request for proposals · 3.23 proposal affidavit 25 3.24 conflict of interest affidavit and...

REQUEST FOR PROPOSALS

FOR

VETERANS’

ORGANIZATION INSTANT

TICKET LOTTERY

MACHINES AND RELATED

SERVICES

#2014-02

From:

Maryland State Lottery and Gaming Control Agency

Montgomery Park Business Center

1800 Washington Boulevard, Suite 330

Baltimore, MD 21230

Issue Date: August 28, 2013

Due Date: October 9, 2013

NOTICE: Prospective Offerors who have received this document from http://emaryland.buyspeed.com or from a source other than the Procurement Officer, and who wish to assure receipt of any amendments or other materials related to this RFP, should immediately contact the Procurement Officer and provide their name and e-mail or mailing address so that information relative to this Request For Proposals can be sent to them.

Minority Business Enterprises are Encouraged to Respond to this Solicitation

http://emaryland.buyspeed.com/


KEY INFORMATION SUMMARY SHEET Title of RFP: Veterans’ Organization Instant Ticket Lottery Machines and Related

Services

RFP Number: 2014-02

RFP Issue Date: August 28, 2013

The Maryland State Lottery and Gaming Control Agency (―MLGCA‖) is soliciting proposals from qualified Offerors to provide Veterans’ Organization Instant Ticket Lottery Machines and Related Services, to include but not limited to: providing the design, development, installation, implementation, operation and maintenance of a central monitor and control system (―ITLM Central System‖), providing Instant Ticket Lottery Machine (―ITLM‖) design, development, installation, implementation, support, supplies and maintenance at Veterans’ Organizations specified in the Lottery Law and providing the Instant Ticket design, Instant Ticket planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities, as more fully described in this Request for

Proposals (―RFP‖). Offerors are invited to subcontract with other vendors to provide all of the requirements of the RFP, but Offerors must submit proposals encompassing all of the services required in the RFP and may not submit proposals for only certain services of the RFP.

Procurement Method: Competitive Sealed Proposals (COMAR 21.05.03)

Contract Term: Approximately Five (5) year term, w/ 1 five (5) year

renewal option. (Tentative Term beginning December 20, 2013

– December 19, 2018)

Proposals to be Maryland State Lottery and Gaming Control Agency

Submitted to: Montgomery Park Business Center 1800 Washington Boulevard, Suite 330 Baltimore MD 21230

ATTN: Robert W. Howells, Procurement Officer

Tel: 410-230-8789 Fax: 410-230-8727 e-mail: [email protected]

Communications: The Procurement Officer listed above is the only source of

information regarding this RFP. If you receive this information from another source, contact the Procurement Officer immediately.

Pre-Proposal September 12, 2013 at 10:00 a.m. (Local Time)

Conference: Maryland State Lottery and Gaming Control Agency

Deadline for Receipt October 9, 2013 by 2:00 p.m. (Local Time)

Of Proposals:

MBE Participation Goal: An MBE subcontracting goal of 10.0% has been established for

the Contract resulting from this RFP.

mailto:[email protected]

State of Maryland Notice to Offerors/Contractors

In order to help us improve the quality of State solicitations, and make our procurement processes more responsive and business friendly, we ask that you provide comments and suggestions regarding the enclosed RFP. Please return your comments with your proposal. If you have chosen not to submit a proposal for this project, please e-mail ([email protected]) or fax (410-230-8727) this completed form to the attention of Robert W. Howells. Thank you for your assistance.

Contract Number: 2014-02; Title: VETERANS’ ORGANIZATION INSTANT TICKET LOTTERY

MACHINES AND RELATED SERVICES

I. If you have responded with a ―no bid-, please indicate the reasons below: ( ) Other commitments preclude our participation at this time. ( ) The subject of the solicitation is not something we ordinarily provide. ( ) We are inexperienced in the work/commodities required. ( ) The specifications are unclear, too restrictive, etc. (Explain in Remarks section) ( ) The scope of work is beyond our present capacity. ( ) Doing business with Maryland Government is simply too complicated. (Explain

in Remarks section) ( ) We cannot be competitive. (Explain in remarks section) ( ) Time for completion of the proposal is insufficient. ( ) Start up time is insufficient. ( ) Bonding/Insurance requirements are restrictive. (Explain in Remarks section) ( ) Proposal requirements, other than specifications, are unreasonable or too risky.

(Explain in Remarks section) ( ) MBE requirements. (Explain in remarks section) ( ) Prior experience with State of Maryland contracts was unprofitable or otherwise

unsatisfactory. (Explain in remarks section) ( ) Payment schedule too slow. ( ) Other:

II. If you have submitted a proposal, but wish to offer suggestions or express concerns, please use the Remarks section below.

Remarks:

Vendor Name: Date:

Contact Person: Phone/e-mail:

Address:

THANK YOU!


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TABLE OF CONTENTS

SECTION I. INTRODUCTION/OBJECTIVE 1

1.1 SUMMARY STATEMENT 1

1.2 OBJECTIVES 2

1.3 OFFEROR MINIMUM REQUIREMENTS 3

1.4 GLOSSARY OF TERMS USED IN THIS REQUEST FOR PROPOSALS (RFP) 3

SECTION II. MLGCA BACKGROUND 10

2.1 ENACTING LEGISLATION 10

2.2 SENATE BILL 1 10

2.3 HOUSE BILL 646 10

2.4 VETERANS’ ORGANIZATIONS 11 SECTION III. GENERAL SOLICITATION TERMS AND CONDITIONS 12

3.1 ISSUING OFFICE/PROCUREMENT OFFICER 12

3.2 CONTRACT DURATION AND TYPE 13

3.3 e-MARYLAND MARKETPLACE ("eMM") 13

3.4 SCHEDULE 13

3.5 PRE-PROPOSAL CONFERENCE 14

3.6 QUESTIONS 14

3.7 PROPOSAL SUBMISSION 15

3.8 ORAL PRESENTATIONS/SITE VISITS DURING EVALUATION 16

3.9 DURATION OF OFFER 17

3.10 OWNERSHIP OF MATERIAL 17

3.11 PROPOSAL DISCLOSURE PROHIBITION 17

3.12 METHOD OF PROCUREMENT 18

3.13 REVISIONS TO THE RFP 18

3.14 INFORMATION NOT CONTAINED IN THE RFP 18

3.15 CANCELLATION OF THE RFP; REJECTION OF ALL PROPOSALS 18

3.16 PROPOSAL ACCEPTANCE; DISCUSSIONS 18

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3.17 INCURRED EXPENSES AND ECONOMY OF PREPARATION 19

3.18 PUBLIC INFORMATION ACT NOTICE 19

3.19 OFFEROR/CONTRACTOR RESPONSIBILITIES 19

3.20 PROTESTS 19

3.21 MINORITY BUSINESS ENTERPRISE SUBCONTRACT PARTICIPATION 20

3.22 ARREARAGES 25

3.23 PROPOSAL AFFIDAVIT 25

3.24 CONFLICT OF INTEREST AFFIDAVIT AND DISCLOSURE 25

3.25 CONTRACT AFFIDAVIT 26

3.26 RECIPROCAL PREFERENCE - RESIDENT OFFEROR 26

3.27 VERIFICATION OF REGISTRATION AND TAX PAYMENT 26

3.28 PAYMENTS BY ELECTRONIC FUNDS TRANSFER 27

3.29 MULTIPLE OR ALTERNATE PROPOSALS 27

3.30 FALSE STATEMENTS 27

3.31 ANTI-BRIBERY 28

3.32 NONDISCRIMINATION 28

3.33 LIVING WAGE REQUIREMENT 28

3.34 PROMPT PAYMENT REQUIREMENT 29

3.35 LOCATION OF PERFORMANCE OF SERVICES 29

SECTION IV. MANDATORY CONTRACTUAL PROVISIONS-CONTRACT 30

4.1 SCOPE OF THE CONTRACT 30

4.2 CONTRACT TERM 31

4.3 COMPENSATION AND METHOD OF PAYMENT 32

4.4 CONTRACT MODIFICATION 33

4.5 NON-HIRING OF OFFICIALS AND EMPLOYEES 33

4.6 DISPUTES 33

4.7 MARYLAND LAW PREVAILS 33

4.8 NONDISCRIMINATION IN EMPLOYMENT 33

4.9 CONTINGENT FEE PROHIBITION 35

4.10 MULTI-YEAR CONTRACTS CONTINGENT UPON APPROPRIATIONS 35

4.11 TERMINATION FOR DEFAULT 35

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4.12 TERMINATION FOR CONVENIENCE 36

4.13 DELAYS AND EXTENSIONS OF TIME 36

4.14 SUSPENSION OF WORK 37

4.15 PRE-EXISTING REGULATIONS 37

4.16 PAYMENT OF STATE OBLIGATIONS 37

4.17 FINANCIAL DISCLOSURE 38

4.18 POLITICAL CONTRIBUTION DISCLOSURE 38

4.19 RETENTION OF RECORDS 39

4.20 COMPLIANCE WITH LAWS / WARRANTIES 39

4.21 COST AND PRICE CERTIFICATION 39

4.22 SUBCONTRACT,ASSIGNMENT,PROHIBITION ON AFFILIATED ENTITY 39

4.23 INDEMNIFICATION AND RESPONSIBILITY FOR CLAIMS & LIABILITY 40

4.24 NO WAIVER OF RIGHT 41

4.25 CHANGE IN FINANCIAL CONDITION 41

4.26 BANKRUPTCY 41

4.27 TAXES 42

4.28 LIABILITY FOR LOSS OF DATA OR RECORDS 42

4.29 PROPERTY RIGHTS/USUFRUCT 42

4.30 RIGHTS IN PRODUCTS 43

4.31 ROYALTIES 44

4.32 INTELLECTUAL PROPERTY PROTECTION 44

4.33 RIGHT TO REJECT OR SUBSTITUTE PERSONS PROPOSED 45

4.34 CONFLICT OF INTEREST 46

4.35 CONFIDENTIALITY 46

4.36 SET-OFF 47

4.37 DRUG AND ALCOHOL FREE WORKPLACE 47

4.38 DISSEMINATION OF INFORMATION 47

4.39 MLGCA TICKET PURCHASE AND PRIZE PAYMENT RESTRICTIONS 47

4.40 CONTRACTOR COOPERATION 47

4.41 CHANGES, ALTERATIONS OR MODIFICATIONS IN THE SERVICES 48

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4.42 AUDIT REQUIREMENTS 48

4.43 PRODUCT SUBSTITUTION/TECHNICAL ENHANCEMENTS 50

4.44 VARIATIONS IN ESTIMATED QUANTITIES 50

4.45 OVERREDEMPTION 51

4.46 SOFTWARE PROGRAMMING ERRORS 51

4.47 RESPONSIBILITY FOR CONTRACTOR ERRORS 51

4.48 LIQUIDATED DAMAGES 51

4.49 BOND REQUIREMENTS 59

4.50 INSURANCE REQUIREMENTS 62

4.51 MINORITY BUSINESS ENTERPRISECOMPLIANCE 64

4.52 INFORMATION TECHNOLOGY SECURITY POLICY & STANDARDS 66

4.53 GOOD FAITH 66

4.54 NEWS/PRESS RELEASES 66

4.55 SEVERABILITY 66

4.56 ADVERSE INTEREST 66

4.57 NON-EXCLUSIVE RIGHTS 67

4.58 CONTRACT AFFIDAVIT 67

4.59 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA) 67

4.60 COMPLIANCE WITH LIVING WAGE REQUIREMENTS 67

4.61 RELATIONSHIP OF THE PARTIES 67

4.62 PROMPT PAYMENT 68

4.63 NOTICES 70

4.64 ENTIRE AGREEMENT 71 SECTION V. TECHNICAL SPECIFICATIONS/SCOPE OF WORK 73

5.1 GENERAL 73

5.2 CENTRAL MONITOR AND CONTROL SYSTEM 75

5.3 ITLM CENTRAL SYSTEM MONITORING 88

5.4 ITLM CENTRAL SYSTEM PRIMARY & BACK-UP SITE REQUIREMENTS 88

5.5 ITLM CENTRAL SYSTEM TELECOMMUNICATIONS NETWORK 93

5.6 ITLM CENTRAL SYSTEM DISASTER RECOVERY 93

5.7 ITLM CENTRAL SYSTEM SECURITY 94

5.8 ITLM CENTRAL SYSTEM MANUALS AND DOCUMENTATION 100

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5.9 ITLM CENTRAL SYSTEM STAFFING 101

5.10 ITLM CENTRALSYSTEM MAINTENANCE PROGRAM, SERVICE 104

5.11 ITLM CENTRAL SYSTEM ACCEPTANCE TESTING 106

5.12 ITLM CENTRAL SYSTEM IMPLEMENTATION 107

5.13 ITLM CENTRAL SYSTEM - FACILITY REQUIREMENTS 113

5.14 ITLM CENTRAL SYSTEM SERVER BASED DOWNLOADABLE GAMING 113

5.15 ITLM CENTRAL SYSTEM DELIVERABLES 114

5.16 ITLM HARDWARE SPECIFICATIONS 117

5.17 ITLM COMMUNICATIONS 123

5.18 ITLM SOFTWARE REQUIREMENTS 125

5.19 ITLM SPECIFICATIONS 127

5.20 ITLM LOCAL SUPPORT, STAFFING AND SERVICES 130

5.21 ITLM TESTING 132

5.22 ITLM OPERATIONS 133

5.23 ITLM PERFORMANCE 136

5.24 ITLM REPORTS 138

5.25 ITLM SELECTION AND ORDERING PROCESS 139

5.26 TICKET REDEMPTION UNIT 139

5.27 INSTANT TICKET SERVICES REQUIRED 139

5.28 INSTANT TICKET SOFTWARE REQUIREMENTS 146

5.29 INSTANT TICKET DELIVERY SERVICES TO FACILITIES 149

SECTION VI. FINANCIAL PROPOSAL 152

6.1 GENERAL 152

6.2 CONTRACT PRICES 152

6.3 INSTRUCTIONS FOR APPENDIX F-FINANCIAL PROPOSAL SHEET 153

SECTION VII. INFORMATION REQUIRED IN OFFEROR’S PROPOSAL

7.1 TWO VOLUME SUBMISSION

7.2 PROPOSALS

7.3 VOLUME I – TECHNICAL PROPOSAL

7.4 VOLUME II – FINANCIAL PROPOSAL

7.5 SUBMISSION DEADLINE

154

154

154

155

170

170

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SECTION VIII. EVALUATION AND SELECTION PROCEDURE

8.1 QUALIFYING PROPOSAL

8.2 EVALUATION COMMITTEE

8.3 TECHNICAL EVALUATION

8.4 CRITERIA FOR TECHNICAL EVALUATION

8.5 FINANCIAL EVALUATION

8.6 DISCUSSIONS

8.7 BEST AND FINAL OFFER

8.8 FINAL RANKING AND RECOMMENDATION FOR AWARD

8.9 DEBRIEFING OF UNSUCCESSFUL OFFERORS

171

171

171

171

171

172

172

172

173

173

SECTION IX. APPENDICES 174

APPENDIX A – PROPOSAL AFFIDAVIT 175

APPENDIX B – CONTRACT AFFIDAVIT 182

APPENDIX C – PRE-PROPOSAL CONFERENCE RESPONSE FORM 186

APPENDIX D – MONORITY BUSINESS ENTERPRISE INSTRUCTIONS/FORMS187

ATTACHMENT D-1 CERTIFIED MBE UTILIZATION AND FAIR SOLICATION 190

ATTACHMENT D-2 OUTREACH EFFORTS COMPLIANCE STATEMENT 193

ATTACHMENT D-3 SUBCONTRACTOR PROJECT PARTICIPATION STATEM194

ATTACHMENT D-4 CONTRACTOR PAID/UNPAID INVOICE REPORT 195

ATTACHMENT D-5 MBE SUBCONTRACTOR PAID/UNPAID INVOICE REPOR196

APPENDIX E – VENDOR ELECTRONIC FUNDS TRANSFER (EFT) 197

APPENDIX F – FINANCIAL PROPOSAL SHEET 199

APPENDIX G – CONFLICT OF INTEREST AFFIDAVIT AND DISCLOSURE 200

APPENDIX H – LITIGATION/PROTEST BOND 201

APPENDIX I – PROPOSAL BOND 202

APPENDIX J – PERFORMANCE BOND 204

APPENDIX K – LIVING WAGE REQUIREMENTS 207

APPENDIX L – AUTHORIZATION FOR RELASE OF INFORMATION 211

APPENDIX M – LOCATION OF PERFORMANCE OF SERVICES DISCLOSURE 212

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SECTION I. INTRODUCTION/OBJECTIVE

1.1 SUMMARY STATEMENT

1.1.1 In Maryland, legislation has been passed authorizing the development, implementation and operation of an Instant Ticket Lottery Machine System (―ITLM System‖) and specifying that the Maryland State Lottery and Gaming Control Agency (―MLGCA‖) regulate its operation. Therefore, it is the intent of the MLGCA to procure through this Request for Proposals (―RFP‖) an Instant Ticket Lottery Machine Central Monitor and Control System (―ITLM Central System‖), Instant Ticket Lottery Machines (―ITLM‖) and related services and support.

1.1.2 The MLGCA is issuing this RFP to invite qualified Offerors to submit proposals to provide the design, development, installation, implementation, operation, and maintenance of a ITLM Central System for an ITLM System which includes, but is not limited to, a central computer system located at the MLGCA's headquarters, a hot back-up system located off-site, software, and a Telecommunications Network that will connect each ITLM Facility and all ITLMs to the ITLM Central System as described more fully in this RFP. Qualified Offerors proposals shall provide for the design, development, installation, implementation, support, supplies and maintenance of ITLMs at Veterans’ Organizations specified in the Lottery Law, as more fully described in this RFP. Qualified Offerors shall also provide the Instant Ticket design, Instant Ticket planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities. The MLGCA desires to lease, through a revenue sharing agreement, the equipment specified herein and the Contractor shall remove and take possession of the leased equipment upon expiration of the Contract.

1.1.3 The Lottery Law authorizes the issuance of up to five (5) ITLMs each to

MLGCA licensed organizations that are tax exempt and organized as a Veterans’ Organization under § 501(C)(19) or § 501(C)(4) of the Internal Revenue Code. It is estimated that there are currently one hundred and fifty (150) qualified organizations that may apply for the ITLMs. It is anticipated that this number may increase as new organizations file for and obtain § 501(C)(19) or § 501(C)(4) status. Operation of ITLMs is expected to begin in January 2014 and continue to be phased in throughout the term of the contract as qualified Veterans’ Organizations are licensed by the MLGCA. These amounts are estimates only and are not a guarantee of any minimum or maximum total amounts under this Contract.

1.1.4 Offerors are invited to subcontract with other vendors to provide some of

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the requirements of the RFP, but Offerors must submit proposals encompassing all of the services required in the RFP and may not submit proposals for only a portion of the services specified in the RFP.

1.1.5 The MLGCA reserves the right to cancel this RFP and/or reject all

proposals, in whole or in part, when this action is determined to be fiscally advantageous to the State or otherwise in its best interest.

1.1.6 The MLGCA intends to make a single contract award as a result of this

RFP. 1.1.7 The Contract resulting from this RFP will be for a term of approximately

five (5) years, tentatively beginning on or about December 20, 2013 and extending through December 19, 2018.

The period of time from the start date of this Contract until the date when the first ITLM Facility commences live operations, which is estimated to be the period approximately from December 20, 2013 through February 10, 2014, shall be the Start-up Period. During the Start-up Period the Contractor shall install the ITLM Central System, ITLMs and all related equipment and telecommunications necessary to perform all functions required by this Contract and prepare the ITLM System to be fully operational by February 10, 2014, or other date specified by the MLGCA.

The MLGCA shall have, at its sole discretion, the unilateral right to extend the Contract for one (1) additional five (5) year period, for a total Contract term of approximately ten (10) years.

1.2 OBJECTIVES

The MLGCA has the following objectives for issuing this RFP and entering into a Contract for Veterans’ Organization Instant Ticket Lottery Machines and Related Services:

1. To maximize Net Revenue from ITLMs for the benefit of the

Veterans’ Organizations and the State of Maryland;

2. To obtain Instant Ticket Lottery Machines and Related Services that will meet the gaming product needs of the MLGCA for the term of the Contract and that will be sufficiently flexible to meet the MLGCA's evolving requirements;

3. By contracting with a vendor to a) take maximum advantage of the design and production capabilities, implementation knowledge, and operational knowledge available in the marketplace, b) ensure sufficient product mix and product availability, and c) provide specialty themes or other proprietary themes, as needed;

4. To obtain Instant Ticket Lottery Machines and related services that are operationally sound, incorporate the highest level of integrity and

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security, and minimize risk for the MLGCA;

5. To obtain Instant Ticket Lottery Machines that will lead to high Veterans’ Organization and player satisfaction for quality and performance; and

6. To ensure that Instant Ticket Lottery Machines and Related Services are available to the MLGCA and fully operational by February, 2014.

1.3 OFFEROR MINIMUM REQUIREMENTS

1.3.1 EXPERIENCE

The Offeror shall have a minimum of five (5) years experience in at least one or more North American State or Provincial Lottery(ies) in the production, implementation and operation of a ITLM Central System and/or gaming terminals.

1.3.2 TESTED AND CERTIFIED EQUIPMENT

The software and hardware proposed shall currently be in operation in a regulated North American State or Provincial Lottery jurisdiction. (Note: Equivalent or improved newer releases or model numbers of the proposed products and their architectures are acceptable at time of installation as accepted by and agreed to in writing by the MLGCA. The MLGCA shall not accept configuration items that are at the specifications or concept stage only, early in development, or that are products announced but not yet engineered and ready for manufacture and delivery. The MLGCA acknowledges that the ITLM Central System and ITLMs may require adaptation to Maryland's requirements and that component parts may need to be ordered and assembled for delivery. The ITLM Central System and ITLMs are subject to testing by a MLGCA Independent Certified Testing Laboratory that has tested systems for the MLGCA within the past three years.)

1.4 GLOSSARY OF TERMS USED WITHIN THIS REQUEST FOR

PROPOSALS (RFP)

ADA - Americans With Disabilities Act, of 1990 including changes made by the ADA Amendments Act of 2008, and regulations promulgated pursuant to that statute.

Ad Hoc Reports - Reports generated as needed as opposed to on a production schedule.

Applicant – A Person that submits a Proposal in response to this RFP.

(Also, Offeror) Associated Equipment – Hardware located on the Licensee’s premises

that is connected to the Instant Ticket Lottery Machine system for the

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purpose of performing communication, validation, or other functions, but not including the communication facilities of a regulated utility or the Instant Ticket Lottery Machines.

Back-up Data Center ("BDC") - The secondary centralized storage facility

used by an application service provider, which manages and distributes software-based services and solutions to customers across a wide area network from a central data center. For purposes of the MLGCA's ITLM Central System, the BDC is the real-time functional duplicate of the Primary Data Center (PDC). It is geographically separate from the PDC, to prevent a disaster from affecting both Centers at the same time.

Back-up Site – The location where the Back-up Data Center is located. Back-up System – The Back-up/redundant environment that comprises the

components of the ITLM Central System, taken as a single physical and/or logical group, that are designated as being redundant to the Primary System. The Back-up System is responsible for the accurate processing of a transaction in a secure manner if the Primary System is not functional.

COMAR – The Code of Maryland Regulations (available at

http://www.dsd.state.md.us/comar/). Regulations governing the MLGCA are found in COMAR Title 36. Regulations governing the State procurement process are found in COMAR Title 21.

Connectivity - A system’s or device’s ability to link with other systems or

devices, including third party systems or devices. Contract - The Contract entered into between the MLGCA and a selected

Offeror responding to this RFP. The Contract will include all State Mandatory Contractual Provisions and will incorporate the entire RFP, and any Amendments, and all or indicated portions of the selected Offeror’s Proposal, as well as any other provisions indicated in the Contract.

Contract Manager (“CM”) – The designated person as the single point-of-

contact with the authority and knowledge to issue work orders and to resolve all matters in connection with the Contract on behalf of the MLGCA. See Section 3.1.2 for the designated Contract Manager.

Contractor - An entity having a Contract with the MLGCA. The term

Contractor shall apply to the successful Offeror who is awarded a Contract resulting from this RFP.

Days – Calendar days unless otherwise specified.

http://www.dsd.state.md.us/comar/

5

Deal – A pre-determined quantity of pre-printed Instant Tickets, among which are a predetermined and fixed quantity of winning chances, each of which rewards a predetermined prize value and may include a set or series of pre-printed Instant Tickets.

Director - The Director of the MLGCA. EFT - Electronic Funds Transfer through a bank employing the Automated

Clearing House (―ACH‖) network. Failover - Hardware, software or manually initiated method of continuing

ITLM Central System processing in the event of System, component, application, communications or operation failure(s), in as short a time as possible and with little or no impact to the ITLM network. The remaining system(s) shall immediately assume the load in case of failure in one system, without loss or corruption of any data and transactions received prior to the time of the failure.

Facility – A licensed Veterans’ Organization at which Players may play

ITLMs. FY – Maryland State Fiscal Year, July 1 – June 30. For example, FY14

represents the period beginning July 1, 2013 through June 30, 2014. Gross Terminal Income - Wagers less payouts plus or minus any

adjustments. Instant Ticket – A pre-printed ticket purchased from a Deal. Instant Ticket Lottery Machine (“ITLM”) (1) Any machine or other device that, on insertion of a bill, ticket or

similar item, or on payment of any consideration:

(i) is available to play or simulate the play of any game of chance in which the results, including the options available to the Player, are randomly determined by the composition of the deal; and (ii) by the element of chance, that must be wholly within the pre-printed instant ticket, may deliver or entitle the Player who operates the machine or device to receive cash, premiums, merchandise, tokens, or anything of value, whether the payout is made automatically from the device or in any other manner.

(2) ―Instant Ticket Lottery Machines includes a machine or device:

(i) that does not directly dispense money, tokens, or anything of value to winning players; and (ii) that uses an electronic credit system making the deposit of bills,

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coins, or tokens unnecessary.

(3) ―Instant Ticket Lottery Machines‖ does not include an authorized slot machine operated by an eligible organization under Title 12, Subtitle 3 of the Criminal Law Article; machines related to Lottery Instant Tickets (―Scratch-Offs‖) procured by the Lottery under the Instant Ticket Games and Related Services Contract (#2013-01); Instant Ticket Vending Machines (―ITVM‖) procured by the Lottery under the Instant Ticket Vending Machines and Related Services Contract (#2008-26); or Video Lottery Terminals (―VLT‖) described in 9-1A State Government Article.

Instant Ticket Lottery Machine Central Monitor and Control System

(“ITLM Central System”) – The hardware, software and network components which link and support all instant ticket lottery machines and the computer system located at the MLGCA’s headquarters to which instant ticket lottery machines communicate for the purposes of: (1) Information retrieval; (2) Validation of instant ticket play; (3) Retrieval of the win and loss determination from ITLMs; (4) Programs to activate and disable ITLMs; and (5) Validation of software.

Instant Ticket Lottery Machine Operation License (“Operation

License”) – A License issued to a person to operate a Veterans’ Organization Facility that allows Players to operate no more than five (5) ITLMs.

Instant Ticket Lottery Machine System (“ITLM System”) – The ITLM

Central System, ITLMs, Instant Tickets, and associated software and other components.

Key Personnel (“Key Person”) – Critical employees of the Contractor

identified in its proposal or upon Contract commencement who shall perform continuously for the duration of the Contract and may not be replaced without prior approval of the MLGCA.

License – A License required under the Lottery Law. Licensee – An entity that has been issued a License required under the

Lottery Law. Local Time - Time in the Eastern Time Zone (eastern Standard Time or

Eastern Daylight Time, as applicable) as observed by the State. Lottery Law – The Maryland State Lottery and Gaming Control Agency Law,

State Government Article, Title 9, Subtitle 1, Annotated Code of Maryland.

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Manufacturer –A person who:

(1) is engaged in the business of designing, building, constructing, assembling, manufacturing, or distributing an ITLM Central System, ITLMs, Associated Equipment or software, or the cabinet in which n ITLM is housed;

(2) produces a product that is intended for sale, lease, or other assignment to the MLGCA or a Licensee; and

(3) contracts with the MLGCA or a Licensee for the sale, lease, or other assignment of a product described in (1) above.

MBE Certification - A determination made by the Maryland Department of

Transportation that a legal business entity is certified as a Minority Business Enterprise.

MBE Liaison Officer - The person designated by the Lottery to be

responsible for administering the Minority Business Enterprise (MBE) Program.

MDOT - The Maryland Department of Transportation. Minority Business Enterprise ("MBE") - A business that has been

certified by the Maryland Department of Transportation to be a minority business enterprise. Any legal entity, other than a joint venture, organized to engage in commercial transactions, which is at least 51% owned and controlled by one or more individuals who are socially and economically disadvantaged; and managed by, and the daily business operations of which are controlled by, one or more of the socially and economically disadvantaged individuals who own it. Includes a not-for-profit entity organized to promote the interests of physically or mentally disabled individuals.

MLGCA - The Maryland State Lottery and Gaming Control Agency. MLGCC – The Maryland State Lottery and Gaming Control Commission. Notice to Proceed ("NTP") – A formal notification issued by the Procurement

Officer that: (1) directs the Contractor to perform work, and (2) as of a date contained in the NTP, to begin performance of the work.

Offeror – A Person that submits a proposal in response to this RFP. (Also,

Applicant) Person - Unless such a construction would be unreasonable, an individual,

corporation, partnership, business trust, statutory trust, or limited liability company.

Player – An individual who plays a ITLM at a Facility licensed by the

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MLGCA. Primary Site – The location where the Primary System is located. Primary System or Primary Data Center ("PDC") - The components of

the ITLM Central System, taken as a single physical and/or logical group, that are designated as being primarily responsible for the accurate processing of a transaction in a secure manner.

Proceeds – The part of the amount of money bet through ITLMs that is not

returned to successful Players. Progressive Jackpot – A prize that increases as one or more ITLMs are

connected to a Progressive Jackpot System. Progressive Jackpot System – A system capable of linking one or more

ITLMs in one or more licensed Facilities and offering one or more common Progressive Jackpots.

Procurement Officer - A person authorized by the MLGCA in accordance

with law or regulations to formulate, enter into, or administer contracts or make written determinations and findings with respect to them; and designated to be responsible for this RFP, the procurement process, the determination of scope issues in the Contract, and is the only State representative that can authorize changes to the Contract (Section 3.1.1).

Proposal – The response by an Offeror to a Request for Proposals (RFP)

issued by a procurement agency to obtain goods or labor. The response may include but is not limited to an Offeror’s price and terms for the proposed contract, a description of technical expertise, work experience, and other information as requested in the RFP.

Qualified Offerors – Those Responsible Offerors that submitted proposals

initially classified by the Procurement Officer as Reasonably Susceptible of Being Selected for Award (COMAR 21.05.03.03C.(1)).

Report - Information produced by the ITLM Central System that is viewed

via display, printed, or saved to a file depending on the needs of the MLGCA.

Responsible Offeror – An Offeror who has the capability in all respects to

perform fully the Contract requirements, and the integrity and reliability that shall assure good faith performance. (COMAR 21.01.02.01(77)).

RFP - This Request for Proposals for a Veterans’ Organization Instant

Ticket Machines and Related Services (#2014-02), dated August 28, 2013, including any amendments.

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Scheduled Reports - Reports that come included with the Contractor's

proposal or created for the MLGCA and that are produced on a regular production schedule.

Start-up Period - The period of time from the start date of this Contract until

the date when the first ITLM Facility commences live operations, during which time the Contractor shall install the ITLM Central System and all related equipment and telecommunications necessary to perform all functions required by this Contract and prepare the ITLM Central System to be fully operational. The Contractor shall not be paid or accrue the right to any payments under this Contract during the Start-up Period.

State - The State of Maryland. State-of-the-Art - The most current technology. The MLGCA shall have the

sole right to determine if the equipment and system proposed are state-of-the-art at the time the Proposal is received.

Subcontractor – Any person having an agreement with a contractor to

perform all or some of the contractor’s work under a contract with the MLGCA. Does not include an employee with an employment contract, or an employee organization with a collective bargaining agreement.

Telecommunications Network – A statewide data transport system that

connects equipment in ITLM Facilities to the Primary and Back-up Sites.

Veterans’ Organization – An organization that is tax exempt and organized

as a veterans’ organization under § 501(c)(19) or § 501(c)(4) of the Internal Revenue Code.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

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SECTION II. MLGCA BACKGROUND

The information provided in this Section II is for background and informational purposes only. Offerors should not rely solely on information in this Section for the preparation of their Proposals.

2.1 ENACTING LEGISLATION -During the 2012 second special session of the Maryland General Assembly, Senate Bill 1 was enacted relating to the legalization of ITLMs in the State. A summary of some of the provisions of these Bills is provided below. The full text may be accessed at the website of the Maryland General Assembly: http://mgaleg.maryland.gov.

2.2 SENATE BILL 1 - Senate Bill 1 authorizes the Director of the MLGCA to issue to

certain Veterans’ Organizations a license to operate not more than five (5) ITLMs. Under the legislation, Veterans’ Organizations that are issued a license shall locate and operate the ITLMs at its principal meeting hall in the county in which the Veterans’ Organization is located. Additionally, the conduct of gaming and the operation of ITLMs must be consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 MD. 16 (2001). Senate Bill 1 did not provide for the issuance of a license to Veterans’ Organizations in the following counties:

Caroline County;

Cecil County;

Dorchester County;

Kent County;

Montgomery County;

Queen Anne’s County;

Somerset County;

Talbot County;

Wicomico County; and

Worcester County. 2.3 HOUSE BILL 646 - During the 2013 session of the Maryland General Assembly,

House Bill 646 was enacted relating to Instant Ticket Lottery Machines at Veterans’ Organizations. This legislation removed Montgomery County from the list of counties that were not authorized to be issued a license under Senate Bill 1. The legislation also provided additional clarification to the requirement in Senate Bill 1 that the conduct of gaming and the operation of the ITLMs must be consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 Md. 16 (2001) as follows:

The State Lottery and Gaming Control Agency shall ensure that the element of chance in the conduct of gaming through the instant ticket lottery machines is consistent with the holding in the case of Chesapeake Amusements Inc. v. Riddle, 363 Md. 16 (2001), in that the element of chance must be wholly within the pre-printed instant lottery ticket, and that player enhancements in an instant ticket lottery machine may not affect the element of chance being wholly within the pre-printed instant lottery ticket.

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2.4 VETERANS’ ORGANIZATIONS

2.4.1 Section 9-117(a) of the Lottery Law requires Veterans’ Organizations, as a

licensed agent, to receive a regular commission of 5.5% from gross ticket sales. The Lottery Retailer regular commission will increase to 6% when a video lottery operation license for a video lottery facility in Baltimore City is issued. Additionally, a Veterans’ Organization may further receive a cashing fee not to exceed 3% of valid prizes paid.

2.4.2 In addition to the standard Lottery license agreement available at

mdlottery.com, the qualifying Veterans’ Organizations will enter into a contract with the MLGCA through a licensing agreement under which the Veterans’ Organization will remit, on a weekly basis to the MLGCA for deposit in the State Lottery Fund, the Proceeds from the operations of the ITLMs less the regular commission and cashing fee as required under § 9-112(d)(3) of the Lottery Law.

2.4.2. If the regular commission and cashing fee from ITLM operations

exceed the Proceeds, the Veterans’ Organization will receive a settlement deposit from the MLGCA in the same manner that a traditional Lottery Retailer would.

2.4.3 The MLGCA has chosen a lease model to avoid the capital outlay

requirements that would be required of the Veterans’ Organizations if a purchase model was adopted. Under § 9-112(d)(4) of the Lottery Law, the Veteran’s Organization is required to purchase or lease the ITLMs and furthermore the organization may not use receipts from the sales of tickets that would otherwise be credited to the State Lottery Fund under Section 2.4.2 above to pay for such purchase or lease. Consequently, in addition to the amounts submitted to the MLGCA under Section 2.4.2, the Veterans’ Organization will reimburse the MLGCA on a weekly basis an amount equal to the sum that is paid to the Contractor under Appendix F, in order to pay the MLGCA for the lease of the ITLMs and their related systems and support.

2.4.3.1 If ITLM net proceeds are zero or negative during a billing period, the

Veterans’ Organization shall not be required to make a payment for the lease of the ITLMs and their related systems and support.

2.4.4 Payments made by the MLGA to the Contractor for the services provided

under this RFP shall be in accordance with the provisions of Section 4.3 Compensation and Method of Payment which provides for monthly payments.

2.4.4.1 If ITLM net proceeds are zero or negative during a billing period there

shall be no payment to the Contractor.

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SECTION III. GENERAL SOLICITATION TERMS AND CONDITIONS THE OFFEROR SHALL PROVIDE IN ITS PROPOSAL A STATEMENT OF INTENT

TO COMPLY WITH THE TERMS, CONDITIONS, AND REQUIREMENTS SET FORTH

HEREIN. ALSO, THE OFFEROR SHALL PROVIDE IN ITS PROPOSAL ALL

INFORMATION REQUIRED BY THIS SECTION.

3.1 ISSUING OFFICE/PROCUREMENT OFFICER

This RFP is issued by the MLGCA. The MLGCA's Procurement Officer is the sole point of contact in the State with regard to all procurement matters relating to the services described herein. The MLGCA's Procurement Officer is the only person authorized to change, modify, amend, alter, clarify, etc., the specifications, terms, and conditions of this RFP and any contract awarded as a result of this RFP. The Contract resulting from this RFP will become binding and effective after approval by the MLGCA, the Attorney General, the Department of Budget and Management, and the Maryland Board of Public Works.

3.1.1 The sole point-of-contact in the State for the purposes of this RFP prior to award of the contract is the Procurement Officer listed below:

Robert W. Howells, Procurement Officer Maryland State Lottery and Gaming Control Agency Montgomery Park Business Center 1800 Washington Boulevard, Suite 330 Baltimore, MD 21230 Telephone: (410) 230-8789 Fax: (410) 230-8727 E-mail Address: [email protected]

The MLGCA may change the Procurement Officer at any time by written notice to the Contractor.

3.1.2 After the Contract is awarded, the MLGCA’s Contract Manager, who monitors the daily activities of the Contract and provides guidance to the Contractor, is:

Charles LaBoy, Assistant Director for Gaming Maryland State Lottery and Gaming Control Agency Montgomery Park Business Center 1800 Washington Blvd., Suite 330 Baltimore, MD 21230 Telephone: (410) 230-5588 Fax: (410) 230-8727 E-mail Address: [email protected]

The MLGCA may change the Contract Manager at any time by written notice to the Contractor.



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3.2 CONTRACT DURATION AND TYPE

The Contract awarded as a result of this RFP will be for an initial term of approximately five (5) years tentatively beginning on or about November 1, 2013 and extending through October 31, 2018. The MLGCA, at its sole option, shall have the unilateral right to extend the Contract for one (1) additional five (5) year renewal period, for a total contract term of ten (10) years.

The Contract awarded as a result of this RFP will be an Indefinite Quantity Contract

with Firm, Fixed Unit Prices as described in COMAR 21.06.03.02 & 21.06.03.06.

3.3 eMARYLAND MARKETPLACE (“eMM”)

1.Posting of Solicitation Documents: The New eMaryland Marketplace (―eMM‖), which became effective 1/3/2012, is the State's internet-based commerce system and is the single official source for procurement information. Vendors interested in doing business with the State are encouraged to register with eMM. The website for eMM is http://emaryland.buyspeed.com.

All efforts will be made to communicate with potential Offerors. However, the MLGCA is not responsible for failures to deliver by mail, e-mail, fax services, etc. In addition to other means, the RFP, Pre-Proposal Conference Summary,

Offeror questions and MLGCA’s responses, amendments to the RFP, and other

solicitation related information will be provided via eMM. The MLGCA will post relevant information to eMM, and it is the responsibility of interested parties to remain informed of any changes to this information by monitoring eMM.

2.Registration: In order to receive a contract award, an Offeror must be registered on eMM. There is no fee for registration on eMM. Information about eMM can be found at the Maryland Department of General Services website (www.dgs.maryland.gov). If additional assistance is required, the eMaryland Marketplace Support Team can be reached at [email protected].

3.4 SCHEDULE

The Key Dates for this procurement as stated below are for informational and planning purposes. The MLGCA reserves the right to change any of these dates.

Event Date

Issue Date of RFP August 28, 2013

Pre-Proposal Conference September 12, 2013

Due Date for Receipt of Proposals October 9, 2013

Oral Presentations and, if required, Site Visits (Approximately) October 28 – November 1, 2013

Contract Start December 20, 2013



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It is the MLGCA's intention to make a recommendation for award of the Contract resulting from this RFP in November 2013 and to submit that recommendation to the Board of Public Works for approval in December 2013. The Veteran’s Organizations Instant Ticket Lottery Machines and Related Services Contract shall be fully operational on December 20, 2013.

Even if other dates in the procurement process change, the Contract start date shall not change, unless otherwise indicated in writing by the MLGCA. By submitting a response to this RFP the Offeror/Contractor shall be committed to meet the required December 20, 2013 start date for the Start-up Period without regard to other changes in the schedule for this procurement.

3.5 PRE-PROPOSAL CONFERENCE

A Pre-Proposal Conference (―Conference‖) will be held on September 12, 2013, beginning at 10:00 a.m. Local Time, at the Maryland State Lottery and Gaming Control Agency, Montgomery Park Business Center-Suite 330, 1800 Washington Boulevard, Baltimore, Maryland 21230. All potential Offerors are encouraged to attend. Information presented may facilitate the Offeror’s ability to better prepare its proposal and its understanding and ability to meet the Minority Business Enterprise (MBE) goals.

As promptly as practicable subsequent to the Conference and in accordance with State Finance and Procurement Article, §13-210(a), of the Annotated Code of Maryland, a summary of the Conference will be distributed to all parties known to have received a copy of this RFP.

In order to assure adequate seating and other accommodations for this Conference, prospective attendees are requested to return the Pre-Proposal Conference Response Form (Appendix C) no later than September 9, 2013, to provide notice of the anticipated number of individuals who will attend.

If any individual interested in attending the Conference is in need of sign language interpretation or other special accommodations due to a disability, it is requested that a minimum of five (5) working days advance notice be provided. Reasonable efforts will be made to provide such special accommodation.

3.6 QUESTIONS

3.6.1 All questions must be submitted in writing to the Procurement Officer. E-mail is the preferred method of written communication. Telephone inquiries will not be answered.

The Procurement Officer will accept written questions from prospective Offerors prior to the Pre-Proposal Conference. If possible and appropriate, such questions will be answered at the Conference. No substantive question will be answered prior to the Conference. Questions, both oral and written, will also be accepted from attendees at the Conference.

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The MLGCA will prepare written responses to all questions received, both questions received prior to the Conference and questions asked at the Conference, and will distribute these responses to all prospective Offerors who are known to have received a copy of the RFP.

Questions will also be accepted subsequent to the Conference. All post-Conference questions shall be submitted in a timely manner to the Procurement Officer only. The Procurement Officer, based on the availability of time to research and communicate an answer, will decide whether an answer can be given before the Deadline for Receipt of Proposals. Answers to all substantive questions that have not previously been answered and are not clearly specific only to the requestor, will be distributed to all parties known to have received the RFP.

3.6.2 If an Offeror discovers any conflict, discrepancy, omission, or other error in this RFP, it shall immediately notify, in writing, the Procurement Officer. Should a potential Offeror identify alleged ambiguities in the specifications or Contract provisions included in this RFP, or should there be doubt as to the meaning or intent of any section herein, the potential Offeror must request clarification from the Procurement Officer prior to the Deadline for Receipt of Proposals. Failure to do so may prevent consideration of a future protest. (See COMAR 21.10.02.03)

3.6.3 If an Offeror fails to notify the MLGCA of an error in the RFP known to the Offeror, or an error that reasonably should have been known to the Offeror, the Offeror shall submit a proposal at the Offeror's own risk; and, if awarded the Contract, the Offeror shall not be entitled to additional compensation or time by reason of the error or its later correction.

3.7 PROPOSAL SUBMISSION

3.7.1 Deadline for Receipt of Proposals

The submission of Proposals shall be conducted as described in Section VII.

All proposals must be received by the Procurement Officer, at the address

listed in Section 3.1.1 and the Key Information Summary Sheet, no later than

2:00 p.m. (Local Time) on October 9, 2013, in order to be considered.

3.7.2 General Submission Requirements

Requests for extension of the Deadline for Receipt of Proposals (date or time) will not be granted. Offerors mailing proposals should allow sufficient mail delivery time to ensure timely receipt by the Procurement Officer as specified in Section 3.1.1.

Proposals may not be sent by fax or e-mail to the MLGCA.

All written materials must be in English.

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Upon its receipt, each proposal will be stored in a secure place until the time and date of opening. Proposals will not be opened publicly, but shall be opened in the presence of at least two (2) State employees. Proposals shall be shown only to State employees, members of the Evaluation Committee, or other persons deemed to have a legitimate interest in them.

A Register of Proposals will be prepared that identifies each Offeror. The Register of Proposals and identity of Offerors may not be disclosed before the Procurement Officer makes a determination recommending award of the Contract.

Except as provided in COMAR 21.05.02.10 and 21.05.03.02, Proposals or requests for withdrawal or modification received by the Procurement Officer after the Deadline for Receipt of Proposals will not be considered.

Modifications or Withdrawals: Proposals may be modified or withdrawn only by written notice to the Procurement Officer prior to the Deadline for Receipt of Proposals.

Late Actions: A proposal, request to withdraw a proposal, or a modification to a proposal is late if the Procurement Officer does not receive it by the Deadline for Receipt of Proposals. A late proposal, late request for withdrawal, or late modification will not be considered, except under the following circumstances and with approval of the office of the Attorney General:

A. When a late proposal, modification or withdrawal is received before

contract award and the proposal, modification or withdrawal would have been timely but for the action or inaction of State personnel directing the procurement activity or their employees.

B. A late modification of a successful proposal, which makes its terms

more favorable to the State, shall be considered at any time it is received and may be accepted at the sole discretion of the State. (See COMAR 21.05.02.10)

3.8 ORAL PRESENTATIONS/SITE VISITS DURING EVALUATION

Oral Presentations During the evaluation process, Offerors may be required to make individual oral presentations to the Evaluation Committee in order to clarify their proposals. Submission of a proposal does not guarantee an Offeror the opportunity to be invited to participate in oral presentations or discussions. An Offeror’s presentation must include the key staff that would be assigned to this project if awarded the Contract.

Site Visits The Evaluation Committee may make site visits to the Offerors' place of business or other location where Offeror is providing services to a third party.

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Scheduling The Procurement Officer will notify Offerors of the time, place, procedure, scope, and format for any oral presentations, demonstrations and/or site visits that may

be required. These events may be scheduled concurrently or separately at the

MLGCA’s discretion.

Representations Significant representations made by an Offeror during oral presentations, discussions, demonstrations and site visit(s) shall be reduced to writing by the Offeror. All such representations will become part of the Offeror’s Proposal and shall be binding if the Contract is awarded.

Expenses The Offeror shall provide travel, lodging, meals and related expenses both to and from the site visits for up to ten (10) representatives of the MLGCA.

3.9 DURATION OF OFFER

Proposals submitted in response to this RFP are irrevocable for one hundred eighty (180) days following the Deadline for Receipt of Proposals or of Best and Final Offers (―BAFO‖), if requested. This period may be extended only by written mutual agreement between the Offeror and the MLGCA.

3.10 OWNERSHIP OF MATERIAL

All opened proposals become the property of the MLGCA upon receipt and will not be returned to the Offerors. Selection or rejection of the proposal will not affect this right. Unopened financial proposals will be returned to the Offeror.

3.11 PROPOSAL DISCLOSURE PROHIBITION

Upon issuance of this RFP, neither the MLGCA nor its representatives shall discuss the contents of this RFP with potential Offerors or their representatives, other than in conjunction with the Pre-Proposal Conference, the Question and Answer process, oral presentations/site visits or discussions. (See RFP Section 3.5, 3.6, 3.8 and 8.6)

Until a Contract resulting from this RFP is awarded, no employee, agent, or representative of any Offeror may make available or discuss its proposal with any officer of the State of Maryland, any MLGCC member, or any employee, agent or representative of the MLGCA, unless specifically authorized to do so in this RFP or in writing by the Procurement Officer for the purposes of clarification, evaluation, and/or negotiation.

Prior to Contract award, Offerors shall not represent themselves to MLGCA staff, Vereran’s Organizations or the public as having the endorsement of the MLGCA or as a supplier of any products or services to the MLGCA.

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3.12 METHOD OF PROCUREMENT

The method of procurement used shall be Competitive Sealed Proposals pursuant to COMAR 21.05.03.

3.13 REVISIONS TO THE RFP

If it becomes necessary to revise any part of this RFP before the Deadline for Receipt of Proposals, the MLGCA will provide an amendment(s) to all parties who were sent or otherwise are known by the Procurement Officer to have obtained a copy of this RFP. Amendments will be posted on eMarylandMarketplace. Amendments will be distributed in reasonable time to allow prospective Offerors to consider them in preparing their proposals.

Amendments made after the Deadline for Receipt of Proposals will be sent only to those Offerors who submitted a timely proposal.

Acknowledgment of the receipt of all amendments to this RFP issued before the Deadline for Receipt of Proposals shall be required from all Offerors in their Transmittal Letter accompanying their Technical Proposal. (See Section 7.3.1) Acknowledgement of the receipt of amendments to the RFP issued after the Deadline for Receipt of Proposals shall be in the manner specified in the amendment notice. Failure to acknowledge receipt of amendments does not relieve the Offeror from complying with all terms of any such amendments.

3.14 INFORMATION NOT CONTAINED IN THE RFP

Proposals shall be based solely on the material contained in this RFP and any amendments thereto. Offerors are to disregard any newspaper advertisements, news articles, and any oral representations when preparing their proposals.

3.15 CANCELLATION OF THE RFP; REJECTION OF ALL PROPOSALS

The MLGCA may cancel this RFP or reject all proposals, in whole or in part, submitted in response to this RFP when this action is determined to be in the State's best interest.

3.16 PROPOSAL ACCEPTANCE; DISCUSSIONS

The MLGCA reserves the right to accept or reject any or all proposals, in whole or in part, received in response to this RFP, to waive or permit cure of minor irregularities, and to conduct discussions or negotiations with all qualified or potentially qualified Offerors in any manner necessary to serve the best interests of the State. This may be followed by submission of Offeror-revised proposals and a BAFO. This request does not commit the MLGCA to award a Contract.

The MLGCA also reserves the right, in its sole discretion, to award a contract based upon the written proposals received without prior discussions or negotiations with respect to those proposals.

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3.17 INCURRED EXPENSES AND ECONOMY OF PREPARATION

The MLGCA will not be responsible for any costs incurred by an Offeror in preparing and submitting a proposal, in making an oral presentation, in providing a demonstration, or in performing any other activities relative to this RFP. Proposals should be prepared simply and economically, providing a straightforward, concise description of how the Offeror proposes to meet the requirements of this RFP.

3.18 PUBLIC INFORMATION ACT NOTICE

An Offeror should give specific attention to the clear identification of those portions of its proposal that it deems to be confidential, proprietary commercial information or trade secrets, and provide justification of why such materials, upon request, should not be disclosed by the State pursuant to the Access to Public Records Act (“PIA”), Title 10, Subtitle 6, State Government Article, Annotated Code of Maryland. A blanket statement by the Offeror that its entire proposal is confidential proprietary commercial information or a trade secret is unacceptable. Proposals shall be open to public inspection only after Contract award, to the extent permitted by the PIA.

Offerors are advised that, upon request for this information from a third party, the Procurement Officer is required to make an independent determination whether the information may be disclosed. (See COMAR 21.05.08.01)

3.19 OFFEROR/CONTRACTOR RESPONSIBILITIES

The MLGCA will enter into a contractual agreement only with the selected Offeror. The selected Offeror shall be responsible for providing all products, equipment and services required by this RFP. The selected Offeror remains responsible for all work performed by, and any deliverable submitted by, a subcontractor. If an Offeror is the subsidiary of another entity, all information submitted by the Offeror such as, but not limited to, references and financial reports, shall pertain exclusively to the Offeror, unless the parent organization will guarantee the performance of the subsidiary. If applicable, the Offeror must provide an explicit statement that the parent organization will guarantee the performance of the subsidiary. (See Section 7.3.2)

3.20 PROTESTS

The State provides avenues for an Offeror to protest the award or the proposed award of a contract. Any protest or dispute related to this RFP or the resulting contract will be subject to Title 15, Subtitle 2 of the State Finance and Procurement Article, Annotated Code of Maryland, and COMAR Title 21, State Procurement Regulations, Subtitle 10, Administrative and Civil Remedies.

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3.21 MINORITY BUSINESS ENTERPRISE (MBE) SUBCONTRACT

PARTICIPATION GOAL

3.21.1 Minority business enterprises are encouraged to respond to this RFP.

3.21.2 Offerors are advised to carefully review these provisions as they will be closely scrutinized and monitored by the MLGCA for compliance. The

MLGCA will report procurement activity with all Minority Business Enterprises

(―MBEs‖) to the Governor’s Office of Minority Affairs.

3.21.3 Forms required to be submitted are contained in Appendix D: Minority Business Enterprise ("MBE") Instructions/Forms. (Note: If the Offeror fails to submit a properly completed Attachment D-1 at the time of submittal of its Proposal as required, the Procurement Officer must determine that the proposal is not reasonably susceptible of being selected for award.)

3.21.4 General Requirements

1. All MBE firms proposed must be certified by the Maryland Department

of Transportation (―MDOT‖) at the time of proposal submission in order to

be counted. The spirit and intent of the State of Maryland is to afford MBEs the opportunity to perform viable and meaningful services in a teaming effort on its contracts. It is the desire of the State to maximize notice, and the opportunity to participate in the procurement process, to a diverse and broad range of MBEs. Therefore, a minimum certified Minority Business Enterprise participation goal of 10% has been established for this Contract.

The Contractor — including an MBE prime Contractor or a prime Contractor comprising a joint venture that includes MBE partner(s) — shall accomplish an amount of work not less than the MBE subcontract participation goal with MDOT certified MBE subcontractors, unless it has requested and been granted a waiver. An MBE prime cannot subcontract to itself; a prime joint venture with MBE partners cannot subcontract to its MBE partners. In the event that two (2) or more proposals are determined by the Procurement Officer to be equal, the MLGCA may award a contract to the Offeror whose offer reflects the greatest amount of meaningful and diverse certified MBE participation. (See COMAR 21.11.03.10.)

2. Offerors requiring assistance in locating certified MBEs are encouraged to

contact the following offices:

The Governor's Office of Minority Affairs 6 Saint Paul Center, #1502 William Donald Schaefer Tower Baltimore, Maryland 21202

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(410) 767-8232

Minority Business Enterprise Liaison Maryland State MLGCA and Gaming Control Agency Montgomery Park Business Center 1800 Washington Boulevard, Suite 330 Baltimore, Maryland 21230 (410) 230-8823

Offerors requesting a Maryland MBE Directory may contact:

Maryland Department of Transportation Office of Minority Business Enterprise and Equal Opportunity P.O. Box 8755 Baltimore-Washington International Airport Linthicum, Maryland 21240-0753 (800) 544-6056 or (410) 865-1269

The MBE Directory is also available on the Maryland Department of Transportation’s website which is www.mdot.maryland.gov.

3. Pursuant to COMAR 21.11.03.09C(2)(a-e), to achieve the result specified in Section 3.21.4.1, the Offeror shall conduct the subcontractor solicitation process in such a manner as to not place MBE subcontractors at a disadvantage. In this process, the Offeror shall:

a. Identify specific and meaningful work categories within the RFP’s

scope of work that are appropriate for subcontracting;

b. Solicit diverse certified MBEs through written notice at least ten (10) days before bids or proposals are due, describing the identified work categories under item (a) above and providing instructions on how to submit a bid for the subcontracts (Make sure the MBEs are certified in the work category for which they are being solicited – carefully check the NAICS code);

c. Attempt to make personal contact with the certified MBEs solicited in item (b) above and document these attempts;

d. Assist certified MBEs to fulfill bonding requirements or to obtain a waiver of those requirements;

e. In order to publicize subcontracting opportunities to certified MBEs, attend pre-proposal conferences or other meetings scheduled by the procurement agency; and,

f. Notify and encourage those MBEs solicited to attend the pre-proposal conference.

4. Waiver

a. If an Offeror or apparent successful Offeror believes a waiver of some or all of the MBE goal is necessary, including any sub-goal,

http://www.mdot.maryland.gov/

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then the Offeror must request a waiver by completing the applicable section of Appendix D-1 "MBE Utilization and Fair Solicitation Affidavit". The waiver request must clearly indicate what portion of the established goal the Offeror intends to meet. Documentation supporting any waiver request shall include:

i. A detailed statement of the efforts made to select portions of the

work proposed to be performed by certified MBEs in order to increase the likelihood of achieving the stated goal;

ii. A detailed statement of the efforts made to contact and

negotiate with certified MBEs including the names, addresses, dates, and telephone numbers of the certified MBEs contacted and a description of the information provided to the certified MBEs regarding plans, specifications, and anticipated time schedule for the work to be performed;

iii. As to each certified MBE that placed a subcontractor

quotation or offer that the apparent successful Offeror considered not to be acceptable, a detailed statement of the reasons for this conclusion; and,

iv. In the event certified minority subcontractors are found to be

unavailable, a signed and notarized MBE Statement of Unavailability must be prepared by the apparent successful Offeror, including the names, addresses, dates, times, and telephone numbers of the certified MBEs contacted and the reason each MBE is unavailable.

b. An Offeror requesting a waiver must demonstrate reasonable good

faith efforts to meet the goal, and a waiver of any portion of the MBE goal shall be granted only upon reasonable demonstration by the apparent successful Offeror that: 1) certified MBE participation was unable to be obtained or was unable to be obtained at a reasonable price, and 2) if the MLGCA determines that the public interest is served by a waiver.

c. The documentation shall be furnished within the time specified by the

MLGCA. If the MLGCA determines that the recommended Offeror has not complied with the certified MBE subcontract participation contract goal, has not obtained a waiver as required, fails to submit the documentation required by the solicitation, or fails to comply in good faith with outreach efforts, the MLGCA, upon review by the Office of the Attorney General, may reject the proposal or cancel the award of the Contract.

5. Amendment for Unforeseen Circumstances

If at any time before or after the award of the Contract, the Offeror or apparent

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successful Offeror determines that a certified MBE listed on its MBE Utilization and Fair Solicitation Affidavit (Appendix D-1) has become or will become unavailable, then the Offeror shall immediately notify the Procurement Officer who may verify such unavailability. Within ten (10) working days from notification to the Procurement Officer, the Offeror must submit and it shall be considered as part of the Contract, a revised MBE Utilization and Fair Solicitation Affidavit (Appendix D-1) and submit a new Subcontractor Project Participation Statement (Appendix D-3) signed by both the Offeror and the newly proposed certified MBE(s), which must be approved by the Procurement Officer and the MBE Liaison Officer. In the event certified MBE subcontractors are found to be unavailable, the Offeror must submit a request in writing for a waiver.

6. Compliance

a. To ensure compliance with certified MBE subcontract participation

goals, the MLGCA shall verify that the certified MBEs listed in the MBE Utilization and Fair Solicitation Affidavit (Appendix D-1) are actually performing work and receiving compensation as set forth in the Schedule. The Contractor shall:

i. Permit the MLGCA to inspect any relevant matter and conduct periodic reviews, including reviewing records, visiting jobsites and interviewing subcontractors and workers;

ii. Submit monthly a report listing unpaid invoices over 30 days old received from a certified MBE subcontractor, and the reason payment has not been made. By the 15th of each month, beginning the first month after the Contract commencement date, the Contractor shall submit to the MBE Liaison Officer a Contractor Paid/Unpaid Invoice Report (Appendix D-4) for each certified MBE. The report shall include all invoices submitted by the MBE subcontractor and canceled checks; and,

iii. Include in its agreements with its certified MBE subcontractors a requirement that the certified MBE

subcontractors submit by the 15th

of each month to the MBE Liaison Officer a report, the MBE Subcontractor Paid/Unpaid Invoice Report (Appendix D-5), identifying the prime contract, and listing:

(1) All invoices submitted to the Contractor;

(2) Payments received from the Contractor in the preceding 30 days; and,

(3) Subcontractor invoices over 30 days old.

b. Provide right-of-entry at reasonable times for purposes of the State’s representatives verifying compliance with the MBE participation obligations. The Contractor must maintain and retain all records concerning MBE subcontractor participation and make them

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available for inspection for a period of three (3) years from the date of final payment under the Contract. Subcontract agreements documenting the work performed by all MBEs must be retained by the Contractor and furnished to the Procurement Officer upon request. (All MBE information from the first day of the contract until the last day of the contract shall be retained for three years after the final payment of the Contract.)

c. Upon determining the Contractor's noncompliance, the MBE Liaison Officer shall notify the Contractor in writing of its findings and shall specify what corrective actions are required. The Contractor shall be required to initiate the corrective actions within ten (10) working days and complete them within the time specified by the MLGCA. (See COMAR 21.11.03.13 B.)

d. If the MLGCA determines that material noncompliance with MBE Contract provisions exists and that the prime Contractor refuses or fails to take the corrective action required by the MLGCA, then the following sanctions may be invoked:

i. Withholding payment

ii. Termination of the Contract

iii. Suspension of the right of the Contractor to participate in any future contracts

iv. Referral to the Office of the Attorney General for appropriate action

v. Initiation of any other specific remedy identified by the Contract

vi. Liquidated Damages in accordance with RFP Section 4.51.

vi. Any other compliance mechanism authorized in COMAR 21.11.03 or available at law.

e. The MLGCA may, upon completion of the Contract, and before final payment or release of retainage or both, require that the prime Contractor on any contract having an MBE subcontract goal, submit a final report, in affidavit form and under penalty of perjury, of all payments made to, or withheld from MBE subcontractors.

f. If the MLGCA determines that the Contractor has not complied with the MBE subcontract participation goal, and has not obtained a waiver, the Procurement Officer, upon review by the Office of the Attorney General, may determine the Contractor to be in breach of contract. The reasons for this action shall be specified in writing to the Contractor.

7. Prohibited Acts; Fines

Under Section 14-308 of the State Finance and Procurement Article of the Annotated Code of Maryland, any person who commits any of the following acts is guilty of a felony, and on conviction is subject to a fine not

25

exceeding $20,000 or imprisonment not exceeding five (5) years or both:

a. Fraudulently obtains, holds, or attempts to obtain or hold certification;

b. Aids another person in performing an act prohibited under item (a) of this paragraph;

c. Willfully obstructs, impedes, or attempts to obstruct or impede a

State official or employee investigating the qualifications of a business entity that has requested certification;

d. Fraudulently obtains, attempts to obtain, or aids another person in

fraudulently obtaining or attempting to obtain, public monies to which the person is not otherwise entitled under this subtitle; or,

e. In any minority business enterprise matter administered under this

subtitle:

i. Willfully falsifies, conceals, or covers up a material fact by any scheme or device;

ii. Makes a false or fraudulent statement or representation; or,

iii. Uses a false writing or document that the person knows to

contain a false or fraudulent statement or entry.

8. Protests

A protest under COMAR 21.10.02 may not be filed to challenge a decision whether an entity is or is not a certified MBE, nor may a protest be filed concerning any act or omission by the MLGCA under COMAR 21.11.03.

3.22 ARREARAGES

By submitting a response to this RFP, an Offeror represents that it is not in arrears in the payment of any obligation due and owing the State, including the payment of taxes and employee benefits, and that it shall not become so in arrears during the term of the Contract if selected for contract award.

3.23 PROPOSAL AFFIDAVIT

An Offeror submitting a proposal must complete the Proposal Affidavit (Appendix A of this RFP) and submit it with its proposal. The Affidavit includes anti-bribery, non-collusion, debarment, and financial disclosure and political contribution disclosure affirmations.

3.24 CONFLICT OF INTEREST AFFIDAVIT AND DISCLOSURE

An Offeror submitting a proposal must complete the Conflict of Interest Affidavit

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and Disclosure (Appendix G of this RFP) and submit it with its proposal. It is unlawful for any State officer, employee, or agent to participate personally in his official capacity through decision, approval or disapproval, recommendation, advice, or investigation in any Contract or other matter in which he, his spouse, parent, minor child, brother, or sister has a financial interest or to which any firm, corporation, association, or other organization in which he has a financial interest or in which he is serving as an officer, director, trustee, partner, or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, is a party, unless such officer, employee, or agent has previously complied with the provisions of the Maryland Code Annotated, State Government Article, §15-501 et seq.

3.25 CONTRACT AFFIDAVIT

All Offerors are advised that if a contract is awarded as a result of this RFP, the successful Offeror/Contractor will be required to complete a Contract Affidavit, which is included for information purposes as Appendix B to this RFP. This Affidavit is not required to be submitted with the Offeror's proposal, but shall become a part of the Contract to be signed by the Contractor.

3.26 RECIPROCAL PREFERENCE - RESIDENT OFFEROR

1.The provisions of State Finance and Procurement Law 14-401 and COMAR 21.05.01.04 shall apply to this solicitation.

2.Nonresident Offerors submitting a proposal for this solicitation shall include a

copy of the current statute, resolution, policy, procedure or executive order of the resident state for the nonresident Offeror that pertains to that state’s treatment of nonresident Offerors.

3.Although Maryland law does not authorize procuring agencies to favor resident Offerors in awarding procurement contracts, many other states do grant their resident businesses preferences over Maryland contractors. Therefore, as described in COMAR 21.05.01.04, the MLGCA will apply a resident business preference if: a responsible Offeror whose headquarters, principal base of business operations, or principal site that will primarily provide the services required by this RFP is in another state submits the most advantageous offer; the other state gives a preference to its residents through law, policy, or practice; and the preference does not conflict with a federal law or grant affecting the Contract. The preference given will be identical to the preference that the other state, through law, policy or practice gives to its residents.

3.27 VERIFICATION OF REGISTRATION AND TAX PAYMENT

Before a corporation can do business in the State of Maryland it must be registered with the Department of Assessments and Taxation, State Office Building, Room 803, 301 West Preston Street, Baltimore Maryland 21201 and Department of Labor, Licensing and Regulation. Corporations that are not incorporated in Maryland are required to have a resident agent. The resident

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agent must be either an individual (not the corporation itself) with an address in Maryland or a corporation that represents other corporations as a resident agent. Further, both corporations and individuals should contact the Comptroller’s office to verify that they have no tax liability.

The Contractor shall ensure that all subcontractors meet these requirements, and further, that the Contractor and all subcontractors meet these requirements for the duration of the Contract.

A potential Offeror with questions concerning this requirement should contact the Department of Assessments and Taxation at (410) 767-1330. It is recommended that potential offerors and subcontractors be completely registered prior to the Deadline for Receipt of Proposals. Failure to register may disqualify an otherwise successful Offeror from final consideration and contract award.

3.28 PAYMENTS BY ELECTRONIC FUNDS TRANSFER

By submitting a proposal in response to this RFP, an Offeror agrees to accept payments by electronic funds transfer unless the State Comptroller’s Office grants an exemption. The selected Offeror shall register using the COT/GAD X-10 Vendor Electronic Funds (EFT) Registration Request Form, which is provided in Appendix E or may be downloaded at: http://compnet.comp.state.md.us/gad/pdf/GADX-10.pdf. A request for exemption must be submitted to the State Comptroller’s Office for approval at the address specified on the COT/GAD X-10 form and include the business identification information as stated on the form and include the reason for the exemption.

3.29 MULTIPLE OR ALTERNATE PROPOSALS

Neither Multiple nor Alternate proposals will be accepted. Submission of proposals for both the Primary Contract and a Secondary Contract will not be considered to be Multiple Proposals under this paragraph.

3.30 FALSE STATEMENTS

Offerors are advised that Section 11-205.1 of the State Finance and Procurement Article of the Annotated Code of Maryland provides as follows:

(a) In connection with a procurement contract, a person may not willfully: 1. Falsify, conceal, or suppress a material fact by any scheme or device;

2. Make a false or fraudulent statement or representation of a material fact; or

3. Use a false writing or document that contains a false or fraudulent statement or entry of a material fact.

(b) A person may not aid or conspire with another person to commit an act

http://compnet.comp.state.md.us/gad/pdf/GADX-10.pdf

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under subsection (a) of this section.

(c) A person who violates any provision of this section is guilty of a felony and on conviction is subject to a fine not exceeding $20,000 or imprisonment not exceeding five years or both.

3.31 ANTI-BRIBERY

Pursuant to the Annotated Code of Maryland, State Finance and Procurement Article, §16-202, any person convicted of bribery, attempted bribery, or conspiracy to bribe committed in the obtaining of a contract from the State or any of its subdivisions, shall be subject to disqualification from entering into a contract with the State, or any county or other subdivision of the State.

3.32 NONDISCRIMINATION

As a condition of entering into this agreement, the Offeror represents and warrants that it will comply with the State's Commercial Nondiscrimination Policy, as described under Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland. As part of such compliance, the Offeror may not discriminate on the basis of race, color, religion, ancestry or national origin, sex, age, marital status, sexual orientation, or on the basis of disability or other unlawful forms of discrimination in the solicitation, selection, hiring, or commercial treatment of subcontractors, vendors, suppliers, or commercial customers, nor shall the Offeror retaliate against any person for reporting instances of such discrimination. The Offeror shall provide equal opportunity for subcontractors, vendors, and suppliers to participate in all of its public sector and private sector subcontracting and supply opportunities, provided that nothing contained in this clause shall prohibit or limit otherwise lawful efforts to remedy the effects of marketplace discrimination that have occurred or are occurring in the marketplace. The Offeror understands and agrees that a material violation of this clause shall be considered a material breach of this agreement and may result in termination of this agreement, disqualification of the Offeror from participating in State contracts, or other sanctions. This clause is not enforceable by or for the benefit of, and creates no obligation to, any third party.

3.33 LIVING WAGE REQUIREMENT

A solicitation for services under a State contract valued at $100,000 or more may be subject to Title 18, State Finance and Procurement (SFP) Article, Annotated Code of Maryland. Additional information regarding the State’s Living Wage

requirement is contained in this RFP (Appendix K - Living Wage Requirements for Service Contracts). If the Offeror fails to submit and complete the Affidavit of Agreement, the State may determine an Offeror to be not responsible.

Contractors and Subcontractors subject to the Living Wage Law shall pay each covered employee at least the required amount per hour as specified on the Department of Labor, Licensing and Regulation (―DLLR‖) website at www.dllr.maryland.gov, if State contract services valued at 50% or more of the

http://www.dllr.maryland.gov/

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total value of the contract are performed in the Tier 1 Area. If State contract services valued at 50% or more of the total contract value are performed in the Tier 2 Area, an Offeror shall pay each covered employee at least the required amount per hour as specified on the DLLR website. The specific Living Wage rate is determined by whether a majority of services take place in a Tier 1 Area or Tier 2 Area of the State. The Tier 1 Area includes Montgomery, Prince George’s, Howard, Anne Arundel, and Baltimore Counties, and Baltimore City. The Tier 2 Area includes any county in the State not included in the Tier 1 Area. In the event that the employees who perform the services are not located in the State, the head of the unit responsible for a State contract pursuant to §18-102 (d) shall assign the tier based upon where the recipients of the services are located.

The contract resulting from this RFP has been deemed to be a Tier 1 contract.

3.34 PROMPT PAYMENT REQUIREMENT

This procurement and the contract to be awarded pursuant to this RFP are subject to the Prompt Payment Policy Directive issued by the Governor’s Office of Minority Affairs and dated August 1, 2008. Promulgated pursuant to Sections 11-201, 13-205(a), and Title 14, Subtitle 3 of the State Finance and Procurement Article, and COMAR 21.01.01.03 and 21.11.03.01 et seq., the Directive seeks to ensure the prompt payment of all subcontractors on non-construction procurement contracts. The successful Offeror who is awarded a contract shall comply with the prompt payment requirements outlined in the Contract (RFP Section 4.62).

3.35 LOCATION OF THE PERFORMANCE OF SERVICES DISCLOSURE

An Offeror submitting a proposal must complete the Location of the Performance of Services Disclosure Affidavit (Appendix M of this RFP) and submit it with its proposal. The Affidavit includes information regarding any services that the Offeror plans to perform outside of the United States..


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SECTION IV. MANDATORY CONTRACTUAL PROVISIONS-CONTRACT

The Contract resulting from this RFP shall include the following mandatory contractual terms and conditions (See generally COMAR Title 21, State Procurement Regulations, Subtitle 07, Contract Terms and Conditions), and shall be substantially in the format below.

THE ONLY RESPONSE REQUIRED IN THE OFFEROR'S PROPOSAL FOR THIS

SECTION IS A STATEMENT OF INTENT TO COMPLY WITH THE TERMS,

CONDITIONS, AND REQUIREMENTS SET FORTH HEREIN.

NOTE: An Offeror who takes exceptions to the State’s mandatory contractual provisions may have its otherwise qualified proposal deemed to be not susceptible for award. (See also Section 7.3.4 (4))

VERERANS’ ORGANIZATION INSTANT TICKET LOTTERY MACHINES AND RELATED SERVICES CONTRACT

#2014-02

This Veterans’ Organization Instant Ticket Lottery Machines and Related Services Contract #2014-02 (―Contract‖) made this ______ day of _________, 2013 is by and between the Maryland State Lottery and Gaming Control Agency (―MLGCA‖), an agency of the State of Maryland having its headquarters at 1800 Washington Boulevard, Suite 330, Baltimore, Maryland 21230, and ___(The Selected Offeror)____ (―Contractor‖), a _____(Type of Business)_____ having its principal place of business at ____________________________________________ . Now therefore, in consideration of the mutual covenants and promises herein contained, the parties hereto agree as follows:

4.1. SCOPE OF THE CONTRACT

1. As set forth in this Contract and the Technical Specifications of the Request for Proposals #2014-02, the Contractor shall provide Veterans’ Organization Instant Ticket Lottery Machines and Related Services, to include but not limited to: providing the design, development , installation, implementation, operation and maintenance of a central monitor and control system (―ITLM Central System‖), providing Instant Ticket Lottery Machine (―ITLM‖) design, development, installation, implementation, support and maintenance at Veterans’ Organizations and providing the Instant Ticket design, Instant Ticket planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities specified in Lottery Law.

2. The Contractor shall provide the MLGCA with the foregoing services in

accordance with:

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(i) this Contract; (ii) the Request for Proposals #2014-02, dated August 28, 2013, as

amended by: Amendment # dated , 2013 and BAFO dated , 2013, collectively referred to

hereinafter as the ―RFP‖; and (iii) the Contractor’s Proposal, dated , 2013, only to the

extent that it is consistent with the Contract and the RFP.

All of the above documents referred to in (i), (ii), and (iii) are incorporated herein by reference as if fully set forth herein. For purposes of reference, the ―Contract‖ means all of the aforegoing documents, attachments, or exhibits.

3. PRECEDENCE OF CONTRACT DOCUMENTS: In the event of

inconsistencies and/or ambiguities between the Contract, the RFP, the Amendments modifying the RFP and the Contractor’s Proposal, the Contractor’s obligations for providing the required services are defined in order of precedence by (1) the Contract; (2) the Amendments modifying the RFP; (3) the RFP; and (4) the Contractor’s Proposal (Technical and Financial), to the extent that the Proposal does not conflict with the Contract, RFP or Amendments. The MLGCA shall not be bound by any part(s) of the Contractor’s Proposal to the RFP which contains information, options, exceptions, conditions, terms, or prices not requested or required in the RFP, unless specifically included in the Contract.

4.2 CONTRACT TERM

Subject to approval by the Maryland Department of Budget and Management, the Maryland Board of Public Works, and any other necessary State officials, this Contract shall commence on or about December 20, 2013 and expire on December 19, 2018 for a term of approximately five (5) years. The MLGCA, at its sole option, shall have the unilateral right to extend the Contract for one (1) additional five (5) year renewal period, for a total Contract term of approximately ten (10) years. All other terms and conditions, including price, shall remain the same during the renewal period.

Upon the expiration of this Contract, or of the Renewal Option Period if exercised, the MLGCA, at its sole option, shall have the unilateral right to extend the Contract for a Final Renewal Option Period (for transitioning) of up to an additional six (6) month period in order to facilitate the conversion and transition to a follow-on Instant Ticket Lottery Machine contractor. For this Final Renewal Option Period, the MLGCA will determine and indicate the number of months needed to facilitate the conversion and transition to a follow-on contractor at the time of exercising this Option. All other terms and conditions, including price, shall remain the same for this Final Renewal Option as what is in effect at time of expiration of the initial Contract term or of the Renewal Option Period, as applicable. Upon expiration of the initial Contract term of five (5) years, the Renewal Option Period of five (5) years (if exercised), and the

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Final Renewal Option for transitioning of up to six (6) months (if exercised), the total Contract Term shall not exceed approximately ten (10) years and six (6) months.

4.3 COMPENSATION AND METHOD OF PAYMENT

4.3.1 Beginning on December 20, 2013, or upon the commencement

of the Contract, whichever is later, the Contractor will begin to accrue earnings and the MLGCA agrees to pay the Contractor in accordance with this Section 4.3.

4.3.2 Said charges shall be (amount to be inserted upon contract award)

percent of Net Instant Ticket Lottery Machine Proceeds in accordance with the unit price stated in the Contractor’s Financial Proposal Sheet dated ___________, 2013 Appendix F to the RFP, which is attached hereto as Exhibit B to the Contract.

4.3.3 The Contractor shall submit an invoice for these charges to the

MLGCA on a monthly basis to be provided not later than the fifteenth (15th) day of the month following the month of operation. All invoices shall include the Contractor's Federal Tax Identification Number, which is (number inserted upon contract award).

4.3.4 The MLGCA shall make payment no later than thirty days (30) after receipt of proper invoice from the Contractor in accordance with standard State procedures. The MLGCA may withhold and/or reduce payment for unsatisfactory performance, as well as for set-off, counterclaim, liquidated damages, or any other legally permitted deduction. The MLGCA shall have the right to adjust future invoices based on the results of monthly independent audits.

4.3.5 The total price/amount of this Contract for the initial five (5) year term

excluding any future modifications shall not exceed ($ amount to be inserted upon contract award) Dollars. In the event that the MLGCA exercises its unilateral option to extend the Contract in its sole discretion, the total price/amount of this Contract for the Renewal Option five (5) year period excluding any future modifications shall not exceed ($ amount to be inserted upon contract award) Dollars. If the MLGCA exercises the option to extend, such option shall be

at the same prices, terms and conditions. The ―not to exceed‖

amounts are not guaranteed amounts, but only the maximum amount authorized to be expended under this Contract without further written and properly authorized modification. If the charges are likely to become greater than the not to exceed amounts, the MLGCA will request approval from the Maryland Department of Budget and Management, the Maryland Board of Public Works, and other necessary State officials.

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4.4 CONTRACT MODIFICATION

Any amendment, change, modification or extension of this Contract must be in writing and executed by both parties with approval by the Procurement Officer, subject to any additional approvals required by State law. No amendment to this Contract shall be binding unless in writing, so approved by the appropriate parties, and signed by both parties. No amendment may change significantly the scope of the original Contract.

4.5 NON-HIRING OF OFFICIALS AND EMPLOYEES

No official or employee of the State of Maryland, as defined in State Government Article, §15-102, Annotated Code of Maryland, whose duties as such official or employee include matters relating to or affecting the subject matter of this Contract, shall, during the pendancy and term of this Contract and while serving as an official or employee of the State, become or be an employee of the Contractor or any entity that is a subcontractor on this Contract.

4.6 DISPUTES

This Contract shall be subject to the provisions of the State Finance and Procurement Article, Title 15, Subtitle 2, Annotated Code of Maryland, as from time to time amended, and COMAR 21.10 (Administrative and Civil Remedies). Unless a lesser period is provided by applicable statute, regulation, or the Contract, the Contractor must file a written notice of claim with the Procurement Officer within thirty (30) days after the basis for the claim is known or should have been known, whichever is earlier. Pending resolution of a claim, the Contractor shall proceed diligently with the performance of the Contract in accordance with the Procurement Officer's decision.

4.7 MARYLAND LAW PREVAILS

The place of performance of this Contract shall be the State of Maryland, and this Contract shall be governed by the laws of the State of Maryland and for all purposes shall be construed, interpreted, and enforced in accordance with said laws and the decisions of the courts of the State of Maryland thereon and as required under applicable laws and regulations, including approval of the Board of Public Works where appropriate, and shall be binding upon the successors and assigns of the parties hereto. Any and all litigation arising under this Contract shall be instituted in the appropriate court of the State of Maryland.

4.8 NONDISCRIMINATION IN EMPLOYMENT

The Contractor agrees:

1. Not to discriminate in any manner against any employee or applicant for employment because of race, color, religion, creed, age, sex, marital status, sexual preference, national origin, ancestry, or physical or mental handicap

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unrelated in nature and extent so as reasonably to preclude the performance of such employment;

2. To include a provision similar to that contained in subsection 1, above, in any subcontract except a subcontract for standard commercial supplies or raw materials;

3. To post and to cause subcontractors to post in conspicuous places available to employees and applicants for employment, notices setting forth the substance of this clause; 4. To operate under this Contract so that no employee or client is subjected to sexual harassment in the workplace or in locations and situations otherwise associated with the performance of duties per the terms of this Contract. Further, except in sub-contracts for standard commercial supplies or raw materials, the Contractor shall include this clause, or a similar clause approved by the MLGCA, in all sub-contracts. The Contractor has primary responsibility for enforcement of these provisions and for securing and maintaining the subcontractor's full compliance with both the letter and spirit of this clause;

5. As a condition of entering into this Contract, Contractor represents and warrants that it will comply with the State’s Commercial Nondiscrimination Policy, as described under Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland. As part of such compliance, Contractor may not discriminate on the basis of race, color, religion, ancestry or national origin, sex, age, marital status, sexual orientation, or on the basis of disability or other unlawful forms of discrimination in the solicitation, selection, hiring, or commercial treatment of subcontractors, vendors, suppliers, or commercial customers, nor shall Contractor retaliate against any person for reporting instances of such discrimination. Contractor shall provide equal opportunity for subcontractors, vendors, and suppliers to participate in all of its public sector and private sector subcontracting and supply opportunities, provided that this clause does not prohibit or limit lawful efforts to remedy the effects of marketplace discrimination that have occurred or are occurring in the marketplace. Contractor understands that a material violation of this clause shall be considered a material breach of this Agreement and may result in termination of this Agreement, disqualification of Contractor from participating in State contracts, or other sanctions. This clause is not enforceable by or for the benefit of, and creates no obligation to, any third party;

6. The contractor shall include the above Commercial Nondiscrimination clause, or similar clause approved by the MLGCA, in all sub-contracts; and

7. As a condition of entering into this Contract, upon the MLGCA on Civil Rights’ request, and only after the filing of a complaint against the Contractor under Title 19 of the State Finance and Procurement Article, as amended from time to time, the Contractor agrees to: provide to the State within sixty (60) days

35

after the request a truthful and complete list of the names of all subcontractors, vendors, and suppliers that the Contractor has used in the past four (4) years on any of its contracts that were undertaken within the State of Maryland, including the total dollar amount paid by the Contractor on each subcontract or supply contract. The Contractor further agrees to cooperate in any investigation conducted by the State pursuant to the State's Commercial Nondiscrimination Policy as set forth under Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland, to provide any documents relevant to any investigation that is requested by the State. The Contractor understands and agrees that violation of this clause shall be considered a material breach of this Contract and may result in Contract termination, disqualification by the State from participating in State contracts, and other sanctions.

4.9 CONTINGENT FEE PROHIBITION

The Contractor warrants that it has not employed or retained any person, partnership, corporation, or other entity, other than a bona fide employee, bona fide agent, bona fide salesperson or commercial selling agency working for the Contractor, to solicit or secure this Contract, and that it has not paid or agreed to pay any person, partnership, corporation, or other entity, other than a bona fide employee, bona fide agent, bona fide salesperson or commercial selling agency, any fee or any other consideration contingent on the making of this Contract.

4.10 MULTI-YEAR CONTRACTS CONTINGENT UPON APPROPRIATIONS

If the General Assembly fails to appropriate funds or if funds are not otherwise made available for continued performance for any fiscal period of this Contract succeeding the first fiscal period, this Contract shall be canceled automatically as of the beginning of the fiscal year for which funds were not appropriated or otherwise made available; provided, however, that this will not affect either the State's rights or the Contractor's rights under any termination clause in this Contract. The effect of termination of the Contract hereunder will be to discharge both the Contractor and the MLGCA from future performance of the Contract, but not from their rights and obligations existing at the time of termination. The Contractor shall be reimbursed for the reasonable value of any nonrecurring costs incurred but not amortized in the price of the Contract. The MLGCA shall notify the Contractor as soon as it has knowledge that funds may not be available for the continuation of this Contract for each succeeding fiscal period beyond the first.

4.11 TERMINATION FOR DEFAULT

The rights and remedies of the State under the Contract are cumulative. The enforcement of any right or election of any remedy by the State provided by the Contract for any breach of the Contract will not preclude the State from enforcing other rights and availing itself of other remedies available under the Contract for the same breach or any other breach of the Contract.

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If the Contractor fails to properly perform its obligations under the Contract, the State may correct any deficiencies at the Contractor's expense. If the Contractor fails to fulfill its obligations under this Contract properly and on time, or otherwise violates any provision of the Contract, the State may terminate the Contract by giving written notice to the Contractor. The notice shall specify the acts or omissions relied upon as cause for termination. All finished or unfinished work and services provided by the Contractor shall, at the State's option, become the State's property. The State shall pay the Contractor fair and equitable compensation for satisfactory performance prior to receipt of notice of termination, less the amount of damages caused by the Contractor's breach. If the damages are more than the compensation payable to the Contractor, the Contractor will remain liable after termination and the State can affirmatively collect damages. Termination hereunder, including the determination of the rights and obligations of the parties, shall be governed by the provisions of COMAR 21.07.01.11B.

4.12 TERMINATION FOR CONVENIENCE

The performance of work under this Contract may be terminated by the State in accordance with this clause in whole, or from time to time in part, whenever the State shall determine that such termination is in the best interest of the State. The State will pay the Contractor all reasonable costs associated with this Contract that the Contractor has incurred up to the date of termination, and all reasonable costs associated with the termination of the Contract. However, the State will not pay, and the Contractor shall not be entitled to, any anticipatory profits that have not been earned up to the date of termination. Termination hereunder, including the determination of the rights and obligations of the parties, shall be governed by the provisions of COMAR 21.07.01.12 A (2).

4.13 DELAYS AND EXTENSIONS OF TIME

The Contractor agrees to perform the work under this Contract continuously and diligently. No charges or claims for damages shall be made by the Contractor for any delays or hindrances from any cause whatsoever during the progress of any portion of the work specified in this Contract.

Time extensions will be granted only for excusable delays that arise from unforeseeable causes beyond the control and without the fault or negligence of the Contractor, including but not restricted to, acts of God, acts of the public enemy, acts of the State in either its sovereign or contractual capacity, acts of another contractor in the performance of a contract with the State, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, or delays of subcontractors or suppliers arising from unforeseeable causes beyond the control and without the fault or negligence of either the Contractor or the subcontractors or suppliers.

4.14 SUSPENSION OF WORK

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The Procurement Officer unilaterally may order the Contractor in writing to suspend, delay, or interrupt all or any part of its performance of work for such period of time as the Procurement Officer may determine to be appropriate for the convenience of the State.

4.15 PRE-EXISTING REGULATIONS

In accordance with the provisions of Section 11-206 of the State Finance and Procurement Article, Annotated Code of Maryland, as from time to time amended, the regulations set forth in Title 21 of the Code of Maryland Regulations (COMAR Title 21) in effect on the date of execution of this Contract are applicable to this Contract. However, both parties expressly acknowledge the possibility of substantial changes in federal and State laws and regulations applicable to this Contract and expressly agree to renegotiate this Contract as necessary to comply with any such changes. Specifically, Contractor should make note of Environment Article, Section 9-1707 (Newsprint Recycling Program) of the Annotated Code of Maryland and ensure that potential third- party vendors are in compliance with applicable environmental recycling laws and regulations.

4.16 PAYMENT OF STATE OBLIGATIONS

Section 15-104 et seq. of the State Finance and Procurement Article, Annotated Code of Maryland, provides that the State shall remit payment to the Contractor within thirty (30) days after receipt of a proper invoice pursuant to any authorized, written procurement contract. Except as provided in Section 15-105 of this Article, the State's failure to remit payment within this period may entitle the Contractor to interest at the rate specified in 15-104 of this Article, for the period that begins thirty one (31) calendar days after the receipt date. This amount, if paid, shall be in lieu of payment of any other late charge(s) by the State.

For purposes of this contract, an amount will not be deemed "due and payable" and interest payments will not be authorized for late payments unless the following conditions have been met:

(1) The amount invoiced is consistent with the amount agreed upon by the

parties to the contract.

(2) The goods or services have been received by the State and the quantity received agrees with the quantity ordered.

(3) The goods or services meet the qualitative requirements of the contract

and have been accepted by the State.

(4) The proper invoice has been received by the party or unit of government specified in the contract.

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(5) The invoice is not in dispute.

(6) If the Contract provides for progress payments, the proper invoice for the progress payment has been submitted pursuant to the schedule contained in the Contract.

(7) If the Contract provides for withholding a retainage and the invoice is for

the retainage, all stipulated conditions for release of the retainage have been met.

In order to receive payment of interest, the Contractor must submit a proper invoice for accrued interest within 30 calendar days after the payment date (i.e., the date of the check from the State Treasurer that pays the Contractor for the goods supplied or the service rendered) of the amount on which the interest accrued. Interest may not be claimed (1) if a claim has been filed under Title 15, State Finance and Procurement Article (Procurement Contract Administration and Dispute Resolution) Annotated Code of Maryland, (2) for more than one year following the 31st calendar day after the date that a proper invoice is received by a State agency, or (3) on an amount representing unpaid interest.

4.17 FINANCIAL DISCLOSURE

The Contractor shall comply with Section 13-221 of the State Finance and Procurement Article, Annotated Code of Maryland, which requires that every business that enters into contracts, leases, or other agreements with the State of Maryland or its agencies during a calendar year under which the business is to receive in the aggregate $100,000 or more, shall, within 30 days of the time when the aggregate value of these contracts, leases or other agreements reaches $100,000, file with the Secretary of State of Maryland certain specified information to include disclosure of beneficial ownership of the business.

4.18 POLITICAL CONTRIBUTION DISCLOSURE

The Contractor shall comply with Election Law Article, Sections 14-101 through 14-108, Annotated Code of Maryland, which requires that every person that enters into contracts, leases or other agreements with the State, a county, or an incorporated municipality, or their agencies, during a calendar year in which the person receives in the aggregate $100,000 or more, shall file with the State Board of Elections a statement disclosing contributions in excess of $500 made during the reporting period to a candidate for elective office in any primary or general election. The statement shall be filed with the State Board of Elections: (1) before a purchase or execution of a lease or contract by the State, a county, an incorporated municipality, or their agencies, and shall cover the preceding two calendar years; and (2) if the contribution is made after the execution of a lease or contract, then twice a year, throughout the contract term, on: (a) February 5, to cover the 6-month period ending January 31; and (b) August 5, to cover the 6- month period ending July 31.

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4.19 RETENTION OF RECORDS

Unless otherwise stated in the RFP or Contract, the Contractor shall retain and maintain all records and documents in any way relating to this Contract for three (3) years after final payment by the State under this Contract or until the expiration of any applicable statute of limitations, whichever is longer, and shall make them available for inspection and audit by authorized representatives of the State, including the Procurement Officer or designee, at all reasonable times.

4.20 COMPLIANCE WITH LAWS / WARRANTIES

The Contractor hereby represents and warrants that:

1. It is qualified to do business in the State of Maryland and that it will take such action as, from time to time hereafter, may be necessary to remain so qualified;

2. It is not in arrears with respect to the payment of any monies due and owing the State of Maryland, or any department or unit thereof, including, but not limited to, the payment of taxes and employee benefits, and that it shall not become so in arrears during the term of this Contract;

3. It shall comply with all federal, State and local laws, regulations, and ordinances applicable to its activities and obligations under this Contract;

4. It shall obtain, at its expense, all licenses, permits, insurance, and governmental approvals, if any, necessary to the performance of its obligations under this Contract.

4.21 COST AND PRICE CERTIFICATION

The Contractor by submitting cost or price information certifies that, to the best of its knowledge, the information submitted is accurate, complete, and current as of a mutually determined specified date prior to the conclusions of any price discussion or negotiations for: (a) a negotiated contract, if the total contract price is expected to exceed $100,000, or a smaller amount set by the Procurement Officer; or (b) a change order or contract modification, expected to exceed $100,000, or a smaller amount set by the Procurement Officer.

The price under this Contract, and any change order or modification hereunder, including profit or fee, shall be adjusted to exclude any significant price increases occurring because the Contractor furnished cost or price information which, as of the date agreed upon between the parties, was inaccurate, incomplete or not current.

4.22 SUBCONTRACT, ASSIGNMENT AND PROHIBITION ON AFFILIATED ENTITY

RELATIONSHIPS

The Contractor may not subcontract any portion of the services provided under

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this Contract without obtaining the prior written approval of the MLGCA, nor may the Contractor assign this Contract or any of its rights or obligations hereunder without the prior written approval of the MLGCA. The Contractor shall not pledge this Contract as a receivable without the prior written approval of the MLGCA. Any such subcontract or assignment shall include terms and conditions that the Attorney General deems necessary to protect the interests of

the MLGCA and the State. The State shall not be responsible for the fulfillment

of the Contractor’s obligations to any subcontractor or assignee.

4.23 INDEMNIFICATION AND RESPONSIBILITY FOR CLAIMS AND LIABILITY

1. The Contractor shall indemnify and save and hold harmless the MLGCA, MLGCC, the State of Maryland, its agents, or any individual member thereof, or any employee of the State, against and from all liability for any costs, expenses, losses, liabilities, fines, penalties, suits, actions, demands, or claims of any nature or character whatsoever arising from or relating to the performance of the Contractor or its subcontractors under this Contract or in any manner related to the subject matter of this Contract. This section 4.23 shall survive the termination of this Contract.

The Contractor shall indemnify and save and hold the aforementioned entities and individuals harmless for the failure of the Contractor, its agents or employees, or its subcontractor(s), to comply with the terms of this Contract (or any part thereof), negligence of the Contractor, injury or death to any person, damage to property, nuisance (public or private), or trespass arising out of or attributable to the performance of work by the Contractor, its agents or employees, or its subcontractor(s), except to the extent caused by the negligent or willful act or omission of the State or its employees, agents, or independent contractors, other than the Contractor, its agents or employees, or its subcontractor(s). The whole, or so much of the moneys due, or to become due the Contractor under this Contract, as may be considered necessary by the Procurement Officer, may be retained by the MLGCA until such suits or claims for damages shall have been settled, or otherwise disposed of, and satisfactory evidence to that effect furnished to the Procurement Officer.

2. The Contractor further agrees to indemnify the State for damage, loss, or destruction of State property in the Contractor's care, custody, and/or control during the term of this Contract due to the action or inaction of the Contractor or its subcontractor(s).

3. State law prohibits the State from incurring, by way of an indemnity agreement, a potentially unlimited liability when no funds have been appropriated to fund the liability, the risk is uninsured, and the indemnity agreement is not conditioned upon the future appropriation of funds to satisfy the liability. Notwithstanding any other provisions of the Contract documents, the State shall have no liability to the Contractor under the circumstances described in this paragraph.

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4. The State has no obligation to provide legal counsel or defense or pay attorney's fees to the Contractor or its subcontractors in the event that a suit, claim or action of any character is brought by any person not party to this Contract against the Contractor or its subcontractors as a result of or relating to the Contractor's obligations under this Contract.

5. The State has no obligation for the payment of any judgments or the settlement of any claims against the Contractor or its subcontractors as a result of or relating to the Contractor's obligations under this Contract.

6. The Contractor shall immediately notify the Procurement Officer of any claim, suit or action made or filed against the Contractor or its subcontractors regarding any matter resulting from or relating to the Contractor's obligations or performance under the Contract, and shall cooperate, assist, and consult with the State in the defense or investigation of any claim, suit, or action made or filed against the State as a result of or relating to the Contractor's performance under this Contract. Neither the Contractor nor subcontractors may settle or resolve any such claim, suit or action without advance notice to the State. 7. The MLGCA will provide written notice of any claims filed against the MLGCA or MLGCC arising out of the Contractor’s performance under the Contract of which it has notice. With the concurrence of the Office of the Maryland Attorney General, the MLGCA may allow Contractor the right to control such litigation, but the MLGCA and the State reserves the right to jointly participate in all such legal proceedings, as well as the settlement of any such claims.

4.24 NO WAIVER OF RIGHT

The failure of a party to insist upon strict adherence to any term of the Contract resulting from this RFP shall not be considered a waiver or deprive the party of the right thereafter to insist upon strict adherence to that term or any other term of the Contract.

4.25 CHANGE IN FINANCIAL CONDITION

If the Contractor experiences a substantial change in its financial condition during the term of the Contract or any extension thereof, the Contractor shall notify the Procurement Officer in writing of the change at the time the change occurs or is identified. Failure to notify the Procurement Officer of such a substantial adverse change in financial condition may be sufficient grounds for terminating the Contract.

4.26 BANKRUPTCY

Upon the filing of any bankruptcy proceeding by or against the Contractor, whether voluntary or involuntary, or upon the appointment of a receiver, trustee, or assignee for the benefit of creditors, the Contractor shall notify the Procurement Officer in writing immediately.

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4.27 TAXES

The MLGCC and MLGCA shall have no responsibility for the payment of any federal, state or local taxes which become payable by the Contractor or its subcontractors as a result of this Contract.

The State is generally exempt from Federal excise taxes, Maryland sales and use taxes, District of Columbia sales taxes and transportation taxes. Exemption certificates will be completed upon request. Where a Contractor is required to furnish and install material in the construction or improvement of real property in performance of a contract, the Contractor shall pay the Maryland sales tax and the exemption does not apply.

4.28 LIABILITY FOR LOSS OF DATA OR RECORDS

In the event of loss of any data or records necessary for the performance of this Contract where such loss is due to the error, negligence, or intentional action of the Contractor or its employees, agents or subcontractors, the Contractor shall be responsible, irrespective of cost to the Contractor, for recreating such lost data or records in a manner, format, and time frame acceptable to the State.

4.29 PROPERTY RIGHTS/USUFRUCT

Upon the expiration or termination of the Contract, all documents, listings, graphics, data and all other materials developed as a result of the Contract shall be delivered to and become the property of the MLGCA. In addition, the Contractor shall furnish, within fifteen (15) days after receipt of the Notice of Termination, such reports and projects as may be required, based on work already completed.

Any data, information, survey instruments, and reports collected or prepared by the Contractor in the course of performing its duties and obligations under this Contract shall be deemed owned by the MLGCA. This ownership provision is

in consideration of the Contractor’s use of public funds in collecting, preparing,

or using such data, information, survey instruments, and reports. These items shall not be used by the Contractor for any independent project of the Contractor or publicized by the Contractor without the written permission from the MLGCA. Subject to applicable State and federal laws and regulations, the MLGCA shall have full and complete rights to reproduce, duplicate, disclose, and otherwise use all such data, information, survey instruments and reports.

Except as otherwise provided in this subsection, if any trademark, copyrightable or patentable material is developed by the Contractor in the course of performance of this Contract, the MLGCA and the State shall have a royalty-free, non-exclusive, and irrevocable right to reproduce, publish, or otherwise use the work, and authorize others to do so.

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If, for any reason, other than the natural expiration of the Contract term, the Contractor ceases to perform the Contract, the MLGCA shall, in addition to any other rights it may have under this Contract, acquire a property right (usufruct) in all property (tangible or intangible, real or personal) used by the Contractor to perform the Contract and which is necessary to provide such service. Said property right (usufruct) shall be limited to the right of the MLGCA to possess and make use of such contractual items solely for the use and benefit of the MLGCA in operating, maintaining, altering and improving the operational characteristics of the Systems being used by the MLGCA under the Contract. Such property right (usufruct) shall be limited in time to the duration of the Contract or as the MLGCA deems necessary to fulfill the Contract and any extension thereof or obtain a substitute.

4.30 RIGHTS IN PRODUCTS

1. All original written material including, but not limited to, reports, software

and/or other documentation originated and prepared exclusively for the MLGCA pursuant to this Contract shall belong exclusively to the MLGCA.

2. All preexisting ideas, concepts, know-how and techniques and each

invention, discovery and improvement thereof, previously made or conceived of by either the Contractor or the MLGCA, as the case may

be, whether reduced to practice or not (―Preexisting Party Innovations‖),

and any and all domestic, foreign or other intellectual property and other proprietary rights whatsoever relating thereto, whether registered, recorded or otherwise protected under patent, copyright,

trademark, trade secret or other law (―Intellectual Property Rights‖) shall

remain the sole and exclusive property of the party hereto which made or conceived of same. Furthermore, the MLGCA has the right to use any preexisting intellectual property rights, free of any type of fees, of the Contractor necessary to effectuate the purpose of this Contract.

3. All ideas, concepts, know-how and techniques and each invention, discovery and improvement thereof, exclusively made or conceived for the MLGCA by the Contractor or its employees separately or jointly with MLGCA personnel in the course of performance under this Contract,

whether reduced to practice or not (―New Innovations‖), together

with all Intellectual Property Rights relating thereto (―New Intellectual Property Rights‖), shall be owned solely and exclusively by the MLGCA and may be used by the Contractor only upon written agreement with the MLGCA.

In furtherance of the foregoing, Contractor shall deliver to the MLGCA good and marketable title, free and clear of any lien or encumbrance to all work product and deliverables hereunder; provided that, Contractor shall be permitted to incorporate into said work product and deliverables software and other materials, technologies or other works owned by third

parties (―Third Party Preexisting Work‖) under the terms of a blanket

developer license or other authority; provided further, such Third Party

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Preexisting Work is specifically identified to the MLGCA prior to the delivery of such materials and Contractor obtains at no additional cost for the benefit of the MLGCA, its successors, assigns and contractors, an

irrevocable, perpetual, nonexclusive, royalty–free right and license, for

wherever the MLGCA can lawfully operate, to make, use, sell, offer for sale, reproduce, sublicense and distribute and otherwise exploit said Third Party Preexisting Works.

4.31 ROYALTIES

The State shall not pay any royalties or other fees/costs to outside parties for proprietary material used in the performance of this Contract or in the conduct of the MLGCC or MLGCA activities.

4.32 INTELLECTUAL PROPERTY PROTECTION

To the extent that full ownership of any New Intellectual Property Rights does not automatically vest in the MLGCA by virtue of this Contract or otherwise, Contractor hereby irrevocably transfers and assigns to the MLGCA all right, title and interest in any New Intellectual Property Rights. Contractor shall obtain a suitable form of assignment of any actual or prospective New Intellectual Property Rights from all persons who perform any part of the services under this Contract. In the event the MLGCA elects to file an application for the protection of the New Intellectual Property Rights anywhere in the world based on work product or deliverables made by an employee of Contractor, such

employee and Contractor shall assist the MLGCA, at the MLGCA’s expense,

in preparing such application and shall execute all documents necessary for the MLGCA to file, effect and maintain title to such application in the name of the MLGCA. Contractor agrees to require each of its employees and authorized agents who provide services on behalf of Contractor to execute and provide the MLGCA with a copy of an assignment acceptable to the MLGCA prior to the provision of any services by each such person, and to disclose to the MLGCA the name of each such person and agent prior to the commencement of work by such person or agent.

The Contractor shall promptly provide written notice to the MLGCA of each claim received, or reasonably anticipated to be asserted, that the service, work product, deliverables, or New Intellectual Property Rights infringe or otherwise violate any third party Intellectual Property Rights (―Third Party Infringement Claims‖). Such notice shall include all available information regarding the actual or anticipated notice or claim, the likely parties thereto and an assessment of liability thereunder based on all reasonably available information. Further, from time to time and as changes in circumstances warrant, Contractor shall update in writing the MLGCA on the status of all anticipated notices and claims.

The Contractor shall hold and save harmless the State of Maryland, the MLGCC, the MLGCA, and its agents, officers, and employees from liability of any nature or kind arising out of a claim or suit, including Third Party Infringement Claims, for or on

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account of the use of any service, work product or deliverable furnished or used in the performance of any Contract resulting from this RFP or the New Intellectual Property Rights. The Contractor agrees to defend any and all such threatened or actual claims and suits, and to pay all damages and costs, including attorneys and witness fees, subject to the right of the State to provide additional legal counsel at the State's own expense; provided that, the MLGCA (i) promptly notifies the Contractor in writing of the claim; and (ii) allows Contractor to control and cooperates with Contractor in, the defense and any related settlement negotiations.

In addition to Contractor’s obligations stated above, if any service, work product,

deliverable, or New Intellectual Property Rights become, or can be reasonably anticipated to become, the subject of a Third Party Infringement Claim, the Contractor, at its own expense and with the consent of the MLGCA, shall within thirty (30) days from the time Contractor first learns of such a claim or potential claim, perform the following:

a) procure for the MLGCA the right to continue receiving the service or using the work product, deliverable, or New Intellectual Property Rights,

b) replace the service, work product, deliverable, or the New Intellectual

Property Rights with a non-infringing service, work product, deliverable, or Intellectual Property Rights substantially complying with the applicable specifications, or

c) modify the service, work product, deliverable, or New Intellectual Property Rights so that it becomes non-infringing and performs in a substantially similar manner to the original service, work product, deliverable, or New Intellectual Property Rights.

The Contractor shall not affix any restrictive markings upon any work product, deliverable, New Intellectual Property or other data and if such markings are affixed, the MLGCA shall have the right at any time to modify, remove, obliterate, or ignore such warnings.

Contractor agrees to treat all New Intellectual Property Rights as confidential and trade secret proprietary information. Except as expressly permitted in Section 4.32, Contractor shall not sell, copy, transfer, publish, disclose, display, or otherwise make available any New Intellectual Property Rights to any person or third party (including any of its subsidiaries), except those with a need to know such New Intellectual Property Rights in order to accomplish the purposes of this Contract. Contractor shall secure and protect the New Intellectual Property Rights in a manner consistent with the maintenance of the rights in the New Intellectual Property Rights, and shall take appropriate action by instruction and/or agreement with its employees who are permitted access to such New Intellectual Property Rights, to satisfy its obligations hereunder. The foregoing restrictions continue to apply (even after the termination of this Contract) without limit in time.

4.33 RIGHT TO REJECT OR SUBSTITUTE PERSONS PROPOSED FOR PROJECT

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The MLGCA shall have the right to reject any person proposed by the Contractor to work on this Contract if the MLGCA determines that the use of such person is not suitable for the Contract, they are not qualified, or that their work on the Contract is not in the best interest of the State.

All Key personnel identified in the Contractor’s proposal, or identified at Contract commencement, shall perform continuously for the duration of the Contract, and for so long as performance is satisfactory to the MLGCA. The Procurement Officer will give written notice of performance issues to the Contractor, describing the problem and delineating remediation requirement(s). The Contractor shall respond with a written remediation plan within three (3) Business Days and implement the plan immediately upon written acceptance of the MLGCA. If performance issues persist, the MLGCA may require the immediate removal of person(s) whose performance is at issue and determine whether a substitution is required.

The Contractor may not substitute Key personnel, other than by reason of an individual’s death, sudden illness or termination of employment, without the prior written approval of the MLGCA. To replace any Key personnel identified in the Contractor’s proposal or at Contract commencement, the Contractor shall submit the resumes of the proposed substitute personnel to the MLGCA for approval at least two weeks prior to the effective date of substitution. All proposed substitute personnel shall have qualifications at least equal to those of the replaced personnel, and shall be approved by the MLGCA.

4.34 CONFLICT OF INTEREST

The Contractor shall ensure that there is no real or perceived conflict of interest of clients at any time during the term of the Contract. If the Contractor has any MLGCA-related clients or clients which would be perceived as improper in its alliance to the MLGCA at the time of Contract award, or obtains any such clients during the term of the Contract, the Contractor shall notify the MLGCA of such clients.

The MLGCA shall make the final determination as to whether any

activity constitutes a conflict of interest pursuant to this provision. The MLGCA’s

decision shall be final and without recourse; however, the MLGCA will not make any such decision without providing the Contractor with an opportunity to present comments. Failure of the Contractor to cancel such client accounts upon notification by the MLGCA that a conflict exists, shall constitute a material breach of the Contract, and the Contract is subject to termination by the MLGCA. See provisions of COMAR 21.05.08.08 (B) and State Finance and Procurement Article, §13-211 and §13-212 of the Annotated Code of Maryland.

4.35 CONFIDENTIALITY

The Contractor agrees that any information, whether proprietary or not, made known to or discovered by it during the performance of or in connection with this Contract shall kept confidential and not be disclosed to any person other than

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the State, its designated officials, employees, and authorized agents. The Contractor shall immediately notify the MLGCA in writing if it is requested to disclose any information made known to or discovered by it during the performance of the Contract.

4.36 SET-OFF

The MLGCA may deduct from and set-off against any amounts due and payable to the Contractor any back charges or damages sustained by the State that are caused by the Contractor. Nothing herein shall be construed to relieve the Contractor of liability for additional costs resulting from a failure to satisfactorily perform the services.

4.37 DRUG AND ALCOHOL FREE WORKPLACE

The Contractor shall comply with the State's Drug and Alcohol Free Workplace provisions as set forth in paragraph E. of the Contract Affidavit (Appendix B).

4.38 DISSEMINATION OF INFORMATION

The Contractor shall not release any information related to the services or performance of the services under this Contract nor publish any final reports or documents without the prior written approval of the MLGCA. The Contractor shall indemnify the State, MLGCC and MLGCA, their officials, agents, and employees, from any liability that may be incurred by reason of dissemination, publication, distribution or circulation, of any information, or materials pertaining to this Contract by the Contractor, its agents, or employees.

4.39 MLGCA TICKET PURCHASE AND PRIZE PAYMENT RESTRICTIONS

In accordance with Section 9-123 of the Maryland State Government Article, Annotated Code, no officer or employee of the MLGCA, their spouse, child, brother, sister, or parent residing in the household of such officer or employee shall purchase a Maryland MLGCA ticket or be paid a prize in any Maryland Lottery game. During the term of this Contract, this restriction shall also apply to officers and employees of the Contractor or of any subcontractor whose use is

subject to MLGCA approval who are directly involved with the MLGCA’s

account, and their spouse, child, brother, sister, or parent residing in the household of such officer or employee. The Contractor shall ensure that this requirement is made known to each officer and employee of the Contractor and any subcontractor whose use is subject to MLGCA approval. The Director shall have the sole discretion to determine the applicability of this restriction to any specific individual.

4.40 CONTRACTOR COOPERATION

The Contractor shall cooperate with any subsequent contractor or any other contractor designated by the MLGCA to accomplish its objectives.

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4.41 CHANGES, ALTERATIONS OR MODIFICATIONS IN THE SERVICES

Pursuant to Section 13-218 of the State Finance and Procurement Article, Annotated Code of Maryland, the State has: 1) the unilateral right to order in writing changes in the work within the scope of the Contract; and 2) the unilateral right to order in writing a temporary stop or delay in performance.

1. The Procurement Officer may at any time, by written order and unilaterally and without notice to the sureties, if any, make changes within the general scope of this Contract in any one or more of the following:

a. Description of services to be performed;

b. Time of performance (i.e., hours of the day, days of the week, etc.);

c. Place of performance of the services;

d. Drawings, designs or specifications;

e. Method of shipment or packing of supplies; and

f. Place of delivery.

2. If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this Contract, whether or not changed by the order, the Procurement Officer shall make an equitable adjustment in the contract price, the delivery schedule or both, and shall modify the Contract.

3. The Contractor must assert its right to an adjustment under this clause

within thirty (30) days from the date of receipt of the written order.

4. If the Contractor’s proposal for an adjustment includes the cost of property

made obsolete or excess by the change, the Procurement Officer shall have the right to prescribe the manner of the disposition of the property.

5. Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the Contract as changed.

4.42. AUDIT REQUIREMENTS

The Contractor shall have the audits described below performed on an annual basis for each year of the Contract and Renewal Option period if exercised. The Contractor shall be responsible for the cost of all audits described below as well as implementing all audit recommendations on a timely basis at no additional cost to the MLGCA. Progress reports as well as supporting documentation regarding the status of the implementation of the recommendations may be required at specified time intervals as determined by the MLGCA.

4.42.1 ANNUAL FINANCIAL STATEMENT AUDIT

The Contractor shall have an annual financial statement audit conducted by an

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independent Certified Public Accounting ("CPA") firm. These audits shall be conducted in accordance with auditing standards generally accepted in the United States of America. The Contractor shall incur the cost of the financial statement audit. A copy of the Contractor’s annual financial statement audit, including the opinion, shall be provided directly to the MLGCA upon completion of each audit. The Contractor shall provide the MLGCA with Securities and Exchange MLGCA (SEC) 10-K reports (or the appropriate non-U.S. equivalent) as they are issued, together with any other reports required pursuant to Section 13 of the Securities and Exchange Act of 1934, as amended.

4.42.2 ANNUAL SSAE 16 AUDIT

The Contractor shall have an annual SSAE 16 audit report conducted by an independent CPA firm, as it pertains to the Contractor’s Maryland operations. These audits may also require travel to the Contractor’s headquarters operations. A SSAE 16 Audit includes both a review of the internal controls placed in operation as well as tests of operating effectiveness. The Contractor shall be responsible for the cost of these yearly audits. Prior to contracting with the independent CPA firm, the Contractor shall obtain the MLGCA's approval of the firm. In addition, prior to the start of each audit, the Contractor in conjunction with the MLGCA shall jointly determine the control objectives to be tested. The Contractor shall be responsible for implementing all recommendations on a timely basis at no additional cost to the MLGCA. Progress reports as well as supporting documentation regarding the status of the implementation of the recommendations may be required at specified times as determined by the MLGCA.

If the Contractor fails to receive an unqualified opinion on these yearly audits or fails to comply with the recommendations, the MLGCA will deem this infraction to be a material breach of contract and the Contractor may be subject to liquidated damages as referred to in Section 4.48 of this RFP until all significant deficiencies are corrected to the satisfaction of the MLGCA.

4.42.3 AUDIT OF CONTRACTOR RECORDS AND PROCEDURES

The MLGCA either directly or through third party representatives (e.g., legislative auditors, MLGCA independent auditors, MLGCA internal auditor), shall have the right to audit any and all Contractor and Subcontractor procedures and operations. The Contractor shall fully cooperate and make all records available for review. The Contractor shall implement all audit recommendations, on a timely basis, at no additional cost to the MLGCA. Progress reports as well as supporting documentation regarding the status of the implementation of the recommendations may be required at specified time intervals as determined by the MLGCA. Failure to comply with the recommendations may result in liquidated damages as defined in Section 4.48 until all significant deficiencies are corrected to the satisfaction of

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the MLGCA. 4.43 PRODUCT SUBSTITUTION/TECHNICAL ENHANCEMENTS

During the term of the Contract, the State may desire to incorporate new products or technologies that are within the scope of the Contract but were not available in the marketplace at the time of execution of the Contract. Such new products and technologies may offer significant advantages to the State in terms of economy, efficiency, quality and effectiveness and therefore it may be in the State’s interest to take advantage of such new products or technologies in a manner consistent with applicable law and the Contract.

1. A product or device provided by the Contractor during the term of this Contract may be substituted by the Contractor only under the following conditions:

a. The item has been discontinued by the manufacturer or has

otherwise become obsolete;

b. The replacement item shall be of equal or greater performance and technical capabilities than the item being replaced;

c. The price of the replacement item shall not exceed the price of the

item being replaced; and

d. The substitution shall be pre-approved in writing by the Procurement Officer.

Any request for substitution shall be submitted in writing to the Procurement Officer. The request shall include the reason for substitution; a list of the items being replaced; a list of the replacement items including product documentation, literature, etc.; and the price of the replacement items.

2. Enhancement or replacement of obsolete or obsolescent technology may

be accepted by the State at its sole discretion. Any request for such enhancement or substitution shall be submitted in writing to the Procurement Officer and the Contract will be amended accordingly.

3. Nothing in this Contract shall preclude the MLGCA from utilizing future technical enhancements to the printing processes, evolving printing technologies, or enhancements and proprietary themes or play styles developed by the Contractor, so long as the price charged for such possible future option is fair and reasonable.

4.44 VARIATIONS IN ESTIMATED QUANTITIES

Where the quantity of a pay item in this Contract is an estimated quantity and where the actual quantity of such pay item varies more than twenty-five percent (25%) above or below the estimated quantity stated in this Contract, an equitable adjustment in the Contract price shall be made upon demand of either party. The

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equitable adjustment shall be based upon any increase or decrease in costs due solely to the variation above one hundred twenty-five percent (125%) or below seventy-five percent (75%) of the estimated quantity. If the quantity variation is such as to cause an increase in the time necessary for completion, the Procurement Officer shall, upon receipt of a written request from the Contractor for an extension of time within ten (10) days from the beginning of the delay or within a further period of time which may be granted by the Procurement Officer before the date of final settlement of the Contract, ascertain the facts and make the adjustment for extending the completion data as in his/her judgment the findings justify.

4.45 OVERREDEMPTION

In the event that a Deal must be terminated by the MLGCA as a result of an overredemption, the Contractor shall be responsible for all costs incurred by the MLGCA resulting from the overredemption and the sum of such total costs times the percentage of unsold Instant Tickets. An overredemption occurs when the prizes paid exceed the end of production prize structure established by the Contractor for that Deal.

4.46 SOFTWARE PROGRAMMING ERRORS

The Contractor shall be responsible to the MLGCA for all costs incurred arising out of any software programming errors which may occur under this Contract.

4.47 RESPONSIBILITY FOR CONTRACTOR ERRORS

The Contractor agrees to be responsible for all costs incurred by the MLGCA resulting from errors or omissions by the Contractor regardless of whether the Deal is actually closed-out early. The Contractor shall be responsible for actual costs incurred, including loss of anticipated sales. In addition to the above costs, the Contractor shall also be responsible for the loss of goodwill to the MLGCA, with such loss of goodwill being a flat rate cost of Twenty-Five Thousand Dollars ($25,000.00) per occurrence.

4.48 LIQUIDATED DAMAGES

4.48.1 General - It is agreed by the MLGCA and Contractor that:

a. If the Contractor does not provide or perform the requirements referred to or listed in this provision, damage(s) to the MLGCA will result.

b. Proving such damage(s) will be costly, difficult, and time consuming.

c. The damage figures listed below represent a good faith effort to quantify the range of harm that could reasonably be anticipated at the time of the making of the Contract and is not considered a penalty.

d. Liquidated damages shall become due within thirty (30) calendar

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days after written notification by the MLGCA. The MLGCA may, at its sole discretion, deduct liquidated damages from payments due to the Contractor. The Contractor’s surety shall be liable under the Performance Bond for all liquidated damages assessed against the Contractor.

e. Nothing in this provision shall be construed as relieving the Contractor

from performing all Contract requirements whether listed herein or not, nor is the MLGCA’s right to enforce or to see other remedies from failure to perform any other Contract duty hereby diminished.

f. Remedies of the MLGCA specified in this section or elsewhere in the Contract for breach or failure of performance by the Contractor shall in no way limit any other remedies available to the MLGCA under the Contract; under any stature or regulation; or at law or in equity including, without limitation, all remedies of a buyer under the Uniform Commercial Code. All rights, powers and remedies shall be cumulative and concurrent. Any failure of the MLGCA to exercise a remedy shall not be a waiver of any breach or non-performance by the Contractor nor shall it prevent the MLGCA from later exercising that or any other remedy.

g. The Contract will be used by the MLGCA to monitor Contractor

performance and will provide the basis for determining liquidated damages.

4.48.2 Liquidated Damages Assessment: Collections, Withholds

a. Once the MLGCA has determined that liquidated damages are to be

assessed, the Director shall notify the Contractor of the assessment (or

assessments). At the Director’s discretion, the assessment notice may direct payment of the assessment by the Contractor. If payment is thus directed, the Contractor shall pay the assessment within thirty (30) calendar days of receipt of the assessment notice unless directed otherwise by the Director. If the Director determines that any damage was caused in part by the MLGCA, the Director shall reduce damage assessment against the Contractor proportionately.

b. Any liquidated damages assessment may also be collected, at the

Director’s discretion, by withholding the funds from any payment (or

payments) due the Contractor after the date of assessment.

4.48.3 Conditions for Termination of Liquidated Damages

As determined appropriate by the Director, the following are the conditions under which the Contractor may obtain relief form the continued assessment of liquidated damages which have been imposed.

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a. Except as waived by the Director, no liquidated damages imposed on

the Contractor shall be terminated or suspended until the Contractor issues a written notice of correction to the Director verifying the correction of condition(s) for which liquidated damages were imposed, and all the Contractor corrections have been subjected to system testing or other verification at the discretion of the Director.

b. The Contractor shall conduct the acceptance testing of any correction

the Director deems necessary.

c. The necessary level of documentation to verify corrections will be determined by the Director, who is the sole judge of the accuracy of any documentation provided.

d. A Contractor Notice of Correction will not be accepted until the

correction is verified by a system test and the MLGCA’s written approval of the test results is received.

e. Unless specified otherwise by the Director, system corrections shall be sustained for a reasonable period of at least ninety (90) calendar days from MLGCA acceptance, otherwise liquidated damages may be re-imposed without a succeeding grace period (in those cases where one is allowed) within which to correct.

f. The Contractor’s use of resources to correct defects shall not cause

other system problems.

g. The Contractor shall certify that each defect is corrected. 4.48.4 Severability of Individual Liquidated Damages Clauses

If any portion of any provision on liquidated damages in this Contract is determined to be unenforceable in one or more of its applications, the remaining portion remains in effect in all applications not determined to be invalid that are severable from the invalid applications. If any portion of this liquidated damages provision is determined to be unenforceable in total, the other portions shall remain in full force and effect.

4.48.5 ITLM Central System Implementation

4.48.5.1 Condition

The Contractor shall complete all installation preparations as required by the MLGCA, complete ITLM Central System testing to the MLGCA's satisfaction, pass MLGCA Acceptance Testing, and comply with all other Contractual requirements and the schedule as specified in the final Implementation Plan as approved by the MLGCA.

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4.48.5.2 Damages

The MLGCA may impose liquidated damages of up to $1,000 per day per Facility, after notice by the MLGCA, prior to the scheduled date for commencement of operation, and $1,000 per day per Facility following the scheduled date for commencement of operation for each calendar day of delay in completion of ITLM Central System testing or Acceptance Testing beyond the periods defined in the Contract and may assess such damages until ITLM Central System testing or Acceptance Testing is completed in accordance with definitions and requirements set forth herein.

In addition, the MLGCA may impose liquidated damages of up to $500 per day for each and every failure to provide a deliverable or resolve an acceptance test problem pursuant to the agreed upon schedule or to comply with all other contractual requirements in effect, until such requirement is provided or performed.

4.48.6 ITLM Central System Outage

4.48.6.1 Condition

The ITLM Central System shall not be ―down‖ more than two (2) minutes total during any day. When cumulative downtime extends beyond two (2) minutes during any day due to a problem with any part of the ITLM Central System network for which the Contractor is responsible, liquidated damages may be imposed.

4.48.6.2 Damages

The average amount of revenue per minute per ITLM for the Facility over the 4 week period prior to the ITLM Central System outage will be used to calculate damages. For each minute of downtime wherein a loss of revenue occurs, or fraction thereof, beyond two (2) minutes, the MLGCA may impose liquidated damages in the amount equivalent to the average amount of revenue per minute per ITLM for the Facility over the 4 week period prior to the ITLM Central System outage.

4.48.7 Delivery and Installation of ITLMS

4.48.7.1 Condition The Contractor shall deliver and install all ITLMs within the time period specified in the NTP, but in no case shall the delivery date exceed ninety (90) days from the date of the NTP. An ITLM shall be considered to be delivered and installed and when it has been installed at the designated Facility, passed acceptance testing, been accepted by the MLGCA and is ready to be activated by the ITLM Central System for customer play. 4.48.7.2 Damages In the event that the Contractor fails to deliver and install a ITLM to a Facility within the schedule specified in the NTP, the MLGCA may impose liquidated damages in the amount of One Hundred Dollars ($100.00) per ITLM per day

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for each day or fraction thereof in excess of the specified delivery date that the ITLM is not delivered and installed at the specified Facility.

4.48.8 Inoperable ITLM

4.48.8.1 Condition

The Contractor shall be responsible to determine that all ITLMs are operable and when a malfunction occurs the Contractor shall ensure that the affected ITLM is returned to an operational state within two (2) hours. This time period shall be measured from the time of receipt of a service call, and a repair shall be considered completed when the technician who completed the repair informs the ITLM Central System Contractor that the ITLM is repaired and ready to be activated for play. In all cases the determination as to whether or not an ITLM is operational shall be made solely by the MLGCA.

4.48.8.2 Damages

For any maintenance delay which causes a ITLM to be inoperable beyond the allowable two (2) hours, the MLGCA may impose liquidated damages of up to the amount calculated by the formula below per ITLM per minute for which a ITLM is inoperable:

Average win per ITLM per day at the Facility. x # of minutes inoperable 18 hours x 60 minutes

4.48.9 Deficient ITLM Field Service

4.48.9.1 Condition

The Contractor shall employ sufficient resources and inventory to meet the performance standards for ITLM field service specified in the Contract. Within thirty (30) calendar days after notification from the MLGCA that a performance standard is not being met, the Contractor shall employ such additional resources as are necessary to meet the performance standard.

4.48.9.2 Damages

If the Contractor fails to bring deficient performance up to the required standard within thirty (30) days of notification, the MLGCA may impose liquidated damages in the amount of Five Hundred Dollars ($500) per day per affected ITLM until performance is in compliance with the Contract.

4.48.10 Software Errors

4.48.10.1 Condition Software malfunction resulting in the wrongful award or denial of credits to the ITLM or the partial loss of ITLM operations.

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4.48.10.2 Damages For any software malfunction described above, the MLGCA may impose liquidated damages in the amount of up to $10,000 for each occurrence.

4.48.11 Counterfeit Items

4.48.11.1 Condition

Acceptance of counterfeit bills, tickets, coupons, coins, or tokens resulting in the wrongful award credits and any subsequent additional play or jackpot associated with such acceptance.

4.48.11.2 Damages

For any counterfeit bills tickets, coupons, coins or tokens accepted by the ITLM, the MLGCA may impose liquidated damages in the amount of up to the face amount of the counterfeit item(s) accepted plus $1,000 for each occurrence.

4.48.12 Performance of Progressives

4.48.12.1 Condition

Progressives shall be setup and linked to ensure the highest level of accuracy in operation, payout and reporting.

4.48.12.2 Damages

In the event of the display, payment or reporting of a wrongful award of a progressive jackpot, the MLGCA may impose liquidated damages in the amount of up to $10,000 for each occurrence.

4.48.13 Timely and Accurate Reports

4.48.13.1 Condition

The Contractor shall produce and deliver timely, sufficient and accurate reports within the specified time frames and descriptions in the Contract whether printed or transferred electronically. Reports shall be produced and delivered on both a scheduled and on-request basis according to the schedule approved by the MLGCA at the time of Contract award.

4.48.13.2 Damages

For each late, insufficient or inaccurate report, the MLGCA may impose liquidated damages in the amount of $1,000 per calendar day per report until the report is provided, made sufficient or corrected.

4.48.14 Timely and Accurate Files

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4.48.14.1 Condition

The Contractor shall provide timely, sufficient and accurate files within the specified time frames and descriptions in the Contract. Files shall be produced and delivered on both a scheduled and on-request basis according to the schedule approved by the MLGCA at the time of Contract award.

4.48.14.2 Damages

For each late, insufficient or inaccurate file required by this Contract, the MLGCA may impose liquidated damages in the amount of $1000 per file per day, until the required accurate file is provided to the MLGCA.

4.48.15 Failure to Modify Existing Software/Reports or to Install Additional Software/Reports or Implement Requests for ITLM Central System Service

4.48.15.1 Condition The Contractor shall modify existing software/reports or install additional software/reports or implement requests for ITLM Central System service within a negotiated time frame with the MLGCA having the final determination. In addition, the Contractor shall complete an acceptance test of the required modification or addition to the ITLM Central System, and receive the MLGCA's written approval of such test, within the time frame previously negotiated. 4.48.15.2 Damages The MLGCA may impose liquidated damages of up to $1,000 per day that the modified or additional software or change order is not installed. Release of the change resulting from the modification or additional software may be scheduled by the MLGCA for public sales at a later time.

4.48.16 Failure to Provide Enhancements

4.48.16.1 Condition

The MLGCA and Contractor may during the Contract term agree in writing to a schedule for developing, testing, and implementing or installing a modification or enhancement of an existing ITLM or report or an addition of a new ITLM or report. Upon issuance of the request for a change by the MLGCA, the Contractor shall have fifteen (15) days to respond with a written proposal for delivery of the change. The MLGCA shall make the determination of a delivery date for the modifications and enhancements. 4.48.16.2 Damages If the Contractor fails to meet any date specified in such a schedule, the MLGCA may assess liquidated damages in the amount of $1,000 per day for each day of delay regarding the modification, enhancement, or addition of

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an ITLM and $500 per day for each day of delay regarding the modification, enhancement, or addition of a report, or other system change. The MLGCA, at its sole discretion, may require the Contractor to retain and compensate a third party firm to complete system development tasks in order to ensure timely delivery. The third party firm shall be approved by the MLGCA, and if necessary, selected by the MLGCA. The Contractor shall ensure that the third party retained under these circumstances properly complies with non-disclosure agreements regarding proprietary materials and MLGCA business plans.

4.48.17 Unauthorized Software/Hardware Modifications

4.48.17.1 Condition

The Contractor shall not modify any software or hardware without the prior written consent of the MLGCA or designee. (―Modify‖ does not include replacing a ITLM Central System component with an essentially similar component in the event of necessary maintenance.)

4.48.17.2 Damages

If the Contractor modifies any software or hardware, without the prior written approval of the MLGCA, the MLGCA may issue a written order that the change or modification shall be removed and the ITLM Central System restored to its previous operating state at the Contractor's expense. Further, the MLGCA may impose liquidated damages in the amount of up to $1,000,000 per violation in addition to any other damages that may occur as a result of such unauthorized modification.

4.48.18 Unauthorized Access

4.48.18.1 Condition

The Contractor shall preclude unauthorized persons, that is, personnel who are not authorized by the MLGCA, from accessing the computer facility and/or ILTM ITLM Central System and ITLMs.

4.48.18.2 Damages

If the Contractor fails to preclude access by unauthorized personnel, the MLGCA may impose liquidated damages in the amount of up to $50,000 for each person, for each occurrence in violation. An occurrence shall be defined as each and every act that permits access by an unauthorized person.

4.48.19 Minority Business Enterprise Compliance

See Section 4.51

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4.48.20 Other Breaches of Contract

If the Contractor fails to comply with any material provision of the Contract for which liquidated damages are not specifically provided herein, the MLGCA, after providing such notice as is appropriate to the particular breach, shall be entitled to liquidated damages in the amount of up to $10,000 for each and every calendar day of continued breach of each material provision of the Contract.

4.49 BOND REQUIREMENTS

4.49.1 Proposal Bond

Each Offeror shall submit with its proposal a Proposal Bond in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) to guarantee for one hundred eighty (180) days after the Deadline for Receipt of Proposals the availability of the equipment and services at the offered price. The bond shall be in the form provided in Appendix I and underwritten by a surety company authorized to do business in the State and subject to approval by the MLGCA, or other acceptable security for bond as described in COMAR 21.06.07. A certified check or cashier’s check payable to the MLGCA may also serve as a Proposal Bond.

Offerors may request a release of the bond after the date of Contract award in return for a release signed by the Offeror and accepted by the MLGCA.

4.49.2 Litigation/Protest Bond

Each Offeror must submit with its proposal a Litigation/Protest Bond in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00). The purpose of the Litigation/Protest Bond is to discourage frivolous lawsuits and protests

by permitting the MLGCA to recover, in addition to its attorney’s fees, damages

that result from delay in implementing a Contract. A claim upon the bond may be made by the MLGCA if:

1. The Offeror brings any legal action or protest against the MLGCA, the

State, the MLGCA, or any individual member thereof, or any employee of the State, over the award of a Contract resulting from this RFP;

2. The MLGCA or such other party is the prevailing party at the conclusion of

the action or protest; and,

3. The tribunal before which the action was brought, or any other authorized tribunal, determines that the action or any portion thereof was frivolous, was brought in bad faith, or was not based upon reasonable grounds.

The bond shall be in the form of a policy or certificate underwritten by a surety company authorized to do business in the State and shall be subject to approval by the MLGCA, or other acceptable security for bond as described in COMAR 21.06.07. Offerors may submit Litigation/Protest Bond in a form as found in

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Appendix H.

The bond shall remain in effect for one (1) year from the Deadline for Receipt of Proposals. Offerors, including the successful Offeror/Contractor, may request a release of the bond after the date of Contract award in return for a Release and Covenant Not To Sue in a form acceptable to the MLGCA, signed by the Offeror, notarized and accepted by the MLGCA.

4.49.3 Fidelity Bond

The Contractor shall submit to the Procurement Officer, within ten (10) business days after notice of recommended Contract award, a Fidelity Bond in the amount of One Million Dollars ($1,000,000.00) covering any loss to the State due to any fraudulent or dishonest act on the part of the Contractor, and any officer, employee, or subcontractor of the Contractor. If coverage for subcontractors is not included in the Fidelity Bond, then the Contractor shall require each subcontractor to provide the Procurement Officer sufficient evidence of its own coverage. The bond must be in the form of a policy or certificate underwritten by a surety company authorized to do business in the State and shall be subject to approval by the MLGCA, or other acceptable security for bond as described in COMAR 21.06.07. The Fidelity Bond shall be maintained throughout the term of this Contract, and renewal option period, if exercised. Evidence of renewal of the Fidelity Bond and payment of the required premium shall be provided to the MLGCA.

Failure of the Contractor to submit and maintain the required Fidelity Bond

coverage, including subcontractor coverage, throughout the term of the Contract, and any Renewal Option Period, if exercised, will constitute an

event of Default under the Contract.

4.49.4 Performance Bond

The Contractor shall submit to the Procurement Officer, within ten (10) business days after notice of recommended Contract award, a Performance Bond in the amount of One Million Dollars ($1,000,000.00) guaranteeing that the Contractor shall well and truly perform the Contract. The bond shall be in the form provided in Appendix J and underwritten by a surety company authorized to do business in the State and shall be subject to approval by the MLGCA, or other acceptable security for bond as described in COMAR 21.06.07. The Performance Bond shall be maintained throughout the term of this Contract, and renewal option period, if exercised. Evidence of renewal of the Performance Bond and payment of the required premium shall be provided to the MLGCA. This bond shall also secure liquidated damages.

The Performance Bond may be renewable annually. The Contractor shall require that the surety provide to the MLGCA thirty (30) days written notice of non- renewal, cancellation, or material modification of the bond by either the surety or the Contractor. Non-renewal, cancellation or material modification of the bond

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by the Surety will not constitute an event of default by the Contractor provided that the Contractor obtains an acceptable replacement Performance Bond to be effective prior to the expiration of the thirty (30) day notice period.

Failure of the Contractor to submit and maintain the required Performance Bond coverage throughout the term of the Contract, and any Renewal Option

Period, if exercised, will constitute an event of Default under the Contract.

After the first year of the Contract, the Contractor may request a reduction in the amount of the Performance Bond. The amount and the duration of the reduction, if any, will be at the MLGCA’s sole discretion. If any reduction is granted, the MLGCA shall have the right to increase the amount of the Performance Bond to any amount, up to the original amount, at any time and at the MLGCA’s sole discretion.

The Performance Bond is forfeited to the MLGCA, in whole or in part, if the Contractor defaults in the performance of its contractual obligations or if the MLGCA incurs damages due to the willful or negligent performance of the Contractor or its subcontractors. However, the surety shall have the option within thirty (30) days of notice of default to cure the default or tender funds sufficient to pay the cost of completion up to an amount not to exceed the penal sum of the bond. With the concurrence of the MLGCA, the surety may assume the remainder of the Contract to perform or sublet.

4.49.5 General Bond Information

4.49.5.1 Individual Surety: In accordance with the Maryland Board of Public Works Advisory #2006-04, a bond executed by an individual surety that meets certain specified criteria is also an acceptable form of security.

4.49.5.2 Surety Bond Assistance Program: Small businesses may qualify for assistance in obtaining bid, performance and payment bonds through the Maryland Small Business Development Financing Authority (MSBDFA). MSBDFA can directly issue bid, performance or payment bonds up to $5 million. MSBDFA may also guarantee up to 90% of a surety’s losses resulting from a contractor’s breach of a bid, performance or payment bond or $1,350,000, whichever is less. Bonds issued directly by the MSBDFA Surety Bond Program (Program) will remain in effect for the term of the contract. Bond guarantees will remain in effect for the term of the bond. To be eligible for bonding assistance, an applicant must:

1. Have its principal place of business in Maryland or be a Maryland resident; 2. First be denied bonding by at least one surety in both the standard and

specialty markets within 90 days of submitting a bonding application to MSBDFA;

3. Employ fewer than 500 full-time employees or have gross sales of less than $50 million annually;

4. Not subcontract more than 75 percent of the work;

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5. Have good moral character and a history of financial responsibility; 6. Demonstrate that the contract will have a substantial economic impact; and 7. Never have defaulted on any loan or financial assistance made or guaranteed

by MSBDFA.

Applicants are encouraged to apply for assistance under the Program through their respective bonding agents. Questions regarding the bonding assistance program should be referred to:

Maryland Small Business Development Financing Authority c/o Meridian Management Group, Inc. 826 East Baltimore Street Baltimore, Maryland 21202 Phone 410-333-2548 Fax: 410-333-2552 Email: [email protected]

4.50 INSURANCE REQUIREMENTS

The requiring of any and all insurance as set forth in these specifications, or elsewhere, shall be in addition to and not in any way in substitution for the other protection provided under the Contract. The Contractor shall provide evidence of third-party legal liability insurance for itself and any subcontractors under the agreement covering claims arising from the operations and services provided under this Contract. All insurances required by this Section shall be effective when Contract commences and shall remain in full force and effect during the Contract term and Renewal Option Period, if exercised, and any extension.

Certificates of Insurance duly issued and certified by the insurance company and evidence of the payment of premiums shall be furnished to the Procurement Officer within ten (10) business days after notice of recommended Contract award. Insurance Certificates shall indicate effective dates and dates of expiration of policies. In the event the Insurance Certificate is not received within the required time, or is insufficient respecting the limits and scope specified herein, the Procurement Officer may cancel the award because of breach of contract. Time is of the essence.

The Contractor shall not commence work under this Contract until all the insurance required under this section has been obtained and approved by the MLGCA, nor shall the Contractor allow any subcontractor to commence work on its subcontract until the insurance required of the subcontractor has been obtained and approved.

All insurance companies shall be licensed or authorized to do business within the State and subject to approval by the MLGCA. No acceptance and/or approval of any insurance by the MLGCA shall be construed as relieving or excusing the Contractor, or the Surety of its Bonds, from any liability or obligation imposed upon either or both of them by the provisions of the Contract.


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It is the sole responsibility of the Contractor to insure that its subcontractors or their subcontractors carry insurance required herein to the extent Contractor wishes to impose on its subcontractor such liability insurance. The Contractor shall be held responsible for compliance and enforcement of the MLGCA’s insurance requirements and its own requirements and for any modifications or waivers of these insurance requirements as they apply to subcontractors.

The Contractor shall require that the policies of insurance name the MLGCA as an additional insured and that each insurer shall provide to the MLGCA sixty (60) days written notice of non-renewal, cancellation, or material modification of the insurance policy by either the insurance carrier or the Contractor. Upon notification of non-renewal or cancellation, the Contractor shall provide replacement coverage effective prior to the expiration of the sixty (60) day notice period, or Contractor may be deemed to be in default of this Contract.

By requiring such coverage, the MLGCA shall not be deemed to have waived any immunity from liability which it may otherwise have. An Offeror who seeks to self-insure for the required coverage shall meet all applicable local, State and federal laws and regulations regarding self-insurance and shall submit evidence of such compliance to the MLGCA for approval with its Proposal.

The MLGCA shall have the right to require that the limits of liability set forth in this Section be raised if in its judgment economic or insurance market conditions warrant. If additional costs are incurred because of raised limits, the pre- approved additional cost shall be added to the Contract amount.

If any contract of insurance between the Contractor or any subcontractor and its insurance company shall, to any extent, be determined to be void or unenforceable, it is the intention of the parties that such circumstances shall not otherwise affect the validity or enforceability of Contractor's agreements and obligations under the Contract nor the validity or enforceability of such contract of insurance, each of which shall be enforced to the fullest extent permitted by law.

The furnishing of evidence of insurance by certificate or policy copy that is not in conformance with the requirements shall not constitute a waiver of or amendment to, the aforementioned requirements. Any modification or waiver of the requirements shall be provided by the MLGCA in writing to the Contractor and agreed to by signature of the Contractor.

4.50.1 Property Insurance

Insurance for extended coverage on all Contractor owned Equipment shall be maintained in the amount of actual replacement cost thereof. This policy shall include an All Risk Property Floater to insure personal property including contents, Equipment and mobile items against fire, collision, flood, etc. Neither the State, the MLGCA, nor Facilities shall be responsible for any Equipment not owned by the State.

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4.50.2 Liability Insurance

The Contractor shall maintain Comprehensive General Liability Insurance covering the full scope of the Contract with limits of at least One Million Five Hundred Thousand Dollars ($1,500,000.00) for any one person, and Three Million Dollars ($3,000,000.00) for any one occurrence for death or personal injury, and Three Million Dollars ($3,000,000.00) for any one occurrence for property damage; or a Combined Single Limit for Bodily Injury or Property Damage in the amount of Six Million Dollars ($6,000,000.00).

4.50.3 Errors and Omissions/Deal Insurance

The Contractor shall purchase and maintain during the term of the Contract an Errors and Omissions Insurance Policy for each Deal covering an ultimate net loss of Five Million Dollars ($5,000,000.00) per Deal.

4.50.4 Automotive Insurance

If automotive equipment is required in the performance of this Contract, automobile bodily injury liability insurance with a limit of not less than One Million Dollars ($1,000,000.00) for each person and Two Million Dollars ($2,000,000.00) for each accident, and property damage liability insurance with a limit of not less than Two Hundred Thousand Dollars ($200,000.00) for each accident shall be required.

4.50.5 Worker's Compensation

The Contractor shall maintain Worker's Compensation Insurance, which shall include Employer’s Liability coverage, in amounts as required by State law.

4.51 MINORITY BUSINESS ENTERPRISE COMPLIANCE

4.51.1 A minimum certified Minority Business Enterprise participation goal of Ten Percent (10.0%) of the Contract value, on a yearly basis, has been established for this Contract.

The Contractor agrees that at least this dollar value of the Contract shall be performed by a Maryland Department of Transportation (MDOT) certified minority business enterprise(s). The Contractor further agrees to comply with all requirements and reporting specified in the RFP Appendix D – Minority Business Enterprise Instructions/Forms.

4.51.2 If the MLGCA determines that material noncompliance with MBE Contract provisions exists and that the Contractor refuses or fails to take the corrective action required by the MLGCA, then the following sanctions may be invoked. (See COMAR 21.11.03.13 C.):

i. Withholding payment

ii. Termination of the Contract

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iii. Suspension of the right of the Contractor to participate in any future contracts

iv. Referral to the Office of the Attorney General for appropriate action

v. Initiation of any other specific remedy identified by the Contract

vi. The MLGCA may use any other compliance mechanism authorized in COMAR 21.11.03 or available at law.

4.51.3 The MLGCA may, upon completion of the Contract and before final payment or release of retainage or both, require that the Contractor submit a final report, in affidavit form and under penalty of perjury, of all payments made to or withheld from MBE subcontractors. 4.51.4 Liquidated Damages: This Contract requires the contractor to make good faith efforts to comply with the Minority Business Enterprise (―MBE‖) Program and contract provisions. The State and the Contractor acknowledge and agree that the State will incur damages, including but not limited to loss of goodwill, detrimental impact on economic development, and diversion of internal staff resources, if the Contractor does not make good faith efforts to comply with the requirements of the MBE Program and MBE contract provisions. The parties further acknowledge and agree that the damages the State might reasonably be anticipated to accrue as a result of such lack of compliance are difficult to ascertain with precision. Therefore, upon a determination by the State that the Contractor failed to make good faith efforts to comply with one or more of the specified MBE Program requirements or contract provisions, the Contractor agrees to pay liquidated damages to the State at the rates set forth below. The Contractor expressly agrees that the State may withhold payment on any invoices as a set-off against liquidated damages owed. The Contractor further agrees that for each specified violation, the agreed upon liquidated damages are reasonably proximate to the loss the State is anticipated to incur as a result of such violation.

a. Failure to submit each monthly payment report in full compliance with COMAR 21.11.03.13B (3): $25.00 per day until the monthly report is submitted as required.

b. Failure to include in its agreements with MBE subcontractors a provision requiring submission of payment reports in full compliance with COMAR 21.11.03.13B (4): $25.00 per MBE subcontractor. c. Failure to comply with COMAR 21.11.03.12 in terminating, canceling, or changing the scope of work/value of a contract with an MBE subcontractor and/or amendment of the MBE participation schedule: the difference between the dollar value of the MBE participation commitment on the MBE participation schedule for that specific MBE firm and the dollar value of the work performed by that MBE firm for the contract. d. Failure to meet the Contractor’s total MBE participation goal and subgoal

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commitments: the difference between the dollar value of the total MBE participation commitment on the MBE participation schedule and the MBE participation actually achieved. e. Failure to promptly pay all undisputed amounts to an MBE subcontractor in full compliance with the prompt payment provisions of this contract: $50.00 per day until the undisputed amount due to the MBE subcontractor is paid.

Notwithstanding the use of liquidated damages, the State reserves the right to terminate the Contract and exercise all other rights and remedies provided in the Contract or by law.

4.52 INFORMATION TECHNOLOGY SECURITY POLICY AND STANDARDS

The Contractor shall comply with and adhere to the State of Maryland Information Technology Security Policy and Standards (October 2011). These policies may be revised from time to time and the Contractor shall comply with all such revisions. The most current version of the Security Policy and Standards is available on-line at http://doit.maryland.gov/support/Pages/SecurityPolicies.aspx.

4.53 GOOD FAITH

The parties agree to cooperate fully in good faith and to assist each other to the extent reasonable and practicable to accomplish the objectives set forth in this Contract.

4.54 NEWS/PRESS RELEASES

The MLGCA is the only entity authorized to issue news releases relating to this Contract and performance thereunder. The Contractor shall not issue any news or press releases or any commercial advertising pertaining to this Contract or to the MLGCC or MLGCA without the prior written approval of the Procurement Officer.

4.55 SEVERABILITY

If a court of competent jurisdiction determines any portion of this Contract to be invalid, it shall be severed and the remaining portions of this Contract shall control, at the discretion of the MLGCA, unless otherwise ordered by the court.

4.56 ADVERSE INTEREST

The Contractor agrees that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of its services hereunder. The Contractor further agrees that in the performance of this Contract it will not knowingly employ, directly or indirectly, any person having such an interest.

http://doit.maryland.gov/support/Pages/SecurityPolicies.aspx

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4.57 NON-EXCLUSIVE RIGHTS

The Contract shall be non-exclusive and nothing in this Contract shall preclude the MLGCA from procuring similar services from another vendor. The MLGCA reserves the right to secure directly the services of third parties to perform any services secured under this Contract. The Contractor will not be entitled to payment of any fee or otherwise for any services performed by these third parties.

4.58 CONTRACT AFFIDAVIT

All terms and conditions of the Contract Affidavit, Appendix B of the RFP, are made a part of this Contract.

4.59 COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA)

Contractor shall comply with the Americans with Disabilities Act of 1990 (ADA), including changes made by the ADA Amendments Act of 2008, and applicable regulations. To the extent required by the ADA, Contractor's facilities, services, and programs shall be accessible to persons with disabilities. Contractor shall bear sole responsibility for assuring that its activities under this Contract conform to the ADA. Contractor shall indemnify the State in any action brought pursuant to the ADA for all damages, attorney fees, litigation expenses, and costs, if such action or proceeding arises from the acts of Contractor, or of Contractor's employees, agents, or subcontractors.

4.60 COMPLIANCE WITH LIVING WAGE REQUIREMENT

Contractor shall comply with the Living Wage Requirements as specified in Title 18, State Finance and Procurement (SFP) Article, Annotated Code of Maryland. See http://www.dllr.state.md.us/labor/livingwagefaqs.htm.

4.61 RELATIONSHIP OF THE PARTIES (INDEPENDENT CONTRACTOR)

During the course of this Contract, the Contractor may enter into agreements with third-parties in order for Contractor to fulfill its contractual obligations and responsibilities under this Contract. Contractor fully understands and agrees that the relationship between the MLGCA (State) and the Contractor is that of client and Independent Contractor, and is not, and shall not be deemed to be, any other relationship, including but not limited to, that of joint venture, partners, joint employers or principal and agent. No agent, employee, or servant of the Contractor or any of its subcontractors shall be or shall be deemed to be an employee, agent, or servant of the State for any reason. The Contractor shall be solely and entirely responsible for its acts and the acts of its agents, employees, servants and subcontractors during the performance of this Contract.

From any amount due the Contractor, there will be no deductions for federal

http://www.dllr.state.md.us/labor/livingwagefaqs.htm

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income tax or FICA payments, nor for State income tax, nor for any other purposes that are associated with any employer-employee relationship, unless required by law. Payment of federal income tax, FICA, and State income tax is the responsibility of the Contractor. The Contractor is responsible for complying with all federal and state laws as to taxes and Social Security payments to be withheld from wages paid to its employees and other contractors.

4.61.1 No Liability by MLGCA to Third-Party Vendors or Subcontractors

The MLGCC, MLGCA and State, have no liability for payment or performance to any third party which enters into an agreement with the Contractor for work related

to this Contract. The Contractor does not have the power or authority to sign an

agreement in the MLGCA’s name or on behalf of the MLGCA, to bind or attempt to bind the MLGCC, MLGCA or the State, or any employee or official thereof, to any agreement with a third-party vendor, for payment of any monies or other obligations related to, or arising out of that third-party agreement, or to obligate the MLGCA to any liability if the Contractor fails to pay any subcontractor or other third-party vendor. All agreements into which the Contractor enters with subcontractors and other third-party vendors for work to be performed under this Contract shall be in the Contractor’s name only and shall not name the MLGCA

as a party to the agreement.

4.61.2 Contractor Acknowledgement, Indemnification and Duty to Notify

Contractor acknowledges, fully understands and agrees that the MLGCC, MLGCA or State is not a party to, and is not liable for payment or performance, any third-party agreement that the Contractor may enter into arising out of work related to this Contract. Contractor agrees to remove, redact, or strike any language from agreements it signs with subcontractors and third-party vendors, noting a responsibility or liability by the MLGCC, MLGCA or State with respect to the payment of any monies or other obligations. Contractor agrees to fully indemnify and hold harmless the MLGCC, MLGCA and State from any and all liability of any nature arising out of its third-party relationships, and agrees to provide written notice for each agreement it completes with a third-party vendor, notifying such entities of the Independent Contractor relationship.

4.62 PROMPT PAYMENT

1. If the Contractor withholds payment of an undisputed amount to its subcontractor, the MLGCA, at its option and in its sole discretion, may take one or more of the following actions:

1.1. Not process further payments to the Contractor until payment to

the subcontractor is verified; 1.2. Suspend all or some of the contract work without affecting the completion

date(s) for the contract work; 1.3. Pay or cause payment of the undisputed amount to the subcontractor from

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monies otherwise due or that may become due; 1.4. Place a payment for an undisputed amount in an interest-bearing escrow

account; or 1.5. Take other or further actions as appropriate to resolve the withheld

payment.

2. An “undisputed amount” means an amount owed by a contractor to a

subcontractor for which there is no good faith dispute, including any retainage withheld, and includes an amount withheld because of issues arising out of an agreement or occurrence unrelated to the agreement under which the amount is withheld.

3. An act, failure to act, or decision of the Procurement Officer or a representative of the MLGCA, concerning a withheld payment between a contractor and subcontractor under this policy directive, may not:

3.1. Affect the rights of the contracting parties under any other provision of law; 3.2. Be used as evidence on the merits of a dispute between the MLGCA and the contractor in any other proceeding; or 3.3. Result in liability against or prejudice the rights of the MLGCA.

4. The remedies enumerated above are in addition to those provided under COMAR 21.11.03.13 with respect to subcontractors that have contracted pursuant to the Minority Business Enterprise program.

5. To ensure compliance with certified MBE subcontract participation goals, the MLGCA may, consistent with COMAR 21.11.03.13, take the following measures:

5.1. Verify that the certified MBEs listed in the MBE participation schedule actually are performing work and receiving compensation as set forth in the MBE participation schedule.

5.2. This verification may include, as appropriate:

5.2.1. Inspecting any relevant records of the Contractor; 5.2.2. Inspecting the jobsite; and 5.2.3. Interviewing subcontractors and workers. 5.2.4. Verification shall include a review of:

5.2.4.1.The Contractor’s monthly report listing unpaid invoices over

30 days old from certified MBE subcontractors and the reason for

nonpayment; and

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5.2.4.2. The monthly report of each certified MBE subcontractor, which lists payments received from the contractor in the preceding 30 days and invoices for which the subcontractor has not been paid.

5.3. If the MLGCA determines that a contractor is in noncompliance with certified MBE participation goals, then the MLGCA will notify the contractor in writing of its findings, and will require the contractor to take appropriate corrective action.

5.3.1. Corrective action may include, but is not limited to, requiring the Contractor to compensate the MBE for work performed as set forth in the MBE participation schedule.

5.4. If the Agency determines that a contractor is in material noncompliance with MBE contract provisions and refuses or fails to take the corrective action that the MLGCA requires, then the MLGCA may:

5.4.1. Terminate the contract; 5.4.2. Refer the matter to the Office of the Attorney General for appropriate action; or

5.4.3. Initiate any other specific remedy identified by the contract, including the contractual remedies required by this Directive regarding the payment of undisputed amounts.

5.5. Upon completion of the contract, but before final payment or release of retainage or both, the contractor shall submit a final report, in affidavit form under the penalty of perjury, of all payments made to, or withheld from MBE subcontractors.

4.63 NOTICES

The parties agree that all notices given pursuant to the terms of this Contract shall be sufficient if sent in writing by certified mail and marked ―Certified Mail—Return Receipt Requested‖. Any such notice or communication shall be sent to the following addresses or such other address as may be designated from time to time by the parties in writing:

If to the MLGCA:

Robert W. Howells, Procurement Officer Maryland State Lottery and Gaming Control Agency Montgomery Park Business Center, Suite 330 1800 Washington Boulevard Baltimore, MD 21230

If to the Contractor:

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INSERT CONTRACTOR’S NAME & ADDRESS

4.64 ENTIRE AGREEMENT

This Contract, together with the Appendices attached hereto and documents incorporated herein by reference, represents the complete, total, and final understanding of the parties and no other understanding, communication or representations, oral or written, regarding the subject matter of this Contract, shall be deemed to exist or to bind the parties hereto at the time of execution, and shall be deemed to be superseded by this Contract regarding the subject matter of this Contract..

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

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IN WITNESS WHEREOF, the parties hereto have caused this Veterans’ Organization Instant Ticket Lottery Machines and Related Services Contract #2014-02 to be executed as of the day and year first above written.

CONTRACTOR’S NAME Witness: By:

Name:

(Type/Print)

Title:

Date:

MARYLAND STATE LOTTERY AND GAMING

CONTROL AGENCY Witness: By:

Stephen L. Martino Director

Approved as to form and legal sufficiency this day of , 2013.

Robert T. Fontaine Assistant Attorney General

APPROVED BY MARYLAND BOARD OF PUBLIC WORKS: ITEM#:

(date)

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SECTION V. TECHNICAL SPECIFICATIONS/SCOPE OF WORK

5.1 GENERAL

5.1.1 The MLGCA desires to enter into a contract with a qualified Contractor to provide the design, development, installation, implementation, operation, and maintenance of a ITLM Central System for an ITLM System which includes, but is not limited to, a central computer system located at the MLGCA's headquarters, a hot back-up system located off-site, software, and a Telecommunications Network that will connect each ITLM Facility and all ITLMs to the ITLM Central System as described more fully in this RFP. Qualified Offerors’ proposals shall provide for the design, development, installation, implementation, support, supplies and maintenance of ITLMs at Veterans’ Organizations specified in the Lottery Law, which includes, but is not limited to, the hardware, software, firmware, instant tickets and associated equipment, as more fully described in this RFP. Qualified Offerors’ proposals shall also provide the Instant Ticket design, Instant Ticket planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities. 5.1.2 Offerors must submit proposals encompassing all of the services required in the RFP and may not submit proposals for only certain services of the RFP.

5.1.3 The Contractor shall continuously coordinate the implementation of the ITLM Central System, ITLMs and Telecommunications Network with each of the ITLM Facilities to insure the smooth and timely installation of all components at the Facilities. 5.1.4 The Contractor shall be responsible for all costs, coordination and maintenance as they relate to the design, installation, training, testing, operations and support of a turnkey ITLM Central System environment. Areas of the Contractor's responsibility specifically include, but are not limited to;

5.1.4.1 All Primary and Back-up Site communication lines, computer system components and peripheral equipment, including data center environmental equipment, mainframes/servers, front-end communications processor(s), printers, and tape drives. 5.1.4.2 All communication lines and equipment to each ITLM Facility. 5.1.4.3 All equipment at the ITLM Facility necessary for communicating with the Primary Site, Back-up Site, the ITLM floor, and each ITLM within each ITLM bank. 5.1.4.4 All cabling infrastructure within each Facility (installation, termination and testing).

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a) From the Point of Entry in a Facility to the ITLM Central System Wiring Closets b) From the ITLM Central System Wiring Closet to each ITLM Bank c) From the ITLM Bank to each ITLM d) From the ITLM Central System Wiring Closet to ITLM Facility back offices requiring connectivity or access to the ITLM Central System. Areas include the accounting department for invoicing or MLGCA offices for monitoring or reporting e) From ITLM Central System Primary and Back-up Data Centers to the MLGCA Primary and Back-up Data Centers

5.1.5 ITLMs may include video display terminals simulating the play of pull-tabs, scratch-off tickets, spinning reels or a combination of any and all of those game types. The ITLM System shall have the scalability to accommodate a variety of themes and play combinations. The MLGCA cannot at this time provide a specific number or mix of ITLMs that may be required from the Contractor but it is estimated that there are approximately one-hundred and fifty (150) Veterans’ Organizations that may qualify to place up to five (5) ITLMs at each Facility.

5.1.6 In addition to the technical specifications detailed in this RFP, the following conditions shall be met before an ITLM is approved for use in the State:

5.1.6.1 Each ITLM approved by the MLGCA for placement at a Facility shall conform to the exact specifications of the ITLM tested and approved by the MLGCA. 5.1.6.2 No modification to approved ITLM hardware and/or software is permitted without prior written permission from the MLGCA. 5.1.6.3 The MLGCA reserves the right to modify/update requirements and specifications at any time based on an agreed upon schedule as approved by the MLGCA. 5.1.6.4 Each ITLM shall pass ITLM Central System integration testing as defined by the MLGCA.

5.1.7 ITLMs will be required to connect to the ITLM Central System and operate during the hours required by the MLGCA. 5.1.8 The Contractor shall provide a ticket redemption unit at each Facility.

5.1.9 The Contractor shall be responsible for the Instant Ticket design, planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities, including but not limited to the: 1. Design, scheduling and development of Instant Tickets. 2. Prize structure recommendations 3. Instant Ticket production/printing/security

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4. Instant Ticket Analysis 5. Instant Ticket Delivery services to MLGCA Retailers 5.1.10 Player Tracking Systems and Ticket-In/Ticket-out – The Contractor may install their own player tracking systems. The Contractor shall be responsible for the installation, management and support of cashless technology (ticket-in/ticket-out). The Contractor and ITLM Central System shall be responsible for the polling and reporting of ITLM Ticket-in/Ticket-out meters. 5.1.11 Notice to Proceed ("NTP") - The Procurement Officer will issue a NTP for any work required by the Contract, to include but not be limited to:

Installation and initial start-up of the ITLM Central System located at the MLGCA's headquarters, a hot back-up located off site, software, and all other ITLM Central System components, except Telecommunications Network and equipment installed at a Facility;

Installation of all equipment related to the ITLM Central System that is required to be located at each Facility to support the initial number of ITLMs upon opening and the Telecommunications Network connecting each Facility to the ITLM Central System; and

After the opening of a Facility, the support of additional ITLMs that may be added.

It is anticipated that the MLGCA will issue multiple NTPs over the Contract term, or any extension thereof. However, the MLGCA may not proceed with any portion of the work anticipated by the Contract and the Contractor shall not perform any such work unless a written NTP is issued by the MLGCA.

In response to Section 5.2 – 5.29 below, the Offeror must provide in its proposal a statement of intent to comply with the terms, conditions, and requirements of those specifications.

The following sections describe the SCOPE OF WORK for the providing of an Instant Ticket Lottery Machine System. The Contractor shall deliver all requirements and shall be responsible for all technical functionality and business support.

5.2 CENTRAL MONITOR AND CONTROL SYSTEM ("ITLM CENTRAL SYSTEM")

5.2.1 GENERAL REQUIREMENTS

The Contractor shall provide an ITLM Central System with comprehensive functionality which shall include, but not be limited to, gaming activities, sales, validations, inventory management, marketing support, and information

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management reporting. The Contractor shall provide the following to the MLGCA on a lease basis for the duration of this Contract and any extension thereof:

5.2.1.1 Computer hardware and software, with full redundancy, and telecommunications network to support ITLM operations.

5.2.1.2 An ITLM Central System which shall meet all performance requirements specified in this RFP.

5.2.1.3 An ITLM Central System which shall be operational each and every day (seven days per week, three hundred sixty five/six (365/366) days per year), during times established by the MLGCA.

5.2.1.4 Implementation, maintenance, day to day operation and resolution of outages on its portion of the Telecommunications Network which links the ITLM Facilities, devices and systems within the Facilities and any associated communication/networking equipment involved in the operation of the ITLM network. There shall be no cost to the MLGCA or to the Facilities in resolving Telecommunication Network problems and/or repairs, including problems, which involve wiring or devices used to connect the ITLMs to the ITLM Central System.

5.2.1.5 Any other item, equipment or facilities deemed necessary by the MLGCA for the efficient operation of the ITLM Central System.

5.2.2 OPERATIONS PROCEDURES

The Contractor shall:

5.2.2.1 Create and document the procedures for computer operations staff, especially regarding failure situations, in a straightforward manner.

5.2.2.2 Provide documentation on how the ITLM Central System will maintain the required availability and how upgrades will be performed throughout the term of the Contract, and any Contract extensions.

5.2.2.3 Create documentation on how the System shall be compatible with all ITLMs using open industry protocols (such as: SAS, G2S and S2S).

5.2.2.4 Document the procedures and processes on how the MLGCA shall be able to activate, de-activate and re-activate an individual ITLM, a bank of ITLMs or a whole Facility.

5.2.3 REDUNDANCY The Contractor shall provide and operate Primary and Back-up Sites including, but not limited to, facilities, equipment and staff. The Contractor shall provide a telecommunication transport path between its Primary and Back-up Data Centers and the two MLGCA network host centers (co-located at the Primary Site and Back-up Site). The intent of the MLGCA is to assure ITLM Central System survival in the event of a major outage. Each of these transport paths shall be capable of supporting all of the gaming traffic, the traffic needed between the

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Data Centers, and the traffic between the Data Centers and the MLGCA. The ITLM Central System computer shall be a state-of-the-art, fault-tolerant, redundant, high availability system. The ITLM Central System may be configured in a paired duplex, triplex or multi-redundant configuration with no shared peripherals. All computer system components and peripheral equipment, including front-end communications processors, system printers and tape drives must be similarly fault-tolerant and redundant and maintain high availability. No performance degradation or loss of system functionality shall occur with the failure of a single system component. The ITLM Central System’s storage management solution shall provide fault tolerance and scalability. The remaining system shall immediately assume the load in case of a failure in one system without loss or corruption of any data and transactions received prior to the time of the failure, with minimal service disruption and no loss of processing continuity.

Primary System recovery from a one-system failure shall be accomplished immediately while still maintaining current transactions. This includes the ability to fully service the communications network supporting the ITLMs and management terminals. Back-up System recovery from a Primary Site failure shall be accomplished immediately without loss of any transactions. This includes the ability to fully service the communications network supporting the ITLMs and supplying management terminal functions. 5.2.4 ITLM CENTRAL SYSTEM REQUIREMENTS

5.2.4.1 The ITLM Central System shall have the capability to support up to five thousand (5,000) ITLMs and one thousand (1,000) Facilities and be scalable for future enhancement or growth. The ITLM Central System, as delivered and installed, shall be capable of:

(a) supporting a network of 5,000 ITLMs and associated controllers during peak transaction performance. (b) housing all information necessary to create a Facility record, to include, but not be limited to, the Facility’s name, address, telephone number, taxpayer identification number, financial contact name, financial contact number and bank account number.

5.2.4.2 The ITLM Central System shall operate on a universally accepted gaming industry open protocol (e.g., Gaming Standards Association SAS, G2S, S2S) to facilitate the ability of the maximum number of ITLM manufacturers to communicate with the ITLM Central System and shall be capable of controlling all brands and models of ITLMs currently approved in a regulated jurisdiction.

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5.2.4.3 The ITLM Central System shall provide the capacity for at least an eleven (11) digit dollar amount ($99,999,999,999) for ITLM sales.

5.2.4.4 The ITLM Central System shall be configurable and capable of future scaling and expansion of transactions, storage, Facility locations, and number of ITLMs.

5.2.4.5 Alarms and monitoring devices shall be in place and shall automatically notify the MLGCA’s Contract Manager (or designee) if the ITLM Central System goes down. All levels of sensing such as environmental and system/network availability shall be considered and captured. The Contractor shall notify the MLGCA based upon notice and escalation procedures submitted by Contractor at Contract commencement and approved by the MLGCA’s Contract Manager.

5.2.4.6 At the direction of the MLGCA, the ITLM Central System shall be able to immediately start or cease gaming functions by disabling or enabling any individual ITLM, any group of ITLMs, or all ITLMs. The Contractor shall provide for a process of executing a shutdown command from the ITLM Central System that causes ITLMs to cease functioning and a process of executing a startup command from the ITLM Central System. Both automatic and manual shutdown capabilities shall be available from the ITLM Central System. The ITLM Central System shall have the functionality to disable and enable ITLMs at an ITLM Facility and system wide with a single command for each type.

5.2.4.7 When communication between the ITLM Central System and an ITLM is disrupted, the components shall automatically resume processing as soon as communication is restored without any loss of data.

5.2.4.8 The ITLM Central System shall provide a warning for each ITLM when polled meters are outside of expected parameters. This will allow the Contractor and the Facility to proactively react to inaccurate or suspected inaccurate meter readings. The ITLM Central System shall provide the setting and monitoring of thresholds that provide an alert to the MLGCA in the event any and all meters fall outside of the established threshold values.

5.2.4.9 The ITLM Central System shall provide a single point of entry for all management functions from Management Terminals on the MLGCA's Local Area Network (LAN).

5.2.4.10 The Management Terminal software and emulators shall be compatible with the most current version of Microsoft Windows.

5.2.4.11 The ITLM Central System shall be capable of accepting and processing adjustments to include specification of a dollar amount and explanation for the adjustment. Posting of adjustments shall be allowed

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from either Management Terminals and from computer files supplied by the MLGCA. The ITLM Central System shall provide a single screen for meter adjustments which will allow all adjustments to key meters to be made on a single screen.

5.2.4.12 The ITLM Central System shall provide the capability for ITLMs to operate for up to twenty-four (24) hours without connection to the ITLM Central System, with all data being collected and stored without loss by the site controllers.

5.2.4.13 The functions of the ITLM Central System shall not be obtrusive for the players, for employees who require real-time monitoring of security events, financial transactions, or service of the ITLMs. Performance of the ITLM Central System shall not degrade noticeably during normal functionality. In addition, the ITLM Central System shall provide capacity to accommodate ITLM populations, play volumes, and event recording consistent with all specifications.

5.2.4.14 Time Synchronizing:

5.2.4.14.1 Multiple systems in the configuration, such as a clustering of processors, shall have a time synchronizing mechanism to ensure consistent time recording and reporting for events and transactions. 5.2.4.14.2 The Primary and Back-up System shall be time-synchronized, to ensure that both Systems have all transaction data at all times. 5.2.4.14.3 Synchronization with an external time standard shall be provided.

5.2.5 POWER-UP AND POWER FAILURE RECOVERY During an ITLM Central System power-up or power recovery the Contractor shall monitor the ITLM Central System and all ITLMs to ensure the proper response and functioning of all ITLMs. The Contractor shall respond to any ITLM Central System reauthorization request within five (5) minutes. The Contractor shall establish a manual intervention process for corrective action for any ITLM that does not respond or fails to function properly, including communications and coordination with the Facility.

5.2.6 HARDWARE

5.2.6.1 The Contractor shall obtain prior approval in writing from the MLGCA before making any enhancement or modification to the hardware configuration or procedures. 5.2.6.2 All hardware and ancillary peripherals making up the ITLM Central System shall be new equipment that has not previously been used or

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refurbished, except for equipment that has been used at a Facility may be re-used at another Facility. 5.2.7 SOFTWARE 5.2.7.1 Unauthorized Changes to Software The Contractor shall obtain prior approval in writing from the MLGCA before making any enhancement or modification to the operating software, configuration or procedures. The Contractor shall run a software utility on a daily basis that checks to ensure software libraries have not been modified in order to prevent unexpected and non-approved software changes. The System shall automatically generate and send daily to the MLGCA a report of the results of the software utility check. 5.2.7.2 Software Licenses and Escrow All software installed by the Contractor, as well as any maintenance or enhancements to that software, and all program documentation supplied by the Contractor for the duration of the Contract, shall be licensed to the MLGCA for the duration of the Contract and any extensions at no additional cost. The Contractor shall provide to the MLGCA, or place in escrow with an escrow agent located in the State, in a form acceptable to the MLGCA, up to date copies of all software source code and related documentation developed (or modified) by the Contractor, to operate the System and ITLMs. The purpose is to provide the MLGCA access to and use of the software source code for auditing or continued operations should the Contractor suffer any condition such that it could not continue operations. If the Contractor supplies existing software for which the Contractor or others have copyright/ownership rights, the Contractor shall either provide the source code directly to the MLGCA, in a form acceptable to the MLGCA, or shall place the source code in escrow with an escrow agent located in the State. Two copies of all source code shall be provided in a format approved by the MLGCA. The Contractor shall require the escrow agent to provide written notification to the MLGCA upon receipt of the source code. 5.2.7.3 Protocol Simulation 1. The Contractor shall furnish specifications, protocols and formats of messages to/from the ITLM Central System. This also includes communication between ITLM Central System devices. 2. Protocol Simulator

a. The simulator shall adequately support and exercise all of the transactions and message types that are to be used by the communications protocol.

b. The simulator shall be capable of generating common communication errors to confirm that the ITLM software is properly handling the event (i.e., malformed messages, no acknowledgement, incorrect cyclic redundancy checking ("CRC"), incorrect data, etc.).

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c. The simulator shall provide for performance/volume testing. d. An operations manual or other suitable documentation shall be supplied

with the simulator. e. The simulator shall run on standard, freely available equipment such as a

PC or the equivalent. Alternatively, the supplier may loan suitable simulator hardware to all approved users.

5.2.7.4 Software Validation 1. The ITLM Central System shall initiate a signature validation command whenever any ITLM is enrolled. 2. If an ITLM fails the signature validation test, it shall not be possible to enable that ITLM into normal mode without manual intervention at the ITLM Central System level. A System generated report for both validated and failed ITLMs shall be submitted daily to the MLGCA. 3. One (1) of the following two (2) methods of signature check reference storage must be implemented:

a. ITLM software image storage: All software images that exist in the ITLM shall also be stored in the ITLM Central System. The software images stored in the ITLM Central System are used for signature calculations and are subsequently used to validate the signature calculation results reported from the ITLM.

b. Pre-calculated signature results storage: The table of signature results shall have at a minimum of five (5) entries. These entries shall be generated from randomly selected seed values for each ITLM and repopulated on a daily basis. The utility program used to generate the signature check result table shall be approved by the MLGCA.

4. Both the software image and pre-calculated signature results are sensitive data files that shall have appropriate security such as password protection and file encryption. 5. If the image used for validating the ITLM software is comprised of more than one program or device (for example, an ITLM may have one main program and one theme program) the ITLM Central System shall have the functionality to allow the operator to load each component individually and the ITLM Central System shall combine the individual images based upon the scheme supplied by the ITLM manufacturer to create the combined image. 5.2.8 ACCOUNTING REQUIREMENTS 5.2.8.1 The ITLM Central System shall monitor the operation of each ITLM and create reports using, at minimum, the following information:

1. Number of cents wagered; 2. Number of cents won;

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3. Number of cents paid out by a printed ticket; 4. Number of cents accepted via a printed ticket; 5. Number of cents accepted via coin, bill, ticket or other instrument of

value; 6. Number of cents transferred to the ITLM electronically; 7. Number of cents transferred from the ITLM electronically; 8. Number of cents paid out via hand pay or canceled credit; 9. Number of cents paid out via jackpot; 10. Number of cumulative credits representing money inserted by a player; 11. Number of cents on the credit meter; 12. Number of instant tickets played; 13. Number of instant tickets won; 14. Number of times the logic area was accessed; 15. Number of times the cash door was accessed; 16. Each person who accessed the logic area and the date and time it was

accessed; 17. Each person who accessed the cash door and the date and time it was

accessed; 18. The number of all promotional credits received at the ITLM; 19. The value of all promotional credits received at the ITLM; 20. The number of all promotional credits sent from the ITLM; 21. The value of all promotional credits sent from the ITLM; and 22. The number and value of other electronic credits.

5.2.8.2 The ITLM Central System shall receive all meter-reading data in real time in an on-line, automated fashion. At a minimum, the ITLM Central System shall poll all ITLMs on an hourly basis. Manual reading of meter values may not be substituted for automated requirements. 5.2.8.3 The ITLM Central System shall acquire and report the ITLM meters and not an external or ITLM Central System meter incrementation process. The ITLM Central System shall read and report using the full set of actual ITLM meters.

5.2.8.4 The ITLM Central System shall be able to process all ITLM meter sizes and record lengths with scalability for future growth or enhancement.

5.2.8.5 The ITLM Central System shall provide a breakout of promotional credits by ITLM Facility.

5.2.9 LOCAL AND WIDE AREA PROGRESSIVE ITLMS 5.2.9.1 The ITLM Central System shall be able to report progressive jackpots, from either linked ITLMs at a single or multiple licensed Facilities. 5.2.9.2 The ITLM Central System shall produce reports that clearly demonstrate the method used to arrive at the jackpot amount. This includes the documentation of credits contributed from the beginning of the polling cycle

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(including those from the time period immediately following the previous jackpot) and all credits contributed up to and including the polling cycle that includes the jackpot signal. Credits contributed to the system after the jackpot win occurs, in real-time but during the same polling cycle, shall be considered to have been contributed to the progressive jackpot amount prior to the win. 5.2.9.3 The ITLM Central System shall produce fiscal reports that support and verify the economic activity of each ITLM, indicating the amount of and basis for, the current jackpot amount (the amount currently in play). Such reports shall include but not be limited to: 1. An aggregate report to show only the balancing of the progressive link with regard to Facility-wide totals; 2. A detail report in a format that indicates for each ITLM, summarized by location, the cash-in/cash out and credits-played/credits-won totals, as such terms are commonly understood in the industry.

5.2.9.4 Each progressive controller linking one or more progressive ITLMs shall be submitted to be evaluated by the MLGCA's independent testing laboratory at the Contractor’s expense, pass User Acceptance Testing by the MLGCA and be approved by the MLGCA. 5.2.9.5 There shall be a progressive entry authorization log within each controller and the log shall be completed by any person gaining entrance to the controller. The log shall be entered on a form provided by the MLGCA to provide an audit trail of any employee who gains access to the progressive controller. 5.2.9.6 A progressive meter or progressive controller shall keep the following information in nonvolatile memory which shall be displayed to the MLGCA or Facility upon demand: 1. Number of progressive jackpots won on each progressive meter if the progressive display has more than one winning amount. 2. Cumulative amounts paid on each progressive meter if the progressive display has more than one winning amount. 3. Maximum amount of the progressive payout for each meter displayed. 4. Minimum amount or reset amount of the progressive payout for each meter displayed. 5. Rate of progression for each meter. 5.2.10 ASSET TRACKING 5.2.10.1 The Contractor shall provide state-wide asset management for all ITLMs, including asset tracking, hardware status, location, maintenance history, inventory status and spare parts. The Contractor shall provide designated MLGCA employees with update and report capability to the asset tracking system.

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5.2.10.2 The Contractor shall provide the ability for the MLGCA to track all ITLMs statewide, including both ITLMs that are operational on an ITLM Facility floor and ITLMs that are not currently active. This means each ITLM shall be tagged and tracked based on an overall designation (Serial number, individual asset number) for the entire life of the ITLM while within the State. 5.2.10.3 Asset Tracking may be a part of the ITLM Central System or a separate system. 5.2.11 REPORTING 5.2.11.1 General Requirements All data shall be extractable/exportable to such tools as Excel, Access, text format, etc. All reports shall be exportable with and without headings in CSV (Comma-Separated Values) format and shall be printable in PDF format. 1. The ITLM Central System shall provide a chronological report of any or all

transactions by date, time, transaction type, Facility number, transaction number and any other sort option as required by the MLGCA. The data to produce these transaction reports shall be available in accordance with Section 4.19 of this Contract.

2. The ITLM Central System shall provide two types of reporting tools: Regularly Scheduled Reports and Ad Hoc Reporting capability. The Contractor shall create new standard scheduled reports and Ad Hoc reports, within agreed upon schedules, throughout the term of the Contract as required by the MLGCA.

3. The MLGCA requires maximum flexibility in utilizing the information that is contained on the System.

a. The MLGCA requires that the Contractor maintain a model (such as a relational database) specifically for the MLGCA containing data elements and relationships to be agreed upon by the MLGCA and the Contractor.

b. Data items shall be made current in real time or as close to real-time as possible.

c. Database information shall include all information collected by the System.

d. MLGCA System users shall be able to, using the relational database architecture, develop, modify, save and schedule individual reports.

e. All information retrieved from the relational database architecture in user-developed reports shall be able to be indexed and sorted.

4. The System shall provide the ability for management users to inquire into a Facilities account history for a specified range of dates. The information

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provided in response to such an inquiry shall detail all financial activity for the selected time period. The ability to select specific transaction types for a time period is also required. This account history shall be available to management users in accordance with Section 4.19 of this Contract.

5.2.11.2 Types of Reports 1. ITLM Central System Daily Report Requests - Pre-designed reports requested by the MLGCA from the ITLM Central System shall be accurate and readily available to be generated by the MLGCA on demand. These reports shall include, but not be limited to, the following general types of reports which shall be based upon criteria and format as approved by the MLGCA:

a. Performance Reports b. Financial Summary Reports c. Transaction Reports d. Error and Alert Reports e. Ad -Hoc Query and On-Demand Reports

2. Summary of Required Reports

1. Software Utility Check – Provides the validation status during the startup, normal operation and shutdown of each ITLM. (daily – Section 5.2.7.1)

2. Signature Validation - A ITLM Central System generated report indicating both validated ITLMs and ITLMs that failed the signature validation test. (daily – Section 5.2.7.4 (2))

3. Non-Reporting ITLMs (due to non-communications) - A report by Facility, by ITLM that summarizes the last polled date, by ITLM Manufacturer and serial number, reason for error, and poll address.

4. Non-Reporting ITLMs (communicating but no data reported) – A report by Facility, by ITLM that summarizes the last polled date, by ITLM Manufacturer and serial number, reason for error, and poll address.

5. Accounting Detail – Provide detailed accounting data by ITLM (daily – Section 5.2.8.1)

6. Financial Summary Report - A report by ITLM Manufacturers that summarizes by date the amount played, amount won, net revenue, number of ITLMs and average net revenue by ITLM.

7. Prize Payout Report - Calculates the prize payout percentage of each instant ticket on the basis of cents won divided by cents played.

8. Facility Report - Contains the following information: a. Facility License Number b. Facility Name

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c. Facility Address d. Machine Serial Number e. Cents Played f. Cents Won g. Net Terminal Income h. Gross Profits i. Net Terminal Income j. Sweep Amount k. Sweep Timeframe

9. Transaction Report - A report by Facility, ITLM Manufacturer and serial number that summarizes the cash in, cash out, net revenue, amount played, amount won, progressive jackpot contribution, win frequency, payback percentage, net jackpot won, instant tickets played and instant tickets won.

10. Game Preference Reports - Provides play statistics by trait type, string, by ITLM Manufacturer, or other parameters approved by the MLGCA.

11. Hourly Game Play Report - Tracks hourly play data. The report lists the number of ITLMs actively reporting, cash in amount, cash won amount, average cash played amount per terminal and validations.

12. Accounting/Promotional Credits – Provides a breakdown of all gaming and promotional credits meters in relation to the each ITLM meters and overall usage by ITLM Manufacturer, serial number, or other parameters approved by the MLGCA. (daily – Section 5.2.8.5)

13. Progressive ITLMs – Provides a breakdown of ITLM, local and wide area progressive meters and jackpots. In addition, it will report the reinvestment (escrow) and payment values. (daily – Section 5.2.9.2)

14. Asset Tracking Report – Provides a status by ITLM of key asset management parameters (as required – Section 5.2.10):

a. Serial Number b. Order, Shipment and Delivery Date c. Current Location (Manufacturer, Shipped, Facility, Warehouse…) d. ITLM Installation Date e. Hardware replacements f. Hardware upgrades g. Service Dates h. Regulatory Status and Approvals by Component and ITLM i. ITLM Removal Date j. Destruction or Sale Date

15. ITLM Central System Failover Testing - Contractor shall conduct Failover testing twice a year and report all results of the testing to the MLGCA within five (5) days. (twice per year – Section 5.6.2)

16. Security/User Access Report – Provides detailed audit trail of all user access at all levels including, but not limited to, applications, data and system level access. (bi-weekly – Section 5.7.6)

17. Security Violation Report – Provides all alerts and violations to the ITLM Central System for both external events (facility violations) or internal events (ITLM Central System access or events). (as required –

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Section 5.7.7.2)

18. Security Update Report – Provides all changes (adds, deletes and changes) to the ITLM Central System security schema, including new users, authorization levels, application and data access and ITLM Central System configuration changes.

19. Weekly Sweep Invoice – Creates an invoice to be sent to each Facility stating the amount ―swept‖ at the end of each gaming week.

20. Hotline Report – Provides information regarding service calls, dispatches and resolutions. (weekly – Section 5.10.1 (5))

21. Weekly Combined Invoice - Reports information based on the previous complete billing cycle. This report shall provide, but will not be limited to, the following elements:

a. Summary Total of Wagers b. Summary Total of Payouts c. Summary Total of Adjustments (e.g., promotional play) d. Summary Total of Sales Commission e. Summary Total of Cashing Commission f. Overall Total Due g. Available for at least one (1) year after the Invoice Date.

22. Detail of Combined Weekly Invoice - Provides the detail supporting the Combined Invoice elements for a given week. These reports shall provide, but not be limited to, the following elements: a. On-line ITLMs:

i. Wager Totals, by ITLM ii. Payout Totals, by ITLM iii. Commissions, by ITLM iv. Individual Adjustment Transactions (e.g., promotional

play), by ITLM v. Available for at least one (1) year after the Invoice Date.

23. Calendar Year End Reports – Provides year end 1099 detail reports by Facility and is capable of generating the 1099s.

24. Bank Tape Reports – Allows for the creation of a file from the ITLM Central System to be sent to the bank to sweep the Facility accounts. While it is the intention of the MLGCA to sweep facility accounts on a weekly basis, this file should be able to be generated on demand.

5.2.12 OFF-SITE DATA STORAGE REQUIREMENTS The Contractor shall keep back-up copies of all software and data required to support a full ITLM Central System recovery without loss or corruption of data by maintaining said information in a secure location remote from either the Primary Site or Back-up Site. Data transport shall be via secure and reliable methods and all back-up data shall be encrypted or otherwise secure from unauthorized access. A complete audit trail of the generation, transport, retention and destruction of the back-up data shall be maintained in accordance with Section 4.19 of this Contract and shall be available for review by the MLGCA.

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5.2.13 TRANSACTION INQUIRY The Contractor shall provide to the MLGCA the ability to research transaction history files (search and view all transaction data) to verify the existence of any and all transactions. The purpose is to answer customer questions, to investigate fraud allegations, to gather information for presentation to courts as evidence, and similar such actions. The ITLM Central System shall provide the ability to search in real time and view all transaction data.

5.3 ITLM CENTRAL SYSTEM MONITORING The Contractor shall provide a separate industry standard Network Monitoring System which shall be directly accessible in real time by the MLGCA. This system shall provide a single screen graphical display of the status of all WAN and LAN equipment on the network. Communications test and monitor capability shall be available at both the Primary and Back-up Sites. Network monitoring tools shall be able to interface and analyze protocols, view transaction data for performance and capacity analysis, and create visual and/or audible alarms to provide warning of problems. The capability shall be included to determine whether failure has occurred in the equipment at the Primary or Back-up Site, within the wide area communications network or at the Facilities down to the ITLM bank level. The Contractor shall provide to the MLGCA a real time display of network and equipment status, which will provide view and report capabilities. The system shall advise the MLGCA of any Facility where service has been disrupted and shall attempt to determine whether the equipment is at fault or the Telecommunication Network is responsible for the service disruption. The System shall display the down time of any and all equipment and/or telecommunications circuit in the network over a period of time selectable by the operator or as specified by the MLGCA.

The Contractor shall be responsible for network monitoring and management. The Contractor’s network administrative services shall include configuration processes, including escalation procedures.

5.4 ITLM CENTRAL SYSTEM PRIMARY AND BACK-UP SITE REQUIREMENTS

5.4.1 PRIMARY SITE

The Contractor shall provide and operate a Primary Site including but not limited to facilities, equipment and staff (24/7/365) which shall be used exclusively to support the MLGCA's Contract and shall be co-located in the MLGCA's headquarters building at Montgomery Park Business Center, 1800 Washington Boulevard, Baltimore, MD 21230. Information concerning the cost per square foot and the layout of the space can be obtained from the building owner. The contact information is as follows:

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Kenneth Rice 410-779-1206 (direct line) Managing Director 410-779-1200 (general) Himmelrich Associates, Inc 410-779-1201 (fax) 1340 Smith Ave, Suite 330 Baltimore, Maryland 21209 [email protected]

The MLGCA may provide some assistance to the Contractor regarding building space availability but the Contractor shall be responsible for its costs related to the acquisition, build-out, furnishings, maintenance, utilities, cleaning, etc. All tenant improvements shall be done at the expense of the Contractor. The design and layout of this Site shall be pre-approved by the MLGCA, and it shall not be identified externally or internally as being the premises of the Contractor. At minimum, the following shall be included in this Site: 1. Dedicated Testing Lab: The Contractor shall provide a dedicated space with adequate room to house its test system, ITLMs from multiple manufacturers, printers and reports, and other equipment the MLGCA requires to be tested. The Testing Lab shall be large enough to conduct testing in a comfortable, user-friendly environment. 2. The Contractor shall provide the Testing Lab with its own independent system that is a complete set of computer systems and software consisting of the exact duplicate configuration of the Primary System and have all combinations of equipment and system capabilities including all communication channels to allow any and all testing of ITLM Central System and related hardware and software. The Contractor shall provide a test environment for the ITLMs, including controllers (or technical equivalent approved by the MLGCA) and Central Control System emulation for ITLMs provided by each of the approved ITLM manufacturers. 3. This space shall be fully finished and furnished at the Contractor’s expense. The layout and design shall be approved by the MLGCA. 4. The Testing Lab shall be available at all times to MLGCA personnel. 5. As operational configurations, processes or devices change or upgrade, the testing and development systems shall mirror those changes. 6. The physical area shall comply with all State and local building codes, laws and rules for facilities of its type. The Contractor shall obtain proper permits and inspections. 7. The Contractor shall be solely responsible for the costs of Testing Lab design, construction, utilities and building services expenses. Contractor shall supply electrical and network connections sufficient to support all equipment to be tested. The Testing Lab shall have a separate climate control.


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8. The Contractor shall supply all ITLM Central System supported equipment required for testing to include hardware and/or software. 9. The Testing Lab shall be a secured area with limited access and shall be under video surveillance at all times with live signal feed to the MLGCA.

5.4.2 BACK-UP SITE

The Contractor shall provide and operate a fully redundant hot Back-up Site including but not limited to facilities, equipment and staff (24/7/365) which shall be located in a different power substation and LATA than the Primary Site and at least twenty five (25) miles from the Primary Site. The Back-up Site may reside outside of the State and may, with the MLGCA's prior approval, be located at a shared site with other business of the Contractor provided it is a separate secured video monitored area with live signal feed to the MLGCA's headquarters. A hot Back-up Site is defined as operating a system which receives a mirror image of all transactions on a real-time basis from the active system with the capability to automatically take over processing in the event of a failure at the Primary Site with minimal service disruption to the System and with no loss or corruption of data. The Contractor shall employ a minimum of two computer systems, (i.e. a Master System and a Duplex System) with no shared peripherals, at the Back-up Site. The back-up systems of the MLGCA will also be located at this Site in a secure data center environment which shall be supplied by the Contractor and shall comply with the specifications of the MLGCA. The MLGCA will supply its own computer equipment and software, with all other required to be supplied by the Contractor.

5.4.2.1 The Back-up system(s) shall be of the same processing capacity and architecture as the Primary Site system(s). 5.4.2.2 The latest technology Redundant Array of Independent Disk ("RAID") shall be used to protect key data at the Back-up Site. Data transferred to and recorded at the Back-up Site shall always contain all most recent transactions, allowing a rapid Failover. The MLGCA and ITLM Facility networks must be routed so as to permit transaction processing at the Back-up Site. Other communications to permit MLGCA operations must also connect to the Back-up Site. The Telecommunications Network shall have a routing mechanism independent of the Primary Site so that the Back-up Site can be reached without the Primary Site.

5.4.2.3 The Contractor shall provide a Back-up Site, which contains sufficient hardware to support the same requirements stated for the Primary Site with no single point of failure. The Back-up Site shall contain the capability to perform all functions associated with ITLMs, as well as being available remotely

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by communications from the Primary Site. The Back-up System shall have the same security specification as the Primary System.

5.4.2.4 The operational procedures for failure, transferring control to the Back-up Site and recovery shall be clear and concise. The Contractor shall provide and maintain an up to date disaster recovery plan with scheduled test dates included. The MLGCA shall have the right to review and approve all of the Contractor’s procedures.

5.4.2.5 Any access including dial-back systems shall be capable of logging remote logins. These logins shall be provided to the MLGCA upon request for audit purposes.

5.4.2.6 All Contractor's hardware and software, both Primary and Back-up Systems, shall be designed and operate such that there is no possible corruption of data or loss of transaction integrity.

5.4.2.7 The Contractor shall include in the Back-up Site selection criteria a consideration of the sensitivity to potential adverse conditions such as earthquake, flood or local communications failure. At a minimum, the following shall be included in this Site:

1. Dedicated space of two hundred (200) square feet within the computer room but partitioned from the surroundings of the computer room to be utilized by MLGCA for back-up servers and other equipment for the MLGCA’s Back Office system. Design layout shall be approved by the MLGCA. This space shall fall under the same fire protection and back-up power requirements as the computer room itself.

2. MLGCA Office Space: Upon request, the Contractor shall provide office

space for MLGCA personnel which shall be a minimum of two hundred (200 ) square feet; fully improved and furnished at Contractor’s expense to include Office equipment and furniture (desks, chairs, file cabinets, telephones, copier, fax machine, data line, etc.). The design shall be approved by the MLGCA and shall include restroom access and parking spaces for MLGCA personnel.

3. The Contractor shall supply cleaning services and pay for all utilities and services for this entire Site including the MLGCA's designated area.

5.4.3 FIRE PROTECTION AND STRUCTURAL REQUIREMENTS Both Primary and Back-up Sites shall meet the following minimum structural requirements: 1. Computer rooms and telecommunication rooms shall be separated from other

areas by non-combustible construction having at least a two (2) hour fire resistance.

2. Walls shall be extended from structural floor to structural floor (or roof) above.

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3. Fire doors shall be provided on all entrances into the computer room with a fire resistance rating at least equal to the wall in which the door is located.

4. Fire and smoke dampers shall be provided in ducts that pass through the computer room walls, floor or ceiling.

5. The physical area shall comply with all state and local building codes, laws and rules for facilities of its type. The Contractor shall obtain proper permits and inspections.

6. The physical facility shall be constructed in accordance with the standards specified in the current edition of National Fire Protection Association (NFPA) publication No. 75, ―Protection of Electronic Computing/Data Processing Equipment.‖

7. The Contractor shall install and maintain in good operating condition fire detection, fire suppression, and automatic fire extinguishing systems of sufficient capacities to protect the computer rooms based on FM-200 or another MLGCA approved method. These systems shall be installed and maintained as specified by applicable National Fire Protection Association (NFPA) and State Fire Marshal Standards. Any under floor areas shall also be protected by the automatic extinguishing systems.

8. An air conditioning failure detection mechanism shall be provided. The environmental controls (air conditioning system(s)) shall be interlocked to shut down upon activation of the fire extinguishing system or the automatic fire extinguishing system shall be installed with sufficient capacity to compensate for loss of extinguishing system through operation of the air conditioning systems.

9. All penetrations through the computer room(s), wall(s) or ceiling(s) shall be sealed tightly with material equivalent to existing floor, wall or ceiling construction to prevent passage of heat, smoke and water.

10. There shall be a water detection system covering all under floor areas of computer and media storage areas.

11. Fire proof storage for back-up media shall be able to withstand a minimum two (2) hour fire with no damage to the stored media.

5.4.4 POWER AND POWER BACK-UP EQUIPMENT Both Primary and Back-up Sites shall comply, at minimum, with the following requirements: 1. The Contractor shall provide and maintain in good operating condition, an

uninterruptible power supply with batteries and electrical generating capabilities of, at a minimum, one hundred fifty (150) percent of the capacity needed to sustain all hardware, environments, equipment, communications equipment and necessary lighting to conduct full capacity business until primary power is restored if a failure occur.

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2. If a raised floor is not used in computer areas then the Contractor shall ensure that the designs and procedures utilized provide protection against electrical shocks and accidents.

5.5 ITLM CENTRAL SYSTEM TELECOMMUNICATIONS NETWORK

All wiring shall have disparate paths into the building with separate points of entry, disparate paths inside the building into the site controller closets, and redundancy inside the closets.

5.5.1 OUTSIDE WIRE

All outside telecommunications circuits shall follow disparate paths from both the ITLM Central System Primary and Backup Sites to the separate disparate entry points at each Facility.

5.5.2 INSIDE WIRE

All inside wiring at each Facility shall follow disparate paths from the central computer room to the site controller closets and have redundancy within these closets. Wiring within each Facility shall be a minimum of CAT6 cabling.

5.6 ITLM CENTRAL SYSTEM DISASTER RECOVERY

5.6.1 Disaster Recovery Plan The Contractor shall develop an operational recovery and business continuity plan and provide it to the MLGCA for approval no later than forty-five (45) calendar days from Contract execution date. The plan shall be updated at least annually for the MLGCA’s approval to ensure minimal interruption to service in case of an emergency, and shall include, but not be limited to, the following sections:

a. Business Impact Analysis

b. Risk, Threat and Vulnerability Analysis

c. Recovery Strategy

d. Emergency Response

e. Problem Escalation

f. Plan Activation

g. Recovery Operations

h. Plan Validation, Testing and Maintenance schedules

i. Key personnel contact list to include MLGCA personnel

5.6.2 ITLM Central System Failover Testing and Demonstration

1. As directed by the MLGCA, the Contractor shall execute controlled Failover

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tests twice per year in coordination with the MLGCA and each ITLM Facility. Failover tests shall focus on three key redundancy areas. Primary to Back-up Site, Dual Points of Entry, and Dual paths to the ITLM Central System Wiring Closet. Contractor shall submit its test plan to the MLGCA for approval at least (30) days prior to the test.

2. A remote method to monitor equipment at the Back-up Site shall be provided. The Contractor shall demonstrate that the Back-up Site is fully functional by operating in production from the Back-up Site at least twice a year for at least 24 hours a day as directed by the MLGCA. The Primary Site shall serve as the hot Back-up in this scenario.

3. The Contractor shall conduct operational recovery and business continuity (Disaster Recovery) testing/exercises twice a year, to include full performance and end to end testing of all business processes and procedures, ITLM Central System and component functionality. The MLGCA shall be allowed to observe the testing/exercises. All results of the exercises shall be reported in writing to the MLGCA within five (5) days.

4. The Contractor shall participate in the MLGCA's operational recovery and business continuity exercises twice per year.

5. The Contractor shall correct and retest any deficiencies discovered by audit findings or operational recovery testing within ten (10) days.

6. The Contractor shall automatically permit all gaming traffic to flow to the appropriate Network Host Center when the Back-up Site is invoked.

5.6.3 Destruction of Site In the event of irreparable damage at the Primary or Back-up Site or of an unplanned, extended abandonment of the Site, the Contractor shall provide at no additional cost to the State those host processors, facilities, and other components necessary to resume ITLM sales under a two-Site operational scenario. Such host processors, facilities, and other components shall be furnished, installed and operational within thirty (30) days after the MLGCA declaring a disaster. Until a permanent Primary or Back-up Site can be re-established, substitute Sites shall meet MLGCA-approved environmental and security measures as specified herein for the Primary and Back-up Sites.

5.7 ITLM CENTRAL SYSTEM SECURITY The ITLM Central System shall provide encryption techniques that shall eliminate

and discourage attempts by a third party to eavesdrop on a circuit and gain access to data that might compromise the integrity of the ITLM Central System. The Network shall be made secure and be designed to protect against a disruption of service by tampering with the Telecommunications Network in a way that will not compromise the data but will interfere with the ability of the Network to transmit data in a timely manner.

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5.7.1 SECURITY PLAN The Contractor shall submit a detailed security plan to the MLGCA for approval no later than thirty (30) days prior to commencement of ITLM Central System operations. The Contractor shall comply with and adhere to the State of Maryland Information Technology Security Policy and Standards, the most current version of which is available at: http://doit.maryland.gov/support/Pages/SecurityPolicies.aspx.

At a minimum, the Contractor shall review the Security Plan annually, update as necessary and submit to the MLGCA for approval. The Plan shall include the following sections:

a. Business Impact Analysis

b. Risks, Threat and Vulnerability Analysis

c. Security Strategy

d. Personnel Security Practices

e. Physical Security

f. Data Security

g. Telecommunications Operational and Physical Security

h. Telecommunications Access Security

i. Protection of Software and Other Copyrighted Material

j. Plan Evaluation

k. Security Awareness/Training

l. Plan Maintenance

5.7.2 PHYSICAL SECURITY 5.7.2.1 The purpose of the physical security component of the security program is to reduce the risk of data compromise due to physical break-ins or unauthorized access to equipment and data. The Contractor shall ensure that adequate protective measures are implemented for all computing resources. 5.7.2.2 All Contractor's offices, the Primary and Back-up Sites, and secure areas at the ITLM Facilities shall be secured twenty four (24) hours per day so that only authorized persons designated by the MLGCA are permitted to gain entry into the sites and that such persons are restricted to authorized areas. 5.7.2.3 Access control requirements at the Primary and Back-up Sites and secure areas at ITLM Facilities shall include, but not be limited to:

1. The placement of computer room walls and windows shall limit access by unauthorized individuals.

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2. The general structure of interior walls shall be secured and constructed from the floor to the true, not false, ceiling.

3. The computer room and each ITLM Central System wiring closet shall have secured access (i.e., proxy card, keypad, or keyed lock).

4. The computer room and entrance to each ITLM Central System wiring closet shall have surveillance camera coverage.

5. The Contractor shall provide a log of all visitor access into the computer room and each wiring closet. All non ITLM Central System related access shall be requested in writing and approved in advance by the MLGCA.

6. Site entry and control points shall be guarded.

7 All key access doors shall be self-closing and self-locking with locks being changed periodically.

8. Recording-type closed circuit television shall monitor all vulnerable and sensitive areas. The Contractor shall provide video monitoring systems, back up and recovery for the computer rooms at the Primary and Back-up Sites and for all secure areas at the Facilities so activities can be monitored and recorded (video tape, DVD, or other digital on-line media) for security purposes remotely from the MLGCA's headquarters. Media (tapes, DVD, etc.) shall be kept for a minimum of one (1) month.

9. All visitors and messengers shall be logged in and out of the secure areas and all visitors shall be escorted at all times while inside. Logs shall identify who allowed the access. Logs shall be kept for the life of the Contract and given to the MLGCA upon Contract termination.

10. Access authority shall be removed immediately upon change of assignment or termination.

11. A complete listing generated by the ITLM Central System of the Contractor's staff and access levels shall be furnished to the MLGCA monthly.

12. The Contractor shall keep a current listing and/or memorandum authorizing access to MLGCA or other State staff and their access levels to the secure areas. Sensitive areas shall include, at a minimum, host systems and the communications equipment/workstations used to access host systems.

13. All Contractor employees shall receive, use and be easily recognized by a photo identification badge.

14. The MLGCA shall approve the user access list.

15. The Contractor shall use positive identification using pass, key lock, badge system, cipher lock or other controls for employees, suppliers and visitors to access the computer room.

16. The Contractor shall establish a control system to ensure identification of the individuals having possession of the keys, cards and badges at any given time.

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17. The Contractor shall, at a minimum, on a monthly basis review the list of assigned key cards or access rights and ensure that all persons on the list are still authorized employees.

18. The Contractor shall use logs or special badges for visitors to the computer room.

19. The Contractor shall control the computer room access of maintenance and other personnel.

20. Contractor shall install and maintain Physical Intrusion Detection Devices at all entrances/exits at its secure areas, which shall be operational 24x7x365/366.

21. Contractor shall notify the MLGCA at least 72 hours in advance of any planned visitor being granted access to any Contractor secured areas at any Facility.

5.7.2.4 At any time, personnel authorized by the MLGCA may inspect all premises of the Contractor or its subcontractors involved in the Contract to determine the degree of security and operational compliance. In addition, authorized MLGCA personnel or other party designated by the MLGCA shall also have access to interview any Contractor or subcontractor employee or authorized agent in conjunction with any audit, review or investigation deemed necessary by the MLGCA.

5.7.3 ITLM CENTRAL SYSTEM SECURITY 5.7.3.1 User account files shall not be in plain text format and shall be encrypted. The ITLM Central System shall write to a log file and report on all successful and unsuccessful sign on and log off attempts made to the ITLM Central System. The ITLM Central System shall have the following security features: 1. It shall capture the user ID, user name, sign-on date/time and indicator that signifies a successful/unsuccessful sign-on. 2. It shall log and report all changes to the ITLM Central System by all users logged on to the ITLM Central System (including administrators). 3. All security log files shall be directly accessible by the MLGCA on a daily basis. 4. It shall lock out all users after three (3) unsuccessful log-on attempts. 5. It shall have the ability to assign users to groups and must have the ability to assign privileges to each group. 6. It shall expire a user's password at forty-five (45) days. Once an administrator has reset a user's password, the ITLM Central System shall force

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the user to change his/her password upon the next login. Password expiration shall comply with MLGCA and State Data Security Policies. (http://doit.maryland.gov/support/Pages/SecurityPolicies.aspx)

5.7.3.2 The Contractor shall comply with all of the MLGCA and State Security and Access Policies for both physical security and data security. (http://doit.maryland.gov/support/Pages/SecurityPolicies.aspx) 5.7.3.3 All components of the ITLM Central System shall meet or exceed the ISO 15408 Common Criteria for Information Technology Security (www.isosecuritysolutions.com/ISOIEC-15408.html or csrc.nist.gov/cc/). 5.7.3.4 The Contractor's System Administrator shall have the ability to delete users from the system. 5.7.3.5 Secure Connections

1. There shall be no connectivity to the ITLM Central System from outside the ITLM Central System network without prior MLGCA approval.

2. Any such capability, such as for remote monitoring or diagnosis of equipment or software, shall employ stringent security mechanisms such as message encryption, logging of sessions, Secure Tokens, etc.

3. Connections to other remote systems and terminals shall be protected by firewalls, encryption, secure shell (SSH), Virtual Private Network (VPN) or other means. Any routers shall route traffic only to addresses defined in their routing tables as valid.

4. The acceptability of any such security approach will be subject to MLGCA pre-approval. 5.7.4 DATA SECURITY

1. After the MLGCA has accepted the ITLM Central System in writing, the Contractor shall be prohibited from modifying the software or databases of the ITLM Central System without the prior written approval of the MLGCA.

2. The MLGCA shall have the right to require at any time such further and additional security measures as deemed necessary or appropriate to ensure the integrity of the ITLM Central System or the ITLM(s).

3. Only persons authorized by the MLGCA may access:

a. Sensitive or confidential data

b. Software programs and ITLM Central System documentation

c. Computer rooms

d. Disk, tape, and other media (DVD, CD) libraries and vaults

e. Any other area deemed by the MLGCA to warrant such authorization

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4. Data that is determined to be sensitive enough to warrant encryption while in storage shall be encrypted using an encryption level no less than 128bit Triple DES or other comparable method.

5. The Data Security Plan shall follow MLGCA-approved documentation standards and be available in hard copy and data format.

a. Shared user accounts shall not be permitted.

b. The applications and servers requiring authentication shall support the ability to enforce complex passwords, minimum life of password, maximum life of password and minimum iterations of passwords.

c. The Contractor shall develop, document and implement a security program component that is appropriate for the level of sensitivity/confidentiality of the information being processed. The purpose of the data security component of the IT security program is to reduce the risk associated with the compromise or destruction of Contractor-controlled data. Content shall include rules for the storage and dissemination of data shared with other organizations. The data security program component shall include:

i. Contractor Security Policy Statements

ii. Software version control and its currency

iii. Access control techniques

iv. Data entry processes

v. Processing accuracy

vi. Distribution of output reports and introduction or release of data

vii. Data and program back-up

viii. Controls to prevent unauthorized use or removal of tape files, diskettes, and other media

ix. Data encryption standards for storage and secure management

x. Processing audit trails

xi. Application testing

xii. ITLM Central System access violations

xiii. Intrusion detection notification and response procedures

xiv. Virus prevention, detection and removal

xv. Appropriate disposal of hardcopy data which may contain sensitive information or information which may allow compromise of information systems security

5.7.5 PROBLEM NOTIFICATION All incidents or anomalies shall be reported verbally to the MLGCA immediately and shall be reported in writing to the MLGCA within twelve (12) hours of the

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event. At a minimum, incident and anomaly reporting shall include a description of the incident, its cause, impact on the operation and corrective action taken for each occurrence of ITLM Central System failure, operator error, deviation from established procedures and those items where liquidated damages are applicable.

5.7.6 SECURITY REPORTS The Contractor shall provide read-only access to the ITLM Central System security access table or reports automatically generated from the ITLM Central System without human intervention showing ITLM Central System user privileges and authorities on a bi-weekly basis. These reports shall also include a copy of the user group/class assignments, authority levels and active user names. The Contractor shall provide from the ITLM Central System e-mail notification without human intervention of report generation and certain file accessing as specified by the MLGCA. Contractor shall establish a procedure for reporting and notification of key alerts to the MLGCA. Changes to object code, key files, system value or options, security reports or network parameters shall be prioritized and reported/e-mailed based on severity and alert escalation process approved by MLGCA. 5.7.7 SECURITY PROGRAM UNDER THE CONTRACT

All computer systems provided by the Contractor shall meet or exceed the National Computer Security Center's security standard. All agencies, employees and contractors of the State are responsible for protecting information from unauthorized access, modification, disclosure and destruction.

5.7.8 SECURITY VIOLATION REPORTING

The Contractor shall immediately report any security procedural violation, violation of law (e.g., theft), of equipment, software or material used or to be used in the performance of this Contract. The report shall be delivered personally or by telephone within one (1) hour of the discovery of the incident, followed by a written report within twenty four (24) hours, to the MLGCA.

5.8 ITLM CENTRAL SYSTEM MANUALS AND DOCUMENTATION

The Contractor shall provide with the ITLM Central System, electronically to the extent possible, all associated operation manuals, service manuals, and relevant schematic diagrams, such as Printed Circuit Board (PCB) schematics and other circuit diagrams. Operation manuals and service manuals shall be expressed in broad terms that are directly relevant to the complete ITLM Central System. 5.8.1 Service manuals shall:

5.8.1.1 Accurately depict the ITLM Central System which the manual is

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intended to cover; 5.8.1.2 Provide adequate detail and be sufficiently clear in their wording and diagrams to enable a qualified repair-person to perform repair and maintenance in a manner which is conducive to the long-term reliability of the ITLM Central System.

5.8.2 Circuit schematic diagrams shall:

5.8.2.1 Accurately depict the Primary and Back-up Sites, Telecommunications Network and wiring at each Facility (when available); 5.8.2.2 Provide adequate detail and be clear in their wording and diagrams to enable qualified technical staff to perform an evaluation on the design of the component; 5.8.2.3 Be professionally drafted and satisfy the above requirements; and 5.8.2.4 Be kept up to date at all times with updates being delivered within five (5) days of any changes.

5.8.3 All manuals and documentation shall be delivered to the MLGCA and copies shall be maintained at both the Primary and Back-up Sites.

5.9 ITLM CENTRAL SYSTEM STAFFING

5.9.1 GENERAL

The Contractor shall provide all personnel necessary to meet the requirements of the Contract and to provide a high quality of service to all Facilities and MLGCA personnel. Specifically, the Contractor shall provide all staff as required to meet the timelines identified in the final Implementation Plan and to maintain support for Service Level Agreements.

The Contractor shall at least annually over the Contract term update its organization chart showing the current staffing positions/categories and number/list of personnel assigned. The Contractor shall provide the MLGCA with policies regarding staffing, work schedules and vacations, which shall be approved by the MLGCA.

The MLGCA requires the following minimum Contractor staffing in certain key areas, with all positions being full-time unless otherwise specified. The Contractor shall provide On-going Support Staff which shall be permanent positions in support of all requirements for the duration of the Contract term as specified in Section 5.8.3. The Contractor shall also provide Implementation Staff as specified in Section 5.8.2 which shall be provided in support of the implementation of the ITLM Central System at each of the ITLM Facilities as they open and become operational, and shall remain with the implementation until at least two (2) weeks after the commencement of ITLM operations at a Facility. The Implementation Staff shall be separate individuals in addition to the On-

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going Support Staff. All staff assigned to this Contract shall be subject to approval by the MLGCA.

5.9.2 IMPLEMENTATION STAFF-PLANNING & INSTALLATION

5.9.2.1 PROJECT MANAGER The Contractor shall assign a Project Manager to coordinate implementation of each Facility who shall be the primary point of contact between the Contractor and the MLGCA for all implementation matters for a Facility. The Project manager must be a certified PMP and have a minimum of 5 years experience of LAN/WAN infrastructure and/or Data Center build out project management experience. The Project Manager performs day-to-day management of the project, identifies issues and risks and recommends possible issue and risk mitigation strategies associated with the project; is responsible for ensuring that work performed is within scope, consistent with requirements, and delivered on time and on budget; Identifies critical paths, tasks, dates, testing, and acceptance criteria; monitors issues and provides resolutions for up-to-date status reports; demonstrates excellent writing and oral communications skills.

5.9.2.2 NETWORK SPECIALIST

The Contractor shall employ a Network Specialist who shall be assigned to the Implementation Team. There shall be a Network Specialist assigned to each new Facility and shall remain assigned to that Facility until it is up and running. The Network Specialist shall demonstrate expertise in the type of network proposed and implemented. There shall also be network support in conjunction with the Back-up Site. The Network Specialist shall also provide support to the MLGCA to insure acceptable interface capabilities between the MLGCA and the Contractor’s Primary and Back-up Sites. The Contractor shall employ, for the support of the MLGCA operations, a Network Specialist who is a Microsoft Certified System Engineer (MCSE). 5.9.2.3 ITLM IMPLEMENTATION SPECIALIST

The Contractor shall employ an Implementation Specialist who shall be assigned to the start up of each new Facility. The Implementation Specialist shall demonstrate expertise in the type of network proposed and implemented and shall also provide support to the MLGCA to insure acceptable interface capabilities between the MLGCA and the Contractor’s Primary and Back-up Sites. The Contractor shall employ, for the support of the MLGCA operations, an Implementation Specialist who is a Microsoft Certified System Engineer (MCSE) and shall be assigned to the project at all times to provide LAN / WAN network support. The Implementation Specialist shall have a minimum of 3 years experience with the proposed ITLM Central System and 3 years experience

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working with multiple ITLM manufacturers.

5.9.2.4 INSTALLATION SPECIALIST

The Contractor shall employ an Installation Specialist. This Specialist shall have ITLM Central System installation and configuration experience. The responsibility of this Specialist is the configuration of ITLM Central System software and system and application values. The Installation Specialist will work with the Project Manager and ITLM Integration Specialist to ensure the ITLM Central System interaction and integration works between the Primary Site and the ITLMs on the floor. The Installation Specialist shall have a minimum of 1 year of experience with the proposed ITLM Central System, 5 years experience working with multiple ITLM manufacturers and 2 years experience in LAN/WAN infrastructure support. 5.9.2.5 EDUCATION AND TRAINING SPECIALIST

The Contractor shall employ an Education Specialist. This Specialist will have ITLM Central System installation and configuration training experience. The responsibility of this Specialist is the education of designated MLGCA personnel in the operations and reporting of the ITLM Central System. The Education Specialist will work with the Project Manager Installation Specialist to ensure the ITLM Central System interaction and integration works between the Primary Site and the ITLMs on the floor.

5.9.3 ONGOING SUPPORT STAFF 5.9.3.1 PROJECT MANAGER The Contractor shall assign an overall Project Manager who shall be 1) located at the Contractor’s Primary Site, and 2) the primary point of contact between the Contractor and the MLGCA for Contract and operational matters. The Project manager must be a certified PMP and have a minimum of 5 years experience of LAN/WAN infrastructure and/or Data Center build out project management experience. The Project Manager performs day-to-day management of the project, identifies issues and risks and recommends possible issue and risk mitigation strategies associated with the project; is responsible for ensuring that work performed is within scope, consistent with requirements, and delivered on time and on budget; Identifies critical paths, tasks, dates, testing, and acceptance criteria; monitors issues and provides resolutions for up-to-date status reports; demonstrates excellent writing and oral communications skills.

5.9.3.2 COMPUTER ROOM OPERATORS

For security purposes, there shall never be fewer than three (3) Computer Operators on-site in the computer room at any time – Two (2) Computer Operators at the Primary Site and one (1) at the Back-up Site.

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The Contractor shall submit to the MLGCA for approval at least sixty (60) days before start-up of operation a program and staffing plan for maintaining the Primary Computer System and the Back-up Computer System and Management Terminals.

5.9.3.3 NETWORK SPECIALIST

The Contractor shall employ a Network Specialist who shall be assigned to the project at all times at the Contractor’s Primary Site to provide network support. The Network Specialist shall demonstrate expertise in the type of network proposed and implemented. There shall also be network support in conjunction with the Back-up Site. The Network Specialist shall also provide support to the MLGCA to insure acceptable interface capabilities between the MLGCA and the Contractor’s Primary and Back-up Sites.

The Contractor shall employ, for the support of the MLGCA operations, a Network Specialist who is a Microsoft Certified System Engineer (MCSE) and shall be assigned to the project at all times to provide LAN / WAN network support.

5.9.3.4 ITLM INTEGRATION SPECIALIST

The Contractor shall employ a minimum of two (2) ITLM Integration Specialists who shall be assigned to the project at all times at the Contractor’s Primary Site to support ITLM Integration. These Specialists will have experience with both the ITLM Central System and ITLM Protocols. The responsibility of these Specialists is to test every ITLM before it is sent to the MLGCA for approval for deployment to the Facilities. This testing will verify that all meters are reporting as required and all ITLM functionality is correct. Additionally, these Specialists will be responsible for verifying that all financial reporting is correct for each tested ITLM.

5.10 ITLM CENTRAL SYSTEM MAINTENANCE PROGRAM, SERVICE LEVELS AND SUPPORT

5.10.1 HOTLINE (CENTRAL REPORTING SYSTEM)

1. The Contractor shall provide a central trouble reporting system ("Hotline") whereby Facilities may quickly and easily report problems.

2. The Hotline shall be located at a site which shall be approved by the MLGCA upon Contract award. The Contractor shall also provide a location from which it will support the Hotline if the primary call center becomes for any reason inoperable.

3. The Hotline shall provide, at minimum, a single toll-free number with sufficient lines to ensure that no more than one (1) call out of every one hundred (100) calls receives a busy signal when calling the Hotline. The Contractor shall associate the Hotline number(s) with a system capable of providing comprehensive ad hoc reporting including quality assurance monitoring. These records shall be provided to the MLGCA directly and immediately upon request.

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4. The Contractor shall install and maintain an automated dispatch system for tracking all service calls and repairs which shall be flexible and include a database with ad hoc reporting. Access to this system shall be available to the MLGCA via a Management Terminal.

5. Reporting

The Contractor shall capture all information related to service calls, dispatches and resolutions. Ad hoc Hotline reports shall include, at a minimum:

a. The date and time of the original call

b. The identification of the Facility and caller

c. The general nature of the trouble call

d. The date and time of dispatch

e. The date and time of problem resolution

f. What the technician found upon inspection

g. All comments associated with the service call

h. Whether or not the service call went into penalty status with liquidated damages applying

6. Recording

a. The Contractor shall record all incoming Hotline calls.

b. The Contractor shall maintain recorded calls for at least sixty (60) days from the date a call is received.

c. The Contractor shall make recorded calls available on-line to the MLGCA within twenty-four (24) hours of request.

7. Management

a. The Contractor shall allow the MLGCA to actively participate in the development and revision of the information resources developed to help Hotline operators handle calls.

b. The Contractor shall make a follow-up call to a Facility after an initial service request remains unfulfilled for more than two (2) hours beyond the required response time. The Contractor shall make an additional follow-up call daily, so long as the Facility’s initial service request remains unfulfilled, to update the status of the request.

c. The Contractor shall provide Hotline operator access to information about the status of telecommunication lines.

d. The Contractor shall have a Hotline Quality Assurance and Training Program, which is subject to approval by the MLGCA.

5.10.2 FIELD SERVICE/SUPPORT

1. Facility Equipment

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The Contractor shall arrive at a Facility location, and repair defective or poorly performing equipment within two (2) hours from the time the notice of the malfunction is received by the Contractor. Repairs shall be required 24x7x365.

2. Telecommunications Failures

The Contractor shall be responsible for resolving all telecommunications issues within two (2) hours from the time the notice of the issue is received by the Contractor.

3. Opening of a Facility

The Contractor shall provide a maintenance technician on-site at each Facility for at least a one (1) day period following commencement of ITLM operations at the Facility.

5.11 ITLM CENTRAL SYSTEM ACCEPTANCE TESTING

5.11.1 INITIAL ACCEPTANCE OF ITLM CENTRAL SYSTEM

5.11.1.1 Acceptance Testing, as used by the MLGCA, means an extensive process by which the MLGCA verifies and demonstrates that the delivered ITLM Central System or components meet all of the Contract requirements, that all equipment to be installed is compatible with the ITLM Central System and meets the MLGCA's standards for quality and are thus acceptable for deployment into the ITLM environment. 5.11.1.2 The MLGCA will conduct Acceptance Testing during the initial installation of the ITLM Central System (Implementation Testing Section 5.12.2) and on an on-going basis throughout the Contract term. 5.11.1.3 The MLGCA shall be able to conduct Acceptance Testing to determine ITLM functions and ITLM Central System compatibility. The Contractor shall provide an additional system, which must be of the same architecture, but not the same size, at an independent testing laboratory for testing purposes. If the ITLM fails the Acceptance Test conducted by the MLGCA, the ITLM manufacturer is responsible for making all modifications required by the MLGCA. 5.11.1.4 The MLGCA, or its designee, will conduct a series of Acceptance Tests, which the Contractor shall support. To support Acceptance Testing, the Contractor shall have the Primary Site, computer hardware, communications hardware, software, controllers, and test ITLMs installed and operational at least thirty (30) days prior to the scheduled opening date for the first ITLM Facility to become operational. At that time, the Back-up Site shall also be ready for testing. 5.11.2 FACILITY ACCEPTANCE The MLGCA takes a comprehensive approach to Facility Acceptance and shall have the right to perform any acceptance test that it deems necessary at any

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Facility. The results of these tests will determine whether the MLGCA approves the Facility to implement the ITLM Central System. The MLGCA shall have the sole right to determine the pass or fail decision for each of the Facility Acceptance and test components.

The MLGCA's Facility Acceptance Test script shall include, but is not limited to, the following:

Validate Diverse Points of Entry into Facility

Validate Disparate backbone paths

Validate ITLM Central System IDF complete

Room Construction Complete

Environmental systems functioning and tested

Phone Access available

Monitoring systems installed and operational

UPS available and tested

Fire Suppression Installed and certified

Power and Grounding installed tested

All terminations clean and labeled

ITLM Central System Racks installed, secured, and functioning

All wires neat using horizontal and vertical management

All Cabling/Terminations tested (certified)

ITLM Central System Communicating to Primary Site, Back-up Site and Facility

ITLM Central System Communicating to ITLM banks

ITLM Central System Communicating to each ITLM

The contractor shall provide written documentation to the MLGCA of expected results, actual test results, and status of each exception.

5.12 ITLM CENTRAL SYSTEM IMPLEMENTATION

5.12.1 IMPLEMENTATION PLAN

The Contractor shall have provided in its Proposal a proposed Implementation Plan. The Contractor shall submit within thirty (30) days after Contract award a detailed and finalized version of this Implementation Plan which, when approved by the MLGCA, shall become the basis for Implementation. This Implementation Plan shall include but not be limited to the following:

Executive Summary - This Summary shall provide the MLGCA with a concise but functional summary of each phase of the Plan in order of progression and shall provide a map for the MLGCA to use in reviewing the Plan. Each phase shall be listed in chronological order, beginning with the date of Contract award and

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providing a clear indication of the flow and duration of the project.

High Level Implementation Plan - This shall include a brief description, start and end dates, roles and responsibilities, dependencies, input and outputs and deliverables, and shall ensure a smooth start-up of the ITLM Central System. This Plan shall include a timeline (Gantt chart), beginning with the Contract award date.

1. Implementation

a. The ITLM Central System and components shall be delivered and operational by a date which will be specified by the MLGCA in coordination with the Facilities, and shall commence live operations at that time. All ITLM Central System hardware, software, equipment, staff and all other necessary requirements shall have been successfully tested by both the Contractor and the MLGCA and shall be in place and operational by the specified date.

b. Once the Contractor resolves all exceptions noted during its testing, the software and/or hardware shall be made available to the MLGCA for Acceptance Testing. The Contractor shall provide the MLGCA with a copy of its test scripts and all test results (interim and final) before the Acceptance Testing date. The test system shall mirror the production system. Any differences between the test system and the production system shall be approved in writing by the MLGCA.

c. The MLGCA will make the pass/fail decision for each test. The Contractor shall provide sufficient staff to fix any problems found during the MLGCA’s Acceptance Testing and shall resolve any exceptions noted during the MLGCA’s testing within the timeframe specified in the Implementation Plan.

d. The Contractor shall provide operational support during the MLGCA’s Acceptance Testing.

e. The Contractor shall provide simulators for processing transaction volumes through the system.

f. Project Reporting and Monitoring Requirements:

i. The Contractor and the MLGCA shall have, at minimum, weekly implementation reviews.

ii. The Contractor shall prepare weekly reports on the progress toward the goals and deadlines stated in the Implementation Plan. Reports shall be submitted electronically to the MLGCA in an agreed format such as Microsoft Project.

2. Definition of Business Requirements:

a. During the first thirty (30) days after the Contract start date, a team of Contractor business analysts shall thoroughly familiarize themselves with the MLGCA’s business processes, including the Facilities' business processes, related to ITLMs. The team shall observe the business processes and meet with end users as needed.

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b. At the conclusion of this thirty (30) day period the Contractor shall deliver to the MLGCA a separate business requirements specification ("Business Requirements") document for each major functional area. The purpose of the Business Requirements documents is for the Contractor to demonstrate its understanding of the MLGCA’s business requirements. The MLGCA will review and approve these documents within thirty (30) days of receipt. The documents shall address each business process currently performed by the MLGCA and the Facilities’ business processes. The documents shall identify any modifications to current processes. At a minimum, the Contractor shall produce a separate Business Requirements document for each of the following functional areas that apply to the System:

i. System Administration

ii. Maintenance

iii. Accounting and Billing

3. Software Requirements Specification ("SRS")

a. Upon receiving the MLGCA-approved business requirements documents, the Contractor shall develop corresponding Software Requirements Specification ("SRS") documents. The Contractor shall deliver these documents to the MLGCA for approval no later than forty five (45) days after receipt.

b. The SRS documents are to specify the functionality of the software applications that will be provided by the Contractor at Start-up in support of the MLGCA’s business processes related to ITLMs. The startup software shall function as described in the SRS documents, which shall include, at a minimum, the following:

i. Each specification shall reference the corresponding business requirement or process in the corresponding business specification document.

ii. For each specification the Contractor shall indicate if the functionality exists in the Contractor’s base system. If it does not exist, or if modifications to the base system functionality are required, the Contractor shall provide an estimate of the time it will take to develop the new functionality or modify the existing functionality. The estimate, development and or modification shall be at no additional cost to the MLGCA.

iii. For each specification the Contractor shall identify how the MLGCA may test the functionality in Acceptance Testing. Optionally, the Contractor may also identify how its own staff may test the functionality.

iv. MLGCA approval is required for any subsequent changes to SRS documents. The MLGCA may identify changes during software development and Acceptance Testing.

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4. If modifications or enhancements are required, the following shall apply:

a. Software Development:

i. The startup software shall meet the MLGCA’s business requirements, and future changes to the software shall be accomplished in a timely manner while accurately meeting those business requirements.

ii. The Contractor shall demonstrate its understanding of the MLGCA’s business requirements and processes before software applications for the ITLM Central System are written or modified. The MLGCA shall be given the prior opportunity to thoroughly understand and agree to the functionality of the planned software applications. This goal applies to the development of any initial software applications as well as to subsequent software releases.

5.12.2 IMPLEMENTATION TESTING

The MLGCA takes a comprehensive approach to Acceptance Testing and shall have the right to perform any acceptance test that it deems necessary. The results of these tests will determine whether the MLGCA accepts the ITLM Central System. The MLGCA shall have the sole right for determining the pass or fail decision for each of the Acceptance Tests and test components.

1. At a minimum, the MLGCA's user Acceptance Test script shall include, but is not limited to, the following:

Verify Terminal Identification and Validation at sign on

Manual and Automatic Disabling and Enabling of ITLMs based on full floor, zone, bank or individual ITLM

Verify TITO accuracy

Verify ITLM Central System and ITLM general functionality and response time

Verify all ITLM Central System Reporting and Accounting is accurate and complete

Real-time Polling of Full set of ITLM Meters

Validating of full set of ITLM Meters

Performing validations and balancing accounting reports

Performing validations and balancing performance reports

Performing transaction look-ups and

Test of a full floor sweep

Test of distribution and response of daily invoice.

Validate and balance the results of a Coin-test during installation.

Balance all reports with all available data-

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Machine Financial

Facility Financial

Winning Data

Verify exporting of reports – all formats

Printing and validation of all security reports

Verify Asset Tracking Software

Verify system Facility circuit Failover

Verify ITLM Central System Failover

Verify Facility failure/site controller failure and data recovery when back online

Checking for proper ITLM Central System response to thresholds by forcing the ITLM Central System to reach its failure levels (transactions, meters, etc.).

Forcing ITLM failures to verify proper system notification (including create print jams, disconnect power and communication cables, door opens, etc.)

Forcing Primary and Back-up System failures to verify proper ITLM Central System recovery (including disconnect power and communication cables, improper ITLM Central System operation, etc.)

Forcing ITLM, network and System failures by volume testing System performance in transaction rate and capacity Written documentation of expected results, actual test results, and status of each exception

2. All new programs and any changes to existing programs made by the Contractor shall be tested thoroughly by the MLGCA prior to installation. Acceptance Testing is used to assure that all programs used by the Contractor's operating and support systems and stated in this RFP are performing accurately and reliably prior to installation. In addition, testing also ensures that all accounting, management reporting and Facility support functions are operating accurately and reliably prior to implementation. All software installations, including network applications and ITLM Central System applications, shall be approved in writing by the MLGCA prior to installation.

3. The MLGCA intends to execute comprehensive Acceptance Testing prior to implementation of the ITLM Central System and for subsequent software releases. The MLGCA will approve the Contractor’s development and execution of the Acceptance Test. The Contractor, however, shall be responsible for the quality of the System and software releases. MLGCA approval for the implementation of software based on Acceptance Test results does not diminish the Contractor's responsibility for the quality of the software.

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4. The MLGCA requires that Acceptance Testing be a cooperative effort between the Contractor and the MLGCA. The Contractor shall provide a system dedicated to Acceptance Testing. This test system shall be independent of the production systems. The Contractor shall have overall responsibility for the development and execution of the test scripts, but the MLGCA has the right to amend or reject the test plan. The Contractor shall assure that this test system is available to the MLGCA and that operational resources are available to assist the MLGCA in conducting and evaluating the Acceptance Testing.

5. When the Contractor is ready to deliver the ITLM Central System, the MLGCA will determine whether the ITLM Central System is acceptable according to previously agreed-upon criteria. The method for handling problems will be approved by the MLGCA. Before carrying out Acceptance Testing, the Contractor shall assist the MLGCA in identifying time schedules, procedures for evaluation, software/hardware environments and resources required, and acceptance criteria.

6. The Contractor shall perform extensive self-testing, de-bugging and quality assurance on all software prior to submitting it to the MLGCA for Acceptance Testing. All software submitted to the MLGCA for testing shall be fully operational and principally ready for production use. The MLGCA shall have the right to reject software that is not in Acceptable Testing condition.

7. During acceptance testing, the Contractor shall provide on-site personnel capable of modifying the operating System and all support systems. The on-site personnel shall be assigned to the MLGCA on a full-time basis during Acceptance Testing and be experienced with the specific hardware and software that is being tested.

8. The Contractor shall successfully meet the MLGCA's Acceptance Test requirements no later than one (1) week prior to the scheduled installation of any new software or System enhancements.

9. The MLGCA's requirements for Acceptance Testing include, but are not limited to, the following:

a. The encryption scheme shall be in effect during all tests.

b. The Contractor's test system shall include all ITLM types using all communication methods applicable in the live environment. The number and configuration of ITLMs to be used for Acceptance Testing shall be determined by the MLGCA.

10. Performance Criteria: The Contractor shall ensure that all ITLM Central System support, including any network, software, hardware, and facility(ies), meets documented specifications and standards and shall pass performance testing criteria and be approved by the MLGCA in order to be in compliance with the Contract.

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5.13 ITLM CENTRAL SYSTEM - FACILITY REQUIREMENTS

5.13.1 General

Each Facility is required to provide to the Contractor, at Contractor’s cost, computer room/rack space, HVAC, power and back-up power and cable infrastructure access to the ITLM floor.

5.13.2 Facility 5.13.2.1 The Contractor is responsible for the design, coordination, installation, testing, training and operation of all ITLM Central System networks, internal and external connectivity and hardware for the ITLM Facility. 5.13.2.2 All Wiring and data infrastructure installed by the Contractor for the gaming floor network shall be owned by the MLGCA. Wiring for the gaming floor network is to be controlled by the Contractor including final testing and all terminations. The Contractor shall be responsible for the monitoring and maintenance of all Contractor installed infrastructure within the ITLM Facility. Contractor shall have network infrastructure cabling tested and certified and provide the results to the MLGCA. 5.13.2.3 The Contractor shall provide to the MLGCA an "as built" wiring schematic for all wiring at each Facility. 5.13.2.4 The Contractor shall provide the Facility with access to reports listed under 5.2.11.2 that are limited to the Facilities ITLMs and their related activities. 5.13.2.5 The Contractor shall email to each Facility the Facility Report listed under 5.2.11.2 each Monday by 6:00 am.

5.14 ITLM CENTRAL SYSTEM SERVER BASED DOWNLOADABLE GAMING

Server Based Gaming solutions will give the MLGCA the ability to enhance the customers’ gaming experience by downloading software to a specific ITLM, group of ITLMs and/or progressive ITLMs from a central location; to reconfigure those ITLMs with new features or different software; to provide an array of services to players; and to deliver account-based wagering.

The Contractor shall provide all equipment, hardware, software and personnel necessary to provide the central monitoring, authentication and reporting for Server Based Downloadable Gaming.

All ITLMs and servers shall communicate with an open protocol. The MLGCA’s preference is for a system architecture that is designed to Gaming System Association (―GSA‖) recommendations and Game to System (―G2S‖) and System

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to System (―S2S‖) protocols. The Contractor shall provide a system capable of handling a combination of thin, thick and hybrid clients simultaneously.

5.15 ITLM CENTRAL SYSTEM DELIVERABLES

The following table identifies the items to be delivered to the State. Items are referenced to the corresponding Section of the RFP. Items are to be delivered to the MLGCA within the number of days listed in the Due Date column.

Deliverable Schedule

Phase

Deliverable

Number

Deliverable Title Due Date

(NTP + X

Days)

Planning

Planning Phase and Related Documents

1 Project Management Plan NTP + 14

2 Systems Engineering Management Plan NTP + 14

3 Quality Assurance Plan NTP + 14

4 Subcontractor Management Plan NTP + 14

5 Risk Management Plan NTP + 14

6 Training Plan NTP + 14

7

System Architecture Configuration

Documentation / Diagram and Hardware Listing NTP + 14

8 Contractor Software Service Level Agreement NTP + 14

9 Primary/Backup Physical Survey NTP + 14

10 Disaster Recovery Plan NTP + 14

11 Detailed GAP Analysis Report NTP + 21

12 Requirements Document NTP + 30

13 Requirements Traceability Matrix NTP + 30

14 Project Implementation and Baseline Schedule NTP + 30

15 Hardware/Software Installation and Acceptance NTP + 30

Design

ITLM Central System

16 ITLM Central System Implementation Plan and

Baseline Schedule *

17 Requirements Traceability Matrix *

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18 Detailed System Design Document *

19 Security Risk Assessment *

20 Data Dictionary *

21 Final System Architecture Configuration

Documentation / Diagram and Hardware Listing *

ITLM Facility Startup – Per Facility *

22 Implementation Plan and Baseline Schedule *

23 Facility / Vendor Communications Plan *

24 Detailed System Design Document *

25 Requirements Traceability Matrix *

26 Security Risk Assessment *

27 Final System Architecture Configuration

Documentation / Diagram and Hardware Listing *

Documentation *

28 Technical Specifications Documents *

29 QA/QC Test Results *

30 Integration Test Results *

31 Production Readiness Certification *

Testing/

Implementation *

ITLM Central System *

32 QA Test Summary Report *

33 Security Compliance Review *

34 Disaster Recovery Plan Test *

ITLM Facility Startup – Per Facility *

35 WAN Communications Test *

36 Facility LAN Test *

37 End to End Testing (ITLM to Primary and

Backup Sites) *

38 QA Test Summary Report *

39 Security Compliance Review *

Note: An asterisk (*) denotes the dates submitted in the Contractor’s Implementation Plan required by RFP Section 5.11.1. Because deliverable due dates are dependent upon the MLGCA's issuance of a Notice to Proceed ("NTP"), the timing shall be expressed in terms of NTP + X days. 5.15.1 Deliverable Submission and Acceptance Process

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5.15.1.1 For each written deliverable, draft and final, the Contractor shall submit

to the Contract Manager one hard copy and one electronic copy compatible with Microsoft Office 2003, Microsoft Project 2003 and/or Visio 2000.

5.15.1.2 Drafts of all final deliverables are required at least two weeks in advance

of all final deliverable due dates. Written deliverables defined as draft documents must demonstrate due diligence in meeting the scope and requirements of the associated final written deliverable. A draft written deliverable may contain limited structural errors such as poor grammar, misspellings or incorrect punctuation, but must:

Be presented in a format appropriate for the subject matter and depth of discussion;

Be organized in a manner that presents a logical flow of the deliverable’s content;

Represent factual information reasonably expected to have been known at the time of submittal;

Present information that is relevant to the section of the deliverable being discussed;

Represent a significant level of completeness towards the associated final written deliverable that supports a concise final deliverable acceptance process.

5.15.1.3 Upon completion of a deliverable, the Contractor shall document each

deliverable in final form to the Contract Manager for acceptance and memorialize such delivery in a Receipt of Deliverable Form to be provided by the MLGCA. The Contract Manager shall countersign the Receipt of Deliverable Form indicating receipt of the contents described therein.

5.15.1.4 Upon receipt of a final deliverable, the Contract Manager shall

commence acceptance testing or review of the deliverable as required to validate the completeness and quality in meeting requirements. Upon completion of validation, the Contract Manager shall issue to the Contractor notice of acceptance or rejection of the deliverables in an Acceptance of Deliverable Form. In the event of rejection, the Contractor shall correct the identified deficiencies or non-conformities. Subsequent project tasks may not continue until deficiencies with a deliverable are rectified and accepted by the Contract Manger or the Contract Manager has specifically issued in writing a waiver for conditional continuance of project tasks. Once the MLGCA’s issues have been addressed and resolutions accepted by the Contract Manager, the Contractor will incorporate the resolutions into the deliverable and resubmit the deliverable for acceptance.

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5.15.1.5 When presented for acceptance, a written deliverable defined as a final document must satisfy the scope and requirements of the RFP for that deliverable. Final written deliverables shall not contain structural errors such as poor grammar, misspellings or incorrect punctuation, and must:

Be presented in a format appropriate for the subject matter and depth of discussion;

Be organized in a manner that presents a logical flow of the deliverable’s content;

Represent factual information reasonably expected to have been known at the time of submittal;

Present information that is relevant to the section of the deliverable being discussed.

5.16 ITLM HARDWARE SPECIFICATIONS

5.16.1 The following list of ITLM specifications shall be met by the Contractor, but is not intended to limit the state of the art in ITLMs.

5.16.1.1 Size and Ergonomics

A kiosk style cabinet is required and in all cases ITLMs shall be of a size and design that will ensure player acceptance.

5.16.1.2 Button Panel

There shall be sufficient buttons or indicator functions on the ITLM to provide the following functions:

Game selection.

HELP function with context sensitive assistance. When the player opts for HELP in the middle of a transaction, information relevant to that transaction shall appear. HELP shall cover how to play games; credits; and other consumer information.

Cash-out or Ticket-out shall be provided to allow the dispensing of a ticket.

Service Button shall indicate ―Service‖.

5.16.1.3 Security Lock

The ITLM's main processing unit shall be contained in a locked enclosure whose key is different than those of other locks on the ITLM. All locks and associated costs will be the responsibility of the Contractor. A multi-position

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lock is recommended to expedite the re-key process and minimize both unscheduled ITLM access and security exposure.

5.16.1.4 Self-Diagnostics

The ITLM shall be equipped with self-diagnostics and indicators or lights that enable the technician or attendant to monitor the operating status of the ITLM. The functions to be monitored include, but are not limited to, the following:

When the ITLM is ready to accept a transaction

An out-of-order condition

Power on

Local diagnostic test

5.16.1.5 Environmental Fitness

ITLMs and all Contractor supplied equipment shall be suitable for operation in the conditions at the Facility locations, to include but not be limited to appropriate electrical power and designed for difficult environmental conditions such as temperature, humidity, dust, grease, spilled liquids, and player abuse.

5.16.1.6 Memory Capacity and Expansion

ITLMs shall have adequate memory size to support various gaming options. 5.16.1.7 Instant Ticket Algorithms

Instant Ticket algorithms may be inserted into the ITLM either via an EPROM chip or other secure medium, or through secured downloads. For downloads, the ITLM shall incorporate mechanisms that ensure security and verify that the correct version has been received.

5.16.1.8 ITLM Central Computer System Interface

ITLMs shall have transaction based messaging capability capable of operating in an on-line communications mode with the ITLM Central System. Traffic to and from the ITLM Central System will include meter retrieval, ITLM status, and ITLM activation/deactivation messages. The ITLM hardware configuration for communications shall consist of an industry standard connection to an ITLM communications controller (or equivalent mechanism) for on-line communications over an approved network topology.

5.16.1.9 Unique Internal Number

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The Contractor will assigned a unique internal number that identifies the ITLM to the ITLM Central System. The ITLM number shall be stored in non-volatile memory on the main logic board. 5.16.1.10 Activation Through ITLM Central System

Play ability, bill validators and coin acceptors, as applicable, shall be totally inoperable until the ITLM is activated from the ITLM Central System. Diagnostic functions shall be available at all times.

5.16.1.11 User Safety

Electrical and mechanical parts and design principles shall not subject a player to physical hazard or injury. ITLMs shall be inspected and approved for customer safety by a reputable testing laboratory such as Underwriters Laboratories and be in compliance with all applicable FCC rules and regulations. Certification under equivalent Canadian or European standards is acceptable.

5.16.1.12 Protection of Meter Data During Power Fluctuation & Outages

Battery backup, or an equivalent, for the electronic meters shall be capable of maintaining accuracy of all accounting records and ITLM status reports for a period of ten (10) days after power is discontinued to the ITLM. The backup device shall be kept within the locked logic board compartment in the ITLM. 5.16.1.13 Power Switch

An on/off switch that controls the electrical current used in the operation of the ITLM and any associated equipment shall be located in an accessible place within the interior of the ITLM. 5.16.1.14 Protection from Static Interference

The operation of each ITLM shall not be adversely affected by any static discharge or other electromagnetic interference.

5.16.1.15 Bill Validator

ITLMs shall have bill validators installed that meet the following specifications. A player may insert currency in exchange for an equal value of ITLM credits. The bill validator shall accept the six (6) denominations specified below and no denomination over $100 shall be accepted by the bill validator.

One dollar ($1) bills.

Five dollar ($5) bills.

Ten dollar ($10) bills.

Twenty dollar ($20) bills.

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Fifty dollar ($50) bills.

One hundred dollar ($100) bills.

Tickets.

Coupons.

Cash Equivalents. The bill validator shall accept both old and new style U.S. currencies that exist now and may exist in the future. Bills shall be accepted in all four directions that they may be inserted. Bill validators shall have counterfeit screening capability including, but not limited to, checking of ink colors, security stripes, thickness, and character placement. ITLMs shall have a separate bill validator compartment (drop box) which shall:

Be contained in a separate locked area within the ITLM separate from any other compartment of the ITLM.

Be accessible by a key that shall access only the bill validator drop box and no other area of the ITLM.

Have a slot opening through which currency is accepted.

Be identifiable to the ITLM from which it was removed.

Have a separate lock to access the contents of the bill validator drop box. This key shall not access any other area of the ITLM.

5.16.1.16 Front Door Accessibility Only

The internal space of an ITLM shall not be readily accessible when the ITLM's front door is closed and all components shall be accessible via the front door.

5.16.1.17 Secure Access

Access to the interior of the ITLM shall be controlled through a series of locks. 5.16.1.18 Disabled When Open

All ITLMs shall have a security system that temporarily disables the gaming function of the ITLM while the door is open. Communications shall remain on-line. 5.16.1.19 Tampering Alarm

The ITLM cabinet shall have a switch with alarm to detect tampering. At the time the alarm is tripped the ITLM shall also send a transaction to the ITLM Central System. 5.16.1.20 Separate Electronics Interior Area

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Logic boards and all erasable programmable read-only memory chips (EPROMs) shall be in a separate, locked area within the ITLM.

5.16.1.21 Limitations on Hardware Switches

No hardware switches, jumpers or any other means of manipulation shall be installed that alter the pay tables, payout percentages, counters or other areas containing critical data in the operation of an ITLM. Hardware switches, with prior approval of the MLGCA, may be installed on an ITLM to control the graphic routines, speed of play, sound and other purely cosmetic features.

5.16.1.22 Identification Plate

An identification plate shall be permanently installed on the exterior of each ITLM and shall display at minimum the following information:

Manufacturer

Serial number

Model number

5.16.1.23 Rules of Play and Play Information Display

Rules of Play: Where available, the rules of play for each ITLM shall be displayed on the ITLM face, glass or screen. The MLGCA may reject any rules of play that are considered to be incomplete, confusing, misleading or inconsistent with rules approved by the MLGCA. Credits Display: Each ITLM shall display the credits awarded for the occurrence of each possible winning combination of numbers or symbols. Wager Limit: An ITLM shall provide for a maximum wager limit on a single play for a single outcome, as approved by the MLGCA. Limits on External and Temporary Displays: All information required by this Section shall be displayed under glass or another transparent surface. Stickers or other removable devices shall not be placed on the ITLM screen or face without prior MLGCA approval.

5.16.1.24 Printing Mechanism

Each ITLM shall contain a single standard printing mechanism capable of printing an original ticket. The following information shall be recorded on the ticket when credits accrued on an ITLM are redeemed for cash:

Value of the credits in dollars and cents displayed in both numeric and written form

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Time of day and date

Validation number

Facility information

Any other information required by the MLGCA

5.16.1.25 New or Warranted as New Equipment

ITLMs, processing hardware, networking connections, diagnostic equipment and all other Contractor supplied equipment shall be new or warranted as new. Refurbished equipment shall be modern and of current manufacture and notification of equipment status as refurbished shall be made to the MLGCA. The acceptability for use of any new or refurbished ITLM or equipment shall be at the sole discretion of the MLGCA.

5.16.1.26 Cashless Feature

ITLMs shall have the ability to operate without coins and/or currency and support cashable and non-cashable electronic credits, tickets, coupons and cash equivalents. (i.e. cashless system)

5.16.1.27 Player and Employee Tracking System

The Contractor may select a player and employee tracking system of its choice. The ITLM shall be capable of supporting and interfacing with each Facility's player and employee tracking system. 5.16.1.28 Tower Lights

Each ITLM shall be equipped with a tower light, if required, conforming to GSA standards for a minimum of a 2-stack light. The MLGCA shall specify the colors and functions of the lights. 5.16.1.29 Peripheral Hardware

The Contractor shall provide the flexibility to include requested peripheral hardware with each ITLM, including but not limited to:

MLGCA Logo Specific Cabinet Laminate

Video Monitors

Bill Validators

Ticket Printers

Locks

Player Tracking Brackets 5.16.1.30 Instant Ticket Reader/Dispenser

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The Contractor shall provide an Instant Ticket reading and dispensing mechanism that validates the sequence and outcome of each play with the ITLM Central System. The element of chance in the ITLM must be wholly within the pre-printed Instant Tickets and player enhancements in the ITLM may not affect the element of chance being wholly within the pre-printed Instant Ticket.

5.16.1.31 ITLM Documentation

The Contractor shall provide the Probability and Accounting Reports ("PAR sheets") detailing all information such as but not limited to: Hold Percentage, top award odds, progressive information, volatility information and, when available, standard deviation.

5.16.1.32 ITLM Schematics

The Contractor shall provide manuals, block diagrams, circuit analysis and other information as directed by the MLGCA.

5.17 ITLM COMMUNICATIONS

5.17.1 Communications - ITLM Central System

ITLMs shall operate in an on-line communications mode with the ITLM Central System. ITLMs shall support, at a minimum, the SAS 6.01 protocol and be positioned to implement required certified GSA protocols.

5.17.1.1 Connection to ITLM Central System The ITLM shall provide the necessary connection (port) to connect with the ITLM Central System. The ITLM shall provide the interface board required to connect to the ITLM Central System network. This ITLM Central System interface board shall maintain power through all activities except an ITLM power down.

5.17.1.2 Disconnection from ITLM Central System In the event of a communications disruption between the ITLM Central System and any ITLM, the ITLM Central System shall continue to poll the ITLM until the problem is resolved. If the ITLM Central System finds an ITLM that is not responding within the required time, the ITLM will be logged as not responding, and the ITLM Central System will notify the Facility of the problem.

5.17.1.3 Configuration for ITLM Central System

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ITLMs shall be capable of configuring the ITLM accounting to report at the lowest denomination for ITLM Central System reporting.

5.17.2 Communications - Network Control and Security

5.17.2.1 Remote Access Restrictions There shall be no capacity to dial into, or otherwise remotely access or control, any ITLM from a remote device without the MLGCA's prior approval. Contractor's requests will be considered on a case by case basis.

5.17.3 Communication - Serial Ports on ITLMs

The ITLM shall provide sufficient ports, serial or otherwise, to support the ITLM Central System and a player tracking system. ITLMs shall also be positioned to support connectivity for Server Based Gaming or additional connectivity as appropriate or required by the MLGCA.

5.17.3.1 ITLM Central System The ITLM shall provide a connection for transmission of data to and from the ITLM Central System through hardware and network for monitoring ITLM activity.

5.17.3.2 Player Tracking Data The ITLM shall provide a connection for the purpose of player tracking by each Facility. This port must meet the following criteria:

The security of the ITLM Central System is not undermined.

In addition to player tracking the system may be used for employee access control. Identification cards are to be issued to those authorized to access the ITLMs and those persons will be required to insert their cards into the card reader when accessing the ITLM. This procedure would provide date, time and identity of the person entering the ITLM.

5.17.3.3 Server Based Gaming The ITLM shall provide a connection for the purpose of supporting Server Based Downloadable Gaming, if the ITLM can be used or adapted for such purpose and the MLGCA requires such use.

5.17.3.4 Additional Port

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In the event of the need for progressive controller connectivity or other required connections, the ITLM is capable of providing and the Contractor will ensure port availability.

5.18 ITLM SOFTWARE REQUIREMENTS

5.18.1 Software Certification

All software on the ITLMs, or downloaded to the ITLM, shall be approved and certified by one or more independent testing laboratories approved by the MLGCA.

5.18.2 Continuation of ITLM after Malfunction

Each ITLM shall continue to operate with all current features after an ITLM malfunction is cleared. The current wager and all credits appearing on the ITLM screen prior to the malfunction shall be returned to the player. This requirement does not apply if an ITLM is rendered totally inoperable.

5.18.3 Play Transaction Records

ITLM shall not have any mechanism that allows or causes the electronic accounting meters to automatically clear. Each ITLM shall at all times maintain electronic accounting. In the event of a power interruption the ITLM shall maintain accounting for a minimum period of ten (10) days. Each meter shall maintain a total of no fewer than eleven (11) digits in length for each type of information required to be recorded. The electronic meters shall record, at a minimum where available, the following information:

1) Total number of coins inserted. The meter shall count the total number of coins inserted by the player or the coin equivalent if a bill validator is used. 2) Number of credits wagered. 3) Number of credits won. 4) Number of coins or credits wagered in the current Deal. 5) Play history of the last four complete valid plays, commonly referred to as the "win meter". 6) Number of cumulative credits representing money inserted by a player and credits for plays won but not collected, commonly referred to as the "credit meter". 7) Number of coins or tokens dispensed via the hopper (if applicable).

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8) Number and value of Tickets issued. 9) Number and value of Tickets accepted. 10) Number and value of promotional credits wagered. 11) Number and value of credits download to the ITLM. 12) Number and value of credits uploaded from the ITLM. 13) Cumulative Number and Value of Progressive and Non-Progressive Jackpot Meters. 14) Total Number of bills that were accepted. 15) Total Dollar amount of bills that were accepted. 16) A breakdown of each denomination of bill accepted. 17) Number of times the logic area was accessed. 18) Number of times the cash door was accessed.

5.18.4 Credits and ITLM Lock-up

Each ITLM shall be configured with the ―lock-up‖ amount as required by IRS Regulations for W2-G reporting. The ITLM shall also provide the ability to ―key‖ (transfer) the lock-up amount to the ITLM credit meter.

5.18.5 Software Control Features

The hardware, software and communications shall be designed and operated to provide a secure environment.

5.18.5.1 Event Recording on ITLMs: All processing activities, including play, winning events, other play related transactions, other ITLM commands, error conditions and operating system messages shall be recorded immediately so that these data are available for transmission to the ITLM Central System and player tracking system. 5.18.5.2 Unique Addresses: It shall not be possible to duplicate ITLM polling addresses such that an unknown and/or unauthorized ITLM could assume the identity of an approved ITLM. 5.18.5.3 Access to Data and Programs: Access to data and programs used on the ITLM, and used by the ITLM, shall be highly restricted so that they are not accessible to unauthorized personnel. All non-routine access to data and

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programs used on, or by, ITLM shall be logged and all unauthorized attempts shall be reported immediately to the MLGCA. 5.18.5.3 Software Version Validation: A mechanism shall be provided to ensure that versions of software are approved and are the versions intended, without unauthorized modifications. Electronic Signatures or other mechanisms may be employed. Checking the software version will be performed on a real-time basis by the ITLM Central System. 5.18.5.4 Software Procedural Controls: Contractor shall provide and maintain current a procedure, which shall be approved by the MLGCA, for review and change to documentation, procedure, program, specification, and program source and object code.

5.19 ITLM SPECIFICATIONS

The MLGCA may authorize such ITLMs to be played at a Facility as it shall determine from time to time to be in the best interest of the State.

5.19.1 Play Restrictions

ITLMs may be based on bills or credits based on minimums or maximums set by the MLGCA. The amount of the maximum bet for any single play event outcome shall be set by the MLGCA. The MLGCA may authorize extended play features from time to time to which the maximum amount shall not apply.

5.19.2 Player Information

Each ITLM shall display the amount wagered and the amount awarded for each possible winning occurrence based on the number of bills, tickets, coupons, cash equivalents or credits wagered. Each ITLM shall provide a method for players to view payout tables.

5.19.3 Progressives

ITLMs shall be able to support progressives, as directed by the MLGCA, whereby the jackpot may be influenced by the play at other ITLMs. Progressives may include single ITLM progressive, multigame progressive, Facility wide or State wide progressives.

A progressive ITLM is an ITLM with a payoff that increases uniformly as the ITLM is played. A progressive jackpot may be won where a certain pre-established criteria, which does not have to be a winning combination, is satisfied. The ITLM shall be linked to a progressive meter or meters showing the current payoff to all players who are playing an ITLM which may potentially win the progressive amount.

Unless approved by the MLGCA in writing, when more than one (1) progressive

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ITLM is linked together, each ITLM on the link shall have the same probability of hitting the combination that will award the progressive jackpot or jackpots.

5.19.3.1 Operation of Progressive Controller-Normal Mode

During the normal operating mode of the progressive controller, the controller shall do the following:

Continuously monitor each ITLM attached to the controller to detect inserted tokens or credits wagered.

Multiply the accepted tokens/credits by the programmed rate of progression and denomination in order to determine the correct amounts to apply to the progressive jackpot.

The progressive display shall be constantly updated as play on the link is continued. It will be acceptable to have a slight delay in the update as long as when a jackpot is triggered the jackpot amount is shown immediately.

At least one (1) progressive display to which a group of progressive ITLMs is linked shall continuously display the amount of the progressive jackpot that a patron may win.

5.19.3.2 Operation of Progressive Controller-Jackpot Mode

When a progressive jackpot is recorded on an ITLM which is attached to the progressive controller, the progressive controller shall allow for the following:

The displaying of the winning amount.

The displaying of the ITLM identification that caused the progressive meter to activate if more than one ITLM is attached to the controller.

The progressive controller is required to send to the ITLM the amount that was won. The ITLM is required to update its electronic meters to reflect the winning jackpot amount consistent with this rule.

When more than one (1) progressive ITLM is linked to the progressive controller, the progressive controller shall automatically reset to the reset amount and continue normal play. During this time, the progressive meter or another attached approved device shall display the following information:

1. The identity of the ITLM that caused the progressive meter to

activate. 2. The winning progressive amount. 3. The new normal mode amount that is current on the link.

5.19.3.3 Security of Progressive Controller

Each progressive controller linking two (2) or more progressive ITLMs within the State shall be housed in a double keyed compartment in a location approved by the MLGCA. All keys shall be maintained in

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accordance with regulations and internal controls. The MLGCA shall be in possession of one (1) of the keys.

A list of the Facility's employees having access to a progressive controller shall be submitted to the MLGCA and updated continually.

A progressive controller entry authorization log shall be maintained within each controller. The log shall be on a form prescribed by the MLGCA and completed by any individual gaining entrance to the controller.

5.19.3.4 Progressive Controller; Metering Information

The progressive controller shall keep the following information in nonvolatile memory which shall be displayed upon demand:

The number of progressive jackpots won on each progressive level if the progressive display has more than one (1) winning amount.

The cumulative amounts paid on each progressive level if the progressive display has more than one (1) winning amount.

The maximum amount of the progressive payout for each level displayed.

The minimum amount or reset amount of the progressive payout for each level displayed.

The rate of progression for each level displayed.

5.19.4 Bonus Plays

ITLMs may be capable of supporting bonus plays for the players. If a bonus is awarded immediately prior to the announced closing time of the Facility, then the ITLM shall operate as follows:

5.19.4.1 If the bonus round is fully automatic and player intervention is not required, the ITLM shall finish all of the free bonus plays. At the end of the bonus round the player shall be required to cash out. 5.19.4.2 If the bonus round requires player intervention but does not require an additional wager, then the ITLM shall allow the player to make any decisions regarding free bonus plays, provided that these decisions are made within five (5) minutes. At the end of the bonus round the player shall be required to cash out.

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5.19.4.3 If the bonus round requires an additional wager, and that would not exceed the maximum allowable wager amount, then the player shall be allowed to make all decisions and wagers associated with the bonus plays. At the close of the bonus round the player shall be required to cash out.

5.19.5 Tournaments

ITLMs shall have the ability to support Tournament Play.

5.19.5.1 All tournament play shall be on machines which have been tested and approved in accordance with the rules and for which the tournament feature has been enabled. 5.19.5.2 All ITLMs used in a single tournament shall utilize the same electronics and machine settings. The ITLMs must utilize credit points only for tournament play and tournament credits shall have no cash value. 5.19.5.3 Tournament play shall not be credited to the electromechanical meters of the machine.

5.19.6 Signage

The Contractor shall be responsible for all signage as it relates to franchise, premium and theme ITLMs. All other signage will be the responsibility of the Facility.

5.20 ITLM LOCAL SUPPORT, STAFFING AND SERVICES

The Contractor shall be responsible for all maintenance and costs in support of all ITLMs and associated equipment it places within the State.

5.20.1 Personnel

On-Site Support: The Contractor shall provide on at least one on-site ITLM Technician for a period of at least one (1) day after the opening of a Facility.

Contractor shall provide all other staff in accordance with its Proposal, as accepted and approved by the MLGCA, and shall provide a single point of contact for field service personnel to obtain technical support. 5.20.2 Training

Contractor may be required, as directed by the MLGCA, to provide training for Facility and MLGCA staff regarding the operation of its ITLMs, including materials, equipment and personnel for the training.

5.20.3 ITLM Maintenance and Support

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The Contractor is responsible for all maintenance and associated costs for its ITLMs. The Contractor shall implement and manage maintenance, which shall include all requirements using experienced staff for pre-opening, opening and post-opening support at each Facility, in accordance with the Maintenance Plan submitted with its proposal and approved by the MLGCA and including the following requirements:

5.20.3.1 Response Requirements: The Contractor shall be responsible to determine that all ITLMs are operable and when a malfunction occurs the Contractor shall ensure that the affected ITLM is returned to an operational state within two (2) hours. In all cases the MLGCA shall have the right to make the determination as to whether an ITLM is operable and whether the Contractor responded within the required time period. 5.20.3.2 Maintenance Facilities: The Contractor shall maintain a sufficient number of maintenance centers and depots throughout the State to fully support the ITLM maintenance and repair program and provide spare parts and technical services to maintain the ITLMs in compliance with the Contract.

5.20.3.3 ITLM Maintenance Items: The Contractor shall during any service call routinely check mechanical security, safety, electronic reader, and any other attachments provided by the Contractor: The Contractor shall maintain the ITLM in the highest level of appearance including but not limited to cleaning of equipment and refurbishing of covers. 5.20.3.4 Parts Supply: The Contractor shall maintain an adequate supply of parts to sustain the service of ITLMs that it has supplied and is required to maintain. The Contractor shall maintain a current sparing matrix and ensure timely delivery to all maintenance contractors or consortiums. At each Facility space is limited for the Contractor to provide bench maintenance and spare parts. Spare parts space will be available only on a just-in-time basis. Thus the Contractor shall be required to have off-site storage space.

5.20.3.5 User and Service Documentation: The Contractor shall keep all Operating and Service Manuals for all ITLMs updated and accessible to the MLGCA. 5.20.3.6 Preventative Maintenance: The Contractor shall establish a preventive maintenance plan for each type of ITLM delivered, which shall be approved by the MLGCA, and perform preventive maintenance in accordance with the approved plan. 5.20.3.7 Maintenance Log: A written maintenance log shall be kept within the main cabinet access area in each ITLM. Every person, including MLGCA personnel, who gains entry into any internal space of an ITLM shall sign the log, record the time and date of entry and list the areas inspected or repaired.

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The maintenance log forms will be retained by the Contractor for a period of three (3) years from the date of the last entry and be available upon request for inspection by the MLGCA. 5.20.3.8 Trouble Tracking and Reporting System: The Contractor shall maintain and manage a data base and reporting system that fulfills the following criteria:

Tracking and various reporting of all ITLMs and related problems whether or not actual problems were found. Records for each ITLM by serial number shall be maintained for the life of the ITLM and shall include ITLMs in reserve or returned for maintenance.

Information for various reports shall be available in real time. The real time retrieval shall not be limited to inquiries for the current day, but shall include a minimum of twelve (12) months of activity by date.

Various reports shall include, but are not limited to: a. By Facility for a given period b. By part or component c. Others as defined by the MLGCA

Data shall include, but not be limited to: a. ITLM serial number b. Component, sub-component, part identifiers c. Time and date of reported problem d. Nature of problem reported e. Field service person identifier f. Problem resolution and date and time g. Elapsed time from notification to completed repair (down time)

The Contractor shall provide the MLGCA with read-only access to problem management, Asset Tracking and Inventory Management systems and all associated reports.

5.20.4 Meetings

The Contractor shall be required to attend meetings at the MLGCA's headquarters or a Facility in accordance with a schedule established by the MLGCA, not to exceed four (4) meetings per year and eight (8) hours per meeting. During the first year after the opening of a Facility, the Contractor may be required to attend additional meetings.

5.21 ITLM TESTING

5.21.1 The MLGCA shall require the Contractor to utilize the services of one or more of the certified independent testing laboratories approved by the MLGCA.

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5.21.2 All testing will be performed, approved and certified by one or more of the certified independent testing laboratories approved by the MLGCA. 5.21.3 Each independent testing laboratory will be responsible for direct billing the Contractor for all costs related to testing of the Contractor's ITLMs, gaming products, software and systems. 5.21.4 Testing services shall include, but not be limited to:

Testing of Contractors ITLMs, Gaming Products, Software and Systems

Audits and Investigations

Transfer of Approvals

Testing of ITLM Central System (must be conducted by a certified independent testing laboratory that has tested systems for the MLGCA within the past three years)

5.21.5 The MLGCA may require that two working units of each model of an ITLM be transported to the location designated by the MLGCA for testing, examination and analysis. The Contractor shall pay all costs of testing, examination, analysis and transportation of such ITLM models. 5.21.6 The testing, examination and analysis of any ITLM may require dismantling of the ITLM and some tests may result in damage or destruction to one or more electronic components of such ITLM. The MLGCA shall have no liability for any such damage or destruction. 5.21.7 The MLGCA may require that the Contractor provide specialized equipment. 5.21.8 The MLGCA may require additional no-notice random testing. All costs related to such testing shall be the responsibility of the ITLM Contractor. 5.21.9 The MLGCA will conduct a series of acceptance tests in conjunction with the Contractor to fully determine the passing or failing of the Contractor's equipment in accordance with the specifications of this Contract. Failure of the Contractor's ITLM to pass these tests may result in the Contractor being assessed liquidated damages or forfeiting up to the full amount of the performance bond. It is not the responsibility of the Contractor to pay for the acceptance testing but the cooperation of the Contractor in these tests is required.

5.22 ITLM OPERATIONS The Contractor shall ensure that any impact on ITLM operations, including but not limited to, delivery, installation, conversion, upgrade, movement, replacement, repair and removal, is communicated in writing to the MLGCA and Facility.

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5.22.1 Shipping of ITLMs Upon initial delivery of ITLMs from the Contractor, when replacement or removal of ITLMs is required, or at any time a ITLM is transported, the Contractor shall

comply with this Section. ―Transport‖ means any shipping, transfer, delivery or other movement of ITLMs into or out of the State, or between Facilities within the State. ―Transport‖ does not include the movement of ITLMs within a Facility.

5.22.1.1 The Contractor shall comply with applicable provisions of 15 U.S.C. §§ 1171 - 1178, commonly known as the Johnson Act. 5.22.1.2 The Contractor shall submit written notice to the MLGCA prior to transporting a ITLM. 5.22.1.3 Trucking companies or common carriers shipping ITLMs shall be bonded and shall ship all ITLMs in sealed trucks or trailers. 5.22.1.4 A Contractor when transporting one or more ITLMs into, within or out of the State shall, prior to shipment, provide the MLGCA with the following written notice on forms prescribed by the MLGCA containing:

1. name and address of person initiating transportation, 2. reason for transportation, 3. method of transportation, 4. name of and address of carrier, 5. anticipated beginning and end dates of transportation, 6. name and address of destination, 7. name and address of manufacturer, 8. manufacturer’s serial number, 9. model number, 10. description, and 11. any other information requested by the MLGCA.

5.22.1.5 The person proposing to transport or transporting an ITLM shall promptly provide the MLGCA with written notice of any changes to the information already submitted as required under Section 5.22.1.4. 5.22.1.6 A person transporting an ITLM shall plainly and clearly label the package so that the name and address of the shipper and recipient, and the contents of the package, may be readily ascertained during an inspection of the outside of the package.

5.22.2 Installation

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5.22.2.1 The Contractor is responsible for the assembly and installation of all ITLMs and associated equipment. 5.22.2.2 The Contractor shall not change the assembly or operational functions of an ITLM authorized for placement in the State unless a request for modification of an existing ITLM prototype has been approved by the MLGCA.

5.22.3 Movement

5.22.3.1 The Contractor shall be responsible for the movement of ITLMs within a Facility and outside of the Facility.

5.22.4 Conversions, Upgrades and Expansions

5.22.4.1 The Contractor shall be responsible for various types of conversions, upgrades and expansions, subject to notification to approval by the MLGCA, which shall include but not be limited to:

Change to a new protocol for communicating with the ITLM Central System.

Change in ITLM denomination or theme.

Expansion of ITLM hardware or software capabilities. 5.22.4.2 No repairs to, or replacement of, the logic board or circuitry within the ITLM's logic area may occur unless authorized personnel are present. The logic area shall not be unlocked by anyone other than authorized personnel.

5.22.5 Replacement and Removal

5.22.5.1 Upon notification of the requirement for replacement or removal of an ITLM, the Contractor shall coordinate the replacement or removal of all ITLMs with the Facility and the MLGCA in accordance with agreed upon terms or performance standards. 5.22.5.2 A Contractor transporting one or more ITLMs within or out of the State shall comply with Section 5.22.1.

5.22.6 Operational Impact - General The Contractor shall comply with the requirements specified below which apply for all operational impact:

5.22.6.1 Minimizing risk and disruption: The Contractor shall minimize conversion risks (downtime, data loss), maintain a good Facility, and minimize disruption for players.

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5.22.6.2 Schedule and tasks: The Contractor shall provide and maintain a plan (Project, Gantt, PERT, or similar) identifying the major milestones to be accomplished for the manufacture, equipment delivery, software programming, installation, and testing. 5.22.6.3 Quality assurance and internal testing: The Contractor shall conduct internal tests and schedule acceptance testing by the MLGCA. 5.22.6.4 Tools and techniques for project management: The Contractor shall provide a project team structure, process and tools that facilitate MLGCA oversight of the implementation. Regular reporting, walkthroughs, and project status meetings are required. The MLGCA shall be provided licensed copies of any project management software to enable MLGCA staff to monitor and maintain project management schedules. 5.22.6.5 The Contractor shall conduct all ITLM activities and functions in a manner which does not pose a threat to the public health, safety or welfare of the citizens of the State, and which does not adversely affect the security or integrity of the MLGCA.

5.22.6.6 The Contractor shall promptly report to the MLGCA any facts or circumstances related to ITLM operations which constitute a violation of State or federal law.

5.23 ITLM PERFORMANCE

If it becomes clear that certain ITLMs are under-performing with regard to generating proceeds, the MLGCA shall have the right to alter the mix of ITLMs. The following procedure will apply for determining the need for and carrying out the replacement of under-performing ITLMs.

5.23.1 Performance Reports

The ITLM Central System will generate a series of reports to the MLGCA and the Contractor that define the performance of the ITLMs. The reports will apply to the overall population of ITLMs and to defined groups within the total ITLM population. The Contractor shall provide to the MLGCA monthly performance data for its comparable ITLMs as available from other jurisdictions. This shall include, but is not limited to, Win per day per ITLM.

5.23.2 Performance Metrics

On a schedule determined by the MLGCA, Proceeds from the ITLMs will be reviewed and the MLGCA will analyze if any ITLMs or groups of ITLMs are under-performing, considering the following:

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1) If a group of similar ITLMs are under-performing the total ITLM population by fifteen (15%) percent or more or are performing in the bottom tier of the ITLM population; 2) If a group of ITLMs is under-performing a comparable set of ITLMs with a similar play style by fifteen (15%) percent or more or are in the bottom tier of ITLMs of a similar play style; and, 3) If a group of ITLMs is under-performing a comparably-located set of ITLMs by fifteen (15%) percent or more or are in the bottom tier of ITLMs comparably located.

Metrics to be used to determine comparative performance may include:

Proceeds

Coin In

Handle Pulls (Plays)

Actual Win Percentage

Maintenance History

5.23.3 Performance Evaluation

As a result of such performance tests the MLGCA will make a determination whether an ITLM or group of ITLMs is under-performing and whether correction or replacement is in the State's best interest. 5.23.4 Performance Replacement For an ITLM or group of ITLMs determined to be under-performing, the Contractor shall have ten (10) days to provide a corrective action plan to the MLGCA and the MLGCA will approve/disapprove said plan within ten (10) days. The Contractor shall then have forty-five (45) days in which to perform adjustments that are acceptable to the MLGCA. At the end of the adjustment period the ITLMs will be monitored for a period specified by the MLGCA according to the ongoing performance measurements and may be subject to future adjustments as part of the total population.

If the performance metrics indicate that a ITLM or group of ITLMs is still under-performing, the MLGCA shall have the right to order those ITLMs to be removed within thirty (30) days or longer timeframe as ordered by the MLGCA. The MLGCA may then replace the removed ITLMs, based on performance experience or other criteria as determined by the reviews described above, other market conditions, or other selection criteria. ITLMs are subject to these conversion, adjustment, and removal provisions for the Contract term. For removed ITLMs, the Contractor shall receive no further compensation from the MLGCA.

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5.24 ITLM REPORTS

The Contractor shall provide the following reports to the MLGCA:

1. Jurisdictional Performance Report (see Section 5.23.1) – (provide daily or as requested) sorted by Facility and by ITLM, that summarizes the last polled date by serial number, reason for error, and poll address.

a. Jurisdiction – State b. Facility Name c. Facility Address d. ITLM Grouping by Type e. Win Per Unit per Day

i. By Grouping ii. By ITLM

2. Progressive Jackpot Report – (provide daily or as requested) summarizes by date the amount played, amount won, Proceeds, number of ITLMs and average Proceeds by ITLM.

a. Facility License Number b. Facility Name c. Facility Address d. Facility Name e. Facility Address f. Progressive Jackpot Name by ITLM g. Progressive Jackpot Meters by ITLM

3. Maintenance Report – (provide monthly or as requested) summarizes the maintenance history and status of each ITLM

a. Facility License Number b. Facility Name c. Facility Address d. Facility Name e. Facility Address f. ITLM Asset Number g. ITLM Central System Number h. ITLM Serial Number i. ITLM Maintenance History j. ITLM Maintenance Status

4. Delivery/Removal Report – (provide monthly or as requested) details the delivery or removal of ITLMs

a. Facility License Number b. Facility Name c. Facility Address d. Facility Name e. Facility Address f. Scheduled Delivery/Removal Date

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g. ITLM Asset Number h. ITLM Central System Number i. ITLM Serial Number j. Reason for Removal

5.25 ITLM SELECTION AND ORDERING PROCESS

The MLGCA will not designate or require a specific percentage or quantity of ITLMs per manufacturer to be allocated at a Facility, but will work with each Facility to identify the best mix of ITLMs. ITLMs may be selected and ordered from the Contractor in accordance with this section. The MLGCA will issue a NTP as needed throughout the term of the Master Contract to acquire ITLMs. At minimum, each NTP will contain the following information:

Type/Model of ITLMs

Number of ITLMs

Technical Requirements

Delivery schedule, not to exceed ninety (90) days

Facility

The Contractor shall respond within the timeframe stated in the NTP. NTP responses shall be sent via e-mail to the Procurement Officer.

5.26 TICKET REDEMPTION UNIT

The contractor shall provide a ticket redemption unit at each Facility that is connected to the ITLM Central System to allow the validation and redemption of tickets for cash.

5.27 INSTANT TICKET SERVICES REQUIRED:

5.27.1 NON-DISCLOSURE OF THE MLGCA’S PLANS

The Contractor shall assure that the details of the instant tickets planned by the MLGCA are not disclosed to persons or organizations other than the personnel and agents and subcontractors of the Contractor whose assistance in the production of the instant tickets are necessary.

5.27.2 SITE VISITS FOR INSTANT TICKET PRODUCTION/PRESS CHECK The MLGCA may conduct a maximum of three (3) site visits during each Contract year to the Contractor’s facility to conduct press checks. The number of site visits may be less.

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The Contractor shall pay the reasonable and necessary expenses for transportation, lodging and meals for up to two (2) MLGCA representatives

to conduct the site visits at the Contractor’s facility. The cost of any site visit

for press checks not conducted as specified above shall be credited to the MLGCA as specified in the Financial Proposal Sheet-Attachment F.

The MLGCA may conduct site visits unannounced to ensure security and compliance with Contract requirements.

5.27.3 STAFFING

The Contractor shall assign an experienced account team with at least one (1) primary day-to-day contact, who shall have sufficient knowledge and expertise in Instant Ticket printing services and shall:

a. Provide assistance in development of Instant Ticket concept/designs

and prize structure development;

b. Be the point of contact concerning the performance of the development, printing, and marketing of Instant Tickets and payment for those services performed; and

Personnel assigned by the Contractor to service this Contract shall be approved in advance by the MLGCA in accordance with Section 4.34.

5.27.4 PRIZE STRUCTURE(S)

The Contractor shall recommend the best possible prize structures to maximize Instant Ticket sales and revenue. The Contractor shall guarantee that each Deal of Instant Tickets is produced based on randomization of all prizes. The Contractor shall propose the various levels of prizes and the combination of wins available, the probability of winning prizes, the numbers of winners, and the cost of such prizes. The prize structure shall include, but not be limited to, the following:

1. Deal name, number, date and version; 2. Ticket price point; 3. Production quantity; 4. Revenue generated; 5. Percent of prize payout, overall and per way of winning a prize; 6. Each tier level for prizes and play action indicating how each tier is won; 7. Overall probability of winning any prize in the game and consolidated

probability if there is more than one way to win a prize; 8. Probability of winning each prize amount; 9. Average winners per Deal, and average targeted prize; 10. Number of winners per Deal; 11. Prize cost and percent of prize fund dedicated to each prize level,

subtotaled by low, mid, and high tiers;

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12. Deal size; 13. Total number of Deals; and 14. Ticket size.

The prize structure shall be submitted to the MLGCA electronically in Excel format (which will be able to be changed/revised by the MLGCA) and shall be accompanied by an explanation regarding the various details of running the Deal. The MLGCA shall review the proposed prize structure and may indicate changes or instructions. The Contractor shall then produce the Deal in accordance with this approved prize structure.

5.27.5 INSTANT TICKET REQUIREMENTS FOR ALL DEALS

Specifications for the Instant Tickets and requirements of the work to be performed are detailed below:

1. Instant Ticket Quality

The MLGCA, as a State agency dealing with independent Facilities and the consuming public, requires a product of exceptionally high quality. Instant Tickets may be inspected by the MLGCA upon delivery. The MLGCA shall have the right to inspect up to one hundred percent (100%) of the Instant Tickets for compliance with the specifications herein. However, inspection by the MLGCA does not relieve the Contractor of its responsibility to meet all Contract requirements.

Instant Tickets shall meet the following minimum quality standards:

a. No scratches across the latex covering of the Instant Tickets;

b. No uneven, rough latex coverings;

c. No holes in the latex coverings exposing portions of the hidden symbols;

d. No latex coverings ―dripping‖ on the design printing;

e. No latex coverings that smear or fail to come off when rubbed;

f. No overprint and display designs that are unclear or not crisply printed;

g. No Instant Tickets out of order within a Deal;

h. No symbols that are chopped or incomplete;

i. No miscounted number of Instant Tickets in a Deal;

j. No inks offset on latex coverings from one ticket to another;

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k. No off-register latex coverings or overprint designs;

l. No symbols not totally covered by the latex covering;

m. No symbols that smear under normal handling or with slight moisture;

n. No unevenly trimmed Instant Tickets; and

o. Any additional commonly accepted industry standards that may apply.

2. Inks

Inks shall not smear, run, or stain under normal handling or use by consumers, nor shall they be chemically or dermatologically irritating under normal handling and use by consumers. Inks shall be resistant to water and other common solvents. Inks shall be of such a nature that there is no ―offsetting‖ from the front of Instant Tickets to the back of Instant Tickets on an the roll and vice versa.

5. Ticket Patterns and Pick-Out

No winning or losing Instant Tickets shall be recognizable from any characteristics of the tickets or ticket patterns other than the symbols concealed by the rub-off material. It shall not be possible to ascertain whether an Instant Ticket is a winning or losing ticket, using any practical or economical technique, unless the application of the technique renders the Instant Ticket unsalable to the public or easily recognizable as having been tampered with.

6. Bar Code

The Contractor shall be able to facilitate interleaved two (2) of five (5) Bar Code symbology. The Deal code, number, ticket sequence, first six (6) digits of verification number of the Instant Ticket, and a two (2) digit check digit shall be encoded in the Bar Code, for a total of twenty-one (21) digits. At some time during the term of the Contract, as directed by the MLGCA, the Contractor shall transition to a PDF-417 bar code format or other similar technology.

All variances shall be in accordance with the American National Standard Institute (ANSI). A first pass read rate of ninety-five percent (95%) or more is required.

Contractor shall be capable of providing Bar Code technology solutions certified under NASPL. An NSI certified solution is one that has achieved certification against the then current version of the NASPL Standards Initiative (NSI) Bar Code Technical Standard (Bar Codes for Instant Tickets

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in the Lottery Industry) in accordance with the NSI Certification Policy, including the NSI Certification Policy Supplement for Bar Code Technology Certification.

8. Play Symbols

The play symbols shall be legible and uniformly positioned and aligned on the Instant Tickets. Symbols shall be easily readable by the public and meet industry standards for height, depending on the particular design and ticket layout chosen by the MLGCA. The Contractor shall be able to supply a variety of type styles, sizes, and colors. Application of the play symbols shall be performed in a random manner.

9. Captions

To provide redundancy for security reasons and to prevent consumer disputes, each play symbol shall be accompanied by a caption that spells out the play symbol in type smaller than the symbol itself.

11. Protective Coating

The symbols under the rub-off shall be covered with a transparent protective coating so that the symbols are protected when the consumer rubs off the opaque covering.

12. Rub-Off Material

The rub-off coating material shall be opaque and of such quality as to maintain the security of each of the Instant Ticket’s play symbols. The rub-off material shall appear and feel ―smooth and regular to the touch‖ and shall fragment when so removed without causing dusting. The rub-off material shall not be chemically or dermatologically irritating or cause harm to clothing when removed. Instant Tickets shall remain readable and able to be rubbed easily, but not so easily as to be affected by heat, cold or friction between Instant Tickets, for a minimum of one (1) year from delivery date to the Facility. The rub-off material shall be completely removable by scraping with a coin or other object. There shall be no visible removal of rub-off material upon one (1) rub using the edge of a penny at twenty-five (25) grams pressure. The rub-off material shall break at no more than seventy-five (75) grams pressure unless otherwise specified by the MLGCA.

13. Overprint

Exceptional standards are expected in the production of Instant Tickets to assure that they are secure.

15. Validation Number (VIRN Number)

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The MLGCA requires a secure traceable Instant Ticket. Every Instant Ticket shall contain a Deal-wide unique Validation Number and will be randomized over the whole range of the Deal.

16. Void Tickets

There shall not be any void or “dead” Instant Tickets in a Deal.

17. Perforations

The perforations between Instant Tickets shall allow Instant Tickets to be separated from each other but should not break apart in normal transit and handling.

18. Deal Size

The consistency of the correctness of the count of Instant Tickets in a Deal is of extreme importance to the MLGCA. However, the MLGCA shall have the right to determine Deal sizes by theme and/or price point.

19. Ticket Numbers

Each Instant Ticket shall bear an individual consecutive number starting with 001 within each Deal. The MLGCA requires that a check digit be with the ticket number. Each Instant Ticket shall bear a Deal number. Deal numbers shall be consecutive (except for omissions) and non-duplicating in the Deal. The Contractor shall have procedures to assure that the same Deal number is on all Instant Tickets in the Deal and that Deal numbers are not duplicated. Each Instant Ticket shall also bear a Deal identifier. All Instant Ticket identification numbers and letters shall, at the discretion of the MLGCA, be Bar Coded and OCR-A readable.

21. Deal Packaging

Each Deal shall be shrink wrapped so that the Deal number is visible. The MLGCA shall have the right to use or other special packaging.

24. Transportation

The Contractor shall transport Instant Tickets to the Contractor’s warehouse in locked and sealed trucks, unless the MLGCA requests a different method. These trucks shall not contain any item(s) other than MLGCA Instant Tickets or other MLGCA related items during delivery. Trucks

shall be unlocked and opened only upon arrival at the Contractor’s

warehouse and only by the Contractor.

On each carton of Instant Tickets the Contractor shall include a Bar Code, which identifies the contents of the carton, so that the Contractor can scan

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an entire carton of Instant Tickets at one time for assignment to a Facility.

25. Shipping Manifest List

At the time of the delivery, the Contractor shall provide the MLGCA with a list of Deals delivered.

26. Instant Ticket/Book Reconstruction

The Contractor shall reconstruct Instant Tickets on an as needed basis as requested by authorized representatives of the MLGCA. The MLGCA will supply the contractor with a list of persons authorized to request Instant Ticket reconstructions. By the end of the first week of every month, the Contractor shall provide the designated MLGCA representative with a listing of all tickets reconstructed during the previous month. This listing shall include, at a minimum, the following information: date of reconstruction, validation number, deal and ticket number, MLGCA requestors, MLGCA approver.

The Contractor shall retain reconstruction records for three (3) years following the announced end of each affected Deal.

27. Accountant’s Review

The Contractor shall engage an independent Certified Public Accountant experienced in Lottery operations and acceptable to the MLGCA to review the procedures and controls employed by the Contractor during the production of each Instant Ticket Deal. The Certified Public Accountant shall provide directly to the MLGCA a bound report, printed on paper,

which shall state the tests performed on the Contractor’s production

procedures and the related findings. These tests shall include, but are not limited to, a review of the controls on the computer tapes or other methods of seeding used in producing high tier winners, low tier winners, and non-winners in accordance with the final approved prize structure.

28. Validation Algorithm and Other Computer Information

The Contractor shall ensure that the MLGCA’s ITLM Central System contains the algorithm and all related computer coded information needed to validate Instant Tickets.

30. Ticket Compatibility

All Instant Tickets shall be compatible with all ticket dispensing systems utilized by the MLGCA during the term of the Contract.

5.28 INSTANT TICKET SOFTWARE REQUIREMENTS

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5.28.1 Deal Randomization Software Certification

All Deal randomization software shall be approved and certified by one or more independent testing laboratories approved by the MLGCA.

5.28.2 Randomness Testing

Each Deal’s placement of Instant Tickets shall be the result a random number generator that will randomly determine the occurrence of each specific Instant Ticket within the Deal. A selection process shall be considered random if it meets the following statistical requirements:

5.28.2.1 Chi-Squared Analysis: This test is the sum of the squares of the difference between the expected result and the observed result. Each Instant Ticket must satisfy the 99 percent confidence limit using the standard chi-squared analysis.

5.28.2.2 Runs Test: A statistic that determines the existence of recurring patterns within a set of data. Each Instant Ticket must not produce a significant statistic with regard to producing patterns of occurrences. Each Instant Ticket will be considered random if it meets the 99 percent confidence level with regard to the "runs test." 5.28.2.3 Correlation Test: Each Instant Ticket is independently chosen without regard to another Instant Ticket within that Deal. Each Instant Ticket is considered random if they meet the 99 percent confidence level using standard correlation analysis. 5.28.2.4 Serial Correlation Test: Each Instant Ticket is independently chosen without reference to the same Instant Ticket in the previous determination. Each Instant Ticket is considered if it meets the 99 percent confidence level using standard serial correlation analysis. 5.28.2.5 Random Number Generator Protection: The random number generator and selection process shall be impervious to influences from outside devices including, but not limited to, electromagnetic interferences, ESD and RF interferences. 5.28.2.6 Additional Tests: Any other tests deemed necessary by the MLGCA.

5.28.3 Percentage Payout

Each Deal shall maintain its own pay-tables and shall meet the following percentage payout specifications:

5.28.3.1 Payout Limits. Payout from a Deal shall not be greater than 90%, unless otherwise approved by the MLGCA.

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5.28.3.2 Minimum Probability. Each Deal shall have a probability that shall not exceed 1 in fifty million (1:50,000,000) of obtaining the maximum payout for each play.

5.28.4 INVENTORY CONTROL

The Contractor shall maintain logs of Instant Ticket inventory between all points of production and the delivery to the Facilities. The Contractor shall also maintain logs of all destroyed Instant Tickets. The Contractor shall collect the above data in a timely manner.

5.28.5 QUALITY CONTROL

The Contractor shall employ quality control procedures to ensure that all Instant Tickets delivered meet all specifications and requirements of the MLGCA. The MLGCA may require the Contractor to submit Instant Tickets from time to time to an outside, independent laboratory for testing at no additional cost to the MLGCA. The MLGCA shall select the testing laboratory.

5.28.6 “END OF PRODUCTION” PRIZE STRUCTURE

After all Instant Tickets have been produced, the Contractor shall promptly provide the MLGCA with an “end of production” prize structure which accurately states the total number of Instant Tickets delivered and the actual number of winners. Additionally, multiple tiers of the same prize value shall be consolidated on a separate report.

5.28.7 ATTAINMENT OF PRIZE STRUCTURE

The only variance between the “end of production” prize structure and the final

approved prize structure to be tolerated will be that which occurs in the omitted Deals. If the number of voided Deals alters higher tier prizes, the MLGCA may request the reprint of all voided Deals. All prizes of $1000.00 or more shall be exact to the approved prize structure. Prizes of $999.00 or less shall be within a 2.0% variation.

5.28.8 VALIDATION ASSISTANCE

The Contractor shall assist the MLGCA in a timely manner in the analysis and validation of questionable Instant Tickets.

5.28.9 SECURITY

1. Plant Security - The printing plant or other facility where Instant Tickets are

manufactured shall be equipped with a plant security system, to be reviewed and approved by the MLGCA. The system shall ensure that

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tickets and materials are protected from theft, alteration and destruction, not only during the manufacturing process, but also while in storage on the Contractor’s premises. Any failure of the Contractor’s plant or other facility to be in full compliance with the MLGCA’s security standards shall be corrected and brought into full compliance by the Contractor within a reasonable time, as determined by the MLGCA.

The MLGCA shall have the right to make any number of announced or

unannounced inspections of the Contractor’s premises at any time.

2. Security Breach - Upon discovery of any breach of security experienced by

the Contractor during the term of the Contract, especially theft or disappearance of any paper stock, Instant Tickets, waste, printing plates, imagery tapes, program tapes or the like, the Contractor shall immediately within one (1) hour notify the Contract Manager by telephone or in person. The Contractor shall follow up within twenty four (24) hours with written notification to the Contract Manager detailing the specifics of the occurrence and what steps have been taken to correct the problem. The MLGCA shall be the sole judge of the adequacy of the steps taken and shall have the right to specify other steps to be taken.

The MLGCA shall have the right to require at any time such further and additional security measures as it deems necessary and/or appropriate to ensure the integrity of the operation of the MLGCA.

The MLGCA reserves the right, at any time and without prior notice, to inspect and otherwise evaluate all phases of performance specified in the Contract, and the premises in which such work is performed.

5.28.10 BUSINESS RECOVERY PLAN

The Contractor shall have an up to date Business Recovery Plan which shall be documented, maintained and periodically tested to ensure minimal interruption to service provided to the MLGCA in case of an emergency or disaster at

the Contractor’s facility. The Contractor shall submit this plan to the MLGCA for

review and shall amend the plan if it is not approved by the MLGCA.

5.28.11 PROBLEM TRACING

The Contractor shall build into its system of construction a means to be able to trace the extent of any problem in printing, etc., which may be discovered while a Deal is in operation.

5.28.12 NONCONFORMING TICKETS

Nonconforming Instant Tickets (any Instant Ticket which deviates from any specifications) may be rejected by the MLGCA. If the number of such Instant Tickets rejected is more than one percent (1%) of the ordered quantity of Instant

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Tickets, the Contractor shall replace such Instant Tickets at no additional costs to the MLGCA, as soon as is reasonably possible, given the availability of material and production times. If the quantity of Instant Tickets rejected is less than the above percent for such Deal, the Contractor need not replace nonconforming Instant Tickets but shall issue a refund or credit for the Instant Tickets to the MLGCA. This remedy is in addition to any other remedy provided for in this Contract or any other remedy provided by law.

5.28.13 WORKING PAPERS The Contractor shall provide for the MLGCA’s approval Working Papers. The Working Papers shall provide preliminary review of the basic Deal development and shall include the following: 1. Detailed Instant Ticket description; 2. Detailed specifications including prize structure and programming

parameters; 3. Complete set of rules, and symbols and fonts; 4. Production, packaging and shipping information; 5. Production timeline to include:

a. Working Papers signed date; b. Approximate printing date; c. Approximate delivery date to distribution warehouse; and d. Deal launch date.

6. Deliverables schedule including: a. Disk containing symbols; b. Disk color draw downs and color composites; c. Validation tapes; and d. Deal tapes.

Contractor shall not begin production of an Instant Ticket until the MLGCA has approved that Instant Ticket’s Working Papers.

5.29 INSTANT TICKET DELIVERY SERVICES TO FACILITIES

5.29.1 The Contractor shall be responsible for the delivery of all Instant

Ticket shipments to MLGCA Facilities located throughout the State. The

Contractor may subcontract with another company(ies) to provide these services, but the Contractor is totally responsible for any work and services performed by its subcontractor(s).

5.29.2 The MLGCA estimates there will be approximately one hundred and fifty (150) Facilities located throughout Maryland. The number of Facilities may increase or decrease during the term of the Contract. These amounts are estimates only and are not a guarantee of any minimum or maximum amounts under this Contract.

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5.29.3 The Contractor shall deliver all packages within twenty four (24) hours of pick-up from the Contractor’s warehouse.

5.29.4 The Contractor shall return to the Contractor’s warehouse all packages that are undeliverable.

5.29.5 The Contractor shall provide the MLGCA with an automated system that tracks the status of the deliveries. At a minimum, this tracking

system shall generate a daily report of all of the previous day’s orders that

have not been delivered as well as a report of all refusals and the reason for the refusal.

5.29.6 The Contractor shall have in operation a secure warehouse and distribution facility that will be used to sort, store for shipping, and ship MLGCA packages containing Instant Tickets.

5.29.7 The Contractor shall obtain all statutorily required approvals by the Public Service Commission to operate in Baltimore City and all counties in the State of Maryland where the operation of Instant Ticket Lottery Machines at Veterans’ Organizations is authorized.

5.29.8 The Contractor shall have in operation a fleet of vehicles and sufficient personnel to operate the fleet to perform all required MLGCA services.

5.29.9 The Contractor shall not make a partial shipment of packages of Instant Tickets to a Facility. A Facility is required to accept the entire shipment of Instant Tickets. Each Instant Ticket delivery will consist of one or more sealed packages containing rolls of Instant Tickets.

5.29.10 The Contractor shall maintain all Instant Tickets and Instant Ticket delivery information in a secure manner at all times. The MLGCA

shall have the right to inspect, unannounced, any part of the Contractor’s

warehouse facility and distribution system. The Contractor shall reimburse the MLGCA for the reasonable and necessary expenses for transportation, lodging and meals incurred by the MLGCA for the unannounced inspection.

5.29.11 Any information regarding lost, stolen or missing Instant Tickets shall be immediately reported by the Contractor to the Security department at MLGCA Headquarters. The Contractor shall file a police report within twenty four (24) hours of reporting such losses.

5.29.12 The Contractor shall provide throughout the Contract term a

Delivery Point-of-Contact person ( ―Point-of-Contact‖) who shall be

knowledgeable about the Instant Ticket delivery services, provide technical assistance regarding the delivery system, and attend related meetings as required by the MLGCA. The Point-of-Contact shall answer questions regarding the location of packages not yet delivered to Facilities and any problems or concerns relating to all delivery services under the Contract.

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5.29.13 Each of the Contractor’s employees making deliveries to MLGCA Facilities shall a) have dress and appearance appropriate for the purpose of making deliveries to MLGCA Facilities and present a positive image of the MLGCA, as determined acceptable by the MLGCA throughout the term of the Contract, and b) display an official form of identification or insignia as approved by the MLGCA.


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SECTION VI. FINANCIAL PROPOSAL

6.1 GENERAL:

6.1.1 The Offeror must complete and submit the Financial Proposal Sheet provided in Appendix F. The Financial Proposal Sheet shall be the separate Financial Volume of the Offeror’s proposal, and shall be submitted separately and clearly marked ―Financial Proposal‖ in accordance with Section 7.2. The Offeror must provide complete price information for all services required. Offers to provide only partial services are not acceptable and shall be rejected. Do not change or alter this Form or the Offer may be deemed unacceptable.

6.1.2 The Offeror’s proposed prices shall be fully loaded and expressly include: overhead expenses (e.g., fringe benefits, administrative costs, profits, etc.); and all related and incidental expenses (e.g., travel) associated with providing all services and equipment required by this RFP. No other amounts or costs will be paid to the Contractor. Specifically, no taxes or assessments or license fees or permits of any type will be paid in addition to the prices proposed on the Financial Proposal Sheet.

6.1.3 All Prices proposed shall be firm fixed prices for the entire term of the Contract, to include the Renewal Option period, if exercised, and any other extensions.

6.1.4 The Contract that results from this RFP will be an Indefinite Quantity Contract with Firm Fixed Unit Prices in accordance with COMAR 21.06.03.02 & 21.06.03.06.

6.2 CONTRACT PRICES

The Offeror shall state its proposed price to provide Veterans’ Organization Instant Ticket Lottery Machines and Related Services, to include but not limited to: providing the design, development , installation, implementation, operation and maintenance of a central monitor and control system (―ITLM Central System‖), providing Instant Ticket Lottery Machine (―ITLM‖) design, development, installation, implementation, support, supplies and maintenance at Veterans’ Organizations specified in Lottery Law and providing the Instant Ticke t design, Instant Ticket planning, production, security and storage in the Contractor’s warehouse and delivery of Instant Tickets to the Facilities, as more fully described in this Request for Proposals (―RFP‖). The price shall be expressed as a Firm Fixed Percentage of Net Instant Ticket Lottery Machine Proceeds as stated on the Financial Proposal Sheet-Appendix F.

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6.3 INSTRUCTIONS FOR APPENDIX F-FINANCIAL PROPOSAL SHEET

Appendix F is to be completed by the Offeror and signed in ink by an individual who is authorized to bind the Offeror to all prices offered. Any erasures or alterations must be initialed by the signer in ink.

All prices must be recorded with two decimal places if a percentage (e.g. 0.00) and with dollars and cents if a dollar amount (e.g. $00.00)

All prices must be the actual price that the State will pay for the proposed item and may not be contingent on any other factor or condition.

Nothing shall be entered on the Financial Proposal Sheet that alters or proposes conditions or contingencies on the proposed prices.

It is imperative that the prices entered on the Financial Proposal Sheet be recorded correctly. Any incorrect entries or inaccurate calculations by the Offeror will be treated as provided in COMAR 21.05.03.03E and 21.05.02.12.


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SECTION VII. INFORMATION REQUIRED IN OFFEROR’S PROPOSAL

7.1 TWO VOLUME SUBMISSION

The selection procedure for this RFP requires that the technical data and financial data must each be submitted separately. Offerors must submit proposals in two separate volumes, which will be separately evaluated:

a. Volume I - Technical Proposal

b. Volume II – Financial Proposal

Offerors must submit proposals encompassing all of the services required in the RFP and may not submit proposals for only certain services of the RFP.

7.2 PROPOSALS

1. Volume I - Technical Proposal must be sealed separately from the Volume II - Financial Proposal, but submitted simultaneously to the Procurement Officer at the address listed in Section 3.1.1.

2. An unbound original, so identified, six (6) paper copies and one (1)

complete and exact electronic copy of each Volume shall be submitted. The electronic copy shall be included with the original paper copy of each respective Volume (Technical or Financial).

3. The electronic version of Volume I - Technical Proposal shall be

submitted in MS Word or PDF format, and Volume II - Financial Proposal shall be submitted in MS Word, PDF or Excel format. The electronic versions must include the ability to search, copy and print selected pages and partial pages. Electronic media shall be CD or thumb drive and shall bear the RFP number and name, name of the Offeror, and the Technical or Financial Volume number (Volume I is Technical or Volume II is Financial).

4. The Offeror is required to submit a separate sealed package for each

Volume. Each Volume and each separately sealed package are to be labeled either “Volume I-Technical Proposal” or “Volume II-Financial Proposal”.

5. On the outside of each sealed package, the Offeror must include the RFP

Title and number, the name and address of the Offeror, the Volume number (I=Technical or II=Financial), and the Deadline for Receipt of Proposals.

6. All pages of each proposal Volume must be consecutively numbered from

beginning (Page 1) to end (Page ―x‖). The final page of each Volume shall state ―Final Page‖.

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7.3 VOLUME I – TECHNICAL PROPOSAL

7.3.1 Transmittal Letter A brief transmittal letter prepared on the Offeror’s business stationery must accompany the original Technical Proposal. The purpose of this letter is to transmit the proposal and it shall:

Acknowledge receipt of all Amendments to the RFP, if any.

Be signed by an individual who is authorized to commit the Offeror to all services and requirements as stated in the RFP, including the prices contained in its proposal.

7.3.2 General Format of Technical Proposal

If an Offeror is the subsidiary of another entity, all information submitted by the Offeror such as, but not limited to, references and financial reports, shall pertain exclusively to the Offeror, unless the parent organization will guarantee the performance of the subsidiary. If applicable, the Offeror’s proposal must contain the following explicit statement that the parent organization will guarantee the performance of the subsidiary:

―(Parent) hereby guarantees absolutely the full, prompt and complete performance by (Offeror) of all the terms, conditions and obligations contained in this Contract, as it may be amended from time to time, including any and all exhibits that are now or may become incorporated hereunto, and other obligations of every nature and kind that now or may in the future arise out of or in connection with this Contract, including any and all financial commitments, obligations and liabilities. (Parent) may not transfer this absolute guaranty to any other person or entity without the prior express written approval of the MLGCA. (Parent) further agrees that if the MLGCA brings any claim, action, suit or proceeding against (Offeror), (Parent) may be named as a party, in its capacity as Absolute Guarantor. (Parent) expressly recognizes and agrees that any and all notices, correspondence, or other written or oral communication from the MLGCA to (Offeror) shall be conclusively deemed to have been received by (Parent), and (Parent) hereby waives any and all requirements that it receive any such

notices, correspondence or written or oral communications, whatsoever.‖

This section provides specific instructions for submission of the Offeror’s Technical Proposal. Adherence to the required organization and numbering will allow the Evaluation Committee to ―map‖ the RFP requirements directly to the Offeror’s responses by paragraph number and facilitate a fair and uniform review process. In addition, the Proposal shall:

1. Be prepared in a clear and concise manner.

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2. Address all points of this RFP. The Offeror shall regard specifications in this RFP as mandatory.

3. Be organized and numbered in the same order as given in the RFP, using the

correct subsection and paragraph number for each specification. For example, Section 2.1 Para 1; Section 3.2 Para 4; etc.

4. Not include in the Technical Proposal any reference to prices proposed by the

Offeror.

5. Include in the Technical Proposal the specific sections as described below in Sections 7.3.3 through 7.3.11.

7.3.3 Title and Table of Contents

The Technical Proposal should begin with a title page bearing the name and address of the Offeror and the name and number of this RFP, followed by a table of contents.

Confidential Information: Information that is claimed to be proprietary or confidential is to be labeled accordingly throughout the text and a summary of those sections is to be placed after the Title Page and before the Table of Contents in the Offeror’s Technical Proposal, and if applicable, also in the Financial Proposal. Only those portions that can reasonably be shown to be proprietary or confidential may be identified as such.

7.3.4 Executive Summary

1. The Offeror shall condense and highlight the contents of the Technical Proposal in a separate section titled ―Executive Summary.‖

2. The Offeror shall state whether or not it meets the Offeror Minimum Requirements (Section 1.3) and provide verification of compliance.

3. The Summary shall identify any exceptions the Offeror has taken to the requirements of this RFP, the Mandatory Contractual Provisions or any

other attachments. If an Offeror takes no exception to the State’s terms,

conditions and requirements, the Executive Summary should so state. By submitting a proposal in response to this RFP, the Offeror shall be deemed to have agreed to and accepted all mandatory contract terms and conditions set forth in the standard contract form, unless otherwise noted.

Warning: If there is any item, including any standard clause provision with which the Offeror cannot or will not comply, such exception must be clearly noted and explained, including the degree to which the Offeror may consider some degree of compliance. Exceptions to terms and conditions may result in having the proposal deemed unacceptable or classified as not reasonably susceptible of being selected for award.

4. The Offeror must provide a statement of intent to comply with the terms,

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conditions and requirements of Sections III. and IV., and provide any information required by these Sections.

5. The Offeror must provide a statement of intent to comply with the terms,

conditions and requirements of Section V.

7.3.5 Offeror Technical Response to RFP Requirements The Offeror shall address all requirements as described in Section V of the RFP and describe in the Technical Proposal how it proposes to meet each requirement. If the Commission is seeking the Offeror’s agreement to a requirement, the Offeror shall state agreement or disagreement.

As stated above, any exception to a term, condition or requirement may result in having the proposal deemed unacceptable or classified as not reasonably susceptible of being selected for award. Any paragraph that represents a work requirement shall include a detailed explanation of how the work will be done. In this Section the Offeror may expand upon the requirements, provide detail regarding how it will accomplish the requirements, describe best practices, etc. Specifically, in this Section the Offeror's Proposal should address, but not be limited to, the following:

7.3.5.1 ITLM Central System General

Provide an Overview of System and procedures.

7.3.5.2. ITLM Central System

a) Describe the ITLM Central System configuration/redundancy. b) Describe what platform (operating system) the ITLM Central System runs and

what are the pros/cons of using this platform. c) Describe the communications protocols that the ITLM Central System

supports, including whether the protocols are open or proprietary, which other jurisdictions are currently using these protocols, the types of ITLMs supported by the protocols, and a listing of manufacturers of gaming devices presently authorized to use this protocol.

d) Describe how the ITLM Central System shall be connected to the individual

ITLMs at a Facility. e) Provide additional information on software and hardware solutions for

monitoring and managing each facet of the system, network, data and each site.

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f) Discuss and provide examples of accounting and performance reports that are a standard part of the ITLM Central System.

g) Describe how progressives are handled. Discuss meter management and

reporting, performance tiers and participation fee accounting and reporting. h) Provide information on overall asset tracking and management. What

information regarding each asset can be tracked by the ITLM central system, or is a separate system being proposed? Areas of interest include, service history, costs, depreciation, hardware inventory and location.

7.3.5.3 ITLM Central System Primary and Back-up Sites a) Describe the Primary Site lab operations and testing. Provide additional

information on the process for testing new chips and network equipment. Discuss needs for lab initialization and operations.

b) Identify and describe the location of the Back-up Site. 7.3.5.4 ITLM Central System Telecommunication Network a) Beginning at the Facility, describe the techniques, hardware, software and

communication links that will be employed to ensure that communications and ITLM Central System support of ITLM operations will not be lost.

b) Explain in detail how the ITLM Central System will deal with communications

interruptions to an ITLM Facility. Describe the approach to guaranteeing that ITLM machine events/condition messages, meter readings, and commands issued by the ITLM Central System are not lost due to a communications interruption.

c) Describe the techniques, hardware and software that will be employed within

the Facilities to ensure that communications between the ITLMs and ITLM Central System shall not be lost.

7.3.5.5 ITLM Central System Disaster Recovery

Provide processes on how systems are connected and configured to ensure maximum availability. In the event of loss of functionality provide Component Failure Analysis and procedures for recovery.

7.3.5.6 ITLM Central System Security

Describe the processes and control procedures that shall be implemented internally to ensure ITLM Central System integrity, including:

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a) How virus protection is handled, updates, vulnerabilities; b) If there are regular reviews of security functions and physical security for the ITLM Central System; c) How segregation of duties and least privilege assignments for employees are implemented; d) How the network is secured and reviewed for security vulnerabilities; and e) A description of the backup and restore procedures for databases and ITLM Central System.

7.3.5.7 ITLM Central System Manuals and Documentation Provide description/examples of manuals/documentation.

7.3.5.8 ITLM Central System Staffing Describe the staffing model for implementation and post implementation of the ITLM Central System. The staffing model should correspond to the proposed work breakdown structure, project schedule and overall project management plan. The staffing model shall include but not be limited to the type of resources necessary to implement the ITLM Central System and support the ITLM Central System post implementation, job functions, experience, education, training, certifications, work locations, and availability/work schedule. Include the names and titles of resources designated as key personnel. Provide a description of how the following scenarios would be accomplished in the implementation and post implementation staffing models:

1. Code development and migrations (Identify any third parties or subcontractors that will be used to write code)

2. ITLM Central System Testing 3. Report Creation/Development/Distribution 4. Ad-hoc reporting requests 5. Server/hardware/network administration – Data Center, WAN 6. Issue resolution

a. Hardware at the Data Center and the Facility b. Software c. Communication/Network at the Facility d. Financial Variance e. Undefined /General

7.3.5.9 ITLM Central System Maintenance, Service Levels & Support

a) Describe the service and maintenance program, to include reporting procedures.

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b) Describe how this requirement for maintenance will be fulfilled at each Facility, including (1) will the Offeror's maintenance staff be ―on-call‖ and (2) how will Offeror's staff interact with and rely upon the Facility staff? c) Describe procedures for problem reporting, tracking, escalation and dispute resolution. d) Identify the physical location of proposed Hotline call center and describe.

7.3.5.10 ITLM Central System Acceptance Testing Provide an overview of support procedure for Acceptance Testing. 7.3.5.11 ITLM Central System Implementation Plan The Offeror shall provide with its Proposal an Implementation Plan. The Contractor shall provide details including charts (Gantt, PERT, or similar) identifying the major milestones to be accomplished for the equipment delivery, software programming, installation and testing (Note: Within thirty (30) days of contract award the successful Offeror shall submit a detailed and finalized version of this Implementation Plan which, when approved by the MLGCA, shall become the basis for Implementation.) a) Provide a detailed communication plan for the deployment and implementation of the ITLM Central System, including all key stakeholders (i.e. MLGCA, ITLM Facilities, ITLM manufacturers, ITLM testing and certification contractor, etc.) b) Provide the Offeror's estimate of the time it will take from contract start date to have the ITLM Central System fully operational to support the first ITLM Facility in operation. Activities and tasks should include:

Facility Planning/ ITLM Central System Contractor Requirements

Facility Hardware Installation

Facility Wiring

Facility Turn-up

Facility Testing

ITLM Central System Training for Facilities

Coordination of Floor Moves

Coordination of Maintenance

Facility Point of Contact

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Go-Live

Post Installation Support and Site Turnover.

c) Describe the process for bringing up a subsequent Facility while still operating one or more other Facilities with no interruption of operations, including how the Offeror would support getting multiple ITLM Facilities operational. d) Describe the Offeror's expectations and requirements for the availability of State resources to support its implementation activities as outlined above.

7.3.5.12 ITLM Facilities

Describe ITLM Central System Contractor Space requirements at the Facilities. 7.3.5.13 Server Based Downloadable Gaming Describe the ITLM Central System's capabilities for centrally monitoring, authenticating and reporting regarding Server Based Downloadable Gaming. 7.3.5.14 ITLM General Provide a description of each of the types and models of ITLMs being proposed, to include a description of all standard features and available optional features. Provide specification sheets, product information sheets, etc. for each ITLM. The Offeror may include any information about additional features and functions that it may wish to incorporate into the proposal (e.g., new themes, electronics, displays, security, software, safety, connectivity, etc.). Specify if optional features are included in the base prices offered or if they are available only at additional cost. Offerors shall indicate memory size of ITLMs being proposed and provide examples of memory available for various gaming options. If ITLM memory can be upgraded, Offerors must describe this function. Describe the Offeror’s capacity to manufacture and deliver ITLMs, in regard to both volume of ITLMs and typical delivery schedules.

7.3.5.15. ITLM Hardware Specifications

a) Provide diagrams depicting the component level of the proposed ITLM. Deviations from standard hardware and software products must be documented. b) Software Algorithms: If an Offeror is proposing downloads, identify and describe mechanisms that ensure security and verify that the correct version has been received.

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c) User Safety: Offerors must submit proof that the proposed ITLM has been inspected and approved (or approval is pending) for customer safety by a reputable testing laboratory such as Underwriters Laboratories. Offerors must certify that proposed ITLMs are in compliance with all applicable FCC rules and regulations. Certification under equivalent Canadian or European standards is acceptable. d) New or Warranted as New Equipment: Offerors must certify that all proposed ITLMs, processing hardware, networking connections, diagnostic equipment, etc. are new or warranted as new. Refurbished equipment must be modern and of current manufacture and be clearly identified as such. Describe the warranty period and conditions. e) Peripheral Hardware: Describe and indicate by brand name where applicable the standard features included with the ITLM, such as cabinet design, video monitor, bill validator, ticket printer, locks and player tracking system brackets; also describe optional items that may be included at no additional cost and upgraded items that may be available at additional cost.

7.3.5.16 ITLM Communications Describe how the proposed ITLMs are flexible regarding the communications protocol to be used and specify any central system providers with whom the Offeror already has a communications protocol agreement. 7.3.5.17 ITLM Software Requirements Provide the components that make up any and all ITLM software (firmware), including the payout and software control features. Information regarding the software change management process, upgrade process and frequency, and the features and functionality of each software component should be described.

7.3.5.18 ITLM Specifications Describe each of the ITLM themes being offered. Identify themes associated with franchises and indicate if any additional cost is to be associated with a franchise theme. Provide specifications and details for any other ITLM themes the Offeror may have developed or can provide.

7.3.5.19 ITLM Local Support, Staffing and Services

a) Maintenance Program: As the responsibility and costs for ITLM maintenance is solely the responsibility of the Contractor, Offerors may consider all options for providing maintenance and support including individual maintenance coverage, multiple manufacturer support, Central System Contractor, subcontractor or third party coverage or a hybrid or consortium of any and all maintenance options.

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The Offeror shall describe its overall maintenance program, procedures, personnel levels and capabilities for the maintenance of ITLMs and associated equipment. b) Maintenance Plan: The Offeror shall provide its Maintenance Plan describing how it will implement and manage maintenance, which shall include all requirements and include pre-opening, opening and post-opening support at each Facility, and specifically include the following topics (see Section 5.6.3):

Response Requirements

Maintenance Facilities

ITLM Maintenance Items

Parts Supply

User and Service Documentation

Preventive Maintenance

Maintenance Log

Trouble Tracking and Reporting

7.3.5.20 ITLM Testing Provide information on ITLM testing options and functionality, including what diagnostics are supported, what modes are available for facility testing to minimize ITLM outage, and a description of the process for submission to an independent testing lab and the related documentation and approval process.

7.3.5.21 ITLM Operations Describe how the various types of conversions would be conducted by the Offeror.

7.3.5.22 ITLM Performance The Offeror shall provide performance data for its comparable ITLMs, as available, from other jurisdictions. This shall include, but is not limited to, Win per day per ITLM, the number of ITLMs the Offeror has in the facility and the total number of ITLMs in the facility. This report shall be provided as part of the response to the RFP. 7.3.5.23 Overview of Instant Ticket Production Methods The Offeror shall provide a description of the methods to be employed in the manufacturing of Instant Tickets. Each of the major production steps shall be identified and described. The Offeror shall describe its proposed production plan and schedule to be adhered to for all Deals to be produced under this Contract. The plan and schedule proposed shall begin with the presentation of the proposed Deal to the MLGCA and conclude with the delivery of the final product to the MLGCA’s

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Facility network. The plan and schedule shall include all major steps, decision points, production steps, and internal controls in the creation, production, and distribution cycles for an instant ticket Deal. 7.3.5.24 Instant Ticket Anti-Counterfeiting and Anti-Alteration Features The Offeror shall describe the built-in features against counterfeiting and alteration in its Instant Tickets. Include in their entirety any reports made by independent testing laboratories during the past two (2) years. 7.3.5.25 Instant Ticket Production Facility/Business Recovery Plan 1. The MLGCA requires a highly reliable source of Instant Tickets. The Offeror shall describe its main production facility and its backup facility(ies) for the production of Instant Tickets for the MLGCA, including location, security features and capacities. The Offeror shall detail the current percentage of operating capacity being utilized at the production facilities, and the anticipated impact of adding the printing volumes anticipated by this RFP. 2. The Offeror shall provide a copy of its Business Recovery Plan to be used in case of emergency or disaster at its production facility. 7.3.5.26 Delivery of Instant Tickets to Facilities The Offeror must describe the proposed process/procedures and time frames for the delivery of Instant Tickets, from the pick-up of packed Instant Tickets at the Contractor’s warehouse to the delivery of these Instant Tickets to Facility locations. If a subcontractor is to be utilized, the Offeror must name the subcontractor and describe the subcontractor’s experience with deliveries. The proposed subcontractor must be approved by the MLGCA. The Offeror must describe its automated tracking system that will be provided to the MLGCA to track deliveries and the types of reports and information that will be available to the MLGCA. The Offeror must provide a plan for delivery based on the estimated number of Facility locations (150) throughout Maryland, and factor in the capacity to support additional Facilities over the Contract term (See Section 2.3). This plan shall discuss how deliveries are to be made within the required twenty four (24) hours after pick-up from the Contractor’s warehouse. Any geographic areas that cannot be delivered within the required time period must be identified and explained. The Offeror must describe the procedures and processes utilized to document the delivery and receipt of Instant Tickets to the Facilities and how delivery information is updated in the automated tracking system. The Offeror must also describe the procedures and processes followed when a

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package is refused or undeliverable. The Offeror must describe the type of vehicles that will be used to pick-up packed Instant Tickets and POS materials from the Contractor’s warehouse. The Offeror must describe how it will maintain all Instant Tickets in a secure manner at all times. The Offer must describe the back-up procedures for the delivery of Instant Tickets in the event that the primary delivery service becomes unavailable.

7.3.6 Offeror’s Organization, Background, and Financial Stability

7.3.6.1 Organization and Structure

The Offeror should provide any information about its business and/or organization that demonstrates its capabilities to fulfill the scope of services detailed in Section V Technical Specifications of this RFP. The Offeror shall describe its organization and its structure, to include:

1. A brief history of the company.

2. The exact name of the Offeror submitting the proposal; the type of business entity (e.g., corporation, partnership, etc.), and the place of the Offeror’s incorporation, if applicable.

3. The name, address and telephone number of all personnel, consultants,

sales agents or other entities involved in aiding the Offeror’s efforts to obtain this Contract pursuant to this RFP or otherwise assisting the Offeror.

4. The organizational structure and staffing plan for the MLGCA's account,

including an organization chart of the Offeror’s organization showing:

a. All major divisions and units; b. Which components will perform the requirements of this Contract; c. Where the management of this Contract will fall within the

organization; d. What corporate resources will be available to support this Contract

in both primary and secondary, or back-up roles; e. The name/positions on the chart who will work on this account and

indicate for each the percent of time to be dedicated to the MLGCA’s account. Include on the chart any new positions that would be created as a result of acquiring this account and provide a description of how these positions would be filled and when; and

f. The number of full time equivalent positions, at minimum, that the Offeror will commit to this account.

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5. A list of all professional affiliations. 6. The Offeror’s plan to fulfill the MBE requirement associated with this

contract.

7.3.6.2 Background and Experience

The Offeror shall describe its background and experience related to ITLM programs and other gaming activities. This experience must be under the Offeror’s company name. Offerors shall describe how their organization can meet the requirements of this RFP and shall include: 1. Any relevant experience comparable to what is requested in Section V

Technical Specifications:

Describe the Offeror's experience in developing, implementing and maintaining ITLM Central Monitor and Control Systems for ITLMs

Explain if the Offeror has any Central Systems currently in operation in support of ITLMs, slot machines or other similar forms of gaming. If so, describe each system, the number and type of machines that it supports, how long the system has been in operation, etc. and compare the System being proposed for Maryland to these other systems.

Describe its most recent three (3) engagements for other clients involving services similar to those requested by this RFP that were successfully performed by the Offeror;

2. Provide a list of current client accounts and billings. Describe whether

the organization has lost any client accounts within the last three (3) years and why.

3. Provide a minimum of three (3) client references capable of documenting

the Offeror's ability to manage projects of comparable size and complexity and two (2) references from other organizations, subcontractor or service providers, which are relevant. Each reference must include the following information:

a. Name of client organization;

b. Name, title, and telephone number of Point-of-Contact for client organization;

c. Value, type, and duration of contract(s) supporting the client organization;

d. The services provided, scope of the contract, geographic area being supported, and performance objectives satisfied; and

e. An explanation of why the Offeror is no longer providing the services to the client organization, should that be the case.

NOTE: The MLGCA shall have the right to contact any reference of its

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own choosing, or any other source, as part of the evaluation and selection process.

4. Provide a list of any current or previous contracts that the Offeror has had

with any department or agency of the State of Maryland, to include the contract name and number, contract term and contract amount.

7.3.7 Financial Capability and Legal Action Summary

1. Offerors shall provide evidence of their financial capacity to provide the goods and services required by this RFP, to include:

a. The last three (3) year end audited financial statements to the extent that the Offeror obtains audited financial statements in the ordinary course of its business. The financial statements shall include the auditor’s opinion, complete set of financial statements, and footnotes. If the Offeror does not obtain audited financial statements in the ordinary course of its business, the Offeror shall provide financial statements that have been reviewed or compiled by an independent Certified Public Accounting firm.

b. A least five (5) financial references from banks or other financial institutions attesting to the Offeror’s credit worthiness.

2. The Offeror shall include the following information regarding legal actions:

a. A statement as to whether there are any pending legal actions against the Offeror and a brief description of any such action.

b. A brief description of any settled or closed legal actions against the Offeror over the past three (3) years.

c. A description of any judgments against the Offeror within the past five (5) years, including the case name, number, court, and what the final ruling or determination was from the court.

d. In instances where litigation is ongoing and the Offeror has been directed not to disclose information by the court, provide the name of the judge, location of the court, and case name and number.

e. A statement whether the Offeror, a subsidiary or intermediary company, parent company or holding company was indicted, accused or convicted of a crime or was a subject of a grand jury or criminal investigation during the past five (5) years.

f. A statement whether the Offeror, a subsidiary or intermediary company, parent company or holding company was the subject of any order, judgment or decree of any court of competent jurisdiction permanently or temporarily enjoining it from or otherwise limiting its participation in any type of business, practice or activity during the past five (5) years.

7.3.8 Assigned Personnel’s Background and Experience

Offeror's shall describe the team that will be assigned to service the MLGCA’s

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account under this Contract. State the number and category of personnel who will be engaged in this work and where they will be physically located during the time they are engaged in this Contract. Indicate the responsibilities each individual will have in this Contract and how long each has been with the Offeror. Describe whether the Implementation and On-going Project Manager will be the same or different persons and, if different, explain how these two persons will coordinate activities. For each person identified as Key Personnel and other key staff who will be involved with this Contract, the Offeror must state their full name, title, function, business address and business telephone number and provide their biography/resume with minimum five (5) year employment history to include education and experience relevant to the requirements of this RFP and specifically with implementation of lottery, ITLM and gaming systems. State whether or not, during the last five (5) years, any of the following events occurred relative to any of the persons identified:

a. Such person was indicted, accused or convicted of a crime or was a subject of a grand jury or criminal investigation (excluding traffic violations and other minor offenses).

b. Such person was the subject of any order, judgment or decree of any court of

competent jurisdiction permanently or temporarily enjoining such person from engaging in any type of professional or business practice or activity.

c. Such person was the subject of any order, judgment or decree of any federal or

state authority barring, suspending or otherwise limiting the right of such person to engage in any professional or business practice or activity.

7.3.9 Economic Benefit

Offerors shall submit with their proposals a narrative describing benefits that will accrue to the Maryland economy as a direct or indirect result of their performance of this contract. Proposals will be evaluated to assess the benefit to Maryland’s economy specifically offered. (Do not include any detail of the financial proposal with this technical information.)

Proposals that identify specific benefits as being contractually enforceable commitments will be rated more favorably than proposals that do not identify specific benefits as contractual commitments, all other factors being equal.

Offerors shall identify any performance guarantees that will be enforceable by the State if the full level of promised benefit is not achieved during the contract term.

As applicable, for the full duration of the Contract, including any renewal period, or until the commitment is satisfied, the Contractor shall provide to the Procurement Officer or other designated agency personnel reports of the actual attainment of

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each benefit listed in response to this Section. These benefit attainment reports shall be provided quarterly, unless elsewhere in these specifications a different reporting frequency is stated.

In responding to this Section, the following do not generally constitute economic benefits to be derived from this contract:

1. Generic statements that the State will benefit from the Offeror’s superior performance under the contract;

2. Descriptions of the number of Offeror employees located in Maryland other than those that will be performing work under this Contract; or

3. Tax revenues from Maryland based employees or locations, other than those that will be performing, or used to perform, work under this Contract.

Discussion of Maryland based employees or locations may be appropriate if the Offeror makes some projection or guarantee of increased or retained presence based upon being awarded this contract.

Examples of economic benefits to be derived from the Contract may include any of the following. For each factor identified below, identify the specific benefit and contractual commitments and provide a breakdown of expenditures in that category:

1. The contract dollars to be recycled into Maryland’s economy in support of the Contract, through the use of Maryland subcontractors, suppliers and joint venture partners.

2. The number and types of jobs for Maryland residents resulting from the Contract. Indicate job classifications, number of employees in each classification and the aggregate payroll to which the Contractor has committed, including contractual commitments at both prime and, if applicable, subcontract levels.

3. Tax revenues to be generated for Maryland and its political subdivisions as a result of the Contract. Indicate tax category (sales taxes, payroll taxes, inventory taxes and estimated personal income taxes for new employees). Provide a forecast of the total tax revenues resulting from the Contract.

4. Subcontract dollars committed to Maryland small businesses and MBEs.

5. Other benefits to the Maryland economy which the Offeror promises will result from awarding the Contract to the Offeror, including contractual commitments. Describe the benefit, its value to the Maryland economy, and how it will result from, or because of the Contract award. Offerors may commit to benefits that are not directly attributable to the Contract, but for which the Contract award may serve as a catalyst or impetus.

NOTE: Because there is no guarantee of any level of usage under the Contract, the Offeror should state its level of commitment per $1,000,000 of Contract value. In other words, for each $1,000,000 of Contract value, how many Maryland jobs will be

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created, what Maryland tax revenue will be generated, how much will be paid to Maryland subcontractors, etc.

7.3.10 Subcontractors

Offerors shall identify all subcontractors, if any, including subcontractors used to meet the MBE goal of this RFP, and provide a complete description of the roles these subcontractors will have in the Contract performance.

7.3.11 Required Submissions

Offerors must submit the following items with the original Technical Proposal

(Note: Offerors need to submit only one (1) paper original of items #1 through 10)

1. A completed Proposal Affidavit (Appendix A);

2. The Certified MBE Utilization and Fair Solicitation Affidavit (Appendix D-1);

3. A completed Conflict of Interest Affidavit and Disclosure (Appendix G);

4. A Proposal Bond in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (see Appendix I);

5. A Litigation/Protest Bond in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) (see Appendix H);

6. Statement of Intent to Comply (Section 7.3.4, paragraphs 4. & 5.); 7. Living Wage – Affidavit of Agreement (Appendix K);

8. Authorization for Release of Information Appendix L); and

9. Location of the Performance of Services Disclosure (Appendix M).

7.4 VOLUME II – FINANCIAL PROPOSAL

This Volume must contain the Offeror’s pricing information. The Offeror must submit its prices being proposed on the Financial Proposal Sheet provided in Appendix F. The Financial Proposal Sheet (Appendix F) must be submitted separately and clearly marked as ―Financial Proposal‖ as stated in Section 7.2. The Offeror must provide complete price information for all services required by this RFP.

7.5 SUBMISSION DEADLINE

The Offeror must submit an original, so identified, six (6) paper copies and one (1) complete and exact electronic copy of its Proposal (both Technical and Financial) by the closing time and date specified in Section 3.7 of this RFP.

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SECTION VIII. EVALUATION AND SELECTION PROCEDURE

8.1 QUALIFYING PROPOSAL

All Offerors’ proposals received by the Deadline for Receipt of Proposals will be first reviewed by the Procurement Officer to determine if the Offeror’s Minimum Requirements specified in Section 1.3, if any, have been met and to determine compliance with the submission requirements of the RFP and, in particular, with the requirement for submission of the MBE Forms contained in Attachment D-1. An Offeror not meeting the Minimum Requirements will be determined to

be―not responsible‖. A proposal that does not include the completed D-1

MBE Form will be determined to be ―not reasonably susceptible of being selected for Award‖. If either determination is made, the proposal shall not be further considered and the Offeror’s financial proposal shall be returned unopened.

8.2 EVALUATION COMMITTEE

The Evaluation Committee will be appointed by the Director and may include members of the MLGCC. All proposals from Qualified Offerors (―qualified proposals‖) will be evaluated by the Evaluation Committee. The Evaluation Committee may request additional assistance from any other source, and may obtain information from any source regarding verification of an Offeror’s qualifications.

8.3 TECHNICAL EVALUATION

The Evaluation Committee shall conduct its evaluation of the technical merits of the proposals. The technical evaluation of each proposal will be completed by the Evaluation Committee in accordance with the Evaluation Criteria set forth in Section 8.4 below. If at any time in the evaluation process an Offeror is determined to be not responsible or a proposal is determined to be not reasonably susceptible of being selected for award, the proposal will be dropped from further consideration in the awarding of the Contract and the financial proposal will be returned unopened to the Offeror.

8.4 CRITERIA FOR TECHNICAL EVALUATION

The criteria that will be used by the Evaluation Committee for evaluation of the Technical Proposals are listed below, in descending order of importance, i.e., criterion no. 1 is more important than criterion no. 2, criterion no. 2 is more important than criterion no. 3, etc.

1. Proposed ITLM Central System and Compliance with Technical

Requirements 2. Proposed ITLMs and Compliance with Specifications

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3. Instant Ticket Production Methods and Security 4. Proposed ITLM Implementation Plan 5. Offeror’s Background, Experience and Financial Stability 6. Telecommunication Network 7. Delivery of Instant Tickets to Facilities 8. Production Facility/Business Recovery Plan 9. Economic Benefit

8.5 FINANCIAL EVALUATION

The separate Financial Volume of each qualified proposal, which consists of the Financial Proposal Sheet provided in Appendix F, will be distributed to the Evaluation Committee following the completion of the technical evaluation.

All qualified Offerors will be ranked from the lowest (best) price to the highest price, based on the Offeror’s proposed "Firm Fixed Percentage of Net Instant Ticket Lottery Machines Proceeds" as specified on the Financial Proposal Sheet - Appendix F.

A resident business preference will be given, if applicable, as described in Section 3.26.

8.6 DISCUSSIONS

The Evaluation Committee may enter into discussions with qualified or potentially qualified Offerors as set forth in COMAR 21.05.03.03.C. Discussions, however, need not occur and the MLGCA may make an award without holding discussions (See COMAR 21.05.03.02.A(4)). Offerors may be asked to participate in face to face discussions with the Evaluation Committee or other State representatives concerning their proposals. Discussions may be conducted by telephone, or may be in the form of written questions to be answered by the Offerors and conducted by mail, e-mail, or facsimile transmission at the discretion of the MLGCA.

8.7 BEST AND FINAL OFFER

When it is deemed in the best interest of the State, the Procurement Officer may permit qualified Offerors to revise their initial proposals by submitting a Best and Final Offer (BAFO). The Procurement Officer shall notify each qualified Offeror of the scope of the requested BAFO (Technical and/or Financial) and shall establish a common date and time for the Offeror’s submission. The Procurement Officer may require more than one series of BAFOs and discussions if the Director or designee makes a determination that it is in the State’s best interest to conduct additional discussions or change the MLGCA’s requirements and require submission of another BAFO. If more than

one BAFO is requested, an Offeror’s immediate previous offer shall be construed

as its best and final offer unless the Offeror submits a timely notice of withdrawal or another BAFO. The Procurement Officer may consult with and seek

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the recommendation of the Evaluation Committee during the BAFO process.

8.8 FINAL RANKING AND RECOMMENDATION FOR AWARD

Upon completion of all discussions and reference checks, the Procurement Officer will recommend award of the Contract to the responsible Offeror whose proposal is determined to be the most advantageous to the State, considering the technical evaluation factors and price factors as set forth in this RFP.

In making the most advantageous Offer determination, technical factors and price factors shall be given equal weight.

Recommended contract award, if any, resulting from this RFP, is subject to all appropriate State approvals.

8.9 DEBRIEFING OF UNSUCCESSFUL OFFERORS

Unsuccessful Offerors will be debriefed upon their written request to the Procurement Officer, provided the request is made within a reasonable period of time, not to exceed ten (10) days, after receiving notice from the Procurement Officer of not being recommended for award. Request for debriefings shall be honored by the MLGCA at the earliest feasible time after the request has been received. Debriefings shall be held in accordance with COMAR 21.05.03.06.


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SECTION IX. APPENDICES

APPENDIX A - Proposal Affidavit. This form must be completed and submitted with the Offeror’s Technical Proposal.

APPENDIX B - Contract Affidavit. It is not required to be submitted with Proposal. It must

be completed by the selected Offeror and submitted to the Procurement Officer within five (5) working days after notification of proposed contract award.

APPENDIX C - Pre-Proposal Conference Response Form

APPENDIX D - Minority Business Enterprise (MBE) Instructions/Forms

APPENDIX D-1 – Certified MBE Utilization and Fair Solicitation Affidavit

APPENDIX D-2 – Outreach Efforts Compliance Statement APPENDIX D-3 – Subcontractor Project Participation Statement APPENDIX D-4 – Contractor Paid/Unpaid Invoice Report APPENDIX D-5 – MBE Subcontractor Paid/Unpaid Invoice Report

APPENDIX E – Vendor Electronic Funds Transfer (EFT) Registration Request Form

APPENDIX F – Financial Proposal Sheet. Must be completed and submitted by the Offeror

and comprises the Offeror’s Volume II – Financial Proposal.

APPENDIX G – Conflict of Interest Affidavit and Disclosure

APPENDIX H – Litigation/Protest Bond

APPENDIX I – Proposal Bond

APPENDIX J – Performance Bond

APPENDIX K – Living Wage Requirements for Service Contracts - Affidavit of Agreement

must be completed and submitted with the Offeror’s Proposal.

APPENDIX L – Authorization for Release of Information

APPENDIX M – Location of the Performance of Services Disclosure

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APPENDIX A – PROPOSAL AFFIDAVIT

COMAR 21.05.08.07 (Effective 5/13/2013)

(This Affidavit is Required to be Completed & Submitted with Offeror’s Proposal)

Page 1 of 7 A. AUTHORITY

I HEREBY AFFIRM THAT:

I,_ (print name) (title),

of (print firm name) possess the

legal authority to make this Affidavit.

B. CERTIFICATION REGARDING COMMERCIAL NONDISCRIMINATION

The undersigned Offeror hereby certifies and agrees that the following information is correct: In preparing its proposal on this project, the Offeror has considered all proposals submitted from qualified, potential subcontractors and suppliers, and has not engaged in "discrimination" as defined in §19-103 of the State Finance and Procurement Article of the Annotated Code of Maryland. "Discrimination" means any disadvantage, difference, distinction, or preference in the solicitation, selection, hiring, or commercial treatment of a vendor, subcontractor, or commercial customer on the basis of race, color, religion, ancestry, or national origin, sex, age, marital status, sexual orientation, or on the basis of disability or any otherwise unlawful use of characteristics regarding the vendor's, supplier's, or commercial customer's employees or owners. "Discrimination" also includes retaliating against any person or other entity for reporting any incident of "discrimination". Without limiting any other provision of the solicitation on this project, it is understood that, if the certification is false, such false certification constitutes grounds for the State to reject the proposal submitted by the Offeror on this project, and terminate any contract awarded based on the proposal. As part of its proposal, the Offeror herewith submits a list of all instances within the past 4 years where there has been a final adjudicated determination in a legal or administrative proceeding in the State of Maryland that the Offeror discriminated against subcontractors, vendors, suppliers, or commercial customers, and a description of the status or resolution of that determination, including any remedial action taken. Offeror agrees to comply in all respects with the State's Commercial Nondiscrimination Policy as described under Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland.

B-1. CERTIFICATION REGARDING MINORITY BUSINESS ENTERPRISES.

The undersigned Offeror hereby certifies and agrees that it has fully complied with the State Minority Business Enterprise Law, State Finance and Procurement Article, §14- 308(a)(2), Annotated Code of Maryland, which provides that, except as otherwise provided by law, a contractor may not identify a certified minority business enterprise in a bid or proposal and:

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(1) Fail to request, receive, or otherwise obtain authorization from the certified minority business enterprise to identify the certified minority proposal;

(2) Fail to notify the certified minority business enterprise before execution of the contract of its inclusion in the bid or proposal;

(3) Fail to use the certified minority business enterprise in the performance of the contract; or

(4) Pay the certified minority business enterprise solely for the use of its name in the bid or proposal.

Without limiting any other provision of the solicitation on this project, it is understood that if the certification is false, such false certification constitutes grounds for the State to reject the proposal submitted by the Offeror on this project, and terminate any contract awarded based on the proposal.

B-2. CERTIFICATION REGARDING VETERAN-OWNED SMALL BUSINESS

ENTERPRISES.

The undersigned Offeror hereby certifies and agrees that it has fully complied with the State veteran-owned small business Enterprise Law, State Finance and Procurement Article, §14-605, Annotated Code of Maryland, which provides that, a person may not:

(1) Knowingly and with intent to defraud, fraudulently obtain, attempt to obtain, or aid another person in fraudulently obtaining or attempting to obtain public money, procurement contracts, or funds expended under a procurement contract to which the person is not entitled under this title; (2) Knowingly and with intent to defraud, fraudulently represent participation of a veteran–owned small business enterprise in order to obtain or retain a bid preference

or a procurement contract;

(3) Willfully and knowingly make or subscribe to any statement, declaration, or other document that is fraudulent or false as to any material matter, whether or not that falsity or fraud is committed with the knowledge or consent of the person authorized or required to present the declaration, statement, or document;

(4) Willfully and knowingly aid, assist in, procure, counsel, or advise the preparation or presentation of a declaration, statement, or other document that is fraudulent or false as to any material matter, regardless of whether that falsity or fraud is committed with the knowledge or consent of the person authorized or required to present the declaration, statement, or document;

(5) Willfully and knowingly fail to file any declaration or notice with the unit that is required by COMAR 21.11.12; or (6) Establish, knowingly aid in the establishment of, or exercise control over a business found to have violated a provision of §B-2(1) — (5) of this regulation.

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C. AFFIRMATION REGARDING BRIBERY CONVICTIONS

I FURTHER AFFIRM THAT:

Neither I, nor to the best of my knowledge, information, and belief, the above business (as is defined in Section 16-101(b) of the State Finance and Procurement Article of the Annotated Code of Maryland), or any of its officers, directors, partners, controlling stockholders, or any of its employees directly involved in the business's contracting activities including obtaining or performing contracts with public bodies has been convicted of, or has had probation before judgment imposed pursuant to Criminal Procedure Article, §6-220, Annotated Code of Maryland, or has pleaded nolo contendere to a charge of, bribery, attempted bribery, or conspiracy to bribe in violation of Maryland law, or of the law of any other state or federal law, except as follows (indicate the reasons why the affirmation cannot be given and list any conviction, plea, or imposition of probation before judgment with the date, court, official or administrative body, the sentence or disposition, the name(s) of person(s) involved, and their current positions and responsibilities with the business):

.

D. AFFIRMATION REGARDING OTHER CONVICTIONS


Neither I, nor to the best of my knowledge, information, and belief, the above business, or any of its officers, directors, partners, controlling stockholders, or any of its employees directly involved in the business's contracting activities including obtaining or performing contracts with public bodies, has:

(1) Been convicted under state or federal statute of:

(a) A criminal offense incident to obtaining, attempting to obtain, or performing a public or private contract; or

(b) Fraud, embezzlement, theft, forgery, falsification or destruction of records or receiving stolen property;

(2) Been convicted of any criminal violation of a state or federal antitrust statute;

(3) Been convicted under the provisions of Title 18 of the United States Code for violation of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. §1961 et seq., or the Mail Fraud Act, 18 U.S.C. §1341 et seq., for acts in connection with the submission of bids or proposals for a public or private contract;

(4) Been convicted of a violation of the State Minority Business Enterprise Law, §14- 308 of the State Finance and Procurement Article of the Annotated Code of Maryland;

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(5) Been convicted of a violation of §11-205.1 of the State Finance and Procurement Article of the Annotated Code of Maryland;

(6) Been convicted of conspiracy to commit any act or omission that would constitute grounds for conviction or liability under any law or statute described in subsections (1)—(5) above;

(7) Been found civilly liable under a state or federal antitrust statute for acts or omissions in connection with the submission of bids or proposals for a public or private contract;

(8) Been found in a final adjudicated decision to have violated the Commercial Nondiscrimination Policy under Title 19 of the State Finance and Procurement Article of the Annotated Code of Maryland with regard to a public or private contract; or

(9) Admitted in writing or under oath, during the course of an official investigation or other proceedings, acts or omissions that would constitute grounds for conviction or liability under any law or statute described in §§B and C and subsections D(1)—(8) above, except as follows (indicate reasons why the affirmations cannot be given, and list any conviction, plea, or imposition of probation before judgment with the date, court, official or administrative body, the sentence or disposition, the name(s) of the person(s) involved and their current positions and responsibilities with the business, and the status of any debarment):

E. AFFIRMATION REGARDING DEBARMENT


Neither I, nor to the best of my knowledge, information, and belief, the above business, or any of its officers, directors, partners, controlling stockholders, or any of its employees directly involved in the business's contracting activities, including obtaining or performing contracts with public bodies, has ever been suspended or debarred (including being issued a limited denial of participation) by any public entity, except as follows (list each debarment or suspension providing the dates of the suspension or debarment, the name of the public entity and the status of the proceedings, the name(s) of the person(s) involved and their current positions and responsibilities with the business, the grounds of the debarment or suspension, and the details of each person's involvement in any activity that formed the grounds of the debarment or suspension).

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F. AFFIRMATION REGARDING DEBARMENT OF RELATED ENTITIES


(1) The business was not established and it does not operate in a manner designed to evade the application of or defeat the purpose of debarment pursuant to Sections 16-101, et seq., of the State Finance and Procurement Article of the Annotated Code of Maryland; and

(2) The business is not a successor, assignee, subsidiary, or affiliate of a suspended or debarred business, except as follows (you must indicate the reasons why the affirmations cannot be given without qualification):

G. SUB-CONTRACT AFFIRMATION


Neither I, nor to the best of my knowledge, information, and belief, the above business, has knowingly entered into a contract with a public body under which a person debarred or suspended under Title 16 of the State Finance and Procurement Article of the Annotated Code of Maryland will provide, directly or indirectly, supplies, services, architectural services, construction related services, leases of real property, or construction.

H. AFFIRMATION REGARDING COLLUSION


Neither I, nor to the best of my knowledge, information, and belief, the above business has:

(1) Agreed, conspired, connived, or colluded to produce a deceptive show of competition in the compilation of the accompanying bid or offer that is being submitted;

(2) In any manner, directly or indirectly, entered into any agreement of any kind to fix the bid price or price proposal of the bidder or offeror or of any competitor, or otherwise taken any action in restraint of free competitive bidding in connection with the contract for which the accompanying bid or offer is submitted.

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I. CERTIFICATION OF TAX PAYMENT


Except as validly contested, the business has paid, or has arranged for payment of, all taxes due the State of Maryland and has filed all required returns and reports with the Comptroller of the Treasury, the State Department of Assessments and Taxation, and the Department of Labor, Licensing, and Regulation, as applicable, and will have paid all withholding taxes due the State of Maryland prior to final settlement.

J. CONTINGENT FEES


The business has not employed or retained any person, partnership, corporation, or other entity, other than a bona fide employee, bona fide agent, bona fide salesperson, or commercial selling agency working for the business, to solicit or secure the Contract, and that the business has not paid or agreed to pay any person, partnership, corporation, or other entity, other than a bona fide employee, bona fide agent, bona fide salesperson, or commercial selling agency, any fee or any other consideration contingent on the making of the Contract.

K. CERTIFICATION REGARDING INVESTMENTS IN IRAN

(1) The undersigned certifies that, in accordance with State Finance and Procurement Article, §17-705, Annotated Code of Maryland:

(a) It is not identified on the list created by the Board of Public Works as a person engaging in investment activities in Iran as described in State Finance and Procurement Article, §17-702, Annotated Code of Maryland; and (b) It is not engaging in investment activities in Iran as described in State Finance and Procurement Article, §17-702, Annotated Code of Maryland.

2. The undersigned is unable to make the above certification regarding its investment activities in Iran due to the following activities: _________________________________________________________________________________________________________________________________________

L. CONFLICT MINERALS ORIGINATED IN THE DEMOCRATIC REPUBLIC OF

CONGO (FOR SUPPLIES AND SERVICES CONTRACTS) I FURTHER AFFIRM THAT: The business has complied with the provisions of State Finance and Procurement Article, §14-413, Annotated Code of Maryland governing proper disclosure of certain information regarding conflict minerals originating in the Democratic Republic of Congo or its neighboring countries as required by federal law.

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Page 7 of 7 M. ACKNOWLEDGEMENT

I ACKNOWLEDGE THAT this Affidavit is to be furnished to the Procurement Officer and may be distributed to units of: (1) the State of Maryland; (2) counties or other subdivisions of the State of Maryland; (3) other states; and (4) the federal government. I further acknowledge that this Affidavit is subject to applicable laws of the United States and the State of Maryland, both criminal and civil, and that nothing in this Affidavit or any contract resulting from the submission of this bid or proposal shall be construed to supersede, amend, modify or waive, on behalf of the State of Maryland, or any unit of the State of Maryland having jurisdiction, the exercise of any statutory right or remedy conferred by the Constitution and the laws of Maryland with respect to any misrepresentation made or any violation of the obligations, terms and covenants undertaken by the above business with respect to (1) this Affidavit, (2) the contract, and (3) other Affidavits comprising part of the contract.

I DO SOLEMNLY DECLARE AND AFFIRM UNDER THE PENALTIES OF PERJURY

THAT THE CONTENTS OF THIS AFFIDAVIT ARE TRUE AND CORRECT TO THE

BEST OF MY KNOWLEDGE, INFORMATION, AND BELIEF.

Date:

By:

(print name of Authorized Representative and Affiant)

(signature of Authorized Representative and Affiant)

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APPENDIX B – CONTRACT AFFIDAVIT

COMAR 21.07.01.25 (Effective 8/8/2011)

(This Affidavit is NOT Required To Be Completed & Submitted With Offeror’s Proposal) A. AUTHORITY

I HEREBY AFFIRM THAT:

I, (print name), (title),

of legal authority to make this Affidavit.

(print firm name) possess the

B. CERTIFICATION OF REGISTRATION OR QUALIFICATION WITH THE STATE

DEPARTMENT OF ASSESSMENTS AND TAXATION


The business named above is a (check applicable box):

(1) Corporation — (2) Limited Liability Company — (3) Partnership — reign; (4) Statutory Trust —

and is registered or qualified as required under Maryland Law. I further affirm that the above business is in good standing both in Maryland and (IF APPLICABLE) in the jurisdiction where it is presently organized, and has filed all of its annual reports, together with filing fees, with the Maryland State Department of Assessments and Taxation. The name and address of its resident agent (IF APPLICABLE) filed with the State Department of Assessments and Taxation is:

Name and Department ID Number: Address:

and that if it does business under a trade name, it has filed a certificate with the State Department of Assessments and Taxation that correctly identifies that true name and address of the principal or owner as:

Name and Department ID Number: Address:

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C. FINANCIAL DISCLOSURE AFFIRMATION Page 2 of 4


I am aware of, and the above business will comply with, the provisions of State Finance and Procurement Article, §13 221, Annotated Code of Maryland, which require that every business that enters into contracts, leases, or other agreements with the State of Maryland or its agencies during a calendar year under which the business is to receive in the aggregate $100,000 or more shall, within 30 days of the time when the aggregate value of the contracts, leases, or other agreements reaches $100,000, file with the Secretary of State of Maryland certain specified information to include disclosure of beneficial ownership of the business.

D. POLITICAL CONTRIBUTION DISCLOSURE AFFIRMATION


I am aware of, and the above business will comply with, Election Law Article, §§14 101 — 14-

108, Annotated Code of Maryland, which requires that every person that enters into contracts, leases, or other agreements with the State of Maryland, including its agencies or a political subdivision of the State, during a calendar year in which the person receives in the aggregate $100,000 or more shall file with the State Board of Elections a statement disclosing contributions in excess of $500 made during the reporting period to a candidate for elective office in any primary or general election.

E. DRUG AND ALCOHOL FREE WORKPLACE

(Applicable to all contracts unless the contract is for a law enforcement agency and the agency head or the agency head’s designee has determined that application of COMAR 21.11.08 and this certification would be inappropriate in connection with the law enforcement agency’s

undercover operations.) I CERTIFY THAT:

(1) Terms defined in COMAR 21.11.08 shall have the same meanings when used in this certification.

(2) By submission of its bid or offer, the business, if other than an individual, certifies and agrees that, with respect to its employees to be employed under a contract resulting from this solicitation, the business shall:

(a) Maintain a workplace free of drug and alcohol abuse during the term of the contract;

(b) Publish a statement notifying its employees that the unlawful manufacture, distribution, dispensing, possession, or use of drugs, and the abuse of drugs or alcohol is prohibited in the business' workplace and specifying the actions that will be taken against employees for violation of these prohibitions;

(c) Prohibit its employees from working under the influence of drugs or alcohol;

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(d) Not hire or assign to work on the contract anyone who the business knows, or in the exercise of due diligence should know, currently abuses drugs or alcohol and is not actively engaged in a bona fide drug or alcohol abuse assistance or rehabilitation program;

(e) Promptly inform the appropriate law enforcement agency of every drug-related crime that occurs in its workplace if the business has observed the violation or otherwise has reliable information that a violation has occurred;

(f) Establish drug and alcohol abuse awareness programs to inform its employees about:

(i) The dangers of drug and alcohol abuse in the workplace; (ii) The business's policy of maintaining a drug and alcohol free workplace; (iii) Any available drug and alcohol counseling, rehabilitation, and employee assistance programs; and (iv) The penalties that may be imposed upon employees who abuse drugs and alcohol in the workplace;

(g) Provide all employees engaged in the performance of the contract with a copy of the statement required by §E(2)(b), above;

(h) Notify its employees in the statement required by §E(2)(b), above, that as a condition of continued employment on the contract, the employee shall:

(i) Abide by the terms of the statement; and (ii) Notify the employer of any criminal drug or alcohol abuse conviction for an offense occurring in the workplace not later than 5 days after a conviction;

(i) Notify the procurement officer within 10 days after receiving notice under §E(2)(h)(ii), above, or otherwise receiving actual notice of a conviction;

(j) Within 30 days after receiving notice under §E(2)(h)(ii), above, or otherwise receiving actual notice of a conviction, impose either of the following sanctions or remedial measures on any employee who is convicted of a drug or alcohol abuse offense occurring in the workplace:

(i) Take appropriate personnel action against an employee, up to and including termination; or (ii) Require an employee to satisfactorily participate in a bona fide drug or alcohol abuse assistance or rehabilitation program; and

(k) Make a good faith effort to maintain a drug and alcohol free workplace through implementation of §E(2)(a)—(j), above.

(3) If the business is an individual, the individual shall certify and agree as set forth in §E(4), below, that the individual shall not engage in the unlawful manufacture, distribution, dispensing,

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possession, or use of drugs or the abuse of drugs or alcohol in the performance of the contract.

(4) I acknowledge and agree that:

(a) The award of the contract is conditional upon compliance with COMAR 21.11.08 and this certification;

(b) The violation of the provisions of COMAR 21.11.08 or this certification shall be cause to suspend payments under, or terminate the contract for default under COMAR 21.07.01.11 or 21.07.03.15, as applicable; and

(c) The violation of the provisions of COMAR 21.11.08 or this certification in connection with the contract may, in the exercise of the discretion of the Board of Public Works, result in suspension and debarment of the business under COMAR 21.08.03.

F. CERTAIN AFFIRMATIONS VALID


To the best of my knowledge, information, and belief, each of the affirmations, certifications, or acknowledgements contained in that certain Bid/Proposal Affidavit dated , 20 , and executed by me for the purpose of obtaining the contract to which this Exhibit is attached remains true and correct in all respects as if made as of the date of this Contract Affidavit and as if fully set forth herein.

I DO SOLEMNLY DECLARE AND AFFIRM UNDER THE PENALTIES OF PERJURY THAT THE CONTENTS OF THIS AFFIDAVIT ARE TRUE AND CORRECT TO THE BEST OF MY

KNOWLEDGE, INFORMATION, AND BELIEF.

Date: By:

(printed name of Authorized Representative and Affiant)

(signature of Authorized Representative and Affiant)


APPENDIX C

PRE-PROPOSAL CONFERENCE RESPONSE FORM

Project Title: Veterans’ Organization Instant Ticket Lottery

Machines and Related Services

Project: #2014-02 A Pre-Proposal Conference will be held at 10:00 AM (Local Time), on September 12, 2013, at:

Maryland State Lottery & Gaming Control Agency

Montgomery Park Business Center


Baltimore MD 21230

For directions to the meeting site, you may contact Robert W. Howells at 410-230-8789.

Please return this form by September 9, 2013 advising whether or not you plan to

attend. Return this form via e-mail or fax to the Procurement Officer:

Robert W. Howells Fax: (410) 230-8727 e-mail: [email protected]

Please indicate:

Yes, the following representatives will be in attendance:

1.

2.

3.

4.

No, we will not be in attendance.

Company/Firm/Vendor Name Telephone

Signature Name/Title

mailto:robert.howells@

187

APPENDIX D

Page 1 of 3

MINORITY BUSINESS ENTERPRISE INSTRUCTIONS/FORMS

MARYLAND STATE LOTTERY & GAMING CONTROL AGENCY

MINORITY BUSINESS ENTERPRISE PARTICIPATION

PURPOSE

Contractor shall structure its procedures for the performance of the work required in this contract to attempt to achieve the Minority Business Enterprise (MBE) goal stated in the Request for Proposals. MBE performance must be in accordance with this Appendix, as authorized by Code of Maryland Regulations (COMAR) 21.11.03. Contractor agrees to exercise all good faith efforts to carry out the requirements set forth in this Appendix.

MBE GOALS AND SUBGOALS

An MBE subcontract participation goal of ten (10%)_percent of the total contract

dollar amount has been established for this contract. By submitting a response to this RFP, the Offeror agrees that this dollar amount of the contract will be performed by certified minority business enterprises

OR

An overall MBE subcontract participation goal of _ percent of the total contract

dollar amount has been established for this contract. This dollar amount includes:

A sub-goal of percent of the total contract dollar amount to be allocated to certified minority business enterprises classified as women-owned businesses.

A subgoal of percent of the total contract dollar amount to be allocated to certified minority business enterprises classified as African American-owned businesses.

By submitting a response to this RFP, the Offeror agrees that these dollar amounts of the contract will be performed by certified minority business enterprises as specified.

A prime Contractor — including an MBE prime Contractor — must accomplish an

amount of work not less than the MBE subcontract goal with certified MBE subcontractors.

A prime Contractor comprising a joint venture that includes MBE partner(s) must accomplish the MBE subcontract goal with certified MBE subcontractors.

188

PAGE 2 OF 3

SOLICITATION AND CONTRACT FORMATION

An Offeror must include with its offer:

A completed Certified MBE Utilization and Fair Solicitation Affidavit (Attachment D-1), whereby the offeror:

(1) acknowledges the certified MBE participation goal or requests a waiver, commits to make a good faith effort to achieve the goal, and affirms that MBE subcontractors were treated fairly in the solicitation process; and

(2)responds to the expected degree of Minority Business Enterprise participation as stated in the RFP, by identifying the specific commitment of certified Minority Business Enterprises at the time of submission. The Offeror shall specify the price and/or the percentage of contract value associated with each MBE subcontractor identified.

If an Offeror fails to submit Attachment D-1 at the time of submittal of the

offer as required, the Procurement Officer shall determine that the offer is

not reasonably susceptible of being selected for award.

Within ten (10) working days from notification that it is the apparent awardee or from the date of the actual award, whichever is earlier, the apparent awardee must provide the following documentation to the Procurement Officer.

(1) Outreach Efforts Compliance Statement (Attachment D-2)

(2) Subcontractor Project Participation Statement (Attachment D-3) (3) If the apparent awardee has requested a waiver (in whole or in part) of the

overall MBE goal or of any subgoal as part of the previously submitted Attachment D-1, it must submit documentation supporting the waiver request that complies with COMAR 21.11.03.11.

(4) Any other documentation required by the Procurement Officer to ascertain Offeror responsibility in connection with the certified MBE participation goal.

If the apparent awardee fails to return each completed document within

the required time, the Procurement Officer may determine that the

apparent awardee is not responsible and therefore not eligible for

contract award. If the contract has already been awarded, the award is

voidable.

189

PAGE 3 OF 3

CONTRACT ADMINISTRATION REQUIREMENTS

Contractor shall:

1. Submit monthly to the MLGCA a report listing any unpaid invoices, over 30 days old, received from any certified MBE subcontractor, the amount of each invoice and the reason payment has not been made.

2. Include in its agreements with its certified MBE subcontractors a requirement that those subcontractors submit monthly to the MLGCA a report that identifies the prime contract and lists all payments received from Contractor in the preceding 30 days, as well as any outstanding invoices, and the amount of those invoices.

3. Maintain such records as are necessary to confirm compliance with its MBE participation obligations. These records must indicate the identity of certified minority and non-minority subcontractors employed on the contract, the type of work performed by each, and the actual dollar value of work performed. Subcontract agreements documenting the work performed by all MBE participants must be retained by the Contractor and furnished to the Procurement Officer on request. 4. Consent to provide such documentation as reasonably requested and to provide right-of-entry at reasonable times for purposes of the State’s representatives

verifying compliance with the MBE participation obligations. Contractor must retain all records concerning MBE participation and make them available for State inspection for three (3) years after final completion of the Contract.

5. At the option of the procurement agency, upon completion of the Contract and before final payment and/or release of retainage, submit a final report in affidavit form and under penalty of perjury, of all payments made to, or withheld from MBE subcontractors.

Attachments

D-1 Certified MBE Utilization and Fair Solicitation Affidavit (must be submitted with offer)

D-2 Outreach Efforts Compliance Statement (must be submitted within 10 working days of notification of apparent award or actual award, whichever is earlier)

D-3 Subcontractor Project Participation Statement (must be submitted within 10 working days of notification of apparent award or actual award, whichever is earlier)

Note: D-4 & D-5 will not be completed or submitted by Offeror with its

Proposal.

ATTACHMENT D-1 PAGE 1 OF 3

CERTIFIED MBE UTILIZATION AND FAIR SOLICITATION AFFIDAVIT

(Submit with Proposal)

This document shall be completed and included with the submittal of the offer. If the

Offeror fails to complete and submit this form with the offer as required, the

Procurement Officer shall determine that the offer is not reasonably susceptible of being

selected for award.

In conjunction with the response submitted to RFP No. _2014-02_, I affirm the following:

I acknowledge and intend to meet the overall certified Minority Business Enterprise (MBE)

participation goal of 10% (ten percent) and, if specified in the RFP, sub goals of

percent for MBEs classified as African American-owned and percent for MBEs

classified as women-owned. Therefore, I will not be seeking a waiver pursuant to COMAR 21.11.03.11.

OR

I conclude that I am unable to achieve the MBE participation goal and/or subgoals. I hereby request a waiver, in whole or in part, of the overall goal and/or subgoals. Within 10 business days of receiving notice that our firm is the apparent awardee, I will submit all required waiver documentation in accordance with COMAR 21.11.03.11.

2. I understand that if I am notified that I am the apparent awardee, I must submit the

following additional documentation within 10 working days of receiving notice of the potential award or from the date of conditional award (per COMAR 21.11.03.10), whichever is earlier.

(a) Outreach Efforts Compliance Statement (Form D-2) (b) Subcontractor Project Participation Statement (Form D-3) (c) Any other documentation, including waiver documentation, if applicable, required

by the Procurement Officer to ascertain Master Contractor's responsibility in connection with the certified MBE participation goal.

I understand that if I fail to return each completed document within the required time, the Procurement Officer may determine that I am not responsible and therefore not eligible for NTP award. If the NTP has already been awarded, the award is voidable.

3. In the solicitation of subcontract quotations or offers, MBE subcontractors were provided

not less than the same information and amount of time to respond as were non-MBE subcontractors.

4. Set forth below are the (i) certified MBEs I intend to use and (ii) the percentage of the total

contract amount allocated to each MBE for this project. I hereby affirm that the MBE firms are only providing those products and services for which they are MDOT certified.

191

PAGE 2 OF 3

Prime Contractor:

(Firm Name, Address, Phone)

Project Number: 2014-02

Project Description:

Veterans’ Organization Instant Ticket Lottery


List Information For Each Certified MBE Subcontractor On This Project

Minority Firm Name MBE Certification Number

Certification Category For Dually Certified MBE Subcontractors (Check Only One

Certification Category)

African American Owned Woman-Owned

Percentage of Total Contract


Certification Category For Dually Certified MBE Subcontractors (Check Only One





Certification Category for Dually Certified MBE Subcontractors (Check Only One














Continue on a separate page, if needed.

192

PAGE 3 OF 3

SUMMARY

Total African-American MBE Participation: % Total Woman-Owned MBE Participation: % Total Other Participation % Total All MBE Participation: %

I solemnly affirm under the penalties of perjury that the contents of this Affidavit are true to the best of my knowledge, information, and belief.

Offeror's Name Signature of Affiant

(PLEASE PRINT OR TYPE)

Name:

Title:

Date:

ATTACHMENT D-2

OUTREACH EFFORTS COMPLIANCE STATEMENT

This document shall be completed and submitted by Offeror within ten (10) working days of notification of recommendation for Contract award

In conjunction with the offer submitted in response to RFP No. 2014-02_, the Offeror states the

following:

1. Offeror identified opportunities to subcontract in these specific work categories:

2. Attached to this form are copies of written solicitations (with bidding instructions)

used to solicit MDOT certified MBEs for these subcontract opportunities.

3. Offeror made the following attempts to contact personally the solicited MDOT certified MBEs:

4. Select ONE of the following:

a. This project does not involve bonding requirements. OR

b. Offeror assisted MDOT certified MBEs to fulfill or seek waiver of bonding requirements (describe efforts)

5. Select ONE of the following:

a. Offeror did/did not attend the pre-proposal conference

OR

b. No pre-proposal conference was held.

By: Offeror Printed Name Signature

Address Name, Title

Date

194

ATTACHMENT D-3

SUBCONTRACTOR PROJECT PARTICIPATION STATEMENT

This document shall be completed and submitted by Offeror within ten (10) working

days of notification of recommendation for Contract award. Complete and submit one

form for each MDOT certified MBE listed on Form D-1

(Contractor) has entered into a contract with (subcontractor) to provide services in connection with the RFP described below.

Prime Contractor Address and Phone Project Description Veterans’ Organization Instant Ticket Lottery


Project Number 2014-02 Total Contract Amount $


Work To Be Performed


The undersigned Contractor and Subcontractor hereby certify and agree that they have fully complied with the State Minority Business Enterprise law, State Finance and Procurement Article §14-308(a)(2), Annotated Code of Maryland which provides that, except as otherwise provided by law, a contractor may not identify a certified minority business enterprise in a bid or proposal and:

(1) fail to request, receive, or otherwise obtain authorization from the certified MBE to identify the certified MBE in its proposal;

(2) fail to notify the certified MBE before execution of the contract of its inclusion of the bid or proposal;

(3) fail to use the certified MBE in the performance of the contract; or (4) pay the certified MBE solely for the use of its name in the proposal.

CONTRACTOR SIGNATURE SUBCONTRACTOR SIGNATURE

By: By:

Name, Title Name, Title Date Date

195

ATTACHMENT D-4

MARYLAND STATE MLGCA & GAMING CONTROL AGENCY


CONTRACTOR PAID/UNPAID INVOICE REPORT

* Complete and submit this form for each MDOT certified Minority Business Enterprise Subcontractor by the 15th of each month. Failure to comply with MBE reporting requirements may result in sanctions being invoked, up to and including contract termination.

Veterans’ Organization Instant Ticket Lottery Machines and

Related Services #2014-02

Report #:

Reporting Period (Month/Year):

Report is due by the 15th

of the following month.

Contracting Unit

Contract Amount_

MBE Sub Contract Amt_

Contract Begin Date

Contract End Date_

Services Provided

Prime Contractor:

Contact Person:

Address:

City:

State:

ZIP:

Phone: FAX:

Subcontractor Name:

Contact Person:

Phone:

FAX:

Subcontractor Services Provided:

List all unpaid invoices over 30 days old received from the MBE subcontractor named above:

1.

2.

3.

Total Dollars Unpaid: $

**If more than one MBE subcontractor is used for this contract, please use separate forms.

Return one copy of this form to the following address:

Roslyn Fuller, MBE Coordinator

Maryland State MLGCA & Gaming Control

Agency


Baltimore, MD 21230

Phone: 410-230-8831

Fax: 410-230-8795

e-mail: [email protected]

Signature:_ Date:


196

ATTACHMENT D-5 MARYLAND STATE MLGCA & GAMING CONTROL AGENCY


Minority Business Enterprise Participation Subcontractor Paid/Unpaid Invoice Report

Report #:

Reporting Period (Month/Year): /

Report Due By the 15

th of the following

Month.

Veterans’ Organization Instant Ticket Lottery Machines and

Related Services #2014-02 Contracting Unit

Contract Amount

MBE Sub Contract Amt

Contract Begin Date

Contract End Date

Services Provided

MBE Subcontractor Name:

MDOT Certification #:

Contact Person:

Address:

City:

State:

ZIP:

Phone:

FAX:

Subcontractor Services Provided:

List all payments received from Prime

Contractor during reporting period above.

1.

2.

3.

Total Dollars Paid: $

List dates and amounts of any unpaid invoices over 30

days old.

1.

2.

3.

Total Dollars Unpaid: $

Prime Master Contractor: Contact Person:

Return one copy of this form to the following address:

Roslyn Fuller, MBE Coordinator

Maryland State MLGCA & Gaming Control Agency


Baltimore, MD 21230

Phone: 410-230-8831

Fax: 410-230-8795

e-mail: [email protected]

Signature:_ Date:_


197

APPENDIX E

VENDOR ELECTRONIC FUNDS TRANSFER (EFT) REGISTRATION REQUEST FORM State of Maryland Comptroller of

Maryland

Date of Request

Business Identification Information (Address to be used in case of default to check):

Business Name

Address Line 1

Address Line 2

Page 1 of 2

City State

Taxpayer Identification Number:

Federal Employer Identification Number:

(or) Social Security Number:

Zip code

Business contact name, title, e-mail and phone number including area code. (And address if different from

above):

Financial Institution Information:

Name and address

Contact name, phone number (include area code), _

ABA Number Account Number

ACCOUNT TYPE CHECKING MONEY MARKET

Format Desired: CCD CCD+ CTX* (Check one.)

*Note – There may be a charge to you by your bank with this format.

A VOIDED CHECK from the bank account must be attached.

198

Transaction Requested:

1. Initiate all disbursements via EFT to the above account.

2. Discontinue disbursements via EFT, effective .

Page 2 of 2

3. Change the bank account to above information – a copy of the approved Registration

Form for the previous bank account must be attached. I am authorized by * (hereinafter Company) to make the representations contained in this paragraph. Company authorizes the Comptroller and the Treasurer of Maryland to register it for electronic funds transfer (EFT) using the information contained in this registration form. Company agrees to receive all funds from the State of Maryland by electronic funds transfer according to the terms of the EFT program. Company agrees to return to the State of Maryland any EFT payment incorrectly disbursed by the State of Maryland to the Company’s account. Company agrees to hold harmless the State of Maryland and its agencies and departments for any delays or errors caused by inaccurate or outdated registration information or by the financial institution listed above.

*Name of registering business entity

Signature of company treasurer, controller, or chief financial officer and date

Completed by GAD/STO Date Received

GAD registration information verified Date to STO_

STO registration information verified Date to GAD

R*STARS Vendor No. and Mail Code Assigned:

State Treasurer’s Office approval date General Accounting Division approval date

To Requestor: Please retain a copy of this form for your records. Please allow approximately 30 days from the date of your request for the Comptroller’s and Treasurer’s Offices to process your request. Failure to maintain current information with this office could result in errors in payment processing. If you have any questions, please call the EFT registration desk at 410-260-7375.

Please submit form to: EFT Registration, General Accounting Division

Room 205, P.O. Box 746 Annapolis, Maryland 21404-0746

Instructions: Electronic Funds Transfer instructions are located: http://compnet.comp.state.md.us/gad. Questions may be requested by email, [email protected]. Or call 1-888-784-0144. COT/GAD X-10

http://compnet.comp.state.md.us/gad


199

APPENDIX F PAGE 1 OF 1

FINANCIAL PROPOSAL SHEET

This form must be completed in its entirety and submitted by Offeror with the Financial Proposal. Do Not change or alter this form.

The Offeror must state its price to provide all equipment, hardware, supplies, software, personnel and services required by this RFP for providing Veteran’s Organization Instant Ticket Lottery Machines and Related Services.

A. The price/amount shall be expressed as a Firm Fixed Percentage of Instant Ticket Lottery Machine Proceeds. Price shall be stated as a percentage and

shall be stated to 2 decimal places (e.g., %00.00).

Firm Fixed Percentage of Instant Ticket Lottery Machines Proceeds

%____________________ (Basis of Award)

B. Credit per person per site visit for unused press checks/security

visits (Section 5.27.2). Price/amount shall be stated as a dollar

amount and shall be stated to 2 decimal places (e.g., $00.00). $_________.____

Signature: Date: Contractor

Name: Title:

(Printed or Typed) Company: Phone No.

Address:

Federal Tax I.D. #

200

APPENDIX G

CONFLICT OF INTEREST AFFIDAVIT AND DISCLOSURE (THIS AFFIDAVIT IS REQUIRED TO BE SUBMITTED WITH THE OFFEROR’S

PROPOSAL)

A. ―Conflict of interest‖ means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the State, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.

B. “Person” has the meaning stated in COMAR 21.01.02.01B(64) and includes a Bidder,

Offeror, Contractor, Consultant, or Subcontractor or Subconsultant at any tier, and also includes an employee or agent of any of them if the employee or agent has or will have the authority to control or supervise all or a portion of the work for which a bid or offer is made.

C. The Offeror warrants that, except as disclosed in §D, below, there are no relevant facts or circumstances now giving rise or which could, in the future, give rise to a conflict of interest. D. The following facts or circumstances give rise or could in the future give rise to a conflict of interest (explain detail—attach additional sheets if necessary):

E. The Offeror agrees that if an actual or potential conflict of interest arises after the date of this affidavit, the Offeror shall immediately make a full disclosure in writing to the Procurement Officer of all relevant facts and circumstances. This disclosure shall include a description of actions which the Offeror has taken and proposes to take to avoid, mitigate, or neutralize the actual or potential conflict of interest. If the Contract has been awarded and performance of the Contract has begun, the Contractor shall continue performance until notified by the Procurement Officer of any contrary action to be taken.

I DO SOLEMNLY DECLARE AND AFFIRM UNDER THE PENALTIES OF PERJURY THAT

THE CONTENTS OF THIS AFFIDAVIT ARE TRUE AND CORRECT TO THE BEST OF MY

KNOWLEDGE, INFORMATION, AND BELIEF.

Date: By: (Authorized Representative and Affiant)

201

APPENDIX H

LITIGATION/PROTEST BOND

BOND NO.

KNOW ALL MEN BY THESE PRESENTS THAT

having its principal office at as

Principal and authorized

to transact business in the State of Maryland, as Surety and held and firmly bound to the

State of Maryland, as obligee in the sum of Two Hundred Fifty Thousand Dollars

($250,000.00). As a condition of the Maryland State Lottery and Gaming Control

Agency’s Request for Proposals #2014-02, this bond must be supplied with the Proposal with

provision that a claim may be made upon this bond in accordance with Section 4.49.2 of the

Maryland State Lottery and Gaming Control Agency’s Request for Proposals #2014-02 for

―Veteran’s Organization Instant Ticket Lottery Machines and Related Services‖.

PRINCIPAL AND SURETY bind themselves, their heirs, assigns, executors and

administrator, jointly and severally, conditioned that this obligation shall remain in full force

and effect for a period of one (1) year from the Deadline for Receipt of Proposals.

Provided, however, the Surety shall not be liable for the sum greater than the penal sum of

this bond.

IN WITNESS WHEREOF, the said Principal’s hand and seal have been set hereunto and the

said Surety has caused these presents to be signed by its Attorney to become effective on

this, the day of , 2013. WITNESS: BY:

TITLE:

SURETY:

WITNESS: BY:

TITLE:

202

APPENDIX I

PROPOSAL BOND

Page 1 of 2

Bond No.

KNOW ALL MEN BY THESE PRESENTS, that we, (Offeror)

as Principal, hereinafter called the Principal, and

(Bonding Company)

a corporation duly organized under the laws of the state of , as Surety, hereinafter called the Surety, are held and firmly bond unto the State of Maryland, hereinafter called "State" for the sum of Two Hundred Fifty Thousand Dollars ($250,000.00), for the payment of which sum, the said Principal and the said Surety bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents.

WHEREAS, the Principal has submitted a proposal for Veterans’ Organization Instant

Ticket Lottery Machines and Related Services_(#2014-02) (Identify project by number and brief description)

NOW, THEREFORE, if the Principal, upon acceptance by the State of its proposal identified above, within the period specified herein for acceptance for one hundred-eighty (180) days, shall execute such further contractual documents, if any, and give such bond(s) as may be required by the terms of the proposal as accepted within the time specified (ten (10) days if no period is specified) after receipt of the forms, or in the event of failure so to execute such further contractual documents and give such bonds, if the Principal shall pay the State for any cost of procuring the work which exceeds the amount of its proposal, then the above obligation shall be void and of no effect.

The Surety executing this instrument hereby agrees that its obligation shall not be impaired by any extension(s) of the time for acceptance of the proposal that the Principal may grant to the State, notice of which extension(s) to the Surety being hereby waived; provided that such waiver of notice shall apply only with respect to extensions aggregating not more than ninety (90) calendar days in addition to the period originally allowed for acceptance of the proposal.


203

Page 2 of 2

In Presence of: INDIVIDUAL PRINCIPAL Witness

as to (SEAL)

In Presence of: CO-PARTNERSHIP PRINCIPAL Witness

(SEAL) (Name of Co-Partnership)

as to BY: (SEAL)

as to (SEAL)

as to (SEAL)

CORPORATE PRINCIPAL

Attest:

(Name of Corporation)

AFFIX BY: CORPORATE

Corporate Secretary President SEAL

SURETY

Attest: (Name of Surety)

AFFIX

BY: CORPORATE Secretary President SEAL

Bonding Agent’s Name Agent’s Address

Business Address of Surety

204

APPENDIX J PAGE 1 0F 3

PERFORMANCE BOND

Principal Business Address of Principal

Surety Obligee: STATE OF MARYLAND

a corporation of the State of By and through the following and authorized to do business in Administration: MLGCA the State of Maryland

One Million Dollars ($1,000,000.00)

Penal Sum of Bond (express in words and figures)

, 20 Date Bond Executed

Contract Number: _#2014-02 , 20 Description of Contract: Date of Contract

Veterans’ Organization Instant Ticket Lottery Machines and Related Services

KNOW ALL MEN BY THESE PRESENTS, That we, the Principal named above and Surety named above, are held and firmly bound unto the Obligee named above in the Penal Sum of this Performance Bond stated above, for the payment of which Penal Sum we bind ourselves, our heirs, executors, administrators, personal representatives, successors, and assigns, jointly and severally, firmly by these presents. However, where Surety is composed of corporations acting as co-sureties, we, the co-sureties, bind ourselves, our successors and assigns, in such Penal Sum jointly and severally as well as severally only for the purpose of allowing a joint action or actions against any or all of us, and for all other purposes each co-surety binds itself, jointly and severally with the Principal, for the payment of such sum as appears above its name below, but if no limit of liability is indicated, the limit of such liability shall be the full amount of the Penal Sum.

WHEREAS, Principal has entered into or will enter into a contract with the State of Maryland, by and through the Administration named above acting for the State of Maryland, which contract is described and dated as shown above, and incorporated herein by reference. The contract and all items incorporated into the contract, together with any and all changes, extensions of the time, alterations, modifications, or additions to the contract or to the work to be performed thereunder or to the Plans, Specifications, and Special Provisions, or any of them, or to any other items incorporated into the contract shall hereinafter be referred to as "the Contract."

WHEREAS, it is one of the conditions precedent to the final award of the Contract that these presents be executed.

205

PAGE 2 OF 3 NOW, THEREFORE, during the original term of said Contract, during any extensions thereto that may be granted by the Administration, and during the guarantee and warranty period, if any, required under the Contract, unless otherwise stated therein, this Performance Bond shall remain in full force and effect unless and until the following terms and conditions are meet:

1. Principal shall well and truly perform the Contract; and

2. Principal and Surety shall comply with the terms and conditions contained in this Performance Bond.

Whenever Principal shall be declared by the Administration to be in default under the Contract, the Surety may, within 15 days after notice of default form the Administration, notify the Administration of its election to either promptly proceed to remedy the default or promptly to complete the contract in accordance with and subject to its terms and conditions. In the event the Surety does not elect to exercise either of the above stated options, then the Administration thereupon shall have the remaining contract work completed, Surety to remain liable hereunder for all expenses of completion up to but not exceeding the penal sum stated above.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract or to the work to be performed thereunder or the Specifications accompanying the same shall in any way affect its obligations on the Performance Bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract or to the work or to the Specifications.

This Performance Bond shall be governed by and construed in accordance with the laws of the State of Maryland and any reference herein to Principal or Surety in the singular shall include all entities in the plural who or which are signatories under the Principal or Surety heading below.

IN WITNESS WHEREOF, Principal and Surety have set their hands and seals to this Performance Bond. If any individual is a signatory under the Principal heading below, then each such individual has signed below on his or her own behalf, has set forth below the name of the firm, if any, in whose name he or she is doing business, and has set forth below, then all members of each such partnership or joint venture have signed below, each member has set forth below the name of the partnership or joint venture, and each member has set forth below his or her title as general partner, limited partner, or member of joint venture, whichever is applicable. If any corporation is a signatory under the Principal or Surety heading below, then each such corporation has caused the following: the corporation's name to be set forth below, a duly authorized representative of the corporation to affix below the corporation's seal and to attach hereto a notarized corporate resolution or power of attorney authorizing such action, and each such duly authorized representative to sign below and to set forth below his or her title as a representative of the corporation. If any individual acts as a witness to any signature below, then each such individual has signed below and has set forth below his or her title as a witness. All of the above has been done as of the Date of Bond shown above.

206

PAGE 3 OF 3

In Presence of: INDIVIDUAL PRINCIPAL Witness

as to (SEAL)

In Presence of: CO-PARTNERSHIP PRINCIPAL Witness

(Name of Co-Partnership)

(SEAL)

as to BY : (SEAL)

as to (SEAL)

as to (SEAL)

CORPORATE PRINCIPAL

Attest: (Name of Corporation)

BY: AFFIX

CORPORATE Corporate Secretary President SEAL

SURETY

Attest:

BY: AFFIX

CORPORATE Signature SEAL

Title:

(Business Address of Surety) Bonding Agent's Name -

Agent's Address

207

APPENDIX K

LIVING WAGE REQUIREMENTS FOR SERVICE CONTRACTS

A. This Contract is subject to the Living Wage requirements under Title 18, State Finance

and Procurement Article, Annotated Code of Maryland and the regulations proposed by the Commissioner of Labor and Industry. The Living Wage generally applies to a Contractor or Subcontractor who performs work on a State Contract for services that is valued at $100,000 or more. An employee is subject to the Living Wage if he/she is at least 18 years old or will turn 18 during the duration of the contract; works at least 13 consecutive weeks on the State Contract and spends at least one-half of the employee’s time during any work week on the State Contract. The Living Wage Law does not apply to an employee who works less than thirteen consecutive weeks and full-time on a Contract subject to the Living Wage. Information regarding the Living Wage Law may be found on the Department of Labor, Licensing and Regulation website at www.dllr.maryland.gov.

B. The Living Wage Law does not apply to:

(1) A Contractor who:

(A) has a State Contract for services valued at less than $100,000; or

(B) employs 10 or fewer employees and has a State contract for services valued at less than $500,000.

(2) A Subcontractor who:

(A) performs work on a State Contract for services valued at less than $100,000;

(B) employs 10 or fewer employees and performs work on a State Contract for services valued at less than $900,000; or

(C) performs work for a contractor not covered by the Living Wage Law as defined in B(1)(B) above, or B (3) or C below.

(3) Contracts involving services needed for the following:

(A) Services with a Public Service Company;

(B) Services with a nonprofit organization;

(C) Services with an officer or other entity that is in the Executive Branch of the State government and is authorized by law to enter into a procurement (“Unit”); or

(D) Services between a Unit and a County or Baltimore City.

C. If the Unit responsible for the State contract determines that application of the Living

Wage would conflict with any applicable Federal program, the Living Wage does not apply to the Contract or program.

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D. A Contractor must not split or subdivide a Contract, pay an employee through a third party, or treat an employee as an independent contractor or assign work to employees to avoid the imposition of any of the requirements of Title 18, State Finance and Procurement, Annotated Code of Maryland.

E. Each Contractor/Subcontractor, subject to the Living Wage Law, shall post in a

prominent and easily accessible place at the work site(s) of covered employees a notice of the Living Wage Rates, employee rights under the law, and the name, address, and telephone number of the Commissioner.

F. The Commissioner of Labor and Industry shall adjust the wage rates by the annual

average increase or decrease, if any, in the Consumer Price Index for all urban consumers for the Washington/Baltimore metropolitan area, or any successor index, for the previous calendar year, not later than 90 days after the start of each fiscal year. The Commissioner shall publish any adjustments to the wage rates on the Division of Labor and Industry’s Website, which is: http://www.dllr.state.md.us/labor/. An employer subject to the Living Wage Law must comply with the rate requirements during the initial term of the contract and all subsequent renewal periods, including any increases in the wage rate, required by the Commissioner, automatically upon the effective date of the revised wage rate.

G. A Contractor/Subcontractor who reduces the wages paid to an employee based on the

employer’s share of the health insurance premium, as provided in §18-103(c), State Finance and Procurement Article, Annotated Code of Maryland, shall not lower an employee’s wage rate below the minimum wage as set in §3-413, Labor and Employment Article, Annotated Code of Maryland. A Contractor/Subcontractor who reduces the wages paid to an employee based on the employer’s share of health insurance premium shall comply with any record reporting requirements established by the Commissioner of Labor and Industry.

H. A Contractor/Subcontractor may reduce the wage rates paid under §18-103(a), State

Finance and Procurement, Annotated Code of Maryland, by no more than 90 cents of the hourly cost of the employer’s contribution to an employee’s deferred compensation plan. A Contractor/Subcontractor who reduces the wages paid to an employee based on the employer’s contribution to an employee’s deferred compensation plan shall not lower the employee’s wage rate below the minimum wage as set in §3-413, Labor and

Employment Article, Annotated Code of Maryland. I. Under Title 18, State and Finance Procurement Article, Annotated Code of Maryland, if

the Commissioner determines that the Contractor/Subcontractor violated a provision of this title or regulations of the Commissioner, the Contractor/Subcontractor shall pay restitution to each affected employee, and the State may assess liquidated damages of $20 per day for each employee paid less than the Living Wage.

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AFFIDAVIT OF AGREEMENT Maryland Living Wage Requirements - Service Contracts

Affidavit of Agreement

Contract No. 2014-02

Name of Contractor

Address

City State Zip Code

If the Contract is Exempt from the Living Wage Law

The Undersigned, being an authorized representative of the above named Contractor, hereby affirms that the Contract is exempt from Maryland’s Living Wage Law for the following reasons

(check all that apply): Offeror is a nonprofit organization Offeror is a public service company Offeror employs 10 or fewer employees and the proposed contract value is less than $900,000 Offeror employs more than 10 employees and the proposed contract value is less than $100,000

If the Contract is a Living Wage Contract

A. The Undersigned, being an authorized representative of the above named Contractor, hereby affirms our commitment to comply with Title18, State Finance and Procurement Article, Annotated Code of Maryland and, if required, to submit all payroll reports to the Commissioner of Labor and Industry with regard to the above stated contract. The Bidder/Offeror agrees to pay covered employees who are subject to living wage at least the living rate in effect at the time service is provided for hours spent on State contract activities, and to ensure that its Subcontractors who are not exempt also pay the required living wage rate to their covered employees who are subject to the living wage for hours spent on a State contract for services. The Contractor agrees to comply with, and ensure its Subcontractors comply with, the rate requirements during the initial term of the contract and all subsequent renewal periods, including any increases in the wage rate established by the Commissioner of Labor and Industry, automatically upon the effective date of the revised wage rate.

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Affidavit of Agreement

Maryland Living Wage Requirements-Service Contracts

B. (initial here if applicable) The Offeror affirms it has

no covered employees for the following reasons: (check all that apply): All employee(s) proposed to work on the contract will spend less than one-half of the

employee’s time during every work week on the State contract; All employee(s) proposed to work on the contract will be 17 years of age or younger

during the duration of the contract; or All employee(s) proposed to work on the contract will work less than 13 consecutive

weeks on the State contract. The Commissioner of Labor and Industry reserves the right to request payroll records and other data that the Commissioner deems sufficient to confirm these affirmations at any time.

Name of Authorized Representative:

Signature of Authorized Representative Date Title:

Witness Name (Typed or Printed)

Witness Signature Date

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APPENDIX L

AUTHORIZATION FOR RELEASE OF INFORMATION

(Insert Name of Offeror) has submitted a proposal in response to RFP #2014-02 issued by the Maryland State Lottery and

Gaming Control Agency (―MLGCA‖). As part of the MLGCA’s evaluation of the proposal,

it will be contacting other entities that have had business relationships with Offeror. This document, signed by an authorized representative of Offeror, demonstrates the desire of Offeror to:

1. Allow representatives of the MLGCA unfettered access to any and all monitoring

reports, licensing or certification documents, and records of evaluations related to the experiences of Offeror in its prior or current contracts for MLGCA related services, as well as the experiences of any of its parent or subsidiary corporations or other entities with which it has been associated;

2. Allow the same access afforded by the previous section 1 above to apply to

situations in which Offeror may have functioned as a subcontractor;

3. Grant representatives of the MLGCA unfettered access to discuss openly the performance of Offeror related to the experiences set out in sections 1 and 2 above; and

4. Expressly authorize that any and all of the information conveyed to

representatives of the MLGCA be kept in confidence by the MLGCA without any expectation or requirement that the content of such information shall ever be released to Offeror or any other entity, except where otherwise required by law.

Name & Title:

(Name of Offeror) Date:

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APPENDIX M – LOCATION OF THE PERFORMANCE OF SERVICES DISCLOSURE

Pursuant to State Finance and Procurement Article, § 12-111, Annotated Code of Maryland, and in

conjunction with the offer submitted in response to RFP #2014-02, the following disclosures are hereby

made:

1. At the time of proposal submission, the Offeror and/or its proposed subcontractors:

___ have plans

___ have no plans

to perform any services required under the resulting Contract outside of the United States.

2. If services required under the contract are anticipated to be performed outside the United

States by either the Offeror or its proposed subcontractors, the Offeror shall answer the following (attach

additional pages if necessary):

a. Location(s) services will be performed:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________

b. Reasons why it is necessary or advantageous to perform services outside the

United States:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________

______________________________________________________________________________

The undersigned, being an authorized representative of the Offeror, hereby affirms that the contents of this

disclosure are true to the best of my knowledge, information, and belief.

Date: ______________________________________

Offeror Name: ______________________________________

By: ______________________________________

Name: ______________________________________

Title: ______________________________________

Please be advised that the Lottery may contract for services provided outside of the United States if: the

services are not available in the United States; the price of services in the United States exceeds by an

unreasonable amount the price of services provided outside the United States; or the quality of services in

the United States is substantially less than the quality of comparably priced services provided outside the

United States.