, and combined instant/online accounting; • Primary and Secondary computer systems and facilities; • Computer and network operations; Ohio State Lottery 1 Lottery Gaming System RFP Amendment November 21st, 2007 Part 1
    • Request for Proposal • A communications Network; • Terminals; • Ticket Vending Machines (“TVM”); • Telemarketing Warehousing and Distribution application and • Repair, maintenance, and updates for equipment and software. Several options permitted in the RFP augment this list. The new System must be capable of supporting the current gaming products offered to the public by the OSL, and incorporating additional games and promotions into the System to support the OSL’s marketing plans. This RFP, and all activities leading toward the anticipated signing of a Contract pursuant to this RFP, are enabled under Ohio statutes including statutes that establish the purpose, powers, duties, and procedural framework of the OSL. In this RFP, the OSL has defined a series of objectives, requirements, and a proposal evaluation approach representing its best interests in performance of its mission. The Successful Vendor is expected to sign a written agreement (the “Contract”) for the OSL to file with the state of Ohio Controlling Board for approval of the contract thirty (30) calendar days after notice of award identifying it as the Successful Vendor. The Contract will be effective from the award date through June 30, 2009. Subject to and contingent on the discretionary decision of the Ohio General Assembly to appropriate funds for this Contract in each new biennium, the OSL’s intends to renew the Contract for two (2) years of production operations including such time as necessary to complete the OSL business week then in progress and may extend the Contract, under its original terms, for a maximum of four (4) additional two (2) year periods or any combination thereof. It is the OSL’s intention to enter into the aforementioned Contract renewal and extensions subject to the satisfactory performance of the Successful Vendor, and the approval by the state of Ohio Controlling Board, any certification by the Director of the Office of Budget and Management for the state of Ohio, any release and permit required by the Ohio Department of Administrative Services/ Office of Information Technology, and any other certifications or approvals required by law. The OSL makes no representation of any kind regarding expected sales volumes or revenues. 1.15.1 VOLUME I – Technical (Non-Price) Proposal The Technical Proposal must include descriptive and technical matter only and be appropriately labeled on the exterior of the sealed package. No cost figures will be contained in the Technical Proposal. Whether Invited or Offered Options are no charge (in the Base System) or separately charged must be clearly noted in the technical section. Ohio State Lottery 2 Lottery Gaming System RFP Amendment November 21st, 2007 Part 1
    • Request for Proposal Except as specifically provided below, the original plus twelve (12) copies of this part are to be delivered. In addition, the Technical Proposal must be submitted on twelve (12) CDs using a Microsoft Word, Microsoft Project or PDF file, as appropriate. The electronic version should include all proposal sections within a single file to facilitate searches for terms across the breadth of the Proposal excluding the Pricing Section which should be placed on its own CDs. If there is a discrepancy between the hard copy and the electronic copy of the Technical Proposal, the hard copy will control, and the OSL will base its evaluation of the Vendor’s Proposal on the hard copy. The contents of the Technical Proposal (Volume I) must follow this outline below, employing divider pages with tabs to separate the response sections: 1. Transmittal letter. The transmittal letter must contain the names, addresses, telephone numbers and email addresses of individuals for the OSL to contact regarding contractual, technical, site visit, and background investigation matters regarding the Proposal. 2. Bid Bond and Litigation Bond (see Sections 1.31 and 1.32). 3. Performance/Payment Bond Letter (see Section 2. 27). 4. Disclosure of litigation, investigations, and other information (see Section 1.36). 5. Acknowledgement of all RFP addenda. 6. Agreement to comply with all terms and conditions (from Part 2 and Appendix C). 7. Disclosure forms required by the OSL (see Section 1.34 and Appendix W) An original and one copy of the Appendix W Disclosure Form should be filed with the original proposal only. 8. Trade secret protection request letter (if needed). (See Section 1.25.) 9. List of Invited and Offered Options noting whether they are provided within the Base System Price (without separate charge), or at additional cost. 10. Response to all paragraphs of Specifications (Part 3) in identical order to Part 3 subsections. An original hard copy and two (2) electronic copies of the required financial information (Section 3.9.9) should be filed with the Proposal original only, and not with the twelve (12) copies. 11. Vendor-supplied technical documentation as appendices. Ohio State Lottery 3 Lottery Gaming System RFP Amendment November 21st, 2007 Part 1
    • Request for Proposal 12. Two (2) Retailer terminals in working order, with adequate supplies, operating in stand-alone mode, for assessment by the OSL. A Retailer manual and/or user guide must be included. (Terminals need not play current OSL games.) 13. The Vendor must complete a Vendor Information Form in its entirety. The Vendor must submit at least one originally signed copy of this form, which should be included with the Vendor 's originally signed Proposal. All other copies of the Vendor’s Proposal may contain copies of this form. The form is available at: http://obm.ohio.gov/memos/2007/05142007.pdf An original and one copy of the Vendor Information Form should be filed with the Original Proposal, only. Ohio State Lottery 4 Lottery Gaming System RFP Amendment November 21st, 2007 Part 1
    • Request for Proposal PART 2 – SPECIAL TERMS AND CONDITIONS 2.15 Maintenance Standards of Performance for Central System(s) Except when adversely affected by reason of force majeure, on-site remedial maintenance by the Successful Vendor on the Central System element of the Gaming System shall be completed within eight (8) working hours after notification by the OSL remedial maintenance is required, unless the OSL and the Successful Vendor mutually agree to another period of time. If on-site remedial maintenance is not completed within eight (8) working hours after notification by the OSL (unless the OSL and the Successful Vendor mutually agree to another period of time), the Successful Vendor shall be deemed in default of standards of performance and LDs may be assessed in accordance with Section 2.29. In such an instance, the Successful Vendor shall provide an alternative solution allowing the site to continue operations. All maintenance must meet the standards set forth in the requirements, terms and conditions of the RFP. Failure of the Successful Vendor to meet or maintain these requirements, terms and conditions shall provide the OSL with the same rights and remedies as specified elsewhere in the Contract, except the Successful Vendor shall have only eight (8) working hours to remedy a default pursuant to this section, unless the OSL and the Successful Vendor mutually agree to another period of time. The Successful Vendor must provide adequate staff and stock necessary levels of spare parts to provide maintenance per the requirements, terms and conditions of the RFP and the subsequent Contract, including all extensions. 2.23 Title to, Use of, and Compensation for, Intellectual Property To the extent the Successful Vendor utilizes or relies upon the Intellectual Property Rights of a third party in fulfilling its obligations under the Contract, the Successful Vendor will provide the OSL with whatever assurance the OSL deems necessary to determine the use of such third party Intellectual Property Rights is permissible. In addition, in the event of failure to perform or breach of Contract the Successful Vendor must ensure continued right of use of licensed Intellectual Property by the OSL. The Successful Vendor shall indemnify and hold harmless the state of Ohio, the OSL, its Directors, other staff, other State contractors, Retailers, all agents, employees, officers and directors thereof, from any and all claims, damages, fees and expenses (including any attorneys' fees) arising from or related to any claims the Successful Vendor provided products or services partially or fully that violate the Intellectual Property Rights of a third party. Ohio State Lottery 5 Lottery Gaming System RFP Amendment November 21st, 2007 Part 2
    • Request for Proposal While the OSL and the Successful Vendor agree Intellectual Property associated with any product or service provided by (or developed solely by) the Successful Vendor during the term of this Contract and used by the OSL will remain the property of the Successful Vendor, the Successful Vendor will grant a license or authority to the OSL to make use of any such Intellectual Property for the duration of the contract and any extensions thereto, with respect to OSL conduct of games and business. If the license or authority for the OSL to make use of any such intellectual property is to be extended beyond the duration of the contract, or any extensions thereto, the charge for such rights shall be subject to the mutual agreement of the parties. There shall be no additional charge for this right of the OSL during the term of the contract or any extension thereto. The Successful Vendor may not separately charge the OSL an Intellectual Property fee for any items owned by the Successful Vendor. It is the OSL’s expectation any third- party licensing fees shall be charged at cost. 2.27 Performance/ Payment Bond Upon notification of receiving the award, the Successful Vendor will be required to obtain a performance/payment bond or other acceptable form of security in the amount of thirty million dollars ($30,000,000) for every year of the Contract. The Performance/Payment Bond may be renewed on an annual basis. If the vendor defaults in the performance of its contractual obligations, or if the OSL incurs damage due to the vendors breach of its duties, the surety shall have the option to cure the default (in a manner that is acceptable to the OSL) or tender funds sufficient to pay the cost of completion, up to an amount not to exceed the penal sum of the bond. The bond shall indemnify the OSL and the state of Ohio against all direct and indirect damages suffered by failure of the Successful Vendor, its Subcontractors, agents or assignees to perform according to the provisions of the Contract (including but not limited to payments to any third party subcontractors for services rendered under the Contract). The bond shall be paid to the OSL, at its sole discretion, if the Successful Vendor materially defaults in the performance of the Contract. In the event any of the work performed on the OSL Contract is subcontracted by the Successful Vendor, the bond shall protect and be payable to said subcontractor(s) in the event of default by the Successful Vendor and/or its assignees. The performance bond may be assessed liquidated damages payments due the OSL not received within thirty (30) calendar days after written notice has been given to the Successful Vendor of their incurrence and be deemed a default under the Contract. The Responding Vendor must submit a letter from a qualified Security Company stating the Vendor will have such bond if the Contract is awarded to the Vendor. Ohio State Lottery 6 Lottery Gaming System RFP Amendment November 21st, 2007 Part 2
    • Request for Proposal 2.29.6 Applicability of Liquidated Damages and Pro-Rata Liquidated Damages The Successful Vendor shall not be required to pay liquidated damages for delays solely due to matters affected by force majeure, or for time delays specifically due to, or approved by, the OSL. In the liquidated damages sections below, where applicable, the damages shall be pro-rated for partial periods. For example, if liquidated damages are six hundred dollars ($600) per minute, and the period is thirty (30) seconds, the liquidated damages shall be six hundred dollars times thirty divided by sixty equals three hundred dollars ($600 x 30/60 = $300). Ohio State Lottery 7 Lottery Gaming System RFP Amendment November 21st, 2007 Part 2
    • Request for Proposal PART 3 – SPECIFICATIONS 3.0.1 Current Environment This section describes the current System environment and does not require a response. The incumbent Vendor, GTECH Corporation, is responsible for full facilities management for the Primary Data Center (“PDC”) in the Lausche Building in Cleveland, Ohio and for the Secondary Data Center (“SDC”) and test system currently located in Brecksville, Ohio. The current Online Production System at the PDC uses two (2) DEC Alpha DS20E computers with Open VMS Operating Systems, and third-party open system software. The Instant Ticket System at the PDC uses one (1) Stratus computer linked to the Online System by an Ethernet Local Area Network ("LAN") connection. These two (2) Systems are accessed and managed through management workstations using a Windows-based application. The current SDC provides a hot primary and secondary Online System and a warm secondary for the Instant Ticket System. Software development computers, one (1) for the Online and one (1) for the Instant Ticket System, are located at this site. Likewise, test computers, one (1) for the Online and one (1) for the Instant Ticket System, are also located at this site. The OSL also has a test room at Lausche with online, instant, and management workstations linked to the test facilities at the SDC. The current computer production systems at the PDC and the SDC support communications to eight thousand one hundred ninety (8,190) dedicated Retailer terminals. One hundred four (104) Retailers have two (2) terminals. The OSL manages and maintains a number of back office client server and mainframe applications integral to the System operation. These applications, developed by Elsym Consulting, are used to process Retailer sales data and history, maintain claims data, execute electronic payments, and perform System- balancing operations for each of the games. As one of these applications on-line ICS uses a real-time data feed from the System to maintain its current balancing status. The OSL's communications network, Local/Wide Area Network ("LAN/WAN"), links the thirteen (13) OSL facilities (including the OSL's Headquarters Office, nine (9) Regional Offices, its Warehouse, and the Instant Ticket Distribution Warehouse [ITDW]), the Draw Office located in the SDC, the System and the Ohio Data Ohio State Lottery 8 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal Network ("ODN") mainframe. The OSL also provides staff for Acceptance Testing, instant ticket system management and for network and communications support. Currently, the OSL leases one thousand five hundred (1,500) TVMs provided by GTECH Scientific Games International provides cooperative services to the OSL. The contract consists of a combination of Tel Sell order and Pick/Pack distribution. Retailers are contacted by the Tel Sell group weekly or bi-weekly at which time the Retailers place orders for tickets which are delivered to them the next business day via UPS courier. On initial distribution for new games, orders are automatically generated by the Tel Sell system, the orders are packed and all Retailers receive the new games via UPS courier on the begin sale date for the new game. Retailers also contact the Tel Sell group for inventory when they run low on a game. Retailers return inventory via their Lottery Sales Representative (LSR). The LSRs accept all returns of inventory for closing games. The LSRs still visit their Retailers once every two (2) weeks. 3.1.3 OSL Acceptance Testing System Any of the production systems must be available for testing with full support from the Vendor. (The OSL will work with the Vendor to identify and assess any possible risks or impacts on production operations.) The Vendor is obliged to support OSL conducted Acceptance Tests series. The functional, technical, and operational documentation for the System, including mutually agreed to modifications, must be delivered to the OSL twenty (20) business days prior to the OSL's scheduled Acceptance Testing. Please see Section 3.8.8 & 3.8.9 for more information on Acceptance Testing. 3.1.5 Gaming System Quantitative Performance Criteria 1. The System as delivered on day one must support a network of approximately eight thousand eight hundred (8,800) online Retailer terminals and one thousand five hundred (1,500) ticket vending machines (TVM). 2. The system as configured must be capable of supporting ten thousand (10,000) online retailer terminals and three thousand (3,000) ticket vending machines (TVM). 3. The ability to expand the System to accommodate up to twenty thousand (20,000) active Retailer terminals plus an additional five thousand (5,000) ticket vending machines (TVM) must be available, should such an expansion opportunity be desired by the OSL. 4. The System as delivered must be capable of handling up to one hundred thousand (100,000) sales transactions per minute on a continuous basis. Ohio State Lottery 9 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal 5. The System as delivered must be capable of processing up to five thousand (5,000) combined validation and cancel transactions per minute, while selling at the rate in item 3 above. 6. Each single play (single panel) online ticket (considered those tickets which an OSL authorized draw determines the winner) will be produced in no more than four (4) seconds from completion of data entry ("Send" is pressed or betslip is inserted) to availability of the ticket for the Retailer or player. Faster response time is desirable. 7. Variable length, multi-play (up to ten [10] panel) online tickets will be produced in no more than six (6) seconds after completion of data entry ("Send" is pressed or betslip is inserted) to availability of the ticket for the Retailer or player. Faster response time is desirable. 8. All other transactions (e.g. instant Lot transactions, winning ticket validations, cancels, and brief online and instant ticket reports, etc.) will be produced in no more than five (5) seconds after completion of data entry ("Send" is pressed) to availability of the ticket or report to the Retailer. Faster response time is desirable. 9. Primary System recovery in auto-failover mode from a one-system failure must be accomplished in no more than two (2) minutes while still maintaining current transactions. Faster recovery time is desirable. 10. Recovery from the site running primary to the site running in back-up mode in auto-failover mode must be accomplished in no more than two (2) minutes without loss of any transactions or interruption of user access. Faster recovery time is desirable. 11. The System must have the as-delivered capacity in all hardware and software aspects to accommodate at least three hundred (300) concurrent instant (considered those tickets which the winner is defined at the time of play) games being in any status (e.g. loaded, distributed, sold, validated, closed), online sales day of at least seventy-five million dollars ($75,000,000) and an online jackpot of two billion dollars ($2,000,000,000). The response time specifications of this section will be considered met if greater than 95% of the transactions of particular types comply with the specifications including the Central System not having degraded performance for more then the first two (2) minutes of the day. 3.2.1 Retailer Online Terminal Hardware At implementation the System will support approximately eight thousand eight hundred (8,800) full function online Retailer terminals. Within the Base System Ohio State Lottery 10 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal price, the Vendor must also supply additional terminals for training, testing, and spares, as described in Section 3.2.7 and 3.8.9. 1. Online Terminal Identification. No manufacturer or Vendor logo or identification will be attached. The terminal may bear a serial number and bar code for maintenance and logistics. 2. Retailer Online Terminal Features and Functions. Requirements include, but are not limited to, the following Retailer operated terminal features and functions. Response Note: Reliability is considered a critical feature of the Retailer terminal and the responses to this section should call out any features enhancing reliability. a. Size. A compact size is required to ensure Retailer acceptance. If the terminal is modular, then it is important that connecting data and power cables not be unwieldy or obtrusive. Response Note: The Responding Vendor must list the dimensions and weight of the proposed terminal and its peripherals, and identify the external data and power cables required. b. Retailer Touchscreen. There must be a Retailer touchscreen automatically displaying the entire transaction being processed, and will accommodate graphics as well as text. i. The screen must be capable of displaying Retailer messages, reports, and transactions using such readability features as fonts, colors, and screen layouts to provide displays easily read by the user. The OSL requires a screen saver allowing a message to crawl across the screen updateable from Central System. ii. There must be sufficient screen functions to provide for the current OSL games, and for reasonable expansion into new games and gaming options. The colors, locations, graphics, and text labels will be at the discretion of the OSL. iii. The screen must be readable from a variety of user distances and viewing angles, and under various lighting conditions. c. ID Card Reader. The terminal will be capable of reading identification cards using a bar code or equivalent identifier. This system must log every OSL related visitor to the Retailer requiring only a swipe and could be used by security, auditors, and those not conducting inventory or financial transactions. A password entry will not also be required. The ID cards may be used, for example, by Lottery Sales Representatives (LSRs), other OSL staff, or Vendor maintenance technicians. The ID card will cause certain capabilities to be made available via a menu of options, and the Ohio State Lottery 11 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal System will record any transactions performed. The OSL and the Vendor will set privileges for these identification cards through a games management application. The ID card Reader must also allow customer age verification through reading a driver’s license or similar identification using a bar doe or magnetized strip. d. Ticket/Report Printer and Stock. Thermal printers must be capable of accepting a paper stock with a varying roll diameter and provide high resolution images suitable for rendering logos, messages, and symbols, as well as play data, must be fast, quiet, and reliable. i. The printer must be capable of producing tickets and reports using a variety of fonts as approved by the OSL. Graphics, such as the OSL’s or game logo, or a promotional coupon, must be producible. ii. The printer must be capable of issuing tickets, receipts, vouchers, coupons, reports, etc. of uniform size or variable length as determined by the OSL. Tear off tickets are not acceptable. e. Software Loading. Gaming software (the logic to perform gaming functions must be software driven) must be available via down-line loading using a broadcast or multi-cast feature and must also be available through a USB load by a service technician. i. Gaming software may be either solicited by the terminal (when such resident software needs replacement) or driven by the Central System (when gaming software enhancements, e.g., new games, or corrections, are required). ii. Downloading must not preclude near-24 hour operation of the terminal on the network. Software must be downloadable in a modular fashion; only the modules requiring change will need to be downloaded. Background downloading with storage of more than one software version is required, with scheduling or prompting from Central to activate the new version or return to the prior version. The storage will hold a copy of the active terminal application, the application used prior to the current terminal application, and the currently loading system version. f. Secure Sign-On. The terminal must prohibit unauthorized use through a coded sign-on procedure. The System must permit changing of the code without a service call to the terminal. There must be the ability to perform a lottery override to the store manager’s ability to set passwords and access levels for himself/herself and the clerks. A password, for security purposes, is not to be displayed, printed or visible in any manner whatsoever at the terminal but it is acceptable to display stars (e.g. * or ●). Ohio State Lottery 12 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal The password facility must permit multiple levels of secure access, including OSL representative, Vendor representative, store manager/owner, and clerks. This capability could be used to restrict privileged transaction types to authorized users; for example, store managers (but not clerks) may be able to display Retailer financial reports and monitor transactions by individual clerks. For security when the terminal has been idle for a set time period, to be determined by the OSL, the password must be entered to unlock the terminal. The store manager authorization should allow him to establish lower level clerk logins for normal operations but there will be a lottery override feature. g. User Interface Design. The design must minimize keystrokes and navigation through levels of nested screens to ensure utility and productivity for the user. Each game will be set up with default play parameters and a subsequent wager will use the same parameter setting unless the wager is altered by the Retailer, then the changed default parameter must be kept for the remainder of the transaction unless subsequently changed. The Vendor must provide terminal options supporting visually impaired Retailers. Response Note: Examples must be provided in the Proposal to depict selling a ticket. The final user interface design will be developed jointly with the OSL. h. Betslip and Document Scanner. There must be a reader able to read player-completed betslips and other gaming relevant documents. i. The reader must be capable of scanning betslip-sized documents or larger. The Responding Vendor must describe the scanner’s capabilities. ii. The reader must provide flexibility in terms of its ability to read various colors and graphics on the betslips, and the latitude it allows for markings by players. Special markers will not be needed for the betslips. iii. The reader must provide flexibility in the manner documents can be scanned, for example, top or bottom first. iv. The reader must allow the Retailer to quickly process a stack of betslips. As an Invited Option, the vendor may offer an automatic feeder of betslips. Response Note: Responding Vendors must describe the speed and manner the reader is capable of processing betslips. Ohio State Lottery 13 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal v. The reader must be jam-resistant and have a simple mechanism for immediately clearing any jam or non-readable document. vi. The reader must accommodate documents/forms that collect Retailers, players, or field service or maintenance personnel, etc information at the Retailer location. The Vendor may be called upon to collect such data and furnish a data file to the OSL. The Responding Vendor must describe the scanners capabilities. The reader proposed must be the same reader as specified in Roman numeral one (i). i. Random Play Generator. The terminal must have a mechanism for generating one (1) or more random play numbers (quick pick numbers) for any game as requested by the Retailer or via betslip. During implementation, the random number generator mechanism must be certified by an OSL-designated testing agency. The OSL uses a non- replacement random generator for the Kicker game. All possible combinations must be used uniquely prior to resetting for the next pool of one million (1,000,000) selections. Response Note: The Proposal shall describe the algorithms, seeding process, and any other mechanisms employed in the System to ensure the random number generator produces random outcomes. j. Ticket Serial Numbers. Tickets produced by the terminals must bear a unique serial number in Arabic numerals and in a terminal readable code. The serial number must allow tickets to be unambiguously identified for the term of the Contract. k. Play It Again. Tickets produced by the terminals must bear a terminal readable barcode allowing the terminal to reproduce the customer selected numbers previously used for a wager for the next draw or upcoming draw. Please see Appendix T for more details. l. Online Ticket Reader. The terminal must include a reader to read online tickets, for validating or canceling a ticket under OSL-specified terms. Canceling is currently allowed through the reader /brander. i. First read rate is a key factor in the success of the terminal. A first read rate exceeding ninety-five percent (95%) is mandatory. ii. The ticket reader must default to ticket validation mode when a play ticket is inserted. m. Instant Ticket Reader. All terminals (including Retailer and TVMs) must read bar codes, primarily for instant ticket processing. Ohio State Lottery 14 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal i. The terminal must be capable of validating winning instant tickets, both through bar code scanning and manual entry, and supporting other administrative functions that employ machine-readable codes such as the interleaved two (2) of five (5) bar code, PDF-417, two- dimensional matrix bar codes, UPC, and other standards. ii. The OSL considers the bar code reader's first read rate for validating a winning instant ticket as a key Retailer satisfaction item. A first read rate exceeding ninety-five percent (95%) is mandatory. The bar code reader may not be a pen wand. Other bar code reading technologies, such as Charge Coupled Device, CMOS, and laser, may be proposed. iii. The terminal must be capable of reading and processing serialized, bar coded coupons. Characteristics of the coupon bar code will be similar to the instant tickets. iv. The Retailer terminals must have a bar code reader with the means to reach at least twelve (12) feet from the terminal giving it the ability to read different size and shape items (such as POS items, bar coded instant ticket Lots, online ticket stock boxes), and in addition, instant tickets in racks. As an Invited Option, these units may be wireless. v. The terminal reader must allow customer age verification through reading a driver’s license or similar identification using a barcode or magnetized strip. n. Training Mode. The terminal must be capable of operating in a training mode. Training mode transactions generating ticket facsimiles will be marked "VOID - DEMO - NOT FOR SALE" or equivalent in the body of the ticket. Training mode at Retailer locations must be controllable from Central and Retailer systems creating a transaction for the Central System stating the terminal has entered/exited training mode. All Retailer-site training transactions will be logged to the Central System and labeled as training transactions. Training mode must be capable of simulating all transactions allowed without updating production files such as the winner file, etc. The training mode is required to be always available and updated minimally two weeks before a new game is introduced. o. Self Diagnostics. The terminal must be equipped with self-diagnostics and indicators enabling the Retailer and service technicians to monitor the operating status of the terminal. Terminal diagnostics and internal status Ohio State Lottery 15 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal conditions can be initiated and observed remotely by technicians or hotline operators. Such as the following: i. Retailer Diagnostic Information ii. Field Technician diagnostic Information iii. Remote Data Analysis iv. Real-Time Access Response Note: Vendors must submit a listing of all such indicators and operator messages available. p. Transaction Integrity with Consumables Fault. i. The terminal must provide a method of preserving the integrity of the transaction when a reader fault, printer fault, misprint, jam, or end-of-ticket-stock condition occurs. ii. The terminal must return to service when the fault is cleared without notable delay or disruption for the Retailer. q. Universal Serial Bus (USB) Ports and Peripheral Slots/Ports. The OSL anticipates the possibility of using various peripheral attachments for the Retailer terminals. Flexibility to enhance the terminals in such a manner is an important characteristic. In addition to interfaces for terminal features and peripherals identified in this RFP as required upon delivery, there must be a minimum of four (4) additional, slots/ports which are standard interfaces such as PCI, USB, RS-232. These ports will be logically secured when they are not in authorized use. r. Environmental Fitness. The terminal must be suitable for the conditions of Ohio Retailer locations: dedicated 110V 15 amp electrical circuit; small counter top spaces; difficult environmental conditions such as heat, cold, moisture, dust, grease, spilled liquids, and operator abuse. s. Power Cord. Each terminal must come equipped with a power cord at least twelve feet (12') in length, with a three-prong grounded plug. t. Memory and Storage. i. The OSL requires the ability to add games and to insert promotions consuming terminal memory. The terminal, as-delivered, is required to provide at least a fifty percent (50%) margin of available game and promotion memory for future games and promotions as anticipated to be consumed at conversion time by the current Ohio Ohio State Lottery 16 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal games. The open margin does not include the memory to hold a copy of the active terminal applications, the application used prior to the active terminal application, the currently pending application version and the operating system. ii. The terminal must have sufficient memory to support at least three hundred (300) concurrent instant games using up to three (3) different bar code algorithms without an upgrade of terminal resources. iii. The terminal’s memory must be upgradeable. Response Note: The Responding Vendor must describe the extent of this capability. iv. Should AC power to the terminal be interrupted, the gaming software (stored in the terminal’s memory) must not be destroyed, modified or lost for a minimum period of one (1) week from the occurrence of such failure. u. Casework Color. The casework of the terminal and any peripherals must be provided in a color selected by the OSL among options available, using a manufacturer’s standard color chart. The OSL requires a durable and uniform color. Response Note: The Vendor must identify whether the color is a surface coating or molded throughout the casework. v. Sound Generator. The terminal must be capable of producing multiple tones and high fidelity audio when certain transactions or functions are performed, or specified events occur. This must be toggled on or off with the OSL deeming which sounds can be toggled. The use of sounds must not unduly delay the transaction processing time. The OSL will define the functions triggering this feature. The terminal is required to be capable of supporting auxiliary speakers as a peripheral, not occupying any of the eight (8) open peripheral slots. w. Broadcast Messages. Messages from the Central System must be received and displayed to the Retailer. If the terminal is not powered on or communicating with the Central System at the time of broadcast, the Central System will ensure the terminal receives the message immediately upon sign on. x. Retailer Initiated Messaging. The terminal solution must support retailer initiated messaging such as product orders or supply requests. And conformation of the message recites by the System. Ohio State Lottery 17 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal Response Note: The Vendor must describe the user interface for Retailer Initiated Messages. y. Large Dollar Transaction Verification. The terminal screen must display a message for each “large dollar” transaction providing an option to the Retailer to stop or take other appropriate action before completing the transaction. The OSL will define the default amount of a “large dollar” transaction and must approve the terminal messages. The Vendor must propose a feature whereby a specific Retailer can identify a default amount different from the OSL’s selected amount. z. Previous Transaction Listing. Upon request of the Retailer, the terminal must be able to display and print a minimum of the last twenty-five (25) transactions accepted by the System, in order to compare printed tickets with registered tickets. In display mode all the past transactions need not appear on the same screen at once but scrolling forward and backwards is a must. The System must also be able to print selected tickets as reprints defined in Section Z below. aa. Reprinting Capabilities. The terminal must be able to reprint a minimum of the last twenty-five (25) transactions processed. Each of these reprinted transactions will be branded specifically identifying them as a reprinted ticket. A human readable serial number must be provided but scanner readable bar code will not be provided on the ticket. bb. Cancellations. The terminal must support ticket cancellations for those games permitting it. Cancellations must be governed by a set of parameter-driven rules as established by the OSL. cc. Validation Limits. The terminal must not process wins in excess of those permitted by Ohio regulations and set as a parameter by the OSL. For larger wins the terminal must return a response as defined by the OSL, permitting the win to be claimed. dd. Branding. The Retailer terminal must be capable of branding tickets with a programmable message. The circumstance and messages for branding tickets will be worked out in detail between the Vendor and the OSL. For example, when a ticket is validated or canceled, the ticket should be read by the terminal and branded accordingly. Additionally, non-winning tickets may be submitted by players for checking, and these could be branded as non-winners. ee. Language Ability. The Retailer terminal must be able to support foreign languages in common use in Ohio. At a minimum the terminal must support English. As an Invited Option Spanish and Arabic may be suggested. Since the same Retailer terminal may be used by employees Ohio State Lottery 18 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal with different language skills, the terminal is required to be capable of toggling between languages upon user request. Foreign language capability applies to the terminal display, help screens, screen savers and possibly to certain Retailer reports, as determined by the OSL, but not to tickets. If Foreign Language ability is offered it must also be set by user default under sign-in. ff. Terminal Case Design for Safety. The terminal’s design must partition electronic and electrical components from access by the Retailer when conducting Retailer tasks to operate or maintain the terminal (e.g., changing the paper or cleaning the touchscreen). Sharp and protruding edges must be minimized. gg. Alternative Media Reader. As an Invited Option, the OSL will consider an alternative reader capable of handling smart cards, magnetic stripes, RFID, or alternative media. Among other functions, this may be employed as a pre-paid gift card reader, but if so the cost and obligation of obtaining or producing the cards would be negotiable. hh. Cash Drawer Interface. The Retailer terminal must support an RS-232 (or alternative) interface to a conventional commercial cash drawer. ii. Clerk-Associated Transaction Reporting. The System must provide a mechanism associating a specific clerk with a set of transactions produced by a Retailer terminal. The System must produce reports summarizing activities by specific clerks. The Proposal may employ any of several methods for clerk identification, including but not limited to, multiple sign- ons, swiping an ID card, and entry by touchscreen. These sign-ons must be accompanied by a password. If login attempt fails an OSL specified number of times, then the users are unable to access the terminal until their password is reset. 3. Retailer Online Terminal Attachments a. Player Jackpot Display. The Vendor must propose five thousand (5,000) player displays for deployment at Retailer locations. The purpose of this display is to attract the attention of, and inform, potential players. Any such display must be clearly visible from fifteen (15) feet by players. Units must have the capability of being "programmed" using a games management application. As an Invited Option, these units will be wireless units. Due to the wide diversity of available space in Retailer locations, the player jackpot display unit must be capable of resting on the counter beside the terminal, or being mounted on or suspended nearby the terminal. The exact location of the player jackpot display unit will be decided by the OSL in conjunction with the Retailer on an individual Ohio State Lottery 19 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal Retailer basis to optimize visibility. As a Specified Option, the Responding Vendor must propose pricing in delivery quantities of one hundred (100) additional units. b. Player Transaction Display. The Proposal must include a player transaction display for every terminal. The player transaction display is a discreet, individual-oriented display for the player conducting the current transaction. This display may communicate the amount of the current transaction, or notify the player if he or she has a winning ticket. In the event the ticket is a winning ticket, an appropriate message may be displayed. When not displaying a transaction, the player display may provide an advertising or informational message. The OSL must approve the display design and message presentation to ensure functionality and player privacy. c. Self-Service Verifier. The Proposal must include a terminal peripheral for two thousand (2,000) Retailer locations allowing players to check their own online tickets for winners. These devices would be located either at the play stations or far enough away from the Retailer terminal to minimize activity or traffic at the Retailer counter. The self service verifier may include advanced features such as player self-checking of instant tickets, or other player assistance features. As a Specified Option, the Responding Vendor must propose pricing in delivery quantities of one hundred (100) additional units. As an Invited Option, these units may be wireless. d. Flat Panel Advertising Display. The Proposal must include additional display attachments for two thousand five hundred (2,500) Retail locations suitable for displaying advertising and game information to players within the store, as well as airing daily drawings. Such a display would also be ideal for an Amber Alert broadcast. Characteristics the OSL envisions include: flat panel, minimum 15 inch diagonal, flexibility of placement within the retail establishment, visibility from ten (10) feet or greater, and sound available through auxiliary speakers. The display should be capable of storing sound, static image files, and animations of up to three (3) minutes. The stored information should be downloaded in the background over the Retailer terminal network, as well as being loadable at the Retailer location. As a Specified Option, the Responding Vendor must propose pricing in delivery quantities of one hundred (100) additional units. As an Invited Option, these units may be wireless. e. Cash Drawers. As an Invited Option the Proposal may offer cash drawers connecting to the Retailer terminals and triggered to open by the Retailer terminal. The cash register drawer must be secured. Ohio State Lottery 20 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal f. Store Signage. As an Invited Option, the Proposal may offer advertising signage for presentation anywhere in the store, especially in the front window. The signage must be visible and legible from at least one hundred (100) feet, bearing a fixed logo and/or advertising message designed in conjunction with the OSL. Neon or other internal lighting technologies may be used, since the sign must be clearly visible for indoor, daytime, and night-time usage. 3.4.7 Instant Ticket Order Fulfillment: Telemarketing System The System must provide an application to support telemarketing and Retailer account service functions and services. The system must be capable of supporting up to one hundred (100) users with varying privileges. Information displays for the telemarketing staff will employ bold fonts, highlighting, and other mechanisms to promote efficiency and accuracy. Telemarketer Function Support. The System will provide a solution for telemarketers with a broad range of features, including, but not limited to, the following. 1. Ability to sort by game number and name, sell priority, price amount, inventory condition. 2. Ability for the telemarketer to page forward and backward through the application. 3. Ability to block a game from being ordered by the telemarketer. 4. Ability to put a Retailer on a call back list if the Retailer is not ready to order when called initially. 5. Allow telemarketer to make route, contact, and phone number changes (add or delete). 6. Ability to dial phone number from the workstation via an interface to the OSL’s VOIP phone system. 7. Ability to display the next Retailer on a call list after an order has been placed. 8. Allow the telemarketer to exit the sequential call list to perform ordering activities on one particular Retailer. 9. Special-circumstance orders, such as walk-in orders from Retailers must be supported. 10. The Retailer call list will operate according to a set schedule relative to each Retailer. The set schedule for a Retailer will identify a call day (from Monday Ohio State Lottery 21 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal through Friday) and also a call frequency (such as one week, two weeks, or three weeks). 11. The telemarketing supervisor must be able to view telemarketers’ actions by telemarketer name on deferred calls, orders placed, Retailers not ordering, call-ins (out of cycle), and be able to see telemarketer’s orders as the day progresses. 12. The System must be delivered with a capability for auto-ordering, in other words generating orders for shipment based on rates of turnover of the inventory at the Retailer locations. Auto-order must be set up to allow usage only on certain games. Auto-order parameters must be able to be canceled or adjusted by the telemarketing function. 13. The System must have a mechanism to determine initial allocation of new game releases based on sales history determined by price point, game style, etc. 14. The System must have a mechanism to track inventory of other items such as bet cards, thermal paper stock, and POS items. These items are not barcoded on individual units. 3.6.1 Primary Data Center Specifications The Vendor must provide a PDC. The PDC must be provided by the date stated in Section 1.6. The Vendor is responsible for building out the space provided, subject to the approval of the OSL. The Vendor must provide a PDC in Ohio that is a minimum of ten (10) miles away from Lottery Headquarters (and a maximum drive distance of one hour) dedicated solely to use for the OSL. Response Note: The Proposal must contain specifications and a description for the Vendor’s space utilization. 3.7.6 OSL Staff Training The Vendor must provide training for OSL staff, at the OSL offices, or appropriate venues as approved by the OSL. 1. Customized Training. Training must be customized to meet the unique needs of OSL staff performing specific primary and support activities. At times during the Contract, additional training may be needed as System features evolve. a. The Vendor is required to provide training specific to the communications methodology(s) employed by the System for selected OSL support staff. The Vendor is required to provide the OSL two (2) sets of test equipment specific to the System communications Ohio State Lottery 22 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal topologies. The Vendor is required to certify selected OSL communications staff if mandated by others, FCC or industry standards. 2. Training Methods and Tools. Training must incorporate a mix of instructor-led presentations and discussions, as well as interactive hands-on, computer- based activities and workshops. The Vendor will provide workbooks and documentation to support these activities. 3. Staff Training Terminals. The Vendor will be responsible for developing a training program to train two hundred fifty (250) OSL staff in the operation of deployed terminals. The training of OSL staff must encompass the LSR functionality, the Retailer functionality, as well as basic terminal troubleshooting, and should include reference materials/manuals. Training must take place at the OSL's Central and Regional Offices. The Vendor must also train thirty-five (35) OSL trainers who will assist with disseminating the information to the Retailer base. 4. Operator Training. The Vendor will furnish formal training to qualified, designated OSL Information Technology personnel reasonably calculated to render them proficient in the operation of all Central System processing, communications control, line monitoring and other online peripheral and terminal equipment including management workstations, claims validation and payoff terminals, etc. A minimum of twenty (20) people are to be trained. Strict security will be maintained with respect to those chosen for training. 5. Equipment Training. Training will be provided in the operation of all equipment in the System, all applications software, the production systems, procedures associated with restart, backup, and recovery in the event of any System failure and all other computer operations/functions necessary for reliable, productive System operation. 6. Central System Training. This training will take place at the OSL headquarters prior to and following turnover of the System. The Vendor will be required to provide formal classroom and on-the-job training to OSL Information Technology personnel involved in the actual operation of the Central System. Also, for a period of at least thirty (30) days, but not to exceed ninety (90) days, from System turnover date, the Vendor must have at least one (1) qualified individual present in the computer room between 5:00 a.m. and 3:00 a.m. for consultation and assistance while OSL Information Technology personnel are becoming self-sufficient in the operation of the System. Ohio State Lottery 23 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal 3.7.7 Retailer Equipment Maintenance Program The Proposal shall describe the maintenance plan for the Retailer terminals and associated equipment. The term "Retailer terminal" will include all attachments and peripherals, including the network interface, provided or serviced by the Vendor. The Vendor is obligated to obtain replacement parts and services approved, recommended, or recognized by the original equipment supplier as effective. 1. Retailer Terminals a. Retailer Hotline Services. The Vendor must provide a staffed toll-free hotline number during the OSL business hours as defined by the OSL. The Vendor must maintain hotline records for the life of the Contract and any extensions and for three (3) years after cancellation or expiration of the Contract while providing these records to the OSL on a weekly basis. The OSL reserves the right to require calls to be routed elsewhere. Please reference Section 3.7.13. b. Retailer Terminal Maintenance. In addition to repair or replace the terminal, its peripherals, or WAN communications interface, the Vendor’s technicians will be required, during any service call, to routinely check the mechanical security, safety, and general operation of any mechanisms or attachments provided or serviced by the Vendor. c. Terminal Preventive Maintenance (PM) Schedule. The Vendor and OSL will agree on a PM schedule for the Retailer terminals. For the Proposal, the Vendor must propose a PM schedule; however the schedule cannot exceed a one hundred eighty (180) day cycle. A shorter PM schedule is desirable. In no case will there be attempts to render PM services during Retailers’ busiest periods. d. Terminal Parts Supply. The Vendor will maintain an adequate supply of parts to sustain the service of terminals it has supplied and is required to maintain. e. Terminal Repair and Maintenance Reporting. At service events a log will be updated noting the maintenance activities. The log information will be entered into a database accessible to the OSL. The OSL will have access from the games management application to generate reports from the Retailer dispatch and repair data indicating when services have occurred, what services have occurred, and on an exception basis, when services have been untimely. The OSL will also be provided a log for Retailers’ feedback on the timeliness of repairs and any miscellaneous comments the Retailer may have about the repair(s). Ohio State Lottery 24 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal f. Vendor’s Maintenance System. The Vendor must have a system for trouble tracking and maintenance management. The system will, at a minimum, fulfill the following criteria: i. Tracking. Tracking and reporting of Retailer terminal, communications line, network, and other problem reports is required whether or not actual problem(s) are found. Data must be kept on all terminals including those in reserve or returned to a depot for maintenance. ii. Maintenance Information. The Vendor is required to maintain maintenance data for the Contract term and at least three years after the Contract ends, with at least twelve (12) months of data online. iii. Service Levels. Conversely, the Vendor will be expected to provide terminal dispatch, maintenance and repair services as described in Section 2.29. It is, thus, expected Responding Vendors will include the cost of these services in their Base System Price Proposals. Responding Vendors planning to award a subcontract for terminal dispatch, maintenance and repair services, must keep in mind such a subcontract may not be awarded until after the Contract is awarded. Contract must be followed to the satisfaction of the OSL. Therefore, the Price Proposal submitted by Responding Vendors must, in part, be based on the Responding Vendor’s best estimates as to the costs of providing terminal dispatch, maintenance and repair services. Responding Vendors may feel free to explore the costs of such services with Ohio Vendors. However, Responding Vendors are not precluded from exploring these costs with other vendors, and ultimately, include other vendors in any bidding process for the award of the subcontract. g. Equipment Maintenance. The Vendor agrees to maintain all Vendor furnished equipment as follows: i. The Central System(s) will be maintained by a certified computer maintenance provider under subcontract with the Vendor, with all work done in the oversight presence of Vendor personnel. ii. All communication termination equipment will be maintained directly by the Vendor. All Retailer terminals will be maintained either under subcontract with the supplier or directly by the Vendor. Name and address of any and all subcontractors, associated companies, or consultants to be involved in any Ohio State Lottery 25 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal phase of the Contract will be provided. iii. Terminals and any other terminal devices provided by the Vendor will receive remedial maintenance via the hierarchical swap or bench repair/spares pool approach currently used. The existing four (4) elements of this approach; (Retailer Hotline, Dispatch, Field Service and Depot Repair); are to be expanded as necessary by the Vendor to initially accommodate at least eight thousand eight hundred (8,800) Retailer terminals, any other terminal devices provided, and any future expansions. The maintenance function will employ the Vendor's most up-to- date tools. 3.8.1 Conversion Strategy The Vendor is at liberty to propose alternative conversion strategies best supporting the OSL’s implementation. The Vendor must describe the pros and cons of the approach proposed. The Responding Vendor must provide a conversion strategy and proposed timeline for switching approximately eight thousand one hundred ninety (8,190) Retailer Terminals. The strategy must include the distribution of up to eight thousand eight hundred (8,800) new terminals, the installation of new terminals, peripheral equipment. This strategy must also include the installation of one thousand five hundred (1,500) TVMs. The terminals must be delivered to location(s) specified by the OSL. The Responding Vendor's Proposal should indicate plans to mitigate risks to the OSL and minimize inconvenience to Retailers. 3.9.8.1 Telecommunications Capabilities The Vendor must demonstrate the capacity to provide the telecommunications implementation and additional evolutionary changes for the project. 1. Telecommunications Plans. The Vendor will describe its resources, staff skill levels and certifications pertinent to developing and maintaining telecommunications for the contract. 2. Telecommunications Quality. The Vendor must address telecommunications engineering quality practices, and in particular whether the Vendor is certified under the BICSI standards or equivalent. Such practices and certification are desirable. Ohio State Lottery 26 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal 3.9.8.2 Research and Development Program The success of the OSL depends on the availability of new products, gaming features, software innovations, and service enhancements. The Vendor must be capable of supporting the OSL in its mission. The Vendor will describe its resources, capability, capacity and plans for maintaining a research and development effort in such areas as Retailer terminal design, software developments, telecommunications, network monitoring, and sales/operational data mining. Ohio State Lottery 27 Lottery Gaming System RFP Amendment November 21st, 2007 Part 3
    • Request for Proposal PART 4 - PRICING 4.4.4 Price Proposal Quotation Sheet Sales per the Audit Financial Statements of the OSL for Fiscal Years 2005-2007 are as follows: Game Type Gross Sales Gross Sales Gross Sales Fiscal Year 2005 Fiscal Year 2006 Fiscal Year 2007 Online Games $941.9 Million $946.9 Million $905.6 Million Instant Games $1,217.2 Million $1,274.0 Million $1,353.8 Million Note: Fiscal year 2005 and 2006 sales represent audited figures as reported in the Ohio State Lottery’s Comprehensive Annual Financial Reports and are displayed for informational purposes. Fiscal year 2007 sales will be used as the base sales projection for the fiscal year 2010 – 2019 sales periods. Fiscal year 2007 numbers may be unaudited at the time of RFP issuance. Ohio State Lottery 28 Lottery Gaming System RFP Amendment November 21st, 2007 Part 4
    • Request for Proposal Below is a representation of the present value formula used to convert future year pricing. Future Present Value * Value Year 1 $1,000,000 $1,000,000 Year 2 $952,381 $1,000,000 Year 3 $907,029 $1,000,000 Year 4 $863,838 $1,000,000 Year 5 $822,702 $1,000,000 Year 6 $783,526 $1,000,000 Year 7 $746,215 $1,000,000 Year 8 $710,681 $1,000,000 Year 9 $676,839 $1,000,000 Year 10 $644,609 $1,000,000 Total $8,107,822 $10,000,000 * Present value using a 5% discount rate OSL RFP for Gaming Systems and Services PRICE QUOTATION SHEET I. Base System Pricing. Vendors are required to quote the following item as a percentage of gross adjusted instant sales and a separate percentage of gross adjusted online sales for the ten (10) year Contract period. Response Note: TBD pricing is not allowed. The OSL assumes the Vendor will recapture their capital equipment costs over a five (5) year period which will be reflected in the pricing. The OSL anticipates after the five (5) year amortized period, the Successful Vendor’s commission may be lowered accordingly as the Base System equipment had been depreciated. Therefore, at the end of the fifth (5th) year, the OSL, at its sole option, may take complete ownership of all equipment, hardware and/or software to operate the Ohio State Lottery 29 Lottery Gaming System RFP Amendment November 21st, 2007 Part 4
    • Request for Proposal Gaming System. The Successful Vendor must also provide the OSL with a license to utilize any software to operate the Gaming System, at no cost to the OSL. At the end of the Contract Term, whereby all extensions have been exercised, the OSL may require the Successful Vendor to remove and dispose of the Base System equipment or any part thereof, at no cost to the OSL. Responding Vendors are required to quote the Base System described in this RFP as a percentage of gross adjusted online ticket sales and as a separate percentage of gross instant ticket sales carried to six (6) decimal places. The OSL-required percentage of sales quotes for both gross online ticket and instant ticket sales will pertain to ten (10) fiscal years. Ohio State Lottery 30 Lottery Gaming System RFP Amendment November 21st, 2007 Part 4
    • Request for Proposal Base Systems Pricing Percentage of gross Percentage of gross by fiscal year adjusted instant ticket adjusted online ticket sales sales 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Ohio State Lottery 31 Lottery Gaming System RFP Amendment November 21st, 2007 Part 4
    • Request for Proposal II. OSL-Specified Options. Vendors are required to submit specifications and pricing for Specified Options. Conditions of delivery are provided for bidding purposes, although other delivery conditions may apply and would be subject to negotiations. As noted above: Pricing provided for Specified Options reflects implementation of those options beginning fiscal year 2010 and assumes pricing will remain constant for the entire ten (10) compensated years unless otherwise noted by the Vendor. For Price Scoring purposes, the Present Value Calculation will be applied. Options exercised at a future date will be negotiated. Response Note: TBD pricing is not allowed. A. Additional Base System Terminals (Section 3.2) one hundred (100) units as a % of both gross adjusted instant and online sales B. Player Jackpot Display (Section 3.2.1.3.a) one hundred (100) units as a % of both gross adjusted instant and online sales C. Self-Service Verifier (Section 3.2.1.3.c) one hundred (100) units as a % of both gross adjusted instant and online sales D. Flat Panel Advertising Displays (Section 3.2.1.3.d) one hundred (100) Units as a % of both gross adjusted instant and online sales E. Dual-Function TVMs (Section 3.2.3.6.a) one hundred (100) units as a % of both gross adjusted instant and online sales F. Website (Section 3.4.16.1) per monthly cost G. Secondary Data Center in Cleveland (Section 3.6.2) as an annual fixed cost that is and increase or decrees to the base price resulting from locating the SDC in Cleveland. Please note the following RFP Clarification: For Specified Options provided at a cost vendors must be able to provide Specified Options in additional quantities of one- hundred (100) units for items listed on the pricing table A-E. Quantities obtained beyond one-hundred (100) units must be obtainable at prices equal to or less than the price quoted for the first one-hundred (100) units. Ohio State Lottery 32 Lottery Gaming System RFP Amendment November 21st, 2007 Part 4
    • Request for Proposal APPENDIX C: STANDARD CONTRACT TERMS AND CONDITIONS Advertising – The Successful Vendor agrees not to use the OSL's name, logos, images, nor any data or results arising from this procurement process or Contract as a part of any commercial advertising without prior written approval by the Director. (Be advised the “The Ohio Lottery®” logo is a trademarked logo of the OSL, as is the Cash Explosion® game name. The OSL is currently pursuing trademark rights for the Classic Lotto™ and the Ten-OH!™ game names). Assignment of the Contract – Neither the Contract nor any rights, duties, or obligations described therein shall be assigned by the Successful Vendor without the prior, express, written consent of the Director. Subject to the limitations on assignment contained herein, the Contract will inure to the benefit of and be binding upon the successors and assigns of the respective parties hereto. In the event of such approval, the terms and conditions hereof will apply to and bind the party or parties to whom the Contract is assigned as fully and completely as the Successful Vendor is thereunder bound and obligated. No assignment, if any, will operate to release the Successful Vendor from its liability for the prompt and effective performance of its obligations under the Contract. Authority of OSL – On all questions concerning the interpretation of specifications, the acceptability and quality of material furnished and/or work performed, the classification of material, the execution of the work, the assessment of liquidated damages, and the determination of payment due or to become due, the decision of the OSL shall be final and binding. Certification of Funds – Pursuant to Ohio Revised Code Section 126.07, all obligations of the state of Ohio under any OSL contract are subject to the determination by the Director sufficient funds have been appropriated by the General Assembly to the OSL for the purposes of the Contract, and certification by the Director of the Office of Budget and Management such a balance exists. Change of Schedules – The OSL reserves the right, in its own best interest, to modify, reject, cancel or stop any and all plans, schedules or work in progress. Code of Conduct for the Successful Vendor - The OSL is an extremely sensitive enterprise because of the nature of the business and because it is government-affiliated. Therefore, it is essential its operation, and the operation of other enterprises which would be linked to it in the public mind, avoid not only impropriety, but also the appearance of impropriety. Because of this, the Successful Vendor is expected to: 1. offer goods and services only of the highest standards; 2. use its best efforts to prevent the industry from becoming embroiled in unfavorable publicity; 3. make sales presentations in a responsible manner, and when it feels it is necessary to point out the superiority of its goods or services over those of its competitors, do so in such a manner which will avoid unfavorable publicity for the industry; 4. avoid promotional activities which could be interpreted as improper and/or cause embarrassment to the industry; and 5. report security problems or potential security problems with the supplied Gaming System immediately to the OSL. Compliance with the Law – The Successful Vendor agrees to comply with all applicable federal, state, and local laws in the performance of its obligations under the Contract. The Successful Vendor accepts full responsibility for payment of all taxes and insurance including Worker's Compensation insurance premiums, unemployment compensation insurance premiums, all income tax deductions, Social Security Ohio State Lottery 33 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal deductions, and any and all other taxes or payroll deductions required for all employees engaged by the Successful Vendor in the performance of the work authorized by the Contract. It is expressly understood by the parties the Contract is not binding on the OSL until such time as all necessary funds are made available and forthcoming from the appropriate state agencies, and when required, such expenditure of funds is approved by the Controlling Board of the state of Ohio. 1. Compliance with Ohio Ethics and Election Law – The Successful Vendor hereby certifies all applicable parties listed in Division (I)(3) or (J)(3) of O.R.C. Section 3517.13 are in compliance with Divisions (I)(1) and (J)(1) of O.R.C. Section 3517.13. In accordance with Executive Order 2007-01S, the Successful Vendor, by signature on this document, certifies: (1) it has reviewed and understands Executive Order 2007-01S, (2) has reviewed and understands the Ohio ethics and conflict of interest laws, and (3) will take no action inconsistent with those laws and this order. The Successful Vendor understands that failure to comply with Executive Order 2007-01S is, in itself, grounds for termination of this contract or grant and may result in the loss of other contracts with the state of Ohio. The Successful Vendor certifies that it is currently in compliance and will continue to adhere to the requirements of Ohio ethics laws. 2. Drug-free Workplace – The Successful Vendor, including any subcontractors and/or independent vendors, and all field staff associated with providing services under the Contract, agree to comply with all applicable state and federal laws regarding a drug-free workplace. The Successful Vendor shall make a good faith effort to ensure all Successful Vendor’s employees, while working on OSL, State or private property, will not purchase, transfer, use or possess illegal drugs or alcohol or abuse prescription drugs in any way. 3. Compliance with O.R.C. 125.111(B) – The Successful Vendor agrees to comply with O.R.C. Section 125.111(B). Confidentiality and Nondisclosure – The Successful Vendor agrees it will not disclose any information obtained by it pertaining to the OSL's methods, systems, programs, procedures, or operations without written consent of the OSL Director. As used herein, "Confidential Information" may include all information received by a party under or in connection with any negotiations, execution and/or performance of the Contract; or while the Contract is in effect, information relating to the other party's business, technology, proprietary software, trade secrets, products, services, markets, plans or strategies, including without limitation, engineering, programming and other technical and commercial information and know-how, and including the certain terms of the Contract and all of its Exhibits. Confidential information shall not include information widely known to the public or within the lottery and gaming industries, or information produced by the Successful Vendor in connection with the Contract which is considered to be "public record" pursuant to Ohio Rev. Code Chapter 149, and as such term has been or may be construed by Ohio courts. Neither the OSL nor the Successful Vendor shall ever use, duplicate or disclose any confidential information of the other party without the specific and previous written consent of the other party, except where use of such confidential information, or disclosure of such confidential information to either the OSL's or the Successful Vendor's agents, employees, or subcontractors is necessary for the performance of duties under the Contract, and then only if all persons to whom such confidential information is disclosed are advised of their obligation to maintain the confidentiality of such confidential information. Both the OSL and the Successful Vendor acknowledge and agree all confidential information of the other party is and shall remain the exclusive and valuable property of such other party. Immediately on the termination, non-renewal or expiration of the Contract, or on either party's earlier request, each party shall Ohio State Lottery 34 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal return to the other party any and all records containing or embodying confidential information within its possession or control. Contract – The Contract shall incorporate the terms of all related RFP documents, including but not limited to any addenda to the RFP, and the Successful Vendor's Proposal as an integral part of the Contract, except to the extent the Contract explicitly provides to the contrary. In the event of a conflict in language among any of the documents referenced above, the provisions and requirements of the Contract shall govern. Contractor Responsibility – The OSL will consider the Successful Vendor to be the sole point of contact with regard to contractual matters. The Successful Vendor will assume sole responsibility for providing the services and/or commodities required by the Contract, whether or not the Successful Vendor is the direct supplier of said service, commodity, or any component thereof. Upon execution of the Contract, the Successful Vendor will identify a sole point of contact for all matters pertaining to the Contract. Contractor's Responsibilities Upon Termination – After receipt of a Notice of Termination, and except as otherwise specified by the OSL, the Successful Vendor shall: 1. Stop work under this Contract on the date, and to the extent specified, in the notice. 2. Place no further orders or subcontracts for materials, services, or facilities except as may be necessary for completion of such portion of the work under this Contract not terminated. 3. Assign to the OSL effective on the date of Contract termination, in the manner, at the time, and to the extent specified by the OSL, all of the right, title, and interest of Successful Vendor under the orders and subcontracts so terminated, in which case the OSL has the right, at its discretion, to settle or pay any or all claims arising out of the termination of such orders and subcontracts and to reduce any settlement amount determined by the amount paid for such orders or subcontracts. 4. Settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, with the approval or ratification of the OSL to the extent the OSL may require. The OSL’s approval or ratification shall be final for the purposes of this part. 5. Upon the effective date of termination of this Contract and the payment by the OSL of all items properly chargeable to the OSL hereunder, the Successful Vendor shall transfer, assign, and make available to the OSL all property and materials belonging to the OSL, all right and claims to any and all reservations, contracts and arrangements regarding this Contract. No extra compensation is to be paid to the Successful Vendor for its services in connection with any such transfer or assignment. The OSL, concurrently with such transfer or assignment, shall assume the obligations of the Successful Vendor, if any, on all non- cancelable contracts with third parties for such items. 6. Upon termination of the Contract by the OSL, the Successful Vendor shall be deemed to have released and relinquished to the OSL any and all claims or rights it may otherwise have to common law or statutory copyright with respect to all or any part of unpublished material prepared or created by the Successful Vendor in the course of its performance hereunder. 7. Complete performance of such part of the work as shall not have been terminated by the OSL. 8. Take such action as may be necessary, or as the OSL may specify, to protect and preserve any property related to this Contract which is in the possession of the Successful Vendor and in which the OSL has or may acquire an interest. 9. All OSL proprietary materials and associated information and all proprietary materials and associated information determined to be the property of the OSL are considered to be the Ohio State Lottery 35 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal property of the OSL and will be returned to the OSL upon termination of the Contract. Controlling Law – The laws of the state of Ohio shall govern the Contract resulting from the RFP. Any and all litigation arising under the Contract shall be instituted in the appropriate court of the state of Ohio, and, by signing this Contract, the Successful Vendor has waived access to any other court which may have concurrent jurisdiction inside or outside of Ohio, and also agrees to exhaust all remedies outlined in this Contract prior to the institution of any litigation concerning the Contract. The Successful Vendor further agrees the Contract, as awarded, shall be the complete and exclusive statement of the Contract between the parties and supersedes all Proposals, oral or written, and all other communications between the parties relating to the subject matter of the Contract. If any provision of the Contract or the application of any such provision shall be held by a court of competent jurisdiction to be contrary to law, the remaining provisions of the Contract shall remain in full force and effect. Declaration Regarding Material Assistance/Non-Assistance to a Terrorist Organization (DMA) - As a result of Ohio Senate Bill 9, Vendors entering into business contracts with the State must fill out specified forms indicating they have not provided financial assistance or support to a terrorist organization. The Successful Vendor is required to complete the attached DMA form (Appendix W). The link to the Homeland Security web-site where the Successful Vendor can find the most current U.S. Department of State Terrorist Exclusion List as well as the form in PDF format is as follows: http://www.homelandsecurity.ohio.gov/dma_terrorist/terrorist_exclusion_list.pdf. Equal Employment Opportunity – In carrying out the Contract, the Successful Vendor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, age, disability or Vietnam-era veteran status. The Successful Vendor shall ensure applicants are hired, and employees are treated during employment without regard to their race, color, religion, sex, national origin, age, disability or Vietnam-era veteran status. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training including apprenticeship. The Successful Vendor agrees to post in conspicuous places, available to employees and applicants for employment, notices stating the Successful Vendor complies with all applicable federal and state non-discrimination laws. The Successful Vendor shall, in all solicitations or advertisements for employees placed by or on behalf of the Successful Vendor, state all qualified applicants shall receive consideration for employment without regard to race, color, religion, sex, age, disability or Vietnam-era veteran status. The Successful Vendor shall incorporate the foregoing requirements of this Section in all of its Contracts for any of the work prescribed herein, and shall require all of its subcontractors for any part of such work to incorporate such requirements in all subcontracts for such work. Headings - The headings used in this Contract are for convenience only and shall not affect the interpretation of any of the terms and conditions hereof. Indemnification – The Successful Vendor agrees to indemnify, hold harmless and defend at its expense, the state of Ohio, the OSL, and any persons who are at anytime during any term hereof the State's or the OSL's employees, Commissioners, or agents, and their respective successors, heirs, representatives, administrators and assigns ("Indemnities"), from and against any and all responsibilities, suits, judgments, awards, costs, damages, claims, demands, actions, expenses or liabilities of every nature, threatened or brought against or incurred by any of them, whether joint, several or individual, which result or arise from or are connected with or based upon the wrongful or negligent malfeasance, misfeasance, or nonfeasance of the Successful Vendor's employees and the Successful Vendor's products in the performance of the Contract in any of the following situations: Ohio State Lottery 36 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal 1. claiming any program, process, composition, writing, equipment, appliance or device, or any trademark, service mark, logo, idea, combination of ideas, or any other work or invention of any nature, or any other tangible, intangible or intellectual or conceptual property whatsoever developed, provided or used by the Successful Vendor in connection with its performance under the Contract constitutes an infringement of any United States patent, or any copyright or trademark, or any unlawful use of a trade secret of another; and/or 2. a claim by a person other than a party hereto arising from or alleging facts constituting a violation or breach of any representation, warranty or agreement of the Successful Vendor; provided, further, the Successful Vendor is notified promptly in writing and given information and assistance (all at the Successful Vendor's expense) for the said defense. In conjunction with the express approval of the Ohio Attorney General, the Successful Vendor may request and offer to settle any claim indemnified under this Section. 3. a claim for physical harm arising from a TVM due to its hardware components or negligent placement within a designated Retailer location, provided, however, that the Successful Vendor shall have had designated where such TVMs were placed and such TVMs were not moved without the Successful Vendor’s knowledge. 4. any negligent or willful act or error, whether of commission or omission, of the Successful Vendor, or any subcontractor or of any officer, employee or agent thereof. Relief from Injunction - If the use of any element of the Gaming System provided by the Successful Vendor is enjoined as a result of any such suit, action or proceeding, the Successful Vendor shall, at its own option and expense: 1. procure for the OSL the right to continue to use said element; or 2. replace said element with a comparable element which is non-infringing or is not a trade secret; or 3. modify said element so it becomes non-infringing or no longer is a trade secret; or 4. remove said element and pay to the OSL: a. the actual aggregate cost paid by the OSL to Successful Vendor for the infringing items or unlawful use of a trade secret, less a reasonable sum for the OSL’s use; and b. any damages incurred by the OSL as a result of the infringement or unlawful use of a trade secret. Other Indemnification – The Successful Vendor further agrees to indemnify, hold harmless and defend, at the Successful Vendor's expense, the Indemnities from and against any and all responsibilities, suits, judgments, awards, costs, damages, claims, demands, actions, expenses or liabilities of every nature, whether joint, several or individual, resulting or arising from, or connected with or based upon, any of the following: 1. Willful misconduct or negligence of the Successful Vendor, or any subcontractor, or of any officer, employee or agent of the Successful Vendor or any subcontractor, in the performance of the Contract; or Ohio State Lottery 37 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal 2. Any error, defect or malfunction in any of the components of the Gaming System provided or used by the Successful Vendor in its performance hereunder; or 3. Any act or error, whether of commission or omission, of the Successful Vendor, or any subcontractor or of any officer, employee or agent thereof, without regard to whether any of the foregoing is foreseeable, intentional or negligent, or is the fault of the Successful Vendor, any subcontractor, or any officer, employee or agent thereof, or is within the control of any of them. OSL's Defense - The OSL may choose to defend any claim, action, proceeding or suit covered by the Successful Vendor's indemnity under this Section. If the OSL chooses to defend any such claim, action, proceeding or suit, the Successful Vendor shall be relieved of its obligation hereunder to defend the OSL against the same, but the Successful Vendor shall pay all reasonable and necessary costs and expenses. If the OSL chooses to defend any such claim, action, proceeding or suit, and the Successful Vendor is not a party thereto, the Successful Vendor shall have the right: (1) to receive all documents filed in any such action or proceeding; (2) to be advised of the status of the same; and (3) to the extent practicable, have the opportunity to discuss the same with the OSL or the persons defending them; provided, however, the foregoing shall not confer on the Successful Vendor any right to control, direct or formally appear or participate in the defense of or on behalf of the OSL. Representation by the Ohio Attorney General - The OSL will be represented by the Office of the Ohio Attorney General or other counsel appointed thereby in any action brought by a third party against the Successful Vendor and in any way involving the OSL. Payments of Settlements and/or Judgments - Anything to the contrary notwithstanding, the Successful Vendor's liability under this indemnity shall be limited to an amount equal to the sum of the amount of any settlement recommended by the Successful Vendor, and expressly approved by the Ohio Attorney General, plus expenses incurred in achieving such settlement, if: (1) all persons asserting claims to which the indemnity of the Successful Vendor applies agree to such settlement in writing; (2) all such claimants agree such settlement shall be with prejudice to them and they will dismiss all Indemnities from any responsibility in respect of such claims; and (3) all Indemnities have the legal power and authority to agree to, enter and perform such a settlement. Further, the Successful Vendor's liability under this indemnity shall be limited to an amount equal to the sum of the amount of any judgment awarded against any Indemnitee at the first level of adjudication, plus the expenses incurred in defense of such claim, action or proceeding prior to the entry of such judgment; provided, however, should any appeal by an Indemnitee from such judgment or award result in complete reversal of the judgment or award, the Successful Vendor shall pay expenses incurred in such appeal. The Successful Vendor's obligations hereunder to defend or pay for any defense include any appeals from a judgment in favor of any Indemnitee. Extent of Prize Award Liability - If for any reason set forth in this Section, or for any breach of warranty specified herein, the Successful Vendor is deemed obligated to pay a prize award, the payment of which extends beyond the term of the Successful Vendor's agreement with the OSL (including but not limited to, installment prize awards in any Lotto type game), the Successful Vendor agrees to guarantee full payment of such prize award. Independent Contractor - The Successful Vendor shall act as an independent contractor and not as an employee of the OSL in the performance of the tasks and duties which are the subject of the Contract. The Successful Vendor shall be liable, and agrees to be liable for, and shall indemnify, defend, and hold the state of Ohio, the OSL, their respective officers, employees, Retailers and agents harmless from all claims, suits, judgments, or damages (including litigation costs and reasonable attorney's fees) arising from the Successful Vendor's performance of the tasks and duties which are the subject of the Contract, including, but not limited to: Ohio State Lottery 38 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal 1. Obtaining consent of any nature whatsoever. 2. Protecting the OSL against claims for the unauthorized use of name or likeness of any person, libel, slander, defamation, disparagement, piracy, plagiarism, unfair competition, idea misappropriation, infringement of copyright title, slogan or other property rights and any invasion of the right of privacy. Claims arising from contracts between the Successful Vendor and third parties. The parties understand and agree the personnel assigned by the Successful Vendor under this Contract are the Successful Vendor’s employees or agents. Under no circumstances are such personnel to be considered the OSL's employees or agents. The Successful Vendor shall perform its obligations under the Contract as an independent contractor and not as an agent or joint venture partner of the OSL. It is understood neither the Successful Vendor nor its employees are construed as employees of the OSL for the purpose of P.E.R.S., Workers' Compensation, or for any other purpose. Limitation of Liability and Remedies Cumulative - Remedies of the OSL specified in this Section or elsewhere in the Contract for breach or failure of performance by the Successful Vendor shall in no way limit any other remedies available to the OSL under the Contract, under any statute or regulation, or at law or in equity including, without limitation, all remedies of a buyer under the Ohio Uniform Commercial Code (Ohio Rev. Code, Title 13). All rights, powers and remedies of the OSL shall be cumulative and concurrent. No delay or omission to exercise any right or option accruing to the OSL upon any default by the Successful Vendor shall impair any such right or option or shall be construed to be a waiver thereof, but any such right or option may be exercised from time-to-time and as often as may be deemed expedient by the OSL. In the event the Successful Vendor fails to cure a default as defined herein, the Successful Vendor agrees to reimburse the OSL for any actual and direct losses and any actual and direct damages incurred by the OSL. In the event the direct losses or direct damages are uncertain or difficult to ascertain by the OSL, the Successful Vendor agrees to pay the OSL liquidated damages. Said payments shall accrue from the first day of each default, until the day it is agreed to by the Successful Vendor and the OSL the default has been remedied. The OSL may, in writing, waive or delay the accrual of liquidated damages. Furthermore, liquidated damages shall not be the exclusive remedy available to the OSL for damages caused by the Successful Vendor. Under the appropriate circumstances such as the negligent, reckless or willful behavior on the part of the Successful Vendor, the OSL may make a claim against the performance bond, collect against any insurance coverage, or seek to be made whole via any other lawful method. The Successful Vendor also agrees the OSL shall, in the event of an uncured default, have the right to terminate the Contract, either in whole or in part, without liability to the OSL whatsoever. Should the Successful Vendor be assessed the penalty of two (2) or more successive, occurrences of services not performed (and assessed liquidated damages), the OSL may proceed to invoke the Default provisions or, at a minimum, conduct a general Contract review. The Contract review will establish a corrective plan of action that must be followed without further consecutive acts of services not performed. Mediation - The OSL and the Successful Vendor recognize litigation is an expensive, resource- consuming process for resolving business disputes. Therefore, the OSL and the Successful Vendor agree, if any controversy or dispute arises out of or relates to this Contract or any breach of this Contract, they will attempt in good faith to settle the dispute expeditiously through non-binding mediation within thirty (30) days. The OSL and the Successful Vendor shall make good faith efforts to mutually agree upon selection of the mediator, and the costs shall be evenly shared between the parties. Minority Business Opportunity – The Successful Vendor must recognize the OSL's commitment pursuant to Ohio Revised Code Section 125.081 & 123.152 to contract with minority owned and operated firms, registered as Minority Business Enterprises ("MBE") and EDGE Business Enterprises in the state of Ohio. In its dealings with subcontractors and vendors hereunder, the Successful Vendor agrees also to Ohio State Lottery 39 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal follow, wherever in fact possible, with the procedures and guidelines of the Department of Administrative Services, state of Ohio, with respect to ensuring expansion of opportunities for qualified Ohio minority-owned businesses. No Additional Waiver Implied - If the OSL or the Successful Vendor fails to perform an obligation or obligations under the Contract and thereafter such failure(s) is/are waived by the other party, such waiver shall be limited to the particular failure(s) so waived and shall not be deemed to waive any other failure hereunder. Waiver by the OSL shall not be effective unless it is in writing. Non-Appropriation of Funds - It is understood the OSL's funds are contingent on the availability of lawful appropriations by the Ohio General Assembly. Subject to the applicable provisions of the Ohio Revised Code, the OSL represents the following: (a) it has adequate funds to meet its obligations under any Contract awarded to the Successful Vendor for the Fiscal Year during which the Contract is awarded; (b) it intends to maintain any Contract awarded to the Successful Vendor for the full period set forth herein; and (c) it has no reason to believe it will not have sufficient funds to enable it to make all payments due under the Contract during such period. However, if the General Assembly fails at any time to continue adequate funding for the payments and other obligations due hereunder, the OSL's obligations under the Contract are terminated as of the date the funding expires without further obligation of the OSL. The Contract is subject to approval by the state of Ohio Controlling Board. The Contract will not be awarded if the Controlling Board does not approve the Contract. Subsequent terms of the Contract will commence with the start of future Biennia. As the current General Assembly cannot commit a future General Assembly to an expenditure pursuant to Article II, Section 22 of the Constitution of the state of Ohio, the Contract expires as of June 30, 2009. The Contract must be affirmatively renewed in subsequent Biennia through the form of state of Ohio Controlling Board approval subject to the Certification of Available Funds by the Director of the Office of Budget and Management and the issuance of valid state of Ohio purchase orders. Biennia expire on June 30 of odd numbered calendar years. (For example, fiscal years 2008/2009 Biennium expires on June 30, 2009). ORC 9.24 Certification – The Successful Vendor warrants it is not subject to an “unresolved” finding of recovery under O.R.C. 9.24. If the warranty is deemed to be false, this Contract is void ab initio and the Successful Vendor must immediately repay the OSL any funds paid under this Contract. Personnel – If, during the course of the Contract, the State reasonably determines certain Successful Vendor’s personnel are unable or fail to perform their duties in a competent and professional manner, the OSL shall notify the Successful Vendor in writing of its determination. The Successful Vendor shall remove said personnel from the OSL account and shall assign replacement personnel acceptable to the OSL. The Successful Vendor agrees to honor all such requests and replace such personnel, at no cost to the OSL, within ten (10) calendar days. The Successful Vendor may remove an employee for legal reasons or disciplinary measures with less than thirty (30) calendar days notice, but the Successful Vendor shall notify the OSL as soon as possible of such pending action and confirm such notice in writing before removing the employee. In such case, the Successful Vendor shall be prepared to provide replacement personnel. Résumés for replacement personnel shall be supplied within five (5) calendar days of notification to the OSL personnel is/are being removed or receipt of a request from the OSL to remove personnel. The replacement personnel shall be comparably qualified and acceptable to the OSL which shall have the opportunity to interview replacement personnel before selection and to put such individuals through any background checks as contemplated herein. The OSL shall have prior approval rights as to all such replacement personnel. If the Successful Vendor fails to give the notice required by this Section, or if the replacement personnel are unacceptable, the OSL shall have the right to terminate the Contract and the Successful Vendor agrees to reimburse the OSL for all damages and expenses associated with locating replacement personnel. The rights and remedies of the OSL set forth in this Section shall not be exclusive of any other rights or remedies of the OSL arising under the Contract or by operation of law. Ohio State Lottery 40 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal Quality of Work and Services –"Prior approval" requirements may be reserved to the OSL under this Contract, but the Successful Vendor retains the ultimate responsibility to ensure and guarantee the quality of work and services to be provided under this Contract. The Successful Vendor is fully and solely responsible for performing and completing the services specified herein to the satisfaction of the State. Subcontracting – The Successful Vendor must be the Prime Vendor upon awarding of the Contract, and must be the Prime Vendor performing the primary functions of the Contract. After award of the Contract, the Successful Vendor shall neither hire nor use subcontractors without prior written approval from the Director; provided, however, no approval is required for the purchase of articles, supplies, or components and/or the procurement of mechanical services so long as such articles, supplies, components or mechanical services do not include installation, programming, hardware, or other goods and services of the kind contemplated by the Contract. All work subcontracted shall be at the expense and liability of the Successful Vendor. The Successful Vendor may enter into written subcontracts for performance of work under the Contract with prior written approval of the OSL. The OSL shall have the continuing right throughout the term of the Contract to disapprove subcontractors if such disapproval would be in the best interest of the State. The OSL shall have the right to inspect and acquire any of the subcontractor documents executed between the Successful Vendor and the subcontractor. No subcontract the Successful Vendor enters into with respect to performance under the Contract shall in any way relieve the Successful Vendor of any responsibility for performance under the Contract. All subcontractors selected by the Successful Vendor and approved by the OSL must comply with all the relevant terms and conditions contained in this Contract. All subcontracts procured by the Successful Vendor with a value of greater than fifty thousand dollars ($50,000) must be competitively bid unless the subcontractor is a sole source of the goods or services to be provided. All subcontractors selected by the Successful Vendor and approved in writing by the Director must comply with all the applicable terms and conditions set forth in the Contract as they apply to the subcontractor. If any part of the work contemplated under the RFP is to be subcontracted, and is subject to approval as noted above, the Successful Vendor shall provide a complete description of the work to be done, any and all information concerning the subcontractor as the Director may require, and shall submit to the Director the names of the key subcontractor personnel to be assigned to the work prior to subcontracting the work. The Successful Vendor shall be required to review semiannually the performance of its subcontractors and the costs associated with the services they provide to determine whether there has been a cost increase or decrease. Such cost increases and/or decreases may be the basis for discussions among the parties concerning changes in rates of compensation to the Successful Vendor. If the use of any subcontractor is approved by the OSL, the OSL shall have the right to communicate with the subcontractor in all matters related to the performance of the Contract. The OSL will keep the Successful Vendor informed in case of such direct communication. Taxation - The state of Ohio and the OSL are exempt from Federal excise taxes and all State and local taxes, unless otherwise provided. The OSL does not agree to pay any taxes on commodities, goods, or services acquired from, or by, the Successful Vendor. The Successful Vendor must, however, comply with all statutes, rules and regulations governing Federal, State and local income, sales and excise taxes. Termination - In the event of any termination under the Contract, the Successful Vendor shall submit a final invoice for goods and services rendered up to and through the actual date of termination, and shall be compensated for such goods and services. 1. Suspension or Termination Upon Occurrence of Certain Events - The Contract may be suspended or terminated in whole or in part by the Director upon written notice to the Successful Vendor, in the event of one or more of the following occurrences: Ohio State Lottery 41 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal a. it appears to the Director the Successful Vendor: (i) has failed to perform satisfactorily any material requirement of the Contract; (ii) is in violation of a specific provision of the Contract; (iii) full and satisfactory performance of the Contract by the Successful Vendor is determined by the Director to be substantially endangered; or (iv) tests show the Gaming System to be unfit for the purposes of the State-run Lottery. (Should such an event occur, the Director shall give the Successful Vendor written notice of his/her intent to terminate pursuant to this Subsection, and the Successful Vendor shall have ten (10) days or such additional period as the Director in his sole discretion may determine is reasonably necessary to cure the condition, failure or violation giving rise to the Director's right to so terminate or suspend); b. any statement, representation, warranty or certification made or furnished by the Successful Vendor to the OSL in connection with its RFP Proposal, documents in support thereof or the Contract, shall be determined by the Director to be materially false, incorrect, or incomplete; c. the Successful Vendor has made an assignment for the benefit of creditors; d. proceedings have commenced in bankruptcy or reorganization of the Successful Vendor, its parent corporation, if any, or any subsidiary, or for the readjustment of any of their respective debts, under the Bankruptcy Act, as amended, or any part thereof, or under any other act or law, whether state or federal, for the relief of debtors, now or hereafter existing, shall be commenced by or against any of them and have not been discharged within thirty (30) days after commencement; e. a receiver or trustee is appointed for the Successful Vendor, its parent corporation, if any, or any subsidiary or for any substantive part of any of its respective assets, or any proceedings are instituted for dissolution or full or partial liquidation of the Successful Vendor, and such receiver or trustee has not been discharged within thirty (30) days of their commencement; or the Successful Vendor, its parent corporation, if any, or any subsidiary shall discontinue business or materially change the nature of its business; f. any person, agency or instrumentality agreeing to provide financial assistance to the work contemplated under the Contract, or any portion thereof, should suspend or terminate such assistance in accordance with the terms of any Agreement provided for such assistance; g. a principal or an employee of the Successful Vendor or a subcontractor commits a crime of moral turpitude, misrepresentation, fraud or a gambling offense; and h. the Ohio General Assembly fails to appropriate funds for any part of the hardware, equipment, software or services contemplated hereunder. 2. Voluntary Termination – The OSL reserves the right to cancel the Contract at any time, without cause, with thirty (30) calendar days written notice to the Successful Vendor. In the event of such a termination, the Successful Vendor shall also be paid for any services rendered up through the date of termination based upon a final, verified invoice to be issued by the Successful Vendor. Travel Expenses and Office Expenses - Any travel or per diem, or office expenses required by the Successful Vendor to carry out its obligations under the Contract shall be at the Successful Vendor's expense and shall not be reimbursed by the OSL. Warranties of Contractor – The Selected Contractor covenants and warrants as follows: 1. It is lawfully organized and constituted under all federal, state and local laws, ordinances and other authorities of its domicile and is otherwise in full compliance with all legal requirements of its domicile. 2. It is possessed of the legal authority and capacity to enter into and perform the Contract; and the Successful Vendor’s representative who is executing the Contract is so authorized by the Contractor. Ohio State Lottery 42 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal 3. It has been duly authorized to operate and do business in the state of Ohio and all places where it shall be required to conduct business under the Contract; it has obtained, at no cost to the state of Ohio, all necessary licenses and permits required in connection with the Contract; and it shall fully comply with all laws, decrees, labor standards and regulations of its domicile and such other location where performance may occur during the term of the Contract. 4. It has no present interest and shall not acquire any interest that would conflict in any manner with Contract duties and obligations under the Contract. 5. The services rendered shall in all respects conform to, and function in accordance with, the specifications and designs requested in this solicitation. Its performance under the Contract shall not infringe on any patent, copyright, trademark, service mark or other intellectual property rights of any other person or entity and shall not constitute the unauthorized use of any trade secret of any other person or entity Ohio State Lottery 43 Lottery Gaming System RFP Amendment November 21st, 2007 Appendix C
    • Request for Proposal OSL Y-1 Lottery Gaming System RFP Appendix Y